Alibaba is my biggest failure in the stock market.
I bought it in 01/2022 at a price of $129 and sold it at $87.6 in 09/2023.
It's worth $106 now.
Why did I make this mistake?
Because I followed a guru named Charlie Munger, the business associate of Warren Buffett.
Because it looked cheap compared to its earnings.
And I thought it would keep growing at the same rate.
But the truth is: I had no clue about its competitive advantages.
In fact, out of all the annual reports I’ve read, this one was the most complex.
They had so many different businesses — cloud, food delivery, e-commerce, payment services, banking, logistics, media, etc.
Then Charlie Munger said it was a bad investment because it was in the retail business.
And I thought to myself: "Do I even understand what they’re doing?"
So I sold everything — and I was happy to do so.
Now I only buy easy-to-understand stocks.
And it works well.
Don’t buy things you don’t understand.
Don’t buy everything gurus buy.
Focus your investments on what you know, at a good price, and with real competitive advantages.
That’s how I’ve managed to get 30% returns per year, for three years in a row.
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