Can I hear about your worst trades ever?? Everyone will freely talk about their best ones...

C

Cabin111


We always hear about the winners. We so proudly share what we did...Made a killing!! I'd like to get a thread going on some of your biggest blunders in trading and business. I'll share 3...Hope some of you will be bold enough to swallow your pride and share one or two disasters of yours.

My two biggest stock losses came with GM and Rite Aid. With GM I bought it at $44. a share. It was paying a good dividend...I did a covered call on it. I would always hear that the US government would go under before GM!! I was wrong...The government walked GM into bankruptcy in about 2007. I sold my stock for $1. Lost about $4,300. on that trade. The other blunder was Rite Aid. They bought a chain called Thrifty here on the west coast. I thought, if they did this deal, they must have had the financing in place to allow for the growth to expand their market. The lenders weren't stupid...They know their value. This company will gain market share!! Wrong!! Everything about that trade had wrong presuppositions...Live and learn. They paid too much for Thrifty. They didn't gain market share...They were losing it. It was very hard to cannibalize the new company. The economy of scale did not work. Lost a lot on that trade too.

My other biggest mistake in business was buying a old junk rental. Great location in a small town in the heart of the business section...Next to a major freeway. I bought it for a great price. I had to tear down the building. Then I decided to be my own general contractor to build a commercial building (with no tenant secured). Biggest mistake I ever made!! I was totally out of my league as a general. The requirement for California commercial codes was outrageous. Sub contractors would burn me. 1/2 way through the project I got out and just sold the property. Biggest lesson I learned from that one is KNOW WHEN YOU ARE OUT OF YOUR LEAGUE...DO NOT BE AFRAID TO ADMIT IT!! Well those are mine...What about yours??
 
Bought 2 oil stocks to get some good dividends RIGHT before the oil market crash. Lost every single penny invested in the 2 stocks. The 2 stocks ended up with value of 0, had to be written off, couldn't even sell them.

The ABSOLUTE WORST was having bought a strangle on NFLX on one of its earnings thinking that it's the most volatile stock, it would have to pocket me some $$$, its earnings came out, it beat some consensus but issued bad guidance, the market went undecided and the stock went as flat as airport runways, lost 80% of my portfolio within like an hour!

The stock usually moves 15% to 20%. All I needed was a 5% move, just FIVE percent! :banghead: Didn't even have tears to cry or strength to break anything in the house afterwards...:(
 
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Dang, love this thread, glad to see I'm not the only one who has made some major booboos! I remember when I was in college, someone rear ended my Firebird, and it was totaled. I got a check for like $12,000 out of it. Back then tech stocks were hot, and I thought I was going to make a fortune selling covered calls on them. So I bought several tech stock and sold my calls. Market, and techs in particular, cratered shortly thereafter. My ~$12,000 turned into $500.
 
I was also not too far away from losing EVERYTHING on XIV/SVXY on the early February blowout. Lost a little, but I could have been destroyed if I had not largely pulled out of those. Its like the gods aligned for me and I came through clean as a whistle. Actually made a good bit of money from the blowout. But it was pure luck, I just guessed right. I can't believe I'm as old as I am and I'm just not figuring out not to invest in things you do not fully understand ha!
 
JSOP said:
Bought 2 oil stocks to get some good dividends RIGHT before the oil market crash. Lost every single penny invested in the 2 stocks. The 2 stocks ended up with value of 0, had to be written off, couldn't even sell them.

The ABSOLUTE WORST was having bought a strangle on NFLX on one of its earnings thinking that it's the most volatile stock, it would have to pocket me some $$$, its earnings came out, it beat some consensus but issued bad guidance, the market went undecided and the stock went as flat as airport runways, lost 80% of my portfolio within like an hour!

The stock usually moves 15% to 20%. All I needed was a 5% move, just FIVE percent! :banghead: Didn't even have tears to cry or strength to break anything in the house afterwards...:(
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Wowzers, you invested 80% of your portfolio in a single strangle? THAT takes balls. :)
 
Bought JNPR at $34.95 ATH....learned a very expensive lesson about tape reading that day--there were like 50k shares on offer at $35. Nicely reduced my tax liability for this year though...lol. And that lesson has saved my bacon on two other trades since then.

Percentage wise, I pretty frequently have 100% losers, especially going into month options expiry day.

Another fun one with my investor's hat, sold BABA two years ago to hold MO. Not bad trades per se, both solidly green. But obviously was wrong there.
 
Paper traded a system for a good part of a year where I would rebalance between XIV and bonds to catch the VIX spikes efficiently. Decided to put on the trade in late january and caught that spike so hard it went right through my portfolio.

The mistake here was clearly paper trading before going live, otherwise I would have had a nice high watermark to brag about.
 
Tibster said:
Paper traded a system for a good part of a year where I would rebalance between XIV and bonds to catch the VIX spikes efficiently. Decided to put on the trade in late january and caught that spike so hard it went right through my portfolio.

The mistake here was clearly paper trading before going live, otherwise I would have had a nice high watermark to brag about.
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Haha you bought JUST IN TIME for the black swan even that might not come back for several years! :)
 
Amaya( now called The Stars Group which is pokerstars and it’s sub companies). Bought it on a pullback, I didn’t notice earnings were coming up and it dropped 30 percent or so on open. I remember being at work with crap cellphone reception trying to close it. Think at the time it set me back about 8 percent on my account. Was also one of my first 10 trades I think too.
 
Purchased a small position in Thornburg Mortgage right before / during the financial crisis. Bought mostly because there was strong insider buying and I felt that if the people that run the company are risking their own money, must be worth owning a little. It went bankrupt a few weeks or months later.

Second would be selling calls on BA last year. I sold 120ish calls and it was 109 or 111 before earnings. After earnings, the thing was trading 140 about a week later and I lost about $1500 per contract in about a week. Should have covered earlier. In hindsight, it wasn't really a bad trade. I left lots of room for the stock to move after earnings and I sold the weekly. But BA just turned out to be severely mispriced last year.
 
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