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Boredmum's Blog
Dicing with death
Mon, 16th Aug 2010 - Author: BoredmumOkay. I realise that the title is a tad dramatic, but what else do you call trading in Connaught shares (TIDM code: CNT)?
You see, it tends to go a bit further than ‘playing with fire’. There is a very real chance of it entering into administration and you could stand to lose your entire investment.
I have been trading CNT shares fairly successfully in the sense that I may have had 5 or 6 exits in profit.
I was happy to invest just small amounts of money for a 10% to 20% return. Buy and sell quickly - that was my strategy - as I didn’t want to be left holding for any amount of time. I was investing only an amount that, if administration came, then it wouldn’t be a loss that I couldn’t take.
So, a few days ago I traded in and out successfully. Then I bought in again on a slight drop, and the shares traded down, so I doubled up; and then down again they went and I took some more. Obviously, I was taking my average down to lower my get-out price and exit successfully, but before I knew it I had invested 3 times what I was happy to have in.
Then the day’s trading came to an end and I thought ‘What have I done?’ I had only that very week sold out of a share I had been holding long-term as there was a risk of it no longer trading as a going concern. The risk factor there was too great for me now and here I was risking even more.
I was so glad the next morning when there was no company news on CNT. I sold successfully, making 3 times my original anticipated return.
So, did I learn from this? I have to admit that I traded one more time successfully, but with only my original planned stake.
I shall not tempt fate and have now avoided buying more, although I couldn’t resist taking a few in the fantasy share trading game. At least in there it is not real money!
I do hope people invested make good money, but just hope that they are all risk aware.
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"InTheSun - overall it was worth the risk as I made over 100% of my initial investment over about 6 trades. Where I went wrong was averaging down and buying more hence risking more than what I was happy with. I was lucky but as royjohn says...don't break your rules/guidelines."
- boredmum
"In hindsight, was the profit worth the risk Boredmum? In my view it is not, since you were risking 100% of your money to make a 10, 20 or even at 30% gain. Well done on your profits though"
- InTheSun
"royjohn - that is a very good point. You should not cross any guidlines or boundaries you set. If you are happy to trade in CNT with a set amount knowing the risks then keep it to that amount. I was lucky in trading CNT but at least I realise that it was pure luck that made me profit and nothing else. Good luck with your trading."
- boredmum
"I would just add that I have got nothing against a flutter but it is not wise to take your Visa card with you to the races. lol"
- royjohn
"Boredmum, It is so easy to turn from a sensible investor into a gambler. You have learned without being punished but guidelines must never be broken no matter how tempting. ATB Roy."
- royjohn
"ParanoiaBlue - I feel you are correct and I have now left well alone. treetop - It is pure gambling, I was reading the chat forum and felt that so many were unaware of the risk. As long as you know what you are dealing with then fine, but so many don't realise the implications."
- boredmum
"This share is pure gambling. It could jump massively if Gardner gets backing because the banks have no other choice than to stick with it and trust him to do a Lazarus.On the other hand..............."
- treetop
"I think with a debt-for-equity-swap looming large, that private investors could lose virtually everything [I know from bitter experience :) ]. Therefore, to my mind, there is only one sensible way to play this one, at this stage. "
- ParanoiaBlue