Author Topic: I was a fool by playing the stock market  (Read 6986 times)

BrandonP

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I was a fool by playing the stock market
« on: November 14, 2016, 12:41:37 PM »
I wish I had found this website a while ago.

I invested in several risky funds, which have plummeted in recent months. I was nave and thought I could beat the stock market.

Since this website, I have learnt the error of my ways.

Now I've been investing in the whole market via Vanguard, etc.

My question is, should I just sell all my risky, I think I could beat the market stocks? Or should I hold onto them?

My thinking is, the only way for a lot of these stocks is up! So any future money I save, I will be put into Vanguard etc. But these current ones will have such a loss, that I might as well keep them. Or should I just accept the losses, and put what little remains from them in Vanguard etc.?

Thanks!

NoStacheOhio

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Re: I was a fool by playing the stock market
« Reply #1 on: November 14, 2016, 12:59:07 PM »
It's easy to sit here any say sell them, and consider the losses tuition, but obviously you have to make your own decision.

On the upside, you get to write off the losses on your taxes!

BrandonP

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Re: I was a fool by playing the stock market
« Reply #2 on: November 14, 2016, 01:04:56 PM »
It's easy to sit here any say sell them, and consider the losses tuition, but obviously you have to make your own decision.

On the upside, you get to write off the losses on your taxes!

I do?

All of it is in a tax free savings account: TFSA.

zephyr911

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Re: I was a fool by playing the stock market
« Reply #3 on: November 14, 2016, 01:06:56 PM »
I don't know what stocks they are, how much you paid, or how much you know about the fundamentals of each company.
I'm more into individual stocks than the average MMM-er, but it's more for personal reasons than thinking I'm smarter than all the six-figure analysts. I find it is difficult to be knowledgeable about more than a few, even with a lot of time invested (relative to my "spare" time as a full-time wage earner, military reservist, and startup business operator). So even if I knew your portfolio, I'd be unlikely to have a good answer.
One question you might ask is, relative to your overall Stash, is this money you can afford to lose, or is there a benefit to parking it in more secure assets right now? If losing what's left would hurt, I'd suggest cutting your losses. If you have the means to suck it up, let it ride and enjoy the lesson.


It's easy to sit here any say sell them, and consider the losses tuition, but obviously you have to make your own decision.

On the upside, you get to write off the losses on your taxes!

I do?

All of it is in a tax free savings account: TFSA.
Then, no. Sadly. Downside of deferring tax on gains.

NoStacheOhio

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Re: I was a fool by playing the stock market
« Reply #4 on: November 14, 2016, 01:07:10 PM »
It's easy to sit here any say sell them, and consider the losses tuition, but obviously you have to make your own decision.

On the upside, you get to write off the losses on your taxes!

I do?

All of it is in a tax free savings account: TFSA.

Then no, I don't think so. Are you in Canada? I have a bad habit of assuming US until proven otherwise. I'm working on it.

BrandonP

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Re: I was a fool by playing the stock market
« Reply #5 on: November 14, 2016, 01:19:53 PM »
It's easy to sit here any say sell them, and consider the losses tuition, but obviously you have to make your own decision.

On the upside, you get to write off the losses on your taxes!

I do?

All of it is in a tax free savings account: TFSA.

Then no, I don't think so. Are you in Canada? I have a bad habit of assuming US until proven otherwise. I'm working on it.

Indeed I am.

BrandonP

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Re: I was a fool by playing the stock market
« Reply #6 on: November 14, 2016, 01:20:53 PM »
I don't know what stocks they are, how much you paid, or how much you know about the fundamentals of each company.
I'm more into individual stocks than the average MMM-er, but it's more for personal reasons than thinking I'm smarter than all the six-figure analysts. I find it is difficult to be knowledgeable about more than a few, even with a lot of time invested (relative to my "spare" time as a full-time wage earner, military reservist, and startup business operator). So even if I knew your portfolio, I'd be unlikely to have a good answer.
One question you might ask is, relative to your overall Stash, is this money you can afford to lose, or is there a benefit to parking it in more secure assets right now? If losing what's left would hurt, I'd suggest cutting your losses. If you have the means to suck it up, let it ride and enjoy the lesson.


It's easy to sit here any say sell them, and consider the losses tuition, but obviously you have to make your own decision.

On the upside, you get to write off the losses on your taxes!

I do?

All of it is in a tax free savings account: TFSA.
Then, no. Sadly. Downside of deferring tax on gains.

Thanks. That is a good way at looking at it.

seattlecyclone

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Re: I was a fool by playing the stock market
« Reply #7 on: November 14, 2016, 01:23:29 PM »
My thinking is, the only way for a lot of these stocks is up!

Your thinking is wrong. Stocks can and do go to zero. Happens all the time.

TexasRunner

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Re: I was a fool by playing the stock market
« Reply #8 on: November 14, 2016, 01:47:37 PM »
My thinking is, the only way for a lot of these stocks is up!

Your thinking is wrong. Stocks can and do go to zero. Happens all the time.

+1.

You might be unknowingly falling for sunk cost fallacy.  Stocks can cease to exist.

What if I convinced you to pay me 5000$ for a boat, but then gave you a toy boat.  Then I say, for only 1% more, I can give you the remote control as well!  Would you be willing to spend another 50$ to get the controller?

But with the way our brains are wired, you are more likely to say yes than you normally would be, even though you would otherwise find it unreasonable.

Ultimately, the choice is up to you but I would consider it tuition paid and move on.  0.02

zephyr911

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Re: I was a fool by playing the stock market
« Reply #9 on: November 14, 2016, 01:50:57 PM »
My thinking is, the only way for a lot of these stocks is up!

Your thinking is wrong. Stocks can and do go to zero. Happens all the time.

There are still people who bought SunEdison stock in the $30-40 range, who are now holding on as it fluctuates between 5 cents and, whatever it is today (it rallied to over $0.20 last week on wildly optimistic interpretation of some bankruptcy court proceedings, for example).
It took long enough to get here that they all had time to think about selling at $10, $5, $1, and they all decided to hold. Just one example of many.

If you don't understand the companies well enough to have a confident prediction about their future price increases, maybe it's time to cash out what you have and park it where it won't disappear. It's a personal decision, though. Do what makes the most sense in light of your total financial picture.

BrandonP

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Re: I was a fool by playing the stock market
« Reply #10 on: November 14, 2016, 01:56:13 PM »
My thinking is, the only way for a lot of these stocks is up!

Your thinking is wrong. Stocks can and do go to zero. Happens all the time.

+1.

You might be unknowingly falling for sunk cost fallacy.  Stocks can cease to exist.

What if I convinced you to pay me 5000$ for a boat, but then gave you a toy boat.  Then I say, for only 1% more, I can give you the remote control as well!  Would you be willing to spend another 50$ to get the controller?

But with the way our brains are wired, you are more likely to say yes than you normally would be, even though you would otherwise find it unreasonable.

Ultimately, the choice is up to you but I would consider it tuition paid and move on.  0.02

Interesting.

Frustrating as I normally don't fall for this kind of thinking. But it looks like I might be with these investments. 

DavidAnnArbor

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Re: I was a fool by playing the stock market
« Reply #11 on: November 14, 2016, 02:02:33 PM »
Which companies are they ?

BrandonP

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Re: I was a fool by playing the stock market
« Reply #12 on: November 14, 2016, 02:13:42 PM »
Which companies are they ?



CONVALO HEALTH INTL CORP
INSPIRA FINANCIAL INC
KGIC INC
NOBILIS HEALTH CORP
PATIENT HOME MONITORING CORP
THESCORE INC
WESTJET AIR

mxt0133

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Re: I was a fool by playing the stock market
« Reply #13 on: November 14, 2016, 02:33:31 PM »
Sell it and move on with your life.  If you keep them they will just add stress to your life.  Consider it the price of education. 

This reminds me of my brother in law, who in is 60s basically has no retirement savings and he was a chartered financial advisor.  He is currently invested in a handful of pharmaceutical companies and is hoping for a home run.  He has lost is money time and time again but for some reason he thinks this time will be different.  Even if he did find that one stock that goes up 1000%.  He will invest in another high risk investment and loose it all again.

DavidAnnArbor

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Re: I was a fool by playing the stock market
« Reply #14 on: November 14, 2016, 02:47:04 PM »
Back in 2000 I did a similar thing with a small part (10%) of my portfolio, I invested in high flying stocks and mutual funds, and that mostly turned out to be a failure. Fortunately, most of my portfolio was in the S&P500 index fund. I really wasn't all that confidant in stock picking.  I sold those stocks/mutual funds, the ones that didn't go bankrupt, and just put the remaining cash in index funds.

BrandonP

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Re: I was a fool by playing the stock market
« Reply #15 on: November 14, 2016, 02:50:55 PM »
Sell it and move on with your life.  If you keep them they will just add stress to your life.  Consider it the price of education. 

This reminds me of my brother in law, who in is 60s basically has no retirement savings and he was a chartered financial advisor.  He is currently invested in a handful of pharmaceutical companies and is hoping for a home run.  He has lost is money time and time again but for some reason he thinks this time will be different.  Even if he did find that one stock that goes up 1000%.  He will invest in another high risk investment and loose it all again.

I feel like I have learnt for the future in regards to now pick the 'stock market' via Vanguard. It is a tough lesson, that is for sure. And I'm kicking myself, but I wasn't the first person to make this mistake, and I won't be the last!


BrandonP

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Re: I was a fool by playing the stock market
« Reply #16 on: November 14, 2016, 02:52:30 PM »
Back in 2000 I did a similar thing with a small part (10%) of my portfolio, I invested in high flying stocks and mutual funds, and that mostly turned out to be a failure. Fortunately, most of my portfolio was in the S&P500 index fund. I really wasn't all that confidant in stock picking.  I sold those stocks/mutual funds, the ones that didn't go bankrupt, and just put the remaining cash in index funds.

I assume that has worked out well?

According to my calculations, I can still salvage around $3000.


BlueHouse

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Re: I was a fool by playing the stock market
« Reply #17 on: November 14, 2016, 03:06:39 PM »
I owned Baan and Worldcom.  Both delisted. 

If you don't know why you own them, or have a good reason for keeping them, then sell.

soccerluvof4

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Re: I was a fool by playing the stock market
« Reply #18 on: November 14, 2016, 03:35:39 PM »
I learned the lessen the same way you are. But most of those boats do sink. Get out well you can and dont look at them again because if one does climb out you will convince yourself you were right and probably do it again.

BrandonP

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Re: I was a fool by playing the stock market
« Reply #19 on: November 14, 2016, 03:40:49 PM »
I learned the lessen the same way you are. But most of those boats do sink. Get out well you can and dont look at them again because if one does climb out you will convince yourself you were right and probably do it again.

Thank you.

Although I will not do it again.

Already been investing money in the market as a whole. Vanguard etc.

Greenway52

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Re: I was a fool by playing the stock market
« Reply #20 on: November 14, 2016, 06:05:41 PM »
It sucks that this was in your TFSA. Not just because you can't claim the capital gains loss, but also because you lose that TFSA space.

I was in a very similar boat to you actually. I lost about $6k on Barrick Gold in my TFSA when the stock went down to $8 (I bought it at $20). Now it's back up to about $20, so I've broken even (and maybe even made a little if you include the dividend).

I'm not necessarily telling you to hold on to it. As others have said it can go down to zero. In my case, I held on because I still believed in the company.

leighb

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Re: I was a fool by playing the stock market
« Reply #21 on: November 14, 2016, 06:24:11 PM »
One question has helped me re-frame my own thinking. Would I buy those stocks today at their current price? If I answer yes, then I should hold or buy more. If I answer no then I should sell. It helps me to consider holding to be much closer to buying. By holding I'm taking that money at the beginning of each day and saying yes "I want these stocks."

Heckler

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Re: I was a fool by playing the stock market
« Reply #22 on: November 14, 2016, 10:06:44 PM »
Which companies are they ?



CONVALO HEALTH INTL CORP
INSPIRA FINANCIAL INC
KGIC INC
NOBILIS HEALTH CORP
PATIENT HOME MONITORING CORP
THESCORE INC
WESTJET AIR

You know what you need to do. 


http://canadiancouchpotato.com/model-portfolios-2/


Ps, I've only heard of one of those companies.  Best of luck.

WerKater

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Re: I was a fool by playing the stock market
« Reply #23 on: November 14, 2016, 11:59:13 PM »
Sell all of them except for one (does not matter which one). Plan to keep this one in your account forever to remind you of the error you made.

Driko

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Re: I was a fool by playing the stock market
« Reply #24 on: November 15, 2016, 12:33:07 AM »
One question has helped me re-frame my own thinking. Would I buy those stocks today at their current price? If I answer yes, then I should hold or buy more. If I answer no then I should sell. It helps me to consider holding to be much closer to buying. By holding I'm taking that money at the beginning of each day and saying yes "I want these stocks."

+1 If a good stock declines in share price for a good reason and is still a good buy, you wouldn't sell more, you would buy more.

I would also add that many individual stocks rise and fall much more than the overall stock market so if you were wanting to hold on to any of the individual stocks, you would want to do research and find out the reason for the fall in price and if holding onto the stock would be worth the risk.

Goldielocks

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Re: I was a fool by playing the stock market
« Reply #25 on: November 15, 2016, 12:48:08 AM »
It's easy to sit here any say sell them, and consider the losses tuition, but obviously you have to make your own decision.

On the upside, you get to write off the losses on your taxes!

I do?

All of it is in a tax free savings account: TFSA.

Nope!   

In future, only buy for TFSA items that are unlikely to lose money.

I would sell them, and start fresh.  (I did something similar, once upon a time)

Filliteracy

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Re: I was a fool by playing the stock market
« Reply #26 on: November 16, 2016, 06:46:13 AM »
Which companies are they ?



CONVALO HEALTH INTL CORP
INSPIRA FINANCIAL INC
KGIC INC
NOBILIS HEALTH CORP
PATIENT HOME MONITORING CORP
THESCORE INC
WESTJET AIR

When you are asking whether or not to sell stocks you purchased, that to me would indicate you bought them perhaps without a plan/look at the fundamentals of each stocks. I had never heard of any of these (other than West Jet) and I am Canadian. So I looked them all up. One thing to me strikes me as odd - only two (west jet, nobilis) out of your 7 chosen companies is actually earning money. Every other has negative earnings, which, unless your company is burning money because they have a grand vision/working on a groundbreaking product that will pay off in the medium/long term (think Tesla, Amazon), is probably a really bad sign. Of course there's plenty of other anomalies with your portfolio (it seems you are heavy on healthcare, and on very-small cap).

A more accurate title for your thread would be "I was a fool by playing the penny-stock market". Honestly, from now on, stick with index funds, or if you absolutely want to continue picking stocks (and have time to invest in your education and research), read "The Intelligent Investor" by Graham. At least that would be a start.

BrandonP

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Re: I was a fool by playing the stock market
« Reply #27 on: November 16, 2016, 10:46:57 AM »
Thanks for the feedback and comments everyone.

This isn't all my stocks btw. Just a few ones I invested in which were riskier than my usual picks. I have blue chip companies like TD, CNR etc. As well as a couple of Vanguard accounts. And Tangerine.

I certainly have learnt the errors of my ways, and certainly won't be taking the risk with such stocks ever again! Sticking with Vanguard and Tangerine moving forward.

Also surprised people who have commented have only heard of West Jet and not heard of the score.

Thanks again. Some really good information in this thread.

Fishfindr

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Re: I was a fool by playing the stock market
« Reply #28 on: November 16, 2016, 10:56:40 AM »
I took a look at all of them. From a quick and very summarized technical analysis perspective, the only one I would remotely consider holding is WestJet. Dump the rest and call it a lesson learned. Good luck in your future investments.

BrandonP

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Re: I was a fool by playing the stock market
« Reply #29 on: November 16, 2016, 11:08:17 AM »
I took a look at all of them. From a quick and very summarized technical analysis perspective, the only one I would remotely consider holding is WestJet. Dump the rest and call it a lesson learned. Good luck in your future investments.

Thank you.

GuitarStv

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Re: I was a fool by playing the stock market
« Reply #30 on: November 16, 2016, 12:00:10 PM »
Second recommendation for the Canadian Couch Potato strategy for future purchases.

SugarMountain

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Re: I was a fool by playing the stock market
« Reply #31 on: December 06, 2016, 12:30:59 PM »
Years ago, I got talked into investing with a broker.  He put me into 4 stocks.  Two basically went to $0.  I sold them when they were like 10% of the value I bought them for. (I'll have to see if I can find the tickers, I don't even remember them.  If they're worth anything now I may be annoyed. lol.) The broker was flabbergasted that I wouldn't let them ride, instead getting like $400 for each of the lots.  Luckily, one of the stocks he put me in was AAPL at $90 pre-split, so each of those shares are essentially $763, plus I've gotten a lot of dividends from it.

The real question you need to ask yourself is would you buy those stocks today for the current trading price?  If the answer is no, then I'd say dump them and put them into something else.  Think of it this way, say you started with $1000 at the craps table and are down to $100.  Putting it on hard 8 doesn't make that a good bet.

boarder42

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Re: I was a fool by playing the stock market
« Reply #32 on: December 06, 2016, 12:47:30 PM »
only took me 17 years to realize i couldnt beat the market..

started trading stocks when i was 10... found this site 17 years later at 27 ... happened to have been in winter of 2014 just after the best market in my lifetime.  i had barely beaten the market thanks to a well timed tesla play in december.  been on auto pilot since then... from 100k to 550k in 3 years.

Interest Compound

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Re: I was a fool by playing the stock market
« Reply #33 on: December 06, 2016, 01:11:19 PM »
I wish I had found this website a while ago.

I invested in several risky funds, which have plummeted in recent months. I was nave and thought I could beat the stock market.

Since this website, I have learnt the error of my ways.

Now I've been investing in the whole market via Vanguard, etc.

My question is, should I just sell all my risky, I think I could beat the market stocks? Or should I hold onto them?

My thinking is, the only way for a lot of these stocks is up! So any future money I save, I will be put into Vanguard etc. But these current ones will have such a loss, that I might as well keep them. Or should I just accept the losses, and put what little remains from them in Vanguard etc.?

Thanks!

You need to think of your investments differently. You no longer personally value these stocks, as you've decided to become an Index investor, so you need to re-evaluate your holdings. These stocks can be exchanged immediately for cash, correct? So the question becomes:

If you had $3000 in cash today, would you exchange the cash for these stocks? In other words, what's more valuable to you?
  • $3000 in cash
  • These stocks you're holding.
From your posts, I'd guess your answer is, "No, I would not exchange $3000 in cash for these specific stocks." That means you value #1 higher than you value #2. Therefore, since #2 can immediately be exchanged for #1, you should do it immediately.

In other words, if you already own those stocks, you should immediately exchange them for cash.

Indexer

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Re: I was a fool by playing the stock market
« Reply #34 on: December 06, 2016, 08:55:59 PM »
Which companies are they ?



CONVALO HEALTH INTL CORP
INSPIRA FINANCIAL INC
KGIC INC
NOBILIS HEALTH CORP
PATIENT HOME MONITORING CORP
THESCORE INC
WESTJET AIR

Very simple question:  Ignore that they are at losses. Going forward do you think they will grow faster than a Vanguard index fund?

If you said no then sell them.
If you aren't sure then sell them. The index fund is less risky.
If you said yes then you haven't learned anything.

Dicey

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Re: I was a fool by playing the stock market
« Reply #35 on: December 06, 2016, 10:41:48 PM »
According to my calculations, I can still salvage around $3000.
Sorry, if this was mentioned, I missed it. What was the amount of your original investment?

Metric Mouse

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Re: I was a fool by playing the stock market
« Reply #36 on: December 07, 2016, 06:55:23 AM »
I wish I had found this website a while ago.

I invested in several risky funds, which have plummeted in recent months. I was nave and thought I could beat the stock market.

Since this website, I have learnt the error of my ways.

Now I've been investing in the whole market via Vanguard, etc.

My question is, should I just sell all my risky, I think I could beat the market stocks? Or should I hold onto them?

My thinking is, the only way for a lot of these stocks is up! So any future money I save, I will be put into Vanguard etc. But these current ones will have such a loss, that I might as well keep them. Or should I just accept the losses, and put what little remains from them in Vanguard etc.?

Thanks!

You need to think of your investments differently. You no longer personally value these stocks, as you've decided to become an Index investor, so you need to re-evaluate your holdings. These stocks can be exchanged immediately for cash, correct? So the question becomes:

If you had $3000 in cash today, would you exchange the cash for these stocks? In other words, what's more valuable to you?
  • $3000 in cash
  • These stocks you're holding.
From your posts, I'd guess your answer is, "No, I would not exchange $3000 in cash for these specific stocks." That means you value #1 higher than you value #2. Therefore, since #2 can immediately be exchanged for #1, you should do it immediately.

In other words, if you already own those stocks, you should immediately exchange them for cash.

This would be my recommendation.