The Dumbest Mistake I’ve Made In the Market: Netflix Inc. (NFLX), eBay Inc (EBAY)

Now:  I’ve bought and sold several times on the way and up and the way down.  I’m actually excited about the stock once again with the rumors of the iWatch.  Read about that here.

Investment philosophy: Technology companies have been near the top of the market cap before, but rarely has a technology company of this size and prospects traded at a forward P/E of less than 10.  Apple still has a few things up its sleeve.  The question is whether they can disrupt another market.

AAPL data by YCharts

That brings me around to the title of this article.  The dumbest mistake I’ve made in the market? Not taking the long-term approach at ALL times.  If I had adopted a “buy and hold” approach from the beginning, I would have had the following results: >25% gain, >700% gain, >540% gain.  If you truly believe that a company will revolutionize the market, buy and hold until they prove you right.

Oh, and those two rules that served Jimmy so well?

1). If a stock doubles, sell half of it. You still have the stock with room to run, but you got your initial investment out.  Everything else is gravy.

2). If a stock drops by 20%, sell it.  Hardly does a stock recover if it drops more than 20%.

That obviously worked for Jimmy.  I have adopted more of a buy and hold approach.

I’ll leave you with some words of wisdom by the Oracle of Omaha (Warren Buffett): “Our favorite holding period is forever.”

The article The Dumbest Mistake I’ve Made In the Market originally appeared on Fool.com and is written by Robbie Laney.

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