Dicing with death

Monday, 16th August 2010 10:02 - by Boredmum

Okay. 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.