I do apologise that my posts have been BUD-centric lately but it is important that the market is aware and learn from failed experiences- it is as important not to be in a dog share and recognise early and cut your losses, just as it is important not to be overexposed in an unstable market with a Big Kahuna on the horizon. Everyone looks to make money, sure we can focus on doing that but focussing on not losing money is equally if not more important. We tend to glorify our wins and put the dogs in the bottom drawer. That is natural human being tendency and I have been there before. But more often, let your winnings run and cut your (dog) losses quick seems to be a better mantra. Winning stocks have an ever upward moving chart (like APX LT chart), dogs have falling knife charts- cheap gets cheaper - they continue moving in the same direction UNTIL some event completely changes its outlook. For instance, Afterpay (APT) gets smash if regulation prevents its BAU (business as usual) growth or a major customer leaves Appen or the dog stock wins a major game-changing deal (but you still have to be careful its not GSW Amazon type deal!).
If you are in the share market long enough, you would have had been involved in many stocks and learn that you win some and you lose some, but winning a few big and minimising your losses is always a good approach. Holding hundreds of thousands (and some even million) in a single one stock and nothing else and hoping to win big on that single one, is IMO a real risk because you fall in love with the stock , just as the BIG holders did. And you've had no breadth in trading experience, you'd just hold for life and pray the management delivers for you. And the BIG holders continue to believe its management when it has been revealed that its director and founder's father have had a prior fraud criminal record- a person's heavy involvement in that single stock causes him/her to have myopic perspective and strong denial. Everyone wants to be the early bird investor in an Appen like stock that is a multi bagger over time ('vision'), but reality is that one perhaps 1 out of a 20 or 30 ever becomes an Appen, the rest fall by the wayside. Your odds are better betting red or black at the roulette table.
