“A life spent making mistakes is not only more honorable but more useful than a life spent doing nothing.”
~ George Bernard Shaw
A wise man once said that a person who doesn’t make any mistakes in stock market investing is someone who has never bought a stock.
For most of us investors, however, we are left with a lot of regrets come year end…
- I should have bought this stock a few months ago!
- I should have sold this stock a few months ago!
- Why did I sell this stock!
- Why didn’t I buy that stock!
- I made so many mistakes this year!
Needless to say, mistakes lead to resentments, resentments make you miserable, and being miserable is always painful.
When I look back at my mistakes this year, I see one that was really up there.
That mistake was of, well, following Ben Graham’s advice of selling a stock for 50% gains or in 2-3 years, whichever is earlier.
While I have held on to some stocks for 4-5 years now, one stock that really tested my patience was Swaraj Engines, which I had bought in September 2010 at around Rs 405.
After 2.5 years of holding it, I sold it in March 2013 at almost my buying price. Here is how the stock did during the period I held it…:-(
Here is how it did ever since I sold it in March 2013…:-(
Of course, we all suffer from an ailment called “Hindsight 20-20” when things look clearer after they have happened. But then that’s the way you realize you made a mistake that must not be repeated and that must instead serve a lesson not to be forgotten.
For me, the lesson here is that I must be more patient with good, simple, and clean businesses.
First, there are few such businesses available out there. Two, if I can get hold on to one of them, and the underlying business continues to do well and without any negative surprises, I must have the patience to stick with it.
“Be extremely patient with businesses with sound underlying economics” is something I have marked in bold letters in my investing journal.
What about you? Which is the biggest investing mistake you made in 2013?
I know it would be a tough decision to choose just one of your mistakes as the biggest of 2013. I mean, like me, there would just so many, right? 🙂
But please share the biggest investing mistake you made in 2013 in the Comments section so that other tribesmen may take some valuable lessons from it.