It was a tough decision to choose just one of my mistakes as the biggest of 2013. I mean there were just so many!
A wise man once said that a person who doesn't make any mistakes investing is someone that has never bought a stock. Those of us who buy and sell lots of stocks throughout the year will always be left with regrets come year end...
I should have sold this stock a few months ago!
Why did I sell this stock!!!!
Why didn't I buy that stock 10 points ago?
Needless to say, mistakes are always painful. When I look back at my mistakes this year, I see two that were really up there. One was more of a moment of weakness, while the other was underestimating the market.
My Big Blunder
My number one mistake for 2013 was selling Methode Electronics in front of the most recent earnings report. The stock was sliding lower a few days into the release, which was a signal to me that investors wanted less exposure to this name. There was also the Panasonic announcement that they were moving into the touch screen market for automobiles as well. Finally, an analysts whose name shall never B (Riley) mention, came out the day before the report saying they would miss.
My hands were weak and I wanted to protect a big gain so I sold the stock and bagged 90% in 8 months. Pretty good, but when the beat came in and the stock jumped 40% in one day, and that 90% looked really bad.
The lesson here was to ignore the announcements of "pending" competition and focus on the true data that means something. Over the past several months we have watched new car sales come in super strong month after month after month. For a component maker, that is a “tell” that there will be lots of sell through happening for them.
Did you sell at 400?
Maybe you bought at 175?
So that is my worst mistake of 2013 - I will speak to another one in the comments below, where I hope you too will share your biggest mistake of the year.