Your Biggest Investment Losses

adindas

HCIMbtw said:

I realised a £600 loss on blackberry.. was bored playing around with stock picks

AFAIK, People put money in Blackberry since last year, not because of believing the LT investment potential of Blackberry but for momentum play in anticipation of a short squeeze to happen. It is the same trading game with GME/AMC. In short squeeze case, the stock price could rise to 10x+ or even more within a few months. Theoretically it could go to infinity (the reward  you might get). But majority of the short squeeze cases do not really happen and you lose your money especially when you bought it when the price had gone up (the risk you are taking).

Early 2021 Blackberry was a good short Squeeze candidate based on the short squeeze data. In fact gamma squeeze (not short squeeze yet) was triggered in late January 2021 and early February. Many of this information is widely available on the news, investing discussion forum, Redditt.

adindas

Prism said:

adindas said:

Unless I have misunderstood what you mean, to me this statement is suggesting you are using the money you could not effort to lose.

I do think that the idea that we only invest what we can afford to lose a bit outdated. If I lost my investments my future would be pretty screwed to be honest. I certainly invest money that I really need at some point.

Each to their own but what I mean here is something like the money for primary needs such as to pay the rent, mortgage, to clear credit cards, loan, regular monthly living spending etc. What happen if you put it into investment and the investment is going south and you already need the money to cover those needs?? It will force you to sell it at a loss (even the investment has a potential to make a return), + taking another high interest loan that is easy to get to make up the difference. That will be a starting journey of a debt spiral. For such need, the people will normally put his money into instant access saving accounts or high interest current accounts.

For many people, especially for millennial, pension, deposit for mortgage (if it is what you are referring to) is not necessary a primary need, so they could still effort to lose it. For such people, even they lose all of their investment, they still have time and ability to make money to recover the money or to cover their future needs.

Also, within a few decades a lot of things could happen in life such as getting big promotion, get new job with much higher salary, making huge gain in business they are doing, etc.

Prism

adindas said:

Prism said:

adindas said:

Unless I have misunderstood what you mean, to me this statement is suggesting you are using the money you could not effort to lose.

I do think that the idea that we only invest what we can afford to lose a bit outdated. If I lost my investments my future would be pretty screwed to be honest. I certainly invest money that I really need at some point.

Each to their own but what I mean here is something like the money for primary needs such as to pay the rent, mortgage, to clear credit cards, loan, regular monthly living spending etc. What happen if you put it into investment and the investment is going south and you already need the money to cover those needs?? It will force you to sell it at a loss (even the investment has a potential to make a return), plus taking another high interest loan to make the difference. That will be a starting journey of a debt spiral. AFAIK, for such need, the people will normally put his money into instant access saving accounts or high interest current accounts.

For many people, especially for millennial, pension, deposit for mortgage (if it is what you are referring to) is not necessary a primary need, so they could still effort to lose it. For such people, even they lose all of their investment, they still have time and ability to make money to recover the money or to cover their future needs.

Also, within a few decades a lot of things could happen in life such as getting big promotion, get new job with much higher salary, making huge gain in business they are doing, etc.

My main example was investing for our retirement, which you are right we could technically lose and still get a state pension. It would still be a massive blow for many of us though. The numbers involved are high enough that it would be close to impossible to fully recover from a permanent loss. 

Sure, we shouldn't invest money that we might need in the short to medium term.