Stories from Blogophere & Videosphere: Losses from Crypto & Stocks and Lessons learnt

2021 was a good year for stocks and crypto. So far, 2022 is not so good (for lack of a better word). With the high inflationary and rising interest rate environment, geopolitical tensions, there seems to be a never-ending stream of bad news.

On the web, articles and videos about losses have been sporadically popping up. These are often meant as a means for self-reflection on lessons learned and the way forward.

How To Deal With Your Losses

Ultimately, no one wants to suffer a loss of any kind, we invest so as to profit. However, the best course of action is often to cut your losses and move on to the next trade. Turn it into a learning experience that can help you going forward:

1) Analyze your choices. Review the decisions you made with new eyes after some time has passed. What would you have done differently in hindsight, and why? Would you have lost less or perhaps nothing at all if you had acted differently? Answering those questions may help you avoid making the same mistake twice.

2) Recoup what you lost. Tighten your financial belt for a while if you must. You might be able to recoup it with a little discipline if the loss is small enough. Regain that money and try again, keeping in mind the things you learned for the next time the market gets shaky.

3) Don’t let losses define you. Keep the loss in context and don’t take it personally. Remind yourself that a lot of other people out there took a hit just like you did—perhaps even more of a hit than you did. The loss doesn’t define you, but it can make you a better investor if you handle it correctly.

Losses are never easy.

Do you remember that scene when Joker burns a huge pile of cash?

It (our losses) is something that many of us will probably find extremely difficult to forget.

$$$ KPO and CZM $$$: We lost >2 million SGD in the Collapse of Terra LUNA & Good Bye (read here)

To quote:

“At its peak (Portfolio – March 2022), we had a crypto portfolio worth 2.4m SGD with 597k SGD debt from Anchor Borrow and ~100k SGD worth of NFTs. Not forgetting, I had a crypto business with 2 other friends that was built on Terra and we had a bunch of aUST and 5 digits LUNA before the depeg happened. All that is left now is around 28k SGD. A loss of >2 million SGD.”

It is hard reading about their losses. However, there are key lessons learned and self-reflection points highlighted in the post.

Some investors still believe in cryptocurrencies, undeterred from investing even after crash (read here)

$300K lost in crypto staking (read here)

A reader of AK’s blog commented that he has lost $300k in cryptocurrencies.

To quote:

“He shared that he lost big time on Luna and even on his Bitcoin and Ethereum which he staked for much higher returns than the interest income he could get from our local banks.

Apparently, some of the crypto lending platforms where he staked his coins became insolvent recently.”

Seasoned investor AK highlighted a few key points that for any investor, before investing his money for income, it is important to make sure that it is a bona fide income-generating asset. And this is especially true if it promises what seems like an incredibly high return.

Invest For Yourself: Mid Year Review (2) – Reducing Exposure to China / Hong Kong Stocks (read here)

To quote:

“I used to aim for 50% US and 50% China / Hong Kong for my overseas equities exposure.

However, since the beginning of this year, I have started to pare down my Hong Kong stocks as I lost my confidence in the Hong Kong and China economies….

My loss in Hong Kong shares is almost 30%.

Any upward movement will just give me a reason to cash out.

I don’t know where the optimal % holding of Hong Kong equities is now. For a start, I would like to keep it to about 10% of my equity holding and a 25 / 75 ratio split for my Hong Kong and US stocks.

So, if I maintain my current holding of overseas equities, I would be buying more US stocks.”

As China continues with its zero Covid policy which inevitably affects its economic recovery, China and Hong Kong stocks continue to face headwinds and volatility. This is in addition to the geopolitical tensions between the US and China. Like many investors, the prolonged downtrend is sapping the patience of most investors.

Many (China and Hong Kong stock) investors are now at a cross road.
Having said that, recently there is news that regulators were progressing in talks to avoid the delisting of US-listed Chinese companies in the US. Will this be the start of a turnaround, finally?

An unexpected deal may save $1.3 trillion of U.S.-listed Chinese stocks from a mass Wall Street delisting (read here)

Chinese Stocks May Extend Gains on Talks to Avoid Delistings (read here)

Singaporean Lady Road to FI: 6 figure paper loss (read here)

To quote:

“At times like this, grit and having a job is important. Now I’m in a frozen state, unsure what to DCA in. FIRE of any sort definitely has been impacted.”

Singaporean Talks Money: Q2 Portfolio Review | Step back from my goals (read here)

To quote:

“Painful to even talk about this because my crypto value fell more than 50%…

So technically I lost much more than 4000 USD especially since LUNA was almost $100 in the beginning of Q1 of 2022. BTC and ETH have also seen significant falls since Q1. CRO, SOL and Chainlink which I have small positions of have also fell drastically. I sold and clean up my crypto portfolio even though things are down down down, I just wanted to clean it up and also focus on stacking BTC and ETH. So boring DCA action resume for both BTC and ETH. Ending Q2 at about $18,000. A very huge drastic drop compared to Q1…

I think overall, the portfolio has taken a hit from stocks to crypto and even my stablecoin position ahem UST…..I thought entering 2022, I might be able to hit $100,000 by the end of the year but boy oh boy, my portfolio got hammered instead.”

In her post, she mentioned that she has learned a lot from the first half of 2022. For one taking profit is good and allows her to at least secure some profits. Otherwise, she would have to be ready to ride the volatility and see the unrealised profits decrease. She believes in holding quality index funds for the long term but it is nice if she had sold around the top in 2021, but of course, this is all in hindsight.

Azrael’s Financial Cents: Updates for my Portfolio for May 2022 (read here)

To quote:

“I recently got burned pretty badly from the UST/Luna event on May. I thought I would write to share my thoughts.

Back then, when I was looking at UST and researching about it, I promptly forgot that I had a rule that I avoided algo stablecoins as most of them fail and sticking only to fiat backed stablecoins. So I stupidly swapped stablecoins of my smaller account to UST. And less than a week after that, UST unpegged and chaos ensured….

My portfolio YTD is now -71.6%, with the long term XIRR at 0%. It is pretty humbling to see a mistake like that wipe out years of performance.”

I am an avid reader of Azrael’s blog posts, and it is painful to read about his losses. Nevertheless, he has learned from this experience and is rebuilding cash while waiting for opportunities.

STACKED: “I Lost RM 1 Million Investing in KL Real Estate”: 5 key lessons from a Singapore Investor of 36 years (read here)

Cheryl shared the experience of a real estate investor who has at one point, lost more than a million Malaysian Ringgit (SGD 312k) in KL properties alone.

Lessons learnt ranged from, one should not chase after the highest yield while neglecting short-term gains, not having a sound financing strategy, not having enough buffer cash and lack of proper budgeting, not being able to see the bigger picture (by building wealth slowly), to not building rapport with other investors, contractors and agents.

40 year-old lost $618,848 Options Trading in 2022 – Here’s what this Singaporean learned (read here)

Financial Horse shared the experience of an investor who lost $618,848 via options trading in 2022.

To quote:

“Over the past 6 – 12 months, he has been buying long dated FAANG call options. Unfortunately, the crash in the NASDAQ has not been kind to him. As we speak, of his original $1,000,000 portfolio, only about $394,000 remain.”

In retrospect, the investor mentioned that if he could turn back time, he would have taken the huge profits that he made in 2021 and re-invest into stocks and hold them for the long run. And then he would sell covered call options against the stocks that he owns, and generate more side-line income every month.

I recall back to the comment by AK in the post as mentioned earlier, bloggers (and Youtubers) are regular folks just like you and me. We should not read blogs (and watch videos) thinking that they are always right.
I do find the Youtube Channel videos by Chicken Genius Singapore (Ken Teng) entertaining, However, there are many points that I personally find dubious. No doubt he has made huge profits in the growth stocks run-up during the pandemic. However, investing (or trading) is highly personal, and what suits him might not be suitable for you and me. Personally, I follow what I find most comfortable for me and what can allow me to sleep soundly at night.

The Daily Ketchup Podcast: How To Cope With Losing Your Life Savings | TDK Podcast #96

Good video on the Terra Luna crash.

What kinds of investment mistakes have people made and what we can learn from the crash.

Honey Money SG: My Urgent Warning in this Market Crash

Like many Chris is also quite badly hit by the market correction. In the video, he shares the actions that should be taken if one is facing a market downturn.

What I Lost – And Learnt – In The Terra Luna Crypto Crash

Think the title is self-explanatory (on roughly the amount lost).

The cryptocurrency Luna was valued at an all-time high of US$119 in April 2022, before crashing to below US$1 in May.

Lai Yuen, 25, a fresh graduate who was co-president of the NUS Fintech Society and a crypto investor, saw his portfolio lose a six-figure value – approximately the cost of a sedan car in Singapore.

Thank you for reading.