TL;DR
John’s story shows how easy it is to lose everything in the stock market when you confuse luck with skill, especially in a bull market. He’s one of many who lost savings trying to get rich quick—another cautionary tale of unchecked greed and lack of financial knowledge.
Story
John, a Covid-era newbie trader, saw his $5,000 Tesla investment double. He thought he’d cracked the code. But this wasn’t skill; it was a bull market lottery. ‣ Bull Market: When stock prices generally rise. John’s gains were an illusion, a house of cards built on rising prices. Soon, his $70,000 in Schwab and another $20,000 across various platforms vanished. It’s a story as old as Wall Street itself—get-rich-quick schemes end with getting-poor-quick realities. Like the 2008 crash, or Enron’s collapse, John’s tale illustrates the dangers of chasing quick returns. He fell for the gambler’s fallacy: ‣ Gambler’s Fallacy: The mistaken belief that past events influence future independent events. Each loss fueled his next bet, thinking each trade would somehow magically reverse his fortunes. He mistook short-term price spikes for long-term gains, a common mistake of amateur traders. Many comments on the Reddit thread display similar patterns of denial, poor risk management and a lack of realistic expectations. It’s a bleak picture, highlighting how easily even modest savings can evaporate. One commenter lost $400,000—his life savings—on options trading. ‣ Options Trading: A risky strategy involving complex contracts. The comments reveal patterns of chasing fast gains, ignoring risks and a failure to recognize the inherent uncertainty of the market, leading to a financial disaster. It was never an investment strategy. It was simply gambling dressed in financial terms.
Advice
Don’t chase fast money. Learn about investing, not trading. Diversify. And never invest more than you can afford to lose. This isn’t a get-rich-quick scheme; it’s a long-term strategy.
Source
https://www.reddit.com/r/wallstreetbets/comments/1n1l2qf/probably_done_trading/