My Worst Investment Ever Podcast Chris Franzen – Only Play in a Field That You Really Understand
BIO: Chris Franzen has been a hotelier for over two decades, having worked in the US, Europe, Middle East, and Asia.
STORY: Chris saw an advert during the football World Cup a few years ago for a company he was unfamiliar with. He was intrigued by this unknown company that could afford to advertise in the World Cup. He did a bit of research and decided to invest in it. The stock went up for a few days but later plummeted to a point the company folded, and Chris lost his entire investment.
LEARNING: Invest in industries you’re familiar with. Do thorough research before you invest.
“When picking stocks, pick those in industries that you understand well.”
Chris Franzen
Guest profile
Chris Franzen has been a hotelier for over two decades, having worked in the US, Europe, Middle East, and Asia. He learned his trade from the ground up as a chef before rising through the ranks and being appointed Area Vice President with Hyatt Hotels. In July 2021, Chris opened his own company, advising operators and owners in the field of luxury hospitality.
Worst investment ever
Chris was watching the football World Cup a couple of years ago when he noticed this unfamiliar energy company whose ads would keep popping up every now and then. Seeing as the unknown company was paying millions to advertise at such a high-level stage, Chris imagined that it must be a reliable company.
So after a few days, he decided to do some basic investigation and found out it was a Chinese green energy company dealing with solar panels. It was one of the biggest solar panel producers and had unsigned contracts in the pipeline all over Asia. Chris thought this must be an excellent investment, especially because the stock was marked as undervalued. He went ahead and bought stocks worth several thousands of dollars.
About two, three days later, the stock rose, and it was a fantastic investment. After that, Chris didn’t pay much attention for the next few weeks. Suddenly, the stock plummeted day after day. Chris is not a panic seller, so he held onto the stock and waited for it to recover. But unfortunately, for this stock, it kept going down and never recovered. In fact, after about nine months from the day he bought the stock, the company ceased to exist, and he lost all the money he had invested. This remains his worst investment ever.
Lessons learned
- You have to scrutinize what you invest in thoroughly. What security do you have if the company defaults?
- Do thorough research of companies that you want to invest in more so if they are new.
Andrew’s takeaways
- Just because a company can afford to be out there doesn’t mean anything. Big companies can fail, and sometimes they can fail fast.
- If you invest in the overall stock market, it’s going to go down at times, but it’s going to recover. But with individual stocks, some of them can go down and never recover.
Actionable advice
Invest only in companies that are in industries that you understand really well.
No. 1 goal for the next 12 months
Chris’s number one goal for the next 12 months is to ensure his new company gets a decent foothold and build a good reputation. He also hopes that COVID will finally be over sooner or later so people can go back to traveling and enjoying themselves.
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Connect with Chris Franzen
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points