Comments on: The Small Probability of a Very Big Loss

By: manshuv

manshuv — Sat, 24 Jan 2009 00:34:05 +0000

@Ancella: Thanks for commenting. I agree that people who hold the stocks and are able to hold on to them should wait a bit and see if they can salvage something out of it.

@Sri: I think more investors should take a leaf out of your book and do the same thing as you are.

@Chip: Pfizer can pretty much forget about new patents now.

@VC: The lesson is a hard one to learn, and I personally think untile people lose a bit of money, they don’t learn this lesson.

By: VC

VC — Fri, 23 Jan 2009 23:11:15 +0000

People need to learn that stocks come with a lot of risk in the short term. Over the long term stocks perform quite well, but if you are investing in the market you need to know that the market goes through cycles and that your investment is going to go up and down. People get greedy when the markets go up, so many people double their money in stocks but keep holding on to it. If you have doubled your money, sell it! No stock is going to go up forever, if the stock has skyrocketed, it is bound to eventually go down. So by getting greedy and hoping it goes up even more, you also increase the risk that it is going to go down. Only buy your employers stock knowing that there will be times when your investment goes down. If you cannot afford to lose any money, then do not be in the market to begin with. It can be risky! Only take stock from your company if you can afford to lose it.

By: The Small Probability of a Very Big Loss | No Brainer Profits

The Small Probability of a Very Big Loss | No Brainer Profits — Fri, 23 Jan 2009 16:02:33 +0000

[...] Read the original: The Small Probability of a Very Big Loss [...]

By: Chip

Chip — Fri, 23 Jan 2009 15:44:25 +0000

You are right! Everybody are sending people home. If Pfizer can layoff 800 scientists, I just could not believe how a drug company who’s major and business by drug patents would come to still. How are they going to do business?
We are going to witness the worst job losses in the history and the domino effect is seen all over the world.

By: Sri

Sri — Fri, 23 Jan 2009 15:08:24 +0000

The wise thing to do in case of any stock, whether company or otherwise: Take out the initial money invested by you in the stock by selling a portion of stocks. Many do not realize that it is important to take out initial money, which is most likely your hard earned cash or high cost loan.
Next time onwards, that is for future stock purchases, always rotate, that is sell more of the balance stocks to buy more. In case you are investing your hard earned cash, then take that money out as explained earlier.

It is the only way to ensure that your net worth never becomes zero because of “crook stocks”

By: Ancella

Ancella — Fri, 23 Jan 2009 14:51:38 +0000

Well, if it were a couple of years ago, with the market reaching new heights, I would have definitely invested in my employer’s stock. But with the current situation, it would have seemed wise to sell off any company stock I had earlier, as soon as this recession started out, in anticipation of cutting losses. After all, I wouldn’t want to own my company’s stock when its worth a portion of what it was before, with no near hope of it recovering. I know of people who have a good portion of their savings in Satyam stock. But they are holding on to it as of now, as they can’t really afford to lose so much at this stage, in the anticipation of it going up in case of any merger / take over.