Gostevie's Blog
My postings on things investment-related - and perhaps more.
The title of this post refers not to this jaunty little number by ol’ rubber lips (Sorry, Sir Michael Philip Jagger) and his band… https://www.youtube.com/watch?v=gedzgZqNdxE …but to the sorry tale of an ill-advised and ill-executed foray that I made into and out of a company called Tungsten Corporation back in 2015. Although it wasn’t my biggest loss in percentage terms it was by far my biggest loss in actual cash terms. I am not going to put a figure on it here but it was the equivalent to several months’ take home pay at the time. Looking back at this one embarrasses me even now – everything that a mug investor could possibly do wrong I seemed to do with Tungsten. Here are the gory details: Tungsten Corporation (TUNG) Bought and Sold: See table below (all prices inclusive of costs) Percentage Loss: -42.8% In early 2015 Tungsten, led by the charismatic ‘rainmaker’ Edi Truell, became the latest ‘blue sky’ stock to get the bulletin boards buzzing. It described itself as “a leading provider of automated invoice processing, supply chain finance and spend analysis” and although it was nowhere near breakeven and burning cash like it was going out of fashion, Mr Truell somehow persuaded a lot of very sensible people that the potential was there to turn it into a multi-billion pound company, such was the untapped market for its services. It most certainly wasn’t my normal sort of investment but enough experienced and successful investors whose views I respect seemed to believe the hype that I very foolishly became sucked/suckered into joining in and bought my first tranche on the 21st April at just over 175p, convinced that I would make a quick killing as the share price spiked and then move on. But of course the share didn’t spike at all, and over the next few weeks just drifted lower. I should have realised that I had made the wrong call and sold out at a small loss but instead I made the classic novice mistake of being convinced I was right and began averaging down throughout May at prices between 158p and 111p as it went lower and lower. By the end of that month I was thoroughly disillusioned with Tungsten and annoyed with myself for being such a mug but still couldn’t bring myself to sell and move on. Instead, for the first half of June I watched the spiral downwards continue. But surely it couldn’t keep going down, could it? So on June 19th I made two more purchases at just over 60p – my biggest two single purchases in Tungsten – even selling shares in much better companies to fund it. (One of those companies was Tristel [TSTL] which I sold for 78p. The current bid price is around 201p.) Tungsten now accounted for over half of my CREST portfolio and I was spending far too much time thinking and worrying about it, so three market days later when the share price had actually moved up a bit I finally sold half for just north of 63p. I finally decided to bail out completely just over a week later for slightly under 65p and I remember that the sense of relief that I was finally rid of Tungsten was palpable. I was actually almost pleasantly surprised when I worked out that my overall loss was less than 50%. This chart shows what the TUNG share price did during my period of holding: Anyway, as an old teacher used to tell me, the most important thing about mistakes is to learn from them, so what lessons did I learn from this debacle? Lessons Learnt:
Have I ever broken any of those rules post-Tungsten? To quote Captain Corcoran: “Never… Hardly ever!” Purely out of curiosity I couldn’t resist having a quick peek at how Tungsten shares are doing now, a couple of years later, and they are currently trading at around 66p. I’m sorry that only my second post to this blog is on such a negative subject but I wanted to get this one out in the open. The next one will be more positive – honest! Gostevie
3 Comments
catflap
10/5/2017 07:44:13 am
Appreciate the candour. The trade data, which you published, is fascinating. I can almost feel the emotion in the trades, which intensified during May somewhat. Ive not had much success averaging down either.
Reply
Noel Borg aka Borgy74
22/5/2017 09:37:54 pm
So true! in the beginning we are all prone to believing we are right and surely the market is wrong ... we average down and feel assured by anonymous posters also topping up .... conclusion: Losses dont trouble me. I can take that & forget it,but being wrong 4 not taking the loss that's whats does the damage to my pocket & my soul
Reply
25/1/2023 12:52:23 am
Investment is one of the best ways to achieve financial freedom.For a beginner there are so many challenges you face.Trading on the Crypto market has really been a life changer for me. I almost gave up on cryptocurrency at some point, until I got a proficient trader Bernie Doran, he gave me all the information required to succeed in trading I invested $1500. and got back $16,500.00 within 3 days of investment. His strategies and signals are the best reach out to him on Telegram: @bernie_fx
Reply
Leave a Reply. |
Welcome to my Blogs
This is where I post my ramblings on things investment related - and maybe things non-investment related as well from time to time. ArchivesCategories |