Reading time: 10 minutes

Mistakes are to the stock market as volatility is to the chart. Looking back, they are what hurts the most - but also teaches the most. In recent years, I have deliberately tried out many strategies in order to develop my own system. There have been some hits - but also misses, which have shown me what really counts in the long term.

This article is primarily aimed at new investors. I hope to save you from making one or two costly mistakes - or at least to show you what really matters if you want to invest sustainably.

Five examples are particularly influential. They mark the turning points at which I went from being a pure yield hunter to a structured investor.

1. historical performance overvalued

My entry into the $INRG (-1,77 %) (iShares Global Clean Energy ETF) was, in retrospect, almost textbook bad timing. I bought when the story sounded perfect: energy transition, political tailwinds, ESG money, green euphoria. The share price was close to an all-time high and fund providers were outbidding each other with promises for the future.

I let myself be dazzled - not by fundamental data, but by charts and headlines. The ETF portfolio consisted mainly of highly valued solar and hydrogen stocks with P/E ratios that were beyond all reason. I didn't really understand the product and only saw the impressive historical performance.

After a few months, I was down around -17% and realized the loss - a classic example of past performance bias. Today, the ETF is trading significantly lower again.

Learning:

High historical returns are not an argument, but a warning. When a sector is already overrun by institutional money, the regression to the mean begins. Since then, I have checked the composition, valuation levels and the cycle of the narrative for every investment. An ETF is only as good as its components - and hype is no substitute for analysis.

2. value trap instead of value opportunity

$INTC (-2,85 %) (Intel) seemed to me at the time to be a classic underperformance opportunity: lower P/E ratio than $NVDA (-1,91 %) (NVIDIA) or $AMD (-4,03 %) (Advanced Micro Devices), solid cash flow, decent dividend. I saw the numbers, not the structure.

The company has been struggling for years with innovation gaps, manufacturing problems and a protracted strategy. Margins were falling, market share was shrinking - but the valuation looked attractive. This is precisely the nature of a value trap: cheap because the business model is losing competitiveness.

I held on to the thesis for too long and eventually realized a loss of around -21 %. Despite the current upswing, Intel is still lagging behind today, while its competitors have further extended their lead.

Learning:

Valuation alone is not a safety net. Favorable multiples are often a symptom, not an opportunity. I have learned that capital flows, technological dynamics and management quality are crucial. Value only works if the business model is intact - not if you are hoping for a renaissance that is fundamentally unproven.

3. "What falls is cheap" - the fallacy using the example of $PYPL (-2,88 %)
(PayPal)

Another classic mistake: the belief that a sharp fall in the share price is automatically a good entry point. After PayPal's massive correction in 2021, I thought this was a rare opportunity. The company was once overvalued - no question - but I interpreted the setback as a downward exaggeration.

I got in after the share had already fallen sharply and even bought more as it continued to fall. The assumption: "It won't fall that low again." But it continued to fall - and has not recovered sustainably to this day. The exaggerated valuation premium from the boom years was simply no longer justified.

In the end, I realized a loss of around -44 %. The share will probably never reach the old highs again because the market environment, margin structure and growth have changed permanently.

Learning:

A falling share price does not automatically make a share cheap. You have to examine why it has fallen - and whether the fundamental situation has changed. An exaggeration on the upside is often followed by an overcorrection on the downside, and the old valuation remains out of reach for years. Today, I prefer to invest in companies whose trend is intact instead of speculating on "comebacks".

4. warning signals ignored - the example $CLI (-2,46 %)
(Cliq Digital)

For those unfamiliar with CLIQ, the company positions itself as a streaming provider - similar to $NFLX (-1,92 %) (Netflix), only much more niche. On paper, everything seemed to fit: high margins, strong growth, an attractive dividend and a barely noticed small cap with potential.

I saw the opportunities - but not the contradictions. The business model was difficult to understand, the reporting was incomplete and the short interest was extremely high. Nevertheless, I held on to the position - "because the figures were so good".

In the end, I realized a loss of around -26 %, including dividends. Today, the value is almost 90 % lower.

Learning:

If you don't understand a business model, it's not a good idea to be invested. Transparency is not a nice-to-have, but a must. In small caps in particular, you should check carefully whether growth is real, repeatable and sustainable. Since this experience, I have avoided business models that I cannot explain in two sentences - and take high short ratios as a serious warning signal.

5. trend understood - implementation missed

I wanted to focus on the self-service trend early on: Terminals for fast food chains, supermarkets, airports. A massive growth market - but I was looking for the wrong player. I found $M3BK (+0,22 %) (Pyramid), a small German company with a reverse IPO structure, hardly any investor relations, low liquidity and a non-transparent balance sheet.

I invested, convinced by the trend - not the business model. The share fell for months and I realized a loss of around -34%. Today it is trading at penny stock level.

Learning:

A strong trend alone does not make a good investment. The decisive factor is who has the real leverage in the value chain. It is often not the visible brands that benefit, but the blade manufacturers in the background - suppliers, infrastructure companies, platform providers. I have learned to analyze the ecosystem first and then look for the most profitable position in it.

Overarching learnings

These five mistakes were expensive, but their impact was priceless. Today, they are an integral part of my methodology - both in the 10B model (for growth opportunities) and in the Hidden Quality Radar (for quality values).

1. foundation beats narrative:

Stories are loud, but numbers are honest. Today, I check every investment for cash flow quality, return on capital and strategic positioning - and only then for valuation.

2. timing is crucial - but only in the right context:

I used to think that timing was unimportant, the main thing was to invest for the long term. Today I have a more differentiated view: the time of entry is a decisive factor in determining the risk/reward profile. If you buy in euphoric phases, you often pay for the correction years later. On the other hand, those who invest in downward exaggerations - with fundamental analysis and patience - gain a massive advantage. Timing is therefore not a game of chance, but the result of preparation, market observation and discipline.

3. accept small losses:

Discipline beats hope. Getting out early when things go wrong saves capital for better opportunities.

Here I would like to recommend a great article by @DonkeyInvestor recommend: https://getqu.in/eymPwi/

4 Transparency and management count:

I only invest in companies whose strategy and communication are transparent. Trust is not a gut feeling, but a data point.

These experiences have shaped the way I think today: patience instead of greed, quality before valuation, understanding before actionism. I have learned that you don't always have to be right on the stock market - you should think consistently.

Mistakes are inevitable. But if you reflect on them honestly, you build up your expertise with every bad experience.

What mistakes have shaped you - and what have you learned from them?

I have rarely been so bullish. You can find what the guys are doing in some of my posts.

The €100 million sales target for 2022 was known after the acquisition of Pyramid and Faytech.

EBIT should be around 8 million euros.

But the long-term target is more exciting.

The board sees the goal very realistically to reach at least 200 million euros in sales in five years.

That's about 15 percent growth per year.

The current valuation is only around €55 million.

If a fair standard comes in here, the share should rise 100% this year.

Even KUV 1 is cheap for a company that is growing strongly, is profitable and is in the tech sector.

With sales of €200 million, the KUV would be 0.25 in 2027.

KUV 1 then means +400% from today.

KUV 4 at 200 Mio€ turnover (not unusual) would be an enterprise value of 800 Mio€.

Currently 50 Mio€ -> 1600%.

Share price 3€ --> 48€.

Fantasy is part of it, but I'm in it full throttle.

Buy and hold 🙏🏼🚀

I think about this share I will report until it has a little more notoriety or at least the price is higher and known by itself 😄

Wallstreet Online has now noticed for themselves how glaringly undervalued it is.

Not only KUV of below 0.5 km tech range for 2022/2023 but even valued below book value. At some point the reaction has to come.

Here times the article, almost everything well zam:

The price list is richer by an exciting title. Pyramid went public through a reverse IPO.

The price list is richer by an exciting title. Pyramid went public through a reverse IPO. The Freiburg-based company is a provider of self-service terminals that, for example, allow hotel guests to check in themselves, air travelers to check in their luggage themselves, or supermarket customers to take over the work of the cashier. Pyramid even sees itself as the world market leader in self-service terminals for restaurants and grocery stores. The medium-sized company has slipped into the stock market shell of Mic AG. Prior to this, the portfolio of the former venture capital company had been purged. All that remained was a single listed investment, which is soon to be used as a vehicle for a reverse IPO. But that is another matter. Mic AG is soon to be renamed Pyramid. We talk to CEO Andreas Empl about the future prospects. Basically, Pyramid is to become a global player with a special focus on the huge market in the USA. For the coming year, CEO Empl expects revenues to increase to between 67 and 71 million, with EBIT forecast in a range between 6 and 6.4 million. For the cycle that is coming to an end, management is looking at 58.2 million in revenues and 5 million in Ebit. However, Pyramid would like to become a 100 million company. Announced the acquisition of Faytech AG. A manufacturer of touchscreen devices for point-of-sale and point-of-service as well as in-dustrial applications with worldwide production capacity, primarily in China. The company, based in Witzenhausen, Hesse, is growing rapidly. For 2022, the management board expects about 30 million in sales as well as an Ebit of more than 1.7 million. Together with Pyramid, the Ebit adds up to 7.7 to 8.1 million. Empl estimates the synergies at more than 1 million euros p.a.. For example, he expects savings in manufacturing and operating costs. Empl announces that the purchase agreement will be signed by the end of the year. The original target date was October 1. According to Empl, the result of a particularly thorough due diligence process is improved terms for the deal. The aim is to merge the two companies. Together, they want to position themselves as the "world's leading supplier" of self-service terminals. Few stock market players have Pyramid on their minds yet. Since June, the share price has plummeted from 3.50 euros to around 2.50 euros. There seems to be a bottoming out here. The valuation is well below book value, the P/E ratio is in single digits. Conclusion: The future pyramid addresses the trends of digitization and self-service. Price increases programmed.

I'm going to tell you why I think Die MIC AG is cool.

I think it's worth reading, even if it takes a few minutes. You'll learn about the pioneer of the digital marketplace. The whole thing is a German company, which is why the valuation with a price-turnover ratio of less than one and a price-earnings ratio of less than ten is still reality in my view, but not for much longer.

The company itself can basically be said to be nothing special at first. In fact, it could be described as a kind of SPAC, since it was originally just an empty corporate shell. A holding company that was invested in small companies but did not make any significant sales and was or is no longer operational.

Despite this, you can see a significant increase in the share price. This is because they have taken over Pyramid GmbH by acquisition.

Many of you certainly don't know Pyramid as a company, but all of you have used it at some point. If you have entered your order at Rewe or McDonald's on the touch screen with the beautiful pictures of the food you want and then paid, you have used their terminals.

Pyramid has a very strong presence in many countries and is one of the market leaders in terms of technology and distribution.

Recently, Pyramid Computer GmbH confirmed its sales and earnings forecast for 2021.

The forecast of the 100% subsidiary of MIC AG foresees Pyramid Computer GmbH sales in a range of EUR 58.0 million to EUR 63.0 million and an operating result (EBIT) of between EUR 4.9 million and EUR 5.3 million for the financial year 2021.

FY 2020 sales € 57.7 million and EBIT € 4.8 million.

So you can say, not only a decent growth for normal times but especially for the times we currently have, a strong development for a small cap.

Now I just want to throw in the ring, the market cap of this by all means well growing company is €50 million.

And that is the market cap of MIC AG.

So you can say, KUV under 1 and P/E approx. 10.

Definitely not overvalued but really favorably valued for a technological topic.

But the whole thing goes further 👆🏼

After the acquisition of this company from the topic of digital platforms/tablets and payment, MIC AG has started after the attack on another major player from this area.

The plan is to acquire 100% of the shares of faytech AG.

In July, the interest in the acquisition was expressed and currently the diligence is still ongoing.

faytech AG is a leading manufacturer of touch screen devices for P.O.S. (Point-of-Sale and Point-of-Service) and industrial applications with subsidiaries in Asia and North America.

Of course, this acquisition is not 100% through yet but seems to be on the home stretch.

Through this acquisition, MIC AG has issued The fixed revenue target of € 100 million in 2022 or 2023 at the latest. That would be a price-turnover ratio of 0.5 at the file valuation, which I would find very unusual for a digital company.

Let's take a look at the expected revenue development according to research:

Revenue 2022 -> 93M€

Sales 2023 -> 110M€

Turnover 2024 -> 125,5 Mio€

Growth is therefore around 15% per year.

EBIT 2022 -> €6.3 million

EBIT 2023 -> €9.1 million

EBIT 2024 -> €11.3 million

Of course, these are forecasts, but the whole thing reads very well.

P/E ratio would be below 5 in 2024.

We all don't have a crystal ball, but I still don't believe that a small cape with such a strongly growing business segment and a very interesting topic will have such a favorable valuation in the long term.

From my point of view, it is first important that the takeover goes through, then sales will increase strongly again on their own. After that, it is a matter of landing orders for Pyramid and Faytech.

Conclusion:

I only invest in MIC AG because of the acquisition already made and the planned acquisition. I find the touch screen terminals in stores and restaurants extremely cool as a customer and believe that this is a thoroughly justified and exciting investment story.

Potential:

Gigantic as soon as the masses take notice

My target price 12 months:

5.50€ (KUV approx. 2) and thus still not overvalued.

Is this investment advice?

No 😄👍🏼

Have fun!



Price is simply no longer correct...

Payout:389,94€

of which tax refund:47,29€

Addition of the trading costs of €9.90

Total amount:€399.84