John,
However, I don't understand then why you didn't sell it, planning to re-invest the proceeds when it was less historically overvalued.
I've explained that so many times that I really don't know how to explain it in a different way that might be helpful.
Your explanation presumes a greater confidence than I could ever muster in the knowledge that you'll be able to buy back the same shares or other shares so substantially cheaper that you can justify taking a tax bite. Being so certain of the future isn't my strength.
In this particular case, it would have been clearly better if I had sold some or all of my Siebel position. However, there are countless other times that had I made that decision it would have proved to be just as clearly the wrong one. In fact, had I used that sort of decision-making process I would never have purchased the shares at a split adjusted price that is one-third today's price. Buying the shares in the first place might have indeed been a huge mistake. But if it was, I've been extraordinarily lucky. I'll take the luck.
I don't know your opinion about my decision-making process, but if you believe it's irrational I would instead argue that my process is occasionally flawed and mistaken. I don't sense that you have such a low impression of your process, so your process would necessarily be very different than mine.
For me, what it comes down to is that I'm not trying to get the best possible returns. Instead, I'm trying to meet my investing goal of doubling the S&P 500 over the long term as safely as I can. (I'm using my criteria about safety, of course.) The only thing I'm absolutely certain about is that I will quite often make serious mistakes.
If I were allowed only one message to send to the thread, it would be that an investor can seriously outperform the market over long periods despite the huge investing mistakes that are made. I know. I've been there and done that. If my mistakes are the result of being irrational, it's still only an honest mistake. I can easily live with it.
--Mike Buckley |
