My interest in stocks started in 2005 when Howard Stern announced he was going to satellite radio. I remember watching news stories of how shares of Sirius Satellite Radio jumped tremendously and a ton of people made money. I, of course, invested after all the buzz had gone, and ended up losing half of the $500 I invested. I quickly lost interest after that bad experience and forgot about it.
As of last year, one of my two friends Nino has been trying his hand at the stock market. He would research 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’d 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 May 12, and then sell it on the day of the announcement (May 15th), regardless of what the announcement states. He bought around 70 shares of stock for $18.35. Thursday May 15th 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.
I looked at the money he made just from that one bit of information. I've been a fan of wrestling since I was young and never got paid by the company. Here Nino just got $118 and he hasn't watched wrestling in years! What's more, I could have made some money had I invested. If I had bought, say 500 shares and sold it at the same time, I would have made around $600 after transaction fees. The light bulb went off in my head and I decided to get into stocks. The other reason I'm getting into stocks is that I know I can't do these crappy security jobs much longer. Even though my situation at the shipping depot job is getting better with quiet co-workers, I've had enough of wearing these dumb uniforms and dealing with the worst of both jobs: the uppity pricks at the bank job and the slack-jawed mongrels of the shipping depot. I have to get out of these jobs and, eventually, use stocks as the main funding source for my real estate purchases. I understand how much more difficult trading stocks is than staring blankly into space while people look at me like an idiot, but I prefer making money with my mind rather than my body.
To get started, I've downloaded an app called Stock Market Simulator. This will give me a vague idea of just how buying and selling stocks feel like. I also got a video series from The Great Courses entitled "How the Stock Market Works. The lecturer is a guy named Ramon P. DeGennaro and, while he knows his stuff, he's also an awful orator. He simply reads of the teleprompter and he sometimes screws that up as well. His first 8 lectures don't have much information, but it's been getting very good starting with the ninth lecture. I plan to watch a lecture a day and take notes, then study those notes until I understand exactly what terms and strategies he's talked about. Once this is over, I'll watch some Youtube videos from other stock traders to get ideas on how they research companies and what they look for in a stock. The idea is not to trade like them, but rather to use what I learn from them to add onto my own strategy. While all this is going on, I'll be trading on the simulator and I'll write down my reasons for picking that stock. Right now, my reasons won't be very technical, and some might even be out of curiosity. But, as time goes on, I'll start picking stocks based on better analysis and research, which should lead to better picks and profits. Once I'm ready, I'll take my $10,000 and start investing for real.
Of all the subjects on this blog, I'm most excited about this one. I love learning about things that can make me money, and I've seen first hand how studying my actions can make me better in that particular field. I've seen how much better of a real estate investor/property manager I've become since I started actively blogging in 2010. Honest self examination/evaluation was the key, and I think it will pay high dividends once applied to my stock trading life. My goal for 2014 is to be able to make enough money to supplement quitting Tuesdays at the shipping depot. That means I have to be able to make at least $300 a month trading stocks. By the end of 2015, I'd like to double that to $600 a month so that I can quit Fridays at the shipping depot as well, putting an end to those two dreaded 16 hour days. To some these may be very easy goals but, since I have very minimal knowledge of the stock market, I find these to be extremely lofty goals. But I can do it. That fire from my reality check still burns, so I'm attacking this at full strength. Time will tell if I made the right decision.
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