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My Investing Mistakes: Misadventures in Stock Picking and Tax Loss Harvesting


I haven’t been particularly excited to share my investing mistakes with you, but I’ve made a couple of them in the not-too-distant past, and I believe I’ve learned something from them and may have actually benefitted from them. I hope you’ll learn something useful from my blunders, too.

I don’t normally buy individual stocks. In recent years, the only one in my portfolio was the zero-dividend stock from Warren Buffet, Berkshire Hathaway.

Our new semi-retired life gave me a reason to covet a few other individual stocks. Cruise line stocks offer perks like extra onboard credit to their shareholders, and we once had some lengthy cruises lined up for 2020 and 2021!

As you know, 2020 also offered up some opportunities for some serious tax loss harvesting. I harvested plenty of paper losses this year, but I also made a serious unforced error in one of my TLH efforts, a mistake that ultimately led to me making some alternative investments that I might not have considered otherwise.



This may not be classic “stock picking” behavior, as I chose them not based on any chart, analysis, or belief about their future, but rather for a specific shareholder perk that these particular stocks offered.

The mistake most make when choosing individual stocks is believing they can outperform the market in a risk adjusted manner, something few professionals with every advantage can do consistently. While many investors have done quite well, more have failed, and the role of luck of uncompensated risk is rarely acknowledged.


My Stock Picks


Travel was expected to be a big part of my early retirement, and cruising is a nifty way to get from one part of the world to another when you’ve got the time. In fact, we were scheduled to be disembarking in Shanghai after a 30-day Princess repositioning cruise on the day this post is published (November 24th, 2020).

The parent companies of the major cruise lines offer additional onboard credit as a perk to their shareholders, so I had been watching the ticker symbols for a while. There are three major cruise line stocks: Carnival Cruise Lines (CCL), Royal Caribbean Cruise Lines (RCL), and Norwegian Cruise Lines (NCLH). I now own all three.


Cruise Line Shareholder Benefits


Carnival Corporation

Carnival includes the namesake Carnival Cruise Line (the fun ship!), and a number of others you may have heard of, including Holland America, Costa, Cunard, P&O, and Seabourn.

Owning 100 shares of Carnival entitles cruisers to onboard credit per stateroom of:

  • $250 for sailings of 14+ days
  • $100 for sailings of 7 to 13 days
  • $50 for sailings of 6 days or less


See Carnival for details and fine print.


Royal Caribbean Cruises

In addition to their namesake Royal Caribbean cruises, RCL also owns the brands Celebrity, Silversea, and Azamura. Their shareholder benefits are identical to those of Carnival.

Owning 100 shares of Royal Caribbean entitles cruisers to onboard credit per stateroom of:

  • $250 for sailings of 14+ days
  • $100 for sailings of 7 to 13 days
  • $50 for sailings of 6 days or less


Details on the credit and how to redeem can be found on the Royal Caribbean website.


Norwegian Cruise Line Holdings

Norwegian’s holdings includes Norwegian Cruise Line plus the Oceania and Regent Seven Seas cruise lines. Their onboard credit is nearly identical to the others. The only exception is for a cruise of exactly 14 days, which only gets you $100 with NCLH shares, whereas you’d receive $250 in onboard credit with the other lines.

  • $250 for sailings of 15+ days
  • $100 for sailings of 7 to 14 days
  • $50 for sailings of 6 days or less


Navigate to Norwegian’s site for all the info.


My Individual Stock Misadventures


Carnival, which owns Princess Cruise Line, had been hovering in the $50 to $60 range for several years before dipping to $40, at which my limit order for 100 shares was executed on October 8, 2019.

By Christmas, it was back up to $50, a 25% return on my investment in under 3 months — that’s better than 100% annualized, and that figure doesn’t even factor in the $250 onboard credit (~6% of my investment) that I expected to receive the next fall! Cue the “I am the Smartest Man Alive” clip from Billy Madison.




My brilliance knew no bounds. I almost picked up some RCL (Royal Caribbean) at $100 but it didn’t drop below about $101 in the fall of 2019 while spending much of the time in the $120 to $130 range.

My chance would come, though! A novel coronavirus had popped up in the far east, and the forward-thinking market started to price in a resulting reduction in travel.

Lucky me was able to snag 100 shares not at $100, but at $98 apiece on 2/24/2020! That would give me some serious piña colada money on our scheduled cruise from Tokyo to Vancouver on Celebrity Cruise in the spring of 2021!

You know that phrase about catching a falling knife? I know it now better than I ever did.

I doubled down on my rapidly-falling cruise line stocks when they were worth half what I initally paid, buying 200 shares each of CCL and RCL at $19.50 and $49, respectively.

I didn’t have anything booked on Norwegian Cruise Line or their holdings, but figuring it would happen at some point in our future, I picked up 300 shares of NCLH at $15 a share to match the 300 shares I had of CCL and RCL.

With 300 shares of each, I figured we had 100 shares of each major cruise line company that we could one day gift to each of our kids while still hanging on to 100 shares for ourselves. That would give us all shareholder benefits for life.

I wasn’t quite done. In the summer of 2020, I figured if I was willing to buy CCL at $40 and $19.50, I might as well pick some up at $15, and I used some of my June dividends from the index funds in my portfolio to pick up another 200 shares.

For perspective, let’s zoom out a bit on the “I bought here” chart of Carnival’s stock performance.




My Final Tally of Cruise Line Stocks


I am now the proud owner of the following:

  • 500 shares of CCL
  • 300 shares of RCL
  • 300 shares of NCLH




While I would have much preferred to have purchased all of my shares in March when CCL and NCLH were briefly trading below $9 and RCL was under $25, as of September 2021, my shares have recovered enough to put me back in the black, to the tune of about an $8,400 gain on a total investment of $36,500.

To be honest, when 2 of the 3 stocks were in the single digits, there was a real risk they could become penny stocks before going bankrupt. I’m just happy to have not lost my Hawaiian shirt on these.

And this is why I should not deal in individual stocks. It’s a lot to go endure to score a few piña coladas on the starboard deck!


The Chase Sapphire Preferred Card


The Chase Sapphire Preferred is my top pick for your first rewards card. Welcome bonus of 80,000 points worth at least $1,000 when used to book travel (after a $4,000 spend in 3 mo) and other great perks you can learn abouthere.


My Tax Loss Harvesting Fail


In the depths of the madness that was late winter of 2020, a roughly month-long stretch in which most stock markets worldwide lost 30% of 40% of their value, I was swapping index funds to book some paper losses.

The idea behind tax loss harvesting (TLH) is that you can take a capital loss while remaining invested in the same asset class by selling one asset and buying another similar, but not “substantially identical” asset. You can learn more about tax loss harvesting and see an example here.

When trading mutual funds at Vanguard, which is how I usually do it, an exchange takes place at the end of the trading day. You enter the trade at any time during the trading day before the closing bell rings, and Vanguard will sell one fund at the closing price while simultaneously using that money to purchase another fund at it’s same-day, same-time closing price.

There are only so many exchanges that make sense when trading mutual funds, especially in a niche asset class like emerging or developed markets. Luckily, the exchange traded fund (ETF) can be used, instead.

There’s a caveat, though. You cannot simply swap one for another at the end of the day like you can with mutual funds. In some cases, depending on the brokerage you use and the rules they have set up, you might have to wait for your funds to “settle” to be available to purchase another asset.

In other cases, the money might be available in a matter of minutes, but in a highly volatile market, you might find yourself waiting for your next asset’s price to come down from a quick spike before pulling the trigger on the “buy” button. If the fund you plan to buy increases in value while you wait, the price difference can more than wipe out the benefit you got from booking a loss on the fund you sold.

The “instant” between one evening’s market close and the next day’s open can result in a drastic price swing, and that’s where I got tripped up.

Through the first three weeks of March, I had racked up about $150,000 in paper losses while remaining invested, in some cases, getting a bit lucky as an ETF price dropped overnight after I got out of one fund and before I could get into the next.

My Developed Markets lots, including ones I had purchased a few days earlier as I traded out of other international stock funds, were all in the red. I decided to take another $20,000 in losses by trading out of that mutual fund with the plan to buy into an international stock ETF when the funds were available the following morning.

I sold $554,000 worth of VTMGX at the end of the March 23rd trading day.

When the markets opened on March 24th, every international fund was trading at least 5% higher than the previous day’s close. I wasn’t going to let this be a $30,000 mistake; I would wait for prices to return to where they were when I sold.

Later that week, the markets were up 15% from the 3/23 close, and they haven’t come close to testing those lows since. There’s a decent chance they never will.

I was sitting on a big pile of cash, and that wasn’t as comfortable as you might think.


Making Lemonade from Lemons?


A Real Estate Fund

The point of tax loss harvesting is to make lemonade from lemons. Use the falling asset prices to offset some ordinary income and future capital gains taxes.

With that trade, I didn’t make lemonade, but rotten lemons, it seemed.

However, as you might reckon, there are some things you can do with a half-million dollars in cash that are more difficult to do without it.

I had been considering an investment in a real estate fund that had a $100,000 minimum, but the 2% investment fee would be cut to 1% with a $250,000 investment.

In the summer of 2020, I invested $250,000 into the Origin IncomePlus fund. It’s a buy-and-hold real estate fund that invests in a range of equity, preferred equity, and debt deals with the goal of delivering approximately 6% in tax-neutral distributions with anticipated appreciation in the 3% to 5% range for a total return of 9% to 11%.


A Startup Investment

Early in 2020, I invested about $10,000 in a high-end condominium via Compound, a startup that became Republic Real Estate when Compound was acquired by Republic.co.

Having established a good relationship with the folks at Compound, I was introduced to Republic’s CEO, Ken Nguyen. I was impressed with his efforts in helping fund dozens of woman-led and minority-founded businesses and his vision for democratizing startup investing.

I also took note of the fact that Republic’s 800,000+ members tend to get a lot more from their investments on the Republic platform as compared to a place like Kickstarter, like actual equity in the company if it’s acquired or goes public.

They’ve also got an arm of the company that specializes in more mature startups, some of which are household name brands that have not yet gone public via IPO. Physician investors, in particular, have been drawn to Republic Capital. Unlike the offerings at Republic.co, these investments are only open to accredited investors, and I’ve made several investments with them in 2021.

The most recent addition to the Republic family is NextSeed, a platform that offers investments in vetted “Main Street” small businesses throughout the U.S.A. Past offerings from Nextseed include now-funded investments that offered unique perks, like free beer for life! That sounds a lot like an investment I’ve made (and recently cashed in on again with a 3-keg, 8-crowler pickup — thank you, Nick!).

As discussed in How My Investing Has Changed After Financial Independence, I am open to taking risks that I might not have made if we weren’t somewhere beyond FI.

When I was offered an opportunity to invest in Republic as a strategic partner, I sat on it for a bit. Ultimately, I decided it was a leap worth taking, as they’ve got a mission I can easily get behind. A force for positive change like Republic.co was the perfect place to put my money in a year like 2020.

Having made a major gaffe with my TLH efforts left me with more than enough cash to purchase the full allotment of shares made available to me in the form of a SAFE note in the summer of 2020.

These are not referral links, and I’m not compensated in a direct manner for any promotion. However, in this case, I do now own a sliver of the company, and do have a vested interest in their success.

If Republic continues to flourish like I believe it will, I will have made some exceedingly sweet lemonade from those lemons.



What investing mistakes have you made? Did you learn any valuable lessons or make any lemonade from your lemons?


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29 thoughts on “My Investing Mistakes: Misadventures in Stock Picking and Tax Loss Harvesting”

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  4. Is there any sense in using robo services for TLH? I am very green in the world of FI but have always been a quick study. I also want to intersect on Twitter with several Anesthesiologists who NEED to begin their own FI journeys. I am an OR nurse by day but solopreneur after completing 3 12’s. PS- thanks for pointing me towards Earnest!

    • The roboadvisors like Betterment or Wealthfront do automate TLH and I believe they use ETFs exclusively, so you’re not going to get “locked out” as I was when swithching from mutual fund to ETF.

      In general, TLH is easy enough to do on your own, and it’s highly unusual for an asset class to experience a 5% to 10% swing overnight, but those were unusual times.

      Keep in mind you do pay something like 25 basis points in fees for those services. You’ll have to decide if that’s worth it to you.


  5. Not too bad! My investing mistake was selling at least $50,000 worth of Tesla stock after it rebounded in June 2020. If I had held on, it would be worth over $200,000 today. Oh well!

    Back to the salt mines I go!

    • Ouch! But I’m sure you still made out just fine with a healthy profit at that price point.

      That’s another reason I generally avoid buying and selling individual stocks. So much coulda / woulda / shoulda with the benefit of hindsight. And the constant decision-making of whether to buy, sell, or hold today, the second guessing, etc…


  6. PoF,
    I would like to offer up one different reason why individual stock investing may not be right for you. You have made judgements on your cruise line investments only a short time after purchase. True wealth in stock investing comes from long term ownership. Individual stocks are quite volatile in comparison to index funds, so patience is required. Also, if you still like a company’s business after it went down another 20%, buy more! Stock investing is a bit of a different mindset than MF or index investing.

    Also, applying for margin at your brokerage may fix that settling time problem on TLH. You don’t have to use the margin to leverage up your portfolio, but it should permit you to make sell/buy transactions.

  7. OMG Lief I did the same exact thing going from MF to ETF in my fidelity account! was the date March 13th b/c I remember it clearly! What made it worse was despite putting in my order at 9am, I realized after seeing my 9am patient I checked my account and I had put in a Limit order! For anybody going to TLH using etf please make sure to do a “market” order. I guess on fidelity’s platform they make the default option limit orders to protect client from buying into flash crashes, but in this case screwed my TLHing.

    • Tough to get locked out like that.

      There were more down days after 3/13, though. I hope you were able to take advantage of one of them to get back in!

      • yes! I realized my mistake 30min later and got back in. was only out of the market 30min, though was an expensive 30min, and I try not to actually calculate so I don’t upset myself but probably was only around a thousand bucks- nothing like you man!

  8. Really eye-opening Leif. Appreciate you sharing your (mis)adventures in individual stock picking. Too often on the internet, you only get the people who talk about their successes and how they’re so smart when really, none of us really know what any individual stock is going to do.

    The tax loss harvesting issue is eye-opening as well. Hadn’t really thought about the potential volatility issues between when you sell and buy.

    Stay safe out there!

    • Thanks, FP!

      Just keeping it real, like you always do. What happened to me was a rare fluke — a huge overnight swing on a massive amount of money. And never to return to that low again.

      The stars were aligned against me, but I learned from it. And by writing about it, others can learn, too.


  9. It’s really tickling my funny bone to see you get such stars in your eyes over investing for free booze and beer. I guess Sober October was merely a fling!

    • Oh, it was never meant to be permanent — just a thing we’ve done the last 3 years.

      You know “Caro” is the word for expensive in Spanish, right? I like my drinks “gratis.”


  10. Just to make sure I am understanding the TLH part correctly. Going from MF to MF happens at end of day. Going from MF to ETF may have delays? I have most of my funds in VTI so wanted to check if a TLH opportunity comes up in the future. Does ETF to ETF have the same delay?

    • Going from MF to ETF means locking in the selling price at end-of-day but you’re unable to use the money to buy an ETF until the following opening bell.

      You can sell ETFs anytime during the trading day, and it’s up to your brokerage as to how soon that money is available to buy something else. It could be a matter of minute (or even seconds), but it could be 1 or 2 trading days if the funds first need to “settle” and land in a money market account before you can buy a replacement fund.

      I would inquire with a phone call before trying it with ETFs just to be sure that money will be available shortly after you sell.


    • Hi Anu,

      ETF to ETF has no delay at Vanguard- you sell one and buy the other immediately, without the funds having to settle. Like PoF says, it is wise to check with your brokerage, if it is not VG, as to there rules.
      I have always invested in ETFs, not MFs- and I find this a great advantage. Here’s how I TLH with ETFs and some TLH partners to help.

      • Thank you so much PoF and PFB. I only use Vanguard. So looks like I can go from ETF to ETF immediately without any delay but since I am using unsettled funds to buy the new fund, I cannot sell out of that fund to do TLH to a diff fund until the funds have settled.

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  12. Thanks for sharing! This is great to read now, but it would have been even nicer in the summer – I thought I was the only one who had things go against me as so many bloggers noted their clever moves in the market. The balanced view is soooo helpful! Thanks!!

    • I believe in honesty and transparency.

      Nobody’s perfect, especially me. We all make mistakes and take risks that don’t turn out so well.

      If the market had dropped 5% or more overnight, I would have looked brilliant, but that’s not how things worked out!


  13. I followed in your footsteps with the Vanguard Tax Loss Harvesting. I was able to capture some losses and then after waiting for the trade to clear had the stock market shoot up which was great fun.

    I was able to put half of the proceeds in a S & P 500 fund almost immediately and then basically Dollar Cost Averaged into the Vanguard Growth VUG over the next few months. It’s certainly not my proudest moment of investing and handling my Financial Advisor role but the money didn’t stay on the sideline forever at least. But certainly created a “I’m not really that smart” am I moments for about 6 months.

    Cheers and best of luck with your new investments!

    • Is this an argument against tax loss harvesting if you expose yourself to the risk of losing out? I am trying to think of how to quantify it… Thanks for any ideas.

      • I would say it’s an argument against the specific trade of a mutual fund for an ETF.

        MF -> MF or ETF -> either doesn’t carry the same risk of an overnight upwards spike locking you out (as long as your brokerage makes your ETF proceeds immediately available after a sale).


    • Hey Steven – I know someone else who confided in me that something similar had happened to them.

      Like you, there was some reluctant DCA happening into a climbing market over several months afterward for that individual.

      It’s OK to be humbled on occasion. Sounds like you’ve learned from your mistake as I did.


      • I have never claimed to be the smartest investor in the room or made the right decision every single time.

        I rely on invest and repeat, just a small blemish on my investing record, this tax loss harvesting debacle, haha.

  14. “My brilliance knew no bounds.” This line was hilarious, because I secretly feel this way sometimes about my individual stock picks that have done well.

    I hope you can forgive yourself for the drop in price of the cruise ship stocks. Who could have seen this black swan of black swan events?

    The description of the tax loss harvesting issue was also helpful to read. Given the time it takes Vanguard to execute sales and process index fund orders, I’ve always worried about volatility biting me like you described. Again, March of 2020 was probably a once-in-a lifetime occurrence, but it’s educational reading about your experience.

    Thanks for sharing it!

    • I think we’re all guilty of having an inflated sense of our abilities when things are going well. But sometimes things don’t go so well!

      My fall purchase is more forgivable than the February purchases. The only reason I’m in the black is that I was willing to throw more money at the problem in March, and that could have turned out very poorly. To date, that looks like a wise move, but time will tell. Again, this is why I leave individual stocks alone for the most part.

      Regarding the TLH, I do prefer the simplicity of using mutual funds exclusively, but there are a lot more trading partners when you open it up to ETFs.



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