I bet it all on Amazon starting in July 2020. By February 2022, I realized I just didn’t have the stomach for it. It was a big bet. During that period, I lost 3.0% AIRR, and the S&P 500 gained 20.6% (AIRR), or a cummulative 40.6% loss in comparison to the S&P 500.
I wrote in 2020:
I wonder what I’ll be saying about this article in 10 years.
“Ouch!” is what I say after three years.
However, if I had stayed in Amazon until today (August 2023), the AIRR would be -4.4% in comparison 16% for the S&P 500. Total cummulative loss would have been 46.1%. Yay!
For those of you who know me, I jump in to pretty much anything I do with all four paws. It sometimes hurts a lot, and other times, it feels great.
I don’t think of myself as impulsive. I think things through as best as I can, and then I decide. If I had decided to keep half in the S&P 500 and half in Amazon, I would have fared better, of course. That’s just not me.
Hire Warren Buffett
You can be as lazy as me and hire Warren, too.
I was all in on Berkshire Hathaway from about 2003 to about March 2020 when I panicked, and got out of the market due to the COVID-19 scare. Panicking is never good, and hiring Warren Buffet is pretty much always a reasonable choice.
If I had stayed in Berkshire from August 2003 till today, my AIRR would have been 10.2%, and the S&P 500 would have been 9.7%. Betting on Buffet wasn’t bad advice, and I regret that I didn’t.
I often say that you can’t take “half the advice” when someone is giving it. This is part of my “all in” philosophy.
Long ago, Warren Buffett said, “Consistently buy an S&P 500 low-cost index fund. I think it’s the thing that makes the most sense practically all of the time.”
I have many decades of investing experience. I started out “right” in the early 1980’s after reading the Only Investment Guide You’ll Ever Need by Andy Tobias, and thinking index funds were the best investment. I have tried to follow some of Tobias’s advice but not the index investing part. That was probably the most import to follow.
Play It Safe
In 2022, I wrote:
Diversification is thought to be safe, but it leads to owning a lot of Day 2 companies.
I think I am finally done trying to beat the advice of the Oracle of Omaha and many other sages.
So that’s it. I’m all in on the S&P 500, forever.
One more important point: It’s ok to make mistakes. Failure is an option. You will recover from the vast majority of mistakes. Just take the time to learn from them. If you are particularly wise, take the time to learn from the mistakes of others, like mine.