# I made the standard rookie error. How screwed am I?



## clovis8 (Dec 7, 2010)

So I got sucked into the hype and bought some CCME when everyone was claiming it was the greatest thing on earth. Luckily I only bought $500 which is only about 3% of my portfolio. 

Trading it on has been suspended and it is frozen at $11.879. 

It looks like it is a massive fraud of some kind. What happens when trading starts again? I assume it will instantly plunge to 0?

Is there anyway to salvage any of the investment?

It's actually worth the $500 loss to teach me not to be an idiot.


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## Belguy (May 24, 2010)

It reminds me still again why I only invest in funds--mainly index funds.

They can pretty much never go down to zero!!


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## Financial Cents (Jul 22, 2010)

Only buy index ETFs or dividend-paying stocks or both.

Chasing hot stocks, story stocks or any other "tip" is a loser's game.

Don't worry, we've all been there. 

The key is to *never* do it again


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## HaroldCrump (Jun 10, 2009)

When did you buy?
I don't know this company, but a quick Google check shows that there have been multiple warnings over the past few months.
You had quite a few chances to get out....


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## clovis8 (Dec 7, 2010)

HaroldCrump said:


> When did you buy?
> I don't know this company, but a quick Google check shows that there have been multiple warnings over the past few months.
> You had quite a few chances to get out....


 I bought it in December. Of course I made 20% right away which convinced me not to sell. 

Oh well, lesson learned. 

Anyone know what happens when it starts trading again? Can I set it to instantly sell somehow?


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## KaeJS (Sep 28, 2010)

I'm sorry, I'm not sure what will happen when it continues to trade (if it even does).

But, why would you NOT get out after making 20% in a short amount of time?! 

If I bought a stock that didn't pay dividends and it increased by 20% in a short period of time, I would probably sell it and take my profit.

I know you're new to trading (i am quite new as well) but remember the law of gravity. Everything comes down, now and then.


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## HaroldCrump (Jun 10, 2009)

clovis8 said:


> Can I set it to instantly sell somehow?


You could do a market sell order that is good until (say) end of the month.
If or when it re-opens, your order should get filled pretty quickly, assuming there are any buyers.
There will be huge selling so who knows what price you'll get.


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## Mike59 (May 22, 2010)

KaeJS said:


> ... but remember the law of gravity. Everything comes down, now and then.


Great advice. 
Although I would rephrase to read: 
"everything comes down...except silver!"


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## Toronto.gal (Jan 8, 2010)

clovis8 said:


> So I got sucked into the hype and bought some CCME when everyone was claiming it was the greatest thing on earth. Luckily I only bought $500 which is only about 3% of my portfolio.
> 
> Trading it on has been suspended and it is frozen at $11.879.
> 
> ...


I tried to warn you several weeks ago, but you didn't listen. 

Live an learn, but next time, hear the warnings! I'm glad it was only a small amount, don't sweat it. 

http://www.canadianmoneyforum.com/showpost.php?p=47956&postcount=471


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## clovis8 (Dec 7, 2010)

Toronto.gal said:


> I tried to warn you several weeks ago, but you didn't listen.
> 
> Live an learn, but next time, hear the warnings! I'm glad it was only a small amount, don't sweat it.
> 
> http://www.canadianmoneyforum.com/showpost.php?p=47956&postcount=471


I know you did which is why I did not buy more as I had planned. You saved me money. Thanks.


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## Argonaut (Dec 7, 2010)

Looks like there is a class action lawsuit you might want to look into:
http://www.thestreet.com/story/1105...-update-to-the-shareholder-lawsuit--ccme.html

You're lucky it was only $500 though.

Good advice by Financial Cents of sticking with either indexing or dividends, depending on your style. I've got about 5% of my stock portfolio in a speculation on Argonaut Gold, but I can rest easier with that one. Rest is in dividend stocks.


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## Belguy (May 24, 2010)

Who said that "greed is good"?

It's never a good attribute for astute investors to have!!!

When you swing for the bleachers, you might end up in the dugout!!!


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## clovis8 (Dec 7, 2010)

I have 90% of my portfolio in ETFs and blue chips. 5% in large cap mining/oil and only 5% in more speculative stuff so I am not totally insane. 

I do feel burned pretty bad by the market raters who were basically unanimous in a strong buy for CCME not to mention that a major auditing firm said it was rock solid. 

I doubt its worth a class action for $500 but I do think it there was some serious fraud on many fronts.


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## Belguy (May 24, 2010)

My last big individual investments were in Enron and Nortel.


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## hypo (Aug 11, 2010)

Meh 500$ is not a big deal. I was expecting something like 5 or 50k from your title. Just sell when you get the chance and consider it lesson learned


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## Rico (Jan 27, 2011)

hypo said:


> Meh 500$ is not a big deal. I was expecting something like 5 or 50k from your title. Just sell when you get the chance and consider it lesson learned


Yeah, some life lessons cost tuition.


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## Causalien (Apr 4, 2009)

clovis8 said:


> I know you did which is why I did not buy more as I had planned. You saved me money. Thanks.


Try to sell it if the price when it opens is larger than the cost of trading fee. Although if it does re open, there will be a sucker's rally. If it's less than the trading fee, you might as well wait for the rally. 

Consider this your lesson fee. I've made the mistake too. Heck, I just paid a $5000 lesson for trading the Japan disaster. Wiping out my YTD gains.

BTW, China = fraud heaven. Chinese Reverse merger ADR = absolute fraud.


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## Homerhomer (Oct 18, 2010)

Let's look at the bright site, this could be the best $500 dollars you ever spent in investing lesson, and count your blessings for having enough smarts to only include fairly small portion in this POS.

I was such genius 10 years ago, I could do no wrong in tech bubble chasing the next greatest company......., pretty much wiped out my thankfully not so big portfolio. Took me few years to even look at the investments, since then it's been combination of index funds, large dividends payers, cash and some short term trades in large established companies.

Be smart and don't do the same mistake again.


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## Toronto.gal (Jan 8, 2010)

clovis8 said:


> I know you did which is why I did not buy more as I had planned. You saved me money. Thanks.


I'm very glad I did! 

It's not like you went on a money spending bender & it sounds that for the most part, you have been making sound investment decisions & only 'speculated' with a very small amount, nothing wrong with that. 

I would say your biggest mistake [aside from having believed the hype], was having held onto that stock for too long, even after the fraud warnings. You had 20%, but for such a highly speculative trade, you should have gotten out at 10% or less & most importantly, sold on the bad news, even if that would have meant taking a small loss. But mistakes provide big lessons in life, so don't beat yourself up.

Avoid small Chinese caps.

http://china.fixyou.co.uk/2011/03/chinese-fraud-is-widespread.html


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## kcowan (Jul 1, 2010)

The thing about 5% of your portfolio devoted to speculative investments is that some of them will go to zero. That is what speculative means. At some time in the future, you will welcome the lesson. In my case it was a boilerroom piece of wallpaper that stopped trading. It was only $100 but that was many years ago. Welcome to the club. Cheap lesson learned.

And being willing to discuss it here is a good sign that you are open t learning.


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## DavidJD (Sep 27, 2009)

Rico said:


> Yeah, some life lessons cost tuition.


Now for your final lesson grasshopper.

I have a really great stock tip. Just write me a cheque for $750 and I will get you a stock certificate sometime soonish. It is for 75,000 units and they are gauranteed to soar to $1.00 in 3-4 months.




After this lesson you will be a much more mature investor.

Email me to find out who to make the bank draft out to and where to send it.

Trust me!


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## Zzed (Feb 16, 2011)

DavidJD said:


> Now for your final lesson grasshopper.
> 
> I have a really great stock tip. Just write me a cheque for $750 and I will get you a stock certificate sometime soonish. It is for 75,000 units and they are gauranteed to soar to $1.00 in 3-4 months.


Can i get in on this too??


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## bean438 (Jul 18, 2009)

Bears make money
Bulls make money
Pigs get slaughtered


You learned a valuable lesson, for a very low price.

Consider yourself very fortunate.


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## Cal (Jun 17, 2009)

clovis8 said:


> I bought it in December. Of course I made 20% right away which convinced me not to sell.
> 
> Oh well, lesson learned.


You got greedy. If I buy a stock, with the intent to sell, I generally will give myself a +/- % to sell for profit or loss. Then emotion can't play a roll.


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## HaroldCrump (Jun 10, 2009)

^ agreed with this.
This is obviously a rare case when the company is (probably) an outright fraud.
However, in general, I ease my way both when buying and selling.
Since no one has a crystal ball, I normally take and exit my positions in 3 steps.
Sometimes split them equally, i.e. approx. 30% each time or sometimes 30-50-20 or whatever seems to be the direction of the stock.

On the sell side, if my target sell range is between 15% - 20% , I sell in 30% lots.
Or again do 30-50-20.
You pay 4 extra commissions this way but these days commissions are becoming a marginal issue more and more.

This gives you the chance to average down when buying, and while selling, enables you to sell sooner and take some profits off the table.
Something like this works well in a 2008 - 2009 situation that enables you to average down as the market falls (worked for me, at least).

I try and follow this general practice when possible but, of course, there are times when I have gone all in or all out, if I felt the situation compelling enough.


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## MikeT (Feb 16, 2010)

I am still holding a straddle on this stock. Bought back when humble tried to tell me I was stupid and didn't understand how to trade options.


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## clovis8 (Dec 7, 2010)

MikeT said:


> I am still holding a straddle on this stock. Bought back when humble tried to tell me I was stupid and didn't understand how to trade options.


You want to buy mine?


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## disjunct (Mar 27, 2011)

You've probably seen the last of your money, but register for the class action lawsuit and keep an eye out for a resumption of trading. One never knows. 

These sorts of posts are always a Rorschach test. The indexers affirm the reasons they index. Others talk about not taking profits when they were available (pigs get slaughtered). Or how you should have seen the signs/listened to advice. Some affirm the wisdom of restricting your speculation to a small part of your portfolio. Those with masochistic tendencies (or inclined to schadenfreude) focus on the fact the making of the mistake. Others suggest the concept of tuition costs.

All have insights to share, but in the end, they're filtered through their own experiences, which may not necessarily be directly translatable. The interesting question, therefore, is what lessons have _you_ learned? What is it about your strategy, disposition, etc. that led you down this road, and how do you recognize and avoid a similar mistake in future? (I guess that makes me a "tuition costs" type. With a minor in masochism.) 

Happy investing.


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## clovis8 (Dec 7, 2010)

HAHAH this is the current (March 27) ratings from Questrade's research tool.


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## clovis8 (Dec 7, 2010)

CCME dropped to 0 finally today! Weeeee. 

The good news is even with this loss, I am still up 1% since entering the market for the first time ever, in December.


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## HaroldCrump (Jun 10, 2009)

Trading seems to be going.
Current quote is : 0.0001 

Did you manage to sell at market or still holding?


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## clovis8 (Dec 7, 2010)

HaroldCrump said:


> Trading seems to be going.
> Current quote is : 0.0001
> 
> Did you manage to sell at market or still holding?


Hey dont laugh I would take my 2.3 cents and run if I could.


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## Toronto.gal (Jan 8, 2010)

I agree, not funny at all. 

I'm very sorry Clovis, just wish you had listened to me, but at least it was $500 or so and not $5K or more.

Try to enjoy the weekend!


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## clovis8 (Dec 7, 2010)

clovis8 said:


> CCME dropped to 0 finally today! Weeeee.
> 
> The good news is even with this loss, I am still up 1% since entering the market for the first time ever, in December.





Toronto.gal said:


> I agree, not funny at all.
> 
> I'm very sorry Clovis, just wish you had listened to me, but at least it was $500 or so and not $5K or more.
> 
> Try to enjoy the weekend!


Honestly I look at it as an investment in my education about finance and the market. Really it was pretty cheap investment.


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## Taxsaver (Jun 7, 2009)

clovis8 said:


> A major auditing firm said it was rock solid.
> QUOTE]
> 
> A CHINESE auditing firm?


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## clovis8 (Dec 7, 2010)

Taxsaver said:


> clovis8 said:
> 
> 
> > A major auditing firm said it was rock solid.
> ...


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## HaroldCrump (Jun 10, 2009)

clovis8 said:


> Nope, Deloitte Touche. Their signing off on the finances is one of the main reason so many people were bullish.


These Big 5 audit firms are the worst crooks.
They are at the bottom of every single financial scam.
Look what happened to Arthur Anderson re. Enron.
Wasn't E&Y the auditors for World Com?
It is amazing that the financial auditing firms get away relatively scott free after perpetuating scams like these.
Most of the Arthur Anderson guys got away and re-invented themselves as ACN.


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## kcowan (Jul 1, 2010)

HaroldCrump said:


> It is amazing that the financial auditing firms get away relatively scott free after perpetuating scams like these.


In my experience, they generally just make sure accounting principles are followed. Following questionable management practices might get a footnote at best!

(Unlike the ratings agencies who were outright fraudsters/accomplices!)


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## Brian Weatherdon CFP (Jan 18, 2011)

So Clovis, you didn't average-down your cost while it fell? Lucky you. 

Someone mentioned we've all been there.....all too true! And we've averaged-down to get an even better deal on an ultimate descent into oblivion. 

$500 is a small cost for knowledge, wisdom, experience.

Think of how quickly you've learned 

Now remembering it...this is the next trick !!


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## clovis8 (Dec 7, 2010)

Brian Weatherdon CFP said:


> So Clovis, you didn't average-down your cost while it fell? Lucky you.
> 
> Someone mentioned we've all been there.....all too true! And we've averaged-down to get an even better deal on an ultimate descent into oblivion.
> 
> ...


I almost did average-down until Torontogal saved me.


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## Taxsaver (Jun 7, 2009)

clovis8 said:


> I have 90% of my portfolio in ETFs and blue chips. 5% in large cap mining/oil and only 5% in more speculative stuff so I am not totally insane.
> 
> I do feel burned pretty bad by the market raters who were basically unanimous in a strong buy for CCME not to mention that a major auditing firm said it was rock solid.
> 
> I doubt its worth a class action for $500 but I do think it there was some serious fraud on many fronts.


There is already one on its way:

http://www.thestreet.com/story/1106...aintiff-in-the-shareholder-lawsuit--ccme.html


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## clovis8 (Dec 7, 2010)

Taxsaver said:


> There is already one on its way:
> 
> http://www.thestreet.com/story/1106...aintiff-in-the-shareholder-lawsuit--ccme.html


I had read that but I cant see how it's worth joining for my $400 loss?


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## Argonaut (Dec 7, 2010)

clovis8 said:


> I had read that but I cant see how it's worth joining for my $400 loss?


Might be worth looking into. I'm no law expert so I don't know what the legalities are for a non-US citizen shareholder. But I do know that the big winners will be the lawyers.


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## MikeT (Feb 16, 2010)

Hmm... Still looks halted to me. I have a boat load of June puts (and some worthless calls) and I need a new Porsche. I was thinking a 911 turbo.


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## clovis8 (Dec 7, 2010)

MikeT said:


> Hmm... Still looks halted to me. I have a boat load of June puts (and some worthless calls) and I need a new Porsche. I was thinking a 911 turbo.


Not sure what is happening. It was at 0 for several hours earlier today now says halted again.


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