Two-Way Street
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By Matthew Gutierrez · October 27, 2024
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? Twenty years ago today, the Boston Red Sox ended the “Curse of the Bambino.”
The alleged hex began in 1920 after Boston’s owner sent Babe Ruth to the Yankees for $125,000 and a personal loan. But in 2004, the Red Sox ended the curse by beating the St. Louis Cardinals to win their first title in 86 years.
Today, we're chatting with Eric Soda, an individual investor who has held stocks like Nvidia and Apple for years, about his investing process, conviction, and more.
All this in just 5 minutes to read.
— Matthew
Quote of the Day
“Great things are done by a series of small things brought together.”
— Vincent van Gogh
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What Else We’re Into
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Trivia
Over the past 20 years, Apple shares have generated a total return of roughly 48,447% — what is its compound annual growth rate (CAGR) over that period?
Two Way Street: Life and Investing with Eric Soda
A big regret of many elite investors? Selling their best-performing stocks too early.
The same holds for Eric Soda, an author, entrepreneur, and individual investor in Wisconsin who owns a large insurance agency. It was 2008, sometime during the financial crisis, when Soda made his first major investment mistake. He had done the hard work, buying Microsoft during days of panic, but he sold his entire position after he doubled his money.?
The experience was painful — Microsoft has trounced the S&P 500 since then, compounding at nearly 30% annually —?but Soda says he learned an invaluable lesson that has become the cornerstone of his investment philosophy: often, doing nothing is the best decision. Let winners ride.?
“It was a big mistake,” Soda recalls. “I should still have those initial shares. Obviously, it took some luck, but I think the discipline I learned from my Microsoft goof-up has helped me immensely. I’m glad it happened because I was still young, and it’s helped me. That’s why starting early and maintaining a long-term view is so powerful.”
Soda says he’s applied the lesson to his steadfast conviction behind stocks like Apple and Nvidia, which he’s held for years as they keep climbing higher. Below, Soda also shares his journey from self-taught investor and entrepreneur —?he never graduated college — to other life lessons, including his days as a firefighter. This interview has been edited lightly for brevity and clarity.
To start, tell us when you first became interested in investing. What drew you in?
At 17, the whole industry wowed me. I read the WSJ and Barrons in paper form because there wasn’t much on the internet. I just started reading and self-educating, because I never went to college. I started my insurance business and taught myself how to run it.?
After high school, while building your insurance business, you were also a paid-on-call firefighter who fought fires and pulled people out of car wrecks.
It was one of the highlights of my life. I think about doing that and the things I saw and did every day. It gives you a perspective that you can’t get any other way. I always wanted to be a firefighter — two of my grandparents, my dad, and two of my uncles all were once firefighters. I was always fascinated by it. It’s an eye-opening experience with adrenaline. Going into a burning building? Nothing ever comes close to that.?
Tell us about your growing newsletter, Spilled Coffee — including why you launched it — and its mission.
Like many people, I reflected on life during the pandemic: What am I doing? What do I want? Where am I going? I wrote my book during the pandemic and thought about how investing in businesses has been my love since I was a teenager. I wanted to relay what I’ve learned to other individual investors. I wanted to...