The Worst Financial Mistakes I Ever Made
Part I
Written by Jimmie Burroughs
“In life’s journey, having the ability to predict the future gives us an unfair advantage. If we can understand the laws of cause and effect, anyone can predict the future. What we do today leads us to tomorrow’s destination. Why does this simple truth seem to be difficult for most people to understand?” – Celso Cukierkorn
The reason I’m writing these articles is, to help others to avoid doing the same things I did and making the same mistakes. So, I’ll start with the first big financial mistake I made.
Not Recognizing Trends
Understanding the laws of cause and effect(a universal law which specifically states that every single action in the universe produces a reaction no matter what) gives the ability to predict the future outcome of new trends based on dependable logic. There have been several trends in my lifetime. Any one of them would have made me very wealthy had I recognized them for what they were and had invested only a little in them. The first one took place when I was growing up; it was the Gerber company. I was a little too young at that time to be investing, but here is the thing: It was obvious that this company was going to be big. The second world war was over and there were thousands of soldiers returning home who had not seen their wives in a long time as well as young, single men looking for wives. The result was a baby boom, which required a lot of baby food. That trend should have been easy to spot. Gerber was a leader in that trend.
About the time I graduated from high school there was another trend on the verge of beginning, the Interstate Highway System. The system is named for President Dwight D. Eisenhower, who championed it. The Federal Aid Highway Act of 1956, authorized its construction. The original portion was completed 35 years later.
Once again this was the beginning of a new trend of travel. Gas was cheap and cars were more available to the average person. It was easy to recognize this trend, which meant that America was going to have to build a lot of motels across the country. Meanwhile, across the river from where I lived, in Arkansas, a relatively new motel chain, called Holiday Inn, which was started earlier in 1952, was gaining momentum. They started with one motel in Memphis Tennessee. Later on, when I was married, I learned of a great investment opportunity in Holiday Inn, but did I heed It? No!
True, I was still young and didn’t have much money. However, I had made enough money to pay cash for a new Ford convertible. Truth is, at the time, I had a pretty good car paid for. If I had invested that money in Holiday Inn, it would have made a lot of money. But the best trend yet was just around the corner. Again, its potential was not hard to spot. Sam Walton opened up his first Walmart store in 1962, in Rogers, Arkansas, the very year I got married, just a few miles from where I lived. Later on, around the time of its IPO, I heard people talking about what a great investment it was. Did I invest in it? No! Even though it was obvious that a store where you could buy a number of the things you needed without having to drive all over town was bound to be a trend.
That was not the end. From that time until now there have been several trends that have made millionaires out of a small initial investment. Here are some examples:
Walmart: Walmart’s initial public offering was Oct. 1, 1970. Investing in 100 shares, $1,650, would be worth over $4.3 million today.
Apple: On its initial public offering, December 12, 1980, a $1,000 investment would be worth around $430,000 today.
Microsoft: On the day of its initial public offering, on March 13, 1986, a $1,000 investment would be worth more than $1.6 million today.
Amazon: If you had invested $10,000 at Amazon’s initial public offering on May 15 1997, at $18 per share, it would be worth more than $12 million as of May, 2020. That’s more than 120,000% growth.
Netflix: Netflix went public on May 23, 2002, and a small investment of $990 on that initial public offering would have netted over $340,956, after stock splits, for a gain of 34,340% in about 18 years.
Facebook: if you had invested $1,000 in Facebook on its initial public offering on May 18, 2012, you would have made $2,969.32, or a 363.93% return on your investment.
Every one of these companies had plenty of obvious clues that they would be a coming trend. And the thing about it is, you did not have to be very smart to recognize it. Did I invest in any of them? No!
There will be plenty more trends in the coming years. In fact, there are several right now. One of the biggest trends in history is driverless cars. It is projected to be a 7 trillion-dollar trend. Many millionaires will be made with this trend. It is already in operation in Las Vegas: Aptiv’s Self-Driving Vehicles Toped 100,000 Rides In Las Vegas by 2018. You can call for a driverless cab to take you to any location in The Vegas area. Driverless delivery trucks are already being used in some places. The second most invested company in driverless vehicles is GM, whose stock is still very affordable. Waymo, is the #1 driverless car company; the price of its stock is already out of sight at over $1,400 per share. Whether or not you believe this, is not going to keep it from being the biggest thing, not today, but in the not too far away future. It will reduce the cost of travel tremendously as well as the loss of lives on the highway. In fact, a lot of people will not need to even own a car because public transportation will be so cheap.
There are several other trends that could be starting up as a result of the Coronavirus. For example: Biopharmaceutical companies, tech companies, communication companies, to name a few. One of the biggest future trends will be companies involved in developing a new form of cheap energy. Electricity production, as we know it today, will become obsolete. There will a great advancement in batteries that require to be charged only after long periods of use, at a low cost, and rechargeable in as little as 8 minutes instead of hours. It is believed that batteries will be the future form of low-cost energy. One of the leading battery manufacture’s stock is still very affordable. Of course, we have to keep in mind the trends do come and go, and not every trend will pan out, especially like some mentioned in this article.
Finally, actually I have no regrets for not taking advantage of every opportunity that came my way. I’m just thankful for the ones I did take advantage of. Someone said that “the richest man is the man who is content with what he has.” Much of what God has blessed me with money cannot buy. Please read my article on “The Riches that Devour the Soul of Man.”
I hope you have enjoyed this article. My next article on the greatest financial mistakes I’ve made will be on the most recent one. I hope you watch for that one, so you won’t have to make it also.
Disclaimer: I am not a professional stock advisor. The information in this article is based primarily on personal experience and is for information only. Use your own judgement and the recommendations of a professional stock broker before investing in any stock.