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The Billion Dollar Mistake

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The Billion Dollar Mistake

Learning the Art of Investing Through the Missteps of Legendary Investors

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Top investors can make the same stock mistakes as ordinary folks. Here’s how to avoid their errors.

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Editorial Rating

8

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  • Applicable

Recommendation

You might expect that legendary billionaire investors like Kirk Kerkorian, Aubrey McClendon and Nick Maounis would not make the same mental mistakes as a weekend investor. But they do. These investment geniuses, among the world’s smartest – and richest – investors, have lost billions of dollars through boneheaded stock picks. Author Stephen L. Weiss reviews a stack of big investment blunders by these and other renowned financial wizards. Weiss’s vast Wall Street experience backs up his analysis, but you’ll have to decide if he’s correct that people learn more from their mistakes than their achievements. getAbstract thinks you’ll enjoy his instructive saga of investment woes.

Summary

Don’t Do What They Do

Everyone makes mistakes. The fewer you make as an investor, the stronger your portfolio and the richer you become. You can learn what not to do by analyzing blunders made by the world’s most famous investors. Superstars make the same idiotic errors average investors make – but on a much grander, more expensive scale. These “legendary investors” are among the “smartest, savviest, sharpest, most successful” people who have ever selected a stock. You can learn valuable lessons from their errors – and from your own.

How can you learn to make the same mistake only once? Summarize your investment snafus on sticky notes titled “Don’t do this again!” Stick your mea culpas to your computer and listen to yourself.

Bernie Madoff Has a Deal for You

Norma Hill is a typical Bernie Madoff investor. She lost $2.4 million with Bernard L. Madoff Investment Securities. For a widow in her 60s, this is a tragedy. She may have to sell her home to survive. Hill joined Madoff’s investment fund group in 1988. She recalls his comforting, soft-sell approach. His first words to her: “If you feel insecure about any of this, by all means, put it in CDs.”

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About the Author

Stephen L. Weiss has worked on Wall Street for decades and is a senior managing director and head of equities at Leerink Swann, LLC.

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