My Stock Market Investment Failure And What I Learned Chapter

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¶ … Big Failure One significant instance of failure in my career development experience came during my time as an investor. I had been studying finance and markets for some time, as I had always had an interest in how money could be made on the stock market. I was not looking to make millions but I did want to see if I could earn more on my savings by investing in a stock rather than earning next to nothing by keeping my money in a savings account that would pay practically zero percent interest. So I began researching the market. I wanted something that was priced cheap and that would more than likely go up as a result of news hitting the stands in short order. I purchased shares in Lionsgate Entertainment because this company had produced the hit movies The Hunger Games and the TV show Mad Men. I figured Hunger Games would be popular, so I invested in that stock. But because I was new to this arena, I expected the stock to move suddenly and dramatically just because I purchased shares in it. However, I came to realize over time that this is not how the market works. I had a lot of learning to do. Eventually I sold my shares in Lionsgate -- just before it started to move up dramatically. I was frustrated with myself for not having the patience to see my investment out for a longer period. I should have...

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I invested in them. This was before I understood anything about fundamentals, earnings, outstanding shares vs. authorized shares, debt structures, and toxic death spirals. When marijuana legalization news hit the stands, these stocks soared. Suddenly, from wanting only to grow my savings, I was feeling like a king who had hit the jackpot. I did not know what to do and started imagining that these stocks would go even higher than they already had. Instead of selling as I should have, I wanted to hold on and really become a millionaire. I had stopped being "smart" and had become greedy. My father tried to warn me, but I didn't listen. The fact is, I had never even really been smart -- only lucky. I had identified a trend before others had, true -- but I had not been smart about how to profit from it. There was still a lot I had to learn.
And I learned the hard way. Instead of starting out my career in investing with a bang, I ended up losing what I had saved because the penny stocks I had invested in quickly went from green to red over the course of the year and ended up being worthless: each had been a pump 'n' dump scam. This is what led me to realize that there is more to investing than buying low and selling high: emotions play a big part and controlling one's greed for more and more is as important as making good investment decisions. To learn how to properly embark on…

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