Patience Pays

Selling Netflix back in 2010 is definitely the costliest mistake I’ve made, even though it was a fourbagger at the time, quadrupling the value of my investment. I sold after holding it for about three years. I thought I did the right thing after I saw it plummet, but then it shot straight back up. I could be sitting on about a 25-bagger, if I’d just held on. Lesson learned — have patience. — Mark M., Radford, Virginia

The Fool Responds: It may sound trite, but patience really is powerful in investing.

Netflix’s history has been a bit volatile. In 2011 the company announced plans to split its DVDby-mail business from its video streaming business, naming the DVD business “Qwikster.” The idea was met with ridicule and scorn and was retracted not long after. The episode helped push Netflix’s stock down some 75 percent in just about three months. Certainly, anyone who sold before that would be relieved.

It’s important to keep the big picture in mind, though. At the time, did it seem that Netflix was doomed? Its revenue topped $2 billion annually and it was still growing. The stock recovered and kept growing, too.

Today, bears worry about competition from Amazon Prime and others, including Disney’s recent deal to buy 21st Century Fox’s movie and TV assets, but bulls point to Netflix’s aggressive investments in original content as well as its global growth.