Comments on: How it Feels to Lose 45% in One Evening http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/ A narrative financial and investment column Sun, 11 Jul 2010 21:53:14 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Mike http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/comment-page-1/#comment-5296 Mike Mon, 12 Jan 2009 07:59:58 +0000 http://www.moneymythos.com/?p=195#comment-5296 Jon- I learned this the hard way, so take my advice - cut all losses at no more than 8% below your buy price. If you had placed a "trailing sell stop market" order at 8% below the price you bought it at, you would have been "stopped out" with a profit. While everyone else was panicking and reacting (or not reacting) emotionally to the "news", you could have been sitting back and laughing as the price plummeted, content with your meager return as if you had won the lottery. Jon- I learned this the hard way, so take my advice – cut all losses at no more than 8% below your buy price. If you had placed a “trailing sell stop market” order at 8% below the price you bought it at, you would have been “stopped out” with a profit. While everyone else was panicking and reacting (or not reacting) emotionally to the “news”, you could have been sitting back and laughing as the price plummeted, content with your meager return as if you had won the lottery.

]]> By: Jon @ The Money Mythos http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/comment-page-1/#comment-2588 Jon @ The Money Mythos Wed, 30 Jul 2008 00:39:49 +0000 http://www.moneymythos.com/?p=195#comment-2588 Well, I admit that a high short interest is usually a big sign that something is wrong with the stock. But the thing is that the stock had that high of a short interest when it rose from 30 to 75, and I was really able to benefit from that. Stocks with high short interest usually do die a horrible death, but sometimes the short interest comes a little too soon. Well, I admit that a high short interest is usually a big sign that something is wrong with the stock. But the thing is that the stock had that high of a short interest when it rose from 30 to 75, and I was really able to benefit from that.

Stocks with high short interest usually do die a horrible death, but sometimes the short interest comes a little too soon.

]]> By: KMC http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/comment-page-1/#comment-2572 KMC Mon, 28 Jul 2008 14:44:02 +0000 http://www.moneymythos.com/?p=195#comment-2572 Jon, I know you're all about picking stocks and that's fine. But I have to ask, what were you thinking on a stock with 40% of its float sold short? Jon, I know you’re all about picking stocks and that’s fine. But I have to ask, what were you thinking on a stock with 40% of its float sold short?

]]> By: Lamar http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/comment-page-1/#comment-2565 Lamar Sun, 27 Jul 2008 23:27:16 +0000 http://www.moneymythos.com/?p=195#comment-2565 it is impossible to pick winning mutual funds. what we do know is that, on average, mutual fund returns will provide the market returns minus expenses. so the best mutual funds (over long periods of time, similar to one's investing career) will be the ones with the lowest expense ratio. Fidelity and Vanguard index funds are good options here. it is impossible to pick winning mutual funds. what we do know is that, on average, mutual fund returns will provide the market returns minus expenses. so the best mutual funds (over long periods of time, similar to one’s investing career) will be the ones with the lowest expense ratio. Fidelity and Vanguard index funds are good options here.

]]> By: Jon @ The Money Mythos http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/comment-page-1/#comment-2549 Jon @ The Money Mythos Sat, 26 Jul 2008 12:13:59 +0000 http://www.moneymythos.com/?p=195#comment-2549 I did feel that way from the first books on investing that I read (Random Walk, Little Book of Common Sense Investing). But then I went to wrote for a investment advisory service that had been investing in individual stocks for three decades, an over that three decades beat the averages by 7%. Last year all of their publications beat the averages, with one up 100%. Seeing all of that with my own eyes really changed my perspective on the whole thing. Also, I think you would at least recommend an index fund, considering how impossible it can be to pick winning mutual funds! I did feel that way from the first books on investing that I read (Random Walk, Little Book of Common Sense Investing).

But then I went to wrote for a investment advisory service that had been investing in individual stocks for three decades, an over that three decades beat the averages by 7%. Last year all of their publications beat the averages, with one up 100%.

Seeing all of that with my own eyes really changed my perspective on the whole thing.

Also, I think you would at least recommend an index fund, considering how impossible it can be to pick winning mutual funds!

]]> By: Lamar http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/comment-page-1/#comment-2548 Lamar Sat, 26 Jul 2008 04:47:04 +0000 http://www.moneymythos.com/?p=195#comment-2548 How long will it take to learn lesson #5: invest in low-cost mutual funds instead of individual stocks. having a master's degree, I'd think you'd appreciate the overwhelming evidence in academic studies demonstrating that stock-picking is a waste of time. How long will it take to learn lesson #5: invest in low-cost mutual funds instead of individual stocks. having a master’s degree, I’d think you’d appreciate the overwhelming evidence in academic studies demonstrating that stock-picking is a waste of time.

]]> By: Perry http://www.moneymythos.com/2008/07/25/how-it-feels-to-lose-45-in-one-evening/comment-page-1/#comment-2544 Perry Fri, 25 Jul 2008 19:57:16 +0000 http://www.moneymythos.com/?p=195#comment-2544 Ouch..... I bet it was painful to write. Keep at it though, a good education is never cheap Ouch…..
I bet it was painful to write. Keep at it though, a good education is never cheap

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