I'm going to write about stocks/investing on here from time to time. But first, like any good investor, I must subject myself to a (virtual) flagellation over trades gone bad.
I not so proudly present to you, my worst stock buys, ever.
Disclaimer - these are determined from buy point to sell point. Some of these stocks have since recovered, in which case I missed an opportunity to dollar-cost-average (DCA) a way out of my self-created mess.
Stock: Altigen Communications (ATGN)
Purchase Date/Price: June 2000 @ $6.25
Sale Date/Price: June 2001 @ $1.15
% Loss (Annualized % Loss): -82% (-81%)
Investing Idea: Pure play on VoIP telephony equipment.
What Happened Instead: VoIP didn't take off (yet), and even so, a tiny company like Altigen wasn't going to the beneficiary, but instead large equipment providers like Cisco.
Stock: MedImmune (MEDI)
Purchase Date/Price: January 2001 @ $49.31
Sale Date/Price: April 2001 @ $34.84
% Loss (Annualized % Loss): -29% (-100%)
Investing Idea: Everybody has to own a biotech, right?? Plus, it had fallen from its high of above $80.
What Happened Instead: Caught a falling knife in a market of falling knives. I could have DCA'd my way into a gain though; it fell as far as the low $20's but now trades at around $58.
Stock: Ciena (CIEN)
Purchase Date/Price: June 2001 @ $36.98; DCA'd to $11.48
Sale Date/Price: June 2003 @ $5.44
% Loss (Annualized % Loss): -53% (-32%)
Investing Idea: Wow, telecom equipment stocks have fallen a lot...they must be cheap.
What Happened Instead: They were cheap for a reason - this was during the height of the "bandwidth glut" (which has subsequently become the "bandwidth shortage"). Meanwhile Ciena was gobbling up companies and burying itself in debt. I was able to reduce the damage through DCA-ing, but not enough to avoid this list.
Stock: Montana Mills (MMX)/Krispy Kreme Doughnuts (KKD)
Purchase Date/Price: June 2002 @ $6.00 MMX (equivalent $40.29 KKD)
Sale Date/Price: November 2003 @ $10.01
% Loss (Annualized % Loss): -75% (-44%)
Investing Idea: A family member wanted to own Montana Mills but didn't have a brokerage account, so they gave me some money and asked me to purchase it for them, which I did.
What Happened: Montana Mills was bought out by Krispy Kreme. I should have sold at that very moment, but held on only to watch Krispy Kreme crash due to rapid over-expansion and dubious income from franchise rights. This was easily my most painful trade of all time - as much as it hurts to lose money, it hurts 100 times more to lose money for your family.
Stock: ATA Holdings (ATAH)
Purchase Date/Price: September 2004 @ $2.36
Sale Date/Price: May 2005 @ $0.91
% Loss (Annualized % Loss): -61% (-100%)
Investing Idea: I could pretend to have a valid justification for buying not just an airline stock, but a bankrupt airline stock, but I won't.
What Happened Instead: The company continued its downward spiral, with a brief blip provided by a deal with Southwest, which, of course, I missed.
And, last and certainly least, my worst trade ever...which happened to be my first trade ever.
Stock: Covad Communications (DVW, used to be COVD)
Purchase Date/Price: August 2000 @ $15.94
Sale Date/Price: June 2001 @ $0.67
% Loss (Annualized % Loss): -96% (-100%)
Investing Idea: Pure play on the impending DSL rollout.
What Happened Instead: Two huge problems here - 1) DSL is an inferior product, and 2) even so, a tiny company like Covad wasn't going to the beneficiary, but instead the Baby Bells.
Yes, letting that run as far down as it did was pure idiocy. Thankfully, not a lot of money was involved.
I'll continue tomorrow with a slightly cheerier subject, my best stock buys ever.
