Originally Posted by maxboostcore
I lost big with ABK. Anyone have any opinions about this stock. It claimed bankruptcy 2 weeks after I bought. Should I just hold on. Apparently this was a voluntary BK. Anyone have any experience to share their insights. I bought in at $1.04 and now the stock is sitting at $0.14.
And that is where diversification comes in. BK is not a very good thing. I don't know that this will get much past .20 but if it makes you feel better, I have a good size chunk of it that blew past a stop.
These are lessons that drive home the point of having the majority of your holdings in companies that are true leaders in their field and in a field that is good. I should have never mentioned this one (I have played it for a couple of years - gaining 70% of the time). This is a company that the only reason that I played with it was 'cause I saw a pattern - patterns are not as good of a tool as fundamentals... If I told you that there is this company that insures debt from default, would you think that was a good biz to be in? Definitely not. But sometimes there is a number of good pops. If you want to feel any better - look at how many institutions hold it. You may call me a fool but I did pick up a good size lot at 13 cents (wtf am I doing) thinking it will get up to 19-20. If it doesn't happen, it doesn't happen and I lost the money. Not something I suggest anyone do.
The other holdings that I currently hold include AAPL, CHK, CSCO (the day it hit its low), GOOG, CRUS, CL, VZ, SMG, PPG, GLD, SWHG, ATPG and RIMM.
ABK never made up more than 1-3% of my total portfolio (I try to keep las vegas style bets to no more than ~7%). It was a poker game for me.
IMO if you don't have enough to hold at least 5 holdings (preferably up to 10), you should buy a EFT of S&P or some, some.
Also, look at your performance as compared to the S&P 500 and if you're not beating it, join it - in other words, investing in 500 of some of the best companies in the market isn't a bad way to get the appreciation of the best companies and be very diversified!