Ah Chipotle, the very first stock I chose to purchase way back in 2016 in my fun money account. Actually, this company single-handedly motivated me to open up a trading account for my fun money in the first place.
From late 2015 to the middle of 2016, Chipotle Mexican Grill, Inc. had sold off from its all time high of just shy of $750 per share, down to around (including dipping blow) $400 per share.
The company was rife with problems. The CDC and FDA had published reports of Chipotle’s restaurants repeatedly infecting patrons with E.coli and norovirus. Then Chipotle’s Chief Marketing and Development Officer was arrested for repeatedly ordering cocaine through a drug delivery service.
But I loved Chipotle. In spite of all the health/news stories, Olivia and I still found ourselves eating there often. And it seemed to me like business was doing fairly well at any of the locations we frequented. I figured it would only be a matter of time before the stock price would rise again. So, I decided to buy in while it was on sale.
I searched around for various brokers to try and find one with low trade fees. I settled on OptionsHouse, which was later acquired by E*TRADE.
I placed my first two orders on October 6, 2016. I bought one share of CMG at $426.39, and then a second share for $421.44. Then a few weeks later, I bought my third share for $412.15 bringing by average price per share to $419.99.
I held onto these shares and checked the price periodically. By the end off October, the shares were trading down below $360 and had me sweating whether or not I’d be able to recoup my investment or if I had caught the proverbial falling knife.
Well, by New Years 2017, CMG had crossed back above the $400 mark, and I was starting to think that I didn’t want to tie that money up any longer waiting and hoping that it would return to its prior heights of $750 per share (or anything in that ballpark).
Finally, in mid-February 2017, CMG had run back up past my break even point! I was starting to think I was on my way to doubling up my investment of $1,275 (after factoring in the $15 in fees). But within a week the price was trending back down towards $400 and I was back to sweating it.
My sentiments were also shifting and I was leaning towards using that money to purchase a new computer. So, when the price bounced back up to $413.56 on March 9, 2017, I decided to sell (paying another $5 fee for the trade).
In the end, I had a net loss of $39.29.
It’s definitely more than a little painful to look back at the chart now a few years later. With hindsight, I can see that holding onto those shares just two more months would have seen the stock hit almost $500 per share.
And even more recently, CMG hit its all time high of $857.90. Holy smokes! If I had the patience to hold on since my purchase in 2016 and been fortunate enough to sell at the peak, my three shares could have netted me over 100% return on investment with a profit of $1,293.70.
That would have produced an annual return over the 3 and 1/2 year holding period of 23%. Quite a bit better than the S&P 500, which had an annual return of approximately 9% over the same period.
FNMNY 