Many new investors never start because they fear losing money. I get it. Losing money is extremely easy, even after you gain experience and become a good investor. It is also built into our minds that we experience more pain from losing money than from gaining money.
Fortunately, with standard stock investing (more exotic types of investing will be covered on a different day) you can’t lose more money than you put into the investment. In fact, often, the wins will cover many losses!
Today’s article will cover an embarrassing number of my poorly selected stock purchases and a few singularly successful stock purchases that covered all of the losses. By going through the math, you’ll see that you don’t have to always be correct to be successful.
Early Bungles and Hits
I began investing more actively in the early 2000s, but I didn’t have much money so I couldn’t win big or lose big. But I could learn.
The financial crisis of 2008 wrecked many people’s investments, including many of my own. However, I was also able to find a couple of gems to offset my losses. Here is a tale of five stocks that I bought at that time.
Big Losers
Let’s start with four of the stocks I purchased and why they failed.
- CIT: CIT Bank loaned money to small and medium businesses. I did not expect this bank to be allowed to fail in 2008 which turned every dollar invested into a 100% loss.
- FLML: Flamel Technologies offered unique drug delivery technologies for delayed release doses of medicine. I forgot that great technologies only become good businesses if they also have good managers. FLML did not become a good business, so I bailed with smallish losses.
- FORM: Form Factor provides technology for integrated chip production. I lost patience with the stock because it was going sideways (neither up nor down big).
- XWG: Wireless Xcessories Group offered hot cellphone merchandise and add-ons… I forgot fads change and can take down the companies riding on the fads when trends change.
Here were the specific purchases:
| Stock | Buy Date | $ Invested | Sell Date | Gain / Loss |
| CIT | Mar 2005 | $1,570.35 | Dec 2009 | -$1,570.35 |
| CIT | Aug 2007 | $3,773.05 | Dec 2009 | -$3,676.05 |
| FLML | Aug 2005 | $975.95 | Feb 2014 | -$458.95 |
| FLML | Aug 2007 | $1,493.90 | Feb 2014 | $58.60 |
| FORM | Aug 2005 | $654.45 | Oct 2016 | -$394.20 |
| FORM | Aug 2011 | $668.95 | Oct 2016 | $111.80 |
| FORM | Mar 2008 | $1,739.95 | Oct 2016 | -$698.95 |
| XWG | Aug 2005 | $342.25 | Jun 2007 | -$258.75 |
| TOTAL | $11,281.85 | -$6,983.85 |
In those days, I only actively invested in my retirement account, so I lost over a year of my investing contributions! Even worse, none of these losses could be deducted from my taxes.
Big Winners
My big winner was Select Comfort Mattresses (then SCSS, now SNBR). My wife and I bought one of their super expensive beds and we loved it. After some investigation into the company, I also bought the stock.
Unfortunately, they had expanded their operations just before the 2008 financial crisis, so most investors thought they would go out of business. Our early stock purchases were in the high $20s and low $30s per share, so when the stock dropped to $5 a share, we were in real pain.
However, I studied the company’s cash flow and despite the losses on their income statement, I saw that Select Comfort had the cash flow from their business to continue operating. So I bought shares. I bought more when it dropped to $1, then more at $0.50, and even more at $0.25.
| Stock | Buy Date | $ Invested | Sell Date | Gain / Loss |
| SCSS | Apr 2006 | $2,008.45 | Sep 2009 | -$1,758.45 |
| SCSS | Aug 2006 | $490.45 | Sep 2009 | -$365.45 |
| SCSS | Aug 2006 | $432.45 | Sep 2009 | -$307.45 |
| SCSS | Jul 2007 | $445.95 | Sep 2009 | -$320.95 |
| SCSS | Jul 2009 | $445.95 | Sep 2009 | -$320.95 |
| SCSS | Oct 2008 | $55.00 | Sep 2009 | $445.00 |
| SCSS | Oct 2008 | $176.95 | Mar 2010 | $2,421.05 |
| SCSS | Dec 2008 | $153.60 | May 2010 | $5,471.40 |
| SCSS | Mar 2008 | $470.95 | Jan 2012 | $1,789.05 |
| SCSS | Oct 2008 | $66.95 | Jan 2012 | $2,193.05 |
| TOTAL | $4,746.70 | +$9,246.30 |
When the stock bounced back, I was rewarded! Afraid of getting greedy, I sold enough of my position to make back our initial investment. That way I was wrong about their future and the stock went bust, we were OK.
That also means that we missed out on the potential gains that could have been enjoyed. I sold all of the stock a short while later at around $15 which means we missed out on fat profits when the stock hit over $140 per share in 2021! But I also missed the big drop down to its current price around $2. Overall, my mental health is better for getting out.
Early Results
Overall, I made over $9,000 in profit even though some individual stock purchases were sold at a loss. When combined with my loser stocks at the time, I made $2,262.45 in profit. These are not great results, but it goes to show that a single winner can offset many more losers.
Also, look at the totals invested. My losers cut my $11,000 investment in half. But the most I could have lost was the $11,000. My winners came from under $5,000 in investment and almost doubled by money. It even had potential to go up further. The upside is larger!
Recent Bungles and Hits
What a difference a couple of decades makes! My experience makes me more confident, but of course, I still make mistakes. Instead of losing hundreds and thousands of dollars when I make mistakes, I now lose thousands and tens of thousands of dollars. Ouch!
Many stocks “went on sale” in 2021, but instead of reminding myself that sometimes prices drop for a reason, I put my brain on hold and snapped up a few “bargains” which proceeded to drop much more over the next few years! Fortunately, as before, I had a couple of bigger winners to help soothe the pain.
Big Losers
Let’s start with the stocks I purchased and why they failed.
- BL: Blackline Inc. offers a revolutionary accounting software that promises to cut down accounting and auditing time requirements and costs. Unfortunately, the company struggles to grow and reach the potential of its technology.
- DMTK(Q): DermTech created a patch to detect skin cancer that eliminates painful biopsies. I took a chance, but the interest rate peak two years ago destroyed the company and it went bankrupt for lack of financing. Fortunately, this was in a tax deductible account.
- OM: Outset Medical creates a kidney dialysis machine that, if ever approved by the FDA, could make in-home dialysis possible. Their business is not going so good while waiting for approval – they almost went bankrupt.
- TTD: The Trade Desk is quite a successful internet advertising company. However, their sales have stalled with competition from Amazon and people think AI will crush it so their stock price is also crushed.
- TDOC: Teledoc’s remote medical services boomed during Covid and then an ill-timed acquisition destroyed their profitability. They continue to struggle.
- U: Unity Software makes software to make video games. AI concerns put downward pressure on the stock, but the main reason I sold was that they failed to develop new products and their turnaround is taking too long.
- XYZ: I purchased Block, Inc. when it was known as Square and I liked their retail credit card solution. Then they lost focus, chased the blockchain and renamed themselves to Block… and their sales and profitability started to struggle.
| Stock | Buy Date | $ Invested | Sell Date | Gain / Loss |
| BL | Feb 2021 | $4451.44 | May 2024 | -$2,079.94 |
| BL | Feb 2021 | $13,172.35 | Feb 2026 | -$8,743.50 |
| DMTK(Q) | Feb 2021 | $854.45 | Oct 2025 | -$854.45 |
| OM | Apr 2021 | $553.30 | Mar 2025 | -$546.12 |
| TTD | May 2021 | $1,035.46 | May 2024 | $251.56 |
| TTD | May 2021 | $1,117.24 | Jun 2025 | -$26.14 |
| TDOC | Mar 2021 | $13,788.79 | Feb 2026 | -$13,199.11 |
| U | Jan 2022 | $1,759.26 | Jun 2025 | -$1,736.62 |
| XYZ | Mar 2021 | $20,980.92 | Feb 2026 | -$14,891.88 |
| TOTAL | $57,713.21 | -$41,826.22 |
I partially learned my lessons from the early 2000s and put my speculative medical stocks (DMTK, OM) into a taxable brokerage account. This allowed me to deduct those losses from my taxes.
But the other bungles were still in my retirement accounts, so I just cramped my future retirement style quite a bit. Some were controlled and reasonable purchases (TTD, U), but I obviously over invested in BL, TDOC, and XYZ.
Big Winners
My big winners were:
- NVDA: When I first evaluated Nvidia in 2019, I was simply a fan of their graphics cards and their stock had been beaten up. So I bought in and enjoyed the skyrocketing stock as they became the go-to microchip for AI processing. I still own a good-sized chunk and these sales just reflect the shares I sold.
- PLTR: Palantir performs deep data analysis for government agencies and some corporate clients. This was one of the stocks that went on sale in 2021, so obviously, I didn’t pick all losers… just mostly losers.
| Stock | Buy Date | $ Invested | Sell Date | Gain / Loss |
| NVDA | May 2019 | $631.32 | Mar 2022 | $33.81 |
| NVDA | May 2023 | $18,197.29 | May 2023 | $3,742.42 |
| NVDA | May 2019 | $215.90 | May 2023 | $166.46 |
| NVDA | May 2019 | $8,565.44 | Jul 2024 | $34,737.54 |
| PLTR | Dec 2021 | $582.70 | May 2024 | $424.51 |
| PLTR | Dec 2021 | $982.25 | Jun 2025 | $5,950.75 |
| TOTAL | $29,174.90 | +$45,055.49 |
The AI boom drives the stock prices of NVDA and PLTR to ridiculous valuations. Especially for PLTR which hasn’t shown the growth in sales and profits to make me comfortable. Hence, the sale.
Also note that I sold NVDA batches in 2022 and 2023 that would have been worth MUCH more in 2024. Same for PLTR sold in 2024 versus 2025. A single year can produce big swings in prices – both positive and negative. I won this time for these…
Recent Results
Overall, I made over $45,000 in profit on my winners, which offset the nearly $42,000 in losses and provided a meager net gain of $3,000. Again, these are not great results, but it goes to show that a few winners can offset many more losers- even when some drop to $0 per share.
This can be seen even better by comparing that the $42,000 in losses came from over $57,000 invested into the market. The offsetting profits came from just over $29,000 invested.
For an even more positive perspective, compare specific DMTK and NVDA purchases. The DMTK lost 100% of our $854.45. Then note the $34,737.54 of profit from the $8,565 investment of NVDA stock – which is almost a 400% gain!
At the risk of repetition, note that we lost the most amount possible with DMTK and it is only 100%. We still didn’t capture the maximum possible gains for NVDA because the stock continues to go up, but we captured almost four times our initial investment. The upside is higher.
Takeaway Lessons
At the very least, understand that a few big winners can offset a bunch of losing stock choices. Don’t be afraid to take a chance and start exploring investing.
However, there are several other tips that could improve your results:
- Start with fake money in a spreadsheet or with pencil and paper if you don’t want to possibly lose money. Some investing apps allow you to do “paper” trades that allow you to see how you would do if you had actually invested.
- Start small. If the stock dies, you’ll be glad you only had a small amount invested, and if the stock skyrockets, a little will be enough.
- Don’t fall in love. A novel technology, a great product, or wonderful service is not enough to make a good business or a good investment. Look for their ability to turn the great product into real business results such as revenue and profit growth.
- Dump the Losers. I saw many of my ‘bargain’ stocks continue to drop in price and not perform as businesses… and still hung onto them as they dropped even more and performed even worse. If the idea behind purchasing the company isn’t real, move on. For example, I thought I bought a great company at a great price and it turned out I bought a poor company at an eroding price. I should have just eaten the smaller loss as soon as I saw I had been wrong.
In the future, I will continue to make mistakes as well as make good decisions. Hopefully by illustrating my small pains and mistakes it will help you to be an even better investor when you decide to get started!