Most Costly Investment Mistake – Apple Inc, My True Story

(Last Updated On: 11/09/2019)

Do a Google search right now and you will find a plethora of write-ups on on “investment mistake”.

They share one similarity – they are all theories, so to speak. Theories of mistakes made by the rest of the population which you would want to avoid yourself.

People whine about losing money in investing, and boast about their profit when they make money.

But not many study their past losses and learn from what they did wrong, much less blog about it.

To them, it’s a vicious blow to their pride.

Incidentally, a friend asked how was my stock investment in US stock market.

My short answer: I gained money and lost money, but most importantly, I garnered first hand experience in knowing what worked and what didn’t work so well. That shaped my still-evolving investing profile today.

My long answer: I am going to blog about this, including uncensored excerpts from my brokerage transactions history.

The fact is, everyone lose money at some point – it is just a matter of how much, and how you control the damage done without jeopardizing your financial situation.

If Warren Buffet could be candid about his investment mistakes, why can’t we? After all, we are human.

So yea, I am going to be radically honest about my investment mistake. And I am glad I could afford to make mistakes like this before I am in my thirties.

The year was 2008. I was a small time retail investor who have just started my journey dabbling in the US stock market.

Some disclaimer here; I am not a US resident, but I am using Ameritrade as my direct brokerage.

Here is my first and most costly mistake – not keeping the ownership of the world’s most valuable company.

Which is the world’s most valuable company at the time of this writing?

Apple Inc. (AAPL)

Note that I did not said, “not buying the shares of the world’s most valuable company

I guarantee you that this is every retail investors’ mistake in 2008.

I said “keeping”.

Because I possessed 11 shares of Apple in my portfolio back in the 2008 during the financial crisis.

Yes, you read that right.

Eleven shares of AAPL purchased on 30 Oct 2008 with cost of $ 108.52 per share.

Total cost = $1,193.71

I bought it because my fundamental analysis showed its then stock price then was undervalued by more than 50 percent.

But at over 100 bucks a pop, it was still, relatively, an “expensive” stock. Anyway, I later came to learn that price is not equal to value – the hard way.

You could Google how much Apple is worth today. I am not repeating this news here, but let’s summarize what this means in just 1 sentence.

“Market capitalization exceeds $ 500 billion and is still growing, This s higher than the gross domestic product of Poland, Belgium, Sweden, Saudi Arabia, or Taiwan.”

Apple Inc share is worth $ 545 per share at today’s closing price.

If I had just left my money idle in my brokerage account since 2008, I would have grown $ 1,193 to a whopping $ 5,595.

$ 4,402 of lost opportunity cost by doing nothing.

Five fold return in a period of 3 years.

Or 67 percent annualized compounding return in 3 years.


Apple Inc charts

“You could be doing (almost) everything right, but still lose money. Because one rule might contradict with another rule in investing.”

Here are what I did right

#1 – I did not put all my eggs into one basket.

#2 – I had a plan. If the stock price fell more than 10 percent, then I would sell.

That’s exactly what I did. I sold at $ 96.21 on 4 Feb 2009.

Apple Inc buy sell

I know, this looks absolutely silly today.

#3 – I did not let emotion rule. At that time, my 11 shares of Apple dropped 11  percent. It was a fair decision to dump the stocks because it did subsequently bottom to $ 78 in January 2009.

Here are what I did wrong

#1 – Overlooked the long term (3 to 5 years period) potential of Apple Inc. (But who would have known 4 years ago? I am not the Oracle of Omaha)

#2 – Lacks patience.

#3 – I sticked to my plan of  cutting losses if it dropped more than 10 percent. However, I applied it at the wrong time by selling this gem too quickly.

#4 – Naively ignored the market’s psychological support and resistance price when it comes to buying or selling.

There is really nothing like experiencing these mistakes yourself, losing some money in the process and learning from your own unique experience by the end of the day.

Trust me, it’s not like it’s the end of the world. Just don’t put all your money in – money which you could not afford to lose.

Cheers! Feel free share this via your favourite social media platform below. And, if you have a similar story to share,drop me a comment below or at my Facebook page. I would truly appreciate  your comments. Thanks for reading and happy investing!

This Post Has 8 Comments

  1. Steve, very sage advice there – I totally agree with hands and legs raised! Patience is virtue when it comes to value investing, aye?

  2. Let me share something with you:-

    If you buy a Good Fundamental stock that is undervalued (meaning you bought with a margin of safety) then DO NOT SELL (Cut loss) even though it falls by 10%, 20%, etc. You can always recover back if you wait long enough because it will go back up again in time. You must be able to stomach volatility (especially now) and accept the Paper Loss. In time, you will be rewarded with a Decent Profit. I say this from my personal experience on my Genting and Supermax stocks which I have bought and sold WITHOUT A SINGLE LOSS mainly because I held on to them even though at one time I was losing 30% – 40% (Yes, you read it right) on these stocks. There is a saying which says, “If you buy a Lousy Stock at a high price and it goes down, you may not be able to recover but if you buy a Good Stock even at a high price it can always come back up again and you will recover. Even Warren Buffet says he buys stocks and right after he buys it goes down but he still holds on to them and even adds to his position (Dollar Cost Averaging) and in time it will recover and rise further. In the meantime he is collecting dividends, so that is good. You can never time the market accurately and expect to buy at the very bottom or sell at the very top. Just buy with a margin of safety and wait it out. The markets always rise and fall. Just be patient and you will be rewarded.

  3. Thanks for dropping by, Kevin 🙂 . It went to my spam box.
    I agree with you on the inter-comparison (between iPad and other tablets) but I’m not sure if there’s any major breakthrough for iPad3 intra-compared to its predecessor. I feel like it’s 1 step forward, 2 steps backward (slightly bulkier and overkill of retina display)

  4. Everything is a mistake in hindsight. Who would have known they’d continue to grow and be as successful as they’ve been? I think the iPad3 will continue that trend — Android tablets really don’t measure up. On the other hand it might be the push the competition needs to get into gear.

  5. Thanks for sharing your experiences. I think Apple share will still strong for 2-3 years.

  6. I agree Dave. Thanks. The author of Rule#1 did say – Rule#1 – Never lose money. and Rule#2 – Don’t forget Rule#1. That’s certainly easier done than said though 🙂

  7. Having a plan is very important in creating wealth. Preservation of capital is more important. Cheers for your good discipline. The next trade is just a commission away. 🙂

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