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You can be right and wrong at the same time..
Hi everyone!

I linked a trade yesterday and posted “know when to hold em know when to fold em” that received some great feedback. Based on that I have decided to share a few other lessons I have learned over the years from the school of hard knocks that I hope will in turn make you all better investors as well.

This one will be fun as it brings us all the way back to 2015.. and $DIS was my mark..

I was 2 years out of college at the time and going through my confessions of a street addict phase you could say. I had just gained a new arrow in my quiver “the call option” and as a hammer likes to find nails, I was trying to use it on just about everything.

For those who may not remember 2015 was the year $DIS released “The Force Awakens” and I was awestruck. Considering I had just rolled off a few wins with my new friend (the call) this was an absolute no brainer to me. Star Wars is coming out, the market is GOING TO LOVE IT and I would be a fool not to capitalize on the opportunity.

Long story short I had just poured, I hate to say $6k (a ton of money for me at the time) into calls dated to expire just after the movie release plus I had earnings coming up to hype/pump me to the moon.

Fast forward to the ER.. I am up 100% already but hey, the report is gonna be SICK! I mean, how could it not be? I’m up now, so I’m only gonna be up more tomorrow!

Well this is where I learned a very valuable lesson.. the hard way..

narrator “what Sam had forgotten to factor into his thinking was that $DIS is a very large company.. with many moving parts and revenue streams. A single movie, as amazing as it was surely to be, is not enough to buoy a market cap of its size”

So, I was totally RIGHT that StarWars hype was going to be in the air / deliver me to the promise land.. BUT I was TOTALLY WRONG that the market would have my myopic view.

What actually happened..

ESP-f*ck-N! Was losing viewers at an alarming pace due to the new streaming wave the magnitude of which was not to be understood for some time.. and it TANKED $DIS. My calls evaporated. My gains that had only seemed so certain were worthless and the lousy month of time value I was so sure was plenty in-fact was not..

But, before you all feel too badly for me.. I learned my lesson and am happy to say that today $6k seems like such a small figure to my overall portfolio but boy did it hurt at the time!

So, remember kids.. you can be absolutely right about a thesis and have the market prove you absolutely wrong at the same time. Always buy more, and I mean wayy more time than you need for your thesis to play out with calls AND do not just let it ride when you are up triple digits. Be prudent, patient, and thoughtful with your trades and investments. With those ingredients and time I can almost guarantee your portfolios will be on their way to gains.

sam stribling's avatar
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