Many moons ago, I worked at Two Rivers Golf Club in South Dakota. At the time, it was owned by MidAmerican Energy, which itself was owned by Uncle Warren and $BRK.A
I'll never forget that my checks came from 666 Grand Ave., Des Moines, IA.
Due to some creative accounting issues within the payroll department, I received a couple thousand dollars in a 401k from a class action lawsuit that showed we should've had a 401k all along.
Armed with this cash, I picked up about $1,000 worth of $EBAY
, around $20 a share, after listening to a Motley Fool Money podcast highlighting how their upcoming spinoff of $PYPL
would unlock value.
However, I switched jobs and had to sell and rebuy my investments in a new IRA, since they wouldn't let me transfer shares.
No big deal, sell and rebuy eBay, right?
Well, I didn't. I was convinced I'd found better options.
Now eBay is up somewhere around 100% in the time since 2015 -- which isn't too bad to stomach.
But, the PayPal shares I would've received have also doubled since (not to mention they were up as much as 700% just two years ago).
So while maybe this isn't the most significant swing and miss in the percentage of returns lit on fire, it stands out to me as one of my worst trades because I sold (and didn't rebuy) for reasons that had nothing to do with either company's investment thesis -- just merely that I was convinced I could do better, elsewhere.
This single event always comes to mind when considering selling a company I own and plays a significant role in explaining why I tend to hold forever, even with a temporarily broken thesis.
It all ties back to my FOMO on future returns from stocks that I sell too soon -- which always seems to be most investors' single greatest trading regret.
I'd be curious to find out if you all think of this as an overreaction to one event or if I might've taken the correct lesson from a poor trading decision.
Thanks as always for reading. 🙏