It may be the middle of December, but the year is prepping to wrap up for me. I'm going on my honeymoon this afternoon, and while I have skillfully negotiated with my wife that I will be allowed to work a little during the honeymoon, there are limits to how much a man can negotiate.... Anyway, with the year set to wrap up, I've been trying to take a step back and review the year. What worked in the year? What didn't? How can I improve my process? Things like that. I'll continue to think about them through the year end (after all, I have several international flights to ponder those questions during, and there's only so much Disney Plus a man can watch!), and I suspect I'll have some posts on any conclusion or takeaways in the new year. My early takeaways are it's been a generally good year, and I continue to improve as an investor. However, I'm not sure if I improved as much as I'd like to this year, and a particular focus of mine for next year is going to be continued process improvements. I feel like I'm drowning in things I want to research and can only get around to 25% of them; I want to be better at focusing on individual things and cutting projects off when they're no longer interesting. But that's a story for another day. Today I wanted to review the three worst investments I made this year. I run a relatively concentrated portfolio, with the top 5-7 names making up ~80% of the portfolio. Fortunately, none of my three worst investments came from the "core" names, but the effects of investing mistakes add up: a 50% loss on a 2% position is 1% of your portfolio gone. Equity markets do something like 6-8%/year on average, so a 1% loss might seem small but it's actually a significant amount of your expected annual return from investing. Hopefully next year I'll be reporting no "worst mistakes" for the year. But that's super unlikely: between special situations and other small positions, I make too many investments every year to not have one or two go awry. And, honestly, unless you're practicing an actual punchcard investing style where you only make ten investments over you're entire career, you're probably not taking enough risk if you never have one or two investments go against you. Also, I want to emphasize that I am only talking mistakes of commission (investments I made that I shouldn't have) here. I actually have some rather large mistake of omission (investments that I didn't make that I should have) this year; however, those are much more difficult to judge. If I passed on a company because I thought some risk was too great and it goes up 300% the next day, was that an error or was I probabilistically correct and just would have gotten lucky on that one? Tough to say.... and it certainly doesn't make for an easy to write blog post! So we'll be focusing on the lemons I bought today. Perhaps the diamonds I passed on will come in a future post. Anyway, on to the mistakes!