A while back, roughly two years ago, when we started the investment club one of my number one recommendations as a stock was Under Armour. I had doubled money in Under Armour twice as the stock ran to 100, got split and then ran back up to 100. When they split again I knew it would run back up to 100 and we would double our money.
Smart me made this recommendation to the club I left and the club I created when I left. Well, Under Armour reported earnings and got chopped by 25%. It was both brutal and embarrassing. I had created this club, brought in a ton of investors, touted myself as some guru and I was immediately publicly embarrassed. Well me being the ego maniac I am I doubled us down and then Under Armour reported ugly earnings again the quarter after and boom, we lost another 25%. We were down 50% on one position. I doubled down again.
What did this experience teach me
This experience taught me that the investment club needed to make for sure money not rich quick money. I wanted to show off and get a bunch of people a quick pop then hold my hands out like Wolf of Wall Street (my favorite gif). Well, the opposite happened.
From this I learned that since we were moving around 10’s of thousands we could afford to go into something safe but promising and get a solid return. From there my goal was base hits, I wanted to preserve the downside and not get too crazy.
Instead of picking companies that could potentially grow into greatness we picked great things that had the ability to become greater. From there we picked up Netflix, Amazon and Visa. All have gone on to do great numbers, 40% for Amazon and Visa and over 100% in Netflix.
Losses become lessons
I took the loss in the Under Armour as fuel to learn, study, research and lean on the knowledge of the group not the knowledge of myself. A wise man leans on the investment counsel of many. A foolish man thinks he has all the answers.
I learned to hit base hits because for sure money is better than quick money. We made for sure money and we made it big.
Losses don’t stay losses
A year later our Under Armour position is back even. Its actually plus 6%. This means we made back 50% on that position plus a gain, AND we still own the positions that killed it for us.
The win here is that we won by learning and we won when the loss became a win. It was a compounded win.
If you are in what feels like a losing situation don’t quit, trudge through it, you hopped into that losing position for a reason. You hopped into that relationship, marriage, job, business, investment for a reason. Don’t quit, learn. Get the lesson and get the win.
In life you will go through what might feel like a loss. This can be a job loss, a business loss, an investment loss, whatever. The key is that you keep the right mindset about that circumstance and not dwell, quit, complain or point fingers. I took responsibility for that loss so I got the growth from that loss. Had I blamed that on Trump, Hillary, other members, I would be in the same situation now that I was a year ago. Instead we have a portfolio up over 30%, we tripled what we would ever raise and we gained the experience along the way,
Your losses lead you where you need to go. Don’t wait until you have a path that is perfect with no potential risk of loss. You won’t ever get started and you wont learn what you need to learn to truly win. A path that has no obstacles likely leads to nowhere.
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Be great and invest well!