John Pugliano – Diversify Your Portfolio to Beat Overconfidence and Use a Put to Avoid Regrets

John Pugliano is the author of The Robots are Coming: A Human's Survival Guide to Profiting in the Age of Automation. He is the host of Wealthsteading Podcast as well as the founder and money manager at Investable Wealth LLC. John’s circuitous career path includes military services, both enlisted and officer, corporate career in industrial sales, and finally, a late-blooming entrepreneur. John has an MS in Systems Management from the University of Southern California and a Bachelor's of Science and Environmental Science and Engineering from Penn State. In a nutshell, John is the quintessential Millionaire Next Door.   “First, learn how to earn, then you have to save, and then and only then you invest.” John Pugliano   Worst investment ever John found himself in the middle of the internet bubble in the 90s. Being a smart investor, he’d seen the internet bubble coming, and so he got out of technology stocks. This saved his wealth and so he was sitting on his high horse as he watched others lose their investments. The arrogant and overconfident investor Having escaped the internet bubble unscathed, John became arrogant and overconfident. With so much confidence, he invested a very large percentage of his portfolio in a brick and mortar, retail type of service company. He invested in Boston Market, a concept restaurant that served good healthy, home-cooked kind of meals. But the big concept of it was you didn't have to eat there. You could take it at home. Take out was a new thing, and this made the company all the rage. His entrepreneurial instinct told him that the technology stocks would go down, but the brick and mortar type of restaurants would always be there. And besides, the company had great reviews. Everybody loved it. So feeling all smug and overconfident, he put a large portion of his portfolio that he'd already made a profit on from getting out of the internet bubble into Boston Market. Falling off the high horse The Boston Market stock listed at about $20 and was selling at around $45 when John decided to invest in the company. Within a short 18 months, the stock went to zero, and the company went bankrupt. So John didn't lose 10% or 20% or even 50%, he lost a whopping 100% of a large portion of his overall investing portfolio. John was overconfident in his investment plan so much so that he didn’t even consider diversified investments. He put all the money he had in one stock. Lessons learned Diversify your portfolio John learned the hard way that you don’t have to believe in the rich man’s hype. You don’t have to take big risks to win. The way to win is through portfolio diversification. So instead of investing in one stock,