Discussion in 'Educational Resources' started by rcanfiel, Oct 24, 2007.
I would say the Holy Grail Averaging down and too much leverage
I was short MBNA Bank for a couple weeks based on technical reasons, and had been long Bank of America for years in a DRIP plan. In 2005 I think it was, the bankruptcy laws related to credit card debt were changed in favor of credit card companies, making it harder for consumers to walk away from their credit card debt. BofA bought out MBNA for their credit card business at roughly a 20% premium, and I had to cover at this higher price. The BofA shares simultaneously dropped, maybe 5% or 6%, as usual for a bigger company purchasing a smaller one. The MBNA credit card I had is now a BofA credit card
Not being long enough the morning after Y2K.
It was easy money retrospect â¦but like always it was hard to see at the time. We woke up that morning and had coffee in my kitchen flipped on the tube and saw all the great celebrations going on in Sydney. They had already moved across the inter-national date line. Everything was fine...no planes falling outta the sky...all the sound systems and broadcast systems seemed to be working fine ...no mass chaos as predicted...no toasters chasing people down the street. Nothing, nothing at all. Everything was working fine...Y2K had been a big over blown hyped story.
And the good thing was I still had half a trading day to capitalize on it.
Went in to work that morning and everyone was still on edge, very nervous...kinda freaking out. It was Friday morning; we only had half a trading day that day. As the bell approached I decided to load the overnight boat in many of my individuals account only. Clients were left out of this roll of the dice. I took home over 60K QQQ's and an even bigger basket of other tech and Industrial shares. And walked outta the building hat day pale as a ghost. Knowing that I couldn't cover this with the cash in my accounts if something were to go horribly wrong.
Went home as though I didn't have a care in the world. Went swimming in the pool. Took a steam. But all I could think about was this monster position I was carrying. Me and the chick later went out to a Jimmy Buffet concert that night at Universal City. Spent all weekend all smoked up with a nice cocktail close at hand with friends and family having great fun...but still couldn't shake the thought of the big swinging position (for me at the time).
Walked in Monday morning and the QQQ's were gapped 11.5 points higher...my basket was much higher than it was when I left on Friday. Think I made a bit over 1.2mil on the first trading day of 2000. Blew it all out before the close on Monday. Banked the entire thing.
Yet as sweet as that was Iâm still kicking myself to this day that I didn't go all in. I mean REALLY all inâ¦. in all accounts and in all credit lines with every FCM and all clearing firms that I dealt with.. I may never get another shot like that in my life. Though we can always hope.
Thatâs by far my biggest fuxx up.
Stops, stops, stops...
Kill your losses - or they kill you.
Not entering trades!
Playing on 30 min candlesticks
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