I have a friend who bought shares of Nvidia over 20 years ago. At the time I had no idea why she would buy those shares. Anyway, she basically just left it in her account and didn’t bother with it. A couple years ago she started buying more shares from time to time and told me to pick some up. It really just wasn’t something that interest me. Well, we know how that turned out. She’s now sitting on a massive gain and says that this by far is her best investment.
So I’m wondering what war stories you all have to share.
As for me, the one that stands out in my mind happened many years ago. I was just learning about options and I bought a bunch of options for a few hundred dollars in a company called Netscape. I believe it was over the weekend there was an announcement that they were going to be brought out by AOL. On Monday morning my options were worth over US$12,000. In someways, this was one of the worst things that could happen to me, but that’s a whole other story.
Due to the massive increase of US federally declared disaster areas over the last few years, I got the great idea that tech and supplies to combat flooding and fires wild be a good investment. I started researching who was getting the government contracts. Most are state specific and the chore got pretty tedious. But I ended up investing in some fire pump truck manufacturers and airplane drop fire retardent manufacturers and cha-ching, my big winner so far is Perimeter Solutions. Bought at $6 last year and it’s at $10 now.
Still mad at myself for selling bitcoin and TSMC when I did. I’m not good at holding
This sounds like you had some insight and researched it well. You did it the right way. I never research things that deeply. Unfortunately, most of my picks are based on what I read in news articles or hear from others. Which is probably why my timing is horrible when I try to trade. I have much better luck buying and holding.
I remember a billboard on the MRT that has the words 聽說 and a huge maze inside the character, implying that if you heard about it, it’s too late. You’d have to do a huge amount of research to be able to get ahead of the curve, obscure research of who to invest in.
This would have made me up to a million dollars (or up to 20 ‘free’ Tesla cars) if I had pulled the trigger on the trade at the time and held the stock for a few years . I was looking at putting in about 15k USD. I didn’t do it due to a few things that cropped up and I only had a Taiwanese broker account at the time and wasn’t able to buy US stocks.
If you read through the thread you will see I analyzed the business potential fairly well for an amateur (I think I was between jobs at the time).
The second and possibly even bigger mistake was thinking that it was too late to invest when I missed the very early opportunity.
My best investments were in crypto especially defi coins one of which I think I made 50x (I’ve lost on plenty of crypto coins as well).
I think a lot of it also comes from just looking at things closer to home. Years ago, my wife used to like to buy Coach products. Every time we went the place was so crowded. At times, there would actually be a line out the door. So after going to different Coach stores and noticing the same pattern, I decided to buy some shares. I held it for a little while, until it seemed to peak and sold it for a profit.
Crypto is something I never invested in. I just don’t understand it at all. My friends keep telling me to just try a little, but I find it hard to put money in something I have no clue about.
Short term, some truth to buy the rumor sell the news. long term, lots of money to be made regardless.
Basically the Peter Lynch approach to beating the market - you can find market inefficiencies with sectors / companies that you know better, or can just deploy assets better than a large fund that needs to deploy billions.
Crypto is more of a VC model to investing. You put money into 50-100 different coins and hope that at least one gets you a return that is a high multiple of your initial investment. You accept that many investments may go to zero.
Just like any market there is not one way to play crypto.
You diversify within reason, with most investment in the top coins to limit risk.
You DCA to ride out the troughs and get ready for the bull run.
You stick with it long term (note how everybody mentioned above in traditional markets made the big gains…they were long term investors…i.e. the one benefit of getting old lol ).
You don’t panic sell every time there is a dip.
You take some profits when it gets frothy and gaining mass market attention.
Crypto is extremely volatile and trading is always on so you have to go into it with a certain mindset and emotion control .
Also all coins tend to run up and down with movements of Bitcoin, that is the hardest thing to adjust to at the start and where it differs massively from other markets.
How to evaluate a cryptos worth is another discussion, but you can just follow the above strategy anyway for the long term.
I think the Peter Lynch approach is more so for finding opportunities that the market may not have discovered yet. It’s an advantage you may have because it’s something in your area. This area could be geographic or it could in your particular area of expertise or understanding. This is still just an advantage and not a guarantee of returns.
The only way one can tell you how long it will take to double your money is if you know what the yearly returns are. Like Mr_PHB said you can use the rule of 72 to estimate. At a return of 10% it will take a little over 7.2 years to double.
I’m too dumb to invest so I just park my money and hope it beats the rate of inflation. For example, the average inflation rate in the US the last ten years was 2.7%, which, according to the rule of 72, means, if I understand correctly, that your money needs to double every 26 years to beat the average rate of inflation these days. So, so far I’m doing great!
I should have been more specific. I meant in your personal experience as a seasoned investor. One of the assets I park money in is gold and gold has doubled in value in the last ten years, which is equal to an annual rate of return of 7.2%. Would that be competitive with or substandard compared to what an investor could have realized using the Peter Lynch approach to beating the market?
That’s substandard even compared to the S&P. Lynch averaged 29% while managing Magellan (S&P just under 15% at the same time) over 13 years. I’ve historically averaged a couple percent over the S&P, but have been trending a little more conservative the past couple years (although this is turning out to be a really good year). During the last 10 years, I’ve doubled 3 times (that’s up 8x), but that includes my contributions (but gains definitely dwarf contributions at this point in my investment life (that whole Charlie Munger thing of getting your first $100k and letting it work)), so I’d need to look at some old statements to see the total return. Returns are high because of a few big winners, but would be much better if I did a better job holding on to other big winners (hello aapl, msft, and goog!) which I sold way, way, way too early.
