How to lose €14k in one year...

[CorkGuy12]

Re: How to loose €14k in one year...

Are you saying that because you didn't have any more money (resources) you would have continued putting money in if you could have?

I thought about it. (not the spread betting though - was willing to loose that cash)

Had I put in an extra say 4k into the online brokerage account, I'd have been able to maintain my positions, and they would have not been closed out.
(I put 12k on equities, with 8k in the account).

I thought about doing it about 4 weeks ago, but didn't. Didn't expect what happened in the markets. (I only had 1 financial firm - AIB, that I had bought at the 'bargain!' price of €12! but everything I had fell in the order of 20% or more in a few days, having already been down) Most of my positions were closed out in a 48 hour period, and didn't have time to make the international money transfer to stop them being closed.

Had I purchased the shares using real cash (or transferred the 4k in time, so I wasn't borrowing), the positions would be still open, - I'd be down, but with the prospect of recovery in the medium/long term.

 

[Bronte]

Re: How to loose €14k in one year...

Had I purchased the shares using real cash (or transferred the 4k in time, so I wasn't borrowing), the positions would be still open, - I'd be down, but with the prospect of recovery in the medium/long term.

Funnily enough I've often heard men say the same thing down Paddy Power but of course that was gambling and they were only chasing their losses.

 

[zephyro]

Re: How to lose €14k in one year...

im sick of hearing people say that buying stocks is investing and trading is gambling. what rubbish. the whole thing is gambling. do u want ur stocks to go down if you buy them? of course not, u are gambling that they will go up

The difference is that the expected return from long-term investing in stocks is significantly positive but the expected return from short-term trading is negligibly different from zero.

 

[FlyFishing]

Re: How to lose €14k in one year...

I too am down in the market. I would say how much but lets just say it would buy me an S class.

But i have not 'lost' the money as i only buy and hold. I follow what is commonly known as value investing.

I bought all the way down to probably where it is close to the bottom. I am fortunate to be in a position where i can increase my position by about 10K each month. (NYSE market only...no irish shares )

But i am not unduly concerned. Firstly i have researched this particular company well ( for the last year ) so i am confident in it. Secondly i receive a dividend which lessens the pain. ( only realised it now but it is about 6k a year which is the benefit of increasing my holdings ) And thirdly, I have invested in companies that i believe will do very well in the future. As buffet said, only invest in companies where you would not be concerned if the stock exchange closed down for 5 years....and i follow that rule. Follow the company, not particular the stock price.

To think about even more i am actually somewhat happy that the price fell so much. Let me explain. A year ago for 10K i could say pick up 200 shares of a particular company; this month i picked up 700 for the same price. So by following the strategy of adding each month (lowest average cost wins) i have increased my stake in the company for less money. Of course this will only work out for me if the price goes up but my time horizon is 5 years so i can be patient

The stock market requires a strong stomach at times but if you do not require the cash, then to buy and hold ( only certain researched stocks of course ) is the only way to do it.

 

[limerickboy1]

Re: How to lose €14k in one year...

zephro - The difference is that the expected return from long-term investing in stocks is significantly positive but the expected return from short-term trading is negligibly different from zero.

the actual long term results from investing in stocks averages 7% per year, do you call that a good return. the actual return from short / medium term trading can be a big loss or huge returns. if you "invested" in 2003 and held until now you would have lost all your gains. where as if you traded all the way up and shorted on the way down you would be sitting on very big profits

 

[hatfield]

i also went long on friday and made huge profits yesterday . im sick of hearing people say that buying stocks is investing and trading is gambling. what rubbish. the whole thing is gambling. do u want ur stocks to go down if you buy them? of course not, u are gambling that they will go up

I agree with this. You can correctly gamble that profits will go up but even if profits do go up the valuation the stock market puts on a stock can go down!

 

[zephyro]

Re: How to lose €14k in one year...

the actual return from short / medium term trading can be a big loss or huge returns.

True. On average for all traders it's zero less costs, which is a lot less than 7%.

where as if you traded all the way up and shorted on the way down you would be sitting on very big profits

Quite a big if there. It always looks so obvious with the benefit of hindsight. Can you tell us what's going to happen in the next five years though?

 

[FlyFishing]

Re: How to lose €14k in one year...

I would consider myself a seasoned investor. I for example only buy the FT and read it back to back. Even on holidays its the only thing i read. ( i read it because i enjoy it )

I tried the demo of spread betting on paddypower and lost all my funds in a short while.

The lesson i learned from day trading was this:

You can be entirely sure of the future direction of a stock but if that stock fluncuates in the short term your margin can be called and thus you are out of game. So, you can be right but still lose out.

That is why for me, i only go Long.

 

[therock]

Re: How to lose €14k in one year...

Guys, trading stocks or other financial entities requires skill, experience and the right tools.

Without training & a calculated edge, you are just gambling.

If you want to learn how to trade professionally send me an email at peterbr@yahoo.com.

Hi Peter, I would be interested...but do you charge for the advice?

 

[limerickboy1]

Re: How to lose €14k in one year...

zephryo - no one can say whats going to happen in the next 5 yrs. i certainly cant and anyone who says they can is a liar. i use a set strategy and go long / short when my signals say so. if i get a buy signal in gold i buy it even if my gut feeling says its going to go down. you have to go with the trading signals everytime cos the market is all about human psychology and not what you "want the market to do"

flyfishing - day trading is a crazy idea. paddy power and most irish spread betting companies only offer rolling stock contracts so they are closed off each day etc. the uk ones let you trade a stock where the contract wont close for 9-12 months so there is no short term issues etc. also no one can be entirely sure of the future direction of a stock. buy when your signals say buy and go short when your strategy says so .its nothing to do with your own beliefs.

 

[lemur]

Re: How to lose €14k in one year...

Hi Peter, I would be interested...but do you charge for the advice?

Well, of course I charge - for training. Send me an email if you want details.

 

[praetserge]

OP - your problem with spread betting was that you opened too many posiitons with too little capital. i too use spread betting and find it much better than buying shares as i dont want to pay CGT and broker fees etc. buying shares is not any safer than spread betting, what if you "bought" bear sterns or "aig" shares , would that have protected you from the fact that they are now worthless and will never regain their value. of course not

with spread betting the most important thing is not to over bet. i always open the minimum position (25c per point) and if it goes well i can go again (based on chart analysis etc). if i am going well i dont keep on opening positions as greed will undoubtadly lead to ruin. i understand where you come from when you say its volatile . when i started some years ago i had the same experience . i was trading on hong kong shares etc and was making / losing 1000 per night even when i only had 5k in the account. i couldnt sleep properly. i didnt stop till i nearlyl lost it all.

i then left the market, read a load of books (about risk, margin, markets) etc and now i am back in and doing very well. for example at the moment i am short the euro versus japanese yen and long gold (2 euro per dollar rise /fall in gold price). very small positions and they only move about 200 per week. this i can handle no problem. this is all positions should move. i too made huge gains like you , 100%+ in a few weeks. but thats fake and just plain luck .i was buying chinese shares just cos they were going up. i knew nothing about charts, volume etc.

i guess what im saying is that managing risk is essential to mastering spread betting. if you can do that and not make emotional trades then its a great way to make tax free money and not have to rely on useless brokers and pay CGT on any good decisions you make. (CGT is crazy in my opinion)

You're absolutely right... no need to blame spread betting brokers for not managing the risk properly.
I do use spread betting myself and I find it's better than buying shares. but you have manage the risks.