Feeling Violated by ATPG
Board: ATP Oil & Gas
Exited my position today at a 96% loss. To say that I'm licking my wounds is an understatement... got back a couple grand... lost about half a years salary... not a staggering loss, but I still feel violated, a little dirty, and wondering if I should stop investing...
Soooooo, the only Foolish thing to do is pick myself up by the bootstraps, be honest with myself about what I did right or wrong, and learn.... so bear with me...
Lesson 1: Be wary of companies with lots of debt... this might seem like a no-brainer, but it was easy for me to get a little blinded by each rabbit ATPG pulled out of their hat... see lesson 2.
Lesson 2: Be wary of companies that have magicians on staff... it doesn't matter how many times they pull a rabbit out of their hat... it only takes one failed rabbit out of the hat to sink your investment.
Lesson 3: No matter how much you believe in a company or industry, don't completely overload on it. Even if you know for a fact that silver is going back to $50 an ounce, or oil to $200, that doesn't necessarily mean those companies that operate in those industries are guaranteed success.
Lesson 4: No matter how good a business is, if you don't completely trust management to have your best interests at heart, are they really the best place for your money? Guessing perhaps not.
Lesson 5: Past performance is no indication of future performance... old adage of course, but it's sometimes seems "easy" to read the signs of QE and ECB policy and determine where you think the economy is going... there are a lot of moving parts... and they don't necessarily synch up like they're supposed to most days... see lesson 6.
Lesson 6: The market can be irrational... and can stay that way longer than most common investors can stomach... ATPG could win a suit against the government, ramp up production... blah, blah, blah... but they didn't do that quick enough... I wonder if I'm smart enough to follow a stock after a day like today... pretty darn sure I'm NOT smart enough to follow a stock into and out of BK... which is about 80% of the reason I sold today... even if all the stars aligned, and I spent 4000 hours figuring out how things were going to be (riiiiiiight) and that common shareholders would be made partially whole and I quadrupled my holdings? To what end... only having an 85% loss... yeah... No Thank You!
Lesson 7: The signs were there... shares of ATPG ended the year around $7... at a minimum, I should have lightened my position from 6x a normal position to say 3x. It's always easy, with hindsight, to go back and say what if... but the major flags (like Israel) should have (at least for me) triggered a bell.
Lesson 8: Treat each investment individually. At least as far as the decision to buy or sell... portfolio balance is a different discussion, but don't let your losses or gains in one stock push you in a specific direction on a totally different stock that has different rules. When I thought Greece was going to default, I pulled 80% of my funds out of the market, and the 20% I had in, was invested in gold and silver stocks, physical silver and oil (ATPG). My belief in QE's effect on the markets notwithstanding, I may have made a different decision on ATPG had I evaluated them individually prior to evaluating them as part of my overall portfolio.... like oil AND hate ATPG would have been solid... even if my portfolio had to go without oil for a while while I researched an alternative... which is humorous in a way since my current portfolio doesn't have any oil... sigh...
I could go on, but I believe I've digressed past lessons re-learned on ATPG into simply rambling... for those of you that lost a little or a lot on ATPG, I'm sorry... I feel your pain... I honestly thought there would have been asset sales etc, prior to us finding ourselves here at the end of a long dirt road... funny thing about all this is I'm not bitter... because for me, getting mad doesn't get me anywhere... If I don't learn from this mistake (hopefully enough to gain back losses) what have I accomplished? And how foolish? With my DNDN losses, it was a binary event that I was sure that would come to pass that didn't... that lesson was easy compared to ATPG... so I'm going to soldier on... work diligently on diversifying into some property (which I view as one of the best places for new money under the right circumstances) and try hard to think of ATPG each time I buy a new stock.
The proceeds from the sale went into SLW shares... for those curious.