Ten years ago, I was given the option to buy shares in an IPO for a small company called Google. You may have heard of it. I looked at the financials and thought, “Jeez, this thing is overpriced.” So I ignored it. The IPO price for early buyers was $60, I believe. It currently sits at $1200 per share. 1900% increase. Drats.
So here is one of the rare examples of when value buying ends up having you lose out in the long term. First off, I think Google is worth around $650 a share right now. I know I know. That’s almost 50% lower than it sells for today…but it does sell for a premium.
But in 2004, Google had $3Billion in sales and last year it had $60Billion in sales. So clearly they are a growth machine. They have done a great job meeting expectations and leading the industry in ads and it prints money. Who would have guessed that back then? Not many, I would presume.
So do I beat myself up over this? Yes and no. Of course I wish I had done this, so I am upset about that, but if I had invested in Google back in 2004 based on what I saw, then I would have lost TONS more money on other IPOs now and in the future hoping for the same result and would have probably given back all of the Google gains over time.
Having a plan and sticking to it…assess your work over years and years and many investments, not the short term and a few investments. Warren Buffett and Ben Graham and all of the investing greats didn’t beat the market each year…in fact, when years were good for the stock market, they tended to lag. But they stick to their system and when times are bad, they tend to fair pretty well.