What is the solution for them ? Thats a tough call to make.
In my previous life a a mungerilal  I  have had similar experiences too. I had gotten stuck in stocks where everyday I saw them going down and I prayed and hoped  that somehow they would go up to my buying price so that I could exit and not book a loss. Every day I got sinking feeling in my stomach when I saw the stock quotes and saw it lower. ( My rational though told me that I had made a mistake and I should get out, while my heart wished for a miracle to save me) Needless to say, I did not get out earlier when I still could as a result of which I lost a large portion of my capital, not to mention opportunity cost. If I would have taken the hard decision to sell earlier, my capital would not have diminished as much.

Moral of the story for me has been " Never average down "
" When in doubt, get out "




 Once again, Just sharing my experience.





Edited by Mohan - 17/Sep/2007 at 12:12pm

Hey Smartcat, I admire the solutions you bring about.....but a simple question......Buy, sell or hold when a change in sentiment is there, is not the possible option. You cannot buy as the funds dry up faster than one imagines. So, now the solution thats there for my bummy is either to book out or repent as others are making a killing in commodity plays as well. I have advised him that if he cant handle this anymore he cn book out and get into ONGC. He was similarly trapped in Dish as well and I had to make him short so that he could minimise his losses. there is one thing which I have realised dear, dont fight the sentiment to show your bravery for it requires a great deal of courage to abandon the trend and to do bottom hunting rely on hard core financial management principles and not vague vague concepts. No God has said that a P/e of 20 is fair for a company. Also, it never pays to have a heartburn issues here...if one is uncomfortable, he should book out. A loss here and there is not the end of the world.....and you can always make up for that loss.

Well his issue is his accumulation style....he made some very decent killing but somehow the way he plays his shots will always have you you heart in your mouth.......he appears very confident when he enters and displays a lot of conviction till he doesnt get nervous and whenever he gets nervous he gets big time nervous......and this behaviour is typical of many traders who think of themselves a kin of buffett and lynch and what have you.

What to do if the people you entrust your money with trade and not investor so you will become a pseudo trader or a pseudo investor, whatever you may say.......hahahaha