Forum Archive Index - September 2000

["Mike Hudson" <mikehudson@clear.net.nz>]

My name is Mike and this is my hard luck story. Are you sitting comfortably?, then I’ll begin

First I’ll set the scene.

In May of this year I bought some stock in a company called Trex (nasdaq TWP) which manufactures a composite wood/polyethylene decking. I came across the company whilst surfing the web looking for decking products. It looked interesting so I e-mailed them to ask whether they exported the product to be told that demand was so great that they could not satisfy the local market let alone export.

This whetted my appetite and I did some research and came to the conclusion that this was a great growth story. I bought in at $US37.

The stock appreciated quite rapidly and by July 27^th it had reached $57. Still a good story but the valuation now seemed way over the top. Time to sell thought I on July 31^st by which time it had come off a little to $53.

As you know the Nasdaq opens at 1.30am our time. I could have placed a market sell order before retiring but I don’t like to do that with Nasdaq Small Caps as there can be huge spreads. In hindsight that is exactly what I should have done. As you have no doubt guessed by now I overslept my alarm. When I finally staggered to my PC at 6am and logged on to my online broker, "quelle horreur," the bloody thing had plunged to $37, an analyst had downgraded the stock a couple of hours before I got up.

I still hold TWP and I still think it is a good company. It climbed back into the low forties, slumped again and is now about $36, so I haven’t lost anything (or have I?) but it would have been so much sweeter to have sold and bought back in at the lower price and have been several thousand pesos better off.

This will be my last post for a week or so as I have to take a group of customers to Singapore for a few days, yes I know it’s tough but somebody has to do it.

Let’s leave the last word on loss to Marcus Aurelius (121-180 AD)

"Loss is nothing else but change, and change is Nature’s delight"

Cheers

Mike H