Read on Twitter
1/ In the start of 2016, I sold $MA to buy $AXP bc it had lost roughly 50% of its market cap after losing the $COST partnership, and also because I was infatuated with Buffett and $BRK.
$MA was trading at $85 & ~30 PE. $AXP was trading at ~$50 & 10 PE. I thought I was a genius.
$MA was trading at $85 & ~30 PE. $AXP was trading at ~$50 & 10 PE. I thought I was a genius.
2/ Compounding my error was that both $SQ and $PYPL IPO'ed around the same time and was told by many people to buy those instead of $AXP.
I laughed at them for buying $PYPL ~$40 and a 40 PE and $SQ at $14 wasn't even profitable. They don't understand investing, I thought.
I laughed at them for buying $PYPL ~$40 and a 40 PE and $SQ at $14 wasn't even profitable. They don't understand investing, I thought.
4/ Worst of all my only other holding was $AAPL at that time and I did this because I thought I needed to start "diversifying".
Apple is +302.8% since then.
Apple is +302.8% since then.
5/ Expensive (but important) lessons to learn:
- Don't sell a wonderful business to buy something cheaper
- Don't assume something is expensive just bc it is trading at a high multiple
- Don't be infatuated with what your heroes own
- Don't diversify just to diversify
- Don't sell a wonderful business to buy something cheaper
- Don't assume something is expensive just bc it is trading at a high multiple
- Don't be infatuated with what your heroes own
- Don't diversify just to diversify
