My Worst Investment Ever Podcast Peter Ricchiuti – Don’t Fall in Love With a Stock
BIO: Peter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.
STORY: Peter made the mistake of falling in love with a particular stock and hyped it to his clients. The company had no moat and couldn’t stand the competition. Peter’s reputation was severely affected after the stock price fell significantly.
LEARNING: Don’t fall in love with a stock. Diversification is key.
“If you meet a money manager and they tell you they’ve never had any big losers, just run because losses are part of the game.”
Peter Ricchiuti
Guest profile
Peter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.
From Memphis to Mars (PA), Peter has addressed more than 1,200 groups in 47 states and several countries. He has been featured in BARRON’S, Kiplinger’s, The New York Times and The Wall Street Journal. He also hosts a popular weekly business show on National Public Radio in New Orleans called “Out To Lunch.”
Worst investment ever
Peter got interested in a new company making soft soap that would replace the bar soap, which it did. The stock was trading at around $19 a share, and Peter just fell in love with it. He got many blatant signals that this would not work, but he ignored them.
At first, the stock performed very well. However, the company had no moat. So the stock started falling. It got to $9, and Peter was beside himself because he had the stock in many client accounts as a speculative stock. The stock price just kept falling.
As a broker, Peter’s biggest loss was not the money but the fact that his entire clientele and institutional salespeople wouldn’t believe him anymore.
Lessons learned
- Diversification is crucial.
- Don’t fall in love with a stock.
Andrew’s takeaways
- Just because a company or a CEO has an idea and is implementing it well doesn’t mean they can hold on to it.
Actionable advice
Think of all the downsides before you take a position.
Peter’s recommendations
Peter recommends reading How to Invest: Masters on the Craft to learn more about investing.
No.1 goal for the next 12 months
Peter’s number one goal for the next 12 months is to dig deeper into a few stocks he liked a couple of years ago and are now selling for much lower prices.
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Connect with Peter Ricchiuti
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
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals
Connect with Andrew Stotz:
Further reading mentioned
- David M. Rubenstein (September 2022), How to Invest: Masters on the Craft