I’ve made a ton of great investments: QVC in the late 80s, AOL the late 90s, Amazon in the 2000s and Taiwan Semi in the 2020s. What have been my worst investments? Here are a few of them:
- Dream Marketing DMMK. I cant even remember what these guys did. 100% loss, they went defunct in 2013.
- General Motors 2008. 100% loss. I hate the automobile manufacturing industry, I know there are times when you can make money, I’ve never been involved in those times.
- Pets.com Launched in 1998, closed their doors in 2000. Total loss. Ahead of their time, they were what the website Chewy.com is today.
- Bear Stearns. I owned Bear Stearns in the 90s but sold long before they closed their doors in 2008. BST, I can even remember the symbol years later.
- Enron. I owned less than 50 shares of Enron. As this stock plummeted, I basically rode it all the way to zero.
Why do investors avoid selling, even though the stock is crashing?
I have a few theories on this. Some investors simply don’t know what they own. Maybe the holding is small relative to the size of the portfolio. Other investors might know the stock will never recover and they figure since they have a loss anyway, they might as well have the largest loss possible for tax purposes.
How to avoid stocks going to zero? There’s no real guarantee like everything with investing, I’d say the best idea is to watch your investments quite carefully. Even if you can’t subscribe to expensive research tools, consider free tools like Google news alerts. You can set up Google news alerts for anything really; by tracking the headlines closely you’ll keep an eye on your investment and you may be prompted to sell before it’s too late.
In case you’re curious, here are the top stock failures of the 1929 crash:
Caldwell and Company A financial holding company in the South that collapsed due to its leaders investing too much in securities markets.
