Joe Robert
A Conservative Investor's One Impulse Buy
No investor has lost a dollar in his real estate companies, he says, but his AOL investment cost him plenty.
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Real estate investor Joe Robert describes the success of his J.E. Robert Cos. as one built on steadfast, conservative money management.
"When it comes to investing, I'm anything but impulsive. I agonize," he says.
Except once, while investing for himself.
He was on a yacht in July 2000, boating around the Mediterranean with other well-heeled investors from the Washington area, including AOL co-founder James Kimsey, when the conversation turned to the recently announced merger of Time Warner and AOL.
AOL's stock was trading around $50 a share, Robert recalls, and the consensus of those on board -- just their personal opinions, mind you -- was that the price didn't reflect the company's value.
Robert says he kept that conversation in the back of his mind. In December 2000, as he made some year-end investment decisions, he decided to plunk $5 million into AOL stock. The merger with Time Warner soon was completed, but the combined company's share price continued to fall, eventually dipping into the $20s a year later, when Robert admitted defeat and bailed out.
He lost nearly half his investment.
"It was the most impulsive financial decision I ever made," Robert says. "It was like I took a leap off a cliff without looking."
He says no investor has lost a dollar of the $17.5 billion they have invested with his companies over the past 16 years. But with the Time Warner investment for himself, he says, "I strayed from my basics" of researching every aspect of a company before committing money.
But he did adhere to a few principles: He didn't invest more than he could afford to lose, and he got out after a reasonable period. And the whole experience was a good lesson, he says, reminding him to stick to his rules.
-- K.D.
