A story that has it all…6 Figure Losses…Gains…Bears…Bulls…Tough Lessons

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by Mister___Pickles

I’m writing this story in hopes that it inspires one of you developmentally disabled “investors” that true autism can prevail…even if you get knocked out 4 or 5 times. I also hope you learn from my monumental mistakes.

Pull up a chair…

Here is a picture of my account value from the last 3 years, showing my account blowups:

All Time Account Value

YTD account value:

View post on imgur.com

Here are my current positions and my YTD profit/losses by position:

View post on imgur.com

Net Deposit/Withdraw (essentially my money lost by depositing, doesn’t account for any appreciation):

2015: Deposited: $10,300

2016: Deposited: $21,403

2017: Withdrew: $646

2018: Deposited: $49,977

2019: Deposited: $62,497

2020: Withdrew: $49,977

Net: Lost/Deposited: $93,554

Let me set the scene, I was in high school, the market had crashed because of a little snafu involving the housing market. An older family friend of mine suggested investing some money. My mom thought it would be helpful to teach me more about this so she put $1000 towards this endeavor. I invested in some super safe blue chips and didn’t really check it. And so it begins….

A few years later while in college (2012 ish) I checked in on these stocks and they had appreciated a good bit. Let’s say I had a few thousand at this point, and I was working during the summer so I started throwing some more money in. Got into some “riskier” names like Apple, AMZN, and even got in on the FB IPO. I sold AMZN at $190 because even then they had no earnings and it had run up quite a bit. What a great sell looking back! Now let’s flash forward to the 1st account blowup…

1st Account Blowup(2012 ish): I was a college kid who had not yet discovered WSB. Like many of you I was still sucking on my mom’s teet, and I probably could have used some time to crawl back inside my mom and cook a little longer, but that was no longer an option. I had about $10k in my account at this time, so like any true autist I needed to get to $100k immediately

I kept hearing that Apple was undervalued, so I bought some Apple Calls at the 600 strike price. The stock had been at 700 (pre-split). It seemed easy, it would go back to 700 and I’d have 100 bones per call. I remember calculating it and realizing if it just did that I’d have $100k. I was even responsible and went out like 6 months in time.

As expected it stayed undervalued, my calls expired worthless. Lovely. And then afterwards when I had no money, and now no Natty Lites, the stock went on a tear and regained the 700 level and more. I had no income so I just had to sit on the sidelines and think about it. But like any gambling addict I would eventually come back to play again…

I would repeat this process of work in the summer, save up money, blow it on options during the college school year, and finish the year broke. I would get a little dopamine now and then off of gains, but nothing meaningful. Obviously each time I promised myself I wouldn’t let it happen again, and I’d be more responsible next time. You know how that works..

1st Account Blowup TL;DR: Lost 10k in Apple calls

Now after I graduated and got a job paying some real money I was able to save some up and come back to the slot machine more often and with bigger pockets. I lived with my parents like the rest of you, and I got a good paying job right out of college as a chemical engineer. After getting my company match on my 401k and all that responsible stuff, I would take the rest of my paycheck and “invest” it. You know in safe stuff like stocks and then ultimately sell those for some good ole FD’s, which if they paid off I’d just bet on something else. I’m not sure how much I threw away in this process. It’s probably safe to say it was in the neighborhood of $20k/year for a good 4 years until last year or so. After just realizing as I write this that I don’t even know how much I lost, as much as it pains me to add it up, I am going back and adding in how much I deposited and withdrew (lol) annually from 2015 on. It’s probably time I accept it. I’ve added this up top.

2nd Account Blowup: Now if you refer to the graph in 2017 you can see a spike in equity…don’t worry I didn’t hit on a big FD. This was from an inheritance. RIP Gam gam. I got about $70k here(I’m not sure why it didn’t ring up right in my deposit/withdraw statements). At first I invested it responsibly, and then of course I didn’t. I looked back to see how I blew this because I didn’t remember. Basically there are stupid call/puts all over the place in AMZN, AGN, Banks, you name it. I probably had a lot great “hunches”. To be clear I lost everything and anything I had here. It felt crappy knowing my immigrant grandma saved up this money to give to me and I had made short work of it. I always thought afterwards if I had just invested it responsibly this young it would prove to be a lot of money down the road. I also always figured if I just got to $100k I’d invest it responsibly and turn into Warren Buffet (pronounced like an all you can eat Buffet). Chasing the next round number is always a game that you’re sure to lose.

2nd Account Blowup TL;DR: Lost $70k in inheritance on options

3rd Account Blowup: Now after this at some point I got a margin account at TDA with futures and full options capabilities. A great way to lose money even faster! In 2018 I dabbled with mini futures contracts but nothing serious. If you refer to the all time graph I had a mini spike in here as well (always good for 1 a year), but I blew this. This got blown on more options and like I said small amounts of nasdaq futures. This is technically the 3rd account blowup. I did get some money from a family member as a gift and that’s what funded this particular spree. Yeah I felt like crap and all that, but the worst was yet to come, looking back in magnitude these didn’t compare to what laid ahead. If you’re keeping track of what I lost, I know for sure I lost $50k at least of deposits here, so you can add that to the inheritance from above to keep total of just the big one time deposits, not including the bi-weekly paycheck contributions.

3rd Account Blowup TL;DR: Lost $50k from a gift from a family member in options/futures

4th Account Blowup: We are getting to the good ones…Now in the inheritance I should specify that I received a piece of property. I wasn’t going to be able to maintain it so I sold it in 2019. Got about $90k out of it, put about $70k of that into my brokerage account. And if you refer to the all time graph you can figure out what happened here. Did the classic dance, put it in stocks at first, then didn’t. Ultimately lost all of this in Oil Futures. This was the toughest loss to date. This was the last of the “big” money or assets I knew I’d have. This in my mind was my last chance to make a good chunk of money, then invest it responsibly, and just grow it. I was a moron. I never felt lower than when I lost all of this. It was a relatively slow bleed as well. I remember the day I had lost it all, we needed fire wood for the winter. I ordered it and stacked it for 4 hours, just painstakingly blowing my back out on purpose as I felt completely defeated. I know my girlfriend was like what is wrong with this dude, because I was just completely depressed at this point. I thought it was all over. I was sure I’d never recover and never amount to anything. This lasted for a week or two which is a long time in this context and state of mind. I felt very destabilized. I had identified myself almost entirely with money. And after playing with those sums and losing them all I’d ever be able to do at this point was deposit a couple bucks from my paycheck, and what’s a few hundred or thousand bucks at this point? Even if I put that in, I would just try to hit a 100 bagger to get back to what I considered a real amount. To this day I don’t know I’ve ever felt lower than I did at this very moment. It was the one you hear everyone talk about. As if trading oil futures completely overleveraged and not knowing a thing about oil could have ended differently…

4th Account Blowup TL;DR: Lost $70k in essentially inheritance on Oil futures. Completely devastated.

2020(You can refer to the YTD account value chart for this rollercoaster ride): At this point I had nothing. I still had my job and could drop money in from that, but nothing in my mind would compare to the amounts I once had and played with before. At the end of 2019 as many of you know stonks only went up. I figured at some point it would crack, but once the nasdaq hit 9k I realized I should just go long until it finally craters, the bear inside me said it would(that bear has been wrong 100% of the time roughly. He’s a man bear who likes other man bears, maybe even a man bear pig). I finally realized this and stopped trying to pick a top. I didn’t have any money to play with so I did the sensible thing…I took a $7k cash advance on a credit card, I figured I’d make a ton of money, then just pay it back and play with house money. Like many of us here figure….

So I did this and I went long futures. Naturally, as soon as I did this (literally within days), the market began to crater and I went short, as short as I could go. I maxed out my account margin with Nasdaq shorts. Only playing the mini-nasdaq contracts at first. As you know it fell straight down. For what seemed like the first time ever my account was green. I continued to pyramid shorts and stack em up as it went down and it continued to payoff. I got to $100k and I couldn’t believe it. I remember taking a leak just thinking about it at the market close and I looked back at the screen and my account was to $114k already. It seemed like a dream. I continued to max out my shorts all the way down to 6600 points on the nasdaq futures and hit an account value of $370k ish. I kind of figured we had to rally back somewhat since we were down so much so quick. However, I continued to try and pick near term tops and tried to short it(AKA I fought the fed and as you will see, lost). I said if I fell back to $300k in value I’d exit all positions and just be smart…then I lowered that stop to $250k…then $200k…then $150k…then $100k…$50k…and finally I got margin called hard one day at $32k(on the TDA chart it doesn’t always ring up right for some reason with futures). Also, TDA was constantly calling me with margin calls, that was lovely. Anyways, that felt shitty. I really started to question my true motives and goals. I had finally made the money I wanted. More than enough to be smart with and grow into a nice nest egg, and I pissed it all away. I did pay of a good deal of debt, paid back the credit card cash advance (probably first person to actually pull this off), and bought a toy. This was my withdrawing of $50k for the year, which you can see at the beginning.

From here I continued to stay short. Inside I think I just wanted to go back to $0 and end it. Put me out of my misery. Part of me truly wondered if I liked losing it all. I had always done it. Maybe I was just getting what I wanted every time. During this I got a small selloff and my short positions increased my account value to $90k. Now I had this new idea. There were tons of stocks that were undervalued still as we were rallying. If I could get portfolio margin I could get 6.6 times buying power of whatever I had in my account. I could just buy a lot of stocks, and then if the trend flipped again I could short my portfolio to hedge my positions and downside if needed. However, you had to get to $125k in equity on TDA to apply for portfolio margin, and then keep it above $100k or they’d margin call your account. I managed, via futures, to get my account value to $131k. I immediately applied for portfolio margin. You have to take a 20 question test on scenarios with different types of options spread (iron condors, synthetic short, etc.). Even once I reached that value I was dumb enough to hold positions overnight and over weekends and risk going below $125k where they wouldn’t let me open this account.

However, I did finally get approved! If you refer to the YTD chart you will see this started the rebound. Once approved I bought a ton of stock in the banks near or at the bottoms (about $150k in JPM, $400k in WFC) and bought some XOM ($200k), CGC, and TLRY. I have a small futures position in Gold too as an inflation hedge. I looked for stocks that were very undervalued and had big dividends. I figured I could lock in these big dividends and then use the dividends to pay back the margin to get equity, assuming they don’t cut these dividends. The dividends at these levels would actually pay for the margin interest nearly entirely. I added AT&T later on too. I liked the pot stocks as well since they had gotten hammered big time. As I write this we got a good jobs report and what do you know, stocks only go up. My account value is for the first time back at it’s all time high ~$370k. I honestly don’t even believe I found a way to claw back again. I’m speechless, and still worried I will end up as I have every other time. I have about $1.2 million in stock positions. Even with where I am now my positions should pay more than $62k/year in dividends. And I think the stocks can appreciate in value outside of that as well. I’m in a much better place mentally and I finally respect the risk after getting my cheeks spread 4-5 times. I don’t want to get carried out because I didn’t respect the risk. I know I’m in a good place again and I don’t want to screw it up this time. I’m getting to a point where I realize I could almost live off the dividends or at least supplement my income to a great deal. I’m definitely not going to be “guessing” with futures anymore though, and I’ve put a rule in that no futures position can exceed 10% of my portfolio, and my target is for 5% positions. I may even make the 5% rule a hard rule. I also have a trend trading system, and I no longer allow myself to trade against the trend, I can only trade with it. But with this much money and buying power I plan to mainly stick to stocks. And if attractive dividends pop up I will add them. Even if attractive companies pop up I’ll buy them. I know I shouldn’t even be allowed to mention dividend investing in this forum. Screw me right?

Thanks for listening.

2020 TL;DR: Cash advanced $7k off a credit card. Grew it to $370k with futures. Ungrew it to $30k with futures. Grew it back to $370k with portfolio margin/stocks.

I hope someone out there can read this, and learn from it.

I had some seriously low lows. Words cannot describe how I felt. Not only towards myself, but towards my loved ones if they only knew. Do yourself a favor and use this as your experience. Don’t go through this emotional rollercoaster yourself.

Remember, if you make huge gains, don’t be a pig and get slaughtered. Take your gains for god’s sake.

 

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.

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