Mighty Bargain Hunter

Investing and crocheting

December 27th, 2006 | by mbhunter |

How’s THAT for a title to a post!

My wife has become quite a proficient crocheter.  When I looked over, she was rolling a ball of yarn.  On the other end of the yarn, though, was a circular piece she had crocheted to about a foot in diameter that was now being unraveled.

Me:  “That piece is coming apart.”

She:  “I know.”

Me:  “Aww, sorry!”

She:  “It wasn’t lying flat.  I thought I could make it work, but it wouldn’t work.  I need the yarn for other projects, so I can’t sit on this mistake.”

She also said that she’s gotten a lot better about ripping things apart.  She still doesn’t really like doing it, but she recognizes futility and cuts her losses.

I sold a couple of stocks from my account that were going nowhere fast.  If I were crocheting, my piece would have been four or five feet in diameter before I quit.  I wasn’t as willing to admit my mistake.  One stock went down more than 80% before I finally sold it.

So, here are some crocheting tips that taught me something about investing:

• Start crocheting!  Starting the first piece, just like buying your first stock, is the hardest.  And just like you need to buy yarn, buy crocheting hooks, and learn how to crochet, you need to accumulate some cash, set up a brokerage account, and learn how to use it.  Nothing happens, though, until you start crocheting, or until you buy your stock.
• Give time for the piece to form.  A piece needs time to take shape before you can tell if it’s going well or not.  I’ve made this mistake with stocks, too.  Buy a stock, hear some bad news contrary to everything else, sell the stock, watch it go up 500% over the next twelve months.  Killing the monster while it’s little is a good idea, but you have to recognize it as a monster first.  It could be a baby.
• If the piece isn’t working, unravel it and use the yarn again.  If the piece isn’t turning out how you thought it would — and this takes practice, too! — then cut your losses and try again.  Putting more time (or money) into a bad project like this won’t make it better, and it will take more time (money) to unravel once it really looks ugly.  Same with stop losses on equities that are turning south.
• Try again!  You know more than you did last time, so it should turn out easier and look better if you learned what went wrong.  Put the yarn to better use.  Invest in something else!

Questions tagged credit-card at Cash Commons:

• Anybody have sucesss with 0% Balance Transfers on Credit Cards?
• When entering credit card information on a website, does the billing address have to be correct?
• Two of my credit cards got hit with fraudulent charges the same day. What gives?