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Subject:  Learning from a 78-bagger with Netflix Date:  1/23/2018  1:18 PM
Author:  TMFPencils Number:  7221 of 7305

With the stock's pop today, my Netflix position is up 7,744% (cost basis $3.21). A 78-bagger. Yowza.

All credit goes to David Gardner, who recommended Netflix in Stock Advisor. His recommendation intrigued me enough -- along with my family subscribing to Netflix -- that Netflix was one of the first stocks I bought when I started investing in 2005.

Unfortunately, I did sell 2/3rds of my position earlier this decade when I was raising some money to cover some college bills. I gravitated toward selling stakes in my biggest winners -- Netflix, Chipotle, and Monster -- which I still consider to be the biggest mistake I've made as an investor thus far.

I trimmed the flowers -- the winners -- in my portfolio, rather than cutting the weeds. (Netflix is still my largest single position, but boy... it could be a lot bigger.) I would much rather hold a losing stock too long than sell a future winner too early. Chances are the latter will do far more to damage a portfolio's future returns than the former. You won't enjoy many multibaggers if you don't give the companies time to grow and prove themselves out over a period of years and decades.

Few things are more powerful in investing than finding quality businesses and holding them with extreme patience. That "holding" part is easier said than done, but when you see what happens from diligent patience and holding of businesses like Starbucks, Amazon, and Netflix over a period of 10+ years, it makes it a little easier to sit on your hands.

David K
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