Story of an investor in times of crisis

Experience with FNI was very helpful

The story is rooted in the early years of college. Although he graduated University of Automatics and Computers and he is passionate about programming, Cristian Rizea started to be interested in the capital market since ‘97-’98. “I started to follow the evolution of the stock market in 1998 and I was already thinking about investing. However, at that time, I had my savings at FNI.”

The loss did not make him let down guard, but on the contrary, it spurred him to move on, this time on his own.

“After raising money again, in 2002 fall, I found the courage to start all over again with one of my colleagues. I started at Intercapital Invest, but the account I was assigned with required a lot of my time, therefore, one month after I went to Vanguard, the only company in Romania at that time that had an online platform,” Rizea said.

Here is where he started the actual activity as an investor; on his own, with online platform ahead of him and with the experience he had in computer programming. “I don’t remember with how much I started, but I think it was 80 million old lei”, Unic Sol manager said.

The start was special. After the “sad” experience with FNI, few months after the first investment, Rizea saw his portfolio down 20%. “It was a helpful lesson at that time; I understood I still had a lot more to learn. Practically, I started from the premise that I had a choice, whether I leave my money in the bank or try to duplicate it. As long as I earn on my ideas more than in a bank, I should be satisfied. And I am so far”, labursa.ro founder explained.

At that time there was also fear derived from previous failures. However it was overcome by the wish to accomplish something on his own.

“You have a job, you have a salary, and you want to get a house, a car. You must decide what to do with the money. You can keep it at home, but there is the risk of being robbed. You can deposit it in a bank, or you can try on your own. Real estate is an option, but you need higher capital. Therefore, stock exchange is an opportunity and it was my choice,” Rizea added.

“If you want to learn, you must feel the market fever”

It may be a motto, a tip for potential investors or a wisecrack. After six years experience in the market, he experienced all kinds of emotions, and learned from every one of them.

“If you want to learn how the stock market works, you must have some stocks, to feel the market and everything that is going on. Without being directly involved, you tend to stop watching its evolution; you can’t say you read a book, a website and that’s it, you learned everything. Theory differs from practice, and you cannot be emotionally detached,” said Cristian Rizea.

He thinks that the decision to trade on his own was the best decision ever made. The manager said that although he was involved in several projects and had a lot of working to do at his job, he managed to make the right decisions and to make money at the stock exchange.

“Now I just have to learn how to win on declines, on instruments other than shares,” manager added.
He did not have a fixed investment strategy. Rizea told he had shares bought for few years that he simply holds, but in most of the cases he “played” with the stocks.

“I wasn’t a long-term passive investor; I bought, I sold. If I would have bought and held the stocks I had earned much more. In December 2002, I was already 20% on minus, I marked down the loss and when the stock market recovered and reached again the values at which I had sold, I was even more tempted to buy, but I waited. Prices increased by 10% and then I started to take my chance again and I bought again. I learned many things this way”, Rizea stated.

“Unfortunately the media is not very specific about this: somebody who trades daily has a certain profile and certain expectations while those who trade once a month, have a larger period of time,” Rizea explained.

As for losses registered by the manager, there are two different calculations. Compared to the debut of his investments, Rizea says he is still on profit. In 2006-2007 he withdrew all his money from investments in the equity market, directing it to other type of investments. “Compared to money I had at that time, the losses mount to 50%, whereas shares in FIC3 were blocked for one year,” manager said.

Ever since the downward trend started at Bucharest Stock Exchange, Rizea sold almost nothing, but bought shares, anticipating that things will not be over very soon.

“I was not panicked. It is a decline, there are low prices, maybe it would have been better to sell and to buy now, but as I decided not to sell anything and to keep the stocks for one year, I maintain my opinion. I think there are shares that worth to be bought at these prices, even if more declines are still to come. At this point, most of the shares slumped to 2004-2005 levels, and some are even lower. If I bought then, why should I sell now?” Unic Sol manager stated.

Translated by Camelia Oancea

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