What's your biggest single stock loss?

[Pager]

It must be around 2 years since they stopped trading. Did they ever get wound up so that the loss was a taxable deduction?

You could claim the loss in the same tax year as that went belly up, Ferrier Hodgson were the administrators and they organised it some how, anyone still holding should check there website or contact them for the letter, unfortunately it came in handy for me as i was one of the poor bast@rds who owned a parcel

 

[tigerboi]

Re: Tigerboi's Saturday race tips is how you win..

All you unfortunates go get on a few of my tips every week & get some of your money back tomorrow,no -100% over there trendsetters...talk about baggers the tb gives out 10-20 baggers & its for free unlike the shonky dickwads giving advice to the average hard worker...

if some of you had been following those tips you would be laughing,i got a 200/1 shot running tomorrow at the odds now of 16/1...if he gets a run..

eagle farm qld derby...no 7.moatize...2/1 & will win...tb(im having plenty on him..)

 

[Lucky_Country]

MON bought at ~ 30c 2 years ago currently trading at around 28c.
Umm not to bad you say problem is they did a 3 for 1 consolidation !

 

[Miner]

Nice thread to cough up lessons learnt
Bought BYL at $1.26 and sold at 30 cents
Bought IRL at 40 cents and sold at 12 cents
Bought MOL at $5 and sold at $3
Bought GCR at 5 cents and now paper loss at 3.5 cents - did not sell yet

Two more times I will have loss and then I will conquer like the spider of Robert Bruce who tried six times to get success

Cheers

 

[MichaelD]

Let's try the maths again shall we?

(To satisfy the speccie crowd)

Pick 1 x 500% winner.
This will pay for 50 x 10% losers
This will pay for 10 x 50% losers
This will pay for 5 x 100% losers

(For those playing in the ASX300 or so)

Pick 1 x 100% winner.
This will pay for 10 x 10% losers
This will pay for 3 x 33% losers
This will pay for 2 x 50% losers
This will pay for 1 x 100% loser


Bottom line: Are YOU trading with a positive expectancy?

 

[Sean K]

Bottom line: Are YOU trading with a positive expectancy?

Michael, like a few here, you have assumed that 'trading' is all that people do. Some 'invest' also, and/or combine the two. At the minute I am seeing some incredible investment returns that would far exceed the maximum 100% loss from trading. But in the end, how is anyone going to compare with fidelity? No chance!

Bottom line is: this probably isn't a TA 'traders' question...

 

[MichaelD]

Michael, like a few here, you have assumed that 'trading' is all that people do.

Not at all.

The principle underlying profitable behaviour is the same; the winners you get MUST more than pay for the losers. There are many ways to achieve this, but at their heart they ALL have something in common; winners are held and losers are cut.

If you chose to accept 100% losses in your trading plan, you MUST have winners which more than make up for 100% losses or you will go broke.

Unfortunately, most people will hold their losers and cut their winners short.

 

[refined silver]

The principle underlying profitable behaviour is the same; the winners you get MUST more than pay for the losers. There are many ways to achieve this,

Very true

but at their heart they ALL have something in common; winners are held and losers are cut.

Not true.

Many people's losers here were either options that expired worthless, or companies that folded. Sometimes hard to predict and happens very quickly.

Also as I shared, with real speccies, many drop 30-40% at the drop of a hat. If the company was bought for a longer term investment based on fundamentals and those fundamentals are still intact, to sell out on a drop means missing the gains which offset the losses many times over.

If you chose to accept 100% losses in your trading plan, you MUST have winners which more than make up for 100% losses or you will go broke.

True.

Unfortunately, most people will hold their losers and cut their winners short.

True.

Bottom line: Are YOU trading with a positive expectancy?

Absolutely!

 

[njc.corp]

Just some ? for you people out their-

just say for one example u were down 10%-why not pull out-even though 10% is to high in my books-(take it on the chin and move on-even if it was a top stock like bhp)

i am not having a go at anyone-

just want to know where this thread is going-

or is thread on how much mistakes u made when u started and have learnt from it now-

all i got when i search this forum was 2% loss this and that-how come no-one even done it?

by all means i am not having a go

surely no one still operates like this in todays day and age-

Thanks

Nick--(melb)

 

[nioka]

Had another 100% loss confirmed this week. Permodrive, an unlisted local company, brought down by the collapse of an American company which was to commercialise its technology. Went from a value of $1.80 one month to 1.8c the next, now to go into liquidation, I only had $3,000 invested, luckily. Invested to support a local invention that has promise. The company that will be taking it over for practically nothing will eventually be listed and I will buy back in and recoup the loss as it is a worthwhile invention. Watch this space as they say.

 

[Broadside]

Just some ? for you people out their-

just say for one example u were down 10%-why not pull out-even though 10% is to high in my books-(take it on the chin and move on-even if it was a top stock like bhp)

i am not having a go at anyone-

just want to know where this thread is going-

or is thread on how much mistakes u made when u started and have learnt from it now-

all i got when i search this forum was 2% loss this and that-how come no-one even done it?

by all means i am not having a go

surely no one still operates like this in todays day and age-

Thanks

Nick--(melb)

I've never used stop losses and in my early days I had my fair share of stinkers and large % losses and also took profits too soon on my successes. Now I am getting smarter or luckier and cut duds sooner (not a fixed price, just intuition or experience, call it what you will) and average up on winners. If I had set tight stop losses on my specs I would have been stopped out a number of times when they get shaken out on an upward trajectory. My "rule" is don't use leverage because your hand will be forced at the worst possible time, especially in specs, but as we saw this year, even blue chips can be highly volatile. I am sure stop losses are wise esp when using leverage, but it doesn't suit my personality, I think you have to use a system (even if it isn't formal, just intuitive or whatever) that works for you.

But I'm not really a trader, I guess stop losses are musts for those type.

 

[MichaelD]

The principle underlying profitable behaviour is the same; the winners you get MUST more than pay for the losers. There are many ways to achieve this, but at their heart they ALL have something in common; winners are held and losers are cut.

Not true.

Many people's losers here were either options that expired worthless, or companies that folded. Sometimes hard to predict and happens very quickly.

No, completely true. It baffles me that posters in this thread completely miss the point of what I'm trying to get at here. I use technical analysis to trade, but I'm not foolish enough to believe that my edge comes from my analysis and I'm not foolish enough to believe that my way of doing things is the only way of doing things which makes a profit. There are lots of ways to extract money from the markets, but they all share the one common principle.

100% losses are OK if what you're gunning for and getting sufficiently often are 500-1000% gains (so long as you're sufficiently diversified whilst doing it).

The point is that you ARE holding on for the big gains. If, on the other hand, you're taking a 10% gain and running whilst holding onto the losers down to zero then you will blow up.

 

[jonojpsg]

HI all,
Don't know if this is kosher, but if we are talking about biggest $$ losses, then look no further than AEDBlunder on the AED thread. There's a classic example of when you SHOULD set a stop loss...or face a $300k+ loss!!!!!!

My worst was Gullew Gold back in the mid 90s, bought first lot at 20c odd then averaged down (the stupidest strategy ever know to man!) until it got to a point where it was ridiculous. Sold out last year to balance out my capital gains (returned $250 from over $5000 invested)

I'd like to say we live and learn, except I then lost about $10k on AED as well although after I did average down again to an average price of about $2.50, sold at $1.18 just before the price bounced back up over $2.50.

What a life hey - at least it's interesting though

 

[vishalt]

HI all,
My worst was Gullew Gold back in the mid 90s, bought first lot at 20c odd then averaged down (the stupidest strategy ever know to man!) until it got to a point where it was ridiculous. Sold out last year to balance out my capital gains (returned $250 from over $5000 invested)

I'd like to say we live and learn, except I then lost about $10k on AED as well although after I did average down again to an average price of about $2.50, sold at $1.18 just before the price bounced back up over $2.50.

Averaging down works on big caps or small caps that you rely on though?

I mean if you bought BHP @ its $47.30 high and kept averaging it down to $31 - it jumped back up to $50 again? Averaging Woodside down from its $49.50 peak as its lumped to $33 would've worked as well, and SANTOS, Wesfarmers, Woolies etc.

The 20c companies are speculative, have very risk and probably have less than desired corporate governance than the bigger companies.

For small caps I'd rather own a lot of them than average them down. I'm pondering what to do with Beach Petroleum and Neptune Marine Services if they keep falling.

 

[MichaelD]

Averaging down works on big caps or small caps that you rely on though?

You should try averaging down;

1. HIH Insurance
2. Barings Bank
3. OneTel
4. Enron

 

[vishalt]

You should try averaging down;

1. HIH Insurance
2. Barings Bank
3. OneTel
4. Enron

Awesome, you should also have one stock in your portfolio..

Not everything will be a winner.

 

[MichaelD]

Not everything will be a winner.

Precisely why averaging down is a wealth hazard.

 

[NZTurtle]

Back when I thought it was easy... I was using a selection service that had performed well for a long time. Selected a unit trust in the UK and watched it slip by 50%. Then had to go away for 4 weeks. Came back to find it down 94%. I still have it in my portfolio - its living proof!

While I can only loose 100% of a share value and there is no cap, as someone said earlier, you need huge increases to recover a share that has lost 94% of its value to break even...

Now I do both fundi and techie research and have stop losses. If the market says I got it wrong, I'm out and waiting until my techie selection methods support my fundie view and then get back in again.

Cheers T

 

[barnz2k]

you need huge increases to recover a share that has lost 94% of its value to break even...

Yeh forget this sometimes.. If your share goes down 50%, it needs to go up 100% from that level just to even again! getting the 50% back will only get you to 75

 

[chrissyoscar]

I was new to the market and got in on Ecorp, remember them they were an internet company that Kerry Packer Had.
He floated 20% of it on the market.
Well I rode it from $1 to $8 and thought how easy is this, well I also rode it from $8 down to about 30c.
Finally it looked like it was coming good and was making some good money but wouldn't you know it that's when Packer decided he wanted it all back and paid us an amazing! 55c for the stock.
Floats it at $1 then buys it back at 55c.
From memory Ecorp owned Etrade, Wizard, 50% of Ebay Australia and a lot of other stuff.
They were now making money and Packer wanted his 20% of the company back.
That's the side of the share market I hate.
If I buy a stock and don't want to sell it then I shouldn't have to no matter how the vote goes!