Your three worst moves lately?

[fenders53]

Humility is good, and learning from our mistakes makes us better investors long-term.  So what were your three biggest bonehead moves the past year or so?  I'll start of course.  As active as I am, there are surely more than three. 

1.  My infatuation with KHC has not been profitable.  Any fool can see it's a yield trap.  I took a beating on a couple hundred shares a year ago and finally bailed out.  Here I am am year later and own a couple hundred again.  Got assigned selling puts today, and I am down almost 10% before I even get started.  Not sure what to do but if I bail again this will be it for KHC.  Can I block their SP quotes of the internet lol?  

2. Sold covered calls on AAPL early 2019.  I left with a profit, but the lost opportunity was huge.  Would have been my best stock of 2019, or at least real close.  Not the only stock I hurt myself selling calls, but AAPL was the worst move by a wide margin. 

3.  Oil, pretty much anything I touched in oil was a real bad idea.  I constantly railed against the sector here and still got sucked into the dip more than a month too early.  I'm underweight, but it's still hurting my overall performance.  Dividends are not going to justify my decisions.  If it get's any worse the future dividends look shaky.   Even for the majors which I didn't think possible until recently.

[ChadR]

Well since this is over the past year, 2 of my bigger mistakes missed the cut. Selling covered calls on WM and BRK.B when I thought they were overvalued weren't smart moves. Like your AAPL, I missed out on some big gains.

1. Following XOM down. And I'm thinking of adding a few more shares since that yield is so high.

2. investing my daughter's small 529 account with an Edward Jones rep. Since he refers me clients, I felt that I had to invest something with him. This account is around $2k since the rest is a prepaid tuition account. Their fees are high and the mutual funds aren't that great. The things you do for client referrals. At least I don't have to invest my main accounts with him.

3. SKT. Yeah, I'm down over 13% on this one. Still think it's a good long term investment and will probably treat it like XOM and buy some more.

[stockguru]

(02-15-2020, 12:19 PM)ChadR Wrote: Well since this is over the past year, 2 of my bigger mistakes missed the cut.  Selling covered calls on WM and BRK.B when I thought they were overvalued weren't smart moves.  Like your AAPL, I missed out on some big gains.

1.  Following XOM down.  And I'm thinking of adding a few more shares since that yield is so high.

2.  investing my daughter's small 529 account with an Edward Jones rep.  Since he refers me clients, I felt that I had to invest something with him.  This account is around $2k since the rest is a prepaid tuition account.  Their fees are high and the mutual funds aren't that great.  The things you do for client referrals.  At least I don't have to invest my main accounts with him.

3.  SKT.  Yeah, I'm down over 13% on this one.  Still think it's a good long term investment and will probably treat it like XOM and buy some more.

Never invest with a broker like Edward Jones. They are ripoffs. You can do it yourself and could have easily opened up an Etrade for your daughter or another online brokerage account. With the no fees now it makes sense. 

As far as bad investments.. Only 2 come to mind

WBA Got in higher but have been averaging down. I think its very undervalued here and at some point will move to the upside.

Selling HD at $200 seems to have been a mistake lol. But at the time they has missed earnings and thought it would sell to buy back cheaper. Well that didn't work out to well. Lesson learned lol

Oil I'm only 2 names. And thats all I will ever hold. CVX and BP. At least I'm not down on those names due to the dividends.

[fenders53]

(02-15-2020, 12:46 PM)stockguru Wrote:

(02-15-2020, 12:19 PM)ChadR Wrote: Well since this is over the past year, 2 of my bigger mistakes missed the cut.  Selling covered calls on WM and BRK.B when I thought they were overvalued weren't smart moves.  Like your AAPL, I missed out on some big gains.

1.  Following XOM down.  And I'm thinking of adding a few more shares since that yield is so high.

2.  investing my daughter's small 529 account with an Edward Jones rep.  Since he refers me clients, I felt that I had to invest something with him.  This account is around $2k since the rest is a prepaid tuition account.  Their fees are high and the mutual funds aren't that great.  The things you do for client referrals.  At least I don't have to invest my main accounts with him.

3.  SKT.  Yeah, I'm down over 13% on this one.  Still think it's a good long term investment and will probably treat it like XOM and buy some more.

Never invest with a broker like Edward Jones. They are ripoffs. You can do it yourself and could have easily opened up an Etrade for your daughter or another online brokerage account. With the no fees now it makes sense. 

As far as bad investments.. Only 2 come to mind

WBA Got in higher but have been averaging down. I think its very undervalued here and at some point will move to the upside.

Selling HD at $200 seems to have been a mistake lol. But at the time they has missed earnings and thought it would sell to buy back cheaper. Well that didn't work out to well. Lesson learned lol

Oil I'm only 2 names. And thats all I will ever hold. CVX and BP. At least I'm not down on those names due to the dividends.

IMO WBA will figure it out.  Will it take too long? Yeah probably.  This isn't like KHC.  I'm stuck here just hoping.   

HD was and still is overvalued.  High debt and the 5% same store growth thesis is in trouble.  I'll share a little more on my HD thread soon.  You know I am full of opinions but they are based on 35 years of victories and defeats.  If you are going to move in or out of quality stocks based mostly on current valuation, you do it very gradually, whether you are entering or exiting.  It lessens the emotions of the day, and gives you a chance to react when the stock goes higher or lower than you ever dreamed.  When I don't follow this "rule" it almost always cost me money.  If I had to put a number on it, 75% of the time.  Successful fund managers do the same.  Due to size they are forced to move slow, and it benefits them as far as I can tell.

Oil sucks, but if I had to put all my oil money into two majors CVX and BP are contenders.  RDS would be the other.

A friend of mine is an Edward Jones REP. Most of us on this forum have forgotten more about investing than he may ever know. His pay is all about commissions. He's a salesman, not a qualified financial adviser. He won't get you killed, but his advice is less than amazing.

[NilesMike]

2 doozies for me, both MCD. 1st selling it in the 30s in the late 90s, because it just wasn't moving!
2nd, being too stupid to rebuy it at 13/14 in 2003.
That would have been the trade of a lifetime but alas, it's my miss of a lifetime

[ChadR]

Never invest with a broker like Edward Jones. They are ripoffs. You can do it yourself and could have easily opened up an Etrade for your daughter or another online brokerage account. With the no fees now it makes sense.

stockguru, the only reason I have the Edward Jones account is because he refers me clients. I felt I had to repay him, but I don't refer my clients to him for investment advice. I only gave him my smallest account. Given a choice, I would be investing her account on my own, but sometimes you don't have a choice. He's been pushing me to turn all my accounts over to him. Hell no, I gave him my smallest account to keep the peace and to keep the referrals coming.

[fenders53]

(02-15-2020, 03:11 PM)NilesMike Wrote: 2 doozies for me, both MCD. 1st selling it in the 30s in the late 90s, because it just wasn't moving!
2nd, being too stupid to rebuy it at 13/14 in 2003.
That would have been the trade of a lifetime but alas, it's my miss of a lifetime

That isn't exactly the last year or so, but you're doing well if that's your last big mistake Mike.    As I often mention here, my early days of actual analysis were in an investment club in the 90s.  Our buy criteria would make Buffet proud, and as exciting as watching paint dry.  Half those stocks are now Aristocrats and at least 5 baggers, another 25% of them might as well have went BK.  Even after two major market crashes the average annual return has to be well north of 10%, and yield on cost would be crazy high.  That's good enough to get wealthy over time.  Hindsight is 20/20, and you won't hear me say never ever sell an obvious dog, but if I had it to do over again I'd do what we still suggest, buy some quality, diversify, and wait for your chance to buy some more shares on the cheap.  That would serve you well stand alone.  That's always worked.  

While I am crying in my investment beer, the 90's were a special time and I regret that I had no idea what I was doing then.  The tech revolution brought some obvious winners, even if some of them faded.  AOL, AMZN, Ebay,CSCO,MSFT, most of the PC manufacturers.  You just had to control your greed, and have the good sense to start taking some off the table when you got a double in six months.  The problem is the mature investors I studied then had this "deer in the headlights" reaction to new tech high PEs.  They didn't understand tech, and why their dividend stocks were severely lagging.  They predicted the pending bubble pop of course, but they missed the ride.  I remember a first year AMZN earnings call.  Jeff Bezos shows up wearing boots and spurs.  Yeah that really happened.  I'm thinking "who is this arrogant clown?"  Yeah, the online book seller and future richest man in America.  The times were stupid for sure, but you could have bought a lot of these stocks five years after the meltdown.  It was fairly obvious who was here to stay.  I'll play the next crash the same way I played 2007-09.  Mistakes are OK as long as you learn.  That's really the whole point of this thread. If you can't think of a big mistake your lesson is probably coming some year soon.

[crimsonghost747]

Well, some of these are a bit older than a year but anyway.

1. WBA. Thought it was valued OK at $70 but they really can't get ANYTHING done right. They may very well recover, but it'll take years and several bad earnings reports before they do it. Luckily I managed to stay away from selling anywhere near the bottom and managed to ride it up quite nicely before selling everything. Still a substantial loss.

2. Not having more faith in AMAT. I love the company but it's volatile as hell. And luckily I am still long. I sold a pretty decent chunk (to lower risk) during the downturn in the fall of 2018 at around $40. Bought some of it back from the bottom around $32. Now that would be all nice and good but I bought back only less than half of the shares that I sold earlier. The de-risking plan worked but I would have been significantly better off just holding onto all of my shares. Now they are doing great and I'd love to have some more but the price is pretty steep at almost $67.

3. I can't really think of a 3rd horrible choice that I have made recently, so lets go with something that I didn't do.
AAPL, end of 2018/beginning of 2019.

Here are some facts: I hate Apple. I don't like the majority of their products, I think the intentional compatibility issues with anything non-apple is disgusting, I certainly don't like the fact that every single thing they sell is ridiculously overpriced. On top of this apple dislike, I really tend to stay away from big tech companies, I've seen way too many of the ridiculously big ones fail completely.

But we all knew it was ridiculously undervalued at that time. Should have bought some.

[fenders53]

(02-15-2020, 09:50 PM)crimsonghost747 Wrote: Well, some of these are a bit older than a year but anyway.

1. WBA. Thought it was valued OK at $70 but they really can't get ANYTHING done right. They may very well recover, but it'll take years and several bad earnings reports before they do it. Luckily I managed to stay away from selling anywhere near the bottom and managed to ride it up quite nicely before selling everything. Still a substantial loss.

2. Not having more faith in AMAT. I love the company but it's volatile as hell. And luckily I am still long. I sold a pretty decent chunk (to lower risk) during the downturn in the fall of 2018 at around $40. Bought some of it back from the bottom around $32. Now that would be all nice and good but I bought back only less than half of the shares that I sold earlier. The de-risking plan worked but I would have been significantly better off just holding onto all of my shares. Now they are doing great and I'd love to have some more but the price is pretty steep at almost $67.

3. I can't really think of a 3rd horrible choice that I have made recently, so lets go with something that I didn't do.
AAPL, end of 2018/beginning of 2019.

Here are some facts: I hate Apple. I don't like the majority of their products, I think the intentional compatibility issues with anything non-apple is disgusting, I certainly don't like the fact that every single thing they sell is ridiculously overpriced. On top of this apple dislike, I really tend to stay away from big tech companies, I've seen way too many of the ridiculously big ones fail completely.

But we all knew it was ridiculously undervalued at that time. Should have bought some.

I doubt anyone has a sadder AAPL story than mine.  I was definitely following it in the 1990s.  Considered a buy when it was around $14.    Now of course there was at least one 7-1 split in there.  I didn't like AAPL for the same reasons you just cited.  Nobody likes a moat, unless you own the moat lol.  It was a different time though.  MSFT and INTC were winning the PC war, and smart phones didn't exist.

I agree on big tech.  It gives the appearance of no brainer, but the current kings usually fall. The vast majority at least return to mediocrity, and you better not be sitting on a position you purchased at high valuation or you might wait 20 years to get back to even.  Cheeseburgers, Mickey Mouse and dish washing soap moats seem to endure the decades better for us DGI investors.

[rayray]

I don't know--been buying XOM, WMB, GILD, CSCO, GM, and VTR within the last year.

XOM has been a loser

GILD hasn't gone nowhere as well as WMB maybe some of the others too. But I like buying beaten down stocks--will be adding to RDS.b in the near not to far future.

I like big oil stocks a lot--particularly XOM, CVX, RDS.b and BP

only own XOM and RDS.b though

I can't complain...I'm up 245k plus with 42k in dividends that included some forced capital gains due to CELG and OAK buyouts

sold nothing during 2019--only bought

yes...bought WBA--can't win with this one either...maybe some small investments in others that I can't remember but nothing significant

[Otter]

If we are looking at long term capital losses (on paper, at least), BUD (purchased just before the dividend cut), F, and SKT have all been real dogs in my portfolio.

[fenders53]

(02-18-2020, 12:04 PM)Otter Wrote: If we are looking at long term capital losses (on paper, at least), BUD (purchased just before the dividend cut), F, and SKT have all been real dogs in my portfolio.

We are talking about at anything you care to share Otter.  You know I'm a social butterfly right?  The actual purpose is to start a useful conversation though.  If you invest for 40 years you are going to make some mistakes.  If you repeat them too often you should be in index funds.  Nobody wants to hear that including myself.  Might sound like I enjoy beating myself up but that's not really so.  I learned a hard lesson during the tech bubble and have never repeated that error because it was devasting and it's a wonder I didn't just give up on equities.      

These days yield traps are my weakness.  I don't think I am alone here.  I do it over and over.  There is investing for the longterm, and there is just not heeding the obvious warnings.  (ignoring debt, or worse yet ignoring the fact the old thesis is very wounded and it might be forever)  I can't count how many falling knives I've tried to catch.  Sometimes I catch myself living in the past.  The stock is half price so it has to be a good deal.  I believe this is the biggest pitfall for value and/or DGI investors.  But I can head on over to S.A. anytime for reinforcement of my wishful thinking.  

Big oil is a recent example.  Is oil completely dead? No of course not.  Is there any end in sight to the oversupply problem with OPEC-Russia trying to control production, and numerous big oil producing countries off the market due to sanctions?  No shortage of authors pretending like the market is just stupid and oil will rise 50% any day now.  It's just delusional.  Similar story with SKT cheerleading authors pretending like the companies struggles aren't obvious.  After a couple years the market probably isn't wrong.  I sold my SKT long ago before it halved yet again.  The Div wasn't ever going to justify my bad entry.