Your Biggest Investment Blunder!! & lessons learned! - Aussie Stock Forums

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  1. #1
    Dukey's Avatar
    Join Date
    Aug 2006
    Nth Qld and Japan!!

    Cool Your Biggest Investment Blunder!! & lessons learned!

    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
    Last edited by Dukey; 20th-October-2006 at 05:13 PM.

  2. #2

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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.

  3. #3
    nioka's Avatar
    Join Date
    Jul 2006
    Northern N.S.W.

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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.

  4. #4

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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

  5. #5

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    Biggest Blunder: Falling for the organised ramping on Hotcopper.

  6. #6

    Angry Re: Your Biggest Investment Blunder!! & lessons learned!

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

  7. #7

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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) - 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!!!)...
    Ten years ago, a crack commando unit was sent to prison by a military court for a crime they didn't commit... If you have a problem, if no one else can help, and if you can find them, maybe you can hire... The A-Team.

  8. #8

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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!!
    Position sizing and Ability should be best friends

  9. #9
    pacer's Avatar
    Join Date
    Mar 2006
    A pub in perth somewhere

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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....

  10. #10

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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.

  11. #11

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    $14K - buy on fact.
    Don't take investment advice from seafood.

  12. #12
    Billie Jean is not my lover Realist's Avatar
    Join Date
    Jun 2006

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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!!
    Never buy anything because it has gone up in price.

  13. #13
    dj_420's Avatar
    Join Date
    Apr 2006
    Central Coast

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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.
    Money isn't real George, it doesnt matter... It only seems like it does (Blow)

  14. #14

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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.

  15. #15

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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.
    The above post is entirely fictional and any resemblance to any stock living or dead is purely coincidental.
    Michael D

  16. #16
    Stop_the_clock's Avatar
    Join Date
    Apr 2006

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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

  17. #17
    Happy's Avatar
    Join Date
    Jul 2005
    NSW, Australia

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    Lots Value Lost?

  18. #18

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    12k loss


    age 19
    The greatest trick the devil ever played was convincing mankind he does not exist.

  19. #19

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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"!


  20. #20

    Default Re: Your Biggest Investment Blunder!! & lessons learned!

    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

    (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).

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