I'm in a mess after buying some shares :(

Faz · 8 September 2005 at 3:17PM

Basically, I bought a lot of shares in a company called Touch Group Plc (TOU). Since buying them their value has plummeted from 25p a share to 13p a share. I bought approx £5000 of shares to the very strong disapproval of my dad, so as you can imagine I have pretty much shagged myself.

To make matters worse, I was using borrowed money which I then had to start paying interest on. Luckily my dad is going to give me £5000 to pay back the lender, then I can pay him slowely in my own time. My actual question is, does someone have access to any knowledge which may help decide whether it is worth keeping my shares or not? If i sell them now, I probably lose £2300ish of solid cash. If I keep them a little longer term, and they increase in value, my losses will be loss. However if i keep and they don't improve (or get worse!) then my remaining £2700 is being tied up for no cause.

Bit stressed out because of this, back at university in a few weeks, could be doing without... will need to get a part time job to help earn some money back.

p.s. I know I was foolish to buy the shares, but I guess you learn from making mistakes.

calleyw · 8 September 2005 at 4:05PM

No one really knows what will happen to share prices. They could go down which have they done for the last few years and they are slowly recovering now. If they go down you are going to be in the brown sticky stuff even more.

I bought 100 shares at £1.50 about 3 years ago and they are now worth about 10p a share. I have been holding on and on hoping they will go up. After about a year and half unless there is take over then the answer is they are not likely to go up in price.

With anything you should only invest in shares only what you can afford to lose. I can take the loss of £150 (well I can't but I have no choice)and will donate them to charity as it will cost me more than are worth to sell.

Personally I would say never borrow money to finance share buying. I only know of a few cases where people did make money from shares and they borrowed money to do it as. And that was because they bought an intial stake and then sold with a couple of days of going public and made a few thousands in profit.

Personally I think you are better off selling them and then giving that money to your dad and then pay him off the other money as you can. Rather than waiting.

It is hard lesson to learn but I am hoping you have learnt something from it.

Take care

Yours

Calley

Fedz · 8 September 2005 at 8:32PM

Looking at Y! Finance : Basic Chart for TOUCH GROUP They were doing well until March '04. A steady recovery until Jan '05 and since then things are steadily dropping.

Unless they have a magic wand, I don't envisage them doing well but then again I could be wrong

Personally I'd cut my losses, sell them and put it down to a lesson learned.

Lesson learned is never (unless you know for 101% certain) put all your eggs in one basket - buy a portfolio - so losses are absorbed easier.

Good luck nexct time

nrsql · 8 September 2005 at 8:50PM

How did you buy the shares. Do they allow you to place a stop loss on the position?
Find out what that is if you don't know.

Don't be too downhearted about it - you'll have learnt a lot and although not very pleasant hasn't cost all that much.
Analyse why you did what you did and what you did wrong so that you will recognise the signals next time - and also think about why you would want to keep these shares instead of buying others.

A common strategy is to sell shares quickly and take profit when they increase in value a little but when they lose hold on to them and follow them down not wanting to admit to the loss - almost as though it doesn't count until you sell (I'm as guilty as the next person of that).

Luke · 9 September 2005 at 9:16AM

It all depends if you are conducting a short term, medium or long term strategy.
In a short term strategy you should have already sold when they were at about 22.5p in order to protect your capital.

Don't add to a losing position. Its often tempting to buy more thinking that they represent good value, they don't.

Try not to get emotioally attached to your shares. This will allow you to make you best decisions.

Don't buy and sell too much as the commissions can dent your profit, but try to remember this dump losers and buy winners. Good luck investing

SpongeBobSP · 9 September 2005 at 4:59PM

I don't think it was foolish of you to buy shares, but to borrow money to invest in shares was foolish.

I'm in a mess after buying some shares :(

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