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- Reader:
- "Recently, my friend just shared with me that he lost 80k on the day that trump won the election. He went to short jap futures seeing that the DJIA futures were tumbling. The media were calling for doomdays and he shorted aggressively. In the end, he got stopped out. Now he has lost his entire savings. I wonder how long he will need to save another 80k. Now no more ammo to invest if a crash finally happens. I also didnt expect the market to recover that fast and break new high thereafter. Any special advice for the friend of mine.. It seems that he doesnt learn from his mistakes..."
Position sizing, war chest, volatility, nibbles and gobbles.
Don't ever throw everything we have including the kitchen sink into a gamble.
We should be smart enough to know that it is a gamble and be realistic enough to know that things could go horribly wrong.
Don't ever think that we are invincible.
The moment we think we are invincible, we might just fall into a hole which might take us a long time to get out of.
Related posts:
1. Grew more daring and lost $100K!
2. How to make recovering from losses easier?
Bloggy Award
4 comments:
I do not know how old the victim is, but to lose 80K as a young working adult is a big blow.
The 80K is more than enough to pay for a Wedding and BTO house renovation for my case. Once again, the importance of position sizing comes into play.
If the investment/trading is based on probability, it most likely a form of gamble. Speculation type of investment is a usually a small position in my portfolio.
Example, as shared before with AK. MPM belongs to a cyclical industry and classify as a growth stock. It is currently struggling, i have limit my long position in this MPM equivalence to one month of my salary. I have prepared to written off this investment. I have take it as not receiving 13 month for one of my work year. Painful yes, but definitely not crippling. Will survive.
Hi Solace,
Quite unfortunately, many will have to learn the hard way and I am saying this from experience. As long as we learn, the experience is not wasted. :)
China will be handed the opportunity to reshape the rules for global trade and profit from a more isolated US if President-elect Donald Trump carries out his pledge to abandon the landmark TPP pact, observers say.
The likely demise of the Trans-Pacific Partnership has been welcomed by state media in China, where the deal had been criticised as a naked attempt to boost US influence in the region and contain the Asian giant.
Source:
http://www.channelnewsasia.com/news/business/international/trump-s-tpp-withdrawal-gives-china-chance-to-redraw-trade-map/3314676.html
On shorting ComfortDelgro, a reader says...
"Yes i agree..let it crash and burn temporarily, though i always wonder that these shortsellers have balls of steel or simply lack of emotions given they have to pay financial interest on the amount they short every single day they short it....brave souls"
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Blogger AK says...
Traders. ;)
I used to trade more actively and I know many traders do what they do because they want to make more money fast.
Shorting does not require a lot of money to do and it can be very rewarding but because there is very little financial commitment, the temptation to go big can be too much for some.
I have a friend who lost almost $30,000 shorting the market at one time.
And some lost their life savings.
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