So by now, everyone’s heard the news, watched the news, and heard it and watched it over and over again. A veteran umpire for major league baseball unarguably made the worst call ever in his entire umpiring career. When Joyce called the 27th batter safe with two outs in the 9th inning, in the verge of throwing a perfect game, pitcher Armando Galaragga was denied the 21st perfect game of the entire major league history. Everyone’s heart sank when the batter was called safe. They all felt bad for the pitcher. But we all have to feel pretty bad for the umpire as well. Will he ever be forgiven for making such a bad call at such a critical moment in baseball history? Will this call go down as the worst call ever in any sporting event history?
After seeing the replay after the game, Jim Joyce personally apologized to the pitcher for making a mistake and his apology was accepted. The next day, even the fans appreciated Jim’s professionalism of apologizing by applauding him instead of booing him. Jim Joyce was forgiven for his mistake.
So, what does this topic has anything to do with this personal finance? How does this help you with increasing your net worth? Well, when I heard this story, it reminded me of one big financial mistake I made a few years back. You see, after working at my very first job after graduating with an engineering degree, I didn’t know what to do with all the money I was saving. In fact, I saved over $20,000 during my first year of work while making $43,000 gross that year. I’ve never seen my bank account rise so high before. So, I became a little more careless with my money and started investing in high-risk high-reward penny stocks. Penny stocks are stocks that are not regulated by anyone and the price can be manipulated by market movers very easily. One morning I saw my $5,000 portfolio skyrocket to $27,000! It was a 5-bagger indeed and I probably peed in my pants about 3-4 times that day.
What does a young man do when he sees that kind of wealth in such a short amount of time? What would any reasonably smart person do in that situation? For me, all the signs were pointing at sell and take the profits. No one sees a 5-bagger in one day! It was truly a once in a lifetime moment. While all of the signs were pointing to sell, I could not. I went home during lunch that day to think about my options, but after staring at my portfolio for 15 minutes, I decided to hold on to it, hoping it would go up more.
That was my first mistake.
That day, the peak price occurred during lunch time when I was contemplating to sell. From that moment on, I saw the stock price go down steadily. I 5-bagger had become only a 2-bagger. I could’ve still sold that moment and make a decent profit. But instead, I decided to buy more shares. Yeah, I bought more shares and as the price continued to fall, I bought even more. I didn’t know what I was thinking and I definitely had no idea what I was doing. I was a victim of stupidity.
That year, I ended up losing over $25,000 investing in stocks, penny stocks that is. I vowed never to go back to penny stocks after that year. That was over 7 years ago and I’ve learned to forgive myself from those mistakes. As long as I don’t make the same mistake again, I think I’ll be OK. Just as Jim Joyce needs to move on from his mistake, I learned to move on from my mistake as well. I know the analogy here is a little far-fetched, but I was reminded of my mistakes. Hopefully, you’ll be able to learn from the mistakes I’ve made.