Thursday, June 28, 2007

How to lose $10,000 by the afternoon

Lol. This is too funny not to tell.

Right so. My source "Mr Z" tells me- hey "buy abc@xx" this morning.

I go... "Huh? You sure? That's a lot of cash. And its a pretty weak stock."

Mr Z, "Ya sure. Hot tip."

So I help put the order in... by late morning the shares have jumped up by 15%. I put in the order to sell - and made $12k for Mr. Z. That's cash. No tax. Less fees- $11,000.

You'd think he'd be delighted.... but nooo...

In the afternoon, without telling me he reenters into the position at the same price.

A mutual acquaintance whispers into my ear after lunch- "Hey did you know that "Mr. Z" has got back in?"

Me: "Really?? But I just sold his position this morning."

MA: "Ya... but he wants more. Got back in. Same price as your sell."

There's nothing wrong about wanting more- but when the evidence is thin on the ground and the China Stock market is down 5% and forming a double top... don't you think it prudent to exercise a little bit of caution?? And the chart looks a bit weak now...

That's what I would have told him. And that's why he didn't call me.

Look I'm not a share trading genius but I do try and manage my risk. My friend however doesn't.

By the close of the trade, the stock went down below the starting price. My friend has on paper- lost that $11k and more. I wouldn't be surprised if the idiot doubles up on his position tomorrow.

As they say, a fool and his money are soon...

well we'll see - let's not pass judgement too hasty. Maybe the share price will triple tomorrow morning and my friend will be laughing at me.


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