Jim Cramer Reveals the Worst Investment He Ever Made: ‘In the End, There Was Nothing There'

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Jim Cramer’s biggest investment regret was sticking with a low-value stock, even as it continued to lose value.

"I was in touch with management," he says."I did all the work. I looked at all the [company's] filings. And I just kept buying it and buying it and buying it, thinking, you know what? What's the worst that happens?"Memorex Telex was simply not performing. As Cramer later recalled, the company had a"compelling story" but its technology"was simply outmoded and, in the end, there was nothing there.

"I realized it was time to stop because it was going to zero and I wanted to be able to get some sort of capital out of it before it went to zero," says Cramer, who cashed out his holdings for a fraction of the initial purchase price. Later, in 1996, Memorex Telex's stock value was completely wiped out when the company went back into bankruptcy a second time. What was left was then sold in pieces to subsidiaries of other companies."It was the worst percentage loss I've ever had," says Cramer.

As Cramer has written before, the Memorex Telex experience taught him a valuable lesson:"When you have a low-priced stock, don't think to yourself, 'How much more can I lose?' You can still lose everything."

 

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