All investors make mistakes. It is unavoidable. A common characteristic of all great investors is that they do not ignore mistakes, but analyze them and strive to learn from them to avoid making similar ones in the future. In this article I will briefly explain my 4 investment mistakes of 2.014. I also encourage you to share the investment mistakes you have made so that we can all learn from them.
Gowex, a full-blown scam
The Gowex case has been possibly the most mediatic of the Spanish stock market of 2.014. It was a jug of cold water for many investors to see how one of the reference companies in the Alternative Stock Market was nothing more than smoke. In this scam, many investors, including myself, were misled.
Paradoxically, investing in Gowex made me a lot of money this year thanks to the fact that I sold most of my shares in this company because I considered it overvalued. By buying shares at 4,75 and selling 2/3 of my position at just over € 20 per share, the profitability of this operation has exceeded 200% in a few months despite losing a third of the investment.
Do not be confused by this profitability, the fact of making money with Gowex does not mean that it was a serious investment error. I have won a lot, but could also have asked.
To learn more about the subject, I recommend these two articles that I published on the blog:
- 8 lessons to learn from the Gowex scam
- 22 articles recommended to better understand the Gowex case
Tesco, falling back into accounting fraud
When I invested in Tesco, I was aware that I was doing it in a company that was experiencing a difficult situation. In my decision I started from 3 premises:
- The company's problems were temporary, not structural.
- The company has an equity value that offered an important cushion in the event that everything went wrong.
- The return / risk ratio was interesting, offering a sufficient margin of safety.
Tesco's problem was similar to Gowex's, albeit much less serious. To understand what happened, I share with you the reflection of ratios bursátilesthose listed and listed by Gazprom were extremely low, unimaginable in other parts of the world, with a FOR 3 times profit and a Price-Book Value ratio of 0,3.
My hypothesis was that the company should be trading at significantly higher ratios, which would end up being corrected in the medium term after the end of military tensions in the area. Furthermore, if the way it is managed changes, it could be facing a unique investment opportunity.
What happened? A scenario that I had not considered in my analysis. To the problems that the company already had, another very important one was added, the plummeting oil prices. This drop was of particular importance, since the cost of extracting Russian oil is much higher than extracting it, for example, in the desert. Therefore, many of Gazprom's fields have become unprofitable, thereby decreasing the intrinsic value of the company.
And you, have you had investment errors this year?
Now it is your turn.
I encourage you to share your investment mistakes with other readers, so that we can all learn from them.
I await your comments!