Your Biggest Investment Blunder!! & lessons learned!

[Marvin Martian]

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]

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]

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

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

 

[barney]

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]

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]

[...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

[...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]

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]

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.

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]

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]

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]

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]

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).