What are some of your worst experiences? I am curious about % losses as well as absolute amounts due to bad investments. What were they and when were they made. What did you learn from it?
Your worst investing moves made over the years...
By American in Japan Follow Sun, 30 Jan 2011, 10:52pm 6,825 views 59 comments
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Davis, CA
Oh god WebVan, I'd forgotten that one!
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San Antonio, TX
jvolstad's website
American in Japan says
It was a ETrade index fund. I also had one in their S&P 500 fund as well as Russell 2000. I'm no longer trading with ETrade.
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@jvolstad
I wast an indexed fund? If so maybe the timing of it was bad. If you had bought the ETFs SPY or MSU in March of 2009, you could have done very well.
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Beverly Hills, CA
6 Flags, right before the restructuring. Bought 10k shares @ 10 cents apiece on the bet they would recover but at least I sold for 6 cents apiece before it went to 0. After all that BS its back up to 15 a share with the new issued stock...
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In HS I bought 10 really cool shirts at a racecar swap meet for $10 each and planned to sell them at the gas station I workd at on weekends for $15 each. Sold maybe 1 for $12. Sold maybe 3 for $10. Wore a few and gave the rest to buddies. Checked "sales manager" off my bucket list.
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Santa Clara, CA
I had bought some options of a stock and screwed up the expiration year from 2011 to 2010. I lost about 4-5K in a month and decided never to touch options again. What pains me is that I expected it to go up in long run (which it did) but by the time my options exired, stock was getting hammered.
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San Dimas, CA
My house. Actually, my Mom's house.
I was 18, had a little bit of an inheritance from grandma (30k or so) and gave/loaned my mom the down for our/her condo in Rancho Cucamonga (the IE). I agreed to let her put my name on the docs for income verification and promise of a return. She died in 2006, I graduated college in 2009 and had to short sell it to avoid going belly up. I'm the world's biggest proponent of renting until you're either getting the house for free, or you are cemented into the ground in whatever city you are buying. I hate the housing market, but at least I'm young, no kids, no wife and can move on from this with way more knowledge than half the 50 year olds out there.
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44 male
Egg Harbor City, NJ
Kevin says
Someone needs to read Patrick.net, a House should Never be considered an investment, it's a place to live.
As for me, I lost my shirt on BuyX.com, lost about 60% of the money I invested in it. That was the beginning of the Dot Com collapse.
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46 male
Menlo Park, CA
Polycom (PLCM). I bought at 30, watched it go up to 77, and then did not sell as it fell all the way down to 11. Finally sold in the teens.
And it was my own fault: it had a P/E of 100. Huge warning sign, blinking neon letters. All the matters is earnings for stocks, and rents for housing. Everything else is hype and speculation.
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San Jose, CA
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Oh god! I made so many mistakes that I don't even know where to begin. In short, I made easy money during the dot.bomb, doubled & tripled down, and lost all of it back plus about $50k of my own money. Thank god I had a business that was raking in money at that time so I didn't feel bad.
To name a few: Bought Redback network for $62 & sold for $150+, but then lost money on Cisco, Foundry Networks and some other Fiber Optics Company. Bought & sold Proctor & Gamble too early because the stock wasn't a high flyer. Should I kept it till now, PG would have more than quadruple itself :)
Lost a $20k deposit on this home because I backed out after 9/11. In hindsight, 9/11 saved my behind for not buying this home. One of my uncles still lives in this subdivision.
http://www.redfin.com/search#!lat=37.756367&long=-121.997269&market=sanfrancisco&parcel_by_property_id=1954443&sf=1,2&v=6&zoomLevel=17
In hindsight, there was a lot of easy money floating around the SFBA in the mid 1990's to early 2000's. I made more money running a side business 2 days a week than working full-time as an engineer at that time, and engineer was hot at that time too. I got several job offers before I graduated.
Now there are still money to be made, but not as easy as the mid 1990's to early 2000's :)
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Washington, DC
My second Masters degree. Really, one was enough, especially when the second one came without full funding/a fellowship.
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47 male
Lafayette, CA
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E-man says
Oh yeah? Try doing bankruptcy cases for a living. :P
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San Jose, CA
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iwog says
Let me guess. Endless hours on the phone talking to people from the banks that couldn't make the decisions????
What's up with SNY? A lot of institutions have been buying the stock since early Jan 2011? Is it gonna break out soon or what?
U still have PZE? It has been treating you good :D
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Sitting on 100% cash since 2008. Sure, I didn't lose any money, but I have been too terrified to do anything since the crash, even when my gut told me too. If I had done what I should have done I'd have way more in my retirement account than I need at this point. Makes me a little sick when I think about it.
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Tude says
You know on the other side you could have lost a lot too. I have relatives who lost their entire retirement in the crash because of how they were leveraged.
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ChrisLA says
I understand this. The problem is I knew enough to get out in time, but I also knew enough to get back in (but didn't). I am always questioning my ability to know when to get out again. Right now it really is a game that should be played by people who really know the rules and how to work all the fraud and monkey business to their advantage. I know those of us that cannot keep up will just get squashed.
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Tude says
The way we've been doing it is we basically invest and hold forever. We do sell, but rarely, only if we think the company is really not going to be doing well. It does work out long term if investments are right. So far doing all right; knock on wood.
I could have pulled out before the crash and saved more obviously, but I'm not a day trader so wasn't going to move a bit nor I really saw the stock market crash. I didn't know housing bubble was so entrenched into everything else, kind of thought it was just localized to a specific industry. At the end didn't really matter since almost everyone did the same, and when everyone feels the crash the same way the end result has no losers or winners.
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Santa Clara, CA
Purchased WAMU and lost all the money.
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iwog says
Buddy you were gambling on that one, not investing.
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I bought an emerging market mutual fund, unnecessary and a waste. International funds have enough emerging market exposure. My only stock mistake was buying about $3k worth of Sun Micro and not selling it when it was worth about $12K or so. Oh well. Not very exciting and I didn't lose money in this account anyway. I have 99% of my financial assets in mutual funds.
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"mutual fund"
'nuff said. Anyway thanks for your story...
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I have made money in my other funds, no complaints here.
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@kimboslice
Fair enough. I do know that about 75% of mutual funds underperform the S&P 500 index over a 5-year period. In addition they of have hefty charges. You may know something I don't about certain mutual funds in that 20% category.
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I was in a short ETF (SH for the past 6 months), but I sold 2 days ago (I should have waited just 2 days)!
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American in Japan says
I hear you, AIJ. I usually run a put on SPY for the past year, but my last one expired mid-June. #@$!@!.
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FAIRX (Fairholme Fund) with the way it is going right now. I have hopes it will rebound though.
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Davis, CA
FortWayne says
Wall Street financial operations? There is no "investing" there any more except by accident.
You want to invest, loan a family member the scratch they need to start that restaurant or small business.
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>Wall Street financial operations? There is no "investing" there any more except by accident.
LoL!
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I think mine is when I shorted F in early 2008, held the short down to around 6 or something like that but then chickened out when it went back to around 8 early in the summer.
Then later in the year it bottomed around 2.
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Probably not buying Google pre-IPO when they offered up to 5k worth for 50 cents a share. Stayed away from it because it seemed like an echo the dot-com bust. Coulda retired on that one!
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San Carlos, CA
msilenus says
I bought Infospace at something like $4 and change, and sold for $8 and change. This was what, late 90's? Definitely before the bust by a long shot. Doubled my money but I think I only had 1000 shares.
I don't have one trade that tanked, but what I *did* really screw up was the the whole dot-com thing. I was in the software business in the late 90's and was very contrarian about the dot-coms. I kept telling EVERYONE to sell their silly 'internet' stocks. I used to talk about the companies with a business plan "written on a cocktail napkin".
I was finally right but the problem was I didn't take my own advice. I had a lot of 'growth' mutual funds - I was young and pretty lazy/naive about what was actually *in* my mutual funds. Had I taken the time to look closely, I would have cashed them all out. Naturally they were full of these stocks I told people to sell.
I'm still recovering from that one.
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Sybrib says
I bought F at $5, $3, and $1.74. I wish I had put every penny I owned in it. I sold at what, $9 and change. I wish I had held it longer but did ok.
Now ask me about my mutual funds (oh wait, I already posted that debacle).
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American in Japan says
You do realize that SH is not intended for long-term investments and that you weren't really shorting anything, right?
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Yes I do. It simulates a short.
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American in Japan says
Not if you hold it for 6 months.
It only simulates a short if you hold it short-term with relatively low volatility -- its returns are based on the *daily* change. Because of tracking error and volatility drag, it definitely does not simulate a short over the long term.
SH is one of the better ones in terms of these factors, but its tracking error and drag is greatly increased in times of high volatility, such as now. The tracking error and drag are still not as bad as the leveraged versions, however.
Inverse funds are definitely not the same as shorting and do not simulate shorting.
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billy269 says
Isn't Fairholme one of the biggest shareholders of BofA? If I remember correctly, FAIRX bought large amounts of all the banksters -- Shitty, Goldman, and Morgan Stanley, also Notorious AIG, and even things like CIT and certain property managers like Brookfield. Basically, everything that they thought was distressed and possibly oversold. I'm assuming their theory was "at least one of these companies has to do well, right?"
What made you buy them?
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Pacifica, CA
SIRI.
Not very glamorous I know, but back when Howard was in contract renegotiation and they were at 8-12 cents a share. I seriously thought about it...
$1000/0.12c = 83333 shares
Todays price of $1.72
83333 * 1.72 = $143,332.76
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I am out of SH now.
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Davis, CA
Worst investing move recently? A year or two back arguing with Iwog that gold was a useless yellow metal and I saw no sense in buying the stuff.
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Vicente,
don't worry about it. Not doing something is not really a bad investment move. Because it's not a move at all. Missed opportunity, of course. But that is a different question.
If we had to list our worst missed opportunities, the list would be so much longer.
For me, it'd start with my college days when I declined an offer from a Swedish coed on her way back home to Europe, to share a hotel room "to share expenses" near NYC airport during a flights layover. Wanted to perserve my small amount of cash for something else so I spent the night at a relative's house in the area.
I told my professor about it after I had returned home to California. He laughed out loud at me and told me something like, "you dummy, that's what your credit cards are for!"