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About DD, early Elation, Greed, Fear, near Panic, and finally some sanity and hopefully some sleep.

I invested heavily in Rambus just before it took off. This was not a pure GG strategy and I knew it.

I looked at it from a risk reward scenario. Extremely high potential coupled with my belief that I could get out in time if it went wrong.

When the stock took of there was elation. Wow if this baby gorilla does what I expect over the next few years I can retire. This was followed by greed. 44% of my portfolio was in RMBS before it took off, at its peak it was over 80%. That's a lot riding on a single stock. It did not occur to me to place a protective put. A very, very hard hard lessoned followed. The stock tanked 3 days in a row under a severe, cooridinated, and well financed short sell attack.

A 1 month 4 bagger eroded into a 2 bagger in days.
Why didn't I sell some on the way up, why didn't I sell some on the way down? All I wanted at the end of the year was $350 anyway. $470 was there for the taking. RMBS hit an intra-day low of $240 on the way down.

Panic hit. Do I sell, do I wait. Might my 2 bagger become a one-bagger. I held. Fortunately, good news came the next morning. Solid analyst support and a target of $500. Stock jumps $75 on the open and trades at $340 for a period of time.

Sanity sets in.

I sell my entire IRA portion of RMBS which was 2/3 of my holding. Do not even have to pay the taxman. If RMBS dips, I may buy back in some shares later. Still have my 1/3 share in my regular account, now protected by a probably uneeded protective put. I will take the peace of mind. Had no sleep for days and over the weekend. Oddly enough, if the 1/3 shares hit my price target I still have more than enough to retire early like I planned.

Many mistakes made here.

Looking for a good place to park my cash and get some sleep. Think I will try GMST, CREE, ELON, and WIND for starters. Still agressive but diversified. $80-$340 in a couple of months. Could have done better but could have given into panic and done much much worse.

Sanity returns.

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Hey,

Your story sounds similiar to mine except I don't have an IRA account and I was using LEAPS. Sold 1/2 my RMBS position at $300 and parked the nice little sum of money into CREE, GMST, ELON and WIND plus a few other venture capital positions such as AMSC (nice day to, nice 23% jump. I think it was a partial Gilder effect so will probably come down again).

I too felt sanity returning.

I think GG think alike (duh, were all using the same investing strategy). Maybe better to say great minds think alike.

Tinker
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Fear of loss is a powerful motivator, which works well on the way up and the way down (i.e. dont want to sell the "next" Cisco, dont want to hold the "next" Microstrategy, depending on circumstances). While we seek ways to reduce our emotional responses to external events, I guess we are all pretty emotional creatures, and can only hope to manage emotions rather than ignore them.
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Panic hit. Do I sell, do I wait. Might my 2 bagger become a one-bagger. I held. Fortunately, good news came the next morning. Solid analyst support and a target of $500. Stock jumps $75 on the open and trades at $340 for a period of time.

Sanity sets in.

I sell my entire IRA portion of RMBS which was 2/3 of my holding. Do not even have to pay the taxman. If RMBS dips, I may buy back in some shares later. Still have my 1/3 share in my regular account, now protected by a probably uneeded protective put. I will take the peace of mind. Had no sleep for days and over the weekend.


The fact that many of us think this way demonstrates why it often takes a stock a long time to recover after a significant tank -- everybody is waiting to get back to where they were before the tank, so as the price climbs, sellers jump in to avoid the mistake they think they made of not selling before the tank. I personally think that both RMBS and CRA (my recent tanks) will come back, but it will take a while because so many are waiting to sell once the price recovers.
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