# Your Biggest Investment Blunder!! & lessons learned!



## Dukey

OK - this maybe TABOO to some - but I've noticed many Company threads are big on bullish news/sentiments - but more quiet if things are sliding.

So - i thought it might be fun and educational to share some of our biggest Invesment disasters.  As i said on a diff. thread last night - I'll show you mine - If you show me yours!!  Me first - to get the ball rolling.

My worst would have to be MRL (clothes and discount Retailer) at this stage. I just stuffed it up completely from the start. Followed the crowd on entry; Didnt use a STOP; Didn't heed the warning signs when The Wharehouse started to take MRL marketshare; Held on waaayyyy too long ...

MRL - bought in @ $3.35 when it was going gangbusters in Late 2001. 
Only to see The Wharehouse from NZ come and spoil the party. 
--> Finally got out @ 1.05 in Jan 05 !!!   

Lessons - 1. Use stop losses - sometimes it's better to get out, take the loss and move on to something profitable. 
2. WATCH the competition - esp. in Retail env.
3. DON'T just follow the sheep - analyse and be clinincal.

Anyone care to take up the challenge.  
NO need to mention $$ amounts. too


----------



## Dukey

SORRY !　I'm guilty of misleading the punters.

My TMS (Television Media Serv.) stock pick was worse than MRL. ('Millers Retail' btw) MRL was 67% loss if i did my sums right... TMS was a 98% loss!!!  

Bought at $1.94 Jan 2001.  Finally had my shares bought last yr. as an unmarketable parcel (of Global TV - the new name) !!! at ... wait for it ... 0.04c !!   What shat me was that this company seemed to have so much broadcasting work - I couldn't get my head around how they could possibly be losing money?? I'm wondering now if it was some kind of 'mid-tier' company owned and used by the big media players to make some losses in their creative accounting.

Lessons: probably same as above with the addition of - watch out for the big media players. They are much wilier than any of us, and they don't care a fig about small investors.


----------



## nioka

GYM Gympie Gold.One disaster after another, cave ins and a coal mine fire. Went into receivership but not wound up so I couldn't even get a tax loss advantage. Finally got one 2c share for every 15 or so original ones. Didn't end up with a marketable portion and had to buy more to sell the others to make a loss for the tax man.
 What did I learn? Well, life wasn't meant to be easy.


----------



## MalteseBull

SGW, BTV, URL..

lesson to be learnt: 

whenever a stock goes up 50% in one day, don't get on the bandwagon as most of the time it goes down the next day... look at JAK


----------



## juddy

Biggest Blunder: Falling for the organised ramping on Hotcopper.


----------



## FXST01

Still biggest error of my way: Compass airlines GRRRRRRRRRRRRRR such potential


----------



## Sodapop

GTM - $xx,000s down the toilet... If insto's (hello CBA) are dumping at an alarming rate into a severe chart abyss - it means something (cause i am sure they don't    give hints to them or anything - )... and no such thing as a safe company... also a clinic on the risks of dollar-cost averaging... - i was pretty shell-shocked after this (a huge part of my TC gone at 26yo)  :whip  - but i found and researched AUZ to death last year and am streets ahead now (instead of retreating to lick my wounds)... That was the other lesson - you can only win or lose if you put you chips down... 

Honorable mention Challenger Group - bought this as a neophyte (5years ago) thought i was a genius for buying such a low p/e stock (hahahahahahaha...) lost a lot of cash (well for me at the time!!!)...


----------



## barney

I reckon I've got most covered in the "dumb play" department. I've mentioned it a few times on different threads, but one more time will probably make others feel way less dumb than I was ......... in a nutshell, three bad trades on CDU at the height of the "panic" buying ............. I got caught "daytrading" (something I knew nothing about) when the Trading Halt hit.  I had bought many thousands of CDU share with the intention of selling when in profit (to make up for a couple of thousand dollars I had lost the day before) Many days later I sold right near the bottom (thinking that I could lose everything if I held on any longer) And heres the best part. (At this point in time I am down about $60,000) I had one last crack to try and recoup something of my losses ......Guess what .........Lost another $8,000 ................... I reckon that will be hard to beat considering I was only a newbie with limited leveraged capital .............getting depressed thinking about it again     Anyway I'm still learning and I havn't given up yet ............. Long hard road ahead ............ I deserve two of these!!  :homer:  :homer:


----------



## pacer

You're not the only one who's done similar Barney.....It's the biggest casino in the world when you first start, and you can convince yourself that you know what you're doing after a win...lol

Best advice....play small til you have made a few quid then take your initial 'get in $$' and put them back in the bank...then u are playing with profits......if you can't play with your profits you should be investing in growing your own chemical free veges in the back yard.....you'll notice the difference in your life then!

I once went short on BHP at a day trade, and thought I HAD SET A STOP, BUT AFTER GOING FOR A SHOWER AND MAKING A COFFEE, found out I had lost 2.5k (taken a bath instead of a shower...lol) in 1/2 an hour then *watched *my loss go to 3.5k......but I had skulled 6 beers by then, and lost 5 kilo's in sweat.....held for the night and made 5k profit,total, the next day!!!!!, but diddn't sleep much that night, and have grey hairs startng....


NMS is killing me too....50% loss....but am accumulating now....good luck newbies....


----------



## nizar

Lost a bit on PMH trying to "daytrade" - something i KNOW NOTHING ABOUT. Didnt use a stop either   

And lesson learnt: if u wanna be a hero T+3 trade MUCH MORE than the amount of cash you have, stops MUST be used and be tighter than as per normal.

And if a stock has more than doubled the previous day and then gapped up, then probably risk/returns make it not worth the punt.

Barney - CDU was a killer for many people. Fortunately for me i was overseas on holiday so i wasnt even aware it happened until i got back. Good to see you're still in the game.


----------



## cuttlefish

$14K - buy on fact.


----------



## Realist

I was bent over and rogered by JPR shares.

Down from 17.3c to 7.4c.

I still hold the bastards. Dunno what to do, but probably have to bite the bullet and sell.  As soon as I sell they'll no doubt skyrocket.


If something sounds to good to be true - do not buy it!!


----------



## dj_420

some great lessons learnt here.

especially the day trader efforts. i made some money on CTO entering at 36 cents and selling at 38 cents when it was especially volatile few months back, thought i was king and could day trade anything.

jumped on CDU bout a month back when results were due and the price was been pumped up on the mornings trade, i kept chasing the price up but couldnt buy any they were dissapearing so fast, finally got in at 4.90, the sp got to about 4.96 (if i remember correctly) then the tides turned very quickly, lost $1000 in about 15 seconds. 

think i learnt my lesson?? not a chance, when PMH got pumped up i jumped in to try my daytrading efforts again, lost $500 pretty quickly. 

i thought i was been really clever utilising the fact that comsec doesnt require a deposit on trades up to about $25 000 so i thought i could use the banks money by buying and selling on the same day.

i have now learnt my lesson and i only invest for medium to long term now.


----------



## tech/a

Constructing Retaining Walls along the Crafers freeway which opened up the hills area and NOT BUYING HOUSING.

Learning about the Holdfast Shores Developement in Glenelg 2 yrs before it got started and NOT BUYING HOUSING.

Learning about the Port Vincent Marina 2 yrs before it went ahead and NOT BUYING HOUSING.

Trading Successful Long Term methods for 4 yrs and NOT INVESTING IN THEM TO THE SAME DEGREE AS I DO IN HOUSING!

Oh and ofcourse learning about the Adelaide Darwin rail link 2mths before construction and NOT BUYING INDUSTRIAL PROPERTY in Darwin.

(We get most developements cross our office desk for civil Works-thats How I find out years before construction).

There is a plus side.


----------



## MichaelD

Early on in my trading career I came up with a plan to trade breakouts intraday. Limited backtesting suggested extraordinary upsides to the style, so I decided to give it a go with 1 position @$10k.

I was so excited that I couldn't sleep the night before. In the middle of the night I thought to myself that I really should put on a few more positions since I'd be missing out on profits otherwise, so I did.

In 10 minutes I lost $2.5k.

For me, this was my epiphanous moment, since never in my wildest dreams had I anticipated that ALL of the positions I opened would lose money, and lose quite substantially. The one good thing about the episode was that it graphically illustrated how important the use of a stop loss was (so the damage, whilst painful, was limited).

It was this that lead me to learn about proper money management and risk management, and changed my way of thinking about the markets forever from "how much could I make" to "how much could I lose" - I've never looked back.


----------



## krisbarry

While reading through this thread I cannot help but think that many of the so called mistakes made and money lost, was actually not your fault at all.

Much of it comes down to bad management of companies, brokers spruking the market and very poor announcements that construct a rosy picture


----------



## Happy

Lots Value Lost?


----------



## clowboy

12k loss

HIH

age 19


----------



## Julia

My biggest mistake was not to do with shares but in trusting a solicitor.
(I can hear the snorts of laughter!)

Friends had successfully placed money with a solicitor's private mortgage scheme for several years.  Interest rate was around 12 - 15%.

Decided to give it a go.  Obtained all the details of proposed investment which was stated to be first mortgage on Esplanade property at Surfers Paradise which was to be converted to casino.  Registered valuer's reports etc all supported the LVR which was a fairly comfortable 65%.  

Put in $30,000.  Thank heavens it wasn't more.

All went OK for a few months, then no monthly payment.  At first the excuses were more or less credible and than less so.  It pains me too much to recall events from then on.

Outcome was that the whole project was put into hands of receivers who discovered the valuations were grossly inflated.  ASIC became involved and the solicitor concerned was discovered to have been acting similarly with several other projects.

Many people lost a lot more than I did.  When the receivers were done I got $1500 back out of my original $30,000.  The building was sold for a reasonable amount but all the expenses claimed by the receivers plus their legal expenses just ate up most of the redeemed amount.

Did I ever learn the value of that saying "if it looks too good to be true, then it usually is"!

Julia


----------



## tech/a

*Lessons learned.*

(1) When 16 my father was sitting at the kitchen table negotiating with an agent for a magnificent home and tennis court in Belair. It was 1970.He wanted to pay $29,000 and the agent would not accept an offer less than $30,000.
The agent left. A week later Dad called to offer the full $30,000---you guessed it---Sorry already SOLD. Many years later infact 20 I saw the house sold for $536,000 and the tennis court had a house on it so that was sold earlier. 

I have been in the position to buy many properties which found me in stalled negotiations of a few $1,000. I learnt from Dad and went the extra few grand.
Its made me plenty.

(2) Money certainly does make money.

(3) If you dont have the expertise then hire someone who has.

(4) Result is NOT equal to effort.

(5) Most can recognise opportunity
     Few know what to do with it.
     Rarely is it acted upon.

(6) He with the best contacts wins.

(7) A business is only as good as the people who make it up.

(8) The most powerful tools in investment are TIME,LEVERAGE 
     and COMPOUNDING.

(9) Opportunity doesnt last forever,know when to hold'em and when to fold'em.

(10) Learn to make a decision even a wrong one is better than none.

(11) 80% of your effort will bring 20% of your results---make the 20% the 80% you work on.

(12) There are 2 BIGGIES in life---Birth and death--everything else fills in the time in between---dont fret the little stuff.

(13) Dont die Rich!---use it.

(14) What you gladly give away will be returned 5 fold.

(15) Fear is more powerful than greed.

(16) If YOU cant control it DONT DO IT. (For julia).


----------



## Marvin Martian

nioka said:
			
		

> GYM Gympie Gold.One disaster after another, cave ins and a coal mine fire. Went into receivership but not wound up so I couldn't even get a tax loss advantage. Finally got one 2c share for every 15 or so original ones. Didn't end up with a marketable portion and had to buy more to sell the others to make a loss for the tax man.
> What did I learn? Well, life wasn't meant to be easy.



PASMINCO.


----------



## nizar

tech/a said:
			
		

> *Lessons learned.*
> 
> (1) When 16 my father was sitting at the kitchen table negotiating with an agent for a magnificent home and tennis court in Belair. It was 1970.He wanted to pay $29,000 and the agent would not accept an offer less than $30,000.
> The agent left. A week later Dad called to offer the full $30,000---you guessed it---Sorry already SOLD. Many years later infact 20 I saw the house sold for $536,000 and the tennis court had a house on it so that was sold earlier.
> 
> I have been in the position to buy many properties which found me in stalled negotiations of a few $1,000. I learnt from Dad and went the extra few grand.
> Its made me plenty.
> 
> (2) Money certainly does make money.
> 
> (3) If you dont have the expertise then hire someone who has.
> 
> (4) Result is NOT equal to effort.
> 
> (5) Most can recognise opportunity
> Few know what to do with it.
> Rarely is it acted upon.
> 
> (6) He with the best contacts wins.
> 
> (7) A business is only as good as the people who make it up.
> 
> (8) The most powerful tools in investment are TIME,LEVERAGE
> and COMPOUNDING.
> 
> (9) Opportunity doesnt last forever,know when to hold'em and when to fold'em.
> 
> (10) Learn to make a decision even a wrong one is better than none.
> 
> (11) 80% of your effort will bring 20% of your results---make the 20% the 80% you work on.
> 
> (12) There are 2 BIGGIES in life---Birth and death--everything else fills in the time in between---dont fret the little stuff.
> 
> (13) Dont die Rich!---use it.
> 
> (14) What you gladly give away will be returned 5 fold.
> 
> (15) Fear is more powerful than greed.
> 
> (16) If YOU cant control it DONT DO IT. (For julia).





Good advice tech/a
So uv been a winner in stock market from day1?

Come on, i wanna hear some good stories


----------



## Bronte

tech/a said:
			
		

> *Lessons learned.*
> (16) *If YOU cant control it DONT DO IT.*



I feel these are all very very good 'Lessons learned' tech/a


----------



## barney

nizar said:
			
		

> Good advice tech/a
> So uv been a winner in stock market from day1?
> 
> Come on, i wanna hear some good stories





Just backing up re Techs list/advice .................. Good stuff ........... I better read it again ............

PS I like point 11 ....that is clever .............. and Tech, if you're interested, re point 14 ,  I am happy to accept anything you would like to give me ...not sure if you'd get 5X back from my investment decisions, but I'm willing to try if you are   

Actually many people might question the truth in point 14, but whether it be 5X or 2X, it doesn't really matter ......the point is, that good deeds will make you rich .......... if not financially, then spiritually (and I dont mean religion) , and after its all said and done, that is what is important ........... I'd rather meet a "poor" kind man anyday, rather than a rich "dirtbag" , but I reckon (theres that "reckon" word again) if you meet a Rich Kind man, then you have met a "Real" man ................. Cheers Barney.

PPS I'd really like to be one of those "real" men


----------



## carmo

Mistake: T2
Lesson : T3, stay out and vent my anger at the next Federal Election!


----------



## krisbarry

carmo said:
			
		

> Mistake: T2
> Lesson : T3, stay out and vent my anger at the next Federal Election!




LOL


----------



## tech/a

> Come on, i wanna hear some good stories




*Ok.*

When I first started I traded Warrents,like most the lure of a quick buck got me sucked in.I was a little conservative buying $5000 parcels.
Friend was also interested at the same time.He invested $30,000 parcels.
I blew about $5k in about 3 mths and he kept averaging down on BHP warrents (11 yrs ago) eventually had $80,000 commited ---well they expired and so did his $80k. He hasnt traded since.

My broker at the time was a young guy (Young to me (24)) and was heavily into DVT Davenet.Actually it was 100000 shares at 6c each.He mentioned he was doing Technical analysis 101 with the Securities Institute and would I like to join him as a private student. Off I went and got right into it.When I sat the exam I was annoyed that it finished. As it turns out at the time I got the highest SA mark----fantastic the Duck is now a genius--- let the $$s flow.

6 mths later and $20k lighter I realise that technical analysis aint THE answer to trading riches.
At an ATAA meeting I discover NICK RADGE. 
Nick didnt think his course would do me much good---but I paid for his intense course at the Remada Grand in those days and I remember it well.
It was 28/10/97.
I had a reasonable portfolio going at the time. Loved the course and at days end called the broker to see how the market went.
Crash was all I heard down another $7,000. Now I thought,how come Nick didnt warn us during the course ( Un realistic expectations!!!).

Anywaythe course didnt turn me into a profitable trader---NICK RADGE did however---un wittingly---.
At another ATAA meeting some 12 mths later he did a presentation on how analysis ISNT the way to PROFIT.
Suprisingly the Duck got it!!---by the questions and mass objection from those exponents of technical analysis at that meeting I reckon I was pretty well alone! Ive never been to an ATAA meeting since!

Joining Nicks site Reefcap,Nicks influence and contacts who visited was evident from day 1---these guys were/are no dummies.Snippets gelled into ideas into methodologies into systems,with inputs from some very smart people.I listened and learnt (although more than one would have doubted that!). 

The quality of those I have met from Nicks site and those who in my travels I have looked up--Thomas (N 40K) A master in risk management (That was his job for A merchant Bank in Tokyo) and a great guy to boot.---To Roy Larson
the Metastock Master in N.Z. To David Samborsky,the genius who put Tradesim together,all played a part in my developement---and frankly the cost spread between ALL has been amazing value.

Yeh those losses totalling around $40K are well and truely gone and I trade with confidence and enjoy it.

*Lesson learnt*
Every now and then you'll find a gem Here you have a few.Moggie,Stevo (Also from Reef),Waves,Even Bronte (Battman) who plays his cards so close to his chest he should be teaching Poker not Gann.Wayne,Les,Yogi who shouldnt think everyone is out to cut him down! There are some very well informed Fundies here as well you can spot them. Sorry if Ive missed any.
But these are the standouts---the gems.Find them and LEARN,just one thing could change you from nett loser to consistent winner.

*Finally the Barney's * of all websites---those that have got the guts to ask the questions everyone is so concerned that they will get howelled down over.
You my friends are the best teachers of ALL---without your questions the GEMS would never be teased out!

*By the way the young * Broker held those 100000 DVT shares for ages I remember calling him when they were at $7 something and saying when are you going to sell these!! He said this is my one chance at $1 mill so $10.

Then came the tech crash and he sold in the high $3s,happy as a duck in a pond he moved to Sydney after being head hunted bought a house and got married.---Well done a good luck I say!!

*Good enough story?*


----------



## 2020hindsight

tech/a said:
			
		

> [...*Finally the Barney's * of all websites---those that have got the guts to ask the questions everyone is so concerned that they will get howelled down over.  You my friends are the best teachers of ALL---without your questions the GEMS would never be teased out!



hear hear - Yep Barney is the only one I understand around here - lol - the questions that is.  But then someone posts an answer and "Im back in confusion confessed." 

PS thanks for the post, duck   Personally, I still hold with the theory of the monkey suit and the darts board.  I found that theory on a website that Wayne recommended lol.  My subconscious thinks that life and luck are like a flat tyre - only flat at the bottom - and only a small part of the full circle.   I have one dangerous subconscious to contend with let me tell you lol.  And you thought you had handicaps.  I'll shuddup now and let you pepol talk. You make a lot more sens.! 

PS point 14 "What you gladly give away will be returned 5 fold."
- hey now that one I LIKE!!  - reading through the posts - snap! Barney   (I was referring to the money this time lol - forget the bludy ethical stuf lol



			
				tech/a said:
			
		

> [...*Finally the Barney's * of all websites



HEY BARNEY - Now you have a cult following mate lol - "THe Barneys of this world indeed lol.   Don't tell anyone m8, but when I was a kid I had a dog named Barney - and coincidentally, he was a great singer too


----------



## nizar

tech/a said:
			
		

> *Ok.*
> 
> When I first started I traded Warrents,like most the lure of a quick buck got me sucked in.I was a little conservative buying $5000 parcels.
> Friend was also interested at the same time.He invested $30,000 parcels.
> I blew about $5k in about 3 mths and he kept averaging down on BHP warrents (11 yrs ago) eventually had $80,000 commited ---well they expired and so did his $80k. He hasnt traded since.
> 
> My broker at the time was a young guy (Young to me (24)) and was heavily into DVT Davenet.Actually it was 100000 shares at 6c each.He mentioned he was doing Technical analysis 101 with the Securities Institute and would I like to join him as a private student. Off I went and got right into it.When I sat the exam I was annoyed that it finished. As it turns out at the time I got the highest SA mark----fantastic the Duck is now a genius--- let the $$s flow.
> 
> 6 mths later and $20k lighter I realise that technical analysis aint THE answer to trading riches.
> At an ATAA meeting I discover NICK RADGE.
> Nick didnt think his course would do me much good---but I paid for his intense course at the Remada Grand in those days and I remember it well.
> It was 28/10/97.
> I had a reasonable portfolio going at the time. Loved the course and at days end called the broker to see how the market went.
> Crash was all I heard down another $7,000. Now I thought,how come Nick didnt warn us during the course ( Un realistic expectations!!!).
> 
> Anywaythe course didnt turn me into a profitable trader---NICK RADGE did however---un wittingly---.
> At another ATAA meeting some 12 mths later he did a presentation on how analysis ISNT the way to PROFIT.
> Suprisingly the Duck got it!!---by the questions and mass objection from those exponents of technical analysis at that meeting I reckon I was pretty well alone! Ive never been to an ATAA meeting since!
> 
> Joining Nicks site Reefcap,Nicks influence and contacts who visited was evident from day 1---these guys were/are no dummies.Snippets gelled into ideas into methodologies into systems,with inputs from some very smart people.I listened and learnt (although more than one would have doubted that!).
> 
> The quality of those I have met from Nicks site and those who in my travels I have looked up--Thomas (N 40K) A master in risk management (That was his job for A merchant Bank in Tokyo) and a great guy to boot.---To Roy Larson
> the Metastock Master in N.Z. To David Samborsky,the genius who put Tradesim together,all played a part in my developement---and frankly the cost spread between ALL has been amazing value.
> 
> Yeh those losses totalling around $40K are well and truely gone and I trade with confidence and enjoy it.
> 
> *Lesson learnt*
> Every now and then you'll find a gem Here you have a few.Moggie,Stevo (Also from Reef),Waves,Even Bronte (Battman) who plays his cards so close to his chest he should be teaching Poker not Gann.Wayne,Les,Yogi who shouldnt think everyone is out to cut him down! There are some very well informed Fundies here as well you can spot them. Sorry if Ive missed any.
> But these are the standouts---the gems.Find them and LEARN,just one thing could change you from nett loser to consistent winner.
> 
> *Finally the Barney's * of all websites---those that have got the guts to ask the questions everyone is so concerned that they will get howelled down over.
> You my friends are the best teachers of ALL---without your questions the GEMS would never be teased out!
> 
> *By the way the young * Broker held those 100000 DVT shares for ages I remember calling him when they were at $7 something and saying when are you going to sell these!! He said this is my one chance at $1 mill so $10.
> 
> Then came the tech crash and he sold in the high $3s,happy as a duck in a pond he moved to Sydney after being head hunted bought a house and got married.---Well done a good luck I say!!
> 
> *Good enough story?*




Thanks tech/a i knew u would have some good stories.
And i appreciate u taking the time to answer all my questions and queries about trading.


----------



## Dukey

Wow !! - Tonnes of good advice coming through here. 
If we can learn from each others mistakes - we'll be the better for it.

Heres a couple of douzies (How do you spell that??) from Nippon.
Corporate F*%# ups -  not errors made by individual investors .... BUT, I think they show that sometimes the small folks just get swamped by the mistakes or mismanagement or sheer criminal acts of the Big Players.  
As someone said in an earlier post - It's not always our fault... So dont over-commit and be vigilant - because sometimes Sh%# just Happens - and when it does, well ... it hurts someone.... But you can bet the Big Fish are still swimming happily. Not so sure about the littles.

1. _On December 8, 2005 a typing error at Mizuho Financial Group, Japan’s second-biggest bank, to sell shares of J-Com resulted in a net loss of $347 million which is to be shared between the exchange and the bank.

Mizuho Securities mistakenly placed an order to sell 610,000 shares of J-Com for one yen each, instead of one share for 610,000 yen ($5,043), the company said at a late-night news conference. The order -- for more than 42 times the number of shares that J-Com had outstanding -- sent shares of the tiny company falling to their lowest trading limit of 572,000 yen.

In the resulting confusion, investors dumped shares of financial companies they suspected might be involved in the erroneous trade, helping to send the Nikkei 225 Stock Average, which has been rallying, down 301.30 points, or nearly 2%, to 15183.36. Shares of Nomura Holdings, Japan's biggest broker, fell 3.7%, and E*Trade Securities Co. fell 5.3%. Mizuho Financial, Mizuho Securities' parent company, ended down 3.4% at 890,000 yen. At the end of Friday's morning session, the Nikkei had rebounded 35.99 points, or 0.24%, to 15,219.35._

(http://security.typepad.com/internet_security_be_care/2005/12/index.html) - down the page a little.

2. _April 2006: The 'Livedoor' firm will be delisted from the Mothers market Friday over allegations of accounting fraud against company president Takafumi Horia.

Livedoor stock was fetching about 700 yen earlier this year, but tumbled after prosecutors raided the firm's Tokyo headquarters on Jan. 16.  Its market capitalization, which topped 800 billion yen in December, plunged to about 98 billion yen, based on Thursday's closing price._
(http://www.asiamedia.ucla.edu/article-eastasia.asp?parentid=43103)


If I'm not mistaken 800BYen is about 7 Bill $US - Total losses around $US6 Bill !!!

Now thats impressive.    

Not sure if El Pres. Takafumi-San is still swimming.

Nice posts everyone - keep em coming  .- Dukey

...Then again if the thread dies - maybe thats great - if it means we learned our lessons and miraculously picked winners only from today!!... what are our chances.


----------



## barney

Thanks for the kind support Lads ,  I feel a little better about being an "L" plater now .......... Man am I gona have a party if I ever get back to a "square" slate again ........... Everyones invited!!!

Tech that was a great story .............. I reckon you would have some gems to spill over a couple of bottles of red (actually I am a beer and burbon man, but I could cope with "red" to hear the stories!!) 

20/20, Now you behave yourself ........... (anyone read this gentleman's poetry?? ........... You are a smart dude ............... PS I'm not a singer; I'm a guitar/bass/ keyboard (and a little drums) player  ie Muso ............ Musos do all the hard work so the singers can get all the glory (chuckle), ..... there is a bit of truth in that! 

Good thread this ...... brings out the honesty in people Cheers, Barney.


----------



## 2020hindsight

Dukey said:
			
		

> Heres a couple of douzies (How do you spell that??) from Nippon. On December 8, 2005 a typing error at Mizuho Financial Group, Japan’s second-biggest bank, to sell shares of J-Com resulted in a net loss of $347 million which is to be shared between the exchange and the bank.
> 
> Mizuho Securities mistakenly placed an order to sell 610,000 shares of J-Com for one yen each, instead of one share for 610,000 yen ($5,043), the company said at a late-night news conference.



Lol - you gotta laugh havent you,   LIFE ! funniest damn thing I know lol.

(PS and a damned site funnier than second best )

PS Barney - m8 - youre miles ahead of me - At least you can ask intelligent questions lol.  I made this fantastic profit the other day - 15% in a week - trouble is I only had 10% of the shares I thought I had lol.

As for screwups - to err is human , but for a really good screw up you need a computer ....I was living in a small polynesian island when they computerised the govt billing system - the line at the complaints desk was miles long - after a hard day a bloke walks up and says "look here, I have a bill for $432 million!! for electricity !!  - so the bloke behind the counter (has had a long day right  ) says "why dont you just pay it, and sign the cheque "paid under duress" lol


----------



## Nick Radge

I have two:

(1)
In 1987, at the ripe old age of 18, I worked at a broker. In those days it was paper scrip and 2-week settlement. During the heady days people would buy stock then realise they couldn't pay for it. As such the scrip department got a list of default stock which needed to be rid of. For some unexplained reason, management let staff take any stock they wished and then gave them 2-weeks settlement. Up until October 1987 it was a no-brainer almost arbitrage game. So when the morning of the crash came I was loaded to the hilt on stock that I had two weeks to sell and never pay for. I dropped $22,000 whilst earning $12,000 per year. I bought myself a momento to remind me what a knuckle I was and I still carry it with me today as a reminder. 

(2)
This one hurts. In 1998, yes I had already been trading for 13 years, I took a tip from a very close friend who did the books for this company. Yep, a tip! I bought $37,000 worth of options with 12-months to run. Two days later the company went into a halt and was suspended for 11 months. Obviously the options were deemed worthless immediately and the $37,000 vapourised.


----------



## CanOz

What a great story Tech/A, and what a great thread....learning from mistakes is the most valuable way to learn, and very much the most costly in some cases. I look forward to learning more from all of the great posters here....you are why i joined, and why i stay at ASF.

I look froward to more and when i get some time i will list my trading experiences here too.

Cheers,


----------



## tech/a

> I bought myself a momento to remind me what a knuckle I was and I still carry it with me today as a reminder.




Curious what is that momento? 


*CanOz*

Many more way way beyond my skills in this game.
Thanks anyway.


----------



## YChromozome

You can put me down for T2 too. Lesson learnt - Don't buy T3.



			
				MalteseBull said:
			
		

> SGW




But, my biggest mistake was SGW - Sons of Gwalia, what was Australia's third largest Gold producer, and the world's largest producer of Tantalum, a metal used in capacitors for electronics devices. The later was where my interests lied. 

In early August 2004 they went belly up. Some believed they saw it coming, saying the hedge books were in bad shape. They were, but it wasn't enough to see them go down. Many was shocked.

As the days, and weeks, months and years past things became clearer. First, SGW was talking to administrators as much as a month prior to the collapse, and just happened to forget to inform the market. Must of been busy, and it just slipped their mind.

Then there was the little unauthorized trading accidents the CFO had in 2000, some four years earlier. If these losses were correctly applied, SGW would have reported a loss in 2000, not a $83.6 million profit. But in 2000, SGW was trading on a tech boom, in the $10 a share range and with an industry suffering large shortages of tantalum and spot prices through the roof. Better keep it quite, as such an announcement would have put a large dent in the share price. SGW's auditor, Ernst & Young didn't find a thing out of place.

If my memory serves me well, a further two years earlier (six before the collapse) when SGW acquired PacMin, no one bothered to do any drilling/core samples or due diligence. It just assumed PacMin's stated gold reserves were in fact correct and not inflated. The gold reserves they though was there, was not.

The administrator's 185 page report was a good read - Peter and Chris Layor was accused of "possible breaches including failing to install effective internal controls over the company's treasury operations; failing to supervise those operations; failing to ensure Ross-Adjie abided (CFO) by the trading limits set by the board; and failing to tell the board how those treasury operations were being conducted." 

It also goes on to say "the Lalors may have breached the corporations law by failing to keep adequate financial records in the six years to 2003; failed to ensure those financial reports complied with accounting standards; failed to meet the stock exchange's continuous disclosure obligations and failed to understand the nature of the financial derivative products being traded and the imprudent financial risk associated with them."


Lessons Learnt? Don't waste time reading the profit and loss statements, balance sheets and auditor reports - they are probably wrong anyway!

Once bitten, you do wonder who is next from Corporate Fraud? Sol-Trujillo's 'mates' from US West is interesting . .


----------



## Bobby

YChromozome said:
			
		

> Lessons Learnt? Don't waste time reading the profit and loss statements, balance sheets and auditor reports - they are probably wrong anyway!



Yep ! Price action first, all the rest last.
Tech is correct - fear moves price quicker then greed. 

Bob.


----------



## Julia

tech/a said:
			
		

> *Lessons learned.*
> 
> (1) When 16 my father was sitting at the kitchen table negotiating with an agent for a magnificent home and tennis court in Belair. It was 1970.He wanted to pay $29,000 and the agent would not accept an offer less than $30,000.
> The agent left. A week later Dad called to offer the full $30,000---you guessed it---Sorry already SOLD. Many years later infact 20 I saw the house sold for $536,000 and the tennis court had a house on it so that was sold earlier.
> 
> I have been in the position to buy many properties which found me in stalled negotiations of a few $1,000. I learnt from Dad and went the extra few grand.
> Its made me plenty.
> 
> (2) Money certainly does make money.
> 
> (3) If you dont have the expertise then hire someone who has.
> 
> (4) Result is NOT equal to effort.
> 
> (5) Most can recognise opportunity
> Few know what to do with it.
> Rarely is it acted upon.
> 
> (6) He with the best contacts wins.
> 
> (7) A business is only as good as the people who make it up.
> 
> (8) The most powerful tools in investment are TIME,LEVERAGE
> and COMPOUNDING.
> 
> (9) Opportunity doesnt last forever,know when to hold'em and when to fold'em.
> 
> (10) Learn to make a decision even a wrong one is better than none.
> 
> (11) 80% of your effort will bring 20% of your results---make the 20% the 80% you work on.
> 
> (12) There are 2 BIGGIES in life---Birth and death--everything else fills in the time in between---dont fret the little stuff.
> 
> (13) Dont die Rich!---use it.
> 
> (14) What you gladly give away will be returned 5 fold.
> 
> (15) Fear is more powerful than greed.
> 
> (16) If YOU cant control it DONT DO IT. (For julia).




Couldn't agree more, Tech.  In my defence it was many years ago.
Couldn't the same argument be extended against investing in managed funds?  You pay over your money to the Fund Manager but from then on you have no control over just where the money is invested.

Some great lessons posted on this thread - thanks to everyone who has contributed and keep them coming.

Julia


----------



## MichaelD

Stop_the_clock said:
			
		

> While reading through this thread I cannot help but think that many of the so called mistakes made and money lost, was actually not your fault at all.



I have to vehemently disagree with this.

Who put the trade on?
Who ignored their stop loss?
Who listened to a bad tip?

Answer: WE did. There's no one else to blame.


----------



## Smurf1976

Marvin Martian said:
			
		

> PASMINCO.



Yep, same here.

And buying Crest Magnesium at 7.7 cents, holding for ages and selling for 0.2 cents. Then the company came back in the ethanol business and went somewhere near $1.   

Worst mistake of all however was projecting recent past performance into the future and then applying high leverage. Needless to say how that ended up when the trend changed... 

Probably the biggest one, long term, was not being in a realistic position to take advantage of a business opportunity that I knew more about than practically anyone else. I even knew practically an entire team of potential staff which I could easily have employed, including a manager. That is, an entire team of people who had run a very similar business (closed for non-financial reasons) and done it better than anyone else. But I lacked the capital. With the business itself being somewhat "iffy" in terms of getting, and more importantly keeping, council approval it just wasn't realistic to borrow the $ millions that was needed and risk blowing the lot on something that could fail literally overnight at the hands of a political decision. End result - the council decided that it was all OK practically the day someone else went into the same business and they seem to be doing rather well (somewhat of an understatement - they're booming it would seem).


----------



## smoothsatin

Shares: DPL, now PPN floated at 50 cents per share a few years back, its sole business was being the owner of the freehold of a large brothel. Yield approx 8%, with lease and CPI increases for decades. People may recall the mayhem at the time, they went to about $2 within a couple of days, which meant you owned a peice of commercial property with no development opportunity at a yield of 2%! Anyway, their business changed track, it slowly started sliding and i bought in around 80 cents.

I was very new to the game at the time (eagerly handing over my first 5k saved out of uni to my spanking new commsec account) and didn't know what convertible class B shares were, turns out management had 3 class B shares for every one normal tradable class A share. Thus ownership was diluted 4 fold when these were exercised.  

I got out at 40 cents, when i worked out what was going on, the class B shares have since been converted and the shares currently trade at 15 cents.

Lesson 1) Read the fine print and never assume management are honest or ethical, they might be....but they might not be as well. This is particularly important for situations where the capital structure/# of shares on issue can be affected. This is especially true for smaller companies where management may use a publically listed company as their own toy. Note: These guys at PPN have done several other things to carelessly destroy shareholder value.

Lesson 2) Once a manger has acted dishonestly, stay away from any company they act for in the future. No i will not be buying back in to this company, nor will i the guys who span out BXP.

Lesson 3) NEVER catch a falling knife, there is usually a reason why there are long term downward price trends.

Lesson 4) Act on what you learn for your own financial benefit not out of spite.


----------



## noirua

My biggest investment blunder was staying fully invested in 1987 - the crash followed. It took 17 years to make up the losses. I'm now 75% in cash, so it can't happen again.


----------



## krisbarry

MichaelD said:
			
		

> I have to vehemently disagree with this.
> 
> Who put the trade on?
> Who ignored their stop loss?
> Who listened to a bad tip?
> 
> Answer: WE did. There's no one else to blame.




Who mislead the market with a poorly scripted announcement?
Who ramped a share?
Which bank had technical problems and wouldn't accept a trade?
What suburbs had a power outages?
Which bank left you on hold over the phone?
etc etc

A whole range of other events happen that are out of our control so its not always a cut and dry case of failing to follow trading rules.

I reckon we have all been victim to some of the above.


----------



## bunyip

Realist said:
			
		

> I was bent over and rogered by JPR shares.
> 
> Down from 17.3c to 7.4c.
> 
> I still hold the bastards. Dunno what to do, but probably have to bite the bullet and sell.  As soon as I sell they'll no doubt skyrocket.
> 
> 
> If something sounds to good to be true - do not buy it!!




Sell???? Realist, I can't believe what I'm hearing!! And here I was thinking you were a 'hold for 30 years' man!

I'm made heaps of blues in trading, but due to stop losses none of them was ever a serious loss. But I must confess to one trade in which an 'experienced' trader convinced me to cancel my stop as price approached it, because 'this thing is going higher'!
It was a futures trade (can't recall what commodity I was trading). The bloke who advised me to remove my stop was holding a long in this same commodity. He formerly traded futures for two grain organisations, but once he started trading his private account he lost money hand over fist.
Anyway, the contract came down to where my stop had been before I removed it, but kept going down much lower. When the pain got too great I bailed out and lost 2 grand. It was back in my early days in the trading game and I only had a 10 grand account, so to lose 20% of my capital in one trade was a big hit for me.
But it taught me some lessons and I've never repeated the mistake.
1. If you take a long position, never lower or cancel your stop.
2. Never listen to someone who is supposedly an expert. In fact, never listen to anyone.....trading should be very much a 'lone wolf' occupation where you make your own decisions without influence from other people.

Reading some of the other posts on this thread, and looking at the stocks that hammered you, reminds me of Stan Weinstein's rule....."Never buy a stock that's below its 30 week Weighted Moving Average. Never short a stock that's above it 30 week Weighted Moving Average".

I've sat in front of a computer screen with dozens of different people over the years, and we've looked at stocks they've lost money on. One theme keeps repeating itself.......they could have avoided those losses if they refused to buy anything that was below the 30 week average. And they could have hung on to most of their profits on trades that went their way, if they'd got out or at least tightened their stops, once their stock went below the 30 week average. So often I've seen people make big gains from a trade, then give it all back because they don't take measures to lock in their gains.
A point of interest......a 100 day EMA on a daily chart is a pretty good substitute for a 30 week WMA on a weekly chart.

Bunyip


----------



## CanOz

Is the Moving Average the same as the Weighted Moving Average? I only the the choice of MA or EMA on Power Etrade.


----------



## tech/a

C

There are many ways to calculate a Moving average.
Simple moving average --SMA is simply the addition of (I'll use closes) closes devided by number of periods being averaged.
Exponential Moving Average places more weight on recient data and less on older data.
Weighted M/A is similar in that it weights todays price much more heavily that say that of 10 days ago.


I have the maths if you want it but this maybe of help.
http://www.investopedia.com/articles/technical/052201.asp


----------



## michael_selway

tech/a said:
			
		

> *Ok.*
> 
> *By the way the young * Broker held those 100000 DVT shares for ages I remember calling him when they were at $7 something and saying when are you going to sell these!! He said this is my one chance at $1 mill so $10.
> 
> Then came the tech crash and he sold in the high $3s,happy as a duck in a pond he moved to Sydney after being head hunted bought a house and got married.---Well done a good luck I say!!
> 
> *Good enough story?*




hey what hapenned to DVT? i cannot find it anymore

thx

MS


----------



## Seneca60BC

barney said:
			
		

> I reckon I've got most covered in the "dumb play" department. I've mentioned it a few times on different threads, but one more time will probably make others feel way less dumb than I was ......... in a nutshell, three bad trades on CDU at the height of the "panic" buying ............. I got caught "daytrading" (something I knew nothing about) when the Trading Halt hit.  I had bought many thousands of CDU share with the intention of selling when in profit (to make up for a couple of thousand dollars I had lost the day before) Many days later I sold right near the bottom (thinking that I could lose everything if I held on any longer) And heres the best part. (At this point in time I am down about $60,000) I had one last crack to try and recoup something of my losses ......Guess what .........Lost another $8,000 ................... I reckon that will be hard to beat considering I was only a newbie with limited leveraged capital .............getting depressed thinking about it again     Anyway I'm still learning and I havn't given up yet ............. Long hard road ahead ............ I deserve two of these!!  :homer:  :homer:




Sorry Barney to hear about this depressing story.


----------



## bunyip

CanOz said:
			
		

> Is the Moving Average the same as the Weighted Moving Average? I only the the choice of MA or EMA on Power Etrade.




A simple MA (SMA) gives equal weighting to every day (or week) used in its calculation. For example, a 30 day SMA is calculated by adding the closing prices of the last 30 days, then dividing that figure by 30.

EMA's and WMA's are 'front weighted', i.e. they give uneven weighting to each day or week used in their calculation, with the more recent days/weeks being given a higher weighting than less recent days/weeks. This has the effect of making EMA's and WMA's more reactive than SMA's to recent days/weeks, consequently they track the price action more closely than a SMA does.
A WMA is more reactive to recent data than an EMA because it's the more heavily front weighted of the two. You can use the 'two thirds' rule if you wish to use an EMA to duplicate a WMA. Say you wish to use a 30 week WMA but your software doesn't offer WMA's. Two thirds of 30 is 20. So if you use a 20 EMA it will be similar to a 30 WMA.
A weekly moving average can be multiplied by 5 to convert it to its daily equivalent (because there are five trading days in a week).
A 30 week WMA on a weekly chart would be roughly equivalent to a 150 day WMA on a daily chart, i.e. both moving averages would rise or fall or run sideways at more or less the same time, and both would be at similar levels.
If your software can do EMA's but not WMA's, you could use a 20 EMA as a substitute for 30 WMA on a weekly chart. Or if you prefer daily charts, you could use a 100 day EMA as the daily equivalent to the 20 week EMA.

Bunyip


----------



## tech/a

michael_selway said:
			
		

> hey what hapenned to DVT? i cannot find it anymore
> 
> thx
> 
> MS




Think it eventually got taken over.


----------



## Seneca60BC

Well here is my story.

I bought CSM at 4.17 - yep right at the top - and watch her slide to something like 3.50 before bailing out - some $2000 loss.  Luckly I got out when I did cause she went down to $1.80.

Anyway, the cause of this was the price of there primary product crashed as their was an oversupply and their MD retired after some internal conflict.

Sometimes, its hard to stay ahead of the market - and never buy at the top (on most cases)
Cheers


----------



## chicken

noirua said:
			
		

> My biggest investment blunder was staying fully invested in 1987 - the crash followed. It took 17 years to make up the losses. I'm now 75% in cash, so it can't happen again.



Noirua..you said it cant happen again...LOLOLOLO...what happened in the great depression...MONEY WAS WORTHLESS..right....GOLD WAS WORTH A LOT...the jew had the right idea...have some Gold in your investment....as that is the only real currency should the US go belly up...it can happen...one way of clearing their debt..LOLOLOLOLOL


----------



## nizar

Seneca60BC said:
			
		

> Sometimes, its hard to stay ahead of the market - *and never buy at the top * (on most cases)
> Cheers




I wish we knew what the top was/is/will be when taking a position

Chicken - of course a crash can happen again but Noirua was saying that she cannot get burnt that bad this time because shes controlling her risk - 75% in cash instead of fully invested. Read the post properly before laughing. LOLOLOLOLOL


----------



## Knobby22

I have not had a big loss yet (fingers crossed) and have been investing for 15 years. I have always invested using fundamentals and have never geared except for an initial loan of $12,000 till 4 years ago. I think the problem with new investors is that they gear too early and get too involved emotionly. I am usually slow to sell and slow to buy. I am learning to be quicker to sell but have found out most of my mistakes have been caused by buying too quickly.

I have not taken profits when I should however and regretted it greatly. One was Qantas in which I bought a lot of shares at $3.00 and $2.88 and it quickly went to $5 after the Ansett collapse. I held on and eventually sold for $3.80. I have done this a few times with other stocks and I find I still find it hard to sell winning trades when I should.

I also lost $2000 of the float of Southen Pacific Airlines when it floated. The backer went to jail but it forced me to evaluate risk more closely. This is really important to long term success in my opinion.

I have always had a few losses a year (never more than 3% of my investments) but am learning to reduce the number of shares owned and to sell when things do not go as well as expected.

Some of my other big mistakes were caused by not buying enough when feeling sure. This is what seperates Soros and Buffet from the likes of me.
Tabcorp,Unitab, Woodside and Zenyth are good examples. I have 1200 Woodside but if I had been less timorous I may now have 3000.

I am happy though not delighted with my returns which have generally exceeded the all ordinarys returns and overall have done far better, and people are amazed when they see the size of my investments from the initial capital but I am still learning and feel the next ten years will be far more profitable.   

I want to go to a more dynamic approach  and though I dislike charting generally though the moving average method seems quite good. Instead of charting I try to understand the market psychology. It is often possible to get in and out and back in a stock quite quickly knowing the punters will panic, especially in the early stages of a rise. I plan to read Nick Radges book as it appears to be different.


----------



## Knobby22

Actually my biggest blunder was Metalstorm, bought at 40c, sold at 20c. loss $3000.


----------



## Knobby22

noirua said:
			
		

> My biggest investment blunder was staying fully invested in 1987 - the crash followed. It took 17 years to make up the losses. I'm now 75% in cash, so it can't happen again.




I started buying in 1988 so I was lucky. Hardly anyone here has experienced a crash. I greatly fear the next one. The ease of which shares can be shorted and the many firms trading rather than investing makes me think it will be impossible to get out, stop loss or otherwise! Noirua, I am slowly reducing my gearing and am putting money in to pay my house off but cash seems a bit extreme in the present market. Why are you so cashed up?


----------



## barney

Seneca60BC said:
			
		

> Sorry Barney to hear about this depressing story.




Hi Seneca60BC, ( enjoy a bit of Roman History I gather) I appreciate your sentiment.  Hopefully in years to come it might prove to be the catalyst which "woke me up" so to speak ................. I still sit back sometimes and wonder how I put myself in that position ......... but thats life ......... my wife still thinks I'm OK ....... go figure that out    ............ Like I said, if I ever get back to even "square", everybody is gona know about it ............ Party will be at my place ....everyones invited !!!!!  ............ Lets hope that party eventuates ........ I'm determined if nothing else.  Cheers Barney.


----------



## nizar

Knobby22 said:
			
		

> I still find it hard to sell winning trades when I should.




Me too.
I lost a pile in May because of this.

Im trying to tell myself that if i (ever?) see gains of that magnitude again would sell straight away...


----------



## Seneca60BC

barney said:
			
		

> Hi Seneca60BC, ( enjoy a bit of Roman History I gather)Barney.




Yes, I like history in general - 

I understand how it is easy to get emotionally attached with the market - i remember I made $1000 in 2 days with the now defunct HWE and boy was I on a high - only to lose it all soon after on OEX - that taught me its no fun playing in the market.

All the best.


----------



## Seneca60BC

nizar said:
			
		

> Me too.
> I lost a pile in May because of this.
> 
> Im trying to tell myself that if i (ever?) see gains of that magnitude again would sell straight away...




I bought QAN at 3.07 and told myself that if she hits $4.00 Im selling - and before I knew it it hit $4.00 (much too quickly - I thought it would take at least a year) - anyway what I said to myself was - right now be a MACHINE and place a sell order - once I was a MACHINE - there were no emotions attched - so it was very easy to do.  So when you have to sell and your emotionally attached - then become a machine - which has no emotions - this greatly and efficaciously helps you to sell.

Regards


----------



## hardmoney

I started trading the SPI contract in 1988 just after the '87 crash when it was $100 a tick.Back then the volatility used to be very high and it was not uncommon to have 30-50 point gap openings for or against you.Thats 5 grand or so a contract either way.I had DOS PC that I wrote my own trading software for.The system tried to identify trends,but it was way to complex and curve fit to blazes.(it used low pass, and band pass filter techniques)

 After about six months I got so worn out mentally that I used to dread hearing on the radio in the morning what the Dow did overnight.I was still in my twenties back then and trading with a mate.He also just could'nt hack the pressure !
Needless to say, I didn't make a cracker trading the SPI back then.

Lessons learnt,
Only trade with your own money ( were still good mates)
Keep systems simple !!!
Dont give up, it aint that hard to make money, but it took me a bloody long time to figure out how to do it. ( years)

HM


----------



## battiwallah

I am proud to have been a victim of the dot.com boondoggle.  I bought into the infamous BT TIME fund about 2 months before the crash.  I felt pretty pleased with myself for a few weeks as I watched my wealth grow and my confidence as an investor blossomed.  Then reality struck.  I eventually sold out at about half my purchase price, and they still kept dropping.  I lost about $4k.  But in the end it was money well spent in one way - it was a great education.  Now I am a lot wiser and more humble.


----------



## Julia

Reading through today's posts, the common theme seems to be concern as to when to take profits.  I share this.

Do any of you TA experts out there have some basic guidelines which could help in picking when a stock has started on a downtrend, as opposed to being in a very temporary "dip".  Apologies if my terminology is less than it should be.

I'm sure many of us who are basically fundamental investors would appreciate some help here.

At the same time, looking at some stocks which I sold around a year ago because they were definitely trending down at the time, I see they have now recovered and are well past their previous high.  So, as someone commented I think yesterday, if your fundamental reasons for buying the company in the first place still apply, then there is no reason to sell.  Realist would endorse this, I imagine.

Julia


----------



## MichaelD

Sorry, still have to totally disagree with you.


			
				Stop_the_clock said:
			
		

> Who mislead the market with a poorly scripted announcement?



Who listened to the announcement rather than paying attention to what the stock PRICE was doing?


			
				Stop_the_clock said:
			
		

> Who ramped a share?



Who took a tip from a stranger with a hidden agenda?


			
				Stop_the_clock said:
			
		

> Which bank had technical problems and wouldn't accept a trade?



Black swan events will happen. Trading plans need to be robust enough to handle them.


			
				Stop_the_clock said:
			
		

> What suburbs had a power outages?



Who doesn't have a UPS?


			
				Stop_the_clock said:
			
		

> Which bank left you on hold over the phone?



Ditto re black swan events.


			
				Stop_the_clock said:
			
		

> etc etc



We are responsible for EVERYTHING that happens to our trading capital. To attempt to blame others for our omissions or errors guarantees failure at this game. No one else makes us put on a trade. No one else makes us close a trade.


----------



## nioka

Julia said:
			
		

> Reading through today's posts, the common theme seems to be concern as to when to take profits.
> 
> At the same time, looking at some stocks which I sold around a year ago because they were definitely trending down at the time, I see they have now recovered and are well past their previous high.  So, as someone commented I think yesterday, if your fundamental reasons for buying the company in the first place still apply, then there is no reason to sell.  Realist would endorse this, I imagine.
> 
> Julia



A very good point. I never sell just because a price falls. I don't use stop losses. If a price falls I check to see if I still have faith in the company If I have I am more likely to buy than sell, especially if there is a reason for the fall which I consider temporary.


----------



## Happy

Julia said:
			
		

> Reading through today's posts, the common theme seems to be concern as to when to take profits.  I share this.
> 
> Do any of you TA experts out there have some basic guidelines which could help in picking when a stock has started on a downtrend, as opposed to being in a very temporary "dip".  Apologies if my terminology is less than it should be.
> 
> I'm sure many of us who are basically fundamental investors would appreciate some help here.
> 
> At the same time, looking at some stocks which I sold around a year ago because they were definitely trending down at the time, I see they have now recovered and are well past their previous high.  So, as someone commented I think yesterday, if your fundamental reasons for buying the company in the first place still apply, then there is no reason to sell.  Realist would endorse this, I imagine.
> 
> Julia






I flicked through pages of one book, I think it was written by 2 fellows and the title was 
–You only make profit when you sell- or something close.

Couple of methods I think help when undecided, are:

Part selling when not sure is one method.

Another part selling even better, is to sell enough shares to remove your money and leave profit in the market.

Both, substantially reduce profit if you calculate –maximum possible profit-, but –maximum possible profit- is utopia and not possible to make every time, so why agonise.


----------



## nioka

Happy said:
			
		

> –You only make profit when you sell- or something close..



I don't consider you have made a profit until you have bought something of better value than the item sold.


----------



## Freeballinginawetsuit

nioka said:
			
		

> I don't consider you have made a profit until you have bought something of better value than the item sold.




What a silly comment.


----------



## nioka

Freeballinginawetsuit said:
			
		

> What a silly comment.



Think about it again. When you sell all you have is money which you will probably spend. It costs something to buy and sell so that part is lost. If you haven't bought something better than you sold then you are behind. Always works for me.well mostly always. But then again I often do make silly comments so you may be right.


----------



## Dukey

battiwallah said:
			
		

> I am proud to have been a victim of the dot.com boondoggle.  I bought into the infamous BT TIME fund about 2 months before the crash.  I felt pretty pleased with myself for a few weeks as I watched my wealth grow and my confidence as an investor blossomed.  Then reality struck.  I eventually sold out at about half my purchase price, and they still kept dropping.  I lost about $4k.  But in the end it was money well spent in one way - it was a great education.  Now I am a lot wiser and more humble.




Butti !! My man - I was there with you. I switched into BT time right near the top - Ended up about 6k down if memory serves. Taught me  that if i was going to lose my money - I'd be bloody well better doing it MY OWN WAY rather than some anonymous broker twit who couldn't care less about my cash.  
So... I proceeded to do just that for the next couple of years!!  
(see my posts at start re MRL and TMS)


----------



## nizar

As regards to selling; what i do now is, i review the companies i hold, and i say, would i BUY them if i didnt already hold them? If the answer is yes i hold, if no then i sell.

Jim Sinclair reckons if you think the price of gold has topped, sell 1/3rd and then u have capital to buy again when it drops and still 2/3rds in so exposed to further upside, kind of hedging your bets i guess.

With regards to Stop versus MichaelD - im with Michael


----------



## Freeballinginawetsuit

nioka said:
			
		

> Think about it again. When you sell all you have is money which you will probably spend. It costs something to buy and sell so that part is lost. If you haven't bought something better than you sold then you are behind. Always works for me.well mostly always. But then again I often do make silly comments so you may be right.





Sure I spend the money, I certainly wouldn't give up an unrealistic profit target. I certainly would like to take advantage of the liquidity or I may as well be a slow moving Dinasour "Institution" rather than taking advantage of exiting/entering before them (who wouldn't).

The whole reason I trade is to negative gear the profits (and yes you only pay tax on total trades, once a year despite some dribble on the forum). I'm the first to admit I'm into property and the first to admit that I'm not into tax. I would like to realize some security for my own and extended family in homes for the kids. The sharemarket enables some unrealistic opportunities for this that bear no similarity to the hard earned cash from the real business world.

If I owned a share that had doubled in value of course I would take the profit, I'd then put that money into a commercial entity that cost heaps and wiped the profits. I would repeat the process over and over. Once completed I would lend against the asset and start all over again. Along the way their may be costs associated with the trading setup like technology peripherals, a new car to supervise the buildings, some trips to research/buy some materials
etc. Anything that legitamitly can rip off the tax man and save your disposable income!.

It may be possable for the sharemarket to pay for usual out of pocket expenses that are usually funded by ones taxable income. It may be possable to own some form of property (commercial or domestic) that has been funded by and associated with your trading setup. It certainly is possable to put actual gains made on educated investments into real life directions you directly have control over.

Then again you may hold your shares, get your dividends pay your CGT. You may also believe as a shareholder you have a say in your Companies running/management and global material prices. You may even stay in for the long haul with the institutions and ride the dips. Hopefully the world has no wars, the economy holds up,....... and and and!. You could use all your fundamental research and technical analysis to the nth degree, but your still punting on the long term unknowns.

Or you could just take the unrealistic profits when they come along, have tight risk measures on your losers and put your wins into some form you do control.

Because really mate, the best you can do in the sharemarket is have a sensible punt on the near term, the long term is way out of our grasp. 

Anyway I hope your shares are doing well for you and your long holds on substatial gains hold up and keep running.

Cheers.


----------



## tech/a

*JULIA*



> Do any of you TA experts out there have some basic guidelines which could help in picking when a stock has started on a downtrend, as opposed to being in a very temporary "dip". Apologies if my terminology is less than it should be.
> 
> I'm sure many of us who are basically fundamental investors would appreciate some help here.




One of the biggest areas where Fundamental traders could benifit.So in my veiw a very good question Julia. I know your a long term holder so I will base the answer on long term timeframes.

*(1)* Stocks and Markets dont like being out of equilibrium.They like to revert back to the mean, so from a chart perspective any prolonged trading away from the natural angle of the trend of a stock will see it eventually come back to its equilibrium. Each stock is different but you'll find most trend at 35-45 degrees.

*(2)* Volitility is one of the first indicators.Nice orderly trading turns to wild swings in percieved value. The ranges in price each day are longer than when in a trend.

*(3)* The majority of trends which turn to longterm bearish are those which 
(a) Have fundamental news which effects longterm valuation of the company.
(b) Have a period of distribution at the head of a trend before new buyers disappear and selers take hold.

*A 150-200 day EMA (Exponential moving average)* can be a great exit indicator for these longterm stocks.

*ATR (Average True Range) is another*,ATR opperates at a set deviation to the mean.2,3,6 etc.Most traders have found that stops set at 5 to 7*ATR
being the best.Swings to this area are violent enough to trigger the sell,common then for the stock to either trade sideways and do nothing OR fall.

(4) *One of the best Tools in the box * would be a basic understanding of Elliot Wave Theory. Would take a month to learn. Having a grasp of Corrective moves and in particular where a trend is at Wave 1,3, or 5. and the l,ikely length of these waves really gives you some nice targets and areas to watch,coupled with other analysis,will serve you well.
Helps you read corrective moves and gives you confidence when a stock
corrects. Elliot is one of those "Predictive" types of Analysis using current price action. Over the years it has to me proven un canny accuracy.

(5) *Lower highs and Lower lows.* Always form in down moves. The longer they take to form the larger the down move will generally be.

Julia if you wish some charts with examples on these techniques we could move the discussion down to  "Improving Chart Analysis " or start a new thread "Recognising tops"

By the way nothing is an exact science all we can do is place ourselves in the position to take advantage of our analysis if it proves to be correct.
*The quicker you act on the analysis when its Right (and in particular) Wrong the more benificial it is to you.*

Shorter term is another sport all together.

Hope this helps.


----------



## CanOz

tech/a said:
			
		

> C
> 
> There are many ways to calculate a Moving average.
> Simple moving average --SMA is simply the addition of (I'll use closes) closes devided by number of periods being averaged.
> Exponential Moving Average places more weight on recient data and less on older data.
> Weighted M/A is similar in that it weights todays price much more heavily that say that of 10 days ago.
> 
> 
> I have the maths if you want it but this maybe of help.
> http://www.investopedia.com/articles/technical/052201.asp





Many thanks T/A.


----------



## Knobby22

Good question Julia.
Thanks for the answer Tech, .though I will need to research what you are talking about, 

I particularly like your suggestion as follows: (it relates to my mathematic knowledge). 

ATR (Average True Range) is another,ATR opperates at a set deviation to the mean.2,3,6 etc.Most traders have found that stops set at 5 to 7*ATR
being the best.Swings to this area are violent enough to trigger the sell,common then for the stock to either trade sideways and do nothing OR fall.

Tech, How do you work out the mean?


----------



## Prospector

tech/a said:
			
		

> (We get most developements cross our office desk for civil Works-thats How I find out years before construction).
> 
> There is a plus side.




Interesting point TechA - why the big deal about insider share trading then?


----------



## tech/a

Prospector.

Two vastly different yet similar things.

I guess I'm seeing opportunity which I can quite legally talk to you or anyone else about.
If however my company was listed and I knew that we were about to win the Adelaide Darwin Rail link and I told you or anyone else that that was about to happen and you profited from that--then thats insider trading. (one example of it).


----------



## Prospector

Yep, I am sure what you have done is way above board, but I guess I was more querying why insider trading, which is such a nebulous thing anyway, is frowned upon on the one hand, is only occasionally detected, but obviously happens, frequently!


----------



## Julia

tech/a said:
			
		

> *JULIA*
> 
> 
> 
> One of the biggest areas where Fundamental traders could benifit.So in my veiw a very good question Julia. I know your a long term holder so I will base the answer on long term timeframes.
> 
> *(1)* Stocks and Markets dont like being out of equilibrium.They like to revert back to the mean, so from a chart perspective any prolonged trading away from the natural angle of the trend of a stock will see it eventually come back to its equilibrium. Each stock is different but you'll find most trend at 35-45 degrees.
> 
> *(2)* Volitility is one of the first indicators.Nice orderly trading turns to wild swings in percieved value. The ranges in price each day are longer than when in a trend.
> 
> *(3)* The majority of trends which turn to longterm bearish are those which
> (a) Have fundamental news which effects longterm valuation of the company.
> (b) Have a period of distribution at the head of a trend before new buyers disappear and selers take hold.
> 
> *A 150-200 day EMA (Exponential moving average)* can be a great exit indicator for these longterm stocks.
> 
> *ATR (Average True Range) is another*,ATR opperates at a set deviation to the mean.2,3,6 etc.Most traders have found that stops set at 5 to 7*ATR
> being the best.Swings to this area are violent enough to trigger the sell,common then for the stock to either trade sideways and do nothing OR fall.
> 
> (4) *One of the best Tools in the box * would be a basic understanding of Elliot Wave Theory. Would take a month to learn. Having a grasp of Corrective moves and in particular where a trend is at Wave 1,3, or 5. and the l,ikely length of these waves really gives you some nice targets and areas to watch,coupled with other analysis,will serve you well.
> Helps you read corrective moves and gives you confidence when a stock
> corrects. Elliot is one of those "Predictive" types of Analysis using current price action. Over the years it has to me proven un canny accuracy.
> 
> (5) *Lower highs and Lower lows.* Always form in down moves. The longer they take to form the larger the down move will generally be.
> 
> Julia if you wish some charts with examples on these techniques we could move the discussion down to  "Improving Chart Analysis " or start a new thread "Recognising tops"
> 
> By the way nothing is an exact science all we can do is place ourselves in the position to take advantage of our analysis if it proves to be correct.
> *The quicker you act on the analysis when its Right (and in particular) Wrong the more benificial it is to you.*
> 
> Shorter term is another sport all together.
> 
> Hope this helps.




Tech, thank you.  Much appreciated.  All clear except the ATR bit which I don't get at all.  (I'm not the least bit mathematically minded).  Is this discussed anywhere else, or can you explain it differently?

Julia


----------



## nizar

ATR = average true range
How much a share price fluctuates per day on average, so 6.5*or 7*ATR is pretty wide.


----------



## macca

Hi Julia,

Most software has ATR as a standard indicator, it would be a poor program without it. 

The concept is that if a share is fluctuating more than usual it is better to give it room to move. 

If a share tightens it's fluctuations, as in a consolidation phase, we want the stop loss to tighten up a bit, so that if it moves down we hit our stop earlier.

I guess the most common would be the average ATR for the past 14 periods, so ATR(14) usually multiplied by about 2.5 to 4 then this amount is deducted off another piece of data

There a number of different things that people deduct it from, could be recent high or high close or a moving average.

Was a very popular stop loss during the tech boom.


----------



## sails

Julia, here is the Wikipedia definition of ATR http://en.wikipedia.org/wiki/Average_True_Range 
(NB I have added the bold font)



> Average True Range (ATR) is a technical analysis indicator developed by J. Welles Wilder, based on trading ranges smoothed by an N-day exponential moving average.
> 
> The range of a day's trading is simply high − low. *True range extends it to yesterday's closing price if that was outside today's range,* ie.
> 
> true range = max(high,closeprev) − min(low,closeprev)
> The average true range is then an N-day exponential moving average of the true range values.
> 
> Wilder recommended a 14-period smoothing. Note this is by his reckoning of EMA periods (see the EMA article on that), meaning an α=1/14.
> 
> The idea of ranges is that they show the commitment or enthusiasm of traders. Large or increasing ranges suggest traders prepared to continue to bid up or sell down a stock through the course of the day. Decreasing range suggests waning interest.



Also, a link to Incredible Chart's "Indicators A-Z" on ATR:  http://www.incrediblecharts.com/technical/average_true_range.htm


----------



## stevo

Biggest blunder (trading) - not having a system. Sure I did ok in the 90's but it was pure luck. 

In my other business I don't seem to be able to put a foot wrong lately. My blunder in business was that, if someone wants to give you substantially more money for doing things a little differently don't fight it too much - adapt and get the best deal that you can! 

Investing / trading lessons learned - *trade with a system* . I discovered that I trade much easier when I have a strategy I have coded into a mechanical system that I can backtest, forward test and basically overtest! If I can't test a strategy I won't trade it.

Stevo


----------



## Casual_Investor

barney said:
			
		

> I reckon I've got most covered in the "dumb play" department. I've mentioned it a few times on different threads, but one more time will probably make others feel way less dumb than I was ......... in a nutshell, three bad trades on CDU at the height of the "panic" buying ............. I got caught "daytrading" (something I knew nothing about) when the Trading Halt hit.  I had bought many thousands of CDU share with the intention of selling when in profit (to make up for a couple of thousand dollars I had lost the day before) Many days later I sold right near the bottom (thinking that I could lose everything if I held on any longer) And heres the best part. (At this point in time I am down about $60,000) I had one last crack to try and recoup something of my losses ......Guess what .........Lost another $8,000 ................... I reckon that will be hard to beat considering I was only a newbie with limited leveraged capital .............getting depressed thinking about it again     Anyway I'm still learning and I havn't given up yet ............. Long hard road ahead ............ I deserve two of these!!  :homer:  :homer:




Wow thats aweful barney  I really feel for you there.. Id hate to lose that much money. You shouldnt put it all down to your dumbness... trading CDU at that time was purely gambling... anything could have happened... at that time no one knew how to rate the company.. it was all specualtion. Everyone knew the risks.. win big or lose big. You lost big... but imo it doesnt make u any worse than someone who bought at $2 and won big (with the same thought process of you). 

The biggest lesson Im sure you would have learnt is evaluate your risk.. and buy/sell stocks based on your evaluation... ARE YOU prepared to lose 'x' amount of money with 'y' probability for the chance of making 'x' amount of money with 'y' probability? Think of taht deadly worst case scenario coz it sure as hell could happen. Dont buy stocks convincing yourself they HAVE to go up coz nothing is ever certain. And NEVER impulse buy to cover up a previous days losses.

Anyway I really hope all the best for you and your future trades.


----------



## Space Cadet

Biggest Blunder:   Not backing Makybe Diva in last year's Melbourne Cup  

Going to Derby Day, Melbourne Cup and Oaks day next week   

I'll be the one in the black suit


----------



## Happy

And how will be dressed Mrs Bullmarket?


----------



## bluefin

Happy,

she bought a new dress for Derby Day on Monday and I've had a sneak preview - looks very nice


----------



## constable

My biggest f'up to date happened 3 weeks ago on sen. I was up around 4k on  day trading with some large buyers coming out of no where ( me thinks this has something to do with whats happening now but wrong thread )and the stock heading into the 50's with ease. Any rate they came back a little and i bought 50000 @ 51. The next day they had dropped to 50 so i brought some more thinking great buying opp then they dropped to 49 and bought some more to average down. By the end of it i was holding 720000 units with an average price of around 48 and running out of time dumped the whole lot at 46 YOUCH. Great lesson dont average down and compound your losses and yes where was my stop call? 
Im still holding 120000 @ 48 and although no one really knows, even if they do come out swinging after their suspension i doubt its going to cover what i lost!


----------



## tech/a

$350,000 of SEN.

Your nuts.
You must Have a $3.5 million Capital base.


----------



## constable

170k in stock thereabouts which allows me to trade a further 170k plus another 50k credit on each 3 accounts. Yep it was absolute stupidity, i really thought i could by myself out of it but hey im learning!


----------



## CanOz

constable said:
			
		

> My biggest f'up to date happened 3 weeks ago on sen. I was up around 4k on  day trading with some large buyers coming out of no where ( me thinks this has something to do with whats happening now but wrong thread )and the stock heading into the 50's with ease. Any rate they came back a little and i bought 50000 @ 51. The next day they had dropped to 50 so i brought some more thinking great buying opp then they dropped to 49 and bought some more to average down. By the end of it i was holding 720000 units with an average price of around 48 and running out of time dumped the whole lot at 46 YOUCH. Great lesson dont average down and compound your losses and yes where was my stop call?
> Im still holding 120000 @ 48 and although no one really knows, even if they do come out swinging after their suspension i doubt its going to cover what i lost!




Great post Cons....do you see what Tech/A is alluding to? You risked a very high proportion of your capital. What would be really interesting is if you could relive the event for us, knowing what you have learned.

Heres hoping you get it all back soon....

I really miss Ballarat.

Cheers,


----------



## constable

believe you me the last three weeks my trades have been considerably smaller plus the fact 2 of my broking a/cs had their credit facilities reduced (as a result of sen) but ive managed to claw back about 20% and should have money for xmas.


----------



## Julia

Well, we wait and see, but mine could constitute selling RIN in order to take the profit in case the whole takeover deal just dies.  If it doesn't and the offer runs to $20 or more, then I will be less than happy.  Probably a few others here as well.

Julia

PS  But think of the smile on Realist's face!


----------



## stoxclimber

Interesting that most people treat biggest blunder as most money lost, rather than mistake made! Some of us out here, I'm sure, made some big trading mistake and made a killer - but either don't think of it as a mistake or rationalise that it was a good buy..

My biggest blunder (in my short career) ended up making me money - I sold ZFX when it tanked following the zinc correction with the idea of buying it back later at a lower price - where I don't really know anything about short term trading. I ended up buying at a higher price than I sold for, but since I bought in for the same $ amount I had before it tanked I actually made more money!


----------



## CanOz

Ok i said i would post my trading scorecard as my investment blunder, so here it is. Since i started trading 4 months ago i've recorded:

wins: 10

Losses: 23

B/E: 2

This is where i was a bit surprised:

Avg. Win$ - 215.43
Avg. Loss$ - 215.12

The good thing that has come out of this since my trding experience began, is that i'm letting the winners run now.

I think too that i plan the trade and trade the plan now, instead of going by impulsive emotion. I stick with the plan, with a good stop in place too.

Great learning experience so far. 

Cheers,


----------



## Ken

i sold james hardie at 6.70

sold rinker at 12.80

both when i said to myself they were undervalued and long term holdsss...  

i bouight cummins corp and they are on a trading halt... so that sucks..


----------



## two40

First week of trading doesn't excuse the following. 

GDN - I hate you. In a week where many made huge profits off this stock I lost. Twice. Enough said... lesson learned.   

240


----------



## doctorj

Will you continue to trade next week?

What lesson did you learn?


----------



## 3 veiws of a secret

WPL was slipping and threatening to dive all day yesterday ,whilst @ $ 37.39'ish I decided to enter a line @ $37.25 (a big line,must I say) ,went to the toilet ,mobile rang whilst on the toilet ,scrambled like a wounded Italian football player to answer it.I was the wife "peel the spuds!".
Got back to the screen in record time ,so I thought!!!!! trade goes through with my pants at me ankles.GULP! have a look where they ended up today.....I'm the sort of trader that chases the stock down and runs around the neighbourhood thinking I'm dead smart and cocky! 
The moral of the story is never leave the screen! and when you look at the screen make sure your pants are UP!,otherwise have a portable dunny in your office. 
BTW this is just my latest comical event ,I have been trading for over 30 years ........its a case of you trade within your limits!


----------



## two40

doctorj said:
			
		

> Will you continue to trade next week?
> 
> What lesson did you learn?




I will most definately continue.

I learned several things and to be honest I'm glad my first couple of trades were losses. As strange as it sounds, to me, it makes perfect sense. Like a kid reaching for a hot plate, I've been slightly burned. In the future when I sense the same heat I will run the other way.

I learned that trends work both ways. With or without reason.

I learned that everyone has an opinion but only mine is valid because at the end of the day it is my money on the line. I will listen and absorb but some of the noise is just that and needs to be ignored.

I haven't learned how to sleep easy yet but going to bed with an unrealised loss helped.

I learned that emotion should be checked at the door.

I also learned that patience in a fast moving market is worth more than any stock.

I learned not to trade with money I do not have. Day trading is not always done within the same day and commsec wants its money in 4 days. haha

The most important lesson that I learned (and I've gained a lot of encouragement from this) is that short term trading will be made up of many small losses, if you control yourself properly. This is fine because the small percantage of stocks that do go up in your favour will offset all the tiny losses and then some.


----------



## barney

Casual_Investor said:
			
		

> Wow thats aweful barney  I really feel for you there.. Id hate to lose that much money. You shouldnt put it all down to your dumbness... trading CDU at that time was purely gambling... anything could have happened... at that time no one knew how to rate the company.. it was all specualtion. Everyone knew the risks.. win big or lose big. You lost big... but imo it doesnt make u any worse than someone who bought at $2 and won big (with the same thought process of you).
> 
> The biggest lesson Im sure you would have learnt is evaluate your risk.. and buy/sell stocks based on your evaluation... ARE YOU prepared to lose 'x' amount of money with 'y' probability for the chance of making 'x' amount of money with 'y' probability? Think of taht deadly worst case scenario coz it sure as hell could happen. Dont buy stocks convincing yourself they HAVE to go up coz nothing is ever certain. And NEVER impulse buy to cover up a previous days losses.
> 
> Anyway I really hope all the best for you and your future trades.





Hi CI, Thanks for the support,  (Sorry I'd missed your post and would have replied sooner) It was a hard lesson, but hopefully a valuable one long term ........ Worst thing for me I think was actually making a little money early on (when I knew nothing about trading) which lulled me into a false sense of invincibility !!! .......... I am on a mission now to "redeem" myself to my family, but like I said,   Long hard road ahead .......... So much to learn Cheers Barney


----------



## CanOz

barney said:
			
		

> Hi CI, Thanks for the support,  (Sorry I'd missed your post and would have replied sooner) It was a hard lesson, but hopefully a valuable one long term ........ Worst thing for me I think was actually making a little money early on (when I knew nothing about trading) which lulled me into a false sense of invincibility !!! .......... I am on a mission now to "redeem" myself to my family, but like I said,   Long hard road ahead .......... So much to learn Cheers Barney




You know Barney, i could have been in the same boat as you...but i started trading in the bear market after CDU's epic rise and fall. This taught me the lessons with small losses instead of large ones. 

I feel lucky to have traded through the period i did, i think the lessons i learned were cheaper, but none the less valuable.

Cheers,


----------



## barney

CanOz said:
			
		

> You know Barney, i could have been in the same boat as you...but i started trading in the bear market after CDU's epic rise and fall. This taught me the lessons with small losses instead of large ones.
> 
> I feel lucky to have traded through the period i did, i think the lessons i learned were cheaper, but none the less valuable.
> 
> Cheers,




Hi Can,  Pleased to hear the losses have been small.  Hopefully my story is a wake up call for other new starters to get educated before trading, and who knows, maybe it might help a few people not lose their cash ............. that would be a good thing. Cheers, Barney.


----------



## markrmau

Using stop losses.

At one stage I bought $20k bhp at about $16 - stopped out.

Bought $20k wpl at about $19 and same thing happened. (I haven't looked through my records for exact prices etc).

Lesson learned: Buy a stock for a particular reason, and sell only when that reason is no longer valid.

EPG - bought about 58c because gas in europe sells at big premium to aussie gas. CHX (now arrow) seemed succesful at making the technology work. EPG drops to under 40c - I almost tripple my holding at 42c because the reasons I bought were still valid.

Caution: this only works if you are able to look completelly impartially at a stock. If you become emotional and 'fall in love with stocks' your in trouble.


----------



## markrmau

Falling in love with stocks.

Here's the scenario (for me it is CSE):

You buy a stock for whatever reason. The stock has a massive increase and you  are making a lot of profit (paper). You start becoming delusional and start thinking you are a better trader / investor than other people. You then start to 'fall in love with stocks' and keep pouring money into them even when there is clear evidence something is wrong.

Beware of these delusional feelings. This is where you should use stop losses.


----------



## Pager

First stock I ever bought was Pacific Dunlop, at $3-60 I thought they were a bargain, a few weeks before they were $5-60 !, within a few months they were below $2 with all there heart implant problems etc

Lesson learnt if a big stock is falling over don’t touch it   .

With trading Futures mechanicly, starting but not being prepared (Mentally) for drawdown’s, first few months were ok and the account was up a bit, down a bit, then I hit drawdown and just at the wrong time made every excuse under the sun that somehow the market had changed   , closed the account, but had I carried on would have done ok.

Lesson learnt, take a long term view and futures markets are far smarter than me.

On my second attempt at futures I took my first 20 trades as losers  , but just took the long term view, also I had just been unfortunate in my timing to re-start   , but 2 years later im trading 4 simple systems across 5 markets and the account is up about 40%   .

Cheers

Pager


----------



## Casual_Investor

Ive learnt alot just from reading this thread. Thanks guys.. and gluck with your trading decisions.

Im very new to market and Im trying to NOT learn the hard way (like some of you here unfortuntely have). I try to pick trends... make my own judgements as to what a stock will do based on what Ive read, and from other stocks that were in a similar set up and moved a certain way. 

I do alot of pretend trading (as in not really trading but pretending to haha) Unfortuntely Ive learnt that you can never EVER be 100% sure what a stock is going to do and thats frustrating. Sometimes I get it right... sometimes I dont and I dont know why. I like to always know why.

Ive only made three real trades in my trading history. One was earlier this year on CAZ.. made a quick $200 off that for only putting in 500. (happened to buy in the high 40's and sold in the high 70's. I was proud of that but I know that does not make me an experienced trader thats better than everyone else.. not buy any stretch.

Other trade was EXT... bought around 8 cents but when it started dropping I got freaked out and sold for a small loss. Lucky... coz it continued to fall.

And the onnly stock I hold is AWE.. which I bought around 3 bucks early in may. Got really freaked after the oil price crash where AWE crashed down to the 2.60's. Decided not to sell, convincing myself that oil would eventually recover (I think this is a bad trading habit haha). However it worked for me this time as AWE has recovered and now Ive even made a little bit on that.

So yeh.. so far havent lost anything yet... but I obviosuly know how easy it is to lose.. So I guess its more education and the occasional educated risk that I decide to take...


----------



## two40

I've just discovered something that has me literally pulling my hair out!!!! Aaaaargh

Have you ever lost $50,000? I just did.

Years ago I invested in PMA. Bought 25,000 @ 10.5c at the time and forgot about it. I used to get mail from them and basically didn't care what it said or what it meant. To be honest I didn't know any better. I've moved house three years ago and obviously stopped getting letters etc. I do recall something happening with that company where they offered 1 share in 100 or 10. Can't recall though. Anyway, today I ran into the code and was absolutely shocked to find out that they are trading @ $2.02! That's $50,500 worth and I'm willing to bet that I will not see a cent of that. 

Anyway, I'm off to try to locate some paperwork or some evidence that might lead me to any shares I might have left. First port of call is an email to both PMA and Quicken who I used to buy the shares. Wish me luck.

240


----------



## nizar

two40 said:
			
		

> I've just discovered something that has me literally pulling my hair out!!!! Aaaaargh
> 
> Have you ever lost $50,000? I just did.
> 
> Years ago I invested in PMA. Bought 25,000 @ 10.5c at the time and forgot about it. I used to get mail from them and basically didn't care what it said or what it meant. To be honest I didn't know any better. I've moved house three years ago and obviously stopped getting letters etc. I do recall something happening with that company where they offered 1 share in 100 or 10. Can't recall though. Anyway, today I ran into the code and was absolutely shocked to find out that they are trading @ $2.02! That's $50,500 worth and I'm willing to bet that I will not see a cent of that.
> 
> Anyway, I'm off to try to locate some paperwork or some evidence that might lead me to any shares I might have left. First port of call is an email to both PMA and Quicken who I used to buy the shares. Wish me luck.
> 
> 240




Maybe u can try to ring ComputerShare


----------



## JimBob

I had some shares in One Tel when they went bust, so did all my cash there, lucky i didnt have too many of them.  My biggest blunder was when i brought some BHP shares with the intention of selling them the next day and making a quick profit.  Problem was they went down by about $1 the day i brought them and 50 or 60 cents the next day, i had to sell them meaning i lost a couple of thousand dollars.  I learnt that you can lose money a lot faster than you can make money sometimes, and also not to invest money that you arent prepared to lose.  I try to be cautious, but sometimes i just cant resist having a little bit of a gamble.


----------



## georgew

Bought 50,000 shares in Transol(TNC) in 2005 (average 40cents). They then went on voluntary administration for a year and now are back trading at 2 cents.

My 50,000 shares have now been reduced to 25,000 under the new re-listing deal.

So my $20,000 is now worth $500!!

*#&*!!!


----------



## insider

I once listened to a friend who has a friend who has a friend who is suposedly an inside trader... TAM (tanami gold) were meant to increase by at least 30% in one month... they fell about 30% in one month but I sold before that... That was my first loss... The lesson here was that "FREE advice is often the MOST EXPENSIVE" (rich dad poor dad)... boy how true is that. I could have paid for a real inside trader with that money


----------



## insider

Another investment blunder was when I first started I invested In UXA (unranium Exploration Australia) and being novice I was impatient... I bought High, 19 cents, and sold low, 13 cents... A month or two later they went upto 45 cents... Money is harder to recover than gain cos you have less to work with... Lesson here " good things come to those who wait" stole this from the movie RONIN... The second lesson is control your emotions and make decisions without emotion


----------



## insider

Another was that I sold AGS at 43.5 cents after holding them for 4 months then they jumped upto a dollar... The lesson here is "you make more money investing instead of trading" Warren Buffet


----------



## mrWoodo

My continued blunder is selling out early - Taking a measly 10% whilst ignoring volume/demand. Two examples of this are CBH and OXR, both earned me approx $1k, both could have been more like $15k had I held onto my nerve


----------



## insider

A trick I find that works is always have something better to do then the share market.... That's right because If you do, then controlling emotions and dettaching yourself from the outcome of a company is a lot easier... Take up a hobby, get laid (that's mine) or playing guitar are cool ones for me...

This all helps you get over stuff


----------



## insider

You know I just realized that this thread alone is worth millions of dollars because think about how much it cost to have these experiences... WE'RE RICH


----------



## ts2000

What a great thread.  Thanks all who have posted.

I am a small timer because I only invest to make money for holidays and for the fun of it.  I have only lost $300 at the most on one trade and at worse I come out even (most of the time).  Sometimes I have felt myself get carried away and get tempted to take out a margin loan but I will remember this thread the next time I get carried away with myself.


----------



## Julia

Most costly mistake I have ever made is last week exiting KZL and ZFX.
Not only lost potential profits as they quickly regained minor drop, but I've let myself in for 100% CGT, not having owned them a full year!

Have I learned something from this?  Yes, don't ignore the fundamentals when you are investing for the medium - long term.

Julia


----------



## imajica

JPR - lost a few grand on this one

the in specie looked like a done deal

lesson learnt: if something appears to good to be true, then it probably is


----------



## jtb

How b'out buying into PDN in '98 (75ooo @ 7c). Holding for 3 years (despite the spikes) sure that nuclear energy and uranium was about to go off. Ended up cashing out at a significant loss to buy into BDL (down from >2.00 to 3c) sure that their african worries were complete- only to have BDL fall over and do a 100:1 share consolidation  
Managed to turn 5K into $50 for the whole excercise. 
Stopped doing the sums when PDN breached $5 (try to anyway  )

What do you do, told myself three years was the limit


----------



## Sir Burr

My single big blunder was back when IB was fine with margin for Aussies.
Big mistake 10/2014 lost a crap load and took years to recover.

Lesson learned for sure.


----------



## sptrawler

My single biggest blunder, is holding onto a $ hit share, thinking it will end up smelling like roses.
The problem is I still do it, I think Skate said, doing well in shares is knowing when to sell.
That is the best tip ever. IMO


----------



## myrtie100

sptrawler said:


> My single biggest blunder, is holding onto a $ hit share, thinking it will end up smelling like roses.
> The problem is I still do it, I think Skate said, doing well in shares is knowing when to sell.
> That is the best tip ever. IMO



I have done this a number of time. 

And like duh - Homer!!

I now - always draw a line in the sand. I'm out at that level, no ifs, no buts!


----------



## sptrawler

myrtie100 said:


> I have done this a number of time.
> 
> And like duh - Homer!!
> 
> I now - always draw a line in the sand. I'm out at that level, no ifs, no buts!



I know what you are saying, I locked in an eye watering loss on AMP, last week.
But I feel a lot better now, I've stopped sobbing and having suicidal thoughts.


----------



## myrtie100

Oh sptrawler - good on you for biting the bullet!


----------



## Smurf1976

Biggest blunder I've ever made was taking professional advice and not questioning everything.

Long story short lost serious $ at the time. 

If you're paying for advice on any subject then make very sure that whoever's giving such advice is themselves successful in that field. Make sure you know enough to determine whether or not they know their stuff. Same goes with anything important.


----------



## Sir Burr

sptrawler said:


> My single biggest blunder, is holding onto a $ hit share, thinking it will end up smelling like roses.




Yeah that's something I've avoided totally. Weekends (weekly system), run a scan and enter the sell 5% below Fri close. Never missed a sell.



Smurf1976 said:


> Biggest blunder I've ever made was taking professional advice and not questioning everything.
> 
> Ahhh yes, I can relate to that!


----------



## Value Collector

My biggest blunder has been not buying CSL when it was less than $25.

I understood the company, I believed it was a great company, with good growth prospects etc. and knew it was recession proof.

But I couldn’t get past the high P/E ratio, and that was a mistake.


----------



## qldfrog

I so wish my biggest blunder was a missed opportunity.
.i was playing with a set of option.left for a Thai holiday in the north with a 60k paper profit, when back in the connected world after a fortnight, was at a 10k loss
What was i thinking
I never ever made 60k paper profit since...


----------



## Skate

@Sir Burr thank you for reactivating a thread I have not read before & this thread is very educational. I'm re-posting a few of my posts from the 'Dump it here' thread as there maybe a quote that gets other members to visit & read my thread.



Skate said:


> *Quote*
> “Education is something that is done to you. Learning is something you do for yourself."
> Skate.






sptrawler said:


> I know what you are saying, I locked in an eye watering loss on AMP, last week.
> But I feel a lot better now, I've stopped sobbing and having suicidal thoughts.




@sptrawler thanks for making this quote as it has given me the blatant opportunity to promote my 'Dump it here' thread & your post adds validity to one of my previous post [attached below]



Skate said:


> *Misery of selling a large loss*
> When the misery of a big loss is suddenly removed by selling the position you'll feel a surge of energy - the weight will be lifted and you might be surprised at how readily you can find other opportunities that will help you make up your loss.
> Skate.




*The bleeding obvious*
As this thread is about investment blunders let me state the bleeding obvious -  blunders in this game come from (a) NOT picking stocks that increase in price & (b) NOT effectively managing the positions after you buy them. Item (b) is the one you should take notice of - not doing so can cost you money.



Skate said:


> *Trading success depends on two basic things:*
> 1. Picking good stocks that increase in price, and
> 2. Effectively managing the stocks after you buy them.
> Effective management means having a plan for either cutting losses or taking gains. Managing your stocks after you buy them is what determines your level of success. Great investing results are a product of shrewd selling rather than smart buying.
> Skate.






Skate said:


> *Luck*
> To a great degree, our success or failure in the market is a function of our luck. We like to think that our results are a direct consequence of our insight and efforts, but the reality is that luck plays a big part in how we do.
> *Punching Bag*
> No matter how smart we are, or how hard we work, we will regularly be hit by news, circumstances, and developments that are unforeseen and unknowable. The stock market gods will periodically use us for their entertainment, and there is nothing we can do to prevent it, so we have to be ready and mentally prepared.
> Skate.






sptrawler said:


> My single biggest blunder, is holding onto a $ hit share, thinking it will end up smelling like roses.
> The problem is I still do it, *I think Skate said, doing well in shares is knowing when to sell*. That is the best tip ever. IMO




@sptrawler - thanks for referencing one of my posts & for the benefit of others I'll re-post them.



Skate said:


> *Selling*
> Successful trading is largely the art of selling. Buying a stock is easy. It is determining when to cut our losses or when to take our profits that is hard. Because it is so hard to determine when it is the right time to sell, many just don’t do it.






Skate said:


> *It's underrated*
> Selling is one of the most underrated and unappreciated tactical tool any trader has. Traders like us can use our small size, quickness, and aggressiveness to outmanoeuvre and outrun the giants of the market controlling our own destiny by being quick to act when the time is right, and quick to retreat and sell at the first sign of trouble.
> Skate.




The 'Dump it here' thread if full of quotes like the ones above, other members have also contributed to the thread & it's a worthy read. If you only want to read my posts grab the free eBook listed in my tag below.

Skate.


----------



## Zaxon

My biggest investment blunder was, a few years ago, being inspired by Warren Buffett and becoming a value investor.  I underperformed during that period.  It was a blunder for me, personally, because by nature, how I view investing is the opposite of how a value investor sees the world.

I have no doubt that if I stuck with it, I would have been successful at value investing.  I learn fast and can apply myself to just about anything.

But as Warren says: stick to your circle of competence. My lesson learned is that there's no need to become an expert in every style of investing.  You're better of finding the style that aligns best with your personality, and become an expert in that.


----------



## willoneau

My biggest blunder, sucked into saftey in the market and wasting heaps of time and money naively trying to win at futures trading untill BBY went broke.


----------



## willoneau

Biggest regret, not finding this place in 2004.


----------

