Saul, I am a bit curious about your 2014 results. Since this is quite recent, what were the key lessons from this result since your portfolio performance over a long period of time is quite extraordinary. Thanks, Chandy
Great question, Chandy. Let’s see.
First of all, BOFI, one of my larger positions went from $106 to $65 on all good news. I bought all the way down from $90 and part way back up. It’s back at $98.30 as I write, and one of my highest conviction stocks, but at the end of 2014 it was at $77 something. This was probably the biggest loss I suffered.
Second, The CEO of UBNT became more interested in micromanaging his NBA basketball team than running his company (as I see it) and the price dropped considerably.
I made some errors in ignoring my own criteria and principles and plunged on a few penny stocks (small positions, happily), which I soon got out of at losses.
I made another mistake investing in PFIE. Partly it got killed because of the collapsing oil market, but I should have known better: This was a little company with no history whose CFO and other officers had been involved in a couple of failed enterprises together before this one. Also (I think I remember, the CFO had been sued for malfeasance). Poor choice on my part.
I bought Avigilon at about $22 and had to sell it at $17.50. It’s at $14.60 now. I don’t really think of this one as a mistake. The CEO just decided he wanted to go to $500 million in sales, and to heck with profits. He’s doing it. As I said, I don’t see that as my fault. Just one of the things that happens. In addition, the Canadian dollar crashed against the dollar. That could be my fault as I know better than to invest any more than necessary in companies that denominate their earnings in foreign currency. (Yes, I am in CRTO).
Those are the ones I can think of.
The lesson is important. Everything I touch doesn’t turn to gold! I make mistakes too! Lots! (But the good decisions seem to end up outweighing the bad by a big margin.)
Hope this helps.
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