Lessons Learnt from Stupid Mistake - Share Yours

(17-02-2014, 12:25 PM)funman168 Wrote: Bought KINGSmen just after IPO on advice of "good" friend.
Average down all the way from abt 70cts to 30+ cts using cashline, credit card, contra..
In the end kanna force sold, and staring at a loss of almost 50k.

Lucky after that manage to get sm loans from family, and pick up several multi-bagger to recover..

1) Those of us who has been leveraged to the hilt learnt one thing. Don't get into debt. I cannot even describe the misery for even small mistakes that are being multiplied.

2) Shorted KLCI a month after AFC all the way down... and made almost zero, because thought trading is the way to go. Lesson learn is to catch the big move and ignore noise

3) Bought QAF when Salim first took over and dragged on for years with no recovery in sight. Learnt that analysing catalysts are important.

4) Bought Aztech warrants when it first listed thinking it was a beta recovery stock even though I was skeptical about company's prospects. Learnt to respect your fundamental views.

These are just snippets of my mistakes... too many to recount but helped me learnt many things in the process of paying school fees.

Bought CAO on analyst reports, then trading scandal broke, recover less than 1/3 of money.

Trade on many textile s-chips in Singapore, low PE, high cash, goo earning growth, what no to learn. Learn that if there is no one to verify the customers' orders, or fail other screening test like tax paid by subsidaries, etc. better not touch s chips. Never brush aside all s-chips thou, holding YZJ, was looking at sound global t one time.

If the slightest thing do not make sense for s-chip, business plans, expansion plans or numbers, dun buy, for s-chip

Although I did not lose much money from nam lee, I considered it a lesson, I look at past 7 years of capex data and assume its low, it is important to know the capex cycle, not just by looking at pattern of capex but also dig deeper on land lease expiry , expansion plans etc

(17-02-2014, 11:56 AM)madagnet Wrote: On hindsight, EuNetworks has never seen a profitable year since then and has been making rights issue all over the place with promises of a turn around the following year.

eunetworks is it the one that gkgoh also invested in?

In my early years of investing/trading, I have absolutely no idea what I am doing. It is purely based on pattern on price movement, rumours from the fish market and news report. Succumbed to the temptation of contra and got burnt! Bought Jurong Tech long time ago using CPF and never really know what is going on. Have been ignoring the market for a few years until 2-3 years ago found that this co got delisted. Write off $8k from my book from this buy.

Just last year, I started on FA. Only scratching the surface but at least give me some ideas how analyst value a company. Problem now is my FA skills still sucks and I still have no idea how to work out if a company is going to boom or burst in the future. I may buy into company based on past performance and "future potential" and the next moment it all went downhill plus some old habits still difficult to kick!

Lessons learnt is one thing. Be disciplined enough not to repeat them is another!

I really appreciate this forum because it gave me insight to information that I cannot find in textbooks. That said, I haven't really read alot of books.

start trading in 2008, know nuts of stock market, only know how to compare today price with yesterday last done.

1. Contra NOL and "earn" 1k, thought I got Midas touch and talk about stock everyday.
2. buy Sunvic on recommendation from friend whose brother is a broker. - loss 1k.
3. Go back to NOL, that when the cards start falling. Contra and loss big, had to borrow to pay back. Total retire from stock market.

After attending value investing course in 2013, learn how to read annual report and calculate intrinsic value, been in the black since then.
However, still make minor mistake, like buying 1lot of 2nd chance with $25 transaction fee, ignore reading the detail of annual report.

Lesson Learnt
1. Don't invest money you don't have at the first place
2. Do your own research, don't act from other recommendation.

Hope folks here can learnt something from my case

Cheers

(18-02-2014, 02:03 AM)Andrew Q Wrote: start trading in 2008, know nuts of stock market, only know how to compare today price with yesterday last done.

1. Contra NOL and "earn" 1k, thought I got Midas touch and talk about stock everyday.
2. buy Sunvic on recommendation from friend whose brother is a broker. - loss 1k.
3. Go back to NOL, that when the cards start falling. Contra and loss big, had to borrow to pay back. Total retire from stock market.

After attending value investing course in 2013, learn how to read annual report and calculate intrinsic value, been in the black since then.
However, still make minor mistake, like buying 1lot of 2nd chance with $25 transaction fee, ignore reading the detail of annual report.

Lesson Learnt
1. Don't invest money you don't have at the first place
2. Do your own research, don't act from other recommendation.

Hope folks here can learnt something from my case

Cheers

Quote:1. Don't invest money you don't have at the first place

Very good reminder.

After so many years in the market, i still have to keep on monitoring consciously my cash flow when investing.
It is even more critical now as i am a "CHIAP KA KEE" now.
In fact, no spare cash, don't even try to invest at all.
Don't believe then try it lol!
Then come back and share your experience with us.
Shalom.

As I've mentioned previously my investing style is I don't short contra or margin or borrow to play so I'm very conservative i only buy low and sell high and make very very few mistakes in that area. Most of my mistakes I can sum up in a word "Patience" these are some of my big regrets.

I thought gold would rise bought 1.5kg gold in 1997 at ard $30+/gram during India and Pakistan nuclear standoff when they were playing chicken and testing their nukes but exited the investment too early.

When oil prices went abv $100/barrel I thought biofuels will be good and bought shares in palm oil companies but alas played out by my impatience when I sold too early.

Tried to invest in the Nasdaq after tech crash, bought SONICblue which was making the RIO mp3 players before iPods became fashionable thinking its a surefire business as MP3 business was on the increase, even thought creative should just stick to soundcards and not compete in mp3 market with their Zens. Company finally tanked and delisted because of some fraud. investment wiped out, lost 10k++ SGD.

Part of why I am cautious buying something with what looks like good fundamentals but price is at its high, always possibility of a nasty surprise you never expected.

Lesson 1

Previous highs got no bearings on how company performs.
(Learnt from - PCRD, Creative Technologies)

Lesson 2

Don't try to read too much into news report and betting on price movement. Market interpret news both ways.
(Learnt from - Stats Chippac)

Lesson 3

Avoid S-chip in Singapore like plague.
(Learnt from - CAO, China Flex)

Lesson 4

Unless the new company is way better than the one you have, why bother investing in something new altogether?
(Learnt from - Singapore Shipping, Cougar Logistic, St******)

Lesson 5

Capricorn effect is way over rated.
(Learnt from - every new year)

Lesson 6

Don't be greedy. If the stock already exceeded its intrinsic value, sell. It will almost always come down at some point.
(Learnt from - YZJ)

Lesson 7

Always keep certain amount of cash for opportunities. More so, deep in a downturn.
(Learnt from - corrections in market)

Lesson 8

When aunties in the wet market are talking about stock market, you better get out fast.
(Learnt from - crashes)

Lesson 9

Never listen to recommendations, always do your own research.
(Learnt from - Babcock and Brown (Global Investment))

Lesson 10

There are value traps (doh!). Understanding dynamics of a company can be crucial.
(Learnt from - UIS)

Lesson 11

Hot industries can be extremely volatile. Can provide quick returns if you can catch bottom, if you know bottom, that is.
(Learnt from - Ezra)

Lesson 12

Expensive stock can have good value too. Don't dismiss them just because they are expensive.
(Learnt from - UOL)

Here's a memorable mistake for me,

In early 2011, I was primarily a short term trader and traded in and out of Genting Singapore shares. During a results announcement, the company reported poor results. (revenue miss and net loss for quarter) I got edgy and anticipated a large crash the next day. When it gapped down and sank on large volume, I panicked and sold off all of my holdings.

The stock drifted a little lower and proceeded to stage a rebound but, I was "on tilt" to borrow a poker term, and did not buy my position back. The stock closed unchanged from the previous day.

This taught me that, no matter what strategy we pursue in the market, we have to be in control of our emotions. On a book in which I used to record my trading and investing ideas, I still have on the cover my lesson from this episode, "We cannot control the market, we can only control ourselves."