January 2015 Trading Results

01/09/2015

Tesla Inc. (TSLA)

Bought 40 shares at 206.12

Jetblue (JBLU)

Bought 100 shares at 14.42

01/20/2015

Sold 40 shares of TSLA at 190.50 for a $627.97 LOSS

01/26/2015

American Airlines (AAL)

Bought 140 shares at 55.89

01/28/2015

Sold 140 shares at 52.62 for a $472.11 LOSS

Bought 450 shares of JBLU at 16.24

02/02/2015

Sold 550 shares of JBLU at 16.55 for a $339.47 PROFIT

After months of sim trading with the Stock Market Simulator, it was time to do it for real. Before doing this, my brother Alex, who will retire this year due to his success in options and futures, gave me some advice:

• Keep my emotions out of it. Once I have a plan and it makes sense to me, see it through.

• Do NOT invest the entire $10,000 to start. I’m a novice, and what should be important to me is my win/loss ratio, not the amount of money I make. I should invest a max of $1000 to start.

As what happens when most morons get good advice, I ignored it and did my own thing. I started off buying 40 shares of TSLA, followed by 100 shares of JBLU. I had a good feeling about airline stocks this year due to the low oil prices, so I figured JBLU would be a safe bet. Why I chose to invest more money in the wildcard than the safe bet I'll never know. TSLA is one of the stocks that Nino tracks and not one of mine, so I didn’t know too much about it. What I know is that it’s a very active stock that goes up and down regularly, and I thought 206 was its low point. My plan was to hold it for two weeks. And I was right… that is until the company’s founder, Elon Musk, went on stage at the Detroit Auto Show to state that business in China isn’t going so well. The stock plummeted $15 after hours, and I could do nothing but sit there in disbelief. Why the fuck would the owner of a car company go to an autoshow of ALL PLACES to talk bad about his own company?? That’s like a production studio paying for advertising at a movie convention and the ad says, “My movie sucks!” I finally did some research and saw that Elon makes these types of blunders all the time. He talks a lot and many times he makes bold predictions that don’t come true.

The next week I was supposed to hold it until that Friday, as that was the original plan. Seeing the stock sink below $190 on Monday, however, made me change my mind. Articles started coming out about how overvalued the company is and my resolve buckled. The stock just gonna keep going down, I thought. So I sold all 40 shares. The very next day, the stock went up $5. The next day, another $5. Had I stuck to my original plan I would have made most of my money back, but I made an emotional decision and I lost a lot of hard earned money.

Next came the AAL and JBLU earnings reports. Since I had such a good view of the airlines, my plan was to buy AAL shares, and then sell after their earnings report comes out. I’ll then use that profit to buy more JBLU shares just before their earnings report, and that should be good. AAL’s earnings report came out and it was great… their best earnings report in years. Yet, for some godforsaken reason, the stock went down 5% that day. The next day another 1%. It's still down to this day and I have no idea why! I took my money out and was down by $901. I used the remaining money to invest in JBLU. The first couple of hours the stock was down, and I was starting to think this was AAL all over again. At one point, I was down $1500. By 10:00am, however, the stock was up 5%, and ended the day up a massive 8.75%. I couldn’t sell immediately, however, because I waited too long to sell my AAL stock and there’s a 3 day holdover between when one buys a stock with the money sold from another stock. Had I sold AAL when I was supposed to, I could have taken my money out the very next morning and made a couple hundred more dollars with JBLU. Ugh!

Lessons Learned:

I was afraid I’d treat this new venture with hesitation. I thought that maybe I’d be afraid to make my first trade with so much real money on the line. But I was dead wrong. The Stock Simulator prepared me for exactly how I would feel when I lost/gained real money, and that felt good. That was the first step.

Now that I know I can trade with the same boldness that I buy properties, it’s time to get smart. I must have a plan for every month’s trade and stick to it. Had I done that, I would have never bought TSLA, as my original plan was to buy JBLU and keep it until 1/29. Had I done that, I would have made $1,742. But I had no game plan. When Nino told me about TSLA I jumped on it, and it cost me big. And I did a bad job controlling my emotions with TSLA, but I have very good overall feeling that I’ll be able to control them in future trades.