Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: steve mamus who wrote (5429)	3/22/2000 7:32:00 PM
From: the options strategist	Read Replies (2) \| Respond to of 8096

To Thread: A touching article on those who lost money in the bios last week. All Aboard Burned by margin Chat-room group hugs to ease pain By Shawn Langlois, CBS MarketWatch Last Update: 5:06 PM ET Mar 22, 2000 NewsWatch Your thoughts How could anybody possibly lose any substantial amount of money in this relentless stock market? "The sun will come out again, and the children will smile and play. Don't let the loss of money overwhelm you." BillCoe888 Believe me, it's a lot easier than the lofty Nasdaq might suggest. When a stock like Celera (CRA: news, msgs) drops nearly $200 in a few short days, or when shares of MicroStrategy (MSTR: news, msgs) evaporate more than 80 percent in the blink of an eye, someone's left to pick up the pieces. Especially when the lure of margin beckons the investor in search of those astronomical returns. Victims of margin-accelerated plunges often venture to the message boards when times get rough, but one young man's sobering tale touched a nerve among the self-proclaimed Fools participating on The Motley Fool boards. GlobalStreamer detailed his run-in with Celera: "I placed a small amount of my modest, yet not-too-shabby-for-a-20-something, portfolio in CRA. I began to use a 'margin' account to buy Celera. I was borrowing from my broker to buy more and more. The stock continued to rise. Things were looking unbelievable from my vantage point. Next, the unthinkable. In the last 2 weeks, Celera has fallen from its high of 276 to 85 at one point today. Why? I will never know -- perhaps just to teach me this lesson. As it fell, I told myself what a great chance it was ... what a sale ... what idiots the sellers were, running scared from meaningless Clinton/Blair comments and throwing all biotechs in the garbage, etc. On the way down, I began to sell my other stocks to get Celera, cheaper (and again, using that MARGIN)." He went on to recount his entire plight, but this was the bottom line: "As I sit tonight, I have no shares of Celera in my account and an account that was worth almost $60,000 and was full of 6 promising, fantastic stocks is now worth $0." Ouch. Shortly after that financial disaster was posted, the Fool Community gathered to comfort their downtrodden, fellow investor. Rgbbcs did his best to soften the blow: "I could say, 'You're young. You'll be back up in no time,' but words like that don't help at this time. Your loss was a real physical blow -- like a death, with all the stages: denial, anger, grief. We'll wrap our cyber-arms around you." And CTCotton felt he learned a valuable lesson without having to endure the same fiscal agony: "I'm trusting that your post will prevent me from having to actually undergo what you did before I learn the pit falls of margin." I'm sure taking a Zen-like stance was no easy task for GlobalStream, but that was the path many folks, like ABio87 insisted he take: "There are much worse losses to suffer in life than temporary monetary ones. Setbacks such as these only count as failures if you do not learn from them." Another despondent investor Over on Yahoo, Nazdick also drew massive cyber-support when he shared his misery of being caught in last week's incredible MicroStrategy avalanche. See full story. A snippet from his post: "I bought on margin -- lost everything I worked 21 years to save. This is nice for those who enjoy the suffering of others. I never thought one could lose like this. I am drinking now to gain courage to meet my losses like a man. I see no other avenue of escape. God bless others who lost." The desperate tone stirred up an outpouring of emotion from the likes of Psych62: "You may feel that this is the end, however, this could be a beginning. Money is important, but it is not going to bring you happiness. Right now is the time to assess what you do have, i.e. your health and the ability to start again. I wish you all the best in having the courage to start over, life is a series of ups and downs and that's what makes it a challenge." Take a look at the big picture, urged BillCoe888: "Loss of money doesn't make you a failure. There are other avenues. The sun will come out again and the children will smile and play. Do not let the loss of money overwhelm you." Keep it in perspective, offered StkTrd1: "I know all must seem lost, but it is not. Many people in the world live all their lives without ever seeing 1/10th of what you lost here, and they are content." Well said. It was heartwarming to see the cutthroat, and often vulgar, Yahoo message boards band together for a virtual group hug. With so many stocks flying at warp speed, it's easy to get whisked away in the frenzy, but irrational exuberance, coupled with margin over extension, can truly be a recipe for disaster. Invest wisely, people ... it's a jungle out there.