1999 Nov - China Prosper - Watch out following the next pump dump chart, the runaway big movie can not lose truck
The pick up truck swerved to stop from running me into the tarmac of the hot afternoon.
At this moment, I am not the usual happy go lucky Irishman that everyone knows me as. Instead, I am walking the streets of Guadalajara Mexico numb to the outside world, in a daze, just muttering to myself. All I can think is, that I am a truly worthless individual, that I am stupid, that I am a sucker, that I am a fool, that I am an eejit, that I am really just another gambling addict and I really don't care if I die right here and now.
But let's go back a day!
I get up and log on to my computer and my internet stock broker account.
Financial news on the internet centres around a China/US trade agreement break through. One click to an internet news provider and the word on Wall St is that China Prosper, a Hong Kong construction company, is said to be one of the main beneficiaries of the breakthrough. Luckily, they say, it's shares are also listed on the reputable stock exchange in New York, called The NASDAQ. I click to the stock charts for the company and I see that during the final half hour of trading the previous day the company's stock went up 215 per cent. So the news must be true and this is the big tip I have been waiting for all year.
I monitor the trading every minute from my computer screen. In the first half hour of trading the stock has gone up another 534 per cent to 80 dollars a stock . Then 6 minutes later it falls back to 42 before rising again to 47 dollars. Its going up again. If I buy it now with all my savings and then get out after a 10 per cent rise I will have made a killing just from one morning's work. Greed begins to seduce me.
I make one click onto my trading account and I put on a large position. I invest the total balance of my account (180,000 dollars) in order to buy as many shares at market of China Prosper. Why at market? Because greed tells me to buy at any price seeing as it is going up and up and up.I think that the shares will be bought at 47 or thereabouts give or take a fifth of a dollar and that cleverly the balance of my account will be fully used up to maximise my assured quick profit!
As I stare out through the big art deco silver framed windows of my 2 bedroom flat in Guadalajara the adrenaline courses through my veins after just placing the order. The trees that line the boulevard below are radiant in the sunshine even though they also hide an old hidden dirty sewer which runs underneath the road just 20 metres away from where I was sitting in my 3 story rustic painted condominium. This sewer in the hot months of May and June and July stink out the whole neighbourhood. I foolishly bought the apartment 3 months ago in August not knowing this important fact. Or rather, it was a detail that the estate agent and the owner, a priest, forgot to mention to me. This thought could not be accidental. My mind must have led me to these thoughts and now to the possibility that what I was doing in the stock market this morning also stank.
17 minutes later I return to my computer screen and to my internet stock broking account. I see no immediate confirmation of the buy. Normally I get confirmation ten seconds after placing an order. I begin to feel the rashness of the previous actions surging up through the back of my neck prickling its hairs along the way. 23 minutes later and still no confirmation of my buy at 47 dollars or even thereabouts, 25 minutes later still nothing! Something is wrong and I don't know how to get out of it, this mess of my own making. I put in a cancellation order to cancel everything. Instead a minute later a confirmation of my initial buy comes up on the screen!
I bend down to analyse all the new lines of scrolling information confirming my original buy order but "gasp", it says that my shares of China Prosper were bought at 54.5 dollars instead f 47. This can't be! I didn't have that much money in my account. It's nearly 20 per cent higher than I expected to buy the shares for 10 minutes ago. How come?
It was then that the 'First Mistake' was made. Since I had not put a limit price on my buy transaction my internet stock broker automatically loaned me the rest to make the buy happen at the market price (at any price). I thus become instantly 21000 dollars in debt to my internet stockbroker. But hey the stock was going to go up, wasn't? I need a break from this screen.
24 minutes later I nervously go to check the current price of my stock and with a click of the mouse I see that instead of rising rapidly even further it has fallen from its high of 54.5 dollars down to 47 again. No, it can't be! None of my shares have ever moved up and down twenty per cent in 20 minutes! Making some quick calculations in my head I realise that in the 25 minutes since my broker bought me the shares in China Prosper I am down nearly 40000 dollars on my portfolio but on top of that loss, I also have a loan outstanding of 21000 dollars to pay to my broker at some stage!
The Second Mistake revealed itself. I had also broken one of my other rules of buying. 'Buy only in the evening'. I had bought, in the morning! This put my rules out the window and panic and indecision set in!
In this state I found myself saying inwardly, "Why don't you wait until the end of day to make a decision on what to do? Things might improve. "
I don't know what I did in the meantime. All I know is that the same thought went through my head again and again, 'Please give me one more chance to get out of this situation with minimum damage to my life savings!
7 hours later and 5 minutes before the NASDAQ market closed I click on the web page of my internet stock broking account again. Has it shot up? 'Oh my God, China Prosper has shot down to 33 dollars a share or to put it another way they are down circa 40% 80,000. A knot grips viciously in my stomach. The worst has happened. The waiting has caused an even huger loss. I decide in the panic to obey desperately an old trading rule of mine and find myself repeating inwardly "You will sell in the morning as you always have done!" This decision will give you "hope" of a rise from the awful closing price of 33 dollars. I have a sleepless night!
Next morning on opening of the NASDAQ market I take another look at the computer screen. I watch as China Prosper sinks even faster to 26 dollars a share. It's time for me to give up the ghost, and finally sell, the shares. I find after the sale that I am now left, after paying back the 20000 borrowed on margin, with only 80000 dollars 50000 pounds (gbpusd = 1.60) in cash in my account to go back to Europe. Or to put it another way, I have lost roughly $100,000 of my life savings in 24 hours.
5 months later.
In the beginning I used to love this game of chance but, on that fateful day back in November, after being blinded by all my other great gambling successes of the year, I had forgotten how dangerous it could all become in just a blink of an eye. I realised I had not being playing the game for the sake of the game, but really, for the pleasure of a powerful green monster within, ...."Mr Greed".
At this moment, I am not the usual happy go lucky Irishman that everyone knows me as. Instead, I am walking the streets of Guadalajara Mexico numb to the outside world, in a daze, just muttering to myself. All I can think is, that I am a truly worthless individual, that I am stupid, that I am a sucker, that I am a fool, that I am an eejit, that I am really just another gambling addict and I really don't care if I die right here and now.
But let's go back a day!
I get up and log on to my computer and my internet stock broker account.
Financial news on the internet centres around a China/US trade agreement break through. One click to an internet news provider and the word on Wall St is that China Prosper, a Hong Kong construction company, is said to be one of the main beneficiaries of the breakthrough. Luckily, they say, it's shares are also listed on the reputable stock exchange in New York, called The NASDAQ. I click to the stock charts for the company and I see that during the final half hour of trading the previous day the company's stock went up 215 per cent. So the news must be true and this is the big tip I have been waiting for all year.
I monitor the trading every minute from my computer screen. In the first half hour of trading the stock has gone up another 534 per cent to 80 dollars a stock . Then 6 minutes later it falls back to 42 before rising again to 47 dollars. Its going up again. If I buy it now with all my savings and then get out after a 10 per cent rise I will have made a killing just from one morning's work. Greed begins to seduce me.
I make one click onto my trading account and I put on a large position. I invest the total balance of my account (180,000 dollars) in order to buy as many shares at market of China Prosper. Why at market? Because greed tells me to buy at any price seeing as it is going up and up and up.I think that the shares will be bought at 47 or thereabouts give or take a fifth of a dollar and that cleverly the balance of my account will be fully used up to maximise my assured quick profit!
As I stare out through the big art deco silver framed windows of my 2 bedroom flat in Guadalajara the adrenaline courses through my veins after just placing the order. The trees that line the boulevard below are radiant in the sunshine even though they also hide an old hidden dirty sewer which runs underneath the road just 20 metres away from where I was sitting in my 3 story rustic painted condominium. This sewer in the hot months of May and June and July stink out the whole neighbourhood. I foolishly bought the apartment 3 months ago in August not knowing this important fact. Or rather, it was a detail that the estate agent and the owner, a priest, forgot to mention to me. This thought could not be accidental. My mind must have led me to these thoughts and now to the possibility that what I was doing in the stock market this morning also stank.
17 minutes later I return to my computer screen and to my internet stock broking account. I see no immediate confirmation of the buy. Normally I get confirmation ten seconds after placing an order. I begin to feel the rashness of the previous actions surging up through the back of my neck prickling its hairs along the way. 23 minutes later and still no confirmation of my buy at 47 dollars or even thereabouts, 25 minutes later still nothing! Something is wrong and I don't know how to get out of it, this mess of my own making. I put in a cancellation order to cancel everything. Instead a minute later a confirmation of my initial buy comes up on the screen!
I bend down to analyse all the new lines of scrolling information confirming my original buy order but "gasp", it says that my shares of China Prosper were bought at 54.5 dollars instead f 47. This can't be! I didn't have that much money in my account. It's nearly 20 per cent higher than I expected to buy the shares for 10 minutes ago. How come?
It was then that the 'First Mistake' was made. Since I had not put a limit price on my buy transaction my internet stock broker automatically loaned me the rest to make the buy happen at the market price (at any price). I thus become instantly 21000 dollars in debt to my internet stockbroker. But hey the stock was going to go up, wasn't? I need a break from this screen.
24 minutes later I nervously go to check the current price of my stock and with a click of the mouse I see that instead of rising rapidly even further it has fallen from its high of 54.5 dollars down to 47 again. No, it can't be! None of my shares have ever moved up and down twenty per cent in 20 minutes! Making some quick calculations in my head I realise that in the 25 minutes since my broker bought me the shares in China Prosper I am down nearly 40000 dollars on my portfolio but on top of that loss, I also have a loan outstanding of 21000 dollars to pay to my broker at some stage!
The Second Mistake revealed itself. I had also broken one of my other rules of buying. 'Buy only in the evening'. I had bought, in the morning! This put my rules out the window and panic and indecision set in!
In this state I found myself saying inwardly, "Why don't you wait until the end of day to make a decision on what to do? Things might improve. "
I don't know what I did in the meantime. All I know is that the same thought went through my head again and again, 'Please give me one more chance to get out of this situation with minimum damage to my life savings!
7 hours later and 5 minutes before the NASDAQ market closed I click on the web page of my internet stock broking account again. Has it shot up? 'Oh my God, China Prosper has shot down to 33 dollars a share or to put it another way they are down circa 40% 80,000. A knot grips viciously in my stomach. The worst has happened. The waiting has caused an even huger loss. I decide in the panic to obey desperately an old trading rule of mine and find myself repeating inwardly "You will sell in the morning as you always have done!" This decision will give you "hope" of a rise from the awful closing price of 33 dollars. I have a sleepless night!
Next morning on opening of the NASDAQ market I take another look at the computer screen. I watch as China Prosper sinks even faster to 26 dollars a share. It's time for me to give up the ghost, and finally sell, the shares. I find after the sale that I am now left, after paying back the 20000 borrowed on margin, with only 80000 dollars 50000 pounds (gbpusd = 1.60) in cash in my account to go back to Europe. Or to put it another way, I have lost roughly $100,000 of my life savings in 24 hours.
5 months later.
In the beginning I used to love this game of chance but, on that fateful day back in November, after being blinded by all my other great gambling successes of the year, I had forgotten how dangerous it could all become in just a blink of an eye. I realised I had not being playing the game for the sake of the game, but really, for the pleasure of a powerful green monster within, ...."Mr Greed".
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