A Investment Lesson Learnt With iPhones And Stop Losses
Greed. It was all about greed. This is a post about how iPhones taught me the importance of research and setting your stop losses before you invest.
I did not do prior market research not did I even prepare for the losses I was going to make.
iPhone X, the most “anticipated” phone of the year, was my worst investment of the year. When I heard about the opportunity to be able to sell each iPhone X at a profit of $1000 through the contact, I jumped at it. I managed to grab 2 of them and got them delivered in the first batch, 3rd November 2017. The adrenaline and happiness could not be put into words when I found out that I managed to get to the payment page. It’s odd because it’s not even a freebie. Why am I so happy when I just spent $3799 on something that I am not going to use? But anyway, having the guarantee I got plus the luck I had, I was exhilarated to get my hands on the cold hard cash I could get.
On that very day I received the 2 iPhones, I was told that I could not sell the phones at such high profits of $1000 anymore. My world was transformed from the brightest of silver to space grey instantly (pun intended). I knew I could not possibly get that high of a profit by reselling it locally. It was almost impossible. As the hours tick by, I kept refreshing the second hand phones price page and watch the price tumble to below my cost price but I still held on to that hope that the price would rise again. (Such a hypocrite of still spreading that theory of principle “hope is for the hopeless, know when to cut your losses”.) At the point of watching the losses really coming through, it was a desperate attempt to frantically search for buyers. Shameless that I was, I sought every help I could – second hand phone shops, foreigner friends, colleagues and even my friends in investments. And I found my stop loss, a backup plan, the worst possible outcome that could happen. The return policy!
That was a sigh of relief there. Within the 14 days, there are 3 situations that could happen: sell at breakeven, sell at a loss less than 15% or return it with a loss of 15%. I know my exit plans now (although it is WAY TOO LATE).
Being a supposedly financially savvy person, I could not have possibly told anyone about this stupidity of believing something that is obviously too good to be true! But I did. I told my loved ones around me about my ignorance.
This was an expensive lesson learnt. Do your research before you dive into any investments. Also, this reinforced what I have previously learnt: When things are too good to be true, it is probably not true.
PS: Look what you made me learn. 🙂
Updates: I managed to ring up the Apple Store in Singapore and they agreed to let me return the phone without any charge. Although I did not make any losses, it is an investment lesson worth remembering.