The Wirecard Debacle – 3 Things Investors Can Learn From It


The violent crash of the WirecardShare (WKN: 747206) has hit many investors hard. The author of this article was also of the business model, assuming the official numbers were correct convinced. But even if the money is now lost, every setback also offers opportunities to act better and more carefully next time. Here are three suggestions for investors to avoid future mistakes in investment decisions.

1. Don’t put everything on one card

Successful portfolio management requires paying attention to the correct weighting of the individual positions. A portfolio that is reduced to just a few shares offers both potential opportunities and high risks. Larger individual losses can quickly crash the entire depot. However, a broadly diversified portfolio could also more easily compensate for a total loss of a lightly weighted position. However, if an investor has to write off a previously heavily weighted portfolio value in whole or in part, extraordinary success will be required in subsequent years. The right number of Calling stocks is not easy. However, it is clear that individual positions should generally not be weighted higher than the individual risk profile allows. This also makes it easier to avoid high losses.

In general, capital preservation should be the top priority. Legendary Warren Buffett said rule number 1 was never to lose money. Recovering losses with the same stock that crashed deeply due to major problems is unlikely to succeed in most cases.

2. Learn from the professionals

Short sellers can also be wrong, as is the case Tesla currently shows. At Wirecard they had the right nose. The majority of Wirecard shares had been sold short for some time. Private investors could learn from this that it can make sense to study the arguments of the professionals carefully. Shares with high short positions (these quotas can be found for German shares via the Federal Gazette, for example) should therefore be studied even more intensively before buying.

Shares that are sold very short could also be avoided in general. As a rule, private investors have only limited time to research. Many hedge funds also have completely different resources. At Wirecard, some large funds significantly reduced their positions according to the KPMG report. Towards the end, only a few institutional investors were still invested in Wirecard. Private investors could have drawn their own conclusions from this.

3. Never fall in love with an investment

The famous fund manager Peter Lynch already warned investors against getting too excited about a single share. If this were the case, there would be a risk that the critical distance, which is also necessary for successful investing, would be lost. Investors sometimes spend a long time with a company and think that at some point they know it very well. Many shareholders develop an emotional bond. It is all the more difficult to include negative aspects in the evaluation. If the necessary distance is missing, criticisms may be downplayed or even ignored. It is precisely the contra arguments that investors should pay particular attention to when making an investment.


Even if you have lost a lot of money in the Wirecard case, you should definitely not be discouraged. Because even the professionals make mistakes in their investments. Nevertheless, your own decisions should be processed critically in order to be able to act better and more successfully in the future. On the stock market, it is crucial to stay on the ball in the long term and not to let setbacks get you down. Turning your back on stocks after a loss could turn out to be a mistake. In the long run, decent returns can finally be achieved on the stock markets.

The post The Wirecard Debacle – 3 Things Investors Can Learn From It appeared first on The Motley Fool Germany.

Read more

Yannick Barth does not own any of the stocks mentioned. The Motley Fool does not own any of the stocks mentioned.

Motley Fool Deutschland 2020


Please enter your comment!
Please enter your name here