Regrets in Investing: Lessons Learned from Missed Opportunities and Bad Decisions
Introduction
Every investor has experienced regret over missed opportunities or poor decisions. In this piece, I will share my reflections on missed investments and bad trades, offering valuable insights that can help you make more informed decisions. From holding onto a gas and oil company too long to selling Apple shares too soon, these experiences highlight the importance of staying disciplined and adhering to investment principles.
Missed Opportunities Due to Lack of Courage
One of the most significant regrets I have is not investing more in Berkshire Hathaway (BRK.A) in 2020. Our initial buying program was ambitious, and we planned to purchase a substantial amount. However, halfway through, we lost our confidence and only bought half the intended quantity. This decision led to missing out on doubling our initial investment in about 20 months plus additional dividends.
Looking back, had we stuck to our plan and bought more Berkshire Hathaway, we could have achieved even better returns. This experience underscores the importance of maintaining courage and discipline during investment opportunities, especially when faced with market volatility.
Unconventional Holding in a Downturn
Another example of a missed opportunity came in 2008 when I purchased General Motors (GM) stock just as the market was crashing. Despite the company declaring bankruptcy, the investment was not a complete loss due to dividends. However, I still feel a twinge of regret for not recognizing the warning signs earlier and selling the stock before it was too late.
Bad Decisions and Losses
On the downside, there were stocks that turned sour, like certain oil companies and Briggs and Stratton. I held onto these for too long, despite seeing the warning signs. The bankruptcy announcement brought an end to my investment, resulting in a significant capital loss of $12,000.
Another regret involves selling Apple shares too quickly. I bought 100 shares at $11 and sold them 6 weeks later at $20, missing the opportunity to capitalize on a potential uptrend. If I had held onto the shares, the value would have multiplied several times over, resulting in a current value of about a million dollars.
Federated Property Casualty (FPVD): An Innovative Investment
An interesting case comes from my experience with Federated Property Casualty (FPVD) shares. My son talked me into buying shares in a body camera company, and together we acquired 500,000 shares for a modest investment of $1,400. Unfortunately, the company defaulted on a $186,000 loan, triggering a decline in share value to a mere 6 cents. However, the company later merged its assets and changed its name, with the stock value bouncing back to around 30,000 cents. Had I held onto these shares, I would have recovered not only my initial investment but also significantly more.
These stories highlight the importance of staying abreast of market trends, listening to mentors, and making informed decisions. While some of these investments were mistakes, they also taught valuable lessons about greed, patience, and the consequences of loss.
Conclusion
Investing is a journey filled with both successes and regrets. By analyzing our mistakes and learning from them, we can avoid repeating the same errors. Whether it's carefully considering missed opportunities or making tough selling decisions, the key is to stay informed and disciplined.