My Worst Investment Ever Podcast Shawn O'Malley – Geopolitics Can Take Your Investment to Zero
BIO: Shawn O’Malley is the chief editor and writer of the We Study Markets newsletter from The Investor’s Podcast Network, the world’s largest stock-investing podcast with over 110 million downloads.
STORY: Shawn wanted to hedge inflation during the COVID pandemic, so he invested in the Russian ETF at the end of 2021. The ETF performed well, and Shawn was happy. Then rumors of Russia invading Ukraine started. The invasion happened in February, and the Russian ETF stopped trading, taking Shawn’s investment to zero.
LEARNING: Understand how geopolitical events and domestic politics affect investments. You won’t be compensated for lack of knowledge.
“Investing is all about continuous learning and getting comfortable with the risks that we take.”
Shawn O’Malley
Guest profile
Shawn O’Malley is the chief editor and writer of the We Study Markets newsletter from The Investor’s Podcast Network, which is the world’s largest stock-investing podcast with over 110 million downloads.
He writes for an audience of over 30,000 readers daily, breaking down the most important stories in financial markets with longer write-ups exploring financial history, the economics behind everyday life, and insights from legendary investors.
Shawn hopes to help keep people informed about current news while adding the perspective of a long-term investor.
Worst investment ever
In April 2020, Shawn was sent home from school because of the COVID lockdowns. He was a junior in college at the time. He spent a few weeks doing nothing productive but soon realized this would be an extended lockdown. Shawn decided to find valuable ways to manage his time. He started taking long walks while listening to the We Study Billionaires podcast, which interested him in value investing.
At the time, oil prices were negative. Shawn didn’t understand the futures market or know anything about oil. Still, it felt like an opportunity since he believed oil prices wouldn’t stay negative forever. Shawn bought into some oil and gas stocks and held them.
Over the next year or so, Shawn developed this sort of outlook that some of the inflationary pressures of the lockdown would eventually manifest. So he started thinking more about how to hedge inflation to have exposure to energy prices. Shawn naively started looking for the most undervalued energy stocks in Russia. At the end of 2021, he bought into the Russia ETF as a creative and cheap way to play this inflation and energy price spike he was trying to foresee.
Shawn held that investment for a year, and things were looking good. The inflation manifested, and the energy stocks started to rally. At this point, Shawn thought he was pretty clever. In January 2022, all these rumors about Russian troops gathering around Ukraine for an invasion started. Shawn believed it was just a conspiracy theory. He played down the risk and held down his investment. The attack happened in February, and the Russian ETF stopped trading, taking Shawn’s investment to zero.
Lessons learned
- Understand how geopolitical events and domestic politics affect investments.
Andrew’s takeaways
- It takes time to become aware that risks are everywhere, and your first job is to understand them.
- You won’t be compensated for lack of knowledge.
- When you build a portfolio of international stocks, you’re not investing in global stocks but in a currency. So you have to at least understand the currency impact.
Actionable advice
You have to learn investment lessons for yourself. But, there are a lot of investment mistake stories from investing legends such as Warren Buffett. Read those archives, and you’ll learn a lot about investing mistakes, how to run or find great businesses, excellent management, compounding goodwill, and treating people well.
No.1 goal for the next 12 months
Shawn’s goal for the next 12 months is to hit 100,000 subscribers for the We Study Markets newsletter and make financial markets understandable to as many people as possible.
Parting words
“Thank you for having me on the show. I hope I can count on your listeners as readers of my newsletter one day.”
Shawn O’Malley
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Connect with Shawn O'Malley
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
- Jeremy J. Siegel (September 2022), Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies