The forecast says it’s gonna be raining all day today. I should be in a bad mood because I’ll hate working at the shipping depot in the rain. But, after finding out that I already have 18k in my account with two more paychecks to go, I think I’ll be okay.
For the last couple of months, Nino has been trying his hand at the stock market. He researches a stock and determines the best time to buy and then sets a small target for sale: a $40 profit here, or a $20 profit there. I’ve been watching him do this for a while and decided to help him out a bit. I knew that the WWE was about to announce a TV deal with NBC Universal, so I told him to buy as many shares of WWE as possible on Monday, and then sell it on the day of the announcement, regardless of what the announcement states. He bought around 70 shares of stock for $18.35. Yesterday was the big announcement and, once the stock hit $20 per share, he sold it and made $118 after transaction fees. It turned out to be a great decision to sell before the announcement, because the announcement revealed that the deal was over $100 million less than what the WWE was aiming for. The stock tumbled and is currently trading at $11.42 per share. Had he waited for the actual announcement, he would have lost a substantial amount of money.
This experience is making me consider investing in stocks and trading. Had I invested $10,000 into that stock and pulled out, I would have made over $400. And I like the way Nino does it. He researches the stock chart to identify the peaks and valleys, invests at a valley, and then sells when it begins to go up. He sets small goals, such as a stock going up 30 cents or 50 cents. It minimizes his risk and has him end the month with a little extra in his pocket. The most I ever invested was in Sirius Satellite Radio when Howard Stern went on there. But I waited until after he went on there before I invested, and I ended up losing half my money. That was my first lesson in stock trading: It’s better to invest in rumors than to wait for the reality of a situation. News reports about how Howard Stern would impact the satellite radio world got people talking about the company. Rumors and gossip began to swirl. Rumors give hope, and hope inspires confidence. Confidence inspires investment and the stock rises as a result. Even though I learned this lesson, I didn’t do anything with it at the time and focused on real estate instead.
I told Nino about my interest in doing stocks again, and he sent me this link that does a great job comparing the top rated online stock brokerages like TD Waterhouse or Charles Schwab. I’m gonna do a lot of research, and I hope to have everything up and running by July. I should have a little over $20,000 by then, so I’ll take $10,000 out and use it for trading. It's just sitting there in my saving account making me a paltry 70 cents a month, so why not? You know, I remember having a conversation with Nino about stocks, in which he believed that trading stocks and gambling at the casino are one in the same. But I have to disagree. If I gamble at a casino, I’m learning the ins and outs of playing that game. When I trade stocks, I’m learning about how companies run. I’m learning about how happenings in one area of the world can affect the economy of another part of the world. I’m learning the language of money, and it’s pretty cool to have the opportunity to learn about companies and world economies while getting some gas money at the same time.
Real estate will always be my primary investment, but I think I need to make room for things like stocks. Making at least $50 extra every month with tiny trades will be a nice source of extra income that can pay for food or gas. If I can be disciplined like Nino and give myself very small goals to reach per trade, the chances of me making some form of profit will increase. I’m… I’m actually excited about this. I’m especially excited about putting the finishing touches on my new blog template. Tabs for real estate, women, sketches, stocks, health, and etc? Ooooh, just the thought of it is putting a fine smile on my face! Let it rain...
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