Australian (ASX) Stock Market Forum

Your Biggest Investment Blunder!! & lessons learned!

Jump to new
Casual_Investor said:
Wow thats aweful barney :eek: 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.
Click to expand...


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
 
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
Click to expand...

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,
 
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,
Click to expand...

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.
 
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.
 
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.
 
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 :banghead: .

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 :eek: , 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 :eek: , but just took the long term view, also I had just been unfortunate in my timing to re-start :mad: , but 2 years later im trading 4 simple systems across 5 markets and the account is up about 40% :) .

Cheers

Pager
 
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...
 
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
 
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
Click to expand...

Maybe u can try to ring ComputerShare
 
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.
 
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!!

*#&*!!! :banghead:
 
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 :D
 
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
 
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
 
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 :)
 
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
 
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 :D
 
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.
 
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
 
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
 
Top