Investment Mistakes Made

I find that it is important to list the mistakes that I make. Each year I will therefore conclude with a post concerning the mistakes that I made.

Running mistakes 2020-2012 AND looking back:

  • Did not catch up directly with how beneficial the UK company pension scheme was (ETF Mixed)
  • Finalised a divorce according to German law.
  • Had to sell off stock assets due to settling the divorce.
  • Sold successful companies far too early (Adidas + MuRe)
  • Not weighing in the risk and impact of oil price fluctuations for companies in both a positive and negative way.

Mistakes 2015:
  • Had no rules for when to divest a poorly performing company. (Asian Bamboo)
  • Did not sell the company when the fundamentals changed into a direction I found unacceptable. (Fugro)
  • Decided to sell because a big investor sold his shares (Warren Buffett). (MüRe)
  • Did not sell my shares when the share price increased due to an offer. (K+S)
  • Got married without rigorous pre-nuptial agreement.
Mistakes 2014:
  • Did not keep track of the importance of tangible and intangible assets in the balance report for the companies of which intangible is always bunk and tangible can also be freely adjusted (forests, property etc.) but with tangible there is at least a little bit of truth behind it in comparison to intangible. (Asian Bamboo, Eniro)
  • Need to look more carefully at the issuing of shares and retained earnings. Issuing of shares = living on shareholder since no bank is prepared to give you a loan and no retained earnings = poor (no?) business. (Eniro)
  • I have not cared at all about the management running the companies. For my contrarian analysis I will not add that parameter but I will before I make any further investments in a new company. (Asian Bamboo, Eniro)
Mistakes 2013:
  • If in doubt with understanding any financial paper then directly call the bank and talk to them! Never fail an investment due to that you think you know what the paper means. (Coba)
  • Added more stocks in companies where the stock price decreased due to poor results. I will never again use the stupid rule of buying more stocks in a company that is falling. Today I will say let it fall. Find out why it falls. If due to poor result then do nothing and IF the company start showing good results again then buy more shares. It will still be cheap! IF the company decreases due to rumors or the entire branch get knocked down investigate the situation and make a decision to buy more or do nothing. (Asian Bamboo)
  • Decided to take shares instead of dividend and it was not clear to me that I had to pay a fee to my broker of more than double usual broker fee for buying stocks. So I paid as much in fees as I paid for the stocks that I received in the dividend payment. (BP)
Mistakes 2012:

  • Bought Q-Cells after knowing the they would go insolvent. I did it because I wanted to test the principle of what happened when a company in Germany went insolvent that had a P/B value below 1. It should mean that money should be payed out to the shareholders. In Germany, less frequently than in the US, they make a restructuring of the company and gives the creditors shares in the restructured company. Happily for me they decided to restructure and I sold the stocks after owning them for only 2 days. Took only a very small loss upon the biggest being the buy and sell fee. Still it was very stupid of me! (Q-Cell)
  • I bought BP stocks far too early. Still the litigations are not over and I could buy the stocks today even cheaper then what I bought them for. Never buy into a litigation. I had read this rule in "The Intelligent Investor" but had obviously already forgotten about it when I bought the BP shares. (BP)
  • Did not sell and re-buy stocks with a significant loss. In Germany you can only equilibrate stock profits with stock losses, even dividends are unfortunately excluded from that. However this means that when you have a loss in a stock it can be worth to realise it especially since a loss stays until you can equilibrate it with a gain, meaning that if the loss is not used then it gets carried over to the next year. There might be a time aspect on the sell and re-buy so please check the rules on this one! (Asian Bamboo)
  • I think that my criteria for increasing my shares in a company is maybe too early. If one of my stocks drop down by around 25-30% then I step in and buy more when it is cheap. Many times the stocks dropping have continued to drop further. Almost in every case. Maybe I will increase the border to a 40-50% decrease for buying more. (Asian Bamboo, no such buy rule exist)
Mistakes before 2012:
  • Buying plenty of IPOs and never ever stepping out. Everytime when they increased the number of shares I stupidly went along and gave them even more of my money.
  • Allowing other people than myself handling my money.

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