30 - GameStop stock investment post-mortem (2017-2019)

Mental Models discussed in this podcast: Zero Based Thinking Resulting Check out Annie Duke's book "Thinking in Bets" to learn more Skin in the Game Check out Nassim Taleb's book "Skin in the Game" to learn more Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a review. Your feedback helps me to improve the podcast and grow the show's audience.  Support the Podcast on Patreon This is a podcast supported by listeners like you. If you'd like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron. You can find out more information by listening to episode 11 of this podcast.  GameStop Stock Investment Post-mortem - Show Outline The full show notes for this episode are available at https://www.diyinvesting.org/Episode30 Initial Buy Thesis Dividend yield exceeds 10% Dividend is sustainable Check out Episode 5 of the podcast to learn more Investment Results Loss of 50-55% of the principal invested in GameStop stock Investment Process Was my Buy Thesis correct? Root Cause of my Investment mistakes Was my Sell Thesis correct? I did not sell solely because the dividend was eliminated Free cash flow from declining businesses ought to be distributed to shareholders Conclusion My bad process led to bad results in this case Could have been better or worse Lessons Learned Investment Rules Never buy a retail company with declining revenue Never buy a physical retail company with debt on its balance sheet (If they lease their locations) Do not hold onto a stock once you know your investment thesis is wrong Prioritize investing in companies where management has skin in the game Red Flags A combination of large stock price declines without insider buying or stock buybacks Non-investors you talk to think the company will be a bad investment References: Investing Rules - How I limit investing mistakes