Well, I was hoping to do two things:
1. Write this post after I sold for profit and just barely made it alive and donate all profits to charity like I have before on those bets in prior blog post
or…
2. Take a small loss and write a blog post about how and why I did what I did and shouldn’t have and hopefully people learn from it
But …
Neither of those panned out and got smacked around for $50k maybe more maybe less I don’t know yet I’ll verify it later – mad.. yah… BUT I will tell ya it FEELS great to be out – loss or not – felt worse in LOL
I don’t care if it runs, if it hides … every now and then I have to be humbled by this stuff to remind you that the money in accounts are REAL and not just numbers AFTER A SOLID start to the year.
I started the TOS account with $14k and ran it to $130k with no dips, Sogo $30k again to $65k …. IB I don’t know I take out of that one …. and so on and so forth. You saw how hot trading was – got a new account with some great shorts and nailed for $12k and was making on average about $3k a day effortlessly within the first hour of trading each day… ya got real easy – this is my type of market.
Past few days made a little bit on Rediff.com India Ltd. (REDF) and Sify Technologies Limited (SIFY) … a little bit .. not a lot – these were textbook plays that normally I’d capitalize at least $10k + if not $20k on each play
So why didn’t I?
Well .. bogged down ‘hoping‘ on AVATAR VENTURES CORP (AVVC.OB)
Didn’t hear too many people get hurt so that’s a good thing I said about 600 times for people to sell at 1.20 and 1.25 + because it wasn’t the normal bounce and the bounce was met with more selling on the offer – why didn’t I listen to myself not sure? Wasn’t that easy tho – but again – importance of sticking to your rules and not doing dumb shit.
Now – don’t get me wrong as I always say I trade tickers not companies so this is just a small rant because why not – I’m writing about a huge loss
The first point I knew (even though I mean… we already knew) but just confirmed the fact that you could sell shoe polish, organic cat food or have the next cure for cancer IPO it on the OTC and sell $10 million worth of stock was the following:
Have they made any apps? (this just changed by the way)
Who knows – they just changed their “business-apps” page to “divisions” probably because when you click it before it said “coming soon” and they had done zero prior projects – anything that trades publically with a market cap approaching $100 million surely has some history … no?
Website made by a 3rd party – not even internal? Please!
Bottom of their website – this GREAT app company they are going to potential buying (recent LOI) … scroll to bottom – guys … this website was made by a template by someone who has NO IDEA and NO PROGRAMMING skills. You think a regular programming nerd would allow that to be in the footer? Hell no! They just put this website up as a face – you could do this with a programmer in about 60 minutes. No way these guys have even made a map, they’d build their website themselves not higher some third party who gets a back link out of it …. sorrrrrrry try again
News? News doesn’t matter they are in a $6 billion market
nah, you don’t need that … just talk about how big the market is! Google the acquisition target, it’s a fluke – there’s nothing on the internet about any of it – no reviews, no testimonials .. just … nothing
What do we do? LOL $6 billion market mention again
Each dip … told people not to play that it was continuous selling etc… but yet I the idiot held on but nearly ‘forced to” There was never really a panic dip just slow selling, same stuff I tell people to stay away from and wait for a panic dip – finally yesterday there was a panic followed by a nice rebound. Figured they finally cleaned out all the sellers that were just scalping in and out and back on track with the program.
Easy for many to get out … but if playing size it wasn’t .. that’s why – there was no real buying volume the past 3-4 days the only volume was on bid and/or those in control being best offer. Could I have just hit the bid? Ya probably a little bit at a time, but the market was so manipulated they would have taken 500 shares and tanked it on me.
If I tried to slowly sell out even place 500 shares out there they’ll under cut you … if the bid had a .01 spread they would hit the bids and put the offer down a few pennies more.
Why? The whole time you though, “oh boy VERT saves the day” guess what he’s AUTO and ARCA .. maybe even NITE selling. There was no support, just a bunch of selling then rebuying 10 cents later.
Yesterday they pushed it red to green I thought they had just about cleaned it up and it may be back on the run again – then today happened – my plan to sell into any good push, but they were one step ahead and at the end of the day had a motive – get out any size and clean it up. They’re probably at the point of just rebuying
Besides the first pull back that left be wondering (since normally you pull back and rip it back on no volume and your back on highs) these people decide to sell into the first uptick – what does that mean?
Normally you see them panic everyone out … bunch of volume go and then rip it back to wherever it was with a strong bid not letting in those panic sellers in at a cheaper price .. but instead these guys just wanted to sell, because as soon as it turned guess what, offer was thick .. AGAIN. The deal is screwed … but probably can go now because they bought it all back. They wanted to shake the tree and probably are counting shares and know how many shares are away from them – they got what they wanted but I doubt it’ll do well from here on out.
The only volume comes from either VERT buying at market like you saw at the end of the day … or from tanks – other than that – volume is shot. And that was probably just the main sellers getting flat for the day.
Good luck longs wish you well but boy was it a sigh of relief to sell out today, loss hurts? Yes? Do I like it? No … manageable? Absolutely
I moved my bike for Cinco De Mayo 4 years ago almost to this exact date – that was my biggest loss $89,000 in about 3 minutes – checking my Palm Pilot back in the day with AlphaTrade Level 2 only to see my account blow up in front of my eyes. I had flash backs haha, and said fuck it and hit the bid. This was a good humbling moment to go back to doing what I do best.
Market was super hot for a LONG time but Medefile International, Inc. (MDFI.PK) that suckered in a lot of people nevermind and I use this term lightly (given by day) the sheep who chased the gap open this morning and kept buying at any price on Smart Holdings, Inc. (SMHS.PK) … let that ne a lesson to gap buying as if MDFI didn’t just teach you this first hand last week. People are starting to get cut up on these plays – just look at Kurrant Mobile Catering, Inc. (KRMC.OB) today.
Kurrant Mobile Catering, Inc. (KRMC.OB) = 0 trades for me in it today
Smart Holdings, Inc. (SMHS.PK) = 0 trades in it for me today
($38,829)lossAVVCLong Stock
Well this sucked, too big and you couldn’t get out, http://bit.ly/mw93x9
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May 3rd, 2011 at 7:52 pm
Good read, thank you for this post.
May 3rd, 2011 at 8:20 pm
Nice read and appreciate your honesty. I was in this POS too… average 1.17 out after yesterday’s dip.. somewhere around 1.08. Hate taking losses, but I agree with u 100%, it felt great to get out of this pos!
May 3rd, 2011 at 8:44 pm
Great post. I got burned on AVVC as well (and normally I don’t long these mailer pumps). I did OK with it at first but then thought the first few down days were shakeouts and went in bigger than normal…then forced to take about a $2K loss. This was the first time I ever went in big on a mailer (normally I go in small); I guess I saw KNKT, LEXG, and the others and felt the same thing would happen here. Combine that with a bonehead CHBT long-term short (was betting that it would get halted, and it still hasn’t) that I finally covered today…set me back about $5K this month. CHBT is still a fraud but I don’t have the capital to be holding shorts for months, tying up capital that I could be using for trades that I know work.
Like with you, for me it was a lesson to stick with what I’m good at. I have a nice set of core strategies now that I should stick with, and stop trying “one-off” trade ideas (like CHBT) or going in too big when it comes to unfamiliar territory (like AVVC). I’ll bounce back just like I always have from setbacks, just like you’ll bounce back as well.
May 3rd, 2011 at 9:27 pm
Great post Nate! I lost on this as well just like most, but learned valuable lessons that out weigh the loss!
I don’t think I have ever watched a stock so close, I was counting every share ASCM bought at 1.25 and watching every tick for days, even though my gut was saying get the F out.
Thanks for all that you do! Helped me make good money this year!!
May 3rd, 2011 at 10:52 pm
Nate, you still my idol. I have taken big losses in the past and learned from them. Every single time I’ve bounce back and I am sure you’ll bounce back. Today I broke my 74 stock winning streak and you know what I did after the loss, I left my house and wrote on a napkin my core rules. It’s going back to the fundamentals that make you a great trader. Good luck with your trading and you will rock again.
May 4th, 2011 at 12:00 am
Excellent post… It’s great that you share your bad experiences with people so they can learn from them. When we get too cocky and abandon our rules a lesson is bound to come! Your post hits home for me because I took a $20k loss on Friday after having a great week. Before I went to bed on Friday I wrote my 5 basic rules down and stuck it on my computer… Also kicked back some cocktails and bitched myself out the entire weekend. You’re a true pro and you do everyone in your group a ton of good. Thanks again for everything.
May 4th, 2011 at 11:09 pm
Nate, could you kindly explain why “you couldn’t get out”? I thought all you had to do was sell it immediately before the loss became bigger…
Thanks for answering my curiosity!
May 4th, 2011 at 11:11 pm
@glee just as I write above ……
if I was in smaller that’s one thing easy to get out … but I had size and no way to just whack out…and if u tried to get out slowly on offer they’d just down tick and match your offer and get in front of you – read it again I talked about it
they obviously ripped it back today that was their goal to get everyone out and rip it back – they won … o well