Don’t know about you, but I’ve never met or read about anyone who’s never been wrong about anything, even experts and the most savvy among us.
Yet we’re always hesitant to talk about those instances. We’re eager enough to discuss our successes but aren’t as willing to open up when things don’t go exactly as we’d hoped, planned or expected — regardless of what it is — a hiring choice, a business decision, a purchase, a relationship, an
investment or what have you.
Not Warren Buffett, however, who has this to say on the subject:
“Charlie and I view the marketable common stocks that Berkshire owns as interests in businesses, not as ticker symbols to be bought or sold based on their ‘chart’ patterns, the ‘target’ prices of analysts or the opinions of media pundits. Instead we simply believe that if the businesses of the investees are successful (as we believe most will be) our investments will be successful as well. Sometimes the payoffs to us will be modest, occasionally the cash register will ring loudly. And sometimes I will make expensive mistakes. Overall – and overtime – we should get decent results. In America, equity investors have the wind at their back.”
I agree with Mr. Buffett. It is also my belief that no one is immune from making mistakes and if Warren Buffett can be open about it, so can I.
A stock we recommended surprised the market when the company recently reduced its dividend, which caused a sell-off of its shares. It was a surprise because the fourth quarter and 2017 had produced very good results for them.
So did we make a mistake, were we wrong about it being a good investment? Yes, in the immediate term – but it’s early innings. Does this make it a loser? We won’t know until we sell.
Will it always be so, is it just a moment in time? Or is it an opportunity? Consider this, from Warren Buffett’s 2017 letter to Berkshire Hathaway shareholders:
“When major declines occur, however, they offer extraordinary opportunities to those who are not handicapped by debt. That’s the time to heed these lines from Kipling’s If: “If you can keep your head when all about you are losing theirs … If you can wait and not be tired by waiting … If you can think — and not make thoughts your aim … If you can trust yourself when all men doubt you … Yours is the Earth and everything that’s in it.”
Give me a call if you want to discuss. And, as always, we suggest you read the entire letter here.
Alan Friedman is an Investment Advisor with CIBC Wood Gundy in Toronto. The views of Alan Friedman do not necessarily reflect those of CIBC World Markets Inc. CIBC Wood Gundy is a division of CIBC World Markets Inc. a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.