Tuesday, April 14, 2009

Couple of Thoughts on Stocks

1. I know I said no bank stocks, but Citi is not a client and they were too appealing. Citi (C) is extremely volatile. It has gone up 40% in two days and down %20 in one. This volatility if played correctly can lead to a lot of quick gains, as evidenced. Remember, I'm arguing that a buy and hold strategy is bad. So volatility for me is sort of good.

2. If I had kept Wal Mart when I first bought it, I'd be up roughly 5%. If I had kept Yahoo, I'd be up 9%.

3. There are some tax considerations when looking at my current gains. I believe that anything I make will be considered short term capital gains and I'll pay something like 33% on it. Ouch.

4. Buying and selling stocks is much more nerve racking when it's real money. Captain Obvious, I know, but the level of stress I experience when I try to make a decision about buying or selling is somewhat amazing. I can't imagine what kind of stress people like Bill Gross must go through.

5. My method works for me because I'm not trading thousands/millions of dollars at a time. If I were trying to play this same game on a larger scale, it would not work as well because the impact from selling large amounts of stock at once would immediately lower the price. The same applies to buying. When I sold 400 share, the order was broken up into two orders of 150 and 250. Luckily I was able to get the same price for both, however if I had tried to sell 10,000 shares at once there is no telling what the end result would look like.

6. The dow has hit a weird ceiling of 8000. It can't seem to stay above that mark. Eventually it well, but until then it's a good indicator as to when to buy and sell.

7. I'll probably quit posting my progress if I actually hit 25%. I don't like talking about money publicly. I grew up in one of those weird protestant households where money was not something you ever discussed outside of a whisper. If I hit 25%, then I'll feel that I've proven my point and the game is done.

8. This is fun. It's thrilling, much like roulette.

9. I have a great roulette strategy I'd be happy to tell you about sometime. I won a few hundred dollars the last time I used it. I ended up giving it back playing slots, but it was fun none the less.

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