My Worst Investment Ever Podcast Axel Meierhoefer – Never Get Involved in Anything You Don’t Understand
BIO: Axel Meierhoefer was born in Germany, served 22 years as an air force aviator and instructor. In 2005, he started his consulting company then discovered real estate investing during the recession.
STORY: Axel blindly invested in penny stocks in the late 90s. He knew nothing about penny stocks at the time, and he ended up losing $75,000 after the market fell suddenly.
LEARNING: Never get involved in anything that you don’t understand. Understand how company P/E ratios work and how they affect a stock.
“If it’s initially interesting, I’ll first go into research until I’m satisfied I understand it well enough to commit money to it.”
Axel Meierhoefer
Guest profile
Axel Meierhoefer was born in Germany, served 22 years as an air force aviator and instructor. In 2005, he started his consulting company then discovered real estate investing during the recession. Now, experiencing financial freedom, he wants to share his secrets and life lessons with us. You can find him on his Ideal Wealth Grower YouTube Channel.
Worst investment ever
In the late 90s, Axel was appointed the program manager for this new German Flight Training Center in the US. While at the center, the media kept constantly drumming on how necessary it was for everybody to be in the stock market. It was going on and on about the Dot-com boom that would change everything.
At the time, neither Axel nor most other people he was with had any idea what a blue-chip stock or a penny stock was. But one thing that was the real fascination, initially for him, was that it didn’t take a rich person to start participating because the penny stocks were relatively cheap, well below $1 apiece. So you could buy like several thousand without investing a substantial amount. He figured if it’s not a considerable number, it won’t make a difference, so he bought a bunch of stocks.
In just a few months, the stocks gained, and some of Axel’s friends cashed in their stocks, but he decided to hold onto his stocks. Unfortunately, the stock’s value plummeted as fast as it had gained. Axel ended up losing $75,000.
Lessons learned
- Don’t get involved in anything that you don’t understand.
- Learn how to differentiate between companies with reasonable valuation ratios and those that are just hype.
Andrew’s takeaways
- You can never know the future, but you can know the present if you do your research well. If you know where you are, it can help you think about what you want to do.
Actionable advice
Don’t be greedy. If you have been lucky enough to follow your principles and follow your purpose, and things have worked out well, there is nothing wrong with taking something off the table and putting it into something that still has all this potential ahead of it.
No. 1 goal for the next 12 months
Axel’s number one goal for the next 12 months is to grow his real estate property portfolio by another two or three properties.
Parting words
“Anybody can be an investor.”
Axel Meierhoefer
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Connect with Axel Meierhoefer
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