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Author: vanonuma Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3812  
Subject: Fool's fool aka REAL fool Date: 4/21/2006 11:19 PM
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THIS message board caught my eye! And reading down the experiences (I didn't get through all of them), Goldnail's was a heartbreaker. But to be honest, most of the posts look pretty light on the wallet. I think some of you are holding back.

Where should I begin?

Blythe, now renamed Raining Data - about an $80,000 hit. The guy that introduced Blythe originally introduced Newbridge Networks, which was a serious winner, so I bet heavy with the second opportunity.

Next, shorting yen calls with a strike of 102 yen. I was always on the long side of options but when the yen went to this level for the first time, I knew it could not last because a cup of coffee in Japan was already $4.00 even at 115 yen to the $. But what I did not know was the new derivative product called a knock out option, which the brokers had sold to the Japanese corporates. So as the price got down to the knock out levels, the brokers were seriously under water on their trade. For some mysterious reason (like the brokers buying tons of yen to save themselves) the yen rose through the knock out levels. Then the Japanese were in serious trouble because they had to repatriate their profits from out of the U.S. and they no longer had a hedge. That led to panic buying of the yen which went to 80ish to the $. The margin calls were murder. So I got out then with about half of my liquid net worth left. Try explaining that one to your wife! And if I had stayed with the strategy, I would have made money because the yen came back and the options expired worthless.

How about 20% of net worth lost in a direct investment in a Chinese pipe making company? Not much explanation required there.

Risk taker? You bet! Boy am I glad I'm not in the military, because I would have been dead a long time ago.

If I had put that money in something normal--the truth is, if I had not lost so much money, and I had a pile of cash now, I would probably be risking it big and losing it. So I am glad I took by body blows when I was in my 30s and now keep my bets smaller and my investments conservative.
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