What have been your worst investments in the stock market? Did you learn anything?

[Valuegrowth]

My worst investment was losing entire capital. After I bought shares of a company, they ended up bankrupt.

Lesson learn: Never buy stocks without doing home work. Buy understandable business.

How about you? Thank you in advance for your comments and experiences.

[ValueNZ]

My worst investment was losing entire capital. After I bought shares of a company, they ended up bankrupt.

Lesson learn: Never buy stocks without doing home work. Buy understandable business.

How about you? Thank you in advance for your comments and experiences.
What company did you buy shares in and have go bankrupt? What was your 50 bagger?

[JBmurc]

yeah heaps(but then I've held 100+ different spec companies over the years always going get a few dogs.. esp doing my earlier trading days ... taking stupid risks putting far to much of the portfolio into only a couple of high-risk stocks ..not being diverse enough ...

Two that come to mind CVR ... Gold producer in KAZ... that the MD was telling me over the phone how they were meeting Gold Production targets to next minute belly up out of capital .... VIL I think it was another cracking disaster .. discovered oil went back for the appraisal oil GONE>>>> ..

[Valuegrowth]

Thanks JBmurc.

For me it was over diversification. Not keeping a strategy, records and not monitoring . First of all, I could have avoided my mistake if I had done home work before doing anything.Then again I got temptation and bought another unviable investment. It look like it’s going to go out of business sooner than later. It’s really have become a long term investment. Picking a weak company for a long term is a great mistake. This mistake led me to pick low debt strong balance sheet companies. These companies not only can ride out difficult times easily but also can acquire weak competitors. More than that they don’t need to raise capital or they can get internally or can borrow money from banks easily.

I still can’t believe the end of Dominion Finance(DF). When I tried to buy some debentures, my investment adviser suggested me to invest in debentures of Provincial Finance. Instead I went with debentures of DF after seeing strength of their balance sheet. If I am correct Provincial Finance went to receivership before DF. When the sector were falling-apart one by one, fortunately, I took my money out of debentures, except some stocks. Another good lesson for me.

https://www.nzherald.co.nz/business/big-names-may-help-dominion-finance-sell-moratorium-plan/XACLORL6TVTCZUY6P36AEOHKFY/


yeah heaps(but then I've held 100+ different spec companies over the years always going get a few dogs.. esp doing my earlier trading days ... taking stupid risks putting far to much of the portfolio into only a couple of high-risk stocks ..not being diverse enough ...

Two that come to mind CVR ... Gold producer in KAZ... that the MD was telling me over the phone how they were meeting Gold Production targets to next minute belly up out of capital .... VIL I think it was another cracking disaster .. discovered oil went back for the appraisal oil GONE>>>> ..

[SBQ]

In my early years of investing, around 1996-2000 I invested in a company called 360 Networks. This was a TSX listed company (when I was living in Canada) which was deploying fibre optic networks around the world. Transcontinental through all the oceans around the world. In Canada, their fibre optic lines would be laid on the railroad networks (in a new quick manner without the costly digging of trenches). They went bankrupt and I lost is all.

Around 2003 I bought shares in Yahoo when they IPO on the open market. It's stock price had tripled in some years when Microsoft tried to buy them out. Jerry Yang the CEO of Yahoo at the time did not accept MS's offers as he thought it was too low. Well then the GFC came and Yahoo stock pretty much collapsed under $20 from $100. For the many many years it stayed at that price even during Marissa Meyer's control. Then somehow, a company that I never heard of named Altaba bought out Yahoo. It traded on the Nasdaq for I think maybe 3 years before they delisted. An interesting story about this situation because I always held the shares through my TDA account. What happened was a portion of my Altaba shares were sold off on some offer and in return I received a bit of cash. The rest what my broker explained to me went into escrow. 10 years later and the shares are still in escrow but routinely every year or random month, I receive some disbursement from those escrows. They were not dividends and the status was not deemed "income" (either way it was a small amount). Now the interesting part is this. Back in 2021 TDAmeritrade issued statements to foreign account holders that they would be in the process of closing their accounts. Upon many contacts with them in trying to find a way to keep the account open, they had no exception. It was not after until the 3rd enquiry I made (this time on the telephone) that the support person noticed I had an escrow attached to my account (it was interesting to note that the escrows were in some # format that did not say Yahoo / Altaba). When TDA looked it up and went to his supervisor, he came back telling me some surprising information. One being that he 'they' can NOT close my account. In fact he told me that it would be 'against the law for them to close my account' and basically said that as long as those escrows are held, there is no way they would be allowed to close. However, they still had placed trading restrictions in that I can no buy shares nor send funding to that account. Though all the dividends from the shares held in the account would still be paid. Knowing that the account would be frozen in trading for some time or many years, I had to be thoughtful in what shares to hold... such as owning Berkshire Hathaway.

I prefer TDA's trading platform over IBKR. Maybe one day rules and regulations will change and Charles Schwab (who owns TDA) may look at allowing foreign accounts.

As a lesson though... never invest in what you can't afford to lose. I had a total of 500 YHOO shares which was not a lot of $ at the time (maybe represented only 2% of the total invested portfolios). Today, my goal of total assets invested has been reached and therefore, have allocated a much higher % to gamble. Around 25% of the capital which I can afford to lose with no threat on retirement or the things I or my family would like to buy.

[kiwikeith]

Yes I much preferred Charlie Schwab to Ineteractive brokers. Much easier platform to navigate. If they allow NZ based accounts again I will go back to Schwab.

My worst investment - in this part of the world would be Ariadne. With Landmark not too far behind. In the US I owned a chinese ADR which was the biggest egg distributer in China - until the biggest egg distributer in China (with the same name) came out and said they had nothing to with the NY listed ADR.

[Valuegrowth]

Thanks SBQ, Kiwikeith. No more investment in high-debt companies and companies who raise capital very often. Low debt, cash rich strong balance sheets firms are my favourites.

"SBQ;1007440]In my early years of investing, around 1996-2000 I invested in a company called 360 Networks. This was a TSX listed company (when I was living in Canada) which was deploying fibre optic networks around the world. Transcontinental through all the oceans around the world. In Canada, their fibre optic lines would be laid on the railroad networks (in a new quick manner without the costly digging of trenches). They went bankrupt and I lost is all.

Around 2003 I bought shares in Yahoo when they IPO on the open market. It's stock price had tripled in some years when Microsoft tried to buy them out. Jerry Yang the CEO of Yahoo at the time did not accept MS's offers as he thought it was too low. Well then the GFC came and Yahoo stock pretty much collapsed under $20 from $100. For the many many years it stayed at that price even during Marissa Meyer's control. Then somehow, a company that I never heard of named Altaba bought out Yahoo. It traded on the Nasdaq for I think maybe 3 years before they delisted. An interesting story about this situation because I always held the shares through my TDA account. What happened was a portion of my Altaba shares were sold off on some offer and in return I received a bit of cash. The rest what my broker explained to me went into escrow. 10 years later and the shares are still in escrow but routinely every year or random month, I receive some disbursement from those escrows. They were not dividends and the status was not deemed "income" (either way it was a small amount). Now the interesting part is this. Back in 2021 TDAmeritrade issued statements to foreign account holders that they would be in the process of closing their accounts. Upon many contacts with them in trying to find a way to keep the account open, they had no exception. It was not after until the 3rd enquiry I made (this time on the telephone) that the support person noticed I had an escrow attached to my account (it was interesting to note that the escrows were in some # format that did not say Yahoo / Altaba). When TDA looked it up and went to his supervisor, he came back telling me some surprising information. One being that he 'they' can NOT close my account. In fact he told me that it would be 'against the law for them to close my account' and basically said that as long as those escrows are held, there is no way they would be allowed to close. However, they still had placed trading restrictions in that I can no buy shares nor send funding to that account. Though all the dividends from the shares held in the account would still be paid. Knowing that the account would be frozen in trading for some time or many years, I had to be thoughtful in what shares to hold... such as owning Berkshire Hathaway.

I prefer TDA's trading platform over IBKR. Maybe one day rules and regulations will change and Charles Schwab (who owns TDA) may look at allowing foreign accounts.

As a lesson though... never invest in what you can't afford to lose. I had a total of 500 YHOO shares which was not a lot of $ at the time (maybe represented only 2% of the total invested portfolios). Today, my goal of total assets invested has been reached and therefore, have allocated a much higher % to gamble. Around 25% of the capital which I can afford to lose with no threat on retirement or the things I or my family would like to buy."

Yes I much preferred Charlie Schwab to Ineteractive brokers. Much easier platform to navigate. If they allow NZ based accounts again I will go back to Schwab.

My worst investment - in this part of the world would be Ariadne. With Landmark not too far behind. In the US I owned a chinese ADR which was the biggest egg distributer in China - until the biggest egg distributer in China (with the same name) came out and said they had nothing to with the NY listed ADR.

[justakiwi]

Brierley Investments. First ever investment back in 2007. Knew absolutely nothing about investing in shares, but purchased on the recommendation of my (now ex's) friend. Fortunately I only had around $2000 invested. Got sucked in by the regular bonus issues - damn, I thought they were the best thing since sliced bread :D

We all know how that turned out.

[Valuegrowth]

Thanks justakiwi.

https://www.charles-stanley.co.uk/insights/commentary/learning-stock-market-investing-mistakes

Football managers frequently say they learn more about their team from defeats than from victories. It's a similar story for investing.


First ever investment back in 2007. Knew absolutely nothing about investing in shares, but purchased on the recommendation of my (now ex's) friend. Fortunately I only had around $2000 invested. Got sucked in by the regular bonus issues - damn, I thought they were the best thing since sliced bread :D

We all know how that turned out.

[Rawz]

Mine is HMY.

The company had a good foothold in the NZ market and then made the typical kiwi company decision to expand over the ditch into the much bigger and harder Aus market.

Management sold us shareholders the dream that the Aussie book would grow quickly and be bigger than the NZ book in no time. They promised to generate cash positive earnings.

Anyways did they do what they said they would do?? Well all you have to do is look at the SP. They say the SP will reflect the company fundamentals. Well the SP is a complete disaster!

[Valuegrowth]

Thanks Rawaz for sharing your experience.

Mine is HMY.

The company had a good foothold in the NZ market and then made the typical kiwi company decision to expand over the ditch into the much bigger and harder Aus market.

Management sold us shareholders the dream that the Aussie book would grow quickly and be bigger than the NZ book in no time. They promised to generate cash positive earnings.

Anyways did they do what they said they would do?? Well all you have to do is look at the SP. They say the SP will reflect the company fundamentals. Well the SP is a complete disaster!

[Cadalac123]

Yes I much preferred Charlie Schwab to Ineteractive brokers. Much easier platform to navigate. If they allow NZ based accounts again I will go back to Schwab.

My worst investment - in this part of the world would be Ariadne. With Landmark not too far behind. In the US I owned a chinese ADR which was the biggest egg distributer in China - until the biggest egg distributer in China (with the same name) came out and said they had nothing to with the NY listed ADR.

Classic lol
On similar lines, PET on ASX. Lots of contracts that looked juicy and watering. Had a strong bull phase and became a bagger. Then CEO starts cashing out and it turns out the deals were sour.. all based in China by the way.
Never again. Still have a small amount stuck in there as it was in a trading halt for years then unhalted for one year and now back in a trading halt. First time ever being down 99% on a stock. I keep it in my portfolio as a reminder of what can happen (and because I don't want to cash out an amount less than trading fees)

[Valuegrowth]

Thank you Cadalac123 for sharing your experince. People don't realize not only traders but also investors make great mistakes( make lossess ).By investing in the following company I have lost my total captial. If I am correct they have delisted now. People including investors talk only about thier great winners but they don't like to talk about losers.
https://www.nzherald.co.nz/business/sealegs-owner-future-mobility-in-unlisted-trading-halt-while-loss-widens/LRQ5S2R7DE4KOTHXSF4SXE7YZA/#:~:text=FMS%2C%20which%20makes%20and%20sells,plat form%20was%20half%20a%20cent.


Classic lol
On similar lines, PET on ASX. Lots of contracts that looked juicy and watering. Had a strong bull phase and became a bagger. Then CEO starts cashing out and it turns out the deals were sour.. all based in China by the way.
Never again. Still have a small amount stuck in there as it was in a trading halt for years then unhalted for one year and now back in a trading halt. First time ever being down 99% on a stock. I keep it in my portfolio as a reminder of what can happen (and because I don't want to cash out an amount less than trading fees)

[Azz]

Mine is a gold mine in an ex-Soviet "stan" country, where the 50/50 venture turned into a total loss for shareholders within one of the 50s, as the mafia hoodlums posing as a government one day decided to turn their 50 into 100 by appropriating all assets (as well as kidnapping a few people to make sure there were no issues with the outcome). This is the only time I've lost an entire investment, and in fact it's the only bad investment I've ever made; the rest have all either been out-and-out winners, or I've sold at a reasonably break-even point where I see no future and can use the capital elsewhere. It's hard to learn from this failed venture, however, as at around the same time I made a bundle on a listed copper mine within another dodgy "stan". I guess you could say only do mining investments in politically stable countries with cultures that value words written in contract - but where would be the fun in that?

[Valuegrowth]

Thanks Azz for sharing you experience. Now I like to pick companies with rising cash flow. For me free cash flow yield is a useful indicator for selecting stocks. Not only I will get above average dividends (Dividend champions) but also above average capital gain. In strong balance sheets we find rising cash flow.

https://www.thebalancemoney.com/cash-flow-really-is-king-1200759 (https://www.thebalancemoney.com/cash-flow-really-is-king-1200759)


Mine is a gold mine in an ex-Soviet "stan" country, where the 50/50 venture turned into a total loss for shareholders within one of the 50s, as the mafia hoodlums posing as a government one day decided to turn their 50 into 100 by appropriating all assets (as well as kidnapping a few people to make sure there were no issues with the outcome). This is the only time I've lost an entire investment, and in fact it's the only bad investment I've ever made; the rest have all either been out-and-out winners, or I've sold at a reasonably break-even point where I see no future and can use the capital elsewhere. It's hard to learn from this failed venture, however, as at around the same time I made a bundle on a listed copper mine within another dodgy "stan". I guess you could say only do mining investments in politically stable countries with cultures that value words written in contract - but where would be the fun in that?

[iceman]

My worst investment was Pike River Coal. No need to repeat the sad story and loss of lives here, but 100% of capital was lost

[Bjauck]

Mine is a gold mine in an ex-Soviet "stan" country, where the 50/50 venture turned into a total loss for shareholders within one of the 50s, as the mafia hoodlums posing as a government one day decided to turn their 50 into 100 by appropriating all assets (as well as kidnapping a few people to make sure there were no issues with the outcome). This is the only time I've lost an entire investment, and in fact it's the only bad investment I've ever made; the rest have all either been out-and-out winners, or I've sold at a reasonably break-even point where I see no future and can use the capital elsewhere. It's hard to learn from this failed venture, however, as at around the same time I made a bundle on a listed copper mine within another dodgy "stan". I guess you could say only do mining investments in politically stable countries with cultures that value words written in contract - but where would be the fun in that?
Mine have been in a dodgy “land” country. I bought PEB and OCA for over a dollar and they have been struggling ever since. I have lost thousands.

A family member lost thousands from the same “land” during the 80’s - she invested in Equiticorp and another company. It turned out to be in a Poorly regulated investment environment in a frontier country. I guess I should have learned from their experience?

[Valuegrowth]

Thanks Iceman. Current financial system is not risk free. Even long term investment is not risk free. One thing is sure. People who invest in companies who produce basic needs which have demand for those products in good and bad times can't go out of business unless they mismanage badly.
My worst investment was Pike River Coal. No need to repeat the sad story and loss of lives here, but 100% of capital was lost65 6

[Azz]

Mine have been in a dodgy “land” country. I bought PEB and OCA for over a dollar and they have been struggling ever since. I have lost thousands.

A family member lost thousands from the same “land” during the 80’s - she invested in Equiticorp and another company. It turned out to be in a Poorly regulated investment environment in a frontier country. I guess I should have learned from their experience?

Dodgy "land" countries - they're the worst! :-)