Aswath Damodaran: Sticking To Your Investment Philosophy Means Leaving Money On The Table

Johnny HopkinsAswath DamodaranLeave a Comment

In his latest interview with Micha.Stocks, Aswath Damodaran explains why sometimes sticking to your investment philosophy means leaving money on the table. Here’s an excerpt from the interview:

So in January 2020 I sold Tesla and I told people look it’s been a great stock for me but given my philosophy of buying things that look inexpensive… looks cheap, it’s now not meeting the test, it’s become expensive, I’ve sold and I haven’t heard the end of it since because the stock is up 10 fold since I sold.

The question often being asked is, are you sorry? A lot of people who read my blog are Tesla enthusiasts, they believe I should never have sold and they asked me whether I have any regrets. And I tell them look in investing regret is one of the most dangerous emotions you can have.

First, regretting something you did or did not do in the past is not going to change what happened so what’s the point of regret.

The second is regret is insidious, because once you start regretting what you did in the past here’s what it does, it changes the way you behave right now.

And I said look given the choice between making 10 times more money on Tesla and abandoning my… or abandoning my investment philosophy, I would rather give up the 10 times value to keep to a philosophy that I feel that I can believe in, that I have faith in.

Sometimes having an investment philosophy means leaving money on the table, and you’ve got to be ok with that.

You can watch the entire interview here:

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