My BIGGEST investing mistake…in hindsight

ChartOfTheDay_870_Facebook_s_user_growth_since_2004_n

As I have said many times, and will continue to say many times in the future… we all make investing mistakes. None of us are perfect and, if we had a crystal ball, we would all be multi-millionaires.

About 6 years ago, I owned 100 shares of Facebook. At the time it was trading for around $18 a share. In a short amount of time, it went up to the low $20’s, and I sold my shares. The company had just IPO’d that year and was having a rough get-go. Their shares plummeted after their IPO of around $30 per share. So, I thought my few hundred dollar gain was nice, and I took it.

Needless to say, Facebook is now trading in the mid $170’s. They closed Friday’s trading session at $174.64. Do you know what my profit would have been, had I kept those 100 shares for the long-term? I’ll tell you… Over $15,000. That’s not even it, I still believe that Facebook is extremely undervalued right now. In hindsight, I would have held those shares indefinitely, with no plans to sell them even now.

I was a very new investor 6 years ago, still trying to nail down my strategy, and still letting my emotions determine my trades. I realized about a year later that I made a mistake, as Facebook started to rise, and there seemed to be no end in sight for them. I learned a valuable lesson about value investing – IT WORKS!

Value investing takes time, it takes effort, and it takes a lot of patience. You have to ignore the normal ebb and flow of the markets, and focus on the prize at the end. The markets will go up, and the will go down, but if you stick to your strategy, and trust your research, in the end you should come out ahead. I did not understand that yet when I sold my Facebook shares for a few hundred dollars. Now I understand it.

I still make mistakes, and will probably continue to do so. Even the great Warren Buffett makes mistakes; it’s part of life. But don’t get discouraged from your mistakes; learn from them and do better next time.



Categories: Investing

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