Stupid money mistakes

Oy vey. I will spare you my annuity travails. I have been taking out ten per cent a year and redistributing with other insurers it to spread the risk. It is kind of like being enmeshed in a spider's web and I am the fly.
 
My other stupid money mistake is penny stocks . It would be better to take the money to vegas and at least get free drinks while you are losing it .
 
Nords said:
I remember then. We bought around $11 in eager anticipation of some new software called OS X. It seemed to be going OK, but it popped up so quickly that we got nervous and sold at $15/share.

Stupidest money mistake? "CANSLIM"...
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Yeah, that's it. In anticipation of new software called OS X. But during that time, headlines were saying things like "Is this the end of Apple computer?", "Can Apple survive?"
 
Nords said:
I remember then. We bought around $11 in eager anticipation of some new software called OS X. It seemed to be going OK, but it popped up so quickly that we got nervous and sold at $15/share.
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My husband still owns a few hundred shares of Apple stock and has for decades in his SEP-IRA. You would not believe how many cycles we have run through with it! Fortunately, we do tend to trim a little on rises - but not all of the position, and add more on crashes, like we did in 2002 and last year. Still we never time it optimally - far from it. It always goes below our buy-in value for a while, and then when we finally take some profits because it seems astronomical goes way higher - until the next go round!

Audrey
 
I bought C at $18 around Aug-Sept '08 thinking that the market was overreacting, it was too big to fail, etc. Then I watched it fall down into the low teens so I bought some more. I gave up around $3. My professor in bus school once warned to never try and catch a falling knife. Guess some lessons you have to learn on your own.

Also - a lesser $ mistake, but really irritating one - last w/e I got snookered into spending $20 to see a movie (yes, that's right...) because the internet listing didn't show us that what we wanted to see "Inglorious Bastards" was only playing in the stupid fancy "premiere" theater, with plush seating & where they "force" you to buy popcorn & a drink by bundling it into the ticket. I'm still ticked at that. Live and learn I guess...never going back to that theater again... (we would have left when we discovered the outrageous ticket prices, but we had dinner plans after the movie, it would have messed up everything to leave and go to another theater...)
 
Bought $25K worth of Worldcom at $1.25 per share the week before the fraud was uncovered/announced. Sold at $.06 so I wouldn't have to see it on my statement.
 
I've been pretty lucky and really can't think of any stocks or bonds that were clinkers, but I've definitely spent too much money on new cars. I'd have quite a bit more moola in the old account if I had kept my vehicles longer.
 
Bought a condo in Dallas in 1980 or so when real estate there was on fire. I didn't want to be bothered with maintenance issues. The condo was in a converted apartment complex.

Then I learned how homeowners associations work.

Sold in 1990 bringing more money to closing than the buyer did.
 
I bought Nortel at $18 on the way down. IIRC, I sold half of it at $10 and the rest at $6. Lost a couple of thousand, but it was educational.

As an early investor, I wasted money on high MERs for a few years, until I saw the light. But even back then I was smart enough to see that the early 1990s were the wrong time to invest in Japan. I had to work hard to persuade my advisor to sell. It was then that I realized that I was just as smart as she was.
 
Back in 1978 I came across the story of a feller by the name of W. Buffett in a fascinating article. All the research I did indicated that this was a very smart fellow doing great things with a company he'd taken over by the name of Berkshire Hathaway. I decided to buy the stock but was taken aback by the fact that the stock then was about $300 a share or so and I had only saved about $5,000 then so I could have only bought about 16 shares or so and would not qualify for a round lot. So I didn't do it. Lets see 16 shares at today's closing price $1,635,200...
 
ejman said:
Back in 1978... the stock then was about $300 a share or so... I could have only bought about 16 shares or so... I didn't do it. Lets see 16 shares at today's closing price $1,635,200...
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Maybe it feels better to think of it as only making 20.7% APY for 31 years...

The reality is that you would've sold in the mid '80s, again in 1999-2000, and yet again in mid-2001.
 
When buying individual stocks vs. mutual funds for a while I subscribed to the idea "to know the investment do you use it" idea. In the world of airlines although I used many brands I had some kind of emotional affinity for some of the older legacy carriers such as Pan Am and TWA. Well....those TWA shares for some reason were in my portfolio and even though the end was near I couldn't part with them....lesson learned is don't let emotion drive a buy or sell decision such as this...cut losses and move on before it hits zero value.
 
Back in 2000 when DW was working at AT&T they had a big push for employees to get in on the ground floor of AT&T Wireless' IPO. All the higher ups were really pushing this as a once in a lifetime opportunity as so many IPO's were doing extremely well at the time. Many many employees took out home equity loans to buy as much stock as they could, figuring they'd make a killing. We ended up ponying up 100k by buying on margin.

Well, the stock pretty much imploded during the dotcom bubble burst, and we were forced to liquidate many depressed funds to make our margin calls. So we basically doubled our losses. It took me a long time to get over that debacle.
 
Well thanks to all the other mistake makers ! I was convinced I was the only one on this board who ever made a big mistake . I feel better now !:)
 
four of them:

1. not buying a one bedroom house for 220K, and thus not being able to sell it some years later for probably approx. 800K (yes, i live in california). i didn't have the money at the time, but in retrospect, of course i would have found a way. i thought the price at the time was way too high for what one got. so, i probably could have found a way, but didn't because i thought the proposition was not sound.

2. getting 80 percent out of the market when it was above 1200 (i'd read perhaps luckily, grantham, and the bank of scotland's warning on impending equity market drops) and then not jumping in with both feet (or even a toe) when it got to 666 (!). still kicking myself. but now it's a bit scary. i'd told myself i'd jump in at 700. but when the time came, there were prognostications of 300, from some quarters, so i didn't jump in. and the balloon has risen.

3. wasting money on stuff i didn't need. (this is just dumb on my part. no need to comment.)

4. buying BRK.B at 3k, watching it go to 4700 and not selling, then down to 2200 (more or less) and not buying more, i just held all the way through. ok, today i'm a bit ahead. but...not a great return for several years in the stock.

the first two were my main mistakes, i think. i know what to do about number three.
number 4, i'm not sure how i could have avoided it, but i am sure i could have.

i try to be sensible, but seem to fall short on picking up the profit.

is there a pattern here, that anyone readily perceives? i'm not sure it's a fair question, but if anyone feels like responding to it, it'll be grist for the mill.

in the spirit of sharing and questioning...and best of luck to everyone...

best...
 
Lets see:

Lucent
An annuity
1031'd proceeds from our office bldg sale into 3 Florida condo's
Not selling my company stock when my acct said to
putting my 401k into cash right before y2k and not putting back into equities at the right time

The list goes on and on
 
I had invested in I2 Technology before the internet boom. Rode it up more than 10-fold, and then rode it down to sell at a loss. Did more or less the same with LSI Logic, 3 Com and Cisco. Though these stocks double and tripled, I sold them all at a loss.
 
Moemg said:
Have you ever made a mistake so stupid you wanted to bang your head on the wall ?
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Bought 1000 shares @ $2.79 of DNDN.
Total cost: $2796.

I only planned to keep the shares for a day or two. I had never done any sort of day trading, but it seemed to me that this might work. Anyhow, I kept the shares for five days before selling them. (I can't even daytrade correctly). Anyhow...

Sold 1000 shares @ $3.81 a shares for a total for $3803. So, I made about $1000 in a week. The plan worked. Easy money.

DNDN is now at $29.20.

Got a spare wall, Moemg? All of mine have been knocked down. By the way, instead of banging your head against the wall, you might try throwing your body against the wall. The pain is much more punishing as it pulsates throughout your entire body. And, sometimes, with some luck, you might end up hurting yourself in places you didn't anticipate. Try it, you'll thank me.
 
OK, I have this friend (no, it's not me), who put his entire IRA (about $60,000) into cash and then yesterday bought $60,000 of DNDN (Dendreon) a biotech stock at about $5.29 a share. He's about 62-63 years old, almost owns his house, and has no other real savings. He still works. He says buying DNDN was a move of desperation. I suggested that with what ever money he may have left that he invest in a small caliber pistol and a bullet. However, we have a mutual friend who really did well the last time DNDN had a huge run-up, sold it before it dropped, and could have launched into retirement with his earnings, but decided not to.


So how did your friend do ? Hope he held out for $29.00 .
 
Moemg said:
OK, I have this friend (no, it's not me), who put his entire IRA (about $60,000) into cash and then yesterday bought $60,000 of DNDN (Dendreon) a biotech stock at about $5.29 a share. He's about 62-63 years old, almost owns his house, and has no other real savings. He still works. He says buying DNDN was a move of desperation. I suggested that with what ever money he may have left that he invest in a small caliber pistol and a bullet. However, we have a mutual friend who really did well the last time DNDN had a huge run-up, sold it before it dropped, and could have launched into retirement with his earnings, but decided not to.


So how did your friend do ? Hope he held out for $29.00 .
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Moemg,

Just go away, will you, please do that for me?:blush: He called me yesterday. He made (paper profits) of close to $86,000 last week.

'Wanna run into a wall with me?
 
redduck said:
Moemg,

Just go away, will you, please do that for me?:blush: He called me yesterday. He made (paper profits) of close to $86,000 last week.

'Wanna run into a wall with me?
Click to expand...


Thanks but I will skip the running into the wall part . I was interested in how that story with your friend turned out . So I guess he saved his retirement and all is well . That is a happy ending to a ballsy experiment .
 
I have made untold stupid money mistakes, many in a career context.

But my investing over close to 40 years has been a relative bright spot. I try not to revisit money left on the table, but since many of the stories in this thread are in this vein, I'll give my most recent one. Back in March Genworth was crashing down near $1/sh, and at the same time there was lot of fairly high dollar offDisDDicer buying. So I paid about $6000 for 5000 shares. I told myself, this is an option, make a lot or lose the bet. Almost immediately it started climbing. One day in April I think some cutie from MegaBroker called and asked if I could meet with the advisor assigned to my account. I like my account rep, and I always like to see the young women in their cute black suits, so I thought why not?

We met, and after a little chit-chat he essentially wanted me to give him the rationale for every item in my portfolio. At this time I was about 90% invested in stocks, and maybe 9% in speculative bonds. I believe he was a little nervous that I might break my retirement, and then he would feel bad, though he has no responsibility.

One by one we went through my motley collection. When we got to Genworth he said, do you really think this belongs in an IRA? So doubt was planted in my mind. A little later I got prudent and sold out for a little over $15,000.

You may know that recently Genworth has been on a tear, and my little $6000 stake would be worth $65,000 at Friday's close. Salt in this wound is that my braggart brother bought it a little cheaper than I did, and he kept his!

I still think it is a black box and probably worth nothing like that amount, but I wish I hadn't called on brokerage that day.

I need to learn to listen to others, but be sure that I don't just blindly apply whatever they might say.This goes for pundits, brokerage advisors and most of all FAs. Not that I am any more clever and perhaps less so than many of these people, but I am familiar with my own game, and I should continue to play it my way.

Ha
 
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