Does anyone here know anything about this stock *Federation FDR *They owned the HOT Tuna clothing label and related stores, i got into it as a good friend was investing with them (his previous tips had been excellent) and he was very close to the directors, anyway *i bought some even though my gut feeling was no. *The stock is a dead duck and my money has gone to ASX heaven. *:'(
the more i hear about the directors the more i can't believe that they are so unbelievably incompetent. *i hear that on one occasion they borrowed money from a Perthg Bookmaker and when they repaid him wrote it up as consulancies fees to hid the fact that they loaned money, he then turned around and said you have never paid me back the loan that money you paid me was for consultancy fees. ;D *Its so funny i can't belive i had money in the stock. :-[
regards westan
stefan
1st-August-2004, 01:26 AM
Which goes to show rule number one in investment:
Never invest based on a tip from your hairdresser, friend, boss, neighbour or cab driver.
Sorry to hear that you lost money with this one. I'm not trying to make fun of you. It happened to me too. I suggest you create a few golden rules based on your experience and then stick to them no matter what.
Happy trading
westan
1st-August-2004, 03:36 AM
Hi stefan
i agree with you except in this case this friend has constantly come up with the goods, i'd put money into a stock he recommended tomorrow as i'm well ahead on his tips. So i guess i'm destined to make the same mistake again.
But thinking about this company (FDR) it just shows that you realy don't know what goes on behind the closed doors. And when a stock comes undone as they do, you can do little about it. The quality of the directors can never be underestimated.
As an example even Hart the guy who bought Burns Philp and nearly lost 250 million didn't know what was lurking in the cupboards when he bought. Lucky for him he didn't give up and has now made 1.2 billion.
regards westan
stefan
1st-August-2004, 04:18 AM
Westan,
I agree 100%. Management is crucial. Which is why I'm so critical towards the clowns at MUL. If you can't trust management, then there is little reason to hold a stock for more than a quick profit. Big guys have lost millions due to incompetent mangement as you said. That's why research is so important if you plan to invest heavily into a specific company. It's hard and most of the time management will not respond to any query you might have. But consider this: If they don't bother, then why should you?
I have learned a few painful lessons and still I'm allowing for the odd "special case" where I ignore the management side of things but I sure do sleep much better when I know a lot about the titles I own.
Different strategies for different people. I for my part try to own only very few titles but I prefer to know them very well.
Happy trading
Stefan
westan
1st-August-2004, 05:30 AM
Hi stefan
In the FRD case my mate and his accountant who also had Big money (over 200K) in this stock were very close to the management they had even been to the Chaimans home and discussed the stock till the early hours of the morning. They were in regular phone conversation with them also.
It makes you think twice before you put too much into these small cap stocks. Sometimers no matter how much reseach you can never be full protected.
regards westan
stefan
1st-August-2004, 07:54 AM
Yes, there is no guarantee indeed. You can get fooled no matter how good your research is. Especially with small companies where nobody really knows what's going on until it's too late. The big ones aren't any better but they tend to have enough money to survive a crisis. (Like NAB for example...)
Anyway, go out there and find a new winner to recover your loss!
Happy trading
Stefan
RichKid
2nd-August-2004, 02:07 PM
Hello folks,
I'm sorry to hear about the bad experience but I believe that if you have clear cut exit strategies, based on technical analysis then you can limit your losses provided you stick to the plan.
I'm new to stocks but I find I sleep much better at night when I decide when to exit before I get in. NewsCorp was a good example (S&P caused share price drop). I lost a bit recently but not half as much as i would have had I not had a stop loss set before I bought. Sometimes you don't benefit from a stock that bounces back immediately but it's worth it in the long run.
As I said I am a beginner and the majority of my first trades were losses (even though the stocks bounced back moderately after I exited) but overall I'm now ahead because I had a plan. I'm sharing this because it might help you get out quick next time. I don't have anywhere near $200k to put into a stock but I believe the principles are the same. Hope your fortunes improve. And most importantly, let's not get emotionally attached to one particular stock. I find this easier because I spend more time on charting than fundamentals but I'm still learning so there may be better ways to cut losses fast.
Hope my ramble makes sense, any feedback welcome. Basically I think there should be a sound money management plan for any investor.
RichKid
stefan
2nd-August-2004, 04:01 PM
Rich,
Sure, having an stop loss in place is a must. Especially if you are into daytrading and short term investment. Not my kind of thing anymore. I spent years doing it and for me it doesn't add up anymore. Too much time to spend in front of a screen, nervously checking the ticker. I switched to long term investments. It's been good to me and it ads up perfectly with my lifestyle.
Happy trading
Stefan
westan
3rd-August-2004, 01:52 PM
Hi all
richkid, while i support you with the exit strategy in a lot of cases FDR included there was no warning one day they are trading the next they are in administration and delisted so you can't get out, there was no drop in price just Bang. Just for the record i didn't loose 250k it was amates accountant i only lost about 5k.
regards westan
stefan
4th-August-2004, 03:06 AM
During the tech bubble, stop orders or exit strategies didn't really help much. Just as Wayne pointed out, stocks went up and down over night and there was nothing you could do but watch them open at much lower levels the next morning. Anyway, in a "normal" market (whatever that means...) you can limit your losses. However, I found that too many stop orders will burn your profits away like there's no tomorrow.
As usual there is no perfect strategy to be successful.
