Welcome everyone. Thank you for joining. This episode is going to be a fun one, because we're going to be looking at my worst investment ever. That's right, where I've lost the absolute most amount of money in the stock market. I'll be revealing it here and kind of explaining what went wrong with it and I'm going to make it more interesting than that. You see the two black boxes here?
This is hiding. What is not only my worst investment by three, worst Investments ever and how much money I lost on each one of them and then we'll be comparing and contrasting that against My 3 best investments ever and how much money I made on those. So you're going to see each of
them. The absolute worst decisions I've made in investing and the best decisions I've made and we'll go over all of it in this episode will also, of course be going over the growth portfolio, which is the story fund and comparing this against the S&P 500. So as always, we have a lot to jump into. Let's go ahead and get started. The first thing you need to know with me is that I have two YouTube channels. One of them that you're watching right now is Joseph Carlson
after hours. Well, I have another YouTube channel. Just called Joseph Carlson, just my name. And on that one, I actually track a different portfolio called the passive income account, and they have different goals. The story fund, which I track on this channel. This goal is just to outperformed the S&P 500 and do that by investing in highly aggressive growth. Centered companies that have huge total, addressable markets, great brand value, a products that are in secular grow Trends,
so on and so forth. So the goal is simply to beat spy and to do what soundly Over a five-year time Horizon. Right now, I'm not beating spy. I'll just be transparent with that. It's been a struggle so far, but I'll go into that more in just a minute. The goal at the passive income account is different. I'm not quite as aggressive with this portfolio. I invest in high-quality dividend-paying companies that have a lot of cash flow. Some cases, they're more
matured. They have less growth ahead of them but they continually generate free cash flow. They do Buy Backs, they pay dividends and overall it's just a steady compounding machine. This portfolio I think is more Hannibal and consistent and I think it's easier to manage. In fact, I play this one a lot more conservatively. I don't take quite as big risks in my opinion, and this one has actually performed better than the story fund.
The story fun where I've been very aggressive and invested in a lot of fast, growing companies that are at higher multiples. In some cases has performed worse overall and I'm actually in the red overall on this one. So those are the two portfolios and I tracked them on two different channels. Again the story funded what the after-hours channel, the passive income portfolios with Joseph Carlson channel. So you can follow each of them transparently week by week.
But my point in mentioning that is in this video, I want to show you the best and worst of each of these portfolios. What are my three best investments? And what am I three worst Investments? Let's go ahead and start off with my three worst Investments and funny enough. Each of my worst Investments are in the story fund. None of them are in the passive income portfolio. In fact, in the passive income portfolio, Haven't lost money, on many companies.
It's been very minimal losses. Most of my losses come from the story fund. So let's go ahead and get started with number one, we have Netflix at a staggering eight thousand four hundred dollars in losses. So let's go ahead and take a look at number 1, my worst investment ever, which is Netflix and it's in the story Fund. In fact, again, all three of my worst Investments are in this portfolio. It's been a very tough ride so far. Netflix is one of my favorite companies.
It's one of My biggest convictions, I'm still very bullish on the company overall, but I have made a mistake and buying this company at a higher price, without a huge margin of safety and their growth rapidly decelerate it which spurred a huge sell-off in the stock. So, when I was buying this company, I didn't think I was overpaying for it. Actually thought that I was buying it, at decent value. That's the reason that I was purchasing it, but obviously,
the market prove me wrong soon. After I was buying it, the market, sold it off, and I'm currently down over In dollars. So Netflix has had a really tough 2022 so far they started off by rapidly decelerate in their growth expectations. The street Wall Street expected around 5 million subscriber gains for q1 and Netflix said nah it's going to be more like 2 million so a lot lower than the expectations of Wall Street.
And then with the Oscars last night, Netflix didn't win, best picture, they had a chance of winning best picture, but Apple came in Apple's a pretty good company. Everything they do. Do and they came in with their streaming service out of left Phil just a couple years ago and they took best picture for a movie before Netflix ever has.
This is incredible. Apple came out of nowhere with Apple TV, plus something that like five people are probably watching right now, but apples actually starting to come out with good stuff, they're winning, best picture at the Oscars and this is an award that Netflix has never won. So, this is just not been a good year for Netflix, and I expect the troubles to continue on and Netflix re accelerates their growth unless they can show that they're still a Growth Company.
They're still growing their total addressable Market. They're gaining subscribers and Latin America and an India and so on and so forth. But right now, this company has been a struggle and I expect to be in the red unless we see some margin Improvement, unless we see some free cash flow growth unless we see subscriber gains Beyond expectations, some of that stuff has to be improved. But as it stands right now, Netflix is my number one big. This loser, I'm down over $1000
now. Moving on, in number two we have Ali Baba. Add a four thousand dollar loss. That's what I'm at right now. Again, Ali Baba's another one in the story fund and I have seven thousand dollars in value and I'm down for thousand dollars some down over 50% on this holding. I think it's been one of the worst scenarios ever where I bought into the company and just immediately it fell 50 percent. And that's a situation with a
lot of people. Because Ali Baba went down from a That was quite High just recently like a year ago and it felt even more to the point where it was considered pretty good value. Even factoring in like China risks in the government, and the potential for delisting is seemed like it was trading very cheap, then it just fell more, and more, and more, and more going from a price of, like,
$300 w low $100. So, lots of investors have jumped in at different times and most of them have been hurt by Ali. Baba, there's not a lot of people that are in the green. With this company but I knew the risks. I knew that China is
unpredictable. I knew a lot of people are uneasy investing there but I went ahead and invested in Ali Baba. Anyway on the calculated assessment, the calculated risk that Ali Baba would not be hurt too much by the Chinese government because they would not have the incentive of hurting, one of their best
companies. And I also made the risk assessment, that's just kind of a guess that the Chinese government will not want to sever relationships with the us because it's to economically beneficial. We already have so many businesses doing business with China. We have Tesla in there and Disney and apple and Coca-Cola, and so on, and so forth. So, I thought that there's a decent chance that those
concerns are overblown. Obviously, I was probably mistaken on that Ali Baba. Continue to fall, I lost some money on it. And now, I am still a holder of the stock. So I'm going to give this one time. We'll see what happens. But so far. This is my second biggest loser. Now, moving on to number three. My third worst. Moment ever is Spotify, which I'm currently down, just like Ali, Baba, four thousand dollars roughly speaking. Now, spotify's a company that has a lot of challenges right
now. They had the Joe Rogan controversy, they have the battle with big Tech and all the streaming services that they're coming out with and pushing so that it's not the perfect story, but the company has a great product. It continues to grow fast, they're growing their membership, very fast as well. And I'm still bullish on the company overall, I bought it during a time where SAS Multiples in general, were much
higher. Spotify was trading around a fifty billion dollar market cap, and right now it's around a twenty eight billion dollar market cap, so it's come down a lot. But again, I remain bullish on this company overall. And I think over the next year or two, I have a chance of erasing, some of these losses. Now, the total hair is sixteen thousand four hundred dollars in losses between my top three worst Investments.
So that's a huge number sixteen, thousand four hundred dollars, I'd like to have that back but keep in mind every one of these companies. He's, I still hold all the original shares that I originally purchased. I haven't sold out of them, so, I have not realized any of this loss. It's just unrealised at this point and I think over the next three years, I have a decent chance of making a lot of it back. So we'll see how this goes in the future.
Now, let's go ahead and transition over to my best investments ever. These are the best stock picks that I've ever done. We have apple this one. I'm up twenty three thousand five hundred dollars. Now, like I mentioned apples in my other portfolio called the passive income. Where I have a dividend growth strategy and Apple has been one of the central Holdings in this portfolio right here. You can see I have twenty three thousand five hundred fifty dollars in gains and the total
position size is 59,000. So a little under half of the position is gains, and this one, I still remain bullish on Apple's trading at a kind of high twenties PE ratio so it's a little bit pricier right now. I'm not pouring money into this holding or anything. When I look at their future, their products are coming out with their Market. Position, their balance sheet and everything. I still think the apple offers, attractive value. So I continue to hold it with apple.
I'm up 23,500, the next one is Costco. I am up over ten thousand dollars right now. In Costco Costco is another company that I consider to be one of the best companies in the world that's in my passive income portfolio. There it is right there up ten thousand five hundred dollars and the total position size is 40,000 now this was not a deep value by in fact I purchase Costco with the Relatively High P/E ratio because I believe in the future of this company so much.
I think that it is one of the most promising stories in the entire Equity markets. I think this company will consolidate retail, it'll grow throughout China. It'll grow everywhere in the world. Because everywhere I see this company, I see people loving the business model, loving the shopping experience, loving how good they treat their employees and their customers and the return policy. And I just think it's incredibly difficult to compete with and so far investors want to own this.
This company they're willing to pay a premium for it and even though I have ten thousand five hundred dollars in gains right now I don't plan on selling it and locking it in. I plan on holding this company for the next ten years because I think the gains will be much higher over that time period. So we have CostCo with over 10,000 dollars in gains.
And number two, and then a number three, it's very close between Microsoft and JP Morgan, but JP Morgan came in third place with over 6,000 dollars and gains in this company. JP Morgan is another company in the passive income portfolio. Here is what it looks like. Currently six thousand one hundred and seventy two dollars in gains. And it is a 20 thousand nine hundred dollar position having said that, this is a company that I do like to kind of buy and sell based off the valuation.
The Price to Book. Value gets up to a 2. I end up selling a little bit and taking some gains, if The Price to Book value goes down to like a 1.5 that's typically when I buy it because that signifies that it's undervalued based on its history. So JP Morgan. Making up third place with six thousand dollars in gains. That is a I love 39 thousand eight hundred dollars in gains.
So with my top three, biggest losers, the absolute biggest mistakes I've made in investing, I'm so far down, sixteen thousand four hundred dollars and my top three winners are up 39 thousand eight hundred dollars that Nets out to twenty three thousand four hundred dollars in gains between these six companies. And that's I think an important way to look at investing, consider the fact that just Apple alone, just my best pick makes up for my top three
biggest loss. Zephyr, having one right pick and investing can make up for a lot of mistakes, and I think that's the way that you have to view this, whenever I make an investment into any stock. I want that to be a winner. I want it to make me a lot of money. And so I do a lot of due diligence, a lot of research. I try to buy very good companies, that attractive values and I want to have a 100% hit rate. I want every single company. I invest in to make me a lot of
money. Unfortunately, that just can't happen. That's not how investing works. Nobody bats. A thousand. Nobody has 100% of the Investments. They make turn out like they expected. Even Warren Buffett, even Bill Ackman, even Peter Lynch, all of them have losers in their portfolio.
Every one of these investors lost money on different Investments. They all have this category of their worst Investments. That doesn't look pretty if you dive right into it, you know, that Warren Buffett, lost money on the airlines he was invested in them and then sold them in 2020. Realizing a big loss and he's lost money on retail Investments. And It's a different Investments Berkshire.
Has lost a lot of money in a lot of different Investments but they've made way more money in their gains there by an apple, makes up for a huge amount of losses. They're buying Coca-Cola makes up for a huge amount of losses.
They have a couple key companies that really erase all the losses of their worst Investments, you can also look at Bill Ackman, he lost money on JC Penney, he lost money on Valiant he lost money on Herbalife, he lost money on a lot of different Investments, but overall his big Winners have made up for his losses and you can say the same thing about any single investor.
So when you're looking at your portfolio and you're looking at some of the investment mistakes you have made, especially recently, with how difficult it's been, don't lose track of the fact that everyone has these losses, most people don't like to show them publicly because it's kind of embarrassing. You want to only show this category of where you're making all the money but I think it's good to put this in perspective.
We have our worst Investments, we have our best investments, and if you're doing intelligent and Testing we're making calculated risks and looking at valuation and investing in high quality companies. Your best investments will make up for way more than your losses. And overall you'll have a huge net gain so even though as an investor, my goal might be to have every investment turn out great and make lots of money. I know realistically that,
that's not going to happen. I'm going to have my set of losers just as I have my set of winners and that's the way that investing has worked throughout all of history. That's the way that it's always been in my My case, my goal is to have my winners make a lot more money than my losers, so that they overcompensate for the losses. That's what I'm trying to do. So even though I try to bat a thousand, I try to hit home runs on everything.
I think the ones that I do hit a home run on the great investments will over compensate for the losses just like apple did for my three worst companies. The risk reward for stocks is just amazing. You can only lose your invested Capital. That's all you stand to lose when you invest in a stock. So if I invest 10,000 dollars into a Company and heaven forbid. I really pick a bad company and
it goes bankrupt. Something that's never happened to me. I would lose ten thousand dollars and I'd be out my initial investment that would be terrible, right? To lose ten thousand dollars but the risk/reward is so good. If you invest in another company that does really well. It can go up 100 percent to twenty thousand. So you can double your money or it can go up 300% or 400%, or five hundred percent a lot of these companies like Costco and JP Morgan and apple have
compounded, huh? Hundreds and hundreds of percent. So you stand to make far more with good compounding companies, then you stand to lose with making one bad pick. The risk-reward is just amazing. And that's part of the reason that I love the stock market. Anyways, that's my video for today. I hope you enjoyed it and I'll see you in the next one.