Over the years, I have made plenty of mistakes with stocks and lost money on many of them, even after I read Peter Lynch and Warren Buffett. The mistake that scared me the most was when I bought into Sears at $170 in 2007, thinking it was extremely undervalued. Then a few months later, I suddenly recognized that Sears is a poor retailer and my wife never went to Sears to buy anything. I sold it at about the same price. Although I didn't lose money on Sears, I still get nightmares from it today. When I was writing Chapter 2 three months ago, the stock was traded at above $14. Now it is below $7. This made me think more about the quality of business and built my conviction of never buying low-quality companies again, no matter how undervalued they seem to be!
Then I made mistakes with good companies. I didn't hold them long enough and missed further gains with great companies like Starbucks and Danaher.
I did do it right with companies like Berkshire Hathaway, Church & Dwight, EBIX, AutoZone, and a few others.
I put what I learned into GuruFocus value screeners, charts, data, and other research tools over the past 12 years. I wrote this book to share my lessons. I hope that even people who don't analyze stocks full time can benefit from it. I hope that my children can stay in the right framework for investing. I do advise them to take accounting courses in college.
Finally, I want to pull the main ideas together: