I didn't say it wasn't stupid but the guy lost his own money and money he borrowed and is responsible for paying back. At least it wasn't someone else's money he blew, so I can only say so much because he is going to have to deal with that as a consequence obviously. You could see it was a train wreck in the making when he first started it but sometimes people need to learn things for themselves no matter how many people tell them otherwise.
Life and/or the markets teach us the lessons we need to learn! and we keep getting taught until we learn! One important lesson that comes to mind is : It's better to remain silent and be suspected of being a fool than to open one's mouth and remove all doubt! Regards Johno
I'll agree with you there. I'm just a beginner but even from the little that I know, this guy seemed to be making terrible decisions. Question - this guy borrowed money "on margin". And it looks like he went all the way down to zero. So he's no only broke, but owes 300 grand, right?
I don't know if he is down to zero. Some folks who follow it closer than me have commented that he probably lost at least 90%+ of his starting cash at the bottom. But yes, he would have to pay back any amount in excess of the cash he had on hand if he ended up losing more than was in his account. His broker would likely force liquidate before that happened though. He either got force liquidated/ sold at the January bottom or is still hanging on hoping for a miracle.
What is ridiculous about the whole sitiuation is the guy had no idea how to trade and actually thought he would achieve his goal. Now a half-way intelligent person would have tried to FIRST learn to trade with his intial 70,000 in savings without taking a second mortgage on his house. What is even worse is he then leveraged that borrowed money with margin. I have no problem if someone takes risk based on reasonable judgement, but to trade that kind of money with absolutely no trading knowledge is criminal.
I don't think that saying "down" to zero is accurate in this case... from where he's standing zero is up, not down.
Yeah, i'm not talking about his loan. He obviously owes more money than he had to begin with before he started trading because over 70% of his starting capital was from a loan/line of credit. I'm saying I don't think he got a margin call from the broker in excess of is starting 72K plus the 170K loan. So, he is out the 72K plus he owes around 157K on the loan. I think he probably ended up with around 10-12K left down from 242K. So, yes for him getting back to zero on his loan would be a "win".
Dustball, I do get annoyed when people equate trading and gambling, but don't high and mighty cause you don't gamble. Many traders like poker and backgammon because of strategy and they think very similarly to when they trade. If you want reasons to think you have a future in the business go look at your account or call your mom and let her tell you how smart you are. Don't try to make yourself feel better by putting other people down. roy