Failed Again. How I’m buying high, selling low, and holding on to losers

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Indexes
  1. AMC and its meme buddies
  2. Buy and Hold (and Lose)
  3. The million dollar question
What is it like, the long-awaited financial independence?

“Once-in-a-lifetime opportunity”, “Mother Of All Short Squeezes”, “FIRE! Financial Independence, Retire Early”, “Scared money don’t make money”, “Risk while you’re young”, “FIRE! Financial Independence, Retire Early”, “The only way to get out of the rut”… Sounds familiar, doesn’t it? I’m sure there are many retail investors like me who fared it way worse than I did, probably some of them having lost tens or hundreds of thousands dollars while trying to break free and retire early. Trust me, I would’ve lost more money if only I had it. Oh my dear fellow retail investors… Shall we be honest at least once and simply call ourselves gamblers who have addiction issues? Heck no! We rely on our charts and technical analysis, we follow market gurus on YouTube and Twitter, we spend our days in Discord groups and throw away nights on Reddit, we do our own research on the companies — and what’s funny — we get some sort of absolute conviction in our own rightness due to the confirmation bias. We essentially invest ourselves in the market. Is it gambling? In many cases, yes, it surely is. As I have witnessed myself, the market can lure you in with a series of insanely profitable trades that you placed not knowing shit about what you were doing — something called “beginner’s luck”. And, certainly, the opposite is true as well: just like that fella at the slot machine who has his own “system” and who is 110% sure the jackpot is coming very soon, just like him, you’re 110% sure that your ticker is going up because of the countless hours you’ve put into digging into the company’s fundamentals, reading paid articles in the WSJ and Barron’s, discussing your thesis with your buddies on Reddit, watching options flows and dark pool prints, and even after getting that much needed last piece of the puzzle from Jim Cramer’s tweet — after all this you’re left staring at the screen and hopelessly watching how your position is going under water. Because it’s kind of gambling, that’s why. But at the end of the day, if I make a shit-ton of money, I won’t care if you call me a gambler, an addict or a dumbfuck. The question is only if I make money.

Why am I doing this? Well, maybe because I just want to entertain you, my dear bored reader, in the hope that you’ll smash that like button below, which in turn will make me a bit happier and soothe the pain from my financial mistakes. Or, perhaps, I’m trying to unleash my inner creator, who — I hope — still can do better in life than this other me — the pathetic, insecure, unambitious chump who has a strong belief that by being confined to his phone and brokerage apps, by wasting his life on drawing trend lines and analyzing the charts he will eventually be able to escape modern-day slavery and achieve the long-awaited financial independence. Yeah, right, fuck him!

AMC and its meme buddies

So, it’s been roughly one and a half years but I still remember this chart and this fabulous fiasco. 50% wiped out in a matter of days because of what, gambling? addiction? No, it happened because of my exemplary stupidity.

Diamond hands? Nah, it can go back to $2 per share, I better panic sell now.

Now, had I held it for just about 3 months longer, I would’ve been able to book something like 3x profit (although, most probably, I would’ve chickened out and sold at around $21–22 just to break even, but still would’ve been better than booking a realized loss).

Patience is key, they said. Well, I didn’t listen.

Obviously, AMC wasn’t the only one. I made several other comparably brilliant trades on APPS, BB, CCIV, U, and many others but all of them followed the same pattern: buy high, sell low — make the other player happy.

Buy and Hold (and Lose)

Have I learned anything from these genius moves that cost me more than monthly income? Oh yes, I’m not that stupid after all. I’ve learned that “it’s not a loss unless you sell” and that eventually “the market goes up”, right? So, hold on, DKNG and SNAP, here I come, take my money! I’m no longer a get-rich-quick options gambler, I’m a very knowledgeable buy-and-hold investor now!

Bought “the dip” in DraftKings. That didn’t age well.

All right, if buying DraftKings shares was still a speculation on the possible rebound, then getting into Snapchat was a thoroughly calculated and planned investment. Well, at least that’s what I was trying to convince myself in, while my wife immediately rebuked me for this “long-term investment” the moment she heard about it. “Who the f***¹ do you think still uses this dinosaur app? Everybody’s on TikTok now!”, — that was her humble remark on my stock picks. And you’ve got to agree with me, it’s really hard to back your thesis when the chart speaks for itself:

Buying “the dip” and diamond-handing Snapchat didn’t work well either.

Any new lessons learned? Technically, yes. I’ve become much better at drawing trend lines and identifying support/resistance levels, although if we forget about the stock market for a moment, this skill is probably not the most valuable one for a middle-aged man to obtain. I’ve read many thick books and lengthy blogs and articles, so at any social event, should anyone ever mention the world economy, the stock market or 401(k) savings, they won’t have a single chance to stop me talking about how selling options is superior to gambling money at Calls & Puts, how to hedge your long-term holdings and get some beer money from selling Covered Calls against them, how to wheel stocks and run Iron Condors, and of course how to (not) blow up your account in the end. I’ve also tried and subscribed to various services that claim to provide you with an edge — kind of a secret knowledge that gives you an advantage over other market participants (aka bigger losers than you). But eventually I unsubscribed from all of them because either they were just a piece of useless crap, or I simply couldn’t justify their cost because they didn’t help me become profitable enough. Similarly, I’ve followed and unfollowed many popular niche influencers, who were pretty good at growing their fanbase but not so much at trading. This is actually one mysterious riddle I still cannot solve: why would anyone care about relatively miniscule income from their YouTube channel if they’re self-proclaimed trading gurus who can make thousands every day? Why would a successful trader who constantly uses TradingView platform for his well-paying job, not splurge $10/month on a paid plan to get rid of this message from his screenshots and videos? No-no, I get it, Gen Z frugality and things like that, but seriously, $10 per month?

Frugality. This must be the secret ingredient to building wealth.

Anyway, all this knowledge, all the screen time, theory and hands-on experience, psychological and emotional aspects — all this doesn’t mean shit because I’m still the same person who got burned badly by his own lame decision. Still the same average Joe who is slowly crawling his way back out of the darkness of losses, sometimes stupidly adding even more losses along the way. But there is actually one good thing I’ve learned while spitting all this out. You see, one bar on this chart represents one week of my life. So each of these nasty red bars that are slowly sliding down to the very fucking bottom — each bar means anxiety, depression, insomnia, evaporated self-confidence and constant doubts about my cognitive abilities. It’s a cocktail of all possible negative emotions that impact all areas of life. It’s absolutely fucking disastrous to sit and watch how your hard earned dollars are disappearing, and whatever steps you’re taking to “manage” your position, are only turning it to worse. But what’s even more appaling is that slavery we talked about in the beginning, the one we‘re trying to escape. So, now that guy with a whip is back and the situation is way worse than before, because ultimately I need to put in more hours to compensate for the lost money, lost opportunities, lost health, lost time with the loved ones.

The million dollar question

So, my dear friend, what should I do? Should I give up and stop? Pull out the remaining money, close the account and forget about it once and for all? I bet you’ve asked yourself the same questions if you’ve ever been in this boat. One thing I seem to know for sure is that there aren’t too many options for the average folks like us to build any considerably serious wealth by working the job we don’t like for our entire lives. Trading and investing is one of these options. Some have succeeded, many others have tried, failed and returned to their drudgery wishing they never left it.

[1]: I had to bleep this out because my wife is actually a nice person who doesn’t normally use foul language.