Another crazy week for the markets! My “hot stock”, $DOW, started the week on fire going up about 1.5% three days in a row. I knew it would have to go down soon, but it DROPPED. I learned the day it dropped about moving average lines and came to realize it had gotten way ahead of its 50 MA. So it dropped about 5% in 2 days and now I’m sitting just a little lower than before. I have made a new commitment, however, not to sell a stock for a loss if the fundamentals for the company haven’t changed, and the market is just correcting itself temporarily. I believe this to be the case and so I am holding on to $DOW for another week.
Meanwhile as always seems to be the case, my smaller, secondary stock $APC is having a great time and going up almost every day. Unfortunately I don’t have enough money in this stock for it to make much of a difference.
I have made a few new decisions this week. The biggest one being my strategy. I will make a list of 25 fundamentally sound stocks that seem like they will go up in the long run. I will then watch these stocks daily and try to use what I have learned about stock charts to buy these at the perfect time. Once I have made 5-10% I will sell out and wait till the perfect time on another stock. I will hold the money until I feel really good about a new stock. I have made the mistake of not having any money at the times that I know a stock is about to break and have missed some opportunities.
I will enact my plan this week.
Good luck to me 🙂
Geez what a week on the market! Up and down and up and down. This whole Ukraine thing is causing chaos. It’s scary being a first time trader and trying to decide if it’s worth it. I am SO glad I got out of $DATA. It has dropped over 15% since I got out of it. I guess I have made at least one good decision. What was I thinking buying a stock with a P/E ratio of 1500?
My more conservative and recent picks have done moderately well, better than the market as a whole at least. $DOW went up about 2% and has avoided dropping these past 2 days with the market. I bought and sold $GRPN all in the period of 2 days. I just got excited, and right after buying it knew it was probably a dumb decision. It is a stock that I actually think will go up eventually, but not for a while. I used the money from that stock to invest in $APC – mainly off of iBillionaire’s recommendation. I know I need to start valuing stocks on my own, but I still don’t feel experienced enough to choose stocks that no one else seems to like.
I am using the iBillionaire app a lot more to find stocks that may be worthwhile. I have also started using a website called investorwand.com. It shows the valuations of hundreds of analysts and their price goals for different stocks. I use it mainly to discover stocks that I wouldn’t have found otherwise.
My big bet though is on $GOGO. I firmly believe that the future of flights does involve wi-fi and currently $GOGO seems to have a strong hold of that market. I am waiting till I see the stock do a turnaround (guess I am learning a little bit) and then I plan on diving all in!
The market is fun, scary, exciting, intense, and a million other things. Sometimes I can’t sleep at night because I am thinking through different things. I love it though! I am reading everything I can on it, hopefully when the next bull market hits I’ll be ready (armed with knowledge and finances).
I am shifting to weeks now because I cannot post every single day. Not only would it be hard, but in the case of this week it would have been depressing! It seems I chose to get into the market at a shaky time! Five years of pure bull market made me too confident in my first trades. My first trade, which was $data, is still about 5% what I purchased it at. I have held onto it for two weeks because I can’t bring myself to sell when this company has grown steadily for 3 years! The problem with that is that most of my funds are tied up in that stock and it leaves me watching certain stocks that I feel pretty confident about from the side lines.
I made an error with KKD as well. I bought it at the beginning, and it grew about 1%, and then came the earnings reports. I was too scared to gamble away my money so I sold about 20 minutes before the reports. Shares went up about 12% in after-market trading. Oh well. I guess I am learning. I have been looking really hard at airlines lately. ALK has very steady growth, along with DAL. I have looked into their financials and they seem pretty good (to someone who has a very narrow understanding of valuing a company. I have also downloaded an app called iBillionaire on my phone. I love it! It gives you alerts when the top 20 investors in the world purchase stock. I am considering just following what they do. It may not work in the short run, but overall I am confident that these people will make money, not lose it.
Overall I have learned a lot this week. I am not quite as confident in my ability to make money, which is probably a good thing. My next purchases will be GRP and BID, two companies I have researched all week and feel good about. We will see what happens!
Well…I have made two investments in the past few days. I have made a grand total of $.02 off of those $5000. That is definitely better than losing money, but I am still feeling nervous! I lost a good amount on Krispy Kreme. I chose this because of advice picking stock in companies that you see doing well in your life. They are always busy. Guess that isn’t everything. I tried a safer bet with $DATA stock as well. This has climbed pretty steadily for a year now, climbing over 100% throughout the year. I have watched it for 2 days and it hasn’t moved! I just want to make a couple hundred dollars off it and I will be out. The more I research the companies I have chosen the more I realize I probably picked pretty scary stocks. I am reading the book by Peter Lynch still and it is amazing, but is helping me see some of the follies I have made in my choice. I will talk about these.
P/E Ratio – This is highly important in picking a company, and I picked one with a P/E ratio of over 1500. Most companies have between 10 and 50 if they are healthy (also lower is better). So 1500=no good.
Assets – Companies that have a lot of cash on hand, and are working to lower their long-term debt are probably good buys according to Peter. $DATA is growing in liabilities instead.
There are other things as well. I will put a list later on of what I think the most important things you should do before buying a stock are. However, I have learned that you must do your research. You can play with the market a little bit, but make sure you are not playing with stocks that could potentially burn you.
I am currently looking at $JACK (Jack in the Box) stock. They are a company that has been doing everything I have discussed, and seem to be growing. They also have a low P/E ratio. I will pull out of $DATA next time it goes high and put it into $JACK next time it goes low. We’ll see what happens!
Well I’ve done it now. I bought my first stock. In the end I chose a stock I hadn’t even considered up until the day of. I chose Krispy Kreme Donuts. I read a book by Peter Lynch that recommended try to find something that Wall Street may have missed, something they won’t realize for a few years. I thought back to when Krispy Kreme opened its first store in Utah. People went nuts. Lines were a mile long. They have since expanded to many other states. The main reason I invested in it is because they still have 20 states to go! They seem to have wild success in every state they enter, and with almost half of America left, they should continue to rise, and maybe hit the world markets. That’s my hope anyway. I find myself checking the stock every ten minutes in fear. It has dropped about .005% since I bought it and I am already having a heart attack. Maybe the stock market isn’t for everyone.
Back to the book by Peter Lynch, One Up On Wall Street , it was an awesome read. It explains that all of us have an advantage over Wall Street because we live in the world that they analyze. We will notice the trends much earlier than their numbers will. For example when I first started using amazon I thought it was amazing. If I had taken that thought and invested in it, I would be halfway to my first million dollars already. The book explains that opportunities like that are all around us, we just need to have the critical eye of an investor when we hear about them.
I’m stoked to see where Krispy Kreme takes me! I have been researching a firm just starting in the energy business and while terrified I will lose it all, I am excited to see what I can learn!
Learned some really important stuff selecting a broker today. Choosing the broker was stressing me out (probably more than it should). I looked at Sharebuilder. They offer trades for $6.95, and have a really good automatic plan for investing in IRA’s. However as I dug deeper though I found a lot of information about their fees and discovered they charge almost an extra cent for every share purchased of stocks under $1. This can amount to hundreds of dollars with penny stocks. What struck me was how hard it was to find that information, I began to wonder how many fees I was missing in my research. Turns out there is lots of different hidden fees in different companies. I needed to dig a little deeper.
I then began researching the mobile apps for these brokers. Sharebuilder’s app had awful reviews. Eventually I realized there is a lot to think about before you choose a broker. Spend a few days researching – think about when you will be trading, what you will be trading, and how often you will trade.
I eventually stuck with Sharebuilder. I was torn between Sharebuilder and Ameritrade, but finally had to make the choice. Ameritrade costs $9.99 per stock transaction, which can add up quickly if you are an active trader. They also didn’t have as good of a plan for building an IRA.
I plan on finally starting in the next few weeks and we will see where it takes me! I have almost completed Etrade’s education program, and while nervous, I think I ready!
Learned a lot today on Etrade about financial statements and valuing a company. From what I gather the entire stock market is about people determining if a company is undervalued or overvalued, and then basing their buying decision based on that. One important trend I noticed was in the stock of Netflix. This weekend a big announcement was made about a merger deal with Netflix and Comcast. I wondered what that would due to Netflix stock and decided to buy some Monday morning at the opening of the market. Netflix did not disappoint and had gone up $15 a share by the end of the day (nearly an 8% gain).
I am now realizing one of the keys to the game is to be on top of the news. If you can buy right at the beginning of a “good news spike” you can make a quick and hasty profit. For this I recommend Twitter. Twitter is an amazing source for quick up-to-date news from sources you trust. Simply set up an account, follow the proper companies/people, and you will suddenly find yourself “in the loop” as they say. Good luck!
I’ve learned a lot these past few days! One of the most important things I learned was a quite by Robert Miyasaki where he explained that the only risk in the stock market is simply not knowing what you’re doing. He recommended learning from many of the resources available on Etrade, TDAmeritrade, and other online brokerages. As it turns out, they all age massive education centers that offer free education! So I looked at a few of these trying to see which one offered the most comprehensive course list and decided upon Etrade. They have an organization similar to a college with 100 level classes on every subject all the way up to 500 level classes. I have completed all the 100 level classes an would highly recommend them to anyone starting out – they are filled with answers to questions I have been wondering since I started. I plan in completing their course schedule in the next week.
I have taken a few days to read a book recommended by a friend. Most people have heard of it. It is called Rich Dad Poor Dad, by Robert Kiyosaki. This book is inspiring when it comes to the stock market, but really when it comes to investing period. It is written by a real time investor who explains how he uses money to make more money. He uses real life examples to teach different tricks he has used to make his millions. I would highly recommend it to anyone that is really interested in investing. Here is a link to Amazon Kindle where the book can be purchased.
Rich Dad Poor Dad
I have also learned a little bit about company reports. When you go look at many stocks you will see what seems to be a dramatic fluctuation every few months. This is usually the time when a company releases its quarterly reports (mandatory by law). If the reports are better than investors were thinking, the stock price goes up, if they were worse, the stock price goes down. After researching the history of many large stocks it seems to me that they often will rebound from a price drop within the next few months. I am going to try to keep close eye on a few stocks that I think are quality companies that just had a bad few months, and when I sense a rebound, I will try to purchase at that moment. I am still in virtual investing so this is as good a time as any to try this method.
My initial investment in the trading game is doing very well! Twitter is slowly making a come back as I predicted. I talked to a friend that is a broker today. He taught me a few important things to know as time went on. The first one is choosing your online broker. There are many online brokers. These are basically the companies that will make the trades for you. They will do this for a fee, and each company has a different fee. In addition to this many online brokers requires a minimum balance, which is hard for many first time traders. He suggested looking into different brokers. The following link has the ten brokers that I looked at. TDAmeritrade is the one that he recommended.
List of online stock brokers
Before doing anything on the real market you will have to choose a broker, so now would be a good time to start researching that. I chose TDAmeritrade, mainly because of the lack of an account minimum, and my friends advice.
Good luck picking your broker!