I commence with my gratitude to The Ultimate Knower
Biggest names, who have earned their names, by being the best forecasters of the market, are humbled by the market.
In 2008, Buffett bought a large stake in the stock of Conoco Phillips as a play on future energy prices. However, this turned out to be a bad investment, because Buffett bought in at too high of a price, resulting in a multibillion-dollar loss to Berkshire.
In 1993, Buffett bought a shoe company called Dexter Shoes. Buffett’s investment in Dexter Shoes turned into a disaster because he saw a durable competitive advantage in Dexter that quickly disappeared. According to Buffett, “What I had assessed as durable competitive advantage vanished within a few years.” Buffett claims that this investment was the worst he has ever made, resulting in a loss to shareholders of $3.5 billion.
Since Muddy Waters fired its opening salvo in early June, Sino-Forest’s shares have plunged 87%, wiping out $4 billion in shareholder value and scaring off heavyweight investors such as John Paulson, whose hedge fund, Paulson & Co., took a $574 million loss when it bailed out of the stock last week.
Lessons Learned: Must know, when to quit. Not quitting the wrong stance, is the only factor which have always plundered the wealth of many.
THE MOST ACCURATE FORECASTING OF FINANCIAL MARKETS
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