Financial Jungle

I’ve failed over and over and over again in my life and that is why I succeed.

Michael Jordan says it well. Shouldn’t we celebrate and honour our failures as if they’re stars on our shoulders? Even the best basketball player in the world couldn’t make a cut for his high school basketball team, so why should we expect perfection in investing? In fact, the stock market is a place that rewards players who expect failures, because they understand the law of taking a step back and springing two steps forward.

I have this odd habit of observing how investors with different experiences interact in the forums. One consistency and irony I find is that seasoned investors tend to reveal their mistakes more openly, while know-it-all amateurs tend to be more egotistic. Perhaps it’s simply human nature to seek social acceptance by putting their best foot forward — even when neither feet is modeling material. On the other hand, mature investors see every failure as an opportunity to turn over a new leaf. By regularly acknowledging mistakes, these investors become receptive to constructive criticisms from themselves and others, and leave the door opened for further touch-ups to their investment philosophies.

“Sometimes it is better to lose and do the right thing than to win and do the wrong thing.”- Tony Blair

Now that they have inspired me, I’ll reveal my wall of shame!

DoubleClick - Bought $91, sold $76 one month later.
Cisco - Bought $104, sold $73 nine months later.
Knight/Trimark - Bought $57, sold $35 four months later.
AboveNet - Bought $55, sold $39 two months later.

The worst blunders?

Conexant Systems - Bought $163. Still holding it at $1.36.
AirIQ - Bought $28. Still holding it at $0.15.

The lessons I learned? Always invest for the long-term, analyze the financial statements and think independently from the others — but it’s okay compare notes with experienced investors whom you respect.

ps. If you don’t have a role model, I recommend you frequent the Financial Webrings investment forum.

ps2. I have more blunders, but can’t find all the receipts at the moment.