The Eclipse and the Odds

On Saturday, my wife and I will take a bus from our New Hampshire home to Logan Airport and fly to Portland, Oregon. It will feel good to get back to my home region and see some old friends. But the announced reason for our trip is my longstanding desire to experience a total eclipse of the sun. The path of the eclipse that will manifest itself on August 21 will start on the northern Oregon coast and head east across the entire state (and a touch south), traversing the entire United States and bidding farewell to North America somewhere in South Carolina.

My plan, which now appears laughably naïve, was to get us up early on the morning of the event and drive southwest or southeast, depending on how the Oregon cloud cover directed us, until we got somewhere into the path of the totality. Then, as the sun returned, we would drive on to see my brother on the Oregon coast.

Hah! What a lunkhead!

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Had I but realized that about a million (that’s a literal million, not just a random big number) people are expected to drive into Oregon to see the eclipse, I might have made a different plan. After all, Oregon has only about 3.5 million inhabitants, total, so the size of the upcoming traffic jam from Depoe Bay on the coast to Prairie City in the east could be monumental. Getting away from the totality path after the sun returns will be like exiting the biggest stadium parking lot you’ve ever seen.

So, since my days of “what the hell, let’s give it a try!” are safely behind me, my wife and I are planning to experience the 90% eclipse from the safety of Portland, in the company of friends and relaxing beverages. It will be fine. *sigh*

I have only one connection to make between deciding to dare to be cautious and growth investing. This is it.

Sometimes you will run into a stock whose story is so intriguing, so audacious, that you will be tempted to ignore the company’s dismal lack of earnings, pathetic revenue growth, scant capital and pitiful chart and say, “What the hell, let’s give it a try!” And if you do it right—more on that later—there’s nothing wrong with doing that.

I’ve done it myself a couple of times, and the results are still sitting in my online trading account, worth so little that it would cost more to sell them than I would realize from the sale.

One of them was National Bank of Greece (NBGGY), which I bought at 15 back in October 2015. NBGGY—which got the five-letter symbol of the OTC crowd after it fell below 1 and was delisted in December 2015—used to trade above 9,000 back in 2007, before the deteriorating economy of Greece knocked the pins out from under it. My reasoning was that the stock’s three-week recovery just before I bought it looked like a reasonable bounce to buy into.

I was wrong.

But the really important thing about my bet on the rebound in Greece’s national bank is that I put virtually no money into it! I bought 16 shares of NBGGY for a total investment of less than $250. So the stock’s decline to 13 cents per share in February 2016 was fairly painless. And the stock’s rally to 43 cents per share (see below) has given me almost no relief.

But back when I was wanting to put a little skin in the game and bet on the recovery of NBGGY, I knew enough to keep my wager proportional to the confidence I had in the underlying issue.

And it’s the same with my desire to see the upcoming eclipse. I’m keeping my bet in line with my best estimate of the possible cost. It’s a lesson my growth stock experience has taught me. It’s a lesson I advise you to learn from my experience, not your own.

By the way, if you look at the chart for NBGGY, you can get three very different stories depending on whether you select the monthly, weekly or daily chart view. And since I’d like to present myself as a prudent and successful growth investor, I’ll choose the one that makes me look best, even if that’s a total lie. Here’s the daily. Enjoy.

Like next Monday's eclipse, these recent returns have been a rare event for National Bank of Greece (NBGGY).

Timothy Lutts

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