The following is a post about real investing mistakes I’ve made. It is my own opinions on investing. You are responsible for your own investment and financial decisions. This post is not investment advice or a recommendation to purchase any particular security. This post may contain affiliate links. You can read my disclosure/about page for more information.
Since I’ve been out of my twenties, I’ve been noticing myself reflecting a lot more about my past.
What’s strange is that your past doesn’t seem that far off while you’re in your twenties. But the moment you crossover into your thirties, it starts to hit you that your past happened decades ago.
Summer tends to make me think about having time off to enjoy the weather with friends. After that moment passes and reality sets in, though, it’s alarmingly apparent how much has changed.
On the other hand, the same type of reflection occurs with investing once you build up enough experience. Now that I’ve built up experience with investing over the past 6 years, I’ve been able to develop the proper investment strategy to fit my goals.
Though, I haven’t experienced a catastrophic market correction on the level of 2008 or 1929, if a market correction did occur, my intention would be to buy as much high quality dividend paying stocks as I could afford.
Market corrections are often how Intelligent Investors are able to create enormous wealth.
However, even the best investors of all time don’t hit 10 for 10 on their selections.
Though I’ve made many mistakes with investing, I’ve actually done quite well with my individual investment selections overall.
With the exception of my positions in Walmart and IBM, I’ve made money on pretty much every single long term equity I’ve ever purchased.
But, I’ve also made a few investment mistakes that literally cost me thousands of dollars.
Here are the 5 biggest investment mistakes that come to mind:My 5 worst investing mistakes, EVER #SMH #investing #blogging Click To Tweet
Selling Corning (GLW)
Corning Incorporated is engaged in manufacturing glass and ceramics. More specifically, it produces display technologies for electronics.
I originally purchased approximately $2,000 worth of GLW shares in 2011 at $13.80 per share.
The reason for my purchase was based on the company profiting longterm off their cellphone display segment.
In addition, I made the purchase based 100% on the rules recommended by Ben Graham in The Intelligent Investor. I thought the company was grossly undervalued. In fact, I found it through a stock screener while searching for undervalued equities.
With that said, I ended up selling the stock at a loss (between $11 to $12 per share) in early 2012. I sold it because I didn’t think I knew enough about the business and because it was a lower dividend (around 2%).
Nowadays, Corning Incorporated is trading at $27.88 per share #SMH! My evaluation was completely right, and the company has doubled its value while paying dividends along the way #SMH! 🤦♂️
Trading before the Crude oil inventory report was released
For the readers that don’t know, I took a year off to have more time, to day-trade and blog.
During my day-trading stint from March 2016 to July 2016, I had a few successful trades and even went on a few impressive winning streaks.
But I also made some major mistakes. Fortunately, none of them were life altering because I used stop limits and proportionate amounts of money to trade with.
But I also saw good chunks of money disappear in seconds.
The worst time this ever occurred was on Wednesday April 27, 2016. As I wrote in my post covering it
“On Wednesday, I got smoked out of the market with my worst trade to date.”
Since I made a similar, successful trade the prior Wednesday, my plan for the trading day was to attempt to predict the direction of crude before the inventory report was released.
My trading plan for that day was to wake up early, read all the early crude oil reports, analyze volume and U.S. dollar, and pick a direction before the inventory report was released.
Here’s how the trade went down:
I bought 200 shares of UWTI at $29.98 for $6,006.03 in anticipation that the inventory report would push oil higher for the day.
I was wrong and the price of oil dropped sharply. In fact, it dropped through my stop limit so fast it didn’t sell. Based on my strategy at the time, I got out immediately at the best available price. I sold 200 shares of UWTI at $28.06 giving me a final amount of $5,612.02. I lost $394.01 in matter of minutes SMH! 🤦♂️
Selling Apple shares, EVER
Since I worked in retail selling iPhones at the time, I originally purchased AAPL shares in 2011 around $375 per share, pre-split.
The stock continued to rise up to $700 before coming back down for a while. I sold some shares at around $680 for a very nice return.
Again before the split, the shares bounced around from approximately $418 to $460 for a while. I bought a couple times at $420 and $428—I later sold them around $456 and $460 for decent profits again.
Since then, the shares rose to nearly $800 as talk of the company becoming the first trillion dollar market capped company surrounded them. Furthermore, the company announced a dividend payment and 7 for 1 stock split.
If I remember correctly, the price of the stock was just under $100 post-split, now it’s on the rise again—it’s priced at $157.50 as of last Friday, post-split.
To be honest, I’ve even made the same mistake post-split! With the cash AAPL has on their balance sheet, dividend policy, brand name and how good they’ve been to shareholders—I will never sell an AAPL share again SMH! 🤦♂️
Holding off or not investing into an employer share program
I worked for two big Canadian companies prior to the company I work at now. I’m not going to mention them by name, but they’re both publicly listed equities that offer stock sharing plans.
I spent nearly 2 years employed by one of them and didn’t participate in their share plan at all.
Furthermore, I spent nearly 4 years at the second company but didn’t start participating in their stock sharing plan until my last year there.
By not participating, not only did I end up missing out on investing thousands of dollars into a quality dividend stock, I didn’t even get to keep their matching contributions when I resigned SMH! The shares have to be vested in order to be released—company matched shares are usually locked in for a certain number of years to encourage employees to stay with the company.
Nevertheless, not enrolling into employer share plans can cause you to miss out on thousands of dollars #SMH! 🤦♂️
Selling Shoppers Drug Mart (SC) before Loblaws purchased them
Again, I completed a Ben Graham style analysis and Shoppers Drug Mart kept back in early 2013.
Over and over, it kept coming up as a great value stock to buy.
I bought it around the start of 2013 close to the time that Drakes “Started from the bottom” came out. The music video for Drakes song was shot in a Shoppers Drug Mart—everything seemed to fit.
I liked the store as a customer, and I anticipated that the business would grow with the aging baby boomer demographic in need of pharmacy products and services.
With that said, I purchased roughly $2,500 worth at around $41 per share (not exact numbers). After becoming worried that larger competitors like Walmart and Amazon would eat into their business, I sold around the middle of 2013.
Though I sold for roughly $44 per share, which earned me a small profit, an announcement was made within a short period of time stating: Lobalws was acquiring Shoppers Drug Mart for 12.4 billion SMH!
The following is a quote from the above linked article:
“Shoppers shareholders will be able to choose either $61.54 in cash or 1.29417 Loblaw shares, plus one cent in cash for each Shoppers Drug Mart share held, on a pro rationed basis.”
$61.54 per share!—SMH! 🤦♂️
Conclusion | Errors of omission
Though I’m probably missing a few other investing mistakes, those are the biggest ones that come to mind.
Besides what’s mentioned above, I can only think about the errors of omission I’ve made.
Frankly, I go on to name a lot of stocks that I should’ve bought. Stocks that I should’ve trusted my analysis on and taken on the risk on. However, for whatever reason, I either purchased another equity or missed the opportunity.
In conclusion, mistakes, slippages and failures help you become better equipped to deal with the future the next time a difficult time comes around.
Once you learn how to listen to your intuition, it becomes much easier to tell the difference between something that is good and something that is not.
Questions for the readers: Have you made any big investment mistakes? Were you able to learn from your mistakes?