I Lose Money So You Don’t Have To: What You Can Learn From These Costly Mistakes

Zig Ziglar once said, “Some of us learn from other people’s mistakes. And some of us have to be the other people.”

In today’s article, I am that “other person.”

Below are three of my worst investing decisions, what happened, and the flawed logic behind why I made them.

Enjoy!

Buying “Cheap” Assets With High Yields (AT&T)

Back when I first started stock picking, I’d often look for low PE companies with high dividend yields.

This isn’t a bad idea.

In fact, it’s similar to Warren Buffett’s “One-Foot” strategy.

I don’t look to jump over Seven-foot bars: I look around for One-foot bars that I can step over.

— Warren Buffett

However, it’s also important to understand why a business is trading at such low valuations.

Some stocks, like tobacco companies, are cheap because major funds won’t invest in them. Likewise, different sectors will occasionally fall out of favor and entire industries will go on sale.