Editor’s note: This article was first published in November 2013; the Herborium share price, the shares’ value of 45 dollars (32 euros), the 100-euro commission and the 6-euro custody fee charged every six months are figures from that time.
As some investors will know, doubts sometimes arise about whether to sell or hold our shares. With my Herborium shares in particular, I don’t have that problem, because I have no choice but to keep them: if I sold them, I would have to pay on top.
It’s comical, but that’s how it is. Last year I bought 300,000 shares of this “penny” company on OTC Markets as a speculative bet, accepting the extreme risk that comes with this kind of company, although the amount was small. The shares quadrupled in value and I decided to sell half of them (150,000 shares). Right now I have 150,000 Herborium shares at 0.0003 dollars each, which comes to 45 dollars (32 euros at the current exchange rate).
Selling them costs me 100 euros in commission (because of the market they trade on). In other words, if I decided to sell them, I would pocket a “profit” of minus 68 euros. Obviously I’m not planning to sell them, although on the other hand they ended up in a separate account where I’m charged a 6-euro custody fee every six months for those shares.
The other day someone asked me whether to invest in this company, and I replied that sometimes I check whether it is still open, because since I bought those shares you hardly hear anything about it. In fact, they don’t even post on their Twitter :-). Sometimes I wonder whether they have already closed or are still in business.
Or who knows, maybe one day those 150,000 shares will pay for my retirement when the company becomes a huge sales success.
See also: Probably the mother of all stock market investing mistakes
See also: Why Warren Buffett doesn’t like investing in commodity companies either
Featured image: cweyant from Syracuse, United States, CC0 1.0, via Wikimedia Commons.
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