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Do I think that I'm worst case? NO WAY!! You only have to look back in time to see what companies, underwriters and well-established financial houses paid for software companies and internet security companies - even our beloved Telstra(using taxpayer's wealth) suffered its billion dollar nightmares, not to mention News Corp's businesses going bust. The bigger they are harder they have fallen: Enron, Vivendi, Worldcom and others handing over billions as if there was no tomorrow. Well now penny has well and truly dropped as these huge gorillas fight for their survival under a pile of debt and scandal. Nope...I'm in good company. The scandals and falls since June 2002 have certainly been enough to scare me. We live in hope that we don't end up with a depression and that losses of up to $US8 trillion at time of writing, are finally stemmed without bringing whole financial system to its knees.
How many lucky devils bought News Corp at $26 and how many have watched decent to $8.46? Losing $12 billion in one year only makes people want to own it, pushing price from below $9.50 back up to above $10.50.
The market lurches from drunken stupor to bottomless pit of despair - it's easy to get it wrong on any day!
In sharemarket trading you live and die by your trading plan - so experiment by all means but at some stage you will need trading rules to live by. The market can leave you behind. It has a way of changing faster than you can. It does its time as a bull and then becomes a bear and in same breath will do an about face and scream to a high, leaving your position in red, when everything you know tells you that market for that stock should not behave that way. You keep screaming ...BUT IT'S A LOSER!!!!!! Stock punters just ignore you, pushing dog of a stock higher, after losses counted in billions of Australian dollars and a weaker quarterly profit. Who really cares? Emotion carries market higher until once again profit takers come in and sell highs.
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Happy Investing, Joseph Sgro The Author
Joseph Sgro was born in Western Australia with a hunger to become a millionaire(a Wild Colonial Boy at heart).
Classroom teacher with 15 years and sharemarket trading experience of 16 years culminated in a portfolio of over $700 000 and a serious turn for the worst in March 2000.
This turn of fortune gave rise to much analysis and a desire to learn what went wrong.