Investment Throwback - Investing and Saving Over

[elakkeelle35v]

I thought I’d start a feel-good investing retro thread, where the idea would be for forum members to share the most memorable events from the very beginning of their investing careers, which happened at least over 10 years ago. So, not recent stories, but more retro stuff, e.g., from the 90s or early 2000s, when the investing environment was completely different. These could be quite useful and fun for the newest younger investors to read about what investing was like “back in the day”. For example, it’s been nice to listen to Aki Pyysing’s stories from the 90s about the Finnish stock exchange on various podcasts, so that’s perhaps the kind of thing I’m looking for here.

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I’m not old enough yet to have investing experience from the 90s, but I can start by sharing an event from 2010, which I recall was when my own stock investing began, or at least it was some kind of initial spark.

The year was 2010, meaning we were living in the post-financial crisis years, and the Eurozone crisis was beginning. I hadn’t invested in stocks before; I kept my money in bank time deposits, partly probably due to the aftermath of the financial crisis. At that time, deposits still yielded a maximum of about 2% interest. I had put 47,000 euros into a time deposit with 2% interest at Sofia Pankki in 2009. As I recall, no other bank at that time could offer anywhere near as good a deposit rate. At the time, it felt like this was a good investment against inflation.

Well, as Wikipedia also states: “The Financial Supervisory Authority revoked the bank’s operating license and placed the bank in liquidation on March 28, 2010, to protect the interests of depositors”. So, in practice, Sofia Pankki went bust. At this point, I broke a sweat . 47,000 euros was quite a large sum for me at the time; I was still a student then and was probably only working part-time alongside my studies. However, I had been sensible enough not to put more into Sofia Pankki than the deposit guarantee at the time, which was 50,000 euros. Eventually, I got all my money back, and I don’t recall having to wait very long, a month or two at most, as I remember. I still have a screenshot of Sofia Pankki’s deposits and notes that Sofia Pankki paid back 40,243.71 euros and the deposit guarantee fund 7,102.67 euros, meaning a total of 47,346.38 was returned. The good thing was that the 2% interest, as I recall, rolled almost the entire time until I got my money back.

But from this, I recall, my stock investing began, because I had to think about where to put these roughly 47,000 euros, as after that, you couldn’t really get any interest from anywhere. My brother had invested in stocks, so probably somewhat inspired by him, I borrowed Seppo Saario’s “How I Invest in Stock Exchange Shares” and Malkiel’s “A Random Walk Down Wall Street” from the library and started to see some sense in stock investing, no longer viewing it as such a big risk when looking at the long term. The timing was also excellent, as the Eurozone crisis was ongoing, and stocks were available at cheap prices. However, I remember that at first, the price decline seemed to continue for a while, and the stocks I bought were significantly in the red, and a -5% drop per day several times in a row was not uncommon, and it felt bad at first, but I had to buy them “when they were cheap”.

The first stocks I bought in 2011 were Fortum, then Sampo, Nokia, and Elisa. Of these, only Sampo is still in the portfolio; the others have been sold. In the first year, I bought stocks for about 29,000 euros, and dividends accumulated to 1,375 euros gross in the first year. The following year, in 2012, I had put all of those 47,000 euros from Sofia Pankki into stocks, and I recall I also immediately put everything I dared from my small salary into stocks as prices fell, though a small emergency fund of a few thousand was always there. In 2012, the portfolio included Elisa, Sampo, Fortum, Nokia, Wärtsilä, Konecranes, YIT, UPM, and Kesko. Of these, Sampo, Konecranes, UPM, and Kesko are still in the portfolio; the others have been sold. Now, a little over 10 years later, the portfolio has grown to approximately 580,000 euros, and annual dividend income is about 26,000 euros gross.

So, thanks partly to Sofia Pankki’s bankruptcy, I started stock investing and abandoned time deposits.

[VPKe]

This thread is perfect for me. Recalling old memories is essential before my memory fails.
I started investing money in 1997. That era is also significant because it was when we started to transition completely to online orders. Previously, orders were made at the bank counter or by phone. If I had had to deal face-to-face with a broker or even make a phone call, my investing career would have ended right there. Fortunately, the internet arrived, and even though I didn’t own an internet-connected computer for years, I was able to place orders from a public computer in the lobby of some library in Tampere or elsewhere.
Investing wasn’t a job for a hasty man even then.

I’ll add more to the thread at some point when I have time from my hectic work.

[anon77573512]

I started investing in Sonera’s second offering (my first shares, however, were probably HPY’s E-shares, which I received when the telephone share was converted to them). I also participated in the IPOs of F-Secure (was it still Datafellows?), Comptel, and SSH. I was an Evlinet customer and had received an ISDN modem at home, but I couldn’t get into the service with my flimsy connection. When selling Comptel, I set a limit price a couple of euros above the current price, just to be safe. By the time I finally got through to the service, the price was already a couple of euros over that… well, I only had 25 shares (if I remember correctly), but it was a wild time even with those Stone Age communication connections.

Edit: I forgot good old Basware. I think I got all 15 shares from that offering. I didn’t hold onto those for long either. As an anecdote, I remember last March when I was lying in the hospital, and a flashback light went on. I wondered how Basware was doing and what its price was. I considered buying a test batch since the price had dropped nicely, but like so many other “almost” purchases, that idea also ended up on the shelf.

[anon59464672]

Inspired by the thread, I started examining my own trades from past years and found discoveries like these:
Yomi (sale date 30.5.2003) and a loss of 175 EUR (what could it have been?)
Turvatiimi (sale date 15.10.2003) and a loss of 5 euros

One that I owned until recently (but not continuously) and has been one of those holdings where I have always failed:
Teleste sale date 6.5.2002 (dividends 40 EUR) and a loss of 553 EUR

Saunalahti Group several sale dates 2002-2005 and a total balance of plus 1.4K EUR
Perlos several sale dates 2002-2006 (total dividends 202 EUR) and a total balance of minus 1429 EUR
Pohjola Pankki A sale date 12.4.2004 and a profit of 71 EUR
Pohjola-Yhtymä sale date 28.5.2004 (dividends 500 EUR) and a profit of 2.65K EUR
Hercules sale date 9.1.2004 and a loss of 140 EUR
Ixonos sale date 3.-10.1.2005 and a profit of 645 EUR
Nec Cp Adr NNM sale date 9.1.2004 and a loss of 31 EUR
Cramo sale date 14.6.2002 (dividend 180 EUR) and a loss of 48 EUR
Elcoteq sale dates 11.2.2005 / 27.4.2005 / 27.12.2006 (total dividends 1225 EUR) and a profit of 4.45K EUR

This is just a small part of eQ’s (eQ is a Finnish investment services company) trading balance from 2002-2008. My trading was quite active but small-scale, except for Nokia swing trades in 2002-2003, which were part of the market learning process, and I survived that session with dry feet (much turnover, little profit: sales 713K and purchases 711K). Fortunately, I understood to stop when I noticed “trading” becoming more difficult day by day.

From later Nordnet (a Nordic online broker) days, there are several other odd birds, but I will mention one more as I noticed yesterday that the company still exists and is still listed in Stockholm, with the closing price yesterday evening being 0.55 SEK:
Anoto Group sale date 24.3.2006 and a loss of 1.23K EUR (selling price somewhere around 16 SEK as a guess, held for just over 4 months)

I have traded a lot of different stocks over the years and I still have the energy, albeit much slower.

Edit: That mysterious Yomi kept bothering me, so it seems it was some kind of setup related to Elisa (a Finnish telecommunications company):

»ELISA OYJ STOCK EXCHANGE RELEASE 29.3.2004 AT 8.00 AM YOMI MERGES WITH ELISA The boards of Elisa Oyj and Yomi Oyj have signed a merger plan, according to which Yomi will merge with Elisa. Yomi has been a subsidiary of Elisa since 2001, and the Elisa Group owns 51.46 percent of Yomi before the merger.«

2nd Edit: I can’t resist adding a few more investments, because when I chose these to put in my glass cabinet, for example, Elcoteq was included because I succeeded with it quite well relative to my stock wealth at the time, and Anoto because as an eternal bull, I have a bad habit of hanging on to weak branches and dropping strong ones too easily, as an eternal bull should. So with Anoto, I was able to let go of a terrible investment case, but it also took too long, but I avoided a catastrophe. The next case is similar to Elco:

Savosolar Sale date 29.8.2016 and a profit of 825 EUR.

and then the biggest single loss of my investment career with one stock:

Cellceutix Corp. Sales 08->11/2016 and a loss of 10.1K EUR
the company changed its name in 2017 → Innovation Pharmaceuticals Inc.

Innovation Pharmaceuticals Inc. sale date 8.12.2017 loss of 3.3K EUR total 13.4K EUR …I looked at yesterday’s closing price: $0.0479

[Boiler-room]

I started investing around 2000. At that time, the Hex index was probably at its peak.
My first investment was JOT-automation, which issued a negative outlook a couple of days later.
Back then, I was working in a factory, and I would order stock prices as paid SMS messages to my phone. It was the same kind of crap even then, having to check prices many times a day.
I didn’t even have internet at home back then, but the cooperative bank had those customer terminals in their lobby where you could access online banking and place orders 24/7.
I also remember in September 2001, I had bought Nokia shares in the morning, and then I watched on TV as planes flew into the WTC towers. That’s when I took a hit (loss) too, just in time.

The investment discussion forum of Arvopaperilehti (securities magazine) was read for years.

[Nordman09]

eQ Online’s user interface back in 2000 looked amazing when you got to use it on a computer; it felt like the whole world was open to you as you could choose companies from there. As a rookie, I didn’t realize that I didn’t understand anything about these companies and their valuation; “investing” or rather, speculating, became all about guessing price movements. My information sources were mainly the paper versions of Arvopaperi and Kauppalehti. In a bull market, I made profits from trades, then in a bear market, most of my money vanished into thin air… My own blunders turned out to be expensive. Later, I started investing again with new money, this time with better success.

What I remember about eQ’s online service:

Paper documents, i.e., a username and a very long list of changing passwords, arrived by mail at home, on different days for security reasons, of course. These slips were really important; they were carefully filed away in a binder. Every time you did something in the online service, you had to cross out with a pen the long password from the passcode list that the online service randomly generated and asked for confirmation. If you lost these slips, getting new ones by mail could take a long time, and I don’t know if reordering would have been chargeable (I never lost the lists).

eQ charged a monthly fee for the book-entry account; a free stock portfolio was something one could only dream of back then. However, if you bothered to make a photocopy of your student card and mail it to eQ, that monthly fee was zeroed for that year. It was a hassle, but it saved a few tens of marks that way.

The use of eQ’s online service was indeed limited by the fact that using the internet from home with a modem connection cost about 5 Finnish marks per hour. On a monthly basis, it was easy to rack up a 2000 mark phone bill if you kept the internet on continuously. Due to this, the internet could not be utilized for stock investing nearly as much as one would have liked. One could reserve free 1-hour internet usage slots at the library, and I certainly used them diligently.

It’s a pity I don’t live in Helsinki. It would have been quite legendary to physically be there at the turn of the millennium, standing as a “tuulipuku” (windbreaker-clad person, a common Finnish stereotype for average people) on the street in long queues for the share issues of hype companies. Now I could reminisce with a smile about losing 2000 marks in that share issue, etc.

[RimaPoika]

I still have the eQ key lists!
Found them while cleaning out old papers.

I remember getting a call too; it probably wasn’t the famous “margin call,” but something along those lines.

In the call, the customer service rep advised me to deposit more “stuff” so the limit or leverage, or whatever it was I requested, could be approved.
the style was amusing: “Hey, you should have a bit more backing you up, so you could use that limit that much.” Not verbatim, but something like that.

I think the service was even advertised as “What do you give to someone who already has everything? eQ.”

The time was sometime in the early days of the Euro. So maybe not so retro after all.

[VPKe]

I happened to read Kim Lindström’s memoir Puoli vuosisataa pörssin sisäpiirissä (Half a Century on the Inside of the Stock Market).
An excellent overview from the 1960s to 2012.

In the beginning, the domestic stock market and the financial world in general seem to have been a real “Wild East.” In the 60s, companies had no obligation (nor interest) to communicate their affairs to outsiders. The use of insider information was a fringe benefit that was used without remorse.
Regulations prohibiting the use of insider information were not introduced until 1989.

Lindström himself has been at the forefront of developing the monitoring and reporting of listed companies, both from the outside and the inside, and for that, a big tip of the hat to him. The book doesn’t reveal any actual investment strategy secrets, as Lindström has been a very conservative dividend/value investor. Boring grinding year after year. Or rather, there were a few rabbits pulled out of the hat every now and then.

In the history of the stock market, the 60s seem to have been a desert with a few closed oases here and there. The current situation seems more like a crowded rainforest with its monkeys and parrots, where everyone has an awful lot to say, but few have the patience to listen.

Recommended reading for those interested in domestic stock market history. A quick read that requires just a few sittings. Suitable for hectic millennials like me and those who consider themselves as such.

P.S. Lindström’s stories from his career made me even more convinced of my own choice not to pursue a career in the finance industry. There seems to have been quite a bit of “all too human” behavior every now and then. Greed and backstabbing, but what else can one expect. (KL was the target in these instances, not the perpetrator)

[TuaL]

Great work over these past 13 years How much of your own money have you put into new purchases during this time, in addition to dividends? 2011 was definitely a great time to start investing, but surely you’ve had to add a bit more on top of that initial capital…

[Warren_Fyffet]

My earliest memories of investing date back to the 1980s, when SYP (Suomen Yhdyspankki) share certificates would drop through the letterbox. My parents had acquired some SYP shares for me. After the mail arrived, they would discuss the matter, and I wondered what all the fuss was about. From memory, the price of a share was 5 marks. The bottle deposit at the time was 40 pennies, and I quickly thought to myself that it wouldn’t take long to collect enough bottles to equal 5 marks, so why all the discussion? The share certificates were then kept in a bank safe deposit box. The box had its own key, and the bank had theirs. Logs and covers were used to record who had visited the box and with whom. The certificates received from the share issues were then hauled over to that deposit box.

[vanha_Qfwfq]

@Warren_Fyffet

from the 1980s, when SYP anti-papers (paper share certificates)

Well look at that, started with the same paper and in the same decade. With common shares naturally, the start of a corporate raider

@Warren_Fyffet

If I recall correctly, the share price was 5 marks.

It definitely wasn’t that cheap. The dividend was 1.60 marks too, except they cut it to 1.40 the very next year. I still haven’t forgiven them for that.

For the benefit of the chairman of the share buyback party, let it be known that share buybacks were unheard of in Finland back then, and furthermore, small dividend incomes were tax-exempt up to a certain limit. For that purpose, there was a dividend tax book where the paid dividends were recorded.

[xlat]

I started “proper” investing, i.e., monthly saving into the Odin Norden fund, in 1998. But even before that, there were very small investments made with summer job money. A few highlights from the 1990s:

Fixed-term deposit, 10.5% interest rate; back then, bank accounts offered real returns—though after inflation, it wasn’t such an enormous return. That was at Osuuspankki (OP), and I got a nice return even in a short time.

City of Tampere bond, 11.5% interest rate. A really good buy because, as the interest rate level fell, there was an increase in value in addition to the interest. At the time, I didn’t understand why the value increased, but I was certainly happy about it.

OP Pirkka investment fund. I bought it without even understanding what an investment fund was, just because the bank clerk advised me to buy it and it had performed well. I later got rid of this, but I kept one unit as a memento of my first fund investment. That unit is still there and has performed miserably due to high fees.

Participating in a public offering. I subscribed to one share of Kansallis-Osake-Pankki (KOP) in a rights issue, just with the thought that I would follow it over the years (at that time, I didn’t have much money). It ended poorly, as the banks were merged; you would have needed 3 KOP shares in the merger, and since I only had one, I received a cash settlement for it.

My first direct stock purchases: Rautaruukki and Kemira. These felt like traditional and safe companies; I held them for a while.

But the best part of the early 1990s was the banks’ amazing investment evenings. I especially remember an Osuuspankki evening; when stock prices had fallen significantly, disappointed investors were pampered with good food and generous alcohol offerings. I also attended events by Ålandsbanken, where the refreshments were also really good. At these investment evenings, they served proper food, and the crowd consisted mostly of older men.

Market crashes gave reason for all kinds of placation; one of the cleverest was the ODIN funds’ campaign, where they handed out large (and high-quality) ODIN umbrellas at investment fairs to protect against the autumn stock market storms.

The beginning of index investing in Finland. I read a publication online (!) about index investing and got very excited about it. The only problem was that there were no index funds in Finland. Like a gift from heaven, the management company Seligson & Co. was founded very soon after, offering a couple of index funds. That started a customer relationship that has lasted to this day. (There wasn’t much information available online at that time, but somehow that American book had ended up there, and I read it.)

All sorts of things have happened. One thing that was quite wild back in the early 90s was the marketing. Often, you would come across instances where they showed great returns and then gave the impression that this would continue in the future. I don’t remember if there was already a disclaimer that historical returns do not predict future performance, but it was certainly not emphasized, and they gave the impression quite boldly—both regarding funds and stock recommendations—that the returns would be good.

[Warren_Fyffet]

@vanha_Qfwfq

@Warren_Fyffet

From the 1980s, when SYP anti-shares

Well look at that, started with the same stock and in the same decade. With common shares, naturally, the makings of a corporate raider

@Warren_Fyffet

The share price was, from memory, 5 marks.

It certainly wasn’t that cheap. The dividend was 1.60 FIM, though they cut it to 1.40 the very next year. I still haven’t forgiven them.

For the chairman of the “share buyback party,” let it be known that share buybacks hadn’t even been heard of in Finland back then, and furthermore, small dividend incomes were tax-free up to a certain limit. For that purpose, there was a dividend tax book where paid dividends were recorded.

A quick Google search seemed to turn up this information:

1980 1 new share free of charge for every 5 old ones, 1 new for every 3 old at 22 FIM. It must be this. I wasn’t able to read properly and was confused by the discussion.

[Pohjolan_Eka]

@vanha_Qfwfq

For the chairman of the “buyback party”: let it be known that buybacks weren’t even heard of in Finland back then, and furthermore, small dividend incomes were tax-free up to a certain limit. For that purpose, there was a dividend tax book where the paid dividends were recorded.

They were certainly heard of, as the law explicitly stated it was illegal:

Share buybacks became legal at the end of the 90s, shortly before I started investing myself. Of course, I’ll admit that I didn’t encounter buybacks myself until the 2000s, as I initially spent my time chasing only the most important indicator, which was dividend yield.

[vanha_Qfwfq]

@Warren_Fyffet

1980 5 old for 1 new free of charge, 3 old for 1 new at 22 FIM.

I was only active the following year, once I had gotten a summer job. I don’t remember the price, but the receipts might still be around. You can’t just throw away receipts that recent, after all.

The most observant ones have already realized by now that banks organized share issues every other moment back then. And distributed dividends. So, in the spring, dividends were paid out, and in the summer or autumn, they collected the money back from the shareholders. Not the most rational behavior, but not everything was rational back then anyway.

The subscription process itself was easy and straightforward. You just went to the branch and queued for a moment at the counter where the subscription (and the purchase order for subscription rights) was handled. At that counter, you were handed an invoice, after which you queued at the teller to pay it. You returned to the first counter to show the receipt and received a temporary certificate. Which was then, sometime later, exchanged for the actual share certificates. SYP (Union Bank of Finland) was not exactly one of the most progressive banks.

@Pohjolan_Eka

We surely must have heard about it, since it was even written into the law that it was illegal:

Ouch. So I was just an ignorant brat. Nowadays, I am no longer a brat.

[In_Der_Esche]

@xlat

Participating in the national share issue. I subscribed for one Kansallis-Osake-Pankki share in the issue, just with the thought of tracking it over the years (I didn’t have money at the time). Things turned out poorly; the banks were merged, and you needed 3 KOP shares for the merger, but I only had one, so I received monetary compensation for it instead.

Share issues used to be better, and the names more festive. The accompanying advertisement and the brand “Centenary commemorative issue” might have caused some teeth-gritting, first among Finnish teachers and later among those who participated in the issue.

The price development in the graph has, of course, been upward-trending, and “a bank stock is always a safe and also a highly profitable investment.” I don’t know what FIVA (Financial Supervisory Authority) would say about that sentence today, let alone the use of the word “gift price” in different parts of the ad.

As a gem from the ad, one must pick out this far-sighted statement:

Kansallispankki is strong and ready for the challenges of the 90s.

Oh boy, oh boy…

[xlat]

Some more reminiscences, this time briefly about the turn of the millennium and fund investing:

Typically, at the end of the 1990s, funds still had large minimum investment requirements, which meant that small investors could not diversify in a sensible way. For example, the minimum investment for the legendary Gyllenberg Momentum fund was 30,000 Finnish marks, which was a significant amount of money. Although, in the 90s, it was quite possible to negotiate things, and that went for life in general, too. So, a phone call was enough for me to be able to invest a smaller amount into the fund.

Regardless, those minimum investment requirements were a major obstacle to sensible investing at the time; the selection of funds was limited anyway, and then those minimums excluded many small investors.

[VPKe]

It seems that minimum investment requirements for funds were indeed generally quite high. I also put my inheritance money directly into one fund, partly because of that minimum, but diversification hasn’t really been my cup of tea anyway. Just sowing the seeds and hoping for the best.

Back when I started, stocks also still had board lots (minimum trading units). At some point, they changed to a recommendation, meaning you could buy/sell smaller amounts, but whether the trade would actually go through was left to chance.

[vanha_Qfwfq]

@VPKe

Back when I started, stocks still had board lots. At some point, they changed to a recommendation, meaning you could buy/sell smaller amounts, but whether the trade would go through was in the hands of the gods.

You were always able to trade those small amounts. Their execution was just, as you said, in the hands of the gods. Especially if the order wasn’t placed at the market price, things could drag on. Brokers would collect them in a notebook and match them up at the end of the day.

Small amounts could also be combined into full board lots, which made the actual trade go through easily. For example, if a board lot was a thousand shares, you could make one up with, say, ten orders of a hundred shares.

And that, of course, could slow down the settlement of trades back when stocks were physical paper certificates. Small sales were always easy to bundle, but with bundled purchases, you might have had to split the share certificates (the number of shares contained in a stock certificate), which took time.