Yes Chuk, nothing in the market is easy and I wish I was better at it.
It was a generalized comment specifically about when things "don't go to plan". There are plenty of posters who have indicated that their capital in ABU is down 50% to 70% at around 32c, as are many of the holders of other Gold stocks. In fact KGL has fallen about 50% in a week. I don't think those who bought at 45c around a week ago would be too pleased when KGL hit 22c today. (Let alone, those who bought the same stock at $1.45 around 2 or 3 years ago!)
I didn't state that stop losses work out well every time. Of course a stock can recover and most investors hold onto a falling stock on that premise. That is why around 80% to 90% of non-professional investors lose money overall when investing in the stock market.
If a stock falls 10% or 20% below the buy-in price then a prudent investor would seriously consider the options of buying more, holding or selling. Sometimes it would be best to buy, other times to sell and sometimes it would be best to hold, but the really important issue is to not lose your working capital and it is "best to be safe than sorry!" At least that is what my broker friends state. If you make a wrong call and miss a bit of profit if the stock rises again then so be it, you can always buy back into the stock again. But if you hold on and lose 50% to 70%+ of your working capital, that really does limit your chances of making money long term and those losses can be hard to win back again.
Whether an investor would get caught up in 2 or 3 stop losses at the same time? Investors having 3 stocks or more that drop 20% all at once? If there was a whole sector sinking fast like the Gold stocks did then I bet there are thousands of Gold investors who wished they'd sold their Gold holdings before 50% to 80%+ was wiped from their value.
I wish I had sold ABU at 5c (pre con) on the way down, and bought in much lower then my 60c (4c) average buy price. Then the balance sheet wouldn't look so bad. A mate of mine sunk $100,000 into Geodynamics at an average price of $1.20, with GDY now being 4c and not a glimmer of hope for a major price rise on the horizon. He is basically "stuffed", with a few minor stocks to play with for minimal profits. Some ABU holders on here have been holding the stock for 7 years+ and are 80% down on their original investment.
In fact if I was smarter I wouldn't have bought ABU shares at all over 2 years ago! I could have been using that money to trade some other stocks and hopefully make a profit, and bought into ABU now, because the sp at 32c (2.13c pre con) is around its lows. Over 2 years of a large capital investment that has done nothing except halve in value!
To all those like myself, who have previously made losses on stocks of 20% to 80%+, or are still holding stocks like ABU and being 20% to 80% down, a consideration to sell a stock when it reaches a 20% loss, often may have in the past, or often may in the future, save you a lot of money, grief and being reminded constantly by the wife that "you're an idiot who has wasted, a lot of our money in a stupid, dud company!"
That's my honest opinion and I have had countless sleepless, worried nights, also nights sleeping in the shed, and bruises from a frypan to support it!
(20min delay)