"Not everything works out as planned." - Buffett

Ifts
Ifts Posts: 1,951 Forumite
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in Savings & investments
Warren Buffett admits to rare investing blunder:

http://www.reuters.com/article/2014/03/01/us-berkshire-results-energyfuture-idUSBREA200QG20140301
Never let the perfume of the premium overpower the odour of the risk

Comments

  • mark55man
    mark55man Posts: 7,924 Forumite
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    Ifts wrote: »
    Warren Buffett admits to rare investing blunder:

    http://www.reuters.com/article/2014/03/01/us-berkshire-results-energyfuture-idUSBREA200QG20140301

    I love reading his letters, but once a year is enough!!
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Everybody makes a wrong call. I'd be wary of anyone who says that they don't. As long as the winners exceed the losers. That's what counts.
  • Ifts
    Ifts Posts: 1,951 Forumite
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    Thrugelmir wrote: »
    Everybody makes a wrong call. I'd be wary of anyone who says that they don't.

    Definitely true that. Only put that article up to show that even Buffett takes a wrong turn occasionally.

    Ive made a fair few of my own over the years. I remember back in the days of Northern Rock when I tried to catch a falling knife and got cut to the tune of £25K. :eek:
    The NR episode didn't stop me buying shares, just taught me a very expensive lesson (also that I could offset that loss against other gains so I sold a few stocks where I would have been hammered on CGT otherwise - so made the best of a bad situation).
    As long as the winners exceed the losers. That's what counts.

    Reminds me of a quote by Soros -

    "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."
    Never let the perfume of the premium overpower the odour of the risk
  • mark55man
    mark55man Posts: 7,924 Forumite
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    Ifts wrote: »

    Reminds me of a quote by Soros -

    "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."

    True


    Or even it is possible to be right, but still to lose money, if you are right in the long term, but the short term does you in.


    "The market can stay irrational longer than you can stay solvent"
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • ChesterDog
    ChesterDog Posts: 1,112 Forumite
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    I think it's actually a very important part of the mindset when investing (and much else in life) to realise that mistakes will happen. These are matters of judgement and - by its very nature - sometimes that will be wrong. Not just MIGHT be wrong; WILL be wrong.

    The important thing is to realise that, accept it and even embrace it. Just strive to have your good decisions greatly outweigh the bad ones.

    If they don't, it's probably best not to continue.
    I am one of the Dogs of the Index.
  • atush
    atush Posts: 18,726 Forumite
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    Ifts wrote: »
    Definitely true that. Only put that article up to show that even Buffett takes a wrong turn occasionally.

    Ive made a fair few of my own over the years. I remember back in the days of Northern Rock when I tried to catch a falling knife and got cut to the tune of £25K. :eek:
    The NR episode didn't stop me buying shares, just taught me a very expensive lesson (also that I could offset that loss against other gains so I sold a few stocks where I would have been hammered on CGT otherwise - so made the best of a bad situation).



    Reminds me of a quote by Soros -

    "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."

    I've tried to catch a falling knife or two in my time, and been cut and made money. Difference is, I never risked more than 1K each time lol. You obv have a greater tolerance that I do :D
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Ifts wrote: »
    Ive made a fair few of my own over the years. I remember back in the days of Northern Rock when I tried to catch a falling knife and got cut to the tune of £25K. :eek:
    The NR episode didn't stop me buying shares, just taught me a very expensive lesson (also that I could offset that loss against other gains so I sold a few stocks where I would have been hammered on CGT otherwise - so made the best of a bad situation).

    I had shares in an IT at the time which was still buying NR shares after September 2007. No one foresaw the complete nationalisation that followed.
  • cathybird
    cathybird Posts: 13,298 Forumite
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    I bought NR shares myself ... only to the tune of about £700 though. And I bought Alliance & Leicester and Bradford & Bingley :) A trio of disasters. Again, only to the tune of about £500 each thankfully. So, though it was painful I didn't lose too much overall and I sure as hell learned to be more vigilant.
    In April I am taking a break from buying: Books
  • Ifts
    Ifts Posts: 1,951 Forumite
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    Thought I would share this article:

    Charlie and the chocolate factory

    that I saw over on fellow MSE poster IronWolf's blog - investingsidekick.com

    I thought it was well written and easy to understand, enjoyed reading it.
    Never let the perfume of the premium overpower the odour of the risk
  • Wilkins
    Wilkins Posts: 444 Forumite
    Ifts wrote: »
    Warren Buffett admits to rare investing blunder:
    Actually, he has made quite a few over the years and admits to them in the BH letters.
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