2014 finished in a way that was quite disappointing. In terms of the stock market, I have missed out on the majority of the gains in the S&P 500 since it was at 1500 or so and I have even bet against Amazon and the entire market along the way. Clearly I have missed the mark.
I was just scanning Yahoo Finance and came across an article where Bill Ackman is announcing that he is in the money on his short of Herbalife. If you are not familiar with the story, please take some time and look into it. Ackman shorted the company by calling it a “Ponzi Scheme” as many reputable investors (Carl Icahn and George Soros) praised the company and bought shares in it. The stock climbed from the $30 range all the way up to $82 per share, and I believe he had lost about $1Billion at that point.
But he kept insisting he was right. EVERYONE said he was wrong. He said “Nope, i’m right. You’re wrong.” Now, granted, the stock isn’t done yet. It could bounce right back up but right now, he is not only making money but he also feels vindication I am sure.
I’ve been shorting Amazon (AMZN) for over 2 years now and have been “wrong” because the stock is above my original short price. I’ve shorted the entire market as well and so far, I’ve been wrong. But there are bright spots. Amazon went from a high of $408 and now it’s sitting under $290. Not quite the darling it was just a year ago. The stock market, overall, has had many jumps and falls over the past six months which are typical during the topping process.
I hope, and I’m confident, that I will end up being right, but patience, my most lacking virtue, is what I need to stick with and what most investors have a problem with. We need patience. In my other businesses, I want things done yesterday, but with investments, you have to give the time to let things pan out if your analysis is correct. Even then, you will be wrong sometimes.
Everyone forgets the tough times during the good times and the good times during the tough times. That’s why sound financial analysis is important at all times. Be patient for the opportunistic times because that is when true wealth is built.