Its my annual mea culpas column for the Washington Post Business Section column.

Here’s an excerpt from the column:

“Once again, it is the time of year when I look back at the various investing, trading and other mistakes I’ve made. (Last year’s version is here; prior years can be found here).

Why go through this annual review of blunders?

Rather than engage in the sort of selective retention that so many investors tend to do and pretend mistakes never happened, I prefer to “own” them. This allows me to learn from them, and with any luck avoid making the same errors again.

My motto: “Fresh mistakes, every year.”

It also provides a good opportunity for humility — a reminder of how little we actually know, and how much our expectations about the future are often at odds with what actually occurs. Ray Dalio, who runs the world’s largest hedge fund, observes this is how we “live up to our potential” as investors. The alternative is continually lying to oneself — about how smart we can be, how insightful our worldview is and what great investors we are. I am reminded of an old Yiddish expression: “Man plans, and God laughs.”

What mistakes did you make last year?


My motto: ‘Fresh mistakes, every year’
Barry Ritholtz
Washington Post, February 9 2014

Category: Apprenticed Investor, Philosophy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Mea Culpas: ‘Fresh mistakes, every year’”

  1. MidlifeNocrisis says:

    My mistake was not being anywhere close to “fully invested” and continually waiting for the correction that never came. I’m retired already so that makes it easy for me to justify, to myself, but it was still a mistake nonetheless.

    From my perspective, your “don’t feed the trolls” wasn’t really a mistake. If part of your goal (even only a very small part) is to educate and enlighten, then you have to feed the trolls every once in a while. Maybe one day some of them will eat something and actually digest it….

    • Bob K. says:

      What is interesting as Barry himself acknowledges how little he knows, yet he sure posts some very declarative views and dismisses those who do not hold them. It is always good to engage in debate, both always learn something.

  2. phillips49 says:

    My mistake – lopsided allocation, way, way overweight bond funds, way, way underweight stocks. Going into 2013, I fully expected QE to remain in place until 2014 and preferred a safe lower return as opposed to higher risk. Got caught off guard by the May FED announcement and the subsequent impact. Waited 30 days to see which way the wind was going to blow and then sold off bond funds, took another 90 days to figure out what I wanted to buy and what sectors to focus on and 45 days more to execute. So I ended ahead for the year, (+5%), but missed most of the run up in stocks. Will I make allocation mistakes again?……probably……there’s a slow moving bias toward what’s working at the moment.

  3. bsnceo says:

    turns out some of my mistakes from 2013 are not so fresh (some stocks just aren’t going to deliver on your hopes). But this is another day and another year and I am not giving up striving to be better and more mindful of the past so that I am not condemned to repeat it (thank you, George Santayana).

  4. intlacct says:

    2013 – Note enuf equities, too much bonds/cash, cratering of small gold position.

    On the positive side I semi-mechanically harvested gains (I have buy, not sell, discipline – so this was a major achievement). That and the bond/cash position was excellent during for taking advantage of buying opportunities in the recent hiccup.

  5. intlacct says:

    couple more observations –

    EM was a laggard (forgot that one) and directly held real estate was excellent.

    Anticipating a blah year in US equities (but crystal ball cloudy…)