I got an email from a reader which I think is an important one for me to share. He wants me to share it with you to warn others. Here it is:
"I just bought your book at the weekend and if I had seen it earlier I would have the 12.99 and not standing a loss of £150k (this is one hundred and fifty thousand pounds)
I am at a point were my whole day is literally spent sweating and stressed out as 100k was from my pension and 95k from my lifetime savings and every mistake in your book I have made. I feel wrecked. I lost most of my money on ..wait for it Desire and Range Resources.
Lifetime savings - I have 19k left which is all in Range and if I sell I have no chance of getting anything back so I guess I sit tight and pray- though if it gets to 10p etc over the next 6 months will I be tempted to hold in case it goes up more?...oh dear I bet you have heard stories from t"$ts like me before lol.
I bought lots of Range and rmp high and panicked and sold low and Xcite and gkp blah blah..oh f*** spd crashed yesterday just noticed..recovered a bit today.
Just thought I would share this with you so you can pass it on..it's not a game..I feel suicidal I've lost all this money for my future (pension) and present ( 19k left-not sure to cash in or wait) and I've now lost my job because I couldn't focus with these losses and lost my long term girlfriend because I was a depressive s*** to be with. it just sickens me to the core and my confidence to get another job is at an all time low.
I don't mind you passing my story on if it helps others. I would hate to see someone else in my position.
I just wish I would have seen your book sooner...I bought more of a lot of the stocks on the way down catching a falling knife, thinking averaging down would work and not doing research..and the worst vice of listening to BB boards and 'so called experts' who mysteriously disappear when the stock falls rapidly.
I guess now I have your book I might sell the lot and plan a new strategy with proper stop losses, although I haven't a great track record in picking stocks or just cut the lot..wipe my mouth of the £150k jointly lost and put it down to stupidity, but hopefully I can get my life back on track. I know this sounds hard to believe but I have never bet on anything before nor been to a casino..it was pure greed listening to someone who said they made a 20 bagger on GKP a couple of years ago.. what an idiot."
So there we are. It's chilling story. It's also a story I have heard a few times from others.
Getting it badly wrong in the market isn't just a loss of money. It can also a mean a loss much greater, that of a loved one.
I think it is easy to spot where he went wrong.
But to spell it out: what all new punters do, buy up all the crazy oil stocks hoping to make a killing. Believing tipsters and bulletin boards and the bloke down the pub.
Putting nearly everything in just a tiny handful of risky stuff and not having a balanced portfolio. Holding onto losers as they crash and hoping they will come back.
As you can see from the email this reader can't bring himself to sell even now. It's a terrible psychological problem. As he says he "might" plan a new strategy with proper stops. Will he though?
Never ever allow yourself to get into this sort of mess. Greed was part of it - "this oil share will make me millions".
Losing punters always think they will get the money back, find excuses for holding onto duffers, never use stops, etc. They never buy companies making real things with real profits, always hoping against hope their company will find oil or gold. They get influenced by idiots.
Overall the biggest mistake is allowing shares to tumble and keeping hold of them, so losing capital. Use stops!