GT Advanced Technologies (NASDAQ: GTAT) filed for Chapter 11 bankruptcy protection today, meaning the sapphire glass manufacturer's common shareholders are largely wiped out. I lost a lot of money today, and many of you reading this did, too. Let's look at what happened, what's going to happen, and what that means going forward. 

Any hope for shareholders?
This is one of the worst ways to learn a lesson as an investor, but it's also critically important that we try to walk away from this debacle with something to help us invest better going forward.

I'm not going to beat around the bush. If you're a GT Advanced shareholder -- as I am -- there's no good news. No silver lining to these clouds. You are almost certain to have lost 90% of whatever value you had as of yesterday. The way Chapter 11 works is pretty plain and simple: The company will possibly be able to reorganize in bankruptcy -- largely through renegotiating its debts -- but common shares, including the shares held by insiders, will no longer give us a stake in the company. That's it. The shares will likely turn up on an "over the counter" market, but those shares are not likely to give you any ownership in GT Advanced when it comes out of bankruptcy. 

When a business in transition gets in over its head 
I've written several times about the company, and frankly, I bought into the huge potential that CEO Tom Gutierrez and his team have been peddling, specifically the return of growth to the global solar manufacturing base and GT Advanced Technologies' technological edge being a value creator for the solar industry it would be supplying.

I've viewed the Apple (NASDAQ:AAPL) supply agreement for the company's sapphire material as a boon, and more than just a lifeline. However, it now appears that the Apple agreement (I have no hard evidence on this, just speculation based on the information available) had become too much of a burden, and maybe Apple wasn't willing to change anything to help GT Advanced. Or maybe GT Advanced was trying to make changes that Apple considered unreasonable. 

At any rate, these kinds of "unknowables" make investing in any company that is not consistently profitable -- and not tied to one or two large customers -- a risky proposition, because the effects of such unknowables can be disastrous. 

Risk is everything that's left, and it's a product of our ignorance
After taking everything that we can think of into consideration, we have the unknowns, and this is essentially what risk is made of, to paraphrase Carl Richards. But what is risk? In short, it's the likelihood of a permanent loss of capital, of which bankruptcy is the worst kind of permanent. 

The only real hedge investors have against what we can't know is our ability to diversify our portfolios. Warren Buffett has called diversification a "hedge against ignorance," and the effects of our ignorance can be multiplied when the company at hand is smaller, more leveraged, and tied to only a handful of customers. For me, diversification meant my invested dollars in GT Advanced comprised less than 2% of my portfolio.

Moving forward means moving on  
I plan to keep covering the story, because there are a number of potential outcomes, and the company's technology is valuable and viable. However, my existing shares are worthless, and I'm not going to bother trying to gain any value from them besides selling the stock. 

If you want to invest in the huge growth potential of the solar business, don't waste too much time trying to scrape value out of your GT shares. Two companies I like, and plan to dig deeper into, are First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR). Not only do both have significant growth ahead, they have two huge advantages that GT Advanced didn't: They are both profitable, and neither is overly reliant on a single customer for business. 

While neither might have the strong upside many of us saw with GT Advanced Technologies, it's protecting the downside that usually makes the biggest difference for investor returns. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.