2022 Stock Pick Review: Nextdoor (KIND)
March 18, 2023 – by Per Christensson
"It's not timing the market, but time in the market that counts."
I've heard that old investment adage dozens of times, and while it sounds clever, it's flawed. When it comes to investing, both timing and duration matter.
Looking over my past PC.net stock picks, timing mattered. AMD, WDC, and FSLY all had healthy runs during the years I chose them, but their performance declined in subsequent years — especially 2022. Had I not sold some of my WDC and FSLY shares in 2020 and 2021, I would not have realized any gains. Even AMD, which held up better than the others, lost over 60% of its value last year.
Timing the market has two sides — buying and selling. Historically, I've timed my stock purchases better than my sales. But last January, when I chose Nextdoor (KIND) as my stock pick, it was a bad time to purchase the stock. KIND started 2022 at $7.89 and finished the year at $2.06 — a loss of 74%.
2022 was a rough year for most markets, with the Nasdaq Composite down more than 33%. But KIND's decline was worse than the average, and therefore my first unsuccessful stock pick.
But was it just bad timing? That remains to be seen. The Nextdoor management made several good decisions last year, and the company rolled out some excellent interface and advertising updates in recent months. Their user base is growing rapidly, and they have some of the best user engagement metrics of any social media platform. When the ad market turns around, I think Nextdoor's stock will too.
So that brings us back to timing. You can invest in a great company, but if you invest at the peak, your returns may be a fraction of what they would be if you invested at the trough. No matter what stock you buy, it's wise to spread your purchases over time, so you can buy more if the stock drops. If the price keeps increasing and you feel like you missed your chance, don't worry — there will always be other stocks to buy.
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