Have you ever experienced a spiffy-pop?
If you don’t know what I’m talking about, chances are you haven’t. I’m not talking about big secrets or confusing ideas here. A spiffy-pop is simply what happens when a stock you own sees its share price increase so much in a single day that it exceeds your original buy-in price. The term is so popular around here that The Motley Fool’s co-founder and CEO, David Gardner, has baked spiffy-pop into his user name.
Let me show you a handful of stocks in my own portfolio that deliver spiffy-pops fairly often. Along the way, I’ll explain how you can set your own investments up to generate lots of spiffy-pops over the years.
The magic of spiffy-pops
The spiffy-pop concept is closely tied to the core Foolish investing concept of long-term investing. The basic idea is to buy shares of great companies while the stock prices are low. Then, leave these positions untouched while the company grows over many years.
Here are some of the most effective spiffy-poppers in my personal investment portfolio:
Let’s break these numbers down a bit.
Every time media-streaming veteran Netflix gains more than $12 in a single day, it’s a spiffy-pop for me. The shares in my portfolio today were added during the Qwikster panic in 2011, adjusted for the seven-for-one stock split of 2015. It doesn’t take much of a move to achieve this feat anymore — I can record a spiffy-pop on every move of at least 2.3%. David Gardner prefers to stop counting after the 13th spiffy-pop for each stock. The “forget-me-pop” for Netflix happened many years ago for me, and it’s not all that exciting to see another pop on a fairly small and completely ordinary move.
The same is true for organic light-emitting diode (OLED) expert Universal Display, which I originally bought for a song in 2006. However, Universal Display experienced a turbulent market in 2020; smartphone sales crashed, but OLED television sets found a larger audience. This company just didn’t have as much good news to celebrate this year as Netflix did. 2021 may very well be different.
Electric vehicle giant Tesla is a newer addition to my portfolio, joining the party in 2014. This company has become a volatile firestorm in recent years, and the share price fell by more than my original purchase price has fallen more often than it has risen. Even so, Tesla has delivered an eye-popping return of 690% in 2020. I expect the spiffy-pops to multiply over the next few years.
The big, juicy takeaway
I also included online advertising technology specialist The Trade Desk in this list, even though I bought my first shares of this company just a few months ago. I bought the stock at a massive discount near the market bottom in March, only to collect my first spiffy-pop when The Trade Desk delivered a fantastic earnings report six months later.
Holding great companies for many years is the most reliable way to rack up lots and lots of spiffy-pops. The Trade Desk isn’t leaving my portfolio anytime soon, and I expect to add a few more spiffy-pop readings for this ticker over many years. For now, it’s just off to an uncommonly impressive start. The real secret to successful investing still lies in buying and holding for the long term. Spiffy-pops are just fun ways to keep tabs on your results.