I'm an idiot/expensive lesson

[bruce1]

Idiot NOT! Expensive and annoying yes. My first or second speculative stock vanished off the face of the earth so long ago I don't remember what it was. Made enough on the other to cover losses on the bad one and have made one or two 'sure thing' speculations with success since.

BRuce

 

[soupcxan]

A couple of months later, with no news in sight, the company declared bankruptcy.
...
The really fun part was paying that loan off at ~15% for the next couple of years.

See, this is why "insider trading" shouldn't be prosecuted. For every $1 made through inside info, I'd wager there are $10 lost by people who think they have a "hot tip" from an inside source.

 

[ShokWaveRider]

What is/are the moral of this/these storie(s)? Stick to mutual funds? (On average down 1 - 2% YTD), or sleep better with laddered CDs?

I personally am still on the fence, as I HAVE to have some return on my capital to live. It is my ONLY source of income. No SS, No Company Pension, Zip, Nada.

Surely, if you can get 4% on your Cash and only withdraw 3% (or whatever the numbers turn out to be in a given year) is that so bad?

Basically you win some and loose some, that's life.


SWR

 

[BUM]

OK go on raise those forgotten suppressed memories. What the hell, is a very dark an stormy Saturday anyway.

Once upon a tech-time our young tech-rep enjoyed a cushy sales job selling among other things, very expensive memory chips to 3 of the United States' (world's) biggest computer makers. Yes, boys and girls at one time computers were built in the US at places like Norwalk, Owego, Menlo Park, Natick, Webster, and someplace called Poughkeepsie. Anyway our bright, eager, and fiercely loyal (an anachronistic deathwish) boyhero was diligently making sure that his three memory famished behemoths were being served up pricy portions of the latest an fastest (nearly 120 nano seconds!) chips. Those commission checks would insure his place in the prestigeous President's Club for years to come and plenty of funds to get into the STOCK MARKET He had heard of a company called Sycamore (pronounced sick-a-more not suck-more as it became known). Our boy waited until just the right moment to buy 1000 shares an $100 per share, and being intensly loyal still owns them... cheezit here comes the wife

 

[farmerEd]

>>He had heard of a company called Sycamore (pronounced sick-a-more not suck-more as it became known). Our boy waited until just the right moment to buy 1000 shares an $100 per share, and being intensly loyal still owns them... cheezit here comes the wife

Ouch!

 

[Donner]

Got this story from a friend of mine who was an eyewitness and swears, SWEARS, it is true---

This incident occurred in one of those ground floor walk-in offices of a large national retail brokerage which shall remain nameless. Anyway, this office had the usual ticker runing and chairs for the public to sit in and watch the market roll by. And the brokers all had little cubbyholes to make their cold calls etc. And by the front door there was a desk for the "man-of-the-day" broker to sit. The man- of- the- day gets all the walk in business for that day.

Well, this man-of-the-day is sitting there reading the sports page when a kid walks in and sits down. Kid says he wants to invest in something. Man-of-the-day asks what his investment objective is. Kid says he wants to double his money fast. Man-of-the-day asks what kind of money are we talking about? Kid says $20.

Man-of-the-day looks at him quietly for a moment and says nothing. Then he says "let's see your twenty, kid". Kid lays his twenty on the desk. Man-of-the-day reaches into his pocket and lays down his own twenty. Reaches into his other pocket and pulls out a quarter. "You call it, kid, double or nothing! " Heads!" says the kid. Sorry kid, but its tails. Man-of-the-day slides the two twenties into his pocket and picks up the sports page. Not another word said. Kid gets up and walks out of that office 20 bucks poorer but ever so wiser!

Donner

 

[RockMiner]

Donner,

Re the $20 story: I love it. If it's not true, well it should be!

 

[ESRBob]

Shockwave Rider'
Welcome back. How was the cruising?

Laurencewill -- I did so many dumb things with individual stocks I have lost count. Like selling Berkshire Hathaway at $5,500-- a 17-year low, back in the early 90s.

I came to realize that even if I heard a good story, did some analysis, read a Barron's article that made perfect sense to me yada yada, once I owned the thing and it actually went up a bit (surprisingly they often do for a little while), that I didn't have a clue when to sell, or why to sell or why to keep owning something.

How can you have a clue? Even people who work there usually don't know. Analysts don't know. CEOs might know but they can't do anything about it. Nobody really knows, because here's what is always lurking on the downside for any individual stock:

Some idiot over in the 14th cubicle over from the window on the third floor of the accounting department starts cooking up something with the clown in the 17th cubicle three rows over, and a year later the whole multibillion dollar edifice drops 27% in value.

Or more to the point, one more poor old soul in intensive care unit 432b on the 11th floor in a hospital in Louisville Kentucky dies this morning and your investment falls 60%.

No company or stock is immune from this.

Value stocks are great, but how do you know if you are in a value play (tyco) or a value trap (enron)?

Funds are the only way to ride through all this stuff and get the returns due the asset class, which, overall, still are prety good.

Seems to me you got off really, really cheap if you can learn the low-cost fund, buy and hold, rebalance once-a-year lesson just by getting canned by one Irish pharmaco.

You lucky dog!!