When market turbulence strikes, it can be hard to shake off high-flying expectations, get grounded and hold tight to a long-term investment strategy. Regular investors like you and me aren’t the only ones who have a history of selling too soon. Even the most wealthy and notorious of investors have, at one time or another, sold a stock or investment too soon.
Read on to find out when Warren Buffett and four other high-stakes investors sold off their investments too soon — and why it can sometimes be a mistake to do so.
Warren Buffett: PetroChina Co. Ltd. (PTR)
Back in the days of the high-flying oil boom, oil giant PetroChina surpassed $1 trillion in market cap which, at the time, made it the world’s most valuable company. The year was 2007, and oil was averaging about $64 dollars a barrel ($73 when adjusted for inflation), according to InflationData.com.
Later that year, after Buffett sold his entire stake in a company whose value would continue to rise, he told a reporter that he left “a lot of money” on the table and, despite a $3.5 billion profit, “I still sold it way too soon.” The company’s stock price peaked on Oct. 1, 2007, at $262.60.
Today, the stock trades just north of $78 per share, but the stock is considered to be in “oversold territory,” according to Forbes. When taking a long-term perspective, perhaps Buffett didn’t make such a poor investment choice after all.
Carl Icahn: Netflix (NFLX)
With fears of the end of net neutrality on the horizon, billionaire investor Carl Icahn sold 2.99 million shares of online subscription video service Netflix, Inc. (NFLX) in October 2013.
Icahn later admitted he wished he hadn’t been so conservative about the company. “I wished I had bought more,” Icahn told CNBC. He executed the sale against the advice of son Brett and fund co-manager David Schechter, who believed the stock was undervalued.
Even so, don’t cry for Icahn. He still made between $700 million and $800 million upon this sale, and then another $960 million when he sold the remainder of his shares in June 2015. As he said, “You can’t cry about making the money that we made on [Netflix].”
Paul Allen: AOL, Inc. (AOL)
In 1994, Microsoft co-founder Paul Allen sold a 24.9 percent stake in AOL for $75 million, reports Reuters. There’s no doubt that’s a hefty profit — except that by 2000, AOL was the largest internet provider in the U.S. and was worth a whopping $125 billion. According to Reuters, had Allen held his shares until the height of the stock bubble, his ownership would have been worth more than $40 billion.
Of course, as the new millennium advanced, broadband took hold and the internet bubble subsequently burst, AOL’s market dominance started to wane. In June 2015, Verizon (VZ) acquired the company; AOL no longer trades on the New York Stock Exchange.
Ronald Wayne: Apple (AAPL)
When Apple (AAPL) was founded in 1976, Ronald Wayne was listed as a co-founder of the company next to Steve Jobs and Steve Wozniak. He was granted a 10 percent stake in the soon-to-become tech giant. Instead of sticking around for a few years and cashing in millions — or billions, it he’d waited until today — Wayne sold his stake in the company for $800 just 12 days after its launch.
“I was 40, and these kids were in their 20s,” Wayne said in an interview with Cult of Mac. “If I had stayed with Apple, I probably would have ended up the richest man in the cemetery.” In July, Apple announced quarterly profits in excess of $49.6 billion; its stock sells for over $110 per share.
For Wayne, selling out of Apple was more than just an opportunity lost. In the same interview, he admitted his finances have been “in a hole for the last 40 years.”
Donald Trump: D.R. Horton (DHI)
Real estate mogul turned-Republican presidential candidate Donald Trump sold his stake in residential home builder D.R. Horton (DHI) in January 2014. According to his personal financial disclosure documentation, as reported by The Street, Trump lost more than $200,000 in his investment.
Trump didn’t release his purchase dates, but his purchase price for the $1 million investment was likely around $26.35 while his sell price was a paltry $20.95, reports The Street. These days, though, D.H. Horton is trading just north of $31 per share. This is one real estate investment the property tycoon should have considered for the longer term.
Market cycles can be unpredictable, making it difficult for even the most seasoned of investors to always know when they’re buying low or selling high. If you’ve made a similar mistake, buck up and know you’re in good company. If your stock purchase is just one small part of your overall asset allocation strategy, chances are it’s a loss that you — like the investors profiled above — can take in stride.
All current stock prices are as of Thursday, Sept. 3, 2015.