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Article - BURNT BY STOCKS - I LOST $700,000 IN 3 MONTHS

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Old 09-04-2013, 09:05 AM   #16
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This is more of a gambling prob already..if he won 2.2m I suspect he would only use it to try to grow more $$ to recoup the losses & try to "turn the tide"...
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Old 09-04-2013, 09:13 AM   #17
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legend wor...
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Old 09-04-2013, 10:21 AM   #18
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Use high leverage to earn cash that you don't have in the first place is the riskiest move for small investors

I have friends who work in hedge fund firms telling me that it is common for big funds to target highly leveraged or speculative company on their weakness, wiping them out by a massive short position then buy back for a quick profit. (or vice versa)

So don't touch leverage unless you can afford to lose. I've already heard countless real stories of how people lose their life savings due to greed.
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Old 09-04-2013, 02:39 PM   #19
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more hiong than a gambler. The thing about this is that he may be gambling in the pre-text of investing. which is even more dangerous than going to the casino.
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Old 09-04-2013, 02:48 PM   #20
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good read!

bump for awareness
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Old 09-04-2013, 02:58 PM   #21
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The article demonstrates a potent mix of greed and fear combined with leverage (in the form of contra) mixed with a gambling mentality. It shows the various emotions that an investor has to handle and how it can completely screw up your portfolio if you are not careful.

Good to also read up on the following (just google or use Wikipedia):-

1) Gambler's Fallacy
2) Overconfidence Bias
3) Loss Aversion
4) Over-Reaction Bias
5) Mental Accounting
6) Anchoring
7) Hindsight Bias
8) Confirmation Bias
9) Endowment Effect
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Old 09-04-2013, 03:06 PM   #22
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contra trading is not for small time investors...my friend lost 40k in the space of 2 weeks, now he's smarter and will short prior to crisis.
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Old 09-04-2013, 03:14 PM   #23
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May be a good time to post this article as a reminder.

It's been 6 years since this occurred. And it could very well happen again.

BURNT BY STOCKS
I LOST $700,000 IN 3 MONTHS


Student on winning stock market streak, then he loses dad's life savings

OCT LAST YEAR: Just a student in Australia, he makes $80,000 from trading
DEC LAST YEAR: Back in S'pore after exams, he role-plays trading & makes an imaginary $100,000 on 1st day & $110,000 on 2nd day
DEC-JAN: Convinces dad to give him life savings of $300,000. But he loses it & the $80,000
Feb: Girlfriend dumps him. He stops trading for 2 weeks.
FEB: He puts money on stocks of 9 companies when market reopens after Chinese New Year

EVEN before he graduated from an Australian university, this Singapore engineering student earned $80,000 in a month.
By Maureen Koh

12 March 2007
EVEN before he graduated from an Australian university, this Singapore engineering student earned $80,000 in a month.

Mr Chan (we are not giving his full name to protect his identity) did not have a job.

'


monthly chart

interesting, this shows, even when the market is on the uptrend, you can still lose money
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Old 09-04-2013, 03:26 PM   #24
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Greed is Good!
Leverage is wonderful!
Without these two, the market won't exist!
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Old 09-04-2013, 03:40 PM   #25
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monthly chart

interesting, this shows, even when the market is on the uptrend, you can still lose money
the worse idiot, will buy in 2007 and do nothing after that.

another worst idiot, will buy in 2007 and sell after that.

the wiser but unlucky one will buy in 2007 and add after that. including yours truly. do you still remember capturing my red red portfolio and uploaded in EDMW?

at the end of the day, nobody can really make a good timing to enter the market. and investing is a long term commitment. you will be rewarded if you are patient and pick the right stocks.
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Old 09-04-2013, 03:57 PM   #26
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Imagine he had invested in blue chip stocks when the market was down
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Old 09-04-2013, 04:06 PM   #27
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the worse idiot, will buy in 2007 and do nothing after that.

another worst idiot, will buy in 2007 and sell after that.

the wiser but unlucky one will buy in 2007 and add after that. including yours truly. do you still remember capturing my red red portfolio and uploaded in EDMW?

at the end of the day, nobody can really make a good timing to enter the market. and investing is a long term commitment. you will be rewarded if you are patient and pick the right stocks.
Wah, you still remember, that was like 2011, well i always wanted to find a chance to apologise to you for that, so please do accept my humble apology one now

yeah, luck plays a part too and hindsight too. you have the hindsight and prevail to go green eventually
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Old 09-04-2013, 04:07 PM   #28
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Imagine he had invested in blue chip stocks when the market was down
yeah, i imagine if he was borne like 2 years later?
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Old 09-04-2013, 04:47 PM   #29
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seems like most pple who invest normally have some battle scars. even those whom i attended seminars and talks also spoke about losing because of greed. Can this really be a cycle (losing money)which most pple go through before getting rid of the greed in us?
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Old 09-04-2013, 04:56 PM   #30
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seems like most pple who invest normally have some battle scars. even those whom i attended seminars and talks also spoke about losing because of greed. Can this really be a cycle (losing money)which most pple go through before getting rid of the greed in us?
it is the beginning of your destruction when you are on a winning streak without any battle scars (because you think you are god of trading, you start to leverage and have your own courses) and it is only through losing that one learn the most and that is also when winning is the sweetest.
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