I’ll tell you a true story.
Life is funny. DONE = Revenio bought a company called Regio from Estonia because of its map positioning software. This is how Revenio got Estonian owners. By chance, back in the Soviet era in 1990, I had met the CEO of Regio. DONE famously bought Regio through a share swap, and a lock-up period prevented the Estonians from selling for 2 years. In the meantime, the share value dropped by over 90 percent. What did the former CEO of Regio do? He pulled a “crucian carp” (ruutana) and it paid off. Regio’s price took off, as you know. How I’m involved in this is that when this CEO and a good Estonian friend of mine, who both owned DONE, told me they owned Revenio, I also got interested in this “general store” (yeah—I mean, from milk processing lines to rubber boats). So I bought 100 euros worth of shares and went to the annual general meeting. Excellent catering—haven’t really experienced anything like it since 1994. Anyway, it turned out at the meeting that they had some kind of patent for intraocular pressure measurement. I got excited about it and immediately bought 5,000 euros worth of shares. Well, it took a while before the price started to react, after they had cleared out—what was it, up to 5 different side businesses? At this stage, I told my Estonian friends that this really is starting to be worth owning. Of course, I bought shares aggressively at various prices into three portfolios. The latest ones were probably around 8 euros.
You know what happened. The price rose excellently from my initial purchase price of 1.45 euros. And since these Estonian friends of mine had received the shares “for free.” When the Covid euphoria faded. I realized myself that the price had gone too high. So I’m being honest—I missed the peak completely. I sold 95% of the shares at a price of 38-31 euros and all the time I was messaging my Estonian friends that this was it and they should sell. But these “crucian carps” (ruutanat) have stayed stuck in the “crucian carp” (ruutana) mindset that it will still rise back to 60 euros, since it previously rose from nearly zero to 70 euros.
SIGH! It’s miserable trying to teach market economics to those born in the Soviet Union. They have lost huge amounts of euros by not believing my advice. I will sell my last Revenio shares in January with a good profit.
So this “story” is probably coming to an end—what did we learn from it? At the peak, it’s hard to sell and you have to settle for some profit, and it’s not worth waiting for former peaks; instead, move on to new pastures.
Happy New Year to everyone—meaning, off to new pastures.