It was the 90’s when I first got involved in the stock market via an IPO of the Commonwealth Bank by the federal government. Until that point, nobody I knew had any involvement in shares so there was nobody to guide me through the pitfalls of this class of investment.
Naturally I read books, which were a great help, but there’s nothing like discussing ideas with someone else, which is one of the reasons we are lucky today because we have various options to do this via the Internet.
Recently I was reflecting back on the mistakes I’ve made over the journey and it occurred to me that I’d made just about all the mistakes there is to make. Part of the reason for this is that I can be impulsive at times, particularly so when I was in my 20’s and 30’s.
During that time I tended to think of myself as an investor without realizing I had the mindset more like a trader. Looking back through my trading history there was one big mistake that I’d made repeatedly – selling too early.
The screenshot added below combined with a look at today’s CSL share price highlights in shocking detail why this is a problem.
At the time I was probably feeling happy with myself given that I’d done a lot of work looking into CSL and I’d made several thousand dollars in the few months I’d held the shares. Nothing had changed within the company, I was just happy to take the healthy profit.
It’d be great if this was the only time I’d sold a solid company way too early but it’s not, it’s occurred many times. This mistake also gets a mention in Christopher Mayer’s wonderful book, 100 Baggers. If you haven’t read the book, you should. It’ll make you a better investor. There is a free online version here: http://csinvesting.org/wp-content/uploads/2017/05/100Baggers.pdf
In the coming months I’ll add some more of my investing mistakes but it would be great if others shared some of what they have learned during their time investing. The blog is here for anyone that wants to share their ideas, knowledge or experiences with others. If you’d like to make a post, email me and I’ll get you set up.
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