My Dumbest Investment

Dick's Sporting Goods was my dumbest investment. After listening to a TV stock guru talk up the stock, I decided to buy the day before its quarterly earnings announcement. Well, it plummeted. At one point I lost well over 25 percent within only a month. I continued to check out the financials of the company and decided that it was worth hanging onto. I planned to cash out when it hit a certain intrinsic value. The market agreed with me, and eventually the stock returned to my original buy price. However, I would have done much better (with much less risk) had I invested in T-bills. Moral: Do not just jump into a stock because a TV dude thinks it's in your best interest.

- Dan Gallagher, Mandan, N.D.

The Fool Responds: You were smart to do your own research into the company and to be patient. T-bills are often not the answer, though. They are indeed less risky, but stocks offer the possibility of greater growth, along with greater risk. Manage that risk by studying investing and companies and by diversifying.

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