Here's where I messed up. And this is what I learned. Why should you make a list of your mistakes? In the investment business, you must expect to be wrong. This ritual forces you to stop lying to yourself about what a great investor you are. In most fields, if you get 3 out of 5 things wrong, your career is in deep trouble. Imagine if a doctor had 60 percent of clients die on him, or an accountant with a 60 percent audit rate. Investing is more comparable to baseball, where hitting the ball only two out of five times means you are batting .400 - making you one of the greatest batters of all time. Congratulations - you are Ted Williams! Understanding this strikeout ratio is just a small part of successful investing. It also helps to have a plan in place so you know what to do when you whiff. I am frequently - and, on occasion, spectacularly - wrong. But I expect that to be the case. Pretending to divine what stocks will go up or down or where the market will be in three or six months is not only silly, it's also counterproductive. Instead, I suggest you anticipate errors and be prepared to correct them, quickly. Hence, my goal every year is to make a whole new set of errors, rather than repeating the same mistakes over and over again. On that note, here's how I fared in 2013: 1 Tactical moves: Last year, a few of my tactical moves worked out, but more than a few did not. Even when you are right, there are costs and taxes associated with being tactical. When you are wrong, there are opportunity costs. At times, I carried excess cash, and that was a drag on performance. Solution: The goal in executing tactical moves should not involve trying to sidestep the 10 to 15 percent retracements. Instead, aim to avoid the large crashes - those 25 percent-plus moves to the downside. We can reduce frequent tactical moves by tightening the metrics that feed our decision-making. Ideally, a defensive tactical investment should be deployed sparingly - twice per decade would be a lot. It should not be an annual event. 2 Real estate/housing market: I doubted - and continue to doubt - the housing market recovery. I expected more foreclosures, more underwater-owner walkaways and an even bigger bank-owned real estate overhang to weigh on the market. I was wrong. Instead, the market stabilized, and prices rose. I failed to recognize just how powerful the Fed's mortgage purchasing program, Operation Twist, was. Today, you can get a 30-year fixed mortgage for about 3.5 percent. This has increased the buying power of those in the market. And the various multibillion-dollar mortgage settlements have given banks more flexibility in how they handle all of the property that remains on their books. I also overlooked the impact of $25 billion in private-equity investment in homes.