BomBitz | A Pinoy's Journey to Financial Independence

BLOOM: How I Made My Biggest Investing Mistake


Last year has been a bloodbath for the stock market. I’m quite sure many investors have experienced the disastrous drop in their portfolio’s value. I was not an exception. As a matter of fact, there were times when all my stock positions are on the red side which means I was having paper losses. Yes, they were only paper losses since I never sold any of them. In my post A Letter to the Newbie Investor I’ve mentioned that one of my stock holdings stumbled by up to 50%. Everytime I remember this, I can’t help but ask myself how did it happen, where did I go wrong. I don’t want this to happen again, and I don’t want this to happen to you either. Let’s try to understand my mistake and hope we can learn from it.

The following summarizes my transactions (i.e. buying and selling) with BLOOM (Bloomberry Resorts Corp) for the year 2015 up to present: 

BLOOM buy sell transaction

I had a good start. In 3 months, I was able to make 16.37% profit. Not bad at all! I bought shares almost at the bottom on Feb. 9, 2015 then sold them at Php12.00 on Apr 14, 2015. It was the relative peak in that period. I would say I was lucky enough to buy and sell shares of BLOOM at very good timings.

BLOOM trading profit

Actually, this was not the first time I’ve done this. In previous occasions, I was able to make significant profit by applying the same strategy on PGOLD (Puregold Price Club Inc) and SCC (Semirara Mining and Power Corporation). On Feb. 9, 2015, BLOOM (Bloomberry Resorts Corp) stock price slumped by about 13% just few minutes after the opening of the trading session. I can’t remember the reason why the sudden fall of share price but upon checking the historical company disclosures, there was no significant news/changes around that date. My instinct must have told me that it was just a panic reaction by traders and investors which caused the drop of the stock price. I took advantage of the opportunity. After a careful monitoring of the price movement on that day, I managed to buy 3,000 shares of BLOOM near the bottom. It proved to be a bargain when the price soared again the following days. After a couple months, I sold my positions and got my profit.

The strategy I used above is just a simple demonstration of what is known by many investors to be the “buy low, sell high” way of trading. Clearly I was able to make money by simply waiting for the days when a certain stock irrationally dives and traders go on panic-selling. I have been trying to follow one of Warren Buffet’s rules: "be greedy when others are fearful". It proves to be profitable, but unsurprisingly, not all the time!

I have become complacent of my own strategy. It seemed to be effective, until one day… On May 14, 2015, BLOOM took a plunge again. It was just a month after I locked-in my profit from the same stock. When I opened the COL Financial platform on that day, BLOOM was one of the highly traded stocks, and it was bloody red. I thought it’s another opportunity to make more money. Without a slight hesitation, I immediately clicked the BUY button and I used all of my buying power to acquire 10,000 shares @ Php10.50 each. Yeah, it could be considered as going “all-in”.

On May 22, 2015, a week after, I have deposited some more funds to my account. This time, BLOOM was still on the downside. In my mind, I was thinking that traders haven’t finished the panic-selling yet, so I bought more shares @ Php9.65 each. I hoped that the same story would happen, i.e. the stock price would rebound the following days. However, contrary to what I expected, it did not happen! I waited and waited but it kept on falling for days, then months, until recently. It was a pain in the eyes to see my portfolio reaching up to more than -50% loss. I realised I just made the biggest mistake ever in my investing life.

BLOOM market crash

So where did I go wrong? Let’s take a look at the company disclosure dated May 13, 2015, the day before I made the suicidal call. There were news everywhere, BLOOM reported a net loss of Php533 million in Q1. The cause of the big loss was the company’s higher expenses than normal due to the completion of the newly built Sky Tower. Of course I read the news! So why did I still put a big bet on BLOOM despite knowing that the company performed poorly? I thought this was just temporary. At the back of my mind I was expecting that their new investment on Sky Tower will bring forth a significant boost on their revenue soon after it starts operating. However, there’s one important factor that I failed to consider. The gaming industry has been hurt badly for the past few years due to China’s crackdown on corruption. So the likelihood of BLOOM recovering quickly is fairly low. It’s something that did not sink into me until later. I was a victim of panic buying.

My BLOOM story did not end there. During the final quarter of 2015, PSEi plunged to near 2-year low. Almost all of the stocks were in bloodbath, BLOOM was still one of the top losers. Out of desperation, I bought more shares with the sole purpose of lowering down my average price. So in November and December 2015, I acquired a total of 11,500 shares @ more or less Php5.25 each. This resulted my average price to go down to about Php8.00. In the past, PSEi usually rallies from late December till early January. This never happened last year. The stock price continued to drop. Did I just catch a falling knife? Some people would recommend doing a “cut-loss”, but isn’t it too late now?

In the recent weeks, I finally saw a little bit of light. BLOOM started to pick up. However, I’m still down by 36.33%, quite significant still. I know it may take some time to recover my capital or at least reach the break-even. I guess BLOOM is testing my patience.

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19 Comments | Add yours
  • francis

    we have almost the same story...i have 200k shares with bloom at 6.3666 ave price...i started buying it last year at 11.35/sh and ave down every month until i reach my ave price now at 6.3666...if it goes down again to 3/sh, i'm willing to add my position just to ave down...i believe in bloom and it is my long term position investment with tp of 12/sh.

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  • Jun Vivas

    I think what was missing in the buy decision acted upon at Php 10.50 down to Php 9.65 was the consideration of the P/E ratio. Subsequent prices were having a P/E of 27.63 & 25.39 respectively which was categorically an expensive level already. Given the scenario surrounding BLOOM in that period must have been given due diligence considering the fact that market sentiments play a major role to volatility. At current price of Php 5.30 (P/E, 13.95), this level is around 61% cheaper relative to the last 5 fiscal year moving average and would be ideal for me to consider a buy. My personal assessment only.

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  • Bacolod Property Specialist

    I myself is a risk taker but , I don't leave the computer desk., without a thorough analysis, why and how com the market goes up or down., sometimes I spend the whole day analyzing stocks., and left behind the closing before trade. But making mistake is normal., minutes before the china market crash I sold all my stocks. and preseved part of my gains and reinvest, until now I only gained average of 15%, where others skyraketed ther porfolio above percent., thats because, I follow the rules of the Books, " like dont invest in begative P/E, or p/E greater that 25, where as, these stocks skyrocketed and most reaches more than 50 percent from its bottom., We need out of the Book knowledge in Stocks.

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  • Robin

    Thanks for sharing. A good read. I am still holding on to BloomBerry. Close to 100k shares. Awaiting China recovery.

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  • Roger

    I was there that time BLOOM dropped big because of the negative earnings, but I was lucky to escape quick early on that morning. Actually 2 days before that drop, the chart looks good as it broke the previous resistance but then a day before the news, it forms a shooting star and on that day of the news it drops big.. Sad but need to move on..

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  • Dondi

    This is a good read especially for newbies, some sort of precaution to at least avoid it. Thanks.

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  • Bgan

    Sell bloom. The mere fact all of you have bloom is a bad sign. Who will buy bloom when everyone has. I cut loss all my bloom at 7 losing 30% and there is no sign of it going back that fast. Don't buy a stock that you need to pray.

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  • Gian

    Still, BLOOM is the best gaming stock for me. :) :)

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  • Kristoffer

    Same thing happened to me. Bought at 11, too greedy to cut loss on earnings report, ipit since last year. Nothing to do now but wait.

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  • Jeshurun

    You just fell short in having the exit loss plan which is the most important.

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  • Alfredo

    In case of BLOOM, you only lose if you sell. Gaming stocks are rebounding now so you should buy more to lower down the average.

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  • Lourd

    Same here. It also happened to me. It's like watching a star fall down from the sky. Haha can't cut loss kasi masyado ng malaki ang binaba. Average down nalang ginawa ko . #LessonLearned

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  • Josel

    Do not ever go all in and use all your buying power in one trade..you can divide your buying capital in 10 equal bets..buy only when there's a significant drop..if you used all your 10 bets and you're still at a loss, sell everything and move on to your next target stock.. don't love a stock that doesn't love you back..

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  • Daryl

    Anybody can be right or wrong but the market will always be right. That's why it's most important to have a battle plan. Set at target cut loss even before entering the trade and don't let emotions change your plan. Remember, you are more more bullish when you are already in the trade than you were before you entered.

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  • Harvey

    Best Defense in Trading = StopLoss., You only average down if it's still within your trading plan. Else, cutloss without mercy and live to trade another day.

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  • Sally

    Risk management is paramount if you want to last in this business! Another thing, as much as possible don't learn from your own mistake, learn from other's mistakes instead!

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  • Charles

    Different traders, different approach. There is no universal right or wrong in this. But in the end, we all learned something. Thanks for sharing. :D

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  • Pearl

    Trading Stocks is a highly stressful & riskier endeavor. Requires you to constantly study, be alert, your appetite for risk must be very high and most of all be ready to win or lose all. As such, I trust you have other investments and other safeguards. I am an advocate of long term investments.

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  • Phillip

    You clearly missed the downtrend indicator a month before your trade. You had been waiting for a year. Hold on a little longer its coming back up. :)

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