The Motley Fool Discussion Boards
Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Re: good time to get rid of some stuff & TLT/SHV||Date: 1/17/2013 12:01 PM|
|Author: altstrat91||Number: 34700 of 35392|
sounds like we could write a book together. for me personally i tend to remember the fails much more than the wins.
"i haven't had a "major idea" that has lost....YET. the biggest loss is coming, for sure, just don't know when."
this is such a critical element to the game of speculation. this is what ultimately drove me to corps. i wanted something a bit more steady in terms of generating an income stream for myself; yet the junk market still gives me some of that high beta feel that the equity/currencies/commodities markets provided for me in the past.
unfortunately i did not go to med school, nor have i ever had an idea for a patent, nor have i ever run a business of my own, nor do i come from money. so for someone like myself, the only way i ever had a shot of creating any kind of wealth for myself was the capital markets.
that MSG was quite a situation there. i can relate to this kind of "idea;" back about wow 10 years ago or so, i had been on a decent run. BUT like you said, that LOSS is always potentially around the corner, just like busting at the blackjack table. the key is going all in, when your best chances are at a hand of 21. that is the tricky part and something i remembered all the time. so at that point, i wanted a big win and was going to walk away for a bit.
so i spent a good month day and night exploring all kinds of companies, stories, etc. finally when all is said and done, all the worlds collided and the stars lined up perfectly in terms of fundamentals, technicals, timing, etc. i end up going all in on Rambus which at the time I paid something like $11ish per share. i even hedged it with some slight out of the money puts. so i had defined the exact amount of loss i could have achieved and new the outcome in terms of time. the puts had like nearly 30 days til expiration.
when you have 100% of your entire capital in one idea, that is all you think about day and night. you watch it tick by tick every day. you don't sleep, you can not eat. days seem like months. after about nearly three weeks of this and Rambus going sideways, decided to close the entire position out for pretty much what i opened it for.
well guess what? literally 6 trading days later, Rambus wakes up and next thing i know its touching $17. over the course of the next month and a half, it went straight up like a reverse ski slope to nearly $50. there is no way you could have gotten stopped out. it literally took years for me to recover from that one. and it always affected my trading after; it was a hindrance to say the least.
i have a couple other big trades that i took on in more recent years but stopped myself out way too soon only to see them become 6 and 10 baggers. you just never recover from that kind of stuff. at least with melco, mohawk, and inment you did not actually lay out capital and take on the position like with MSG. because if you had, it could have driven you to the brink of insanity. i actually blew out an account one time because i was unable to recover from a string of missed/stopped trades that were back to back to back. that LOSER is always lurking in the distance. you can not hit a home run everytime; although your track record is astute enough and sounds pretty damn good.
well if you ever have "ideas" in the future, feel free to drop a line here. i am always interested in hearing from fellow speculators.
|Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|