My Worst Investment Ever Podcast
Business:Investing
BIO: Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence.
STORY: Nick invested in a stock he wasn’t familiar with just because his friends were doing it. He suffered a 78% loss.
LEARNING: Don’t buy individual stocks. Trust your gut.
“If you’re going to gamble, just wager less.”Nick Maggiulli
Guest profile
Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence. He is also the author of OfDollarsAndData.com, a blog focused on the intersection of data and personal finance. His work has been featured in The Wall Street Journal, CNBC, and The Los Angeles Times. Nick graduated from Stanford University with a degree in Economics and currently resides in New York City.
Worst investment everIt was the summer of 2021, and Nick was having a great night with some friends. One of his buddies, who’s pretty good at stock picking, told the group about this new exciting stock called Matterport (MTTR). Matterport is a virtual reality software that allows you to do 3D imaging of a room.
Up until this point, Nick had primarily been a passive investor. The friend convinced the group to invest in Matterport, saying it would be big. Nick put in about 1% of his net worth. The group didn’t do much research. They just discussed the stock in a group chat for a day or two. They didn’t pay attention to it anymore.
Over the next few months, the stock starts going up. Nick got excited about the surprising stock performance. He happened to attend an art show in New York. Coincidentally, the gallery was using Matterport to give a tour of their art venues. This was so wild and got Nick even more excited.
The stock kept going up, and by November 2021, it had doubled. Nick bought it for $15, and now it was $30. At this point, everyone in the friends’ group doubled their investment.
The peak was in November, and then the price started to decrease slightly. Nick figured it was no big deal, as every great winning stock has a decline. So he held onto the stock. The price kept going down. Nick sold his stock in October 2022 at $3.30 a share, making a 78% loss.
Lessons learnedIf you’re going to gamble, make sure you know exactly how much you’re willing to lose.
Nick’s recommendationsIf you want to learn about individual stocks, Nick recommends reading Scale: The Universal Laws of Life, Growth, and Death in Organisms, Cities, and Companies. The book talks about the growth of cities, companies, and that type of stuff. To understand asset allocation, Nick recommends books by William Bernstein. He also recommends reading his book Just Keep Buying: Proven ways to save money and build your wealth if you want to learn the risks of investing in individual stocks.
No.1 goal for the next 12 monthsNick’s number one goal for the next 12 months is to expand his blog’s SEO traffic.
Parting words“Keep buying.”Nick Maggiulli
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Connect with Nick Maggiulli
William Bernstein – Never Invest Based on the Headlines
ISMS 32: 5 Signs of Impending Recession
ISMS 31: Global CPI saw 2nd MoM uptick in August
Swen Lorenz – Carefully Consider Liquidity in Your Portfolio
Paul Merriman – What You Do When You Are Young, Is Golden
Vikram Mansharamani – Liquidity Will Not Always Be There
Gino Barbaro – Buy Right, Finance Right and Manage Right
Robin Wigglesworth – You Can’t Outsmart the Markets
Sheryl Garratt – Shove Your Ideas Out There and See What Happens
Kim Ades – Slow It Down
Nick Hutchison – Have a Proof of Concept Before You Dive Into the Big Idea
ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
Laurie Barkman – Quit Often Quit Fast
Mark Venables – Do Your Best to Secure Your Crypto
Tania Reif – You Can Be Right and Lose Money
Mark Neuman – Constrained Capital and ESG Orphans
Ryan Dusick – Invest Yourself in Something That’s Meaningful
Thomas Chua – Have a Proper Sell Thesis When Investing
Kat Merchant – Do It Today
Laurent Lequeu – Sizing Is Crucial When Trading
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