TideGoesOut (< 20)

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My mistakes as a newbie investor

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February 26, 2009 – Comments (5) | RELATED TICKERS: WY , RICK , NOOF

OK, I've covered the not-so-Foolish things I've done to reuin my financial state in the past. Now to the things I've done recently that weren't so smart.

WY: My first purchase. I work in the industry (not for WY) and thought this was a good idea. I'm not sure why. I sold as soon as I could basically break even, once I realized there were better-tasting fish in the market/sea. MORAL: Do your research!

RICK and NOOF: I still own small amounts of these, and they both are not helping me. NOOF especially seems to do worse than expected. I made this decision just based on the conversation with my wife, "Let's own some adult stocks". MORAL: Think of a stock as an individual entity, not as a concept or a sector. Buy a fund if you want that (is there a porn fund?).

Overall: I'm Canadian, buying American stocks, mostly. I didn't really pay attention to the exchange rate. I haven't been burned on this, but I could have been (and still could be if things really go sour).

On positive notes, I bought NCX and sold out after it hit a 300% increase, before it dropped to a stable point. I got a little lucky on this...I did spend hours researching it, but I bought it with the spare change left in my account, so I just basically made back the commission on my purchases so far. I have a set of 6 stocks currently and I do expect 4 of them to be really good long-term holds. Time will tell.

5 Comments – Post Your Own

#1) On February 26, 2009 at 4:41 PM, kshepheard (70.40) wrote:

Most of my holding consist of Penn West (PWE). When the economic news started to get grim I believed oil would retreat to a range of 70-85 USD per barrel...I never expected it to retreat to the 30-40 range. I was foolish enough to take the cash I had on hand ( I got out of most holdings at a profit before they tanked) and average down with PWE. However, I didn't time it well and not only have I lost siginificantly on this holding, I have an incredibly undiversified portfolio. Mistakes happen and we all learn from them. We live and learn...I hope I can withstand holding this for the long term...The end of the rate caps make me nervous...I expected to be long gone before that ever happened!

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#2) On February 26, 2009 at 5:07 PM, checklist34 (99.82) wrote:

hey kickstart, I was just entering a blog about my mistakes as a newbie investor as well. As you, I spent hours (probably 100's of hours) researching Nova Chem (NCX) and, as you, it bailed me out. When Nova bumped up 300+% in a day, it was by far my biggest holding and selling it drug my entire portfolio into the green.

With prices this low and a long timeframe, you don't have to nearly get all of your picks right to come out ahead.

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#3) On February 26, 2009 at 5:09 PM, MikeMark (31.35) wrote:

I recommend spending time reading to understand the cause and effect better.

There is a theory that essentially claims that we have passed "Peak Credit," a situation where credit was so easy to get and there were so many receiving and the banks were so highly leveraged that credit expanded to it's maximum point. One of the results is that banks won't be making money in the way they did for the past 15 - 25 years. That will affect the stock markets due to availability of funding.

Put your money where it has verifiable growth potential. Remember that a stock is not a guaranteed return holding. There are other types of holdings that can have growth or return potential.

Besides, cash money is king in a deflation. Look at and think deeply about the period from 1900 - 1950 and all of the 1800s. Read "Tomorrow's Gold" and "Economics for Real People" and "Economics in One Lesson". Really understand the whole economic playing field from a historical perspective.

Then read "Clean Money" and have some fun!

Good luck in all your tomorrows!

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#4) On February 26, 2009 at 5:47 PM, dotCZ (68.14) wrote:

I started investing at around March 2008 when people started saying how much it pays of cause everything got so high from the boom days. Was reading forums websites actually wanted to subscribe to zacks for the 1400$ Zack pro that it would help me. Made some really bad decision like buying and selling when it went down almost like a day trader until I realized that I lost 400usd just cause of transactions alone and then lost the rest by making bad decisions on stocks that everybody was recommending cause they were hitting new highs every week for example Agrium, exxon, chevron and gti.

Something that buried my first account from 6k to 500usd was accepting virtual losses and turning them into paper losses. Listening to all the "great" stocks people were recommending without knowing anything about it. Do your own research and find out about the millions of investing options in this world.

The first year of investing was a pretty expensive learning experience, but you know... right now is the best time to buy stocks and the worst is over. While everybody is scared to start now and making fun of me for loosing .. well thats how millions are gained.

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#5) On February 26, 2009 at 5:51 PM, Mary953 (76.42) wrote: