You'd be surprised what you discover by going back and looking over all your trades. You'll have at least some hazy memories of your biggest hits and most unforgivable gaffes, but financial statements bring back all the gritty little details, sparing nothing. They get right up in your face and tell you: "This is how much you lost. This is how quickly you lost it." Or, as in the painful case I'm going to share with you, "This is how much money you could have made."
A great buy
Premature sales are missed opportunities, plain and simple. Money that could have been yours never comes, because you sell before shares skyrocket. Now, this has happened to me on more than one occasion, but my No. 1 premature sale, The One That Got Away, was Apple
In February 2006, the Dow Jones
Followed by an egregious error
The stock continued its rise, and, having traded stocks for about a year by then, naturally I praised my prodigious financial savvy. Three months later I sold all my shares for almost $73 apiece, or nearly 10% more than I bought them for. Not bad, I thought.
But wait! I bought them back a day later when the stock went on sale for a dollar less than my sale price. I would go on to sell them four months later for a $4-per-share gain. I thought I was Gordon Gekko. Those delusions quickly left me, and the next time I bought the stock, it was five years later and it had risen 511% since my first purchase.
Come to think of it, I probably should go to jail, for my sheer stupidity.
So what did I learn from these situations? What can you take away from my missed opportunities? What I learned above all is that patience is a virtue, especially in investing. When you buy into companies that you like, you can't get the jitters and sell on the dips, because they are, by definition, the worst times to sell.
If you like the company and the stock isn't doing well, don't freak out. Go over its financial statements, read its press releases, do some research. Decide whether the company is still as good as you thought it was to begin with. If it is, maybe the market isn't telling you to sell -- perhaps you should think about picking up a few more shares while they're on sale.
In the end, I've learned from experience that it's best to abide by the old Motley Fool rule of thumb: Invest only in companies you'd be comfortable leaving your money in for 10 years. I certainly would be better off if I'd stuck to that principle from the beginning.
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Apple remains one of my top two picks on my Motley Fool CAPS page. To learn more about Apple, read through The Motley Fool's premium report on the company, which details some opportunities and risks facing the tech giant today.
Fool contributor John Divine owns shares of Apple stock, but not nearly as many as he could have if he'd just held onto them the first time around. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.
The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.