Losing money isn’t fun. It’s even worse when you lose someone else’s money.

When I look back over my 17-year career in construction, I think I may have lost somewhere in the range of $100k of my employer’s money by making mistakes or less than ideal decisions. It’s tough to think about it. Even writing it down right now and doing the math is difficult. I want to see myself as having gained all my professional experience and wisdom by being perfect every time. I want to be the type of guy who’s shown how to do something once, and only once, and I’ll do it right all the time.

But that’s simply not the case.

In my first few years in the trades, once I started earning the trust of my supervisors, I was put on the layout crew of carpenters and thus allowed to take some risks. What do layout guys do? They read the drawings and mark out where things are going to get built. Where holes are going to get dug. Where columns and walls will be located. How thick the walls will be. The heights to be poured. In summary, layout guys tell people where to build things.

There’s a ton of stress associated with it. When I was trained how to do it, going backward was part of the training. You do something, then you go back and redo it and check yourself. If the numbers work you move forward again. Then stop and go back. That’s the only way you don’t screw yourself and the project. Everything is so fast-paced these days on job sites, nobody is going to double-check you. If it’s close, they’re going to pour it and the problem will rise up later on when it is vastly more expensive to fix.

Countless times I’d wake up in the middle of the night thinking about a number I’d pulled on a tape measure. Was it right? Shit, they’re gonna pour it first thing in the morning. It would be very hard to go back to sleep. And the next morning I’d race to the job site to check my control lines while pumps were being set up and hoses dragged around to remeasure formwork that took days to build.

its just dirt

My first gig laying out was in the year 2008 in Walnut Creek, California. Things were very slow back then, and my company luckily won a small job doing a concrete foundation and basement for wood framed apartments near a BART station.

They assigned me to layout these huge footings for the guy excavating the earth. Some were so big they could have been Olympic sized swimming pools. The smaller ones were hot tub sized. Anyway, I mismeasured one of the footings and I didn’t realize it till the guy training me came over to me and said, “…that footing looks kinda funny, huh kid?“

It looked normal to me. Then he squints and puts his arm stretched out in front of his face, fingers tight and straight.

“Look down it. Use your eye.”

I did. I lined up like him and sure enough, all of the footings were in a perfect row, except for one of them. A big one. It was jutting out at a nice 45 degree angle compared to the others.

It was as if a cloud suddenly passed in front of the sun on that cloudless summer day. The brightness of the moment, of feeling good about doing something important on my own, turned dull and sickening. I felt my stomach tighten and reached down for the wrinkled and torn drawings in my tool bags. I needed to double-check the math. Maybe that footing was supposed to be turned like that. He must have seen the terror in my eyes because he laughed.

“Just dirt, kid. It’s not a mistake till its poured remember that. That’s when they’ll fire you. Always go back and check yourself.”

I hurriedly ran over and spray painted the correct lines and told the excavator operator that I screwed up.

I never forgot that lesson. Luckily in construction, almost everything is straight and symmetrical. 90 degree intersections, square and plumb. If you just check for that, you’ll catch 90% of potential mistakes.

But you have to look back. You have to know to stop the forward progression once and a while and check yourself.

Obviously, I’ve made a ton more mistakes over the years. The expensive ones were poured and had to be jackhammered down by crews working overtime to make the schedule. I’ve put columns in the wrong place. Holes through concrete slabs in the wrong place. Balconies a foot too long. Most of the time those are the easy ones. The painful ones are the one’s other trades and companies find when they’re installing their material. When things don’t fit, they have to stop work, and they want to get paid extra to stop and come back.

The funny thing is these cringe-worthy mistakes have made me a better builder. The change is similar to the way soft hands will blister and cut easily after physical work, but after much abuse, they are beaten into submission and become callused and leathery tools that can endure.

I’m now a master at catching my own mistakes and the mistakes of others. It’s an art, and the only way to get there is to have fucked up quite a bit. And really, if you catch a mistake before anyone else notices? Is it even a mistake?

knowing when to pour the concrete

Back to the losing money part. This concept of pouring concrete is like actualizing investment losses. If you know the stock or fund has recently gone down in value from your purchase price, why would you pour the concrete? Any time the market is down you probably don’t want to be making those numbers concrete.

Let’s revisit some individual stocks I purchased back in November of 2020. I wrote a few paragraphs detailing my moves you can read here. I have a traditional IRA that I don’t contribute to. This is from a 401k with my previous employer. I used $20k to purchase two reopening stocks and two Chinese e-commerce stocks.

Here’s the value on purchase day- $19,983

And here’s the value today as I type this on 7/7/21-$19,780

A slight loss, but I’ll just call it zero percent return on these bad boys in 8 months time. Back in February/March of this year I was flying pretty high with these stocks. The total valuation for these stocks on March 1st was $23,428–a 17% increase! Then the market “rotated” and we hit some turbulence.

What if I kept that $20k in VTSAX? The question I hate to ask, but this is the looking back part, and it’s a necessary, albeit painful, part of catching and preventing mistakes…I’d have $24,277.92. VTSAX has returned from 11/17/20 to 7/7/21 nearly 21%.

So did I make a mistake buying these stocks and not keeping my money in VTSAX and chilling?

No. Well, I hope the answer is no. That decision will be determined the day I sell.

I don’t know what the future holds, but I’m willing to take the bet that in a few years’ time these valuations will have increased. I like having these stocks in my playground to remind me of how much “smarter” I really am compared to just buying my beloved VTSAX. It keeps me grounded. I’m honestly so glad I don’t have to worry about a ton of individual stocks in my portfolio. I already stress myself out with work and raising two kids, that constantly checking on stocks would just be another thing for me to worry about.

That’s not to say I’m never going to buy more individual stocks. I just know for sure, it will only be a tiny fraction of my portfolio. I’m okay with doing only as well as the market through an index fund in exchange for less stress.

It’s much easier to avoid mistakes when investing for the long term. My story about making mistakes in construction has to do with the time constraints involved. Rushing to a decision–any decision—leads to regret and error…usually. When there are deadlines involved it’s quite easy to make a regrettable and hasty decision in the name of ‘gettin ‘er done‘.

But what’s the excuse for making the classic investment mistake of buying high and selling low? It’s not a schedule pushing us to finish on a certain date. It’s not the need for the money now (I hope).

It’s emotion.

The opposite of logic. Though I will admit emotion has a way of making things seem overly simple and rational at the time. It’s too easy for me to see LUV and DIS and feel nothing but smugness. But the Chinese stocks are another story.

When I read the news about Beijing and BABA and JD, I can’t help but feel emotion rise up. Anxiety about what the Chinese government might do to rattle the stock valuation. Fear that the price may drop. Anger that I’m even bothering to check the price when I don’t need to sell for years.

All of those emotions swirl around in my mind and conjure up the impulse to sell and be rid of the problem. Take the loss and move on. But isn’t it all “just dirt” right now? Selling low would be like me noticing the footing was off and frantically deciding to order and pour the concrete immediately. You’d have to be insane to do that.

The key for me is knowing that I’m not going to sell at a loss unless it’s an emotionless strategic decision. To actualize this loss and go chasing VTSAX or some other fund or stock because I fear I’m missing out or fear I’ve made a mistake would be foolish, especially because of the extremely short time I’ve owned these stocks. Selling based on emotion would be more than a mistake, it would be self-sabotage.

If you catch a mistake before anyone notices, is it even a mistake? Any good mistake stories, investing or work?