Missed Growth Opportunities: Why I Regret Not Buying Amazon and Netflix
Every investor has faced the scenario where a great growth opportunity has passed them by, only to see the stock soar to new heights. I am no exception. Here, I share my personal experiences and regrets regarding two missed investments: Berkshire Hathaway and Amazon. Letrsquo;s delve into why these opportunities were missed and the lessons we can draw from them.
My First Missed Opportunity: Berkshire Hathaway (2001)
Back in 2001, I had a little over $100,000 in idle cash that I toyed with the idea of investing in something substantial. One of my potential targets was a single share of Berkshire Hathaway (BH). At that time, I could have purchased it for just under $100,000. However, I hesitated as the representative at the brokerage house advised me that it was too much money.
Little did I know, that one share of Berkshire Hathway was destined to be worth nearly $2,000,000 today! This experience highlighted the importance of not being afraid to invest significant amounts of money in blue-chip stocks that have strong fundamental value. It also serves as a stark reminder that sometimes, the time to buy is when others are uncertain.
My Second Missed Opportunity: Amazon
Every year, I find myself considering a purchase in Amazon, but my psychological aversion to buying stocks that have already seen tremendous growth holds me back. Over the past eight years, I have repeatedly thought, "I should buy some Amazon," only to be deterred by the companyrsquo;s already high valuation and past success. The temptation to sell at a profit before the stock hits new highs is too great, leading to missed opportunities.
This situation reflects a common challenge for many growth investors: the tendency to avoid stocks that have already seen significant gains. It is a true test of discipline to resist the urge to sell when the stock is performing well. Unfortunately, this hesitation often manifests in missed gains and nagging regrets.
My Third Missed Opportunity: Netflix
Although I hesitated with Amazon, in 2012 I finally bought a little Netflix when it was trading at around $100 per share. My mental condition was that I could afford to lose 80% of my investment. Despite owning it, I remain terrified about its valuation. Netflix has the potential to continue growing, but its current high valuation makes me hesitant to hold onto the stock.
Every year, I resist the urge to sell Netflix, but the fear of locking in significant losses keeps me on the fence. This situation highlights the dual nature of my investment philosophy: I am a value investor at heart but have developed a natural inclination towards growth investing.
Adapting to Changing Market Trends
The market has been dominated by growth stocks for the past decade, and I have had to adapt. My early growth investing experience with Amazon and Netflix has been psychologically challenging, but it has also provided valuable insights. The ability to switch between value and growth investing is crucial in todayrsquo;s market, where the pendulum swings constantly between different investment styles.
For value investors, being detail-oriented, price-conscious, and data-driven is essential. On the other hand, growth investors need to be market-conscious, forward-thinking, and story-driven. However, the most critical factor is maintaining discipline and effective risk management techniques, regardless of your investment style.
Ultimately, the key to successful investing lies in staying true to your fundamental beliefs while adapting to changing market conditions. By recognizing the importance of both value and growth investing, and by remaining disciplined, you can navigate the complexities of the market and make the most of your investments.