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Has /biz/ ever read through this story? http://forum.thecon

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Thread replies: 29
Thread images: 4

Has /biz/ ever read through this story?

http://forum.thecontrarianinvestor.com/index.php?threads/gt-advanced-technologies-inc-gtat.69/

Basically a group of people who bet big on GTAT, the company that signed an exclusivity agreement with Apple to be a supplier of sapphire for what was believed to be the iPhone 6 and iWatch

Long story short, the company was a piece of shit, couldn't get production right, and Apple only ended up using sapphire on the iWatch, and not the phone. About a month after the September 9th reveal of the new phone & watch, the company halted trading and announced they had filed for bankruptcy.

Around page 500 is where people realize they've lost their life savings.
>>
Thumbing through it now, thanks. Sad shit, but why would people go all in with a company like this?
>>
https://ftalphaville.ft.com/2017/01/06/2181962/a-comedic-full-stop/

A different story about investors being idiots, this time involving the Rangers football club, mining interests in Africa and Greenland, and a cycling magazine in Cornwall.
>>
>>1778055

The initial performance of the stock coupled with the hivemind mentality of the forum likely made people feel invincible and reject any criticism of the business model and future prospects

Stark reminder of what can go wrong when you go all in
>>
>going all-in on a stock

lmfao
>>
>>1778087
this, they deserved it
>>
>page 2
>Can anyone here help me understand why some key executives appear to have been unloading some shares as of late?
haha
>>
>I have just lost all of my retirement and all of my son's savings. My son has special needs and I have failed him in the biggest way, sorry for posting this but I am totally devastated!!

>Same here I have lost my entire retirement fund! Something should be done about this.

Jesus...
>>
>I think a good portion of people here lost everything. Myself included. So very sorry to hear about the family, but remember it's just paper. God loves you (whether you believe or not). Your family loves you.

Fuck me, here come the fairy tales.
>>
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>ok well I am done, done managing my own retirement, done with everything. i just hope my wife does not leave me. my parents are not going to be happy, this is not good. sold it all, i am DONE
>>
>I am one of those that got hurt bad. I lost over 90% of my 25 years of retirement savings. I have still not recovered. I am working on preserving what little I have left for when I try to retire in 2 or 3 years. It looks like I will now have to look forward living off of social security for the rest of my life. But I think I have faired better than other GT stockholders. At least I didn't lose everything. To this day anytime I hear GTAT even mentioned I get a knot in my stomach.

Good god... Why? Why would you do that?
>>
It's sad reading the early pages
>Just liquidated my way deep ITM bull call spreads on SPWR and SCTY and bought more GTAT J16 and J15. Mostly J16
stahp
>>
>>1778071
the hivemind was off the charts
>I never committed more that I could afford to lose. Now after being into this forum, I decided to play big and I am 100% on GTAT. I sold my remaining TSLA and APPL yesterday and I am on GTAT on my 401K and personal funds. I know I am playing with my future, but I am banking on this one
>>
>http://forum.thecontrarianinvestor.com/index.php?threads/gt-advanced-technologies-inc-gtat.69/page-527#post-25571
>Basically my net loss is around $750K in stocks and $140K in options. All my earnings for the past 15 years are gone in one night.
holy shit
>>
>>1778439

yeah that guy got blown out

posted later on saying he wishes a horrible death on the family of the executives and he was considering suicide but didn't have the balls to do it

absolutely rekd
>>
>>1778457
Holy fucking btfo batman
>>
>>1778439
Why do people even bother with options?
The risks seem so fucking monumentally huge.
I know jack shit about options.
>>
>>1778746
a small position in options is a legitimate way to protect yourself from major losses (bet against your stocks with a high leverage) whilst having a slightly reduced performance overall.

if you bet in favor of your own stocks (like this guy did) you are just a greedy idiot. i love how people that basically gamble away their money always try to blame other people and not themselves.
>>
Interesting that the last charts of their stock price was classic head and two shoulders formation
>>
I sympathize for people making a loss on an investment but people who just gamble deserve to die, especially when they ruin the future of their family
>>
>>1778746

Options allow you to fully quantify and define your risk. Most people that manage money in the financial markets will use derivatives to do this. You can take large risks or very little.

Even by themselves, options provide a much better vehicle to navigate the markets than stock alone. Especially as a retail investor. Institutional investors are often dealing with vast sums of money and is less practical for them. They can't be as nimble or flexible as retail investors.
>>
>>1778773
So why woudnt you just hold less of the stock if you want less exposure to it? Never really understoot this hedging
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>>1778944
>So why woudnt you just hold less of the stock if you want less exposure to it?

If you hold less of the stock and the value decreases by -5% you still lose -5% of your investment.

If you put a small position in option against your stock with a high leverage you will still lose the -5% in value of the stock. But also benefit from the options. So your overall performance is better than-5%. Maybe only -2%.

The downside: if the value of the stock increases by +5% then the options are worthless and the cost of the options reduce your overall performance. So your overall performance is worse than +5%. Maybe only +2%.

All in all the delta between +5% and -5% was reduced to +2% and -2%. And reduced risk is always good.
>>
Seems like a work of fiction. Then again, the stock market is quite vicious.
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>>1779499
>And reduced risk is always good.
why invest at all then?
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>>1779570
>why invest at all then?
If you are the type of investor that is looking for high risk & high return, then the option & stock combo is not your preferred tool. However, and that may surprise you, there are investors with low risk as their main target.

Also:

(1) A good portfolio is a mixture of different types of risk classes. Including a small amount of high risk assets and a bigger amount of medium-low risk assets.

(2) You can use options temporarily if you think a critical situation might come, e.g. earnings call, president election, IPO of competitor, market launch of new product, ...

(3) You typically don't use options when your portfolio consists of $500 in AAPL.
>>
>>1779987
so reduced risk isn't always good, got it
>>
>>1780110
What is your opinion then. Why would you use options?

If not, why not?
>>
>>1780153
if i wanted to reduce my risk, but contrary to what you originally stated reduced risk is not always good, as evidenced by the fact that people invest at all
Thread posts: 29
Thread images: 4


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