In spite of being largely in cash in my trading account, I’ve managed to make such big blunders, it practically rendered my defensive posture moot.
This all started last week during my triple dipping of the cannabis stocks. I ended up chasing them and stopping out the same day for ~10% losses. Then I bought some Chinese stock, CPHI, because micro crappers were gapping. I missed multiple opportunities to sell for +20% and ended up booking a solid loss of 34% today. The reason why that fell below my 10% stop is because I was out all day yesterday. I don’t like excuses — but that’s the reason.
Then I saw shippers heading up yesterday, so I took 10% of my assets in my trading account, which is 25% of my overall investments, and bought 6 stocks. One of them, ESEA, was up 66% from my basis within an hour of purchasing it.
Did I sell it?
Of course not, otherwise I wouldn’t be writing this post.
Instead of stopping out of them yesterday, I held and then sold during this morning’s blood bath for a collective 16.7% loss.
What have I learned?
Nothing at all.
What can you learn from this?
Quit buying and selling micro cap pieces of shit. You’ll make 100% on 5 of them and then end up blowing up, eventually, in a few errant ones gone sour. I knew the risks and the idiocy of these trades, having made these mistakes before, but I still erred.
The Exodus OS cycle from 10 days ago is over and I closed out the SPY trade I took, for a 6.9% loss on 20% of my Quant account.
Presently, I am ~80% cash in trading account, with 5% long ABX. Gold has been very impressive during this sell off. I have no intentions of buying into this afternoon’s bloodbath, especially after blundering so badly. And that’s the real sin in all this. My mistakes have denied me the ability to act aggressively and might cost me a surreal moment to profit from the panic. But I’ve been reckless enough and that behavior must be moderated, so here I am watching markets reel, lamenting over mistakes that should’ve been avoided.
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You are such and honest and generous man. I sincerely admire how you share your life with us. I am not bluffing or trolling you…..and again thank you for you daily writings and being a role model of character, it inspires me and adds to my daily intellectual bread.
Well, thanks.
I try to keep it real. A lot of hyperbole here and I definitely play the asshole well. But I mean well and do try to help.
“Quit buying and selling micro cap pieces of shit. ” YEEESSSS!!!!
You can also throw $0.50 options onto the bonfire (unless you are hedging a larger position)
Cutting losses is not necessarily the *wrong* move, even if turns out to be the less profitable decision in retrospect.
Well put Dr. Fly. 90% cash in trading account. Cash is the ammo we need to hunt outsized returns. Carrying losing positions is a drag on a lucid mind. In addition to stops I like to cut my losers weekly (Friday) unless there is some compelling reason the following week and still within SP (i.e. drug trial, earnings, etc.). Managing the losers is as important as the winners. My record for worst trade mgmt of the yr is by far $NBEV, from initial long at @2.05 somehow lost money in the T-account for this name.