When it comes to investing, there's no better way to learn than jumping in head first. I had my share of bad experiences too. Today, I will share with you one I learned the hard way.

Just a few weeks ago, I was planning to buy some shares of Markel Corporation (NYSE: MKL). Markel is a property and casualty insurance company. The stock was trading at $320+ a piece. After doing my due diligence, I estimated that the Markel's intrinsic value is somewhere around $368. So buying at $320+ means I would be getting a sweet discount of about 15%.

Was I satisfied with the discount? Noooo.... I was greedy. I looked at the 1 year graph and thought "Hmm... Looks like the price is dipping in July. Maybe it'll fall further." So I hung on to my money and waited, all the while admiring myself for being so patient.

Patience Is Not Always a Virtue
Few days passed by, the stock price did not fall. Instead it went up 2%. I began to despise myself. But I decided to stick to my one virtue that every guru investor preaches — patience. I kept telling myself Mr. Market was just trying my patience.

Another couple of days passed, but Markel kept rising. This time around it's trading at $330+ almost a full 5% over the original price when I first valued the stock. I began to lose my patience. I talked myself into thinking that the stock is just going to keep rising and rising. So I threw in the towel and my cash and bought Markel at $337. Convinced that I grabbed the opportunity before it was gone, I was a happy man. Fast forward a couple of weeks, the stock has now fallen back to the $320s. $^@^(*&!

Despite my frustration, I did not sell. I still believe Markel is undervalued and has plenty of opportunity to grow. I will not discuss why I think so in this article since this happened before I started writing for PFBlog. I will talk about my future picks in detail, but not my past because the valuation I had done would no longer be accurate.

Lesson Learned
The message I want to send through this article is a very important one. So important that Buffett classified a similar mistake he made as the worst mistake he has ever made. For those who are too lazy to read the linked article, I have extracted his quote below:

"I set out to buy $100 million shares of Wal-Mart at a [pre-split price of] $23," recalled Buffett. "We bought a little and it moved up a little and I thought maybe it will come back a bit. That thumbsucking has cost us in the current area of $10 billion."

Of course, his mistake was at a much, much larger scale compared to mine. But the lesson learnt was the same. If you have done your research and you are convinced the company management will make you rich, for heavens sake, do not wait a second longer. Plunk your money into the stock and forget about it. Come back and visit a year later to see how your money's doing.

Why shouldn't you wait? What if the price dropped another 10% tomorrow? What if the price dropped 5% next week? The answer is simple. All these questions are what-if questions. Meaning nobody knows what's going to happen. Who can predict that the stock will drop 10% tomorrow or next week or next month? If you could, please let me know. I want to bet my life savings on you. Hell, I'll even borrow as much as I can and bet everything on you.

Once Again, Don't Wait
When you find yourself questioning yourself if you should wait for the price to drop tomorrow, it's time to stop listening and, as Nike says, just do it. Just bear in mind that the valuation you have done on the stock is most accurate at the time of valuation. Tomorrow the valuation may be stale because the price has changed. So do yourself a favor and stop listening to your Mr. Greed Personality.

I certainly hope I can practice what I preach. What's really frustrating is I read about Buffett's mistake long before I made mine. And still I didn't learn. I think this time it should stick around for two reasons:

1. I actually made the mistake.
2. I wrote down what I learnt and shared it with you.

This ought to paint a smile across my face when I look back at the silly mistakes I've made.

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