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September 15, 2008
What's a girl to do who wants to make some BIG money in the stock market today?
It's Monday; Lehman is going into bankruptcy, BoFA is buying Merrill Lynch, and AIG troubles abound-- for which there seems to be some promise by the Governor stepping in to help without using taxpayer dollars.
Really?
How clever is that?
Our Mayor says, everybody's got problems so just get on and deal with it!
The President on the other hand, is taking a more macro-view of the situation and has stated his sympathy for the employees who are losing their jobs.
Some facts about the current marketplace (as I see it):
- Certain people are likely to make a lot of money from this downturn;
- Lots of scared people will not make money, they will lose because fear always loses;
- Some dumb people are also likely to make scads of money because it's all about speculation; meaning that speculating is simply how you think it'll all pan out in the long/short-term.
- So since it's all a roll of the dice, dumb people can turn out to be lucky people!
I don't know which of the above is true about me, but I do know that I'd like to be smart about what I'm doing here. I have the same access as everyone else (supposedly) to current events.
While traveling, when I didn't have that access because my Internet availability was spotty, I pulled out of the market.
Yep, sold it all!
Now that was smart because looking over that portfolio, today I would be down -20%.
Instead I got to keep that 20% so maybe I'm on the way to perfecting the art of taking gifts from Wall Street?
I had to start from scratch, renew my understanding of what had been going on with the markets. It took me several weeks to get comfortable about buying.
The new portfolio which now consists of exactly 5 companies has stayed healthy. No huge earnings, but no losses either.
That is until today.
Now I'm down -3.12.
Not bad considering that the Dow plunged 300 points at the start of the day.
I'm not panicking so is that smart?
What I want to do is make enough moves during the course of this volatile period that will result in profit and grow my principal many times over.
How the heck do I do that?
I'm a newbie to the market; this is a time for research/study/learning.
In a way I consider myself very fortunate that I am invested in the market during this hap-hazardous period as it's probably the best time to truly find out about myself in relationship to risk and volatility.
But is it also true to believe that's good to know as long as I don't carry that same trading philosophy over to better times?
Or, does that need to change?
During a short course taken last year in basic investing, the instructor said, “Buy and Hold,” and also, “Buy more when the price drops-- think of it just like a sale at Macy's!” These clichės are the backbone of advice given to investment novices.
I think this is very damaging advice because no one is there to tell you when to sell and buying is so easy-- that is if you have the cash.
Nevertheless, today, I'm looking at possibly buying more shares of what I hold because there will likely be some discounts at the end of the day. Maybe I shouldn't wait until the end of the day, but I'm certainly in no mood to give any of my money away to the next guy playing this game!
I suppose Suze Orman would call that attitude the warrior within me?
Thinking about it further, I see what I will probably end up doing is:
- checking the closing prices at the end of the day,
- putting in order(s) tonight with the brokerage to buy in the a.m. at the opening,
- at a yet to be determined price below the closing price because there is a good chance as things stand today prices may drop still further, so I will cover myself with an escape hatch that allows me to cancel or change the buy orders.
Now, this may seem like a lot of stuff to remember and do, but the idea is that I'm learning how to do my homework, how to be disciplined about my choices, and best of all, how to call the shots fast!
So repetition of the process is what makes it possible to be decisive instead of pondering whether or not you're on the right track.
That is: as long as you're still in the game (yippee!).
And... Wall Street Goes Shopping In Washington
Wednesday, September 24, 2008
Wall Street's personal shoppers Bernacke and Paulson are sitting tight; they know that their shopping list is in big trouble. But they never came to Washington for the gifts they say in their proposal they want expecting to get $700 Billion. They came to go home to Wall Street with much, much more. The plan is that they will be happy to take even $1 Billion as that will open the door to the $699 Billion and more. Once the door is opened it will be difficult if not impossible to close it on Wall Street's insatiable need for cash.
Will the shopping list be approved. Will the American citizens allow this absurdity, this mugging to take place? I don't want to believe it possible.
To approve billions of dollars for speculating purposes is what Paulson and Bernake represent. That this should even be up for debate is a sad day for our country. It's time to stop this nonsense. It's time to call what Paulson and Bernake represent by it's real name: gambling, gambling with our limited resources. Gambling on our freedoms by going into debt with our adversaries in all that we hold sacred.
