Aswath Damodaran: Sticking to your investment philosophy means leaving money on the table



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

So in January 2020 I sold Tesla and told people it was a great stock for me, but given my philosophy of buying things that look cheap…it worked. Looks cheap, it doesn’t pass the test anymore, it got expensive, I sold and I haven’t heard from it since because the stock has gone up 10 times since I sold.

The often asked question is, are you sorry? Many people who read my blog are Tesla enthusiasts, they think I should never have sold and they asked me if I had any regrets. And I tell them that investing in regret is one of the most dangerous emotions you can have.

First of all, regretting something you did or didn’t do in the past won’t change what happened, so what’s the point of regret.

The second is that regret is insidious, because once you start regretting what you’ve done 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 the money on Tesla and giving up my… or giving up my investment philosophy, I’d rather give up the 10 times the value to stick to a philosophy that I feel that I can believe, that I Believe in.

Sometimes having an investment philosophy means leaving money on the table, and you have to be okay with that.

You can watch the full interview here:

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