Missing Out

Kenyon Sayler

A FRIEND ASKED ME if I was buying cryptocurrencies or nonfungible tokens. When I replied that I was not, my friend asked if I was afraid that I was missing out on the investment of a lifetime. That got me thinking about three great investments where I did indeed miss out.

First, in 1981, some young engineers were sitting around talking about what we should invest in. One fellow said he was going to buy a share of Berkshire Hathaway, which was then selling for about $500, equal to a week’s salary. In my wisdom, I said that the stock had performed superbly, but CEO Warren Buffett was 51-years-old and unlikely to stick around much longer. In fact, he’d probably have to retire when he turned 65, a scant 14 years hence.

One share of Berkshire Hathaway (symbol: BRK-A) now costs almost $500,000, for an annual return of about 18%. Had I invested the money in an S&P 500-index fund, the price appreciation would have been about 9%. I could add a few percent to the S&P’s return to account for dividends. Still, I clearly missed out on a great stock purchase—and, unfortunately, I didn’t even invest in an S&P 500 fund. More on that later.

Next up: In 1990, feeling like I’d missed one great stock picker, I chose another. I purchased Fidelity Magellan Fund. While people today pay zero trading costs, I paid Fidelity a 3% load, or commission, to invest with the great Peter Lynch. Sadly, two months after I purchased the fund, Lynch decided to retire. I never saw the great returns that Magellan had earned in its early years.

Note that Lynch was only age 44 when he retired. That’s seven years younger than Buffett was when I was concerned that he would retire.

My final miss: I graduated from college in 1981. That was five years after Jack Bogle launched the First Index Investment Trust, which would later be renamed Vanguard 500 Index Fund.

I regularly read The Wall Street Journal and Barron’s. I stayed current on the latest investments. Yet I didn’t invest in any index fund until 1990. Shortly after Lynch’s retirement, I decided to forget about finding the next great investment guru and purchased Vanguard 500. I had lost nine years chasing the latest hot hand, either paying steep trading costs or paying mutual fund loads and high management fees.

Despite my three misses, our investments have been satisfactory. We’ve provided our children with world class educations. We have been able to travel widely with them, both in the U.S. and abroad. We have a nice home and a secure retirement.

So am I worried about not getting in on the ground floor of cryptocurrencies and nonfungible tokens? Not really. Perhaps I’m missing the opportunity of a lifetime. But—like missing Buffett and Lynch—I think our life will still be just fine.

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