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I had managed to lose all my profit in one miserable week as a result of a disappointing earnings report and a general market meltdown. Unable to erect itself again following the strong rise it got from Viagra, Pfizer has not recovered its luster since this episode. |
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My greed to increase my profit to 30 percent had been my downfall. That, and not being mentally nimble enough to respond immediately to what was clearly a change in the short-term stock story and the general market psychology. |
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I should have known better. I had committed one of the mortal sins of investing: I had allowed my profit to be wiped out. I have vowed never again to build up that kind of profit without having a stop-loss in place to protect me from down-side risk. While the merits and disadvantages of using stop-loss orders can be debated, in this case it would have saved me a healthy profit. |
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As well, I will be more careful about letting all profit ride. This is not the craps table in Las Vegas, where you can talk yourself into believing you're playing with the house's money. The object of the game is to make money, not take undue risks just because you're ahead. |
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Next time, I will sell at least a portion of my position to lock in part of my gain. There are times when the dictum of "let your profits run" needs to be tempered to a more conservative position like: "Take some profit off the table and let part of your profit run." |
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In this case, taking even part of my profit would have meant letting the Viagra Express zip us back to Lake Como in Italy. Since I continue to think about this loss of profit with Pfizer many months later, it appears that I may have learned an important lesson from this error based on greed. |
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Greed is not nearly so clear to us as fear. It is often realized only indirectly, after the fact, or not at all. This is because greed is not really a feeling but a combination of thinking and behavior. |
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While it may be all right to admit to ourselves, and sometimes even to others, that we are feeling fear over something, it is less acceptable for us to admit to being greedy. Think about your own reaction to this statement. Is it true for you? Are you more willing to admit to feeling some fear, at least in relation to making an investment, than you are to acknowledge your greedy actions? |
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I know from two and a half decades of clinical practice that men typically dread having to admit feeling afraid of anything, especially |
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