20110220

Part V of the Neophyte Trader: Slacking off to round up



The Mask
In order to put you off the trail that I did absolutely no trading, investing, changing or seeding of my account I will discuss the last segment of this Neophyte Trading.

Here is a blog I read this morning that is useful for anyone who wants to trade and learn from a pro:



$PWAV Powerwave Technologies NASDAQ:PWAV
PWAV blew up this week hitting $4.13 now sitting at $3.73.  This is more valuable than when I sold it. I had 18 shares. I still think its a good pick but I am unable to invest anymore at this time.  Since I like the company I will continue to watch them. I hope they do well.


$ORCL Oracle Corporation NASDAQ:ORCL 
ORCL did a great job this week. It stands at $33.68.  This is the highest ($33.71) it has been in 10 years. I am happy with this. Since I have two little shares. It is good for me. I'd like to get more, but I have to wait.


$HAIN The Hain Celestial Group, Inc. NASDAQ:HAIN 
HAIN reached $31.25 and has dipped down to $30.88. If I was an investor with more cash and I liked this company I would see this as an opportunity to buy more stock. Allas I am tapped out, so I have to let  my two little shares do their thing.


PORTFOLIO PERFORMANCE
Using my favorite financial and trading tool Google Finance I can show you some facts, numbers and a pretty chart. Most importantly I can show it to me. Like I suggested last week: Useful Tools for Financial Management If you want to try trading use this or another tool and just punch in the numbers of what you want to invest and what companies you are interested in.  You can name your portfolio "Play Rich" or something fun and prepare yourself for a new game where you just might no care if you get social security or not.

GOALS:
Ultimately my goal is to make my money work for me. However I have had a "Come to Jesus" meeting with my wife and my debt is something I have to fix.  I have done quite a lot, but I have student loans (the Big expensive Pink Elephant in the Razzizle), credit card debt and we have a lovely mortgage.  A lot of it is progress, but I can not take credit for it. My wife is such a smart financial person. She said I could do the trading, but we need to pay down our debt too.  She is right.

So the goals are like this:

  1. I have to work another 20 years before I can consider the word "retire". I am 41
  2. In the next two years I have to pay down to zero $15000 of debt.
  3. After that we will pay ahead aggressively on our mortgage to reduce interest. We bought our house at the hight of the hosing housing bubble. The good news is that we bought a tiny townhouse and my wife secured a decent mortgage not an ARM.
  4. I will still invest but I have to make it at about $10 a week for seed cash.  This week I added nothing.
  5. I will buy bulk purchases of stocks at about $200 because the trade commission is killing my profit since I am buy such small purchases. The people who handle the real purchases deserve to get paid, but I also deserve to earn on my investment.

THE END GAME
The strategy has changed a bit.  My knowledge has increased.  I am excited.  I am proud that I have begun this. It would never be possible if it was not for the many folks who give up their wisdom and knowledge.  I appreciate those folks so much.  You can find them via: Twitter and Stocktwits.com.
I can not tell you how valuable twitter is. It is real time information.

Here is a great tool for learning investing: http://www.fool.com/how-to-invest/thirteen-steps/index.aspx? from the Motley Fool.


I hope that some of this has been helpful.  Thanks.

20110213

Useful Tools For Financial Management of Stocks Part IV of Neophyte Trader



A Death in the Family

This past week was a very emotional and stressful week. My Uncle Reed died. He wasn't one of those uncle's that you thought was boorish and full of complacent chaff. Uncle Reed was a man I knew for 41 years. He told me so many jokes.  He helped me to learn about fishing, hunting, and construction. When I became a vegetarian (1986) (footnote at bottom of post), he made vegetarian sandwiches for me when I visited. He helped me to be confident in spite of adversity. He also educated me about business. He owned his own business for 35 years. If you have never owned your own business, you don't know anything about business.

One time Reed was with my dad and I fishing back in 1984. I was 14 years old. We were drifting in the Chesapeake Bay. It was almost quiet. Water lapped against the boat gently. You could here the drag of a fishing reel once I while click-click-click as the weight of the lead bobbed on the bottom with bait on the hook. Wind was blowing. The sun was shining.

Reed screamed in his load raspy guttural voice: "Hey Alex do you beat'cher Meat?"

I looked at him and I felt my face turn beat red. The only other person with us was my father. He looked at me and Reed looked at me.  This was the great question my fourteen year old life had come to. I answered as dignified as I could, "no."

He came back quickly to me. He could see that I was a green boy with little self-esteem and no experience in life. He was ready to give me a lesson. He was the Zen master in disguise. "What's you last name?" He asked me.

"Nuttall" I answered.

He smiled. "See," he began in his great powerful voice, "your'e a God-Damned liar." That was Reed. He taught me many unforgettable lessons like that. That was the Nuttall Koan.

This Week's Stock Roundup


I sold my 18 shares of Powerwave $PWAV at $3.5 early Thursday morning. I wanted to free up some cash. I was off from my regular job due to a snow storm. I should have waited to sell when the stock jumped to 3.65.  That would have paid for some of the commission, but I had made up my mind just to let go as soon as possible so I could have a chance to buy another stock. Since I am a neophyte and my assets are small I have to wait 24 hours before I can make a new purchase. The trade has to settle.

Today $PWAV is valued at $3.55. It may jump up or it may not. I'm out.


My two shares in Oracle average in purchase value (my cost) 31.93. Oracle at Friday's close was $33.47.  I have gained $3.08 (1.54*2).

$HAIN (2 HAIN@$30.22)

The New addition to my portfolio is The Hain Celestial Group, Inc. I saw an interview with the CEO on the 7th on Mad Money with Jim Cramer.  I was eating a bag of their Red Hot Blues. I said to myself, "I have to buy this stock!" At close Friday my stock I purchased that morning for $30.22(2) was last trading for $30.31. I made $0.18 by the end of the day.  Most of the time I go to work with change in my pocket and come home with less. Of course the trade cost me $4.50 and to sell it it will cost me $4.50 so factor $9.00 to my original purchase (30.22*2=60.44) | (60.44+4.5(commission to buy)=64.94) | (64.94+4.5(commission to sell)=69.44) With this stock I need have my shares increase up to $34.72 to break even.


This was my first trade. I bought and sold 45 shares. in two days. I lost about $11.00.  When I bought $BGP it was: 0.92 I sold at 0.90.  Today Borders is valued at $0.25 . The NYSE has given Borders 6 months to reach $1.00 or it will be de-listed.

RULES, GOALS and the Zecco
  1. Every trade pays for the cost of the trade and sell!
As you know by reading: Part II of Neophyte Trading I am breaking rule/goal number one a lot. I still have to respect it and I have to make it my goal. I am not here to loose money.  I am not here to make Zecco.com a rich company. I love the service, but I am not a good customer if I just flounder about and eventually get frustrated and leave.  They have great customer service by the way. If you open an account tell them OgFOMK sent you.

Every trade pays for the cost of the trade and sell.  For this reason I have decided that I will change my trading philosophy. My idea before was to go after things I liked, I thought were interesting and I thought were cheap so I could watch those stocks miraculously jump up and make me rich. My wife has a great saying: "Were are never too rich to buy cheap things." That means that we will be poor if we buy cheap stuff. So my style now is: I go after things I like, are companies that are interesting, is a company I would by products from, and is recommended by financial people I trust and respect! For the time being I will engage in no more speculation.
  1. Every trade is a business I would buy from, have bought from (with a positive experience), and has been recommended by a trade guru I respect. e.g. Jim Cramer at CNBC @jimcramer (tweet)
So I have matured a little but no too much.

TOOLS

As promised I am going to introduce the tools I use and expand upon them a bit.
GNUCASH

GNUCASH


Gnucash is something that a small business can use and a person can use to track finance.  The project is nearly ten years old and the platform is available for Windows, Linux and Mac.

You can track your stock portfolios too.  Gnucash will even get quotes for you (not real-time, but enough for you to assess to value of your portfolio.  Everything in Gnucash is an account. You can also prepare professional invoices for clients.  This shows what is on your books for investors.

Because it is open source, you can use it on the three available platforms and you can tweek it to your business needs should you feel bold enough.

I have been using it for 6 years.

I use it for Invoicing clients, tracking stocks, tracking paypal transactions (and the mystery gutter between your bank account funding and the paypal transaction.) and tracking my 6 bank accounts and other stuff.  At tax time I can do reports that make sense to me and Uncle Sugar.

I will expand on this later. To put it in a Nutshell: I have paid for Quicken, and Quicken Business licenses i.e. Intuit and I use GnuCash.  Sooooo why not get GnuCash and manage money instead of a software license.  When you get rich you can contribute.

GOOGLE FINANCE
Google Finance.
Google Finance

Google of course is an information super search.  It also has financial tools that are well worth the account price.  Like many financial sites it allows you to track your own portfolio.  You can perform all of your own trade modelling here as well. You can make real or imagined deposits, purchases, sells and research.

If I had known about this tool 5 months ago when I stated this quest I could have made better modelling and learned about my style and decisions. Nothing beats putting your own money on the line, but training ain't bad either.



I use Google finance to track my portfolio because relevant news pops up according to my trade.  That is a great boon for me.

If you want to get started on trading.  I recommend this as an invaluable tool.  Give yourself an imaginary cash deposit and get to work!

The data in quotes is extremely fast too! That gives great real-time feedback.

YAHOO FINANCE
I have been a customer of yahoo since 1997. I have a love / hate relationship with yahoo. I have paid for yahoo services since 2003. Last year I left their hosting services with Ogfomk.com and I went to GoDaddy.  I still pay them for my email address once a year. (Disclosure)

Yahoo finance is also an excellent tool for learning about stocks.  The layout is simple and effective.  I can track my portfolio and I can play with scenarios of stocks.  Transactions are not as sophisticated as Google's but it is what I have played with for 7 years. 

If Yahoo would like to fire its current CEO and hire me I am available for 2 years at $299,997 a year!  What a bargain! I want stock options that equal my salary because I have a $10,000,000 goal to meet. I will make Yahoo at least double it's stock price. I will also make facebook nervous. I will bet I know more about Yahoo than Yahoo does. 


As you can see the interface is simple.  It is a good tool.  KISS (Keep it Simple Stupid).  The best part for me is that I enter the info and should I find myself in a strange place I can go online and track my stocks without having a boat load of personal information attached. I will admit that I always obscure information so that anyone who really wants to hurt me has to work very hard to do so. I also will say that once I reach $10,000 I will no longer keep this data this way.

Or maybe I will.

NASDAQ 
Nasdaq.com is an extremely useful and informative site. It is, however, running on the legacy OS known as Windows: Netcraft Nasdaq.com. Nasdaq runs like crap! It crashes.  It freezes. BUT! It is an extremely valuable tool for both NYSE (New York Stock Exchange) and NASDAQ stocks. Of course I am running chrome so my experience may be related to this. I however do not care that my experience should be better or worse for a browser. I digress. 

Nasdaq has a bounty of great tools for learning and communicating your stock ideas and tracking news. You can also track your portfolio here, but I warn you that it is best to use the above Yahoo or Google also because when Nasdaq freezes or locks up you will go crazy trying to find that data that you want.  Like a good research paper you should use many different sources. Nasdaq should just pay a team to make MySQL and Linux and then it can generate more revenue. Nasdaq call Oracle or RedHat for a free consultation today. 

I volunteer my services to Nasdaq.com now. I can bring a team in with the sharpest minds for $1.2 Million and have you up and running in 8 months. Since the NYSE is being bought by the Germans, you can smoke them like a cheap cigar and get some of their business too once they realize (the companies who trade NYSE) how cool and Linux you are.




THE END GAME

So the game has changed a bit for me. I am still enjoying the new trade. I absolutely love being able to say: "Oh yes I trade stocks also." I am proud to say my portfolio is worth: $127.56 I have two shares of $ORCL and two shares of $HAIN. When I reach my goal of $10,000 I will know that I can reach $10,000,000. You see in 1986 I started construction as a laborer making $3.15 an hour. I had very little skill just a mohawk and guitar habit. I couldn't hammer a nail to save my life. Now I can supervise multi-million dollar projects. I can build large banks, water-treatment facilities, bridges, tunnels, and anything with blue-prints. In 20 years I will be able to say how I started here.  So will you! We are here together. 

Uncle Reed, I will miss you. Thank you for giving me two cousins and an aunt I would take to battle any time.  You will be sorely missed. I wish we could have talked more about business.

20110206

$PWAV, $ORCL, Part III Trading Novice Exposure for Wealth Generation



This past week was particularly good for my new trade as a trader.

INVESTMENT:


01/03/2011 2:26 PMBought45 BGP@$0.92$-45.90Executed
01/04/2011 09:30 AMSold45 BGP@$0.90$35.99Executed
01/10/2011 09:30 AMBought1 ORCL@$30.85$-35.35Executed
01/20/2011 09:30 AMBought7 PWAV@$3.67$-30.19Executed
01/26/2011 09:30 AMBought7 PWAV@$3.43$-28.51Executed
02/02/2011 09:30 AMBought4 PWAV@$3.40$-18.10Executed


POWERWAVE TECHNOLOGIES:

In this past week I bought 4 more shares of Powerwave $PWAV.  Earnings came out on the 1st of February. I was pretty happy with this decision. The stock shot up to 3.75 a share.  My purchase of 18 shares averaged in value: $3.52.  That's a gain of 0.23 per share.  Since I don't have a lot of money to drop on anything I have to make my buys in stages based upon stocks that I am interested in and are affordable.

For $PWAV my total investment has been (4.5)*(3)=13.5 in Commission and (63.36) for the 18 shares. Total cost to me: 76.86  In order for me to break even I have to have a market value of $76.86 + (4.5) which would be my last trade commission if I sold it.  My shares need to gain up to $4.52 in order for them to pay for themselves.  


ORACLE CORPORATION:

My one little baby share $ORCL I purchased at 30.85 is now valued at $32.60.  That's a gain of $1.75.  We still have to factor the buy and sell so we are looking at (4.5)+(4.5)=9.0  In order for $ORCL to pay for itself it needs to be valued at $39.85.

THE GAME OF MULTIPLES:

I chose to go with Powerwave because I saw potential in a small international company that was inexpensive to buy.  My multiple purchases hurt me with commission costs, but in order to reach a position where I make money I have to have volume.  If I chose a different stock I might increase my spread and position value, but in order to cash in that value I would have to make multiple sales which you can see hurt my small investment opportunity.  The obverse of this is that if I never started to trade at all I would not have been able to even understand this much.  In reality my stock trades make more money than if I held that same amount static in a bank account.  

Multiple shares need to be held as they work together to increase value. Also for the long term multiples held there are dividends. I have yet to understand how that works but I will let you know when it does.

JIM CRAMER and MAD MONEY: 

If you asked me a year ago if I would be watching that dumb show Mad Money I would have laughed.  Now I watch it every weeknight.  I have my little notebook and I write down what companies I am interested and I listen to the erudition of Jim Cramer.  I am not just listening to his opinion.  He has the real CEOs from different companies tell their story.  

Since I don't have a lot of money to use for trading I use someone else's knowledge and I create "watch lists". I use Jim Cramer's experience and knowledge to highlight potential stocks I may want to purchase. It's an exciting time of the day. I always think that I can't believe I never did this before because I have been buying all of these companies' products for years!

BUSINESS IS BUSINESS:

As a punk rock dude in the late 1980s I was opposed to government, big business and that evil thing called money. I still worked. I made money. I bought stuff. I was a consumer. I was a sheep. It took me a long time to see things as they are and not how I wanted them to be. I realized that it wasn't even how I wanted things to be but how I perceived things should be. It's more complicated and should be blogged later.  The essence of realization was that I was not realizing what I could do. I was focused on what I could not do. I was miserable.

Business is a natural activity for human beings. Big business is also a natural temporary activity. It's a beast that gets started and can not be stopped easily. There are some businesses I will never like.  So I don't buy their products. They change or die. The common worker living in the US can buy stocks.  Some companies will fail some will succeed. Instead of being a mindless animal consumer you can participate in the economy by buying stocks in the businesses you do business with. Offset your utility cost by owning utility stock. Offset your McDonald's habit by owning McDonald's stock. (I hate McDonald's.  I won't even take a crap in McDonald's.)

Yesterday I saw a guy buy $50 worth of lottery tickets. I worked at a gas station in Richmond back in 1991. I saw postal workers come in every day as they left the post office across the street. Those workers would spend hundreds of dollars on the lottery. I bought $35 dollars of tickets myself.  After continual loss I decided that beer had a better return value.  What I never realized is that I could have used my disposable income to buy stocks.  Anytime I inquired about buying stocks I was always given the answer: "You have to have a lot of money in order to buy stocks."  "You have to have money to make money." 

Never let someone else's limited experience determine your own ability.

GOALS:

Last week I discussed my goals.  Goal number 1 is the most important. Every trade pays for the cost of the trade and sell! 

It's extremely important to have goals with any activity. I constantly refer to my favorite book by Brain Tracy: Goals. The journey can be rewarding, but the end result needs to be visualized in order to make it through hard times.  

My goal is to show how an ordinary person can make money trading stocks.  I fully intend to show anyone how I am doing it.

COMING SOON:


  1. Financial tools
  2. Useful websites
  3. More trades
PROMOTION:


Buy the way if you decided to start trading and you use Zecco https://www.zecco.com let them know that I sent you.  If you fund up to $500 with your starting account I think I will get $50 credited to mine. I will lavishly thank you.

Check out Stocktwits.com also for the best information, trade ideas and education. Tell them OgFOMK sent you.