Loss of -34.2% of nett worth. From the high of 93.2% to close at 58.98% for 2008.
Who Took My Weath?
No 1. Success can be one of life's worst enemies. It engenders overconfidence and, as a result, one tends to let one's guard down - in some instances, to the extent of recklessness
I have met my worst enemies in 2007, and failed to recognize them sooner, and thus the downfall in 2008. I have previously survived two major corrections with heavy losses and recovered with even more nett profits. But, this Bear killed.
No 2. Leverage
I use a wheelbarrow to lift more dirt than I can carry by myself, I am employing leverage. Leverage involves using a tool to increase my power. That tool is Contra Trading, the tool of leverage is "no upfront money". Just loaded up.
But, I have put too much dirt into a wheelbarrow, and broke my back trying to lift it. Too highly leveraged, and did not have enough cushioning to hold out and when the market turned against me and forced me into liquidation — game over.
Going forward, I WILL ONLY LIFT dirt with my two bare hands. Trade and survive like an American Cockroach. Eat when there is food to be found, and can survive without water for 1 month and without food for 3 months. Goodbye 2008, Welcome 2009. More food to be found. Cheers.
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