“By three methods may we learn wisdom: First, by reflection, which is noblest; Second by imitation, which is easier;
and Third by experience with is the bitterest.” –Confucius
Around 1993, my 10-year-old son Patrick suggested, “Dad, I think you should buy some APPLE stock.” Patrick used APPLE computers at school and loved the design. In one of the those moments you’d like to have back, I ignored Patrick’s advice. APPLE stock at the time was just about a dollar per share and I could have easily bought a 1000 shares. Now, APPLE is a trillion dollar company and I could have had a couple more zeros to the right of my Net Worth number. I made a mistake…a Big Mistake.
Reading Michael Batnick’s Big Mistakes: The Best Investors and Their Worst Investments made me feel better because these investment geniuses also committed blunders. Warren Buffett bought Dexter Shoes (remember them?). He could have paid cash, but instead he paid for the company in Berkshire Hathaway stock. Dexter Shoes went bankrupt and those shares of Berkshire Hathaway would be worth $6 billion dollars today. Jack Bogle, who invented the Index Fund (a fund that mirrors the DOW, the NASDAQ, or the S&P 500)–a vast improvement over investing in Mutual Funds–lost millions with the first company he ran. John Maynard Keynes, the brilliant British economist, lost most of his money when the Stock Market crashed in 1929. All of these investors later went on to succeed in the Stock Market, but they all have scars from their failures…like I do. Have you made any Big Mistakes? GRADE: A-
TABLE OF CONTENTS:
Preface
Acknowledgments
Chapter 1: Benjamin Graham
There Are No Iron-Clad Laws
Chapter 2:Jesse Livermore
Manage Your Risk
Chapter 3: Mark Twain
Don’t Get Attached
Chapter 4: John Meriwether
Genius’s Limits
Chapter 5: Jack Bogle
Find What Works for You
Chapter 6: Michael Steinhardt
Stay in Your Lane
Chapter 7: Jerry Tsai
You’re Not As Smart As You Think
Chapter 8: Warren Buffett
Beware of Overconfidence
Chapter 9: Bill Ackman
Get Off Your Soapbox
Chapter 10: Stanley Druckenmiller
Hard Lessons Can Be Necessary
Chapter 11: Sequoia
The Risks of Concentrated Investing
Chapter 12: John Maynard Keynes
The Most Addictive Game
Chapter 13: John Paulson
You Only Need to Win Once
Chapter 14: Charlie Munger
Handling Big Losses
Chapter 15: Chris Sacca
Dealing With Regret
Chapter 16: Michael Batnick
Looking In the Mirror
About the Author
Index
I’m still waiting for my stock in Amish Video Games to take off.
Dan, I think that ship has sailed!
Our mistake was investing (not a lot, but we didn’t have that much then) some money with my stockbroker aunt in the 80s. When everyone else was making a fortune (before the crash), she managed to barely break even. I could have done better throwing a dart at the stock listings in the newspaper!
Jeff, that was a time before Index Funds became popular. I’ve never been into Real Estate investing but several of my friends have made Big Bucks investing in that sector of the Market.
On the other hand, when Jackie was a kid, the father of one of her friends made a huge killing by buying Polaroid. They moved to Scarsdale.
So, you would have been rich as Scrooge McDuck instead of Donald Trump. No biggie!
Jeff, Luck is a big factor in investing. Timing is everything!
I also wanted to buy some Apple stock (5k worth) but my investment pro said he didn’t think there was adequate asset to profit potential, or some such, nd suggested against it. This would have been in 1990. The guy has done great on other things, but he goofed on that one.
Rick, APPLE was close to bankruptcy during the early 1990s. That’s why I didn’t follow Patrick’s recommendation to buy APPLE stock. APPLE was actually 90 days from going under when APPLE rehired Steve Jobs. Steve Jobs saved the company and set it on the path its benefiting from today.
A friend of mine’s brother in law was one of the early apple guys. He shows up in one of the films about Jobs, the guy who paid for Job’s daughter to go to college. I don’t know if my friend invested there or not, but I suspect he did (when he died his net worth was $3 million, not counting his house.)
Maggie, APPLE stock created a lot of millionaires!
I went with the sure winners: PhotoMat, Blockbuster Video, and Woolworth’s!
Bob, I’m glad you didn’t buy ENRON!