I want to tell you a story about a watch. Many years ago my mother passed away unexpectedly. Dad had died a few years prior and so in my late 30’s I found myself without parents and quite frankly, I felt kind of lost in many ways. As my siblings and I cleaned out my mother’s house getting it ready to be sold, we were each looking for some token or memento that we might keep. In a dresser drawer we found an old box where mom was keeping a few things of my dad. In the box were two watches.
Both watches were in very poor repair. My brother and I knew nothing about watches and he simply took one and I took the other. My brother’s watch was an Omega. I had heard of those before, primarily due to an ad campaign where James Bond disclosed that his watch of choice was an Omega. The one I had taken was a Jaeger LeCoultre similar to the one in the picture on the left.
The watch had a band that didn’t clasp correctly and the face of the watch was scratched. One of the knobs on the right of the watch didn’t seem to match. The watch wouldn’t wind and the hands didn’t move. I took the watch to a repair shop in the mall and after spending $130 found that I had a now cleaner looking watch that still didn’t run well and couldn’t be relied upon.
After doing a little bit of research, I found that there was a place in France that restored Jaeger LeCoultre watches but you had to send the watch to them to be inspected. I decided to do that and in about 60 days received the watch back with an estimate to repair and restore of $2,200. I never dreamed that it would be that much and couldn’t understand why anyone in their right mind would spend that kind of money on a watch. So….in a moment of foolish frustration – I threw it away. I saw no reason to have a broken memento that reminded me of nothing.
Have you ever had one of those moments that you wish you could unwind? That would be one of them for me. I learned later that dad had purchased that watch as a investment while he was serving in the army in Germany. You see the watch on the right hand side of the picture? Same watch as dad’s. A Jaeger LeCoultre Memovox Alarm. 17 jewel (rubies), gold plated, including the band. The watch in the picture is listed at $13,500. The gold band that didn’t clasp? Just the band alone was worth $800 in its broken form because of the gold. And…I….threw it away.
How does all of this relate to finance and investment? Be careful what you throw away. We’ve just gone through and are still going through one of the largest economic downturns in history. Unprecedented. In this uncertain time, be very careful not to throw away what you have because you can’t see the value it holds today. Had the people of the great depression in 1929 held on to what they had for just three years, nearly half of the value lost would have been recovered. Be really thoughtful and patient with your portfolio. Sell only what you have to have. You haven’t lost anything until you sell it. Let the rest rebound. Don’t throw something away today just because you can’t see the value it has tomorrow.
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