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basant
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Joined: 01/Jan/2006
Location: India
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Posts: 18403
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   Posted: 03/Apr/2011 at 9:37am |
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I knew a guy who had $5 million and owned his house free and clear. But he wanted to make a bit more money to support his spending, so at the peak of the internet bubble he was selling puts on internet stocks. He lost all of his money and his house and now works in a restaurant. - Warren Buffett |
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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rajnsharma
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Joined: 31/Jul/2009
Location: India
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Posts: 1202
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Posted: 03/Apr/2011 at 10:09am |
Originally posted by basant
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I knew a guy who had $5 million and owned his house free and clear. But he wanted to make a bit more money to support his spending, so at the peak of the internet bubble he was selling puts on internet stocks. He lost all of his money and his house and now works in a restaurant. - Warren Buffett |
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The message is very clear. 1. Don't try to get rich quickly, it burns most of the times - Avoid Speculation 2. Never bet something in stock markets which can have an impact on your daily life.
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Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett
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kulman
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Joined: 02/Sep/2006
Location: India
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Posts: 9319
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Posted: 03/Apr/2011 at 11:58am |
I knew a guy who had $5 million and owned his house free and clear. But he wanted to make a bit more money to support his spending, so at the peak of the internet bubble he was selling puts on internet stocks. He lost all of his money and his house and now works in a restaurant.
- Warren Buffett |
Ooops!
Rumor has it that he has since stopped accepting tips.
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deepinsight
Senior Member
Joined: 18/Sep/2006
Online Status: Offline
Posts: 980
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Posted: 04/Apr/2011 at 2:01pm |
Originally posted by kulman
I knew a guy who had $5 million and owned his house free and clear. But he wanted to make a bit more money to support his spending, so at the peak of the internet bubble he was selling puts on internet stocks. He lost all of his money and his house and now works in a restaurant.
- Warren Buffett |
Ooops!
Rumor has it that he has since stopped accepting tips.
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Now,
He puts away the dishes.
He is on call for seven-eight tables.
He still accepts tips.(but only cash)
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"Investing is simple, but not easy." - Warren Buffet
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Monkey
Senior Member
Joined: 21/Aug/2009
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Posts: 770
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Posted: 04/Apr/2011 at 2:45pm |
Originally posted by deepinsight
Originally posted by kulman
I knew a guy who had $5 million and owned his house free and clear. But he wanted to make a bit more money to support his spending, so at the peak of the internet bubble he was selling puts on internet stocks. He lost all of his money and his house and now works in a restaurant.
- Warren Buffett |
Ooops!
Rumor has it that he has since stopped accepting tips.
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Now,
He puts away the dishes.
He is on call for seven-eight tables.
He still accepts tips.(but only cash) |
Let us not make fun of some unfortunate fellow who lost lifetime's wealth due to ignorance. This happens in India as well. I have met a taxi driver in Mumbai who sold his house and taxi to "invest" in stock market during 1992 eventually losing almost everything. His sorry face while narrating his story is itched in my memory. There is lesson to be learnt here. I think personal finance should be compulsory subject in our secondary and college education.
Edited by Monkey - 04/Apr/2011 at 2:47pm
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subu76
Senior Member
Joined: 25/Feb/2008
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Posts: 5709
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Posted: 04/Apr/2011 at 4:13pm |
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Someone in my colony (a retired individual) also bet a lot of money around 2007 and lost it all. He and his wife moved to a cheaper city after that.
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manishdave
Senior Member
Joined: 05/Aug/2006
Location: India
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Posts: 1371
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Posted: 04/Apr/2011 at 4:41pm |
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F&O can be used as a tool. WB himself uses both. He wrote put options. Selling insurance is nothing but like selling options. Only difference is he spreads risk and has enough capital to support worst case scenario.
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nikhil090
Senior Member
Joined: 06/Nov/2006
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Posts: 1344
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Posted: 04/Apr/2011 at 5:26pm |
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The activitiy in options market is restricted to very few counters. Even all Nifty/Sensex stock options are not traded regularly. So actually it become less useful due to this constraint.
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