5 shares Fools wish they never bought

Everyone would buy shares if they guaranteed high returns. However, not all do. It’s important to assess why the duds didn’t work out.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young Asian woman with head in hands at her desk

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Here at The Motley Fool, we subscribe to the 80/20 rule in investing. Namely, 20% of the holdings in a portfolio are responsible for 80% of the portfolio’s growth. Inevitably, this means that — put mildly — some of the shares we buy don’t live up to the expectations we had originally invested in them.

Since selling is half of the investing equation, we asked some of our contract writers to share some of the lessons they’ve learned over the years!

Boston Beer Company

What it does: Boston Beer manufactures a range of alcoholic drinks. Its best-known brand is Sam Adams.

By Stephen Wright. I wish I’d never bought shares in Boston Beer Company (NYSE:SAM). The stock turned out to be a terrible investment for me, but more than that, I bought it for all the wrong reasons. 

I bought the shares in various installments around August 2021. At the time, the stock was falling after some previous good performance and I decided that it looked cheap.

The trouble is, I wasn’t basing that view on very much – a strong balance sheet and a sense the stock couldn’t go much lower. How wrong I was.

The business had been faring badly as a result of overinvestment in hard seltzers. When this turned out to be a passing trend, rather than something more durable, the value of the stock fell sharply.

Ultimately, I got rid of the stock at a significant loss. And the current share price is still well short of where I sold my stake as the business continues to battle headwinds.

The lesson here for investors is clear enough. Proper research into investments involves more than just looking at prices and seeing that they’re falling.

Fortunately, I’ve been able to move on from that investment. And I’m careful nowadays not to repeat the same mistakes.

Stephen Wright does not own shares in Boston Beer Company.

Cineworld Group 

What it does: Cineworld Group is the world’s second-largest cinema chain and operates in the US, Israel and across Europe. 

By Royston Wild. I opened a position in Cineworld Group (LSE:CINE) back in 2018 when I paid 297.4p apiece for its shares. Almost two years later to the day I sold all of them for 25.8p. 

When I bought Cineworld shares the firm seemed to be in great shape. Powered by a steady stream of blockbuster hits, the global box office was sitting at record highs. The UK company had also taken over Regal Entertainment a year earlier to gain a foothold in the lucrative North American market. 

The problem was that the business had loaded itself with debt to pursue global expansion. So when the pandemic came along and its theatres shuttered, it came close to collapse. That’s when I decided to sell up. 

I’m pleased I did, instead of hanging around for a potential turnaround. Cineworld’s share price now sits at just 0.42p. And the company will be delisted when administrators are appointed soon, wiping out shareholders completely. I learnt a valuable investing lesson: be careful when buying businesses that load themselves with debt. 

Royston Wild does not own shares in Cineworld Group. 

Greatland Gold

What it does: Greatland Gold hopes to be extracting gold and copper from its mine in Western Australia by the end of 2024.

By James Beard. Down nearly 75%, my investment in Greatland Gold (LSE:GGP) has been a bit of a disaster.

I should have undertaken better research and considered its valuation more closely before buying the shares.

The company’s flagship Havieron gold-copper project was last independently valued in December 2021, at $1.2bn. This implies that Greatland’s 30% share is worth $360m – 25% less than its current market cap.

But the directors argue this is not reflective of the mine’s potential. They claim it contains 6.5m ounces of gold alone. At today’s prices this is worth nearly $13bn.

They also believe that the company’s other substantial interests — which are in the very early stages of exploration — are overlooked.

And because the company feels unloved, it’s planning to list on the Australian stock market. As part of the process, it’s considering whether to raise more money. But if it proceeds, this will mean further dilution for me.

James Beard owns shares in Greatland Gold.

Shell

What it does: Shell is an upstream producer and downstream marketer of oil, gas and energy products.

By Christopher Ruane. Early in the pandemic I bought shares in London-listed oil major Shell (LSE: SHEL) and US peer ExxonMobil.

What happened next?

Exxon maintained its longstanding Dividend Aristocrat status, continuing to raise its shareholder payout annually. But Shell cut its dividend for the first time since the Second World War.

Since then the dividend has grown sharply, although it remains well below its pre-pandemic level.

Seeing the dividend contract for the first time in decades was a surprise to me. But dividends are never guaranteed, so maybe I should have been less shocked.

What really made me wish I had not bought Shell was that the sudden, huge cut shook my faith in management. Rivals like Exxon kept a steady head, so Shell’s large cut seemed like a knee-jerk reaction to me.

I lost my faith in the company’s management at that point and ended up selling all my Shell shares.

Christopher Ruane does not own shares in any of the companies mentioned.

Superdry

What it does: UK-based fashion retailer operating both online and through a network of 219 brick-and-mortar stores worldwide.

By Zaven Boyrazian. I’ve made plenty of mistakes as an investor over the years. And one of my biggest ones was buying shares in Superdry (LSE:SDRY) in 2017. The stock fell over 90% before I finally exited my position in September 2020. And even today, shares have tumbled even further. So, what happened?

There were a lot of moving parts affecting the Superdry share price. But looking back, there was a glaring warning signs that something was seriously wrong.

The co-founder and CEO, Julian Dunkerton, decided to step down in 2018, selling off £71m worth of shares in the process. Then, only a few months later, he decided to return, stating that his previous departure and massive stock selloff was a protest against the strategy other managers were pursuing.

Internal politics within the executive suite is never a good sign. And considering the fashion stock continued to crash even after Dunkerton resumed his role, this spat has seemingly left a permanent mark on a once-thriving business.

Zaven Boyrazian does not own shares in Superdry.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing For Beginners

After getting promoted from the FTSE 250, what’s next for Hiscox?

Jon Smith mulls over the latest reshuffle in the FTSE 250 and explains why he feels this top stock could…

Read more »

Investing Articles

Want dividend yields up to 9.9%? Here’s 3 FTSE 100 and FTSE 250 shares to consider

Looking to turbocharge your passive income? These high dividend yield FTSE 100 and FTSE 250 stocks could be just what…

Read more »

Investing Articles

2 shares absolutely crushing the FTSE 100 in 2024!

Not all FTSE 100 stocks are sleepy and meandering. This duo has surged more than four times higher than the…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Growth Shares

The FTSE 100 could hit 9,000 points by year end. Here’s why

Jon Smith talks through some factors that could help to lift the FTSE 100 to a new all-time high and…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

I’d seriously consider buying this UK technology small-cap stock today

Today's positive trading figures and a runway of growth potential ahead make this small-cap stock look attractive to me now.

Read more »

Investing Articles

It’s October! Does this mean UK stocks are going to crash?

Whisper it quietly, but four of the five biggest one-day falls in the FTSE 100 have been in the month…

Read more »

Investing Articles

With new nuclear energy deals in view, Rolls-Royce’s share price looks cheap to me anywhere under £11.48

Rolls-Royce’s share price dipped after a problem on a Cathay Pacific flight but has now bounced back on positive news…

Read more »

Investing Articles

Is the Greggs share price now a screaming buy for me after falling 10% this month?

Harvey Jones watched the Greggs share price climb and climb, but decided it was too expensive for him. Should he…

Read more »