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Author: Somewhere Big red star, 1000 posts Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3845  
Subject: Re: NUFO & SCMR Date: 2/5/2001 2:19 AM
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I find your post a little disturbing. It's almost as if you're proud of taking excessive amounts of risk, but that'll probably change as you lose real money on your investments. Somehow, risks seem more real after losing money than before. But if you're looking for advice, I'd recommend putting your money back into mutual funds until you learn more about what you're doing. These are the mistakes I believe you've made--ones you've mentioned in this post and in previous posts on other boards:

* You've only become interested in stocks in December of 2000. You still have a LOT to learn. Take your time. The stock market won't go away tomorrow.

* You've already invested in ten different companies. Typically, it takes me a month to research ONE company. While many people may not take as long as I do, I have a difficult time believing you've mastered the art of investing so well as to find the ten companies out of thousands that will reap rewards that dreams are made of.

* Margin should be left alone until you know what you're doing. I'm all for margin, but first get your feet wet. You didn't mention how much you are on margin, but if you're not careful, you'll get burned big time.

* The two stocks you mentioned (NUFO and SCMR) are extraordinarily risky, and nothing in your profile suggests you are qualified to own such stocks. Just because you can shoot yourself in the foot doesn't mean you should. Only those who understand the industry in detail should take such large risks with the companies. (That's my opinion, at least, but there will be plenty of people who say you don't have to know anything about an industry or company to successfully invest in them. Be conservative. Don't believe them.)

* Nothing you've said suggests you have any concept of how to value a company. You've been watching those two stocks climb and wanted to jump in before they got too "expensive". By what measure? Perhaps they're already too expensive and always have been. Then again, they may be dirt cheap even if the price doubles. Until you can determine a ball-park value for where you believe a stock should trade at, you can't say whether it's too expensive or not.

The stock market is a terrific way of building wealth, but it's also a terrific way to lose your shirt if you invest irresponsibly. If you want risk while you're under 30, go to Vegas. If you want solid results, slow down a little. You're not going to make your millions overnight.

-- Ryan

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