NEW YORK (Real Money) -- Not everyone can take the pain of speculating, and if you can't, don't do it. I know that's tough stuff. But so many people call me or tweet me and ask about risky biotechs, or one-hit retailers, or tech stocks with just a handful of customers and one product, that it's time to just face facts. You are going to lose some bucks when you speculate, even if you do it wisely, because it is the nature of the beast.
Perhaps more important, you must take responsibility for your own actions, because speculation always involves trading and rarely involves investing, regardless of your stated intentions.
Let's take an example of a spec that I have been recommending forever: Banco Santander (SAN), the gigantic Spanish bank. When this stock was at $6, I suggested that it would be an ideal speculation holding, because Spain wouldn't let it fail and because it has great worldwide assets. I repeatedly recommended it all the way up. I still like it because the Spanish economy is turning, and the banks holds a gigantic amount of Spanish sovereign bonds at very good prices. I always suggested that you take that stock dividend, which has allowed you to get an even bigger return.
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