Author Topic: Investing Lessons/"Mistakes" from 2020?  (Read 19664 times)

valueinvestor

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #40 on: February 19, 2021, 03:59:03 PM »
I'll echo what others have said. I think it's dangerous to take too many lessons from 2020. The primary lesson I'm taking away is to make sure I think through how current events will actually impact the business I am buying. Some are more obvious than others. I was buying LUV in early March, and really didn't think enough about how hard it is to understand the long term implications the pandemic might have on air travel.

Made the same mistake with Spirit and AerCap, but promptly changed in the middle as soon as it was clear that multiples were not going to rerate and businesses were growing sporadically during the pandemic. SE for example had no issues with COVID, and yet the market was pricing as if the situation was as bad as in the US.


valueinvestor

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #41 on: February 25, 2021, 03:57:02 PM »
How many are sticking to the lessons that you've learned in 2020?

muscleman

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #42 on: February 26, 2021, 08:39:38 AM »
My biggest achievement in 2020 was to sell 90% of my stocks right before the COVID crash as there were many technical indicators showing the top. But I still had a 4% draw down on my account as the remaining positions dropped like a stone, which is a tragic because I had too much fundamental belief in them.
My biggest mistake was to choose not to believe in my technical analysis after the end of March when it says I should be buying aggressively. Being in an inner circle with classmates from Wuhan's CDC and Hospitals, the fundamentals clouded my view too much and scared the shit out of me to buy. I was ramping up exposure on stocks too slowly and ended the year with only a 11% gain.
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BG2008

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #43 on: February 26, 2021, 08:58:01 AM »
My biggest achievement in 2020 was to sell 90% of my stocks right before the COVID crash as there were many technical indicators showing the top. But I still had a 4% draw down on my account as the remaining positions dropped like a stone, which is a tragic because I had too much fundamental belief in them.
My biggest mistake was to choose not to believe in my technical analysis after the end of March when it says I should be buying aggressively. Being in an inner circle with classmates from Wuhan's CDC and Hospitals, the fundamentals clouded my view too much and scared the shit out of me to buy. I was ramping up exposure on stocks too slowly and ended the year with only a 11% gain.

Muscleman,

Thank you for bringing the Covid crisis to our attention early on.  I managed to hold onto our positions but bought a lot of out-of-the money puts to hedge against our portfolio.  We winded being up over 20% thanks to you.  More importantly, the risk management tactic was a very nice "surprise" to my investors during March/April.  Coming out of the crisis, we have gained more of their trust. 

If I can offer you a piece of advice is that if you see Vix trade to 80, just buy and hold your nose.  It only happened once before during 08/09 in my short 15 year career.   So if Vix spikes to over 80, it is just a blaring signal to buy.  I hope you can benefit from this piece of advice in the future.  Frankly, you can say the same for Vix of 40, or 60.  But 80 is definitely a no brainer. 


spartansaver

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #44 on: February 26, 2021, 09:12:14 AM »
My biggest achievement in 2020 was to sell 90% of my stocks right before the COVID crash as there were many technical indicators showing the top. But I still had a 4% draw down on my account as the remaining positions dropped like a stone, which is a tragic because I had too much fundamental belief in them.
My biggest mistake was to choose not to believe in my technical analysis after the end of March when it says I should be buying aggressively. Being in an inner circle with classmates from Wuhan's CDC and Hospitals, the fundamentals clouded my view too much and scared the shit out of me to buy. I was ramping up exposure on stocks too slowly and ended the year with only a 11% gain.

Muscleman,

Thank you for bringing the Covid crisis to our attention early on.  I managed to hold onto our positions but bought a lot of out-of-the money puts to hedge against our portfolio.  We winded being up over 20% thanks to you.  More importantly, the risk management tactic was a very nice "surprise" to my investors during March/April.  Coming out of the crisis, we have gained more of their trust. 

If I can offer you a piece of advice is that if you see Vix trade to 80, just buy and hold your nose.  It only happened once before during 08/09 in my short 15 year career.   So if Vix spikes to over 80, it is just a blaring signal to buy.  I hope you can benefit from this piece of advice in the future.  Frankly, you can say the same for Vix of 40, or 60.  But 80 is definitely a no brainer.

I'll echo these same thoughts. Had a very good year because of your insight, it is much appreciated.

valueinvestor

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #45 on: February 26, 2021, 01:58:30 PM »
My biggest achievement in 2020 was to sell 90% of my stocks right before the COVID crash as there were many technical indicators showing the top. But I still had a 4% draw down on my account as the remaining positions dropped like a stone, which is a tragic because I had too much fundamental belief in them.
My biggest mistake was to choose not to believe in my technical analysis after the end of March when it says I should be buying aggressively. Being in an inner circle with classmates from Wuhan's CDC and Hospitals, the fundamentals clouded my view too much and scared the shit out of me to buy. I was ramping up exposure on stocks too slowly and ended the year with only a 11% gain.


What were the technical analysis that you touched upon? By the way - thanks for alerting the board at the time, wished I've seen it!

muscleman

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #46 on: February 27, 2021, 08:03:47 AM »
My biggest achievement in 2020 was to sell 90% of my stocks right before the COVID crash as there were many technical indicators showing the top. But I still had a 4% draw down on my account as the remaining positions dropped like a stone, which is a tragic because I had too much fundamental belief in them.
My biggest mistake was to choose not to believe in my technical analysis after the end of March when it says I should be buying aggressively. Being in an inner circle with classmates from Wuhan's CDC and Hospitals, the fundamentals clouded my view too much and scared the shit out of me to buy. I was ramping up exposure on stocks too slowly and ended the year with only a 11% gain.


What were the technical analysis that you touched upon? By the way - thanks for alerting the board at the time, wished I've seen it!

Lots of data points that I can't go over in one post, just like you can't summarize Value Investing in one post here.
I am muslceman. I have more muscle than brain!

valueinvestor

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #47 on: February 28, 2021, 06:52:38 PM »
Ahh.. makes sense! Thought there was a particular metric but it seems it was a confluence of them.

james22

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #48 on: March 03, 2021, 08:46:37 AM »
Still struggling with these:

Perhaps a couple broader lessons I've learned: first, to try to do a better job of overcoming my natural aversion to ideas that are popular. One of the mental blocks for me was - "if everyone loves this so much, how can it still be a great value?" Going forward, I'm trying to do a better job of focusing more on an idea's merits and tuning out who likes or doesn't like it.

Second, and similarly, I've realized that it's internally inconsistent to A) believe that I have no edge in interpreting near-term price action, and B) prefer buying securities that have fallen over the near to medium-term past than securities that have skyrocketed. As with the previous item, I'm now trying to focus more on the "signal" - i.e. the idea's fundamental merits - and less on the "noise" - i.e. whether it's recently up, down, or sideways.


https://seekingalpha.com/article/4229722-small-cap-bear-next

To evolve as an investor, Iím eventually going to have to be honest with myself: I got something wrong here.

http://www.philosophicaleconomics.com/2017/09/pmbtdo/
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mattee2264

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Re: Investing Lessons/"Mistakes" from 2020?
« Reply #49 on: March 03, 2021, 09:06:07 AM »

 yeah james i fell into that trap. Especially when some of the initial price moves have been so explosive it is hard to jump on the latest hot trade but if it is still very undervalued it can still be a buy.
 
 agree that it is much more reassuring when you buy a little too early and have the opportunity to average down. but buying a little too late is equivalent and can still produce good results if there is still a large margin of safety.