Thank god I cut loss

In year 2005, I bought 1stsoftware (it is no longer listed today) based on a CEO purchase of 1 Million shares at 10 cents. When its share price fell to 6-7 cents, I bought a few hundred lots. I was thinking to myself how can insider be wrong.

In year 2006, its share price fell even further to 4-5 cents, and the cash balance dropped to a few million dollars. I was very concerned and worried because my holding in 1stsoftware represented a huge chunk of my net worth. I paid a visit to the company in Suntec city and spoke to the CFO.

He presented to me a future plan of the company. As I did not understand much of it, I cut his presentations short. I asked him about the cash balance of the company and questioned if it was sufficient to tide the troubled company over. He seemed unenthusiastic, look down and declined to answer. That convinced me to sell the stock.

But the confirmation to sell was this. When the CFO sends me to the door and we parted, I saw him talking to receptionist and then chatting about the events in the newspapers. When this happened, I knew this company is a goner.

I rushed home and sold all my stocks in 1stsoftware at a loss of 3-4 cents. Thank god, I sold, if not my losses will be 100% and not 50%.

The stock was delisted from SGX a few years later. It never reached 2nd, let alone 1st.