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I'm an idiot/expensive lesson
Old 03-31-2005, 01:31 PM   #1
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I'm an idiot/expensive lesson

So I bought ELN recently when it dropped 80% on a product scare. I though "hey, 8 bucks a share, probably can re-introduce the drug, they voluntarily pulled it off the market, sitting on 1.5 billion cash, not going to go bankrupt anytime soon, no debt maturing until 2008, value play!" ......a third patient dies on the drug, it drops to 3 dollars a share, and I'm out 3 grand.

Soooooo, lessons learned, I should stick to (gasp) mutual funds, index funds, etc. since even this small dent in my portfolio left me gasping for air. I'm holding the shares anyway, not much more to lose, and the company could always turn around in the long run..... :P
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 01:38 PM   #2
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Re: I'm an idiot/expensive lesson

If a pig had wings it would fly.
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 01:47 PM   #3
 
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Re: I'm an idiot/expensive lesson

We are all idiots, just in different areas. - All of us indexers have been where you are. That is the real lesson that sticks. You can read it in books, but you don't believe it until it happens to you. It's like Uncklemick says - It's a male hormonal thing.
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 01:51 PM   #4
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Re: I'm an idiot/expensive lesson

Well if it's a male hormone thing, I'm thuroughly emasculated at this point! This is definitely my last speculative move. I thought with 95% of my portfolio in the "right" kind of investments, I could play with the other 5%. Nope, hurts too much when I lose.
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 01:53 PM   #5
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Re: I'm an idiot/expensive lesson

Hey JG, your supposed to make me feel better! Where's the love?
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 02:16 PM   #6
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Re: I'm an idiot/expensive lesson

Here is the love,

After thirty years of putzing - the ones that really really hurt are the stocks that go down for the count - you sell - and then they recover to blue chip status or other forms of glory.

That's why ??Peter Lynch? of Magellan fame - said never look back.

It's too painful for me to list some of mine - in essence getting kicked in the balls twice - hormone wise that is.

Wellllll - Louisiana Pacific is one. Look at the LPX chart and take one guess where I sold out my DRIP plan.

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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 03:16 PM   #7
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Re: I'm an idiot/expensive lesson

Quote:
So I bought ELN recently when it dropped 80% on a product scare. *I though "hey, 8 bucks a share, probably can re-introduce the drug, they voluntarily pulled it off the market, sitting on 1.5 billion cash, not going to go bankrupt anytime soon, no debt maturing until 2008, value play!" ......a third patient dies on the drug, it drops to 3 dollars a share, and I'm out 3 grand. *

Soooooo, lessons learned, I should stick to (gasp) mutual funds, index funds, etc. since even this small dent in my portfolio left me gasping for air. *I'm holding the shares anyway, not much more to lose, and the company could always turn around in the long run..... :P
Elan is a tougher sell.

With something like Merck, there is enough cash to pay the 4.5% dividend. So you can compute that into the return and reinvest it if the stocks gets any cheaper & if you're not living off your investments yet. Elan does not pay a dividend so you have to rely on what happens to the capital value. In the short term this means news will move the stock more. How an investment performs is hardly indicative of bad news and a fall in price. Depending on circumstances that often presents a better buy-in price.

Petey
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 03:24 PM   #8
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Re: I'm an idiot/expensive lesson

Well if you thought it was a good deal at 8, then it must be a screaming deal at 3, right?

Pick up a little more, put it in your shoebox and forget about it for 5 years or so. Bet you'll be happier about it then...

I did that with Tyco. Bought a bunch back in 95, more on the big dip around 99, was fairly happy with it until the 'scandal' broke, when it slammed into the ground I doubled my holdings. Sold it all last year for a decent long term gain. Felt pretty good.
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 04:08 PM   #9
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Re: I'm an idiot/expensive lesson

I tried that with Borland International back in '92
and lost more than I care to share. :

Cheers,

Charlie
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 04:30 PM   #10
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Re: I'm an idiot/expensive lesson

Thanks for the commiseration, guys! I don't know if I'll buy more, but I definitely will go the shoebox method, check on it next year, maybe a year after that! My wife just handed me my daughter, she seems to still love me, so I guess I'll be o.k.
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 04:47 PM   #11
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Re: I'm an idiot/expensive lesson

Did the same thing with Merck 2 weeks ago. Could not help myself. Worked out ok. A few years ago EDS fell out of bed and went down to $44 per share. YOOHOO! Got a hunch, bought a bunch. Now $22 on a good day. Still holding.


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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 05:03 PM   #12
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Re: I'm an idiot/expensive lesson

here is my tale.

during the dot com phase,before enron i had over 125,000 in my deffered comp program.

to buy 5 years at work,would have cost me 76,000 appx.

but.

i never thought about buying 5 years a few years ago.

never thought about retireing early and things like having money to live on after work.

so, i bought a computer because everyone else already had one.

then started surfing and stumbled onto info where if you paid attention, you could really make your money work,and be young when you retire, then i looked into buying years at work , and in the mean time, the deffered comp dropped like a hot rock and left me less than i had put in out of my pocket.

sad!.

eventually,once i had the knowledge/or partial knowledge, i had no funds to do what i should have.

now i have to have a accountant watch my deffered comp to keep it going up and now require 178,000 if i want to buy 5 years.

every time i think about it.

it makes me mad.

now i ask questions all the time about everything i hear that can make money or save me some.

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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 05:20 PM   #13
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Re: I'm an idiot/expensive lesson

[quote=zuki

* every time i think about it. *

*it makes me mad.

* * [/quote]

Don't think about it.

JG
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 06:27 PM   #14
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Re: I'm an idiot/expensive lesson

For some reason every time I try to picture ELN (Irish pharm) I get this image of drunken Irishman trying to put together the next cure for cancer. Not that there is anything wrong with that
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 06:32 PM   #15
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Re: I'm an idiot/expensive lesson

Quote:
For some reason every time I try to picture ELN (Irish pharm) *I get this image of drunken Irishman trying to put together the next cure for cancer. *Not that there is anything wrong with that *
Eff you Jack!
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 07:03 PM   #16
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Re: I'm an idiot/expensive lesson

Actually I go by wildcat
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 07:39 PM   #17
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Re: I'm an idiot/expensive lesson

Here Laurence, I'll make you feel better...

Bought about 300 billion shares of Enron just a few days before they declared bankruptcy for something like 45c a share. Sold them later on that day when some possibly good news might be coming out for about 90c a share.

Oh wait, thats probably not making you feel any better. Made me feel better
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 08:28 PM   #18
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Re: I'm an idiot/expensive lesson

Well, if this is turning into dumb moves I have made, I would have to say than*most* of my funds have done OK and most of the stocks I traded did better than the S&P, and 5 out of 6 DRIP stocks have beat the S&P for the 5 years I have held them. But the one fund I needed soonest was the fund for my younger son's college costs. He is in high school now and I have been saving since he was 5. I picked a very nice tech fund, the only one I had. And for a while I looked very smart. Based on the approach of college I moved the money into a credit union account with only about a 30% loss. But this is the fund I need soonest and has performed the worst. I do have an IRA that only did OK but I have time for it to recover.
My lesson was to look more at when I need funds. I used to just look at the funds as one portfolio. I am still in the accumulation phase and maybe I have learned that there needs to be different planning in the withdrawal phase.
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Re: I'm an idiot/expensive lesson
Old 03-31-2005, 09:27 PM   #19
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Re: I'm an idiot/expensive lesson

Wildcat, as a (sometimes) drunk Irishman, I resemble er resent that remark! (hick!)

TH, maaaaan, if that's true then you suck!



The thing is, I thought I was the man, I turned 2k into 6 over the last 3 years, making what I thought were smart value plays. I guess I was just getting lucky. Now I'm back to 2.5k. I'm now a (forced) buy and holder. Ah well, it's a mistake I'll never make again, so perhaps the lesson was worth the service charge....plus it really isn't that much money in the scheme of things!
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Re: I'm an idiot/expensive lesson
Old 04-01-2005, 01:03 AM   #20
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Re: I'm an idiot/expensive lesson

We have all done that kind of stupid mistakes. I think I lost 10k in Wcom, 10K on an .com IPO(came out april 2000 - talk about great timing skills here!), 5k on a tech fund also bought around the peak.

I also had my gambling winners but the losses might win.

It helps to REDUCE ones gambling amount if the pain is too much. But I will always need a LITTLE for my gambling account...
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