Useful Tools For Financial Management of Stocks Part IV of Neophyte Trader
By Alex Nuttall - Bio
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
- 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.
- 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: http://www.gnucash.org/
- Google Finance: http://www.google.com/finance
- Yahoo Finance: http://finance.yahoo.com
- NASDAQ Website: http://www.nasdaq.com/
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 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.
