Investment Mistakes - Case Study HPQ (a whopper)

Today (just before close) Hewlett Packard is up $3.50 to almost $25 USD. Apparently their Q2 results were better than expected. For some reason that reminds me about one of my whoppers. BTW a whopper is a mistake, a double whopper is a big mistake and finally a double whopper with cheese is a gigantic mistake (losing lots of money).

Anyways, about 3 years ago - I think it was around mid 2010 I decided to buy a few shares of HPQ. I read the annual and quarterly reports. I probably surfed the net for various opinions. I ended up buying for me what was a fairly substantial position around $47-48. The main thing that attracted me was the high dividend yield which I think at the time was over 4% and the low P/E. I felt pretty comfortable since I "knew" Hewlett Packard for many years.

Shortly after my purchase the stock started to drop and I ended up selling out in the low 40's. What I had missed was the slide in the PC market due to mobile and the tablet invasion. I did not understand the industry thoroughly. My mistakes are:

1.          Insufficient research on the industry
2.          Superficial thinking - the high dividend yield and low P/E should have been a warning.

Maybe the only thing I did right was admit my mistake and sell out. I have made a few of the them. At least it was not a double whopper with cheese.

Disclosure: I do not own shares of HPQ. Please refer to my disclaimer.