We’ve all made investing mistakes. That’s part of the journey. The best thing we can do, of course, is learn from them. So some of our contract writers have agreed to share the names of the stocks that they’ve regretted selling over the years.
BAE Systems
What it does: BAE Systems is Europe’s largest defence contractor, and the seventh largest globally based on 2021 revenues.
By Dr James Fox. I sold BAE Systems (LSE:BA.) in February of 2022, erroneously believing Putin would avoid going to war. Admittedly, I’d done rather well with the stock, but it’s soared since.
Of course, events — no matter or how big or small — can have major impacts on the stock market. In this case Russia’s invasion generated considerable interest in defence contractors, and BAE gained another 20%.
As someone who also works in geopolitics, I’m very aware of the increasingly tense world in which we live in. And, as someone investing for the long run, I should have displayed more clarity and maintained my position in Europe’s leading defence contractor.
Regardless as to whether Russia invaded or not, I believe the already tense geopolitical situation would have pushed BAE higher. Of course, there are concerns about supply chains, and European state deficit eventually reducing defence expenditure, but that’s overplayed. In fact, I’m now looking to get back into BAE.
James Fox does not own shares in BAE Systems.
Berkshire Hathaway
What it does: Warren Buffett’s company owns an insurance firm, a railroad, a utilities operation, and other businesses.
By Stephen Wright. Back in 2020 I sold my shares in Berkshire Hathaway (NYSE:BRK.B). That was a bad move and I regret doing it.
In fairness to me, it wasn’t an entirely thoughtless decision. To set the scene: it was during the pandemic, when a number of stocks were on sale.
In the midst of all the panic, Warren Buffett did… not that much. Mostly, he just exited Berkshire’s stake in the major US airlines at significantly lower prices than he’d bought them for not long ago.
At the annual meeting, Buffett explained that Berkshire hadn’t done anything because they didn’t see anything attractive to do. But with stocks through the floor, I wasn’t impressed by this.
That was more than a little short-sighted on my part. And I’ve subsequently come to understand much better how Buffett thinks and runs Berkshire.
As a result, the decision to sell the airlines makes much more sense. So I’ve bought shares in the company again and it’s one of my biggest investments.
The mistake cost me, though – I had to buy the stock at a higher price than I sold it for. That’s the cost of learning a lesson about investing.
Stephen Wright owns shares in Berkshire Hathaway (B shares).
Dunelm
What it does: Dunelm is a well-known British home furnishings retailer, selling a variety of home textiles such as curtains, bed linen, cushions, quilts, rugs, and more.
By John Choong. Since exiting my position in Dunelm (LSE:DNLM) in late October 2022, the stock has risen by a handsome 45%. Given the poor macroeconomic environment at that time and the uncertainty surrounding the impact of Liz Truss’ mini budget, I opted to exit my position in the retailer.
However, since then, the housing market has proven to be more resilient than many had initially thought. But perhaps more importantly, Dunelm’s sales continue to grow at a steady pace whilst improving its profitability and expanding its market share. This has led to me wish I’d never sold its shares given the value proposition and decent dividend yield (3.6%) provided.
With that in mind, I might be tempted to take up a position in Dunelm again. The firm’s strong proposition paired with its decent valuation could present a solid long-term opportunity to grow my wealth while collecting healthy dividends.
| Metrics | Dunelm | Industry Average |
| P/B ratio | 11.3 | 1.2 |
| P/S ratio | 1.4 | 0.3 |
| P/E ratio | 15.1 | 14.2 |
| FP/S ratio | 1.4 | 0.8 |
| FP/E ratio | 15.1 | 13.0 |
John Choong has no position in any of the shares mentioned.
Legal & General
What it does: Legal & General is an insurance and financial services firm, which helped pioneer index tracker funds.
By Alan Oscroft. I can’t remember when I sold my Legal & General (LSE:LGEN) shares. Or how much I got for them.
I’d bagged a few years of dividends in the time I held them too. So why did I sell?
I was about 50/50 into growth and dividend shares back then. And I’d seen a new growth stock that I really must have a chunk of. I didn’t have the cash, but I didn’t want to miss the boat.
Legal & General, like the whole insurance sector, faces cyclical risk. We can see that in the volatility over the years. It was up at the time, so I sold.
I’ve long forgotten which growth stock I bought with the money. All I know is that it crashed and burned, and I lost most of my stake.
If I’d kept my Legal & General shares, after more years of dividends, I’d be a good bit better off now.
Alan Oscroft has no position in Legal & General, and regrets it.
