Back in May, I ran a pair of articles in tribute to my 1,000th outperform/underperform call in CAPS. On this final day of 2008, I'm rapidly approaching 1,500 picks. Clearly, I'm not on the road to recovery.
This seems as good a time as any to pause and reflect on my performance. Overall, I'm thrilled, having lifted my score by several thousand points and my accuracy above 72%. I even managed to crack the elite ranks of the top 50 players, out of more than 125,000 total.
But I'm not here to brag. I made some boneheaded moves, too, and those are what I want to focus on. It's the only way I can keep improving as an investor, both in CAPS and in real life.
Thus, I present to you three things I fumbled:
No. 1: Abandoning ship
Stepping through the calls I ended this year, there are countless examples of companies that proceeded to implode after I removed my red thumb (that's an underperform call, for the uninitiated). Some examples include Interoil
No. 2: Getting greedy
With shares plunging left and right, it became tempting to pile onto these firms on the downside. This can be just as damaging as chasing a stock that's screaming higher, thanks to the infamous short squeeze phenomenon. One situation in which I got burned was an October underperform call on Cheniere Energy
No. 3: Clinging to old beliefs
This is a classic psychological issue in investing, and it's well-illustrated by my failure to see the impending doom for energy players once the commodity market cracked in July. As share prices dipped (a prelude to a plunge), I threw my support behind firms like Nabors Industries
So what was your biggest investing mistake in 2008, in CAPS or otherwise? Let us know in the comments box below.