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Re: Best and worst investment decisions
Old 07-29-2005, 02:49 PM   #21
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Re: Best and worst investment decisions

Quote:
Worst: not moving out of company stock and index funds fast enough in 2001. Lost 30% overnight.
Fascinating thread -- great learning opportunity.

I have a follow-up question, though. A lot of worst investments involve getting INTO something that didn't do well. I'm also interested in the decision, above, and others like it, not to get OUT OF something fast enough.

I know scores of people in Silly-con Valley who held onto company stock or tech stocks as they imploded -- wonder how common it is to hold on too long vs choose poorly in the first place. Any other war stories of that kind?

Caroline
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Re: Best and worst investment decisions
Old 07-29-2005, 04:29 PM   #22
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Re: Best and worst investment decisions

Another issue is vesting and lockout schedules. If you work in a company, you generally have requirements that can keep you from dumping company stock. These can be very bad things if you work at an Enron, Worldcom etc... Its even more painful to be a paper millionaire and watch it fade while your hands are tied. I had a friend that worked at Cisco, at a nice point during the .com period he was worth $1.5M. Now its around $200k or so... OUCH.

My worst investment: Van Wagoner Post Venture Fund - Didn't think a MUTUAL FUND could bottom out then close up, but that's exactly what it did. It was the pristine example of .com excess. As soon as they bombed, out went a couple $K.

Best investment: Finding this board. I have gleaned so much value from people here that I never would have otherwise, fascinating! I'm hooked.

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Re: Best and worst investment decisions
Old 07-29-2005, 05:44 PM   #23
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Re: Best and worst investment decisions

Worst: Listening to a broker at Morgan Stanley and losing my entire 401k at the age of 38 on CopperMountain back in 2000

Best: Marrying a frugal gentleman and buying our fixer-upper TH for 420K last year and has been appraised recently for 560K
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Re: Best and worst investment decisions
Old 07-29-2005, 06:15 PM   #24
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Re: Best and worst investment decisions

My worst was being afraid that I would make the wrong move and so I did nothing for quite a while.

Best: Educating myself by reading alot of library books and this website and taking action. Wish I would have done this in my 20s and I would be alot richer and retired!!!

Dreamer
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Re: Best and worst investment decisions
Old 07-29-2005, 06:22 PM   #25
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Re: Best and worst investment decisions

Quote:
Originally Posted by MJ
Before 1999, my excellent salary and treasuries were building my investments.
I got "smart" and decided to invest in the stock market and have lost so far 1/2 of my principal investments.

Just some of my great stock choices , Exodus (-$36k), Etoys (-$18k), Agency (-$11k), and CommerceOne (-$13k), all bankrupt. And I thought I didn't gamble. Sometimes it felt like I was playing with monopoly money so that it wouldn't hurt quite so bad.

The one great investment was buying my 2 fam house.
So, am I a genius or what?

JG
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Re: Best and worst investment decisions
Old 07-29-2005, 08:58 PM   #26
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Re: Best and worst investment decisions

Quote:
Originally Posted by Caroline
I know scores of people in Silly-con Valley who held onto company stock or tech stocks as they imploded -- wonder how common it is to hold on too long vs choose poorly in the first place.* Any other war stories of that kind?
TH was regularly castigated for exercising his company's stock options as soon as they were awarded (and missing out while the stock was climbing to the stratosphere).

At one point a friend had over $7M of unexercised options. When he pointed out that this would fund a great retirement, she responded "Yes, but I want to travel!"

She held on to the options. The company stock declined 80%. She's still working...

I think choosing poorly & holding too long are two of the most common mistakes made by any investor.
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Re: Best and worst investment decisions
Old 07-29-2005, 10:04 PM   #27
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Re: Best and worst investment decisions

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Originally Posted by Nords
I think choosing poorly & holding too long are two of the most common mistakes made by any investor.
Are you sure about this?
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Re: Best and worst investment decisions
Old 07-29-2005, 11:59 PM   #28
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Re: Best and worst investment decisions

Caroline,

Your wrote:

Quote:
Fascinating thread -- great learning opportunity.

I have a follow-up question, though. A lot of worst investments involve getting INTO something that didn't do well. I'm also interested in the decision, above, and others like it, not to get OUT OF something fast enough.

I know scores of people in Silly-con Valley who held onto company stock or tech stocks as they imploded -- wonder how common it is to hold on too long vs choose poorly in the first place. Any other war stories of that kind?
In my case the company had a very good history of slow increases with some minor setbacks but continued to increase value over a 2-2 year period and then did a 2:1 split. The stock was on an uphill run and no one suspected any issues. FDA nailed them with a Consent Decree and whamo! the stock lost 30% overnight. I was out of town on business and did not have a way of knowing what happened until it was too late. It was only by my foresight that I had moved over 70 percent of my wife's 4o1k out of company stock (she had been 100% company stock up to that point) We salvaged what we could but we still took a beating on the company stuff and I waited too long on the S&P fund before I moved it too. Overall, I lost over 30% of our combined retirement and it has taken 4 years to get back to where we were back then. That is the major reason I am still working; otherwise I would be ER right now.

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Re: Best and worst investment decisions
Old 07-30-2005, 01:34 AM   #29
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Re: Best and worst investment decisions

Quote:
Originally Posted by Caroline
Fascinating thread -- great learning opportunity.*

I have a follow-up question, though.* A lot of worst investments involve getting INTO something that didn't do well.* I'm also interested in the decision, above, and others like it, not to get OUT OF something fast enough.

I know scores of people in Silly-con Valley who held onto company stock or tech stocks as they imploded -- wonder how common it is to hold on too long vs choose poorly in the first place.* Any other war stories of that kind?
Hoo boy.* *I know one guy who was worth around $100M at one point, exercised his options, held his stock, borrowed against his shares, bought expensive toys, and you'll never guess what happened after that.* *OK, you probably guessed -- stock tanked, guy owed the IRS $20M on the option exercise, he lost everything, and still has a payment plan with the IRS.

But this (and most of the others) are simply risky bets that didn't pay off.* * You can reduce getting burned by this type of risk simply through diversification.

I like to think of it in terms of simple probabilities.* *What are your odds of buying the right stock at the right time and selling at the right time?* * Those are three independent choices, and you have to get all three right.* * Figure 1 in 10 for picking a stock with LOTS of potential.* * And 1 in 10 for buying it while it's cheap.* * And 1 in 10 for selling it near the top.* * That's a 1 in 1000 bet.* *I don't like those odds.
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Re: Best and worst investment decisions
Old 07-30-2005, 05:06 AM   #30
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Re: Best and worst investment decisions

Quote:
Originally Posted by HaHa
Are you sure about this?
I can accept the "choosing poorly" part.

JG
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Re: Best and worst investment decisions
Old 07-30-2005, 05:34 AM   #31
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Re: Best and worst investment decisions

Yes this is a good thread. It is unfortunate though that people do not fill in properly their "profile" so that at least clicking on their pseudo would inform about how old they are as this is a key factor in the way they think relative to money management / investment, etc. Ladies have an excuse though..., but we miss often information about the profiles of the posters.

Back to worst and best. We've had a bit of a mix in the description of what people did as some looked like long term investors (with wrong picks - even Buffet did) and others were trying to do some timing as well which is closer to trading. Trading and investing have nothing to do in common.

I talk a bit of trading @ http://tradingautomation.blogspot.com/ but while trading you know you're gambling trying to put all odds with you (clear open / close rules), good money management, stops (never accepting to lose more than X %), never having more than Y% per line, etc.. But this is sophisticated gambling not investing. A trading portfolio should be less than say max15% of an individual total net worth.

The question about holding on a losing horse is more of a trading question (initial stop loss not thought of !) than of an investing type of behavior. The investor will diversify, know why he's in (fundamental analysis, knows the boss, knows the products, whatever), and let it unfold (eventually to zero). If he's good at investing (not trading) in companies (in stocks) he'll have a limited number of burns for a vast majority of companies making it. The question though is for the average man, why not invest in ETFs following indexes (SPY, QQQQ) or low fees funds ? instead of trying to chose companies ? and we're back to Greaney's site and thoughtful advices.

One more point, Real Estate - especially in Greaney's site - is too often dismissed as not adequate or not considered for whatever reason. Funny to observe than many of your best investments have been in RE (whatever kind of) and that very few of you are attracted by commercial RE (where I made my money).

As I said my biggest blow was being too leveraged on a bear market with huge short positions and not weathering a pull-back which you can hardly see three years later on the chart ! Trading has that beauty that you can also loose big buck being entirely right on the target.

Patrice.
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Re: Best and worst investment decisions
Old 07-30-2005, 06:19 AM   #32
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Re: Best and worst investment decisions

Age 56.

Worst - After years of neglecting retirement accounts, let my husband talk me into a financial adviser.

Best - Took investments over as a personal dictator (with husband's trust and blessing).

It is a pity that someone as novice in investment as myself could manage their investment accounts better than those professing to be experts.* Lessons learned from experience with financial advisers seems to always be negative. Has anyone a good experience to share?
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Re: Best and worst investment decisions
Old 07-30-2005, 06:21 AM   #33
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Re: Best and worst investment decisions

Hello Patrice. *I came to commercial real estate late in life and
then *kind of by accident. *Before that it was apartments and SFHs.
Anyway, I too did quite well in commercial. *I kind of wish
I had semiretired into RE investment in 1993. *Never occurred
to me. *Anyway, it worked out okay as I am happy now just loafing.

JG
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Re: Best and worst investment decisions
Old 07-30-2005, 06:24 AM   #34
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Re: Best and worst investment decisions

Quote:
Originally Posted by Tadpole
Age 56.

Worst - After years of neglecting retirement accounts, let my husband talk me into a financial adviser.

Best - Took investments over as a personal dictator (with husband's trust and blessing).

It is a pity that someone as novice in investment as myself could manage their investment accounts better than those professing to be experts.* Lessons learned from experience with financial advisers seems to always be negative. Has anyone a good experience to share?
I have no "good experiences". All negative. I dropped the idea like a
a hot rock. It was pretty easy for me as I intuitively think I can do it
better by myself.

JG
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Re: Best and worst investment decisions
Old 07-30-2005, 07:16 AM   #35
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Re: Best and worst investment decisions

Best Investment: My own education including learning on this site and making my own decisions

I don’t consider anything to be a “bad investment” since you learn from even the dumb ones (actually I learn more from those).
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Re: Best and worst investment decisions
Old 07-30-2005, 07:47 AM   #36
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Re: Best and worst investment decisions

Heh, heh, heh.

1. The tuition fee - 1966 to now - aka worst investment decisions vs 'theoretical cost of a financial advisor' over the same period.' I have no idea which cost more?. Never heard the term in 1966. I actually listened to my Dean Witter broker in 1966 - and made some money - until he moved.

2. Like the baby sitter, your favorite bartender, and your own personal shrink - financial advisors have a place in this wide world - BUT - costs very widely.

Anyone notice the tv ads - that play on this close 'personal relationship' aspect to make you feel all smarmy and comfy.

eh?



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Re: Best and worst investment decisions
Old 07-30-2005, 07:58 AM   #37
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Re: Best and worst investment decisions

John,

Good to see you had some success in commercial RE (CRE) as well. The US CRE market (which I do not know apart from the NNN prop dedicated sites on the web) is so large and so different for the various states that it is certainly difficult and uncertain to embark on some deals for a foreigner, though I'd like to make a start in the future.

What does SFHs mean ?

Patrice.
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Re: Best and worst investment decisions
Old 07-30-2005, 08:49 AM   #38
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Re: Best and worst investment decisions

I suspect that there is a case for financial planners and that not everyone is going to want to do it themselves, but the ones that would be good are probably the "types" on this board, but they are FIRE and dont want to be bothered to work, so it is a conundrum. It's like Warren Buffet, why would he bother to write a book?
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Re: Best and worst investment decisions
Old 07-30-2005, 09:43 AM   #39
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Re: Best and worst investment decisions

Epilog to my original post: After the bust the Telcom company started issuing regular options at those basement prices to keep everyone from jumping ship. Stock recovered a bit and she cashed out another $100k along with making it to the 10 yr pension level before the plant she worked at shut down (due to Chinese competition).

The $450k net gain mostly makes up for the NYC suburb house we sold in 93 when we moved to our current non-bubble location. No big time RE increases here, but it is cheap and the schools are great . I think all this stuff is a big wash in the end. No substitute for good ole saving and compounding.
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Re: Best and worst investment decisions
Old 07-30-2005, 10:07 AM   #40
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Re: Best and worst investment decisions

Quote:
Originally Posted by wabmester
I like to think of it in terms of simple probabilities. What are your odds of buying the right stock at the right time and selling at the right time? Those are three independent choices, and you have to get all three right.
That's why I built a portfolio (6 figure) of dividend paying stocks. These are blue chip companies. I waited to buy until the prices dipped and have simply held them with dividends reinvested (with no commission charges at Buy and Hold Securities). This eliminates one of the decisions (selling at the right time). My dividend yields are high enough (> 4%) that I would only consider selling if the dividend looks like it might be cut. I get nearly the safety of a Treasury bond with low volitility and upside potential.

I find it alot easier to hit singles than home runs and I don't strike out as much.

Grumpy
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