This is part of a series of profiles highlighting women investors in the Fool community. Find out what makes the fairer sex better at picking stocks at fool.com/girl.
Life in an automotive town first got Sherry Butler, 60, and her husband started in the stock market. But watching the wild ride that companies like Ford (NYSE: F ) , General Motors (NYSE: GM ) , and Delphi took their investors on imparted some valuable (and sometimes painful) lessons that would help Sherry formulate a new approach.
Ignoring all the news to contrary, Sherry, a self-described risk-taker, decided to plunge into the turbulent post-crash 2008 market, figuring there was "nothing to lose." Did it work? Read on to learn more about Sherry (phoebe44 on the boards), including what she's buying right now.
How did you get started investing?
I first became involved in investing sometime during the mid-1990s when my husband, an automotive executive, wanted to buy some Ford stock as it had dropped to around $16. He was certain we could make some money in a short time (we all know how that turned out!). We still hold those same shares today, along with many more that I purchased in 2008 for right around $1.10 per share.
I pretty much followed my husband's lead then, as he felt "we should buy some stocks," and I had an acquaintance who was a full-service broker.
What was your first investment on your own?
My first stock investment was Delphi, an automotive supplier. Many of Delphi's plants were in small midwestern towns and were the lifeblood of those towns. I didn't do much due diligence because I wasn't even sure how to really do that. I was working in one of those small towns that Delphi supported, and we all thought GM would never let Delphi die. But GM couldn't save Delphi because GM couldn't save itself. Delphi went bankrupt, and I rode it all the way down.
How has your approach to investing changed over time?
My investment approach has evolved only since 2008. I pretty much taught myself everything I know today -- learning by trial and error (and, yes, even an experience with a penny stock) and reading newsletter after newsletter. My full-service broker was no help at all. Fortunately, one of the newsletters I stumbled upon was The Motley Fool.
After watching our investments crash and burn during 2008, I decided to take about $25,000 of what was left and get into the stock market. I found it funny that analysts and brokers who had never experienced anything like 2008 before were giving people advice on what to do and how to handle things. I felt there was nothing to lose and everything to gain. People are telling me that they are happy now that they are almost back to where they were before 2008, but I'm well beyond.
My investment approach is to consider only Motley Fool recommendations -- and of those, only the ones that I understand very well. I have a check list, I put it to the test, then study it, make a decision and I don't look back. I do need to reign myself in especially when new recommendations come out and they are all to my liking. I love investing! It's very easy to want to just make a buy. I have a 24-hour rule (36 or 48 is better) in life as well as in stocks. Do nothing (unless in a crisis) about it for 24 hours. I don't always abide by my rule but when I do, life and investing is much, much better!
Any notable successes or failures as an investor?
My biggest investment success was Dana (NYSE: DAN ) , another auto-parts manufacturer. I bought about 2,500 shares of Dana for an average cost of $0.83. I still have 500 shares. It is now around $18 per share. My biggest failures have been when I have tried investment strategies other than long-term investing. I've lost more money shorting stocks and trying to use options than I have on any one particular poor investment.
In our upcoming book, Warren Buffett Invests Like a Girl, we make the case that women are better suited temperamentally to be great investors – they are generally more patient, take less risk, stay calmer in turbulent markets, do more research, and hold for the long term. Do you think you invest like a girl?
I do see several of the traits you mention in my own investing. I definitely am not cocky -- when talking about my investing successes one of the very first things I share is that I have been very fortunate. I have always kept in mind that the minute you start to believe you have Mr. Market figured out, the game is over and you will lose everything you have in a heartbeat.
The existence of my portfolio today is because of my temperament -- particularly staying calm in a market downturn and trading less often. Losing thousands of dollars a day isn't something I lose sleep over as long as I can find a reason for it and know it will right itself again within a reasonable time. And I am definitely a long-term investor and trade only to free up cash for better investments as I planned. However, I like to take risks with stocks (and do) although I am smart enough to realize the days of 2009 and early 2010 are over.
Finally, what stocks are you buying right now?
I'm watching Lumber Liquidators (NYSE: LL ) to see if it is going to be able to recover from its mismanagement of the new inventory control software. I like Titanium Metals, but I think we need a change in political parties before the stock will see gains. Canadian National Railway is one I waited too long to buy, so I am watching for dips to buy in. I've been adding to Microsoft (Nasdaq: MSFT ) lately -- it's all there as a strong company, but we definitely need to see a new CEO and board very soon.
Want to learn more about how to invest like a girl? Warren Buffett Invests Like a Girl is available June 21, but you can get chapter one today for FREE.
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