WCOM Trade #4 The Titanic

Ah, WCOM Trade #4 The Titanic

Trade Rank: 104

In the book, The Intelligent Investor by Graham, the following is entirely TRUE: "Once you lose 95% of your money, you have to gain 1,900% just to get back to where you started. (page 12, 2006)."

WCOM Trade #4, a boat the size of the Titanic, began April 29, 1999. The first of 356 purchases was for $83. The last sale was at a whopping price of $1.721 on May 30, 2002 - nearly the entire cost of the stock - OUCH!

I bought and sold the Titanic all the way down for 1,127 days. STOP-LOSSES were used several times but as it dropped lower and lower I kept on buying it, each time thinking that each lower entry price was better than the last. Talk about an education by fire! WCOM turned out to be one of the biggest accounting scandals of our time, joining the likes of Enron as a fabrication of manipulated, fraudulent financial strategies that ultimately destroyed shareholders, employees, families and friends.

These scandals teach and remind us to remain skeptical and never trust entirely when you invest your honest, hard-earned money. I hope I never invest in a Titanic again, I'd rather sail dinghies, they are more maneuverable and you can have more fun!

Trading Tide Levels:
  • Mid Tide (S&P closed at 2859 on May 17, 2019 coming off a Low Tide of 2801 on May 13, 2019 and a High Tide of 2954 on May 1, 2019)
  • Spring/Neap Tide (VIX rose to 17.63 this morning after closing at 15.96 on May 17, 2019)
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