2024: My Toughest Year in Markets
Investing is hard.
I got serious about investing in late 2020. COVID was going on, and markets were screaming because of printed money. What a time to be alive. NFTs and SPACs were the new hot thing and speculation was everywhere. Luckily, I did not invest in the latest craze of the time. But I did take the time to start deploying some capital at what I thought were opportune times in some industries.
I finally paid off my student loans in 2020. By then, I had read about 30 investment books: Intelligent Investor, Security Analysis, Common Stock, and Uncommon Profits—you know, all the books Buffet recommends that turn you into the next Oracle. I knew enough not to get into that time's highly speculative “assets” and did my best to be patient.
Fast-forward a few years, and I had a few good picks. I bought when oil was negative for a minute, put money into a few other things, and was determined to sit on my ass. I won’t let you in on everything I bought, but Palantir and Facebook were two of my stock purchases. Two tech companies, which I didn’t fully understand, but from my half-assed valuations, I believed they would go up 3-4x.
Not long after…Palantir went down to $7/share and Facebook to $80/share. Both my positions were down 80% + in a short period. But hey…I’ve read all these investing books. We got this, I just have to sit here and do nothing. Easier said than done. The years go by and you think, hmmm…it’s not supposed to take this long. Finally, the two stocks came back around. I sold Palantir for break-even, doubled my money on Facebook, and then sold.
The big winners sold early can cost you more than a mistake sold too late. As I funneled the capital into other positions, Palantir and Facebook continued to go up and go up even as I write this. I was cutting my winners and watering my weeds. Palantir is headed towards $100/share and Facebook towards $1,000/share, I fully expect this to be a 6-figure mistake.
Warren Buffett says, “Mistakes are part of it.” Buffett has had multi-billion dollar mistakes, but this is my first big mistake. It has taught me some lessons no book could have, but that does not fix the feeling of loss. It took four years to get my ass handed to me, and I always mess up big when I do. The experience is invaluable, or at least that’s what I’m telling myself.
Adding to my huge mistake of selling early, the companies I purchased with the money I sold have not done well. In the first 3 years, my returns ranged from 30-70% each year, which I am proud of. In 2024…-50%. Ouch.
Sometimes it can seem like nothing is going right. It happens to all of us. I share my mistakes in hopes you can learn something from them. It’s a lot cheaper to learn from other’s mistakes than to find out for yourself. The biggest learning lesson I took out is to trust your ideas. If a stock goes down 50%+ and then returns to your break-even level, it’s going up further. If you have done the work, hang on.
Look at it this way —If you didn’t sell two winners early for a 6-figure loss and your portfolio did better than -50% in 2024, you’re doing better than me. 2025 is a new year and the market quickly forgets the past. Here’s to being wildly optimistic.
Sincerely,
Donny