Follow Up: Dow Jones Drops 513

When I last wrote about the precipitous drop of the U.S. stock market, it turned out to be the beginning (not the end) of some ridiculous movements. The Dow Jones industrial average dropped 513 points on the day I wrote, which was followed by another drop the following day, then another, then a huge rebound, then another drop before finishing with a rebound. The net change from August 4th to today is actually very minor: less than 100 points. But as I noted before, the movements in-between offered a "golden opportunity".

The question on your mind is, what did I end up doing? For starters, I invested in most of the companies I had expressed interest in before: Pepco, Nokia, and Clearwire. I would have brought more of others, such as Ford and Morgan Stanley, but ran out of capital. My investment was pretty evenly split between the 3 companies I ended up buying stock in -- despite very different number of shares based on their share prices. Here is the breakdown:

• 1215 shares of Clearwire @ $1.42-1.78-- I ended up buying more than anticipated because it kept falling. The buy-in was made in 3 different stages, coming to an average price of $1.73 per share.
• 315 shares of Nokia @ $4.89 -- I brought less of Nokia than expected, due to the optimism on Clearwire and the realization that I wanted some stability in this capital influx. That so-called stability is in...
• 200 shares of Pepco @ $17.64 -- I always wanted to own Pepco for their high-yet-constant dividends. When its price fell to below $18, I made a move to buy more than the originally-planned 150 shares.

As of today, I am up about 14% on this investment. It's nothing breathtaking but I'm happy with the results thus far. I have actually sold 200 shares of Nokia yesterday due to its price jump -- the goal is to buy back more eventually, when the price goes back down.

UPDATE 08-19-2011

Stock price of Clearwire jumped 30% this morning on rumors that Sprint is seeking to buy out the rest of investors (e.g. Comcast) in the company. Not sure why on earth Sprint would want to do that, but I'm happy at the news since it means the stock price has doubled since my purchase. This article also makes a compelling argument to buy even more in the company. I'm thinking about it. Nonetheless, I do not think Clearwire is something to be invested in the long-term of more than a year. The industry is simple changing too fast.