On 3/19/08 I first bought 45 shares of Visa (V) with a market order the day after its IPO at 58.45 per share.  I'd been watching the build up to the IPO and decided with confidence it would be a good buy for the following reasons:  1) V is the largest in its field with only MasterCard (MA)as a distant second;  2) Since MA's IPO the price of its stock has virtually only gone up;  3) V doesn't loan money so it's not vulnerable to the current credit crises;  4) V's profits should go up as people rely more on credit during economic downturns.  The one question in my mind is how fast would V go up?

On 5/8/08 this question was answered as my V shares had increased in value by 51%.  Given this rapid growth and given that the above reasons still held true I added to my holdings another 70 shares with a market order at 89.37 each.  This is where I paid for my most recent lesson in investing.  I shouldn't have used a market order.

New to the wonders of seeing my money grow so rapidly I was feeling excited when I placed the order.  I thought the little I might save by using a limit order may cost me if the price kept climbing.  As it turned out I chased the stock and paid a premium.  One I didn't need to pay as V began a general 15 day decline. 

Fortunately my mistake may have only a short term affect as V is again approaching the amount I last paid.  A small problem is that I now know I paid V's highest value which is the "resistance" point.  I expect V will bump around 89.37 for a time, but will reach a new high soon.   

The lesson I've learned is to allow my analysis and strategy to motivate moves rather than the thrill that comes with success.  That's not to say I won't use market orders again.  But before I do I want to see how it fits into my strategy for that stock and not just jump on for the thrill ride.   Granted I didn't pay very much for this lesson, so I look at it as a bargain.  I want to enjoy the thrills of success, but invest with a strategy that respects the dangers of market.

I think V continues to be a good long term investment.  I expect it to track along with MA to continuing new highs.  Over the next two years, even if it does half as well MA, it will still have a return over 300%.

Mark Gilley