“(NEW) New Century Financial Corp seen filing bankruptcy.” What did I do wrong? March 9, 2007Posted by deminvest in My investing mistakes, NEW New Century Financial Corp, stock I own, stocks, stocks that pay high dividends.
Here is the source.
Now I wonder: “What did I do wrong when I picked this stock? Where there hints to forecast this disaster?”
I definitely can TAG this post among “My investing mistakes”.
Even if I burned $1700 on NEW, it makes me laugh to read my April 3 2006 enthusiastic buyer’s post specially where I write:
“right now I tell I feel like someone who made a big bargain!”
or my April 20 Comment:
“This stock continues to amaze me for how well it is performing and how cheap it is. I think I’ll only sell it if it triples its value.”
But then I don’t feel like laughing at all when I read other investor’s comments on my Blog. I really hope that they did not buy NEW because they read about it in my stupid Blog. I think I should maybe stop posting about a subject I know so little.
But now let’s try to learn form mistakes.
What did I do wrong when I decided to buy New Century Financial Corp?
Examining my last years post I find out:
1) I did not understand well this company’s business… I wrote “What the heck is New Century Financial Corp ?”. A rule I should stick too is: “Only invest in companies you understand well”.
2) I should have been suspicious of numbers that seemed too good to be true. I should have though: “maybe they are not true…” Enron should teach…
3) I should never invest more than the amount allowed by myself. No matter how shiny it seems, not more than $1300 on a single stock!
Now I can only hope that NEW Century Financial survives. A company that has made $59.8 billion of mortgage loans in 2006, could make a lot of damages to many good people (like me) by going belly up.
I will end this post thinking about the Big Man’s bonus… “New Century Financial CEO got $1.07M bonus for 2005″
Congratulations Big Man. We, the people, really feel you deserved that bonus. Good job!