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Worst and best bets
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Q What has been your biggest investing mistake?
A Buying a company's stock without knowing what it does. Examples include Ford Motors and Dolby Digital, my first few stock purchases.
For Ford, everyone knows it as a car manufacturer but it has a huge financial arm that gives out car loans but I didn't know it existed.
I'm sitting on an 8 per cent loss. It's not catastrophic but it's about opportunity cost. Since I bought it in 2010 till today, the S&P Index is up nearly 120 per cent.
I didn't understand Dolby's business and bought it as its historical financials looked great, and am down 30 per cent from the first time I bought it. When I started to be more familiar with Dolby, I invested further. I am now up 10 per cent overall. I learnt I had to build up discipline in investing and not take the gains in the short term.
Q And what has been your best investment move?
A The biggest winner in my portfolio is Netflix, which is up 530 per cent, which I bought twice in 2011.
The first time it was at US$25 per share, then at US$16 per share and it later fell to about US$8.
Anyone would have been inclined to sell it, but I felt the business was strong.
If I didn't have the discipline to hold onto stocks that I thought would go on to do well, I'd have sold and missed out on that. I'm not selling Netflix yet as I don't look at past gains, but where firms will be in five to 10 years.
The two best investments I've made was buying Philip Fisher's book. It laid the foundation for how to think about investing and the stock market. It was a very tough read. I'd never recommend it as the first investing book to read but I was interested in what he was trying to say.
Before I joined The Motley Fool as an employee, I was a subscriber to its services from mid-2010. I paid less than US$200 a year and that's my second-best investment as my learning accelerated.
Rachael Boon