Welcome everyone. Thank you for joining.
This episode is going to be a fun one, because we're going to
be looking at my worst investment ever.
That's right, where I've lost the absolute most amount of
money in the stock market. I'll be revealing it here and
kind of explaining what went wrong with it and I'm going to
make it more interesting than that.
You see the two black boxes here?
This is hiding. What is not only my worst
investment by three, worst Investments ever and how much
money I lost on each one of them and then we'll be comparing and
contrasting that against My 3 best investments ever and how
much money I made on those. So you're going to see each of
them. The absolute worst decisions
I've made in investing and the best decisions I've made and
we'll go over all of it in this episode will also, of course be
going over the growth portfolio, which is the story fund and
comparing this against the S&P 500.
So as always, we have a lot to jump into.
Let's go ahead and get started. The first thing you need to know
with me is that I have two YouTube channels.
One of them that you're watching right now is Joseph Carlson
after hours. Well, I have another YouTube
channel. Just called Joseph Carlson, just
my name. And on that one, I actually
track a different portfolio called the passive income
account, and they have different goals.
The story fund, which I track on this channel.
This goal is just to outperformed the S&P 500 and do
that by investing in highly aggressive growth.
Centered companies that have huge total, addressable markets,
great brand value, a products that are in secular grow Trends,
so on and so forth. So the goal is simply to beat
spy and to do what soundly Over a five-year time Horizon.
Right now, I'm not beating spy. I'll just be transparent with
that. It's been a struggle so far, but
I'll go into that more in just a minute.
The goal at the passive income account is different.
I'm not quite as aggressive with this portfolio.
I invest in high-quality dividend-paying companies that
have a lot of cash flow. Some cases, they're more
matured. They have less growth ahead of
them but they continually generate free cash flow.
They do Buy Backs, they pay dividends and overall it's just
a steady compounding machine. This portfolio I think is more
Hannibal and consistent and I think it's easier to manage.
In fact, I play this one a lot more conservatively.
I don't take quite as big risks in my opinion, and this one has
actually performed better than the story fund.
The story fun where I've been very aggressive and invested in
a lot of fast, growing companies that are at higher multiples.
In some cases has performed worse overall and I'm actually
in the red overall on this one. So those are the two portfolios
and I tracked them on two different channels.
Again the story funded what the after-hours channel, the passive
income portfolios with Joseph Carlson channel.
So you can follow each of them transparently week by week.
But my point in mentioning that is in this video, I want to show
you the best and worst of each of these portfolios.
What are my three best investments?
And what am I three worst Investments?
Let's go ahead and start off with my three worst Investments
and funny enough. Each of my worst Investments are
in the story fund. None of them are in the passive
income portfolio. In fact, in the passive income
portfolio, Haven't lost money, on many companies.
It's been very minimal losses. Most of my losses come from the
story fund. So let's go ahead and get
started with number one, we have Netflix at a staggering eight
thousand four hundred dollars in losses.
So let's go ahead and take a look at number 1, my worst
investment ever, which is Netflix and it's in the story
Fund. In fact, again, all three of my
worst Investments are in this portfolio.
It's been a very tough ride so far.
Netflix is one of my favorite companies.
It's one of My biggest convictions, I'm still very
bullish on the company overall, but I have made a mistake and
buying this company at a higher price, without a huge margin of
safety and their growth rapidly decelerate it which spurred a
huge sell-off in the stock. So, when I was buying this
company, I didn't think I was overpaying for it.
Actually thought that I was buying it, at decent value.
That's the reason that I was purchasing it, but obviously,
the market prove me wrong soon. After I was buying it, the
market, sold it off, and I'm currently down over In dollars.
So Netflix has had a really tough 2022 so far they started
off by rapidly decelerate in their growth expectations.
The street Wall Street expected around 5 million subscriber
gains for q1 and Netflix said nah it's going to be more like 2
million so a lot lower than the expectations of Wall Street.
And then with the Oscars last night, Netflix didn't win, best
picture, they had a chance of winning best picture, but Apple
came in Apple's a pretty good company.
Everything they do. Do and they came in with their
streaming service out of left Phil just a couple years ago and
they took best picture for a movie before Netflix ever has.
This is incredible. Apple came out of nowhere with
Apple TV, plus something that like five people are probably
watching right now, but apples actually starting to come out
with good stuff, they're winning, best picture at the
Oscars and this is an award that Netflix has never won.
So, this is just not been a good year for Netflix, and I expect
the troubles to continue on and Netflix re accelerates their
growth unless they can show that they're still a Growth Company.
They're still growing their total addressable Market.
They're gaining subscribers and Latin America and an India and
so on and so forth. But right now, this company has
been a struggle and I expect to be in the red unless we see some
margin Improvement, unless we see some free cash flow growth
unless we see subscriber gains Beyond expectations, some of
that stuff has to be improved. But as it stands right now,
Netflix is my number one big. This loser, I'm down over $1000
now. Moving on, in number two we have
Ali Baba. Add a four thousand dollar loss.
That's what I'm at right now. Again, Ali Baba's another one in
the story fund and I have seven thousand dollars in value and
I'm down for thousand dollars some down over 50% on this
holding. I think it's been one of the
worst scenarios ever where I bought into the company and just
immediately it fell 50 percent. And that's a situation with a
lot of people. Because Ali Baba went down from
a That was quite High just recently like a year ago and it
felt even more to the point where it was considered pretty
good value. Even factoring in like China
risks in the government, and the potential for delisting is
seemed like it was trading very cheap, then it just fell more,
and more, and more, and more going from a price of, like,
$300 w low $100. So, lots of investors have
jumped in at different times and most of them have been hurt by
Ali. Baba, there's not a lot of
people that are in the green. With this company but I knew the
risks. I knew that China is
unpredictable. I knew a lot of people are
uneasy investing there but I went ahead and invested in Ali
Baba. Anyway on the calculated
assessment, the calculated risk that Ali Baba would not be hurt
too much by the Chinese government because they would
not have the incentive of hurting, one of their best
companies. And I also made the risk
assessment, that's just kind of a guess that the Chinese
government will not want to sever relationships with the us
because it's to economically beneficial.
We already have so many businesses doing business with
China. We have Tesla in there and
Disney and apple and Coca-Cola, and so on, and so forth.
So, I thought that there's a decent chance that those
concerns are overblown. Obviously, I was probably
mistaken on that Ali Baba. Continue to fall, I lost some
money on it. And now, I am still a holder of
the stock. So I'm going to give this one
time. We'll see what happens.
But so far. This is my second biggest loser.
Now, moving on to number three. My third worst.
Moment ever is Spotify, which I'm currently down, just like
Ali, Baba, four thousand dollars roughly speaking.
Now, spotify's a company that has a lot of challenges right
now. They had the Joe Rogan
controversy, they have the battle with big Tech and all the
streaming services that they're coming out with and pushing so
that it's not the perfect story, but the company has a great
product. It continues to grow fast,
they're growing their membership, very fast as well.
And I'm still bullish on the company overall, I bought it
during a time where SAS Multiples in general, were much
higher. Spotify was trading around a
fifty billion dollar market cap, and right now it's around a
twenty eight billion dollar market cap, so it's come down a
lot. But again, I remain bullish on
this company overall. And I think over the next year
or two, I have a chance of erasing, some of these losses.
Now, the total hair is sixteen thousand four hundred dollars in
losses between my top three worst Investments.
So that's a huge number sixteen, thousand four hundred dollars,
I'd like to have that back but keep in mind every one of these
companies. He's, I still hold all the
original shares that I originally purchased.
I haven't sold out of them, so, I have not realized any of this
loss. It's just unrealised at this
point and I think over the next three years, I have a decent
chance of making a lot of it back.
So we'll see how this goes in the future.
Now, let's go ahead and transition over to my best
investments ever. These are the best stock picks
that I've ever done. We have apple this one.
I'm up twenty three thousand five hundred dollars.
Now, like I mentioned apples in my other portfolio called the
passive income. Where I have a dividend growth
strategy and Apple has been one of the central Holdings in this
portfolio right here. You can see I have twenty three
thousand five hundred fifty dollars in gains and the total
position size is 59,000. So a little under half of the
position is gains, and this one, I still remain bullish on
Apple's trading at a kind of high twenties PE ratio so it's a
little bit pricier right now. I'm not pouring money into this
holding or anything. When I look at their future,
their products are coming out with their Market.
Position, their balance sheet and everything.
I still think the apple offers, attractive value.
So I continue to hold it with apple.
I'm up 23,500, the next one is Costco.
I am up over ten thousand dollars right now.
In Costco Costco is another company that I consider to be
one of the best companies in the world that's in my passive
income portfolio. There it is right there up ten
thousand five hundred dollars and the total position size is
40,000 now this was not a deep value by in fact I purchase
Costco with the Relatively High P/E ratio because I believe in
the future of this company so much.
I think that it is one of the most promising stories in the
entire Equity markets. I think this company will
consolidate retail, it'll grow throughout China.
It'll grow everywhere in the world.
Because everywhere I see this company, I see people loving the
business model, loving the shopping experience, loving how
good they treat their employees and their customers and the
return policy. And I just think it's incredibly
difficult to compete with and so far investors want to own this.
This company they're willing to pay a premium for it and even
though I have ten thousand five hundred dollars in gains right
now I don't plan on selling it and locking it in.
I plan on holding this company for the next ten years because I
think the gains will be much higher over that time period.
So we have CostCo with over 10,000 dollars in gains.
And number two, and then a number three, it's very close
between Microsoft and JP Morgan, but JP Morgan came in third
place with over 6,000 dollars and gains in this company.
JP Morgan is another company in the passive income portfolio.
Here is what it looks like. Currently six thousand one
hundred and seventy two dollars in gains.
And it is a 20 thousand nine hundred dollar position having
said that, this is a company that I do like to kind of buy
and sell based off the valuation.
The Price to Book. Value gets up to a 2.
I end up selling a little bit and taking some gains, if The
Price to Book value goes down to like a 1.5 that's typically when
I buy it because that signifies that it's undervalued based on
its history. So JP Morgan.
Making up third place with six thousand dollars in gains.
That is a I love 39 thousand eight hundred dollars in gains.
So with my top three, biggest losers, the absolute biggest
mistakes I've made in investing, I'm so far down, sixteen
thousand four hundred dollars and my top three winners are up
39 thousand eight hundred dollars that Nets out to twenty
three thousand four hundred dollars in gains between these
six companies. And that's I think an important
way to look at investing, consider the fact that just
Apple alone, just my best pick makes up for my top three
biggest loss. Zephyr, having one right pick
and investing can make up for a lot of mistakes, and I think
that's the way that you have to view this, whenever I make an
investment into any stock. I want that to be a winner.
I want it to make me a lot of money.
And so I do a lot of due diligence, a lot of research.
I try to buy very good companies, that attractive
values and I want to have a 100% hit rate.
I want every single company. I invest in to make me a lot of
money. Unfortunately, that just can't
happen. That's not how investing works.
Nobody bats. A thousand.
Nobody has 100% of the Investments.
They make turn out like they expected.
Even Warren Buffett, even Bill Ackman, even Peter Lynch, all of
them have losers in their portfolio.
Every one of these investors lost money on different
Investments. They all have this category of
their worst Investments. That doesn't look pretty if you
dive right into it, you know, that Warren Buffett, lost money
on the airlines he was invested in them and then sold them in
2020. Realizing a big loss and he's
lost money on retail Investments.
And It's a different Investments Berkshire.
Has lost a lot of money in a lot of different Investments but
they've made way more money in their gains there by an apple,
makes up for a huge amount of losses.
They're buying Coca-Cola makes up for a huge amount of losses.
They have a couple key companies that really erase all the losses
of their worst Investments, you can also look at Bill Ackman, he
lost money on JC Penney, he lost money on Valiant he lost money
on Herbalife, he lost money on a lot of different Investments,
but overall his big Winners have made up for his losses and you
can say the same thing about any single investor.
So when you're looking at your portfolio and you're looking at
some of the investment mistakes you have made, especially
recently, with how difficult it's been, don't lose track of
the fact that everyone has these losses, most people don't like
to show them publicly because it's kind of embarrassing.
You want to only show this category of where you're making
all the money but I think it's good to put this in perspective.
We have our worst Investments, we have our best investments,
and if you're doing intelligent and Testing we're making
calculated risks and looking at valuation and investing in high
quality companies. Your best investments will make
up for way more than your losses.
And overall you'll have a huge net gain so even though as an
investor, my goal might be to have every investment turn out
great and make lots of money. I know realistically that,
that's not going to happen. I'm going to have my set of
losers just as I have my set of winners and that's the way that
investing has worked throughout all of history.
That's the way that it's always been in my My case, my goal is
to have my winners make a lot more money than my losers, so
that they overcompensate for the losses.
That's what I'm trying to do. So even though I try to bat a
thousand, I try to hit home runs on everything.
I think the ones that I do hit a home run on the great
investments will over compensate for the losses just like apple
did for my three worst companies.
The risk reward for stocks is just amazing.
You can only lose your invested Capital.
That's all you stand to lose when you invest in a stock.
So if I invest 10,000 dollars into a Company and heaven
forbid. I really pick a bad company and
it goes bankrupt. Something that's never happened
to me. I would lose ten thousand
dollars and I'd be out my initial investment that would be
terrible, right? To lose ten thousand dollars but
the risk/reward is so good. If you invest in another company
that does really well. It can go up 100 percent to
twenty thousand. So you can double your money or
it can go up 300% or 400%, or five hundred percent a lot of
these companies like Costco and JP Morgan and apple have
compounded, huh? Hundreds and hundreds of
percent. So you stand to make far more
with good compounding companies, then you stand to lose with
making one bad pick. The risk-reward is just amazing.
And that's part of the reason that I love the stock market.
Anyways, that's my video for today.
I hope you enjoyed it and I'll see you in the next one.