Difficult to call this a Dunce Moment, but hopefully worth...

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    Difficult to call this a Dunce Moment, but hopefully worth sharing the yarn all the same...

    A few years back, early on in my investing experience, a mate and I were riffing over emerging sectors. He called lithium, having travelled the globe surfing and witnessing the growing appetite for the stuff in the USA. We agreed and both got busy rinsing the ASX for lithium plays. We settled on GXY (his find) and GMM (my find).

    Being new to investing, we went all in ($5k each) – he backed GXY, I backed GMM. GXY started moving and I still had some free capital saved, so I got onboard GXY as well. In the next couple of months GXY went on to triple on his original entry and double on mine, at which point he took some profit off the table and I let it all ride. The SP came back a little and he bought back in. When the SP again moved higher, I decided I'd take some profit, but instead of hitting 'SELL' I accidentally hit 'BUY' (reading this thread, it appears this Dunce Moment is almost a rite of passage). I actually had the capital to cover the extra unwanted buy order, but started to freak out about how much I suddenly had in the market, all in lithium. I sold the parcel that afternoon for the same price I entered, losing just the CommSec brokerage.

    At this point I decided I should really get to know Galaxy (GXY), so I put my head over the footy, reading over all their announcements, better understanding the JV relationship with GMM, and eventually I mapped out milestones in an Excel calendar. To this day, I've not witnessed a management team deliver as well as the GXY team did on their milestones. And our paper worth grew with each one they delivered on, until only the commencement of production remained. And then we got nervous. We were new to this – making money in the market – and we didn't want to see it slip if the company tripped at the finish line. So we sold the bulk of our shares on the run-up to the production deadline (I kept my GMM holding).

    A few weeks later GXY announced that they'd commenced production, deposits from off-take partners had been received, yadda-yadda-yadda. The SP blossomed accordingly. We felt like real bloody dunces. I got deep and dark and started calculating the what-if scenarios on paper, including the accidental buy order and what it coulda delivered. It was sickening stuff, and I was wallowing in it, just couldn't let it go.

    Long story short, we went on to increase our piddly residual holding at a much higher SP. I held my GMM shares all the way through to the merger with GXY (still my best ever investment), eventually selling my entire position at $2.52, post merger, consolidation etc. My friend still holds his parcel, though it is a lot smaller than the original buy.

    The Dunce factor, or consideration at least, is that had I have left both my original GXY and GMM shares alone and never made another trade, I would have made a helluva lot more than I have trading hundreds of times since. Add to that the accidental buy and I would be doing very bloody well.

    But I do love it all, the ups, downs, smiles and frowns. Learning to trade has taught me a heap, not only about finance, markets and various companies, but also about my own emotions, and not just controlling them in a trading environment, but in life in general. I'd like to think I'm a much more measured fella these days, which on reflection is actually my single greatest life investment to date.

    – Alby
 
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