Recently, I came across an interview video online where Sequoia Capital partner Shaun Maguire reminisced about his experience of selling Nvidia too early.

Regarding selling Nvidia, I had previously read about Masayoshi Son's experience of selling too early. Seeing another well-known investor express regret over Nvidia has given me additional perspectives to consider.

In the interview, Shaun talked about his investment in Nvidia:

He bought in at Nvidia's IPO when he was just 13 years old. Being a gaming enthusiast, he was particularly optimistic about Nvidia's future.

After buying, he held onto Nvidia until its market value reached $600 billion.

At $600 billion, Nvidia's gaming and data center businesses each accounted for half of its revenue. He felt the valuation was too crazy, so he sold.

We all know what happened next: Nvidia's market value skyrocketed, surpassing $5 trillion today.

Shaun missed out on Nvidia's remarkable journey from $600 billion to $5 trillion.

The reasons for his early sale can be summarized in two points:

First, he believed he understood the industry too well, to the point of calculating things too clearly, which led him to underestimate Jensen Huang and the potential.

Shaun has an impressive background; he loves gaming but excels academically. He holds a PhD in Physics from UC Berkeley and has a deep understanding of chips and investments. However, this very understanding limited his grasp of Jensen Huang's vision.

He thought his IQ level (by his standards, Level 10) was insufficient to comprehend someone like Jensen (by his standards, Level 15), similar to how an ant cannot understand humans building highways.

Second, he felt he did not see the market's potential later on.

Shaun had studied Broadcom, TSMC, and ASML early on and was well-versed in semiconductors, so he considered Nvidia's aggressive expansion of computing power at the time to be irrational.

However, the subsequent developments surprised the vast majority of people—AI's sudden surge validated Nvidia's foresight in expanding its computing power.

Among these two reasons for selling too early, I believe investors shouldn't be too hard on themselves regarding the second one. This reason involves too many random factors, which cannot be logically predicted or calculated.

Regarding the stunning global debut of ChatGPT in November 2022, I believe that, aside from a very few industry insiders, the vast majority of people could not have anticipated this historical turning point beforehand.

Without this debut or the unexpected rapid development of AI, I believe Nvidia today might still be an excellent tech company oscillating between $600 billion and $1 trillion, but certainly not a top-tier one.

So, at that time and in that context, Shaun's view that Nvidia's actions were too aggressive seems logically sound to me.

The first reason, however, can serve as a lesson for investors to improve their methods and learn from experience. This reason can lead to two simple practices:

• Investing is about investing in people. If a company's business model is solid, and if investors believe in the leadership team, they should seriously consider investing in that company.

• I increasingly believe that the best way to gain substantial returns from a good company is to hold it long-term.

Reflecting on the books and various videos I've consumed over the past couple of years, the most successful cases of great historical investors have generally involved choosing to hold onto companies they believed in for the long term, as long as the company's fundamentals did not change significantly.

Recently, I shared a quote from Duan Yongping: "What can you buy after selling Moutai?" Today, seeing this Sequoia Capital partner's regret over Nvidia, I am more inclined towards this approach.

Following this line of thought, we can also look at Shaun's decision to sell Nvidia from another angle:

If he sold Nvidia because he found a better investment opportunity, I believe that regardless of the outcome, his methods and strategies were sound; the only issue was his understanding at the time was "not enough" or that he failed to correctly predict the future.

However, missing an investment opportunity due to insufficient understanding is not a problem, as no one (including everyone) can earn money beyond their understanding. This is normal, and there's nothing to regret.

Missing an investment opportunity due to an incorrect future prediction is even less of a problem, as no one can foresee the future, especially at that time when predicting the emergence of disruptive technologies like AI and the explosive demand for graphics cards was impossible.

However, if he sold Nvidia purely because he thought its stock price was too high, then there is room for reflection and discussion on some issues:

For example, how high is too high for a company's stock price?

Additionally: After selling a company's stock, how should the cash obtained be managed? Should one wait for it to drop before buying back? If it doesn't drop, will I never be able to buy it back? Can I accept that?

In fact, I have a very simple view: if you sell too early, then you sell too early; there's no need to regret it. Everyone has experiences of selling too early. The most important thing in the investment market is that people must always remain in the market. "As long as the green mountains remain, one need not worry about firewood." As long as you are in the game, investment opportunities will always exist, and you should always look forward.

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