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Technology Stocks : Ascend Communications (ASND)
ASND 220.42+4.9%Dec 12 9:30 AM EST
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To: G.F. who wrote (12353)9/14/1997 2:22:00 PM
From: marie fouchia   of 61433
 
You've all probably heard of the 6 stages of grief--well here's my 6 stages (or mistakes) of the novice small investor who's about to get burned:

1) Buys stock at too high a price based on hype that its a "screaming buy right now".

2) Never sets stops cuz he/she doesn't believe in "taking a loss"

3) Goes into a state of shock and disbelief when stock begins to plummet, freezes and takes no action

4) Averages down on margin

5) Finally totally freaks out, gives up and sells at or near the bottom (or is forced to because of margin call)

6) Watches in disbelief (and takes no action) as the stock then turns around and heads back up. (Or can't take action because the margin loss ate up equity).

Does this sound familiar to any of you? I tend to follow this pattern and have lost A LOT of money because of it. If you miss getting out at a minimal loss, you are better waiting it out (unless the company is a complete speculative play, like CFON or something) if possible, because once you are burned (take a big loss) psychologically it is difficult to buy back in at the bottom (too "gun-shy"). Good Luck, Marie (still holding 500 shares at 40, and still in the "shock" and "frozen" stage, hoping not to hit the "panic" stage--but agreeing that technically this sucker looks like total sh-t). BROKERS AND ANALYSTS__WHAT A FRIGGIN RACKET!!!!
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