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The markets $SPX500 opens higher today especially the $DJ30 is doing great because of $BA (its largest component) as Dennis Muilenburg is resigning from his position as CEO. Our portfolio is doing great today with $POLY.L up by 1.6% with rising $GOLD prices. $SWKS reaches ATH. The only stock down in our portfolio today is $DIS with mixed reviews about the latest Star Wars movie.
5 INVESTING MISTAKES I made in 2019 👎
We all make mistakes, even the great investors. Warren Buffett $BRK.B most recent mistake was with Kraft Heinz $KHC and Ray Dalio, at some point had to ask his father for $4000 as a loan so that he could reboot his hedge fund. What's important is that we admit that we have made a mistake, learn from it and move on. In 2019, I made quite a few mistakes as an investor. Here are top 5:
1. Having too many stocks in my portfolio
At the beginning of the year, I had 18 stocks in my portfolio and right now I have only 11 stocks in my portfolio (13 if you count the workouts). At some point last year, I had 32 stocks in my portfolio. Most of these stocks I bought in 2016 when I was a newbie value investor. I was buying every stock I could find at a discount and found myself in several value traps for example, with Bayer $BAYN.DE and Wells Fargo $WFC . I liked the banking industry and bought four of the big banks $WFC , JPMorgan Chase $JPM , Morgan Stanley $MS and Goldman Sachs $GS . It is useless to have four competing stocks in a portfolio. If you own too many stocks, you will just do as the market. In July, on a single day, I chose to liquidate 40% of my portfolio and focus on only a few stocks. Since then, my portfolio has been doing much better.
2. Day Trading
I took a credit line from eToro and with that influx of cash, I tried day trading. I tell you all the time not to day trade but I thought that I was doing something different. I was only trading volatile stocks and stocks that were going to be acquired by another company. I was only aiming for 1% gain a day but found myself in traps. It was an experiment I tried for a few weeks and I made some profits from it but it is not worth the time.
3. Too late with arbitrage
There were so many arbitrage opportunities this year, namely Celgene, Anadarko Petroleum, Red Hat and I missed most of them because I was holding cash and cash equivalents. When I liquidated 40% of my portfolio, stocks were quite expensive and didn't buy anything. Instead I held cash. I should have engaged in arbitrage immediately, which I believe is a better alternative than holding cash. There are currently two arbitrage trades in my portfolio: Fitbit $FIT waiting to be acquired by Google $GOOG and Allergan $AGN to be acquired by AbbVie $ABBV .
4. Why do I have bonds in my portfolio?
I have 2% of my portfolio in bonds, namely in the $TLT and $IEF ETFs. Bonds are not good investments right now because of the low interest rates and low yields. A better alternative would be to buy Travelers Companies $TRV , which has a portfolio of over $60 billions in bonds. It has the advantage that it gives you exposure to the bond market and at the same time it is is a great insurance company.
5. Wrong investment of time
I read only 28 books this year while last year I read 52 books. I wasted my time in different ways. For example, making one video a day. Since I started making 3 videos a week, my YouTube channel too off. Another mistake was wasting 4 months as a high ticket closer. I should have focussed on investing. Because I was trying to do two things at the same time, I could not start my course about investing and my research partnership started later than I had initially planned.
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