I’m up to Lecture 11 in the “How The Stock Market Works” video series, and it’s getting very technical. DeGennaro is finally getting down to the basic terms used by people in the stock market and does a so-so job explaining them. I usually jot down the term and then look it up later if he doesn’t explain it to my satisfaction. Right now I'm stuck on the concept of debt ratio. As I’m doing this, I’m also executing trades through the Stock Market Simulator app where I can trade with a fake $10,000 in real time. It’s been a great experience so far, and I’m already learned some lessons. These were my picks so far:
June 18th
Dreamworks Animated (DWA)
400 shares bought at $24.51.
400 shares sold same day at $24.84 (Currently trading at 22.80)
Profit: $132
Comments: This was a stock pick Nino made, so I went in with him. He noticed that How To Train Your Dragon 2 had just debuted to lower-than-expected numbers. As a result, Dreamworks’ stock value decreased a bit. Nino predicted that, because Dreamworks is a stable company and Spielberg is still involved with them, they should be able to bounce back soon. He also noted that this has happened before with them, but I couldn’t get any details. Anyway, it was a decent profit from a movie I'll never see.
June 19th
Trina Solar Limited (TSL)
700 shares bought at $12.88
700 shares sold same day at $12.54 (currently trading at 11.39)
Profit: $-238
Comments: I don’t know why I picked this stock. I was browsing around for stocks under $15 per share, and this one caught my eye. I thought, "Hey it's summer. This stock has to do with solar energy. It has to go up!" So, with very little research or strategy, I bought into it. My biggest and only loss so far. No research equals loss. Is this result really a surprise?
June 19th
Apple Inc. (AAPL)
100 shares bought at $91.47
100 shares sold same day at $91.70 (currently trading at 95.45)
Profit: $23
Comments: Another of Nino’s picks. After I sold it, scolded me for selling my stocks so quickly. I realized that I was too impatient but, when trading without a strategy, I feel so paranoid. I want to remember that feeling because it is freaking awful. Every 5 seconds I was looking at the phone and refreshing to see whether it went down or up. That’s not how it’s supposed to be. Had I realized that Apple is a long term stock with a long stable history, I would have held onto it and would have made a lot more money (as it now trades at 95.45 per share).
June 20th
Carmax Inc (KMX)
100 shares bought at $51.77
100 shares sold same day at $52.23 (currently trading at 52.43)
Profit: $46.
Comments: This was my first attempt at a strategy: look to see who is having an earnings report coming up, and then see if there’s any news indicating that the report would be good news. Websites like BusinessWeek, MarketWatch, and Yahoo! Finance were indicating that the earnings report would be good news. Remembering the lesson from that WWE stock, I took a risk and trusted the analysts. They were right. The stock shot up but, because I had only invested half of my money, I only made $46. Remember, that’s $46 with taking transaction fees into play. So that’s really like $15. I also had trouble selling because I was pressing the wrong button. For shame.
July 7th
Alcoa Inc. (AA)
600 shares bought at $14.98
600 shares sold two days later (Wednesday July 9th) at $15.37 (currently trading at $15.97)
Profit: $234
Comments: My biggest profit yet. In keeping with my strategy of picking stock that I believe will have a good earnings report, I saw that Alcoa Inc was going to have an after-hours earnings report conference call on the 8th. So I bought on the 7th and held on until Wednesday morning after the report was released. At the end of Monday it was down to $14.64. I had lost $188. Before closing on Tuesday, the stock was up to $14.88, but it was still a loss. Seeing that negative sign really put me in a bad mood, but it felt so good when I checked my stock Wednesday morning to see that the stock went up after hours and I had made a profit. Still, even after I sold it and made the money ($188 after transaction fees), I was curious about that selloff on Monday and Tuesday. Why did the stock go down if everyone was anticipating good news?? I scoured the internet but only found one article explaining it here. Still… I don’t get it.
So that’s it. My plan is to buy two stocks a week based on earnings reports. For now, I’ll base it on analysts’ reports and forecasts, but soon I’d like to combine their reports with my own research of that company. This will take time, but I am a beginner after all.
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