Many of the immature investors buy overvalued stocks and then they sell when those stocks become cheaper in nature. But this is a wrong way of making an investment and making a decision. If we keep on making a wrong decision, then we keep on feeling a regret which affects our decisions. Our mind carries a past experience which affects our decision. As an investor, we need to make every new decision independently without getting effects from the past experience. If we have a bad past experience then our current decision will affect our regret and if we have a good past experience then our current decision will affect our overconfidence.
After the bad experience, people work more cautiously until they do not again start playing the game. As we again start playing a game, our past experience starts affecting us. When things go up then also greed for taking out profit stop us from getting more gain.
Mr. Chris Sacca is the founder and chairman of Lowercase Capital which is a venture capital fund. This fund considers as one of the successful venture capital funds which have recorded return of 250 times from its initial investment. This fund has put $300000 of a fund to Uber, currently, it’s 5000 times. Some of the other success of Mr. Sacca was Instagram, Uber, Kickstarter, Slack, Automattic (WordPress parent company), Twilio, and Twitter.
He has also a regret of pass on some of the investment. One of the business was Dropbox and giving a pass on to the Dropbox cost him a lot. Another miss of Mr. Sacca was Snap, the parent company of Snapchat. He can speak for his misses because he has a more winner also which has created a fortune. But if we have missed an opportunity or sold-out good businesses earlier then we always remain into the regret. We actually need to move on to the opportunity which we have missed out and need to focus on the other coming opportunities.
Emotional biases affect us badly during our investment journey. If we have a winner into the portfolio and we sold it then also the winner keeps on growing. If we have a loser to the portfolio and we have cut losses then stock again gains from that level. Such situations affect the decision making skill and we make faulty decisions.
As we have seen that Mr. Sacca has missed a few opportunities, Mr. Buffett has missed many and also he has lost money in a few of his investment. Important is that they have never kept their regret with them which has helped them to build an empire. We have to move on rather than sticking with the past decision or getting attached to the previous decision. Our life is full of such decisions and if we stuck with it then we will not make further decisions in our life. We have to learn from our decision and use it for further decisions.
Read for more detail: Big Mistakes: The Best Investors and Their Worst Investments by Michael Batnick