I remember hearing that it’s unwise to deify (make godly) people because everyone is flawed and imperfect, and doing so would cloud your judgment of that person and set you up for a letdown.
The 2024 Berkshire Hathaway annual meeting was on May 4th, and it was the first without Charlie Munger.
A touching tribute to Charlie at the start of the meeting is a must-see for any fan of the dynamic duo.
But one thing jumped out at me from the day’s events.
Finding out that Warren screwed up!
And it might be the most important thing we can use to be better investors.
Berkshire sold its entire Paramount Global (PARA) position, and Warren said, “It was 100% my decision, and we’ve sold it all, and we lost quite a bit of money.”
Barron’s estimated that Berkshire had paid over $30 a share, but how much they lost is unknown.
With Paramount shares recently in the mid to low teens, Berkshire likely lost around 60% of its investment.
Warren lost around 60% of the investment.
This news made me feel much better about exiting Leggett & Platt (LEG) this week for a 59.5% loss.
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Source: SimplySafeDividends.com |
I won’t lie; selling and realizing such a significant loss was pretty painful.
But Warren’s (and my) pain can be your gain.
Berkshire’s Paramount loss reinforces a few essential beliefs about investing.
First, it is incredibly important to sell when you know you’re wrong about an investment and not continue to hold.
There’s a saying, “Every day you don’t sell a stock is another day you choose to buy it.”
That is attributed to Nicholas Darvas, author of the 1960 book “How I Made $2,000,000 in the Stock Market.”
Warren previously said there are just too many streaming services out there these days, and they are battling to get people to subscribe.
This makes it difficult for shareholders in the entertainment business to make money over time.
So, it would seem that he finally realized and admitted his mistake.
With my Leggett & Platt investment, the mistake was not selling when the warning signs started flashing brighter and brighter.
The lesson is that “consumer cyclical” can get nasty at the bottom of a down cycle and even dethrone a Dividend king or two (LEG & VFC).
The second takeaway is that Warren has been investing for over 80 years and is still making mistakes.
So, we should allow ourselves permission to make mistakes, but hopefully, they will decrease in frequency as we gain more experience.
But there’s no doubt about it: we will make investment mistakes.
And when they happen, we need to know how to recognize the mistake and quickly move on.
Just like Warren did.
So, to recap:
- Sell when you realize you are wrong about an investment.
- Permit yourself to make mistakes.
Have you ever had to sell an investment at a significant loss like Warren Buffett did with Paramount?
Hit reply, and I’d love to know!
😁Once again, THANK YOU to the (10) people who responded to the last newsletter!!
Check out the portfolios and podcasts, or see what’s cooking on YouTube.
That said, let’s get to this week’s portfolio activity.
Dividends Received ~$340.35
- Altria (MO) | $147.00
- Toronto Dominion (TD) | $111.20
- AT&T (T) | $82.15
Dividends Received Year to Date~
$2,569.18
Stocks Sold (AVERAGE)
- 100 Leggett & Platt (LEG) | $14.05
- 10 Simon Property Group (SPG) | $142.53
Stocks Bought (AVERAGE)
- 16 Starbucks (SBUX) | $74.49
- 2 Agree Realty (ADC) | $57.55
- 3 Schwab US Dividend Equity ETF (SCHD) | $77.76
- 2 VICI Properties (VICI) | $28.73
- 25 Enterprise Products Partners (EPD)| $28.06
- 2 Visa (V) | $268.99
- 1 PepsiCo (PEP) 5/24/24 $185 Covered Call | $14.66 (We bought the call to close it and netted $110.68 after fees)
Notable Ex-Dividends This Week + SSD Score
- 5/7 Texas Instruments (TXN), 2.91% | 80S
- 5/7 Main Street Capital (MAIN), 5.72% | 62S
- 5/9 Pfizer (PFE), 6.04% | 75S
- 5/9 Nexstar Media (NXST), 4.06% | 60BS
- 5/9 I.B.M. (IBM), 4.03% | 65S
- 5/9 Paychex (PAYX), 3.26% | 70S
- 5/9 Walmart (WMT), 1.39% | 90VS
- 5/10 Apple (AAPL), 0.55% | 99VS
- 5/10 Energy Transfer (ET), 7.99% | 50BS
- 5/10 UPS (UPS), 4.45% | 69S
🗣️Quote of the week🗣️
“Your job won’t be replaced by AI; it’ll be replaced by someone who knows how to use AI.”
–Luis von Ahn, Duolingo CEO and Co-Founder on the Oddlots Podcast
🎦If you missed it, this dividend portfolio update shared a very uncomfortable truth.
Investing Newsletters You Might Like
⭐Ryne Williams writes a free weekly dividend newsletter and creates multiple top-notch YouTube videos every week.
🤑Rick Stambaugh from Orange Mountain Financial brings you ‘Grow Retirement Income.’ He’s a seasoned pro with over 30 years in trading and a passion for guiding folks to a prosperous retirement.
⚠️Seeking Alpha Premium SALE!
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Random music video I enjoy and you might too!
🎵Sublime – Date Rape🎵
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That said, have a WONDERFUL week, and I’ll see you in the next one.
