Warren Buffett Explains Long Term Stock Investing

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3 Principles About Building Wealth That Can Be Learned From Warren Buffett

Warren Buffett is one of the legends of investing. I often read books about him watch his interviews on television as I try to learn as much as possible about his investing style. I respect the fact that Buffett knows a lot about what it takes to make money investing.

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Great Growth Stocks Sold Too Soon

Today I would like to take a look at an investment mistake that I have made in the past. It is a common mistake of many investors,. The mistake is failing to stay invested in great growth stories that have the potential for multibagger status. Selling a stock too soon can rob you of the potential profits. Many investors worry about holding a stock too long but too few consider whether they have given up on a stock too quickly.

Here are 3 great growth stocks that I sold too soon.

Netflix (NFLX)

Who knew that renting DVD’s through the mail would become so popular? Shares looked expensive in the early 2000’s at $26. Since then the stock has split and returned 1300% over the past 8 years. Needless to say, my selling early was a big mistake.

Chipotle Mexican Grill (CMG)

I thought that this would be just another fad restaurant chain. There are so many chains in the restaurant industry that it’s difficult to tell which ones will make it and which ones will now. Well, Chipotle made it. Chipotle shares are up over 200% since the chain was spun off from McDonald’s in 2006.

Google (GOOG)

During Google’s initial IPO, shares were selling in the $85 dollar range. I bought in at $145 and I sold out way too early in the upper 200’s. I failed to see the long term growth potential of Google. Shares of Google are now approaching $500 and the stock could be an earnings giant for a decade or more.

An important lesson to learn from this is that sometimes the best investment ideas can be found in your existing portfolio.

Tomorrow I will take a look at 3 stocks that I believe have multibagger status written all over them.