Seeking Schadenfreude – Part 1: The One That Got Away

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~ Tim Murphy, Investing Groups Success Manager
Today we start a two-part series where Investing Groups leaders share their investing mistakes and lessons learned. We have all made several investing mistakes. Maybe like me, that’s what first brought you to Seeking Alpha – I realized I needed to be learning from like-minded investors and analysts. Unfortunately, there are always a few stocks that haunt us on very emotional levels. The very first stock I bought still stays with me. It was a small fiber optics company, JDS Fitel (now VIAV), which was highlighted in the Ottawa Citizen’s business section in December 1997. I was in the second year of my B. Commerce and was eager to start investing. The article discussed the growth potential of fiber optics and I wanted to invest. So I did. To “diversify” my two stock portfolio, I also bought shares in TD Bank (TD).
A year later while in Wales for a 3rd year exchange, I was strapped for cash (maybe a few too many pub visits with friends) and I decided to sell JDS to capture the 20% gains and keep the safer TD stock. A month later, the stock went on a two-year run and went up 20x. Even now as I go back to research the charts, my heart hurts. As expected, it lost 90%-plus during the dot.com bubble and there’s no way of knowing at what point I would have actually sold it. But in my mind, of course I imagine I would have sold it at the peak. I learned a lot from that experience – mainly that it’s good to let the winners run, while also taking partial gains along the way. Below are the questions we shared with Investing Groups leaders and their responses. In the comments below, please feel free to share the journey of an investing decision that still haunts you today. And a shout out to Investing Groups analyst SomaBull for suggesting the series name.
Discuss one stock/idea that still haunts you. Briefly take us on your journey – why did you initially invest? what did you get wrong? What did you learn from this specific stock/idea?
Trading Places Research – Long View Capital: My Seeking Alpha bio warns that the primary risk in following me is “I am also wrong sometimes.” It’s funny because it’s true.
The first thing I wrote about Facebook, before IPO:
“(Facebook) is still in the same social media business that sunk MySpace and Friendster. There is a central flaw to the whole model: Once your mother is on Facebook, you will no longer want to be on Facebook. This will be true for every social media platform; as soon as it gets popular, young people will move on to the next VC-funded funhouse, and I do not believe that anyone will be able to gain dominance for an extended period. There is too low a barrier to entry, and Facebook doesn’t have a moat.
On top of this, everything has already moved to mobile, and the Facebook app is a disgrace, even after multiple retakes on the project. They are finally giving in and moving to native apps, but are way behind everyone else.
I also question their ability to compete with Google in advertising long-term, and I also think there will be a backlash to all this privacy invasion by advertisers.”
Wow. So where did I go wrong?
The FTC let them buy incipient competition. Facebook ads were not only competitive, they were better. They got their act together on mobile, finally. The privacy backlash was much smaller and later than I thought.
I was too slow to change my opinion. Confirmation bias is your enemy.
Disclosure: N/A
Jonathan Faison – ROTY Biotech Community: ProQR Therapeutics (PRQR) comes to mind in response to the above question. I took a 79% loss in this name after being throwing the dice on a binary catalyst that I had no business being invested in.
The loss was entirely my own fault, as an experienced biotech veteran in our Live Chat reminded me that the MoA and target biology was not clear (lowers the probability of success). I often get too caught up in patient stories, and such was the case with a couple case studies here of super responders to sepofarsen who had this particular form of the eye disease Leber congenital amaurosis. As a result of this and related losses, I’ve tried to focus exclusively on situations where probability of success is highest and where the biology is clear cut. I also try to stick to situations where there’s high downside cushion (other assets in the pipeline, substantial cash position, partnerships, etc.).
ROTY Biotech Community Winners & Losers Page
Disclosure: N/A
Laurentian Research – The Natural Resources Hub: It still hurts that I missed buying Cameco (CCJ) in March 2020, when the stock traded at merely $6. I knew full well the tremendous potential of Cameco – a vertically-integrated uranium fuel vendor in an oligarchic industry – in a uranium bull market, which at the time was unfolding. However, my bid fell short by a few cents, and I watched in shock as the stock gapped up the next day. Regret overwhelmed me as the stock doubled in the next four months.
You might think I have learned from my mistake. Well, I made the same mistake again eight months later: I hesitated to buy a pullback as I still lamented missing the absolute bottom. Today, CCJ trades at around $31 per share.
Laurentian Research for The Natural Resources Hub, modified from barchart
Disclosure: Long CCJ
Edmund Ingham – Haggerston BioHealth: It was January 2022 and the pandemic was raging. Biotech indices were riding high after the industry had successfully delivered two messenger-RNA vaccines with >90% efficacy. This new mRNA technology looked as if it might be successfully pivoted into a range of other disease indications.
The pharma giant Pfizer (PFE) – developer of the Comirnaty mRNA COVID vaccine – made a small investment into a company called Codex DNA, developing synthetic mRNA projects using its DNA technology and workstations, with $240m more in milestone payments on the table.
Despite poor performance since its IPO, with shares falling from >$20, to $6, I liked the deal and acquired shares in Codex. What followed was a near-12 month biotech bear run as investors lost faith in pre-revenue, largely experimental biotechs as a post-pandemic recession loomed.
Codex did generate some revenue from its biotech clients – but not nearly enough – posting revenues of just $27.4m in FY22, and a net loss of $46.5m. A name change to Telesis Bio (TBIO) initially did little to change the downward momentum, although shares are +27% year to date, and guidance for 2023 is for $45m, although profits remain elusive – and I’m down nearly 85%.
What did I learn? Codex / Telesis’ technology is compelling, but uses cases for the technology have not been well established long enough for the products to make meaningful sales. Without an achievable commercial business model in place, the value proposition for investors is absent.
Disclosure: Telesis Bio (TBIO)
Tariq Dennison – The Expat Portfolio: Overall, my biggest investment mistakes have been in missing the upside rather than in riding the downside. Of these, my No. 1 biggest boo-boo that still haunts my decision-making process 20 years later was the decision to sell my shares in Philip Morris/Altria (MO) after a mere 150% return.
I started buying in 1999, putting an “irresponsibly high” percentage of my then limited savings into this stock because I saw it as a wonderful business irrationally beaten down to a wonderful price, with far more upside than downside. Having lived most of my life outside the US, I still saw plenty of value in the tobacco business at a time this stock was selling at less than the value of just the stakes in Kraft Foods and Miller Beer.
I sold in 2003 because I started a new job with an investment bank with a strict personal trading policy, which I followed too conservatively by selling all my individual stock holdings that year, even though I could have held on to a few wonderful ones like Altria without trading them. Part of my regret was thinking I was giving up Altria for the benefit of my career with the bank, but I was also giving up years when I could have learned to become a better fundamental investor. I have since learned to become less of a trader and more of a long-term owner of the world’s best businesses.
YCharts
Disclosure: Long Altria (MO), Philip Morris (PM) and Kraft Heinz (KHC)
Long Player – Oil & Gas Value Research: America Midstream (AMID) and Buckeye Partners (BPL). These companies were undervalued and then got taken private so investors could not participate in the recovery. I had to learn that undervalued alone did not make a good investment in midstream as too undervalued meant they would go private and come public later (or be sold).
This went with the lesson that the smaller oil and gas companies had too many fraud and manipulative type situations to be able to guide investors through that minefield. So in both cases I don’t cover those areas anymore because it’s too easy for a buy and hold investor to lose money.
Disclosure: N/A
Laura Starks of Econ-Based Energy Investing: Smart Sand (SND) was emblematic of the siren call of frac sand generally, which has disappointed me time and again. It looks like a commodities play but is (cheap) real estate, with very low barriers to entry, or at best a very attenuated third derivative of oil prices. Worse, Smart Sand is a Wisconsin (Northern) white sand supplier far from Texas drilling activity and the market had moved to Permian in-basin or local (brown) sand. See Quick Take: Microcap Smart Sand Upswing (NASDAQ:SND)
Grant Gigliotti – Good Stocks@Bargain Prices: I got the bright idea to invest $40,000 on margin in Herbalife (HLF). I was confident in the fundamentals and that I was buying a good company at a bargain price. At the same time, there was a popular hedge fund manager (Bill Ackman), who was having a short-selling war with HLF and he was doing a good job of promoting his reasons, as to why he thought HLF was going to drop to zero.
The fund manager had a much bigger effect than I had thought possible. I underestimated him and I knew that if HLF dropped low enough in price, it would trigger the sale of my shares through a margin call. I had even considered this before I purchased, but I again underestimated the amount that HLF could possibly decrease by. Long story short, the unthinkable happened, and in a short time frame, HLF fell so low that I had lost $15,000 in a flash! And because I bought on margin, and had to face the consequences of a margin call I wasn’t able to hold and wait it out.
HLF eventually came back and continued to make large gains beyond my original buy price. My lesson learned was that using leverage can be extremely dangerous, especially in the case of using leverage in margin accounts, where if the price drops low enough (and it can happen momentarily), you might not even have a chance to defend yourself, or to wait it out, and you might be forced to take the loss. By the way, I haven’t bought on margin since.
Disclosure: N/A
Chris DeMuth Jr – Sifting the World: I’ve made plenty of mistakes; here’s one that might still be salvaged. Last year was rough for takeover candidates but one bright spot was MLP buyouts. I owned all of them and they all worked. Bids got bumped 20%-40%, allowing buyers to take private MLPs that lost most of their reasons to exist as separate trading companies. But I reached for one last one, GasLog Partners (GLOP), that has been a stinker so far. Their GP made a lowball offer and bumped only modestly, securing a deal at an absurd price – nominally $8.65 but $3.28 is double counted; that’s a special dividend of cash already belonging to GLOP owners.
Units are conservatively worth $10-$12 and traded at $15-$20 before the dividend suspension. Was the special committee innumerate or corrupt? Whatever the reason, they caved to the buyer on every point, making this the worst governance abuse in today’s capital markets: Putting The G In ESG With GasLog (NYSE:GLOP). Holders can save me from this debacle; their vote on this atrocious deal is July 6. We deserve better and can demand better. One shareholder, Tourlite, has led the charge against this inadequate offer, independently reaching conclusions broadly aligned with my own (see nearby image).
Heads we win; tails we tie. If we get the offer bumped to a fair $12 per unit, that would be a return of over 40% from here. If the deal goes through, we get a $0.10 net spread offering a 13% IRR to a close by this time next month.
Disclosure: Long GLOP
Andrew Hecht of The Hecht Commodity Report: It’s more of a repeating mistake I must remind myself of constantly with all risk positions. The initial risk-reward dynamics include profit and risk targets. One is set in stone, the other is variable.
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
Christian family goes in hiding after being cleared of blasphemy

LAHORE, Pakistan — A court in Pakistan granted bail to a Christian falsely charged with blasphemy, but he and his family have separated and gone into hiding amid threats to their lives, sources said.
Haroon Shahzad, 45, was released from Sargodha District Jail on Nov. 15, said his attorney, Aneeqa Maria. Shahzad was charged with blasphemy on June 30 after posting Bible verses on Facebook that infuriated Muslims, causing dozens of Christian families in Chak 49 Shumaali, near Sargodha in Punjab Province, to flee their homes.
Lahore High Court Judge Ali Baqir Najfi granted bail on Nov. 6, but the decision and his release on Nov. 15 were not made public until now due to security fears for his life, Maria said.
Shahzad told Morning Star News by telephone from an undisclosed location that the false accusation has changed his family’s lives forever.
“My family has been on the run from the time I was implicated in this false charge and arrested by the police under mob pressure,” Shahzad told Morning Star News. “My eldest daughter had just started her second year in college, but it’s been more than four months now that she hasn’t been able to return to her institution. My other children are also unable to resume their education as my family is compelled to change their location after 15-20 days as a security precaution.”
Though he was not tortured during incarceration, he said, the pain of being away from his family and thinking about their well-being and safety gave him countless sleepless nights.
“All of this is due to the fact that the complainant, Imran Ladhar, has widely shared my photo on social media and declared me liable for death for alleged blasphemy,” he said in a choked voice. “As soon as Ladhar heard about my bail, he and his accomplices started gathering people in the village and incited them against me and my family. He’s trying his best to ensure that we are never able to go back to the village.”
Shahzad has met with his family only once since his release on bail, and they are unable to return to their village in the foreseeable future, he said.
“We are not together,” he told Morning Star News. “They are living at a relative’s house while I’m taking refuge elsewhere. I don’t know when this agonizing situation will come to an end.”
The Christian said the complainant, said to be a member of Islamist extremist party Tehreek-e-Labbaik Pakistan and also allegedly connected with banned terrorist group Lashkar-e-Jhangvi, filed the charge because of a grudge. Shahzad said he and his family had obtained valuable government land and allotted it for construction of a church building, and Ladhar and others had filed multiple cases against the allotment and lost all of them after a four-year legal battle.
“Another probable reason for Ladhar’s jealousy could be that we were financially better off than most Christian families of the village,” he said. “I was running a successful paint business in Sargodha city, but that too has shut down due to this case.”
Regarding the social media post, Shahzad said he had no intention of hurting Muslim sentiments by sharing the biblical verse on his Facebook page.
“I posted the verse a week before Eid Al Adha [Feast of the Sacrifice] but I had no idea that it would be used to target me and my family,” he said. “In fact, when I came to know that Ladhar was provoking the villagers against me, I deleted the post and decided to meet the village elders to explain my position.”
The village elders were already influenced by Ladhar and refused to listen to him, Shahzad said.
“I was left with no option but to flee the village when I heard that Ladhar was amassing a mob to attack me,” he said.
Shahzad pleaded with government authorities for justice, saying he should not be punished for sharing a verse from the Bible that in no way constituted blasphemy.
Similar to other cases
Shahzad’s attorney, Maria, told Morning Star News that events in Shahzad’s case were similar to other blasphemy cases filed against Christians.
“Defective investigation, mala fide on the part of the police and complainant, violent protests against the accused persons and threats to them and their families, forcing their displacement from their ancestral areas, have become hallmarks of all blasphemy allegations in Pakistan,” said Maria, head of The Voice Society, a Christian paralegal organization.
She said that the case filed against Shahzad was gross violation of Section 196 of the Criminal Procedure Code (CrPC), which states that police cannot register a case under the Section 295-A blasphemy statute against a private citizen without the approval of the provincial government or federal agencies.
Maria added that Shahzad and his family have continued to suffer even though there was no evidence of blasphemy.
“The social stigma attached with a blasphemy accusation will likely have a long-lasting impact on their lives, whereas his accuser, Imran Ladhar, would not have to face any consequence of his false accusation,” she said.
The judge who granted bail noted that Shahzad was charged with blasphemy under Section 295-A, which is a non-cognizable offense, and Section 298, which is bailable. The judge also noted that police had not submitted the forensic report of Shahzad’s cell phone and said evidence was required to prove that the social media was blasphemous, according to Maria.
Bail was set at 100,000 Pakistani rupees (US $350) and two personal sureties, and the judge ordered police to further investigate, she said.
Shahzad, a paint contractor, on June 29 posted on his Facebook page 1 Cor. 10:18-21 regarding food sacrificed to idols, as Muslims were beginning the four-day festival of Eid al-Adha, which involves slaughtering an animal and sharing the meat.
A Muslim villager took a screenshot of the post, sent it to local social media groups and accused Shahzad of likening Muslims to pagans and disrespecting the Abrahamic tradition of animal sacrifice.
Though Shahzad made no comment in the post, inflammatory or otherwise, the situation became tense after Friday prayers when announcements were made from mosque loudspeakers telling people to gather for a protest, family sources previously told Morning Star News.
Fearing violence as mobs grew in the village, most Christian families fled their homes, leaving everything behind.
In a bid to restore order, the police registered a case against Shahzad under Sections 295-A and 298. Section 295-A relates to “deliberate and malicious acts intended to outrage religious feelings of any class by insulting its religion or religious beliefs” and is punishable with imprisonment of up to 10 years and fine, or both. Section 298 prescribes up to one year in prison and a fine, or both, for hurting religious sentiments.
Pakistan ranked seventh on Open Doors’ 2023 World Watch List of the most difficult places to be a Christian, up from eighth the previous year.
Morning Star News is the only independent news service focusing exclusively on the persecution of Christians. The nonprofit’s mission is to provide complete, reliable, even-handed news in order to empower those in the free world to help persecuted Christians, and to encourage persecuted Christians by informing them that they are not alone in their suffering.
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What went wrong with ‘the Metaverse’? An insider’s postmortem

It’s now two years since Facebook changed its name to Meta, ushering in a brief but blazing enthusiasm over “the Metaverse”, a concept from science fiction that suddenly seemed to be the next inevitable leap in technology. For most people in tech, however, the term has since lost its luster, seemingly supplanted by any product with “artificial intelligence” attached to its description.
But the true story of the Metaverse’s rise and fall in public awareness is much more complicated and interesting than simply being the short life cycle of a buzzword — it also reflects a collective failure of both imagination and understanding.
Consider:
The forgotten novel
Ironically, many tech reporters discounted or even ignored the profound influence of Snow Crash on actual working technologists. The founders of Roblox and Epic (creator of Fortnite) among many other developers were directly inspired by the novel. Despite that, Neal Stephenson’s classic cyberpunk tale has often been depicted as if it were an obscure dystopian tome which merely coined the term. As opposed to what it actually did: describe the concept with a biblical specificity that thousands of developers have referenced in their virtual world projects — many of which have already become extremely popular.
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You can see this lack of clarity in many of the mass tech headlines attempting to describe the Metaverse in the wake of Facebook’s name change:
In a widely shared “obituary” to the Metaverse, Business Insider’s Ed Zitron even compounded the confusion still further by inexplicably misattributing the concept to TRON, the original Disney movie from the 80s.
Had the media referenced Snow Crash far more accurately when the buzz began, they’d come away with a much better understanding of why so many technologists are excited by the Metaverse concept — and realize its early incarnation is already gaining strong user traction.
Because in the book, the Metaverse is a vast, immersive virtual world that’s simultaneously accessible by millions of people through highly customizable avatars and powerful experience creation tools that are integrated with the offline world through its virtual economy and external technology. In other words, it’s more or less like Roblox and Fortnite — platforms with many tens of millions of active users.
But then again, the tech media can’t be fully blamed for following Mark Zuckerberg’s lead.
Rather than create a vision for its Metaverse iterating on already successful platforms — Roblox’s 2020 IPO filing even describes itself as the metaverse — Meta’s executive leadership cobbled together a mishmash of disparate products. Most of which, such as remotely working in VR headsets, remain far from proven. According to an internal Blind survey, a majority of Zuckerberg’s own employees say he has not adequately explained what he means by the Metaverse even to them.
Grievous of all, Zuckerberg and his CTO Andrew Bosworth promoted a conception of the Metaverse in which the Quest headset was central. To do so, they had to overlook compelling evidence — raised by senior Microsoft researcher danah boyd at the time of the company acquiring Oculus in 2014 — that females have a high propensity to get nauseous using VR.

Contacted in late 2022 while writing Making a Metaverse That Matters, danah told me no one at Oculus or Meta followed up with her about the research questions she raised. Over the years, I have asked several senior Meta staffers (past and present) about this and have yet to receive an adequate reply. Unsurprisingly, Meta’s Quest 2 VR headset has an estimated install base of only about 20 million units, significantly smaller than the customer count of leading video game consoles. A product that tends to make half the population puke is not exactly destined for the mass market — let alone a reliable base for building the Metaverse.
Ironically, Neal Stephenson himself has frequently insisted that virtual reality is absolutely not a prerequisite for the Metaverse, since flat screens display immersive virtual worlds just fine. But here again, the tech media instead ratified Meta’s flawed VR-centric vision by constantly illustrating articles about the Metaverse with photos of people happily donning headsets to access it — inadvertently setting up a straw man destined to soon go ablaze.
Duct-taped to yet another buzzword
Further sealing the Metaverse hype wave’s fate, it crested around the same time that Web3 and crypto were still enjoying their own euphoria period. This inevitably spawned the “cryptoverse” with platforms like Decentraland and The Sandbox. When the crypto crash came, it was easy to assume the Metaverse was also part of that fall.
But the cryptoverse platforms failed in the same way that other crypto schemes have gone awry: By offering a virtual world as a speculative opportunity, it primarily attracted crypto speculators, not virtual world enthusiasts. By October of 2022, Decentraland was only tracking 7,000 daily active users, game industry analyst Lars Doucet informed me.
“Everybody who is still playing is basically just playing poker,” as Lars put it. “This seems to be a kind of recurring trend in dead-end crypto projects. Kind of an eerie rhyme with left-behind American cities where drugs come in and anyone who is left is strung out at a slot machine parlor or liquor store.”
All this occurred as the rise of generative AI birthed another, shinier buzzword — one that people not well-versed in immersive virtual worlds could better understand.
But as “the Metaverse” receded as a hype totem, a hilarious thing happened: Actual metaverse platforms continued growing. Roblox now counts over 300 million monthly active users, making its population nearly the size of the entire United States; Fortnite had its best usage day in 6 years. Meta continues plodding along but seems to finally be learning from its mistakes — for instance, launching a mobile version of its metaverse platform Horizon Worlds.

Into this mix, a new wave of metaverse platforms is preparing to launch, refreshingly led by seasoned, successful game developers: Raph Koster with Playable Worlds, Jenova Chen with his early, successful forays into metaverse experiences, and Everywhere, a metaverse platform lead developed by a veteran of the Grand Theft Auto franchise.
At some point, everyone in tech who co-signed the “death” of the Metaverse may notice this sustained growth. By then however, the term may no longer require much usage, just as the term “information superhighway” fell away as broadband Internet went mainstream.
Wagner James Au is author of Making a Metaverse That Matters: From Snow Crash & Second Life to A Virtual World Worth Fighting For
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