E: Student Investor

Reboot

2008-04-25T07:54:00.000-07:00

Hey everyone... well, no one, actually, since I doubt anyone has continued to read this after I bailed for about 2 months.

College, plus a full-time job have gotten be bogged down; it's the end of the semester, and finals are up. I do plan on restarting this Blog sometime in the early summer, so please - if you have this bookmarked or whatever, don't count me out yet. I do apologize, however, for not giving any updates - that should change soon.

Anyway, I hope ya'll have had a great spring, and I look forward to the summer.

The Man with the Golden Gun,
~E

Not...exactly....Monday.

2008-02-14T19:32:00.000-08:00

Hey everyone!
No, I won't explain where I've been. Nor why I'm posting on Valentine's Day, as opposed to every other day this week. No, that's not lipstick on my collar... I haven't been seeing other blog audiences! You know you're the only audience for me, baby...

*ahem*

I've got a definition for ya'll: Notes.

So, what's a Note? A note is what you pass to that girl/guy you always liked in class, during class, to tell them to meet you in the broom closet for sweaty preteen making out... but did they ever come? no. They always stood you up, and laughed at you in the hallway, and slashed your tires...

In terms of money, a note is a promise to pay - like a car note, or a house note, or a boat note. I won't go too much into the end-user part of a note (like, for the love of God, pay them off and don't get one you can't cover...) but I will say something interesting: If you do your homework and your research, you can buy notes - that's right, you can buy the right to have people pay you. Of course, it will cost a lot of money (more than what I have per month) but, it's just food for thought.

Anyway, I'll let ya'll go for now, just wanted to let you know I still existed; I'm no longer dieing of the plague!

He Is Legend (when it comes to the Flu)
~E

Right, so, where have I been?

2008-02-07T23:23:00.000-08:00

Hey everyone.
I apologize for the lack of posting - I was hit with a really really bad virus over Superbowl weekend, and I still haven't shaken it. It's gotten to the point that I don't sleep for days, so that's a good thing.

I also have had, without fail, a test every single day this week. So, my time and energies have been a little devoted, to say the least. I will resume normal posting schedules next week. Anyway, thanks for checking in, and I'll see you Monday!

Unofficially running for President,
~E

No post for you!

2008-01-29T21:28:00.000-08:00

Sorry everyone, but school is kicking me in the teeth right now, so I don't have the time to give you a thoughtful and insightful post (if you call any of the other stuff I've spewed onto this blog "thoughtful" ) I'll post tomorrow, though.

-E

Recessions and Market Cycles

2008-01-28T22:37:00.000-08:00

Alright, so, today we're going to learn about something that has created confusion and worry for years: The market cycle.

And no, I'm not going to be able to condense all the information you'd need to know about it in one entry - unless you're willing to read 60 pages worth of rambling. No, today, just the basic of the basics. There are two types of markets, as you well know - Bull and Bear. There are also Troughs and Peaks - when the Bear market hits its lowest and the Bull market hits its highest.

The most basic of all basic investment principles is "Buy Low, Sell High". In order to do this, you need to think like the populace: When the market is down, when we're in the middle of a recession, what do people buy more: toothpaste, or cars? So, would Colgate or Nissan's stock jump? The Correct Answer is, of course, Colgate. That is why, in the middle of a recession, DO NOT BUY COLGATE. I know. I came out of no where with that one.

The must fundamental principle of a Bear Market is that it's cuddly and warm. Knowing this, all cuddly and warm stocks (read: necessities) will skyrocket in their value, whereas the non-cuddly stocks (read: un-non-anti-necessities) will drop. You want to time your purchase price of the non-cuddly when the market hits the bottom: sell out all your cuddly stocks and get maximum profit, then dump it into the non-cuddlies. When the Market switches, you'll ride that gravy train all the way to the top.

The flip side, of course, is when you're in the middle of the BS Market - when the non-cuddly stocks of yore become the rampaging money machines of tomorrow. When they reach their peak - usually when the government starts to increase taxes and try and reign in the economy - switch back to cuddly, fluffy stocks and ride them to their peak as the market tanks. Yes, it seems a little cold, but screw the other guy, you're in it for yourself!

The man with the golden eye,
~E

What is a Bond?

2008-01-27T22:18:00.000-08:00

What is a Bond? It is Sean Connery.

But, probably less known, a Bond is basically a loan to an entity without a bank. I know, that sentence hurt me too when I wrote it, so let me try and clear that up.

A Bond is a form of investment that is basically a loan to either a corporation or a government. They give out interest and principle payments, just like you do on your credit card bills. But, the benefit of this is, is that Bonds are usually much more secure, and you have a guaranteed repayment (more so than the stockholders) if the company starts to go under. The bad news is, if the company truly goes under, you lost your money. Not to mention, you (acting as the first national bank of retard helmet) ((remember that? I haven't used that phrase in a while.)) lose all your invested money - it's not like you can pull out like a stock and lick your wounds.

Personally, if you want some super, super safe investment, go with a Government Treasury Bond. The Irony of this is that you're loaning your own government money - and they'll pay you back interest on it! Bad news is that you can't touch your money for X amount of years, and the interest rate you receive on it is very low - just beats inflation, in most cases.

Basically, get a bond if you want to get more interest than at a bank, but don't want to play with your money.

The man who knows what a tilde is, and where it can be found,
~E

And Penny Stocks can be a problem.

2008-01-24T19:29:00.000-08:00

Well, I seem to be recording my first loss here - MTTG went down $0.09 today. If I was a day trader (which sadly, I'm not), I would have pulled out my money this morning - when it peaked again. Sadly, it had a shaky downfall, back to lower than where it was before.

The reason for this upswing and downturn is simple: looking at the financial chart for MTTG (can be found on Google Finance) you can see that the Press Release for the company, and the CNN News release shot the stock upwards - those kinds of adrenaline injections allow the stock to perform at super-human capabilities, but like most steroids, they cause you to crash shortly after.

The general rule of thumb with Penny Stocks, especially for people like us, is to let it sit for a day at max - as you can see, if I pulled out yesterday I would have made a $32.00 profit (give or take) but by letting it sit for another day, I nuked my profits and a sizable chunk of my initial investment money.

This is where limit investing comes into play - which is a little bit more of an advanced technique, which really deserves it's own article. I could have put on a Sell limit if it went below my initial purchase price, and that would have buffered me from any further losses. In fact, that sounds like a fantastic idea - and I'll be using it with my new investment of the day, ITB, and relevant stock data can be found here in this really really long hyperlink that could have been shortened, but I decided not to.

So, I bought some shares of ITB at $18.09, and I'm going to put a sell limit on it if it goes below $18.09. We'll see how it goes tomorrow, yes?

The man whose Birthday will soon be a national holiday,
-E

A penny earned is a penny earned.

2008-01-23T21:40:00.000-08:00

Yeah, so, MTTG, if you invested in it last night with me, would have netted you a profit of USD $ 0,000,000,000.01 per share. In my case, with 200.00 invested at $0.86/share, that would have netted me a profit of $32.56, before dealer fees. Since I have a flat rate per trade, I would take out 9.00 - leaving me with $23.56 in profit. Now, that's not nearly enough to live off of, but for doing nothing to that stock, and making free money, I like that.

For giggles I'm going to leave that money in that stock; it will be good to see how it performs over the week, yes?

Now, I want to bring into focus a very important idea, one that I've been trying to figure out how to exploit for a majority of my lifetime: that of the Infinite Profit Margin. Try googling that - you'll never find it, because investors don't believe it exists. They're right, but not in the non-traditional sense.

What happens if you aren't carrying any money on you, and you find a quarter on the sidewalk? by picking it up, you went from no monies to some monies. You went from nothing to something. That's the fundamental I want to bring to the forefront here.

So, let me ask you something: If I were to pull out my 200.00 initial investment and use it to buy beer money (as we all should do from time to time), the $32.56 would still be invested - nothing but pure profit. Think of that as the quarter you would find on the sidewalk.

But, as with all such things, you must keep them in their place (I said BACK to the kitchen!) ahem... I kid, I kid. Seriously, though, just as you would be no more emotionally attached to that quarter you found on the street, you should not be attached to that additional profit - in fact, if you go flat broke, you still broke even because you withdrew your initial investment. Now, yes, withdrawing your first investment will hurt your investing power, but if you're a whiny little 5 year old, then you can pull it out and invest with whatever shred of confidence you may have, because it won't hurt you at all.

So, if you have been investing along with me, think about your long-term-short-run goal: will you keep your initial bank in, or will you pull it out once you have a profit?

I am Iron Man,
-E

Stock Pick, and Diversifying your Portfolio cont.

2008-01-22T22:57:00.000-08:00

Alrighty! Well... that's probably one of the longer titles that I've ever written, but then, there ya go.
Today's stock pick, from Global Marketing Corporation, is MTTG. I'll dump a few bucks into this stock tonight (buy order for the morning) and we'll see how it goes, yes?

Anyway, the diversification thing: Yesterday I was talking to you about diversifying the major points of your portfolio: the example I gave was putting your eggs into multiple fridges, not just baskets. Well, now it's time to stock those separate fridges with goodies - which I affectionately call "Mini Diversification".

Please note, however, that this is a bit more of an advanced technique - it's more important to be broadly diversified. This is for those who have already diversified their portfolio: I'm now going to gently armor clad your investments.

The basic principle of this armor plating is diversifying within the sectors you've invested in - so, if in construction, having money in performing companies that deal with Real Estate, Construction Management, Construction Equipment, etc. If in Technology, then in Processor Makers, Software Developers, etc. Once again, you're further buffering your investments - for example. If you were invested in Energy stocks - Enron, Georgia Power, etc. When Enron tanked, you still had the other diversified stocks within the same portfolio - and then in a broader perspective, you have the sector-diversified stocks.

That's all there is to it, ya know? That's all I got.

Something that goes bump in the night,
~E

What is a diversified portfolio?

2008-01-21T21:48:00.000-08:00

Well, that's pretty self-explanatory, no? What do people usually consider a "diversified" portfolio, and what actually is?

When you think diversified, the first thing to come to mind is "many eggs in many baskets", or as I like to say, "where did my eggs go, I just bought a carton yesterday!" to which my roommate usually replies with some pun of breaking eggs to make an omelet or something.

True diversification comes at the price of putting your eggs not in multiple baskets, but in multiple fridges, so to speak. That's a bad example, but it illustrates my point quite nicely: Having different points of, say, construction covered (Real Estate Companies, Construction Companies, Construction Equipment Manufacturing companies) is still putting your eggs in multiple baskets, but in the same fridge.

A diversified portfolio would take advantage of multiple markets: Tech Stock, Housing, Foreign, Precious Metals, etc. That's putting your eggs in multiple baskets - and when one is hit hard (like housing right now, for instance) the other fridges still have enough eggs in them to make a delicious, delicious omelet.

The key is, of course, not to start ripping out what eggs aren't crushed from the failing fridges, so to speak. (Yes, it's a bad analogy, but dammit, I've written so much right now, that I have to keep it going) But, instead, to keep investing as you would normally - because, when the Housing Market (for this instance) bounces back, you'll have that much more money put into it, and you'll be there to ride the wave to the fullest.

You could, in fact, think of the Housing Bust as an egg sale - as these companies go down, and if you don't do something silly and pour in a ton of money, but keep investing steadily, you'll buy top dollar stocks on the cheap. When they bounce back (as they always, ALWAYS do) then you'll be all that much more ahead!

Moral of this story: Truly diversify yourself, and invest steadily.

What happens in his room, stays in his room,
~E

What is a Stock?

2008-01-17T22:18:00.001-08:00

For today's post, I thought I'd give you something different. No homework, no rant, just a dictionary term that will help you understand Wall Street lingo. I call it Ebmonics. Don't laugh. >_>

Stock (pronounced "stock" ((No, I don't know how to do those pronunciation thingies.)) )

1) a suffix for wood, as in "woodstock". Hippy lingo.
Woah dude, woodstock was so awesome! I like, took 10 hits of acid, I thought the ground was talking to me, man!

2) suffix for chicken- or beef- or any other number of things. Makes delicious, delicious soup, but sadly the creature used in the stock may never taste it's own glory.
Woah dude, chicken stock was so awesome! I like, took 10 bowls of soup, I thought that I couldn't eat any more, man!

3) A non-concrete, imaginary, arbitrary slip of paper that doesn't really have any set value that may or may not give you some sway in a company. maybe.
I say, good man, this here stock is quite astounding! I acquired roughly 10,000 shares at market value, I couldn't believe the price!

Yes, that's what a stock is. That's all a stock is. A stock does not guarantee you any returns; sometimes they don't even pay dividends. A stock isn't a guaranteed percentage of a company either - the company can buy their shares back, or issue more. A stock is merely a slip of paper that says what some imaginary % of some company may be worth at any given time.

That's your dictionary word for the day!

From the man down under,
-E

Why did IDGJ Jump? It had so much to live for...

2008-01-16T21:08:00.000-08:00

Yes, we all remember IDGJ, that little stock that no one believed in; it started out at a measly penance, and jumped so far up, that anyone invested in it would have surely been able to retire*.

*please note that the author of this work is being very sarcastic. Anyone able to retire on just 100 USD must live in some sort of 3rd world country. If that is the case, then I welcome you and your glorious leader! May the hairs on your penguins grow large, and may your milksacks be bursting forth with honey and mirth. Welcome to the USA!

So, once again, let's turn our heads back here, to IDGJ. We can see back at the beginning of the year (YTD to those just joining us) that the company had it's major explosion. What caused this?! Google finances is kind enough to point it out: Article B: IDGJ submitted to the SEC an application to be listed. That's it - but something that major gives a company a lot of leeway, especially if it's starting out.

These are what I affectionately call "gerflergem", but they're more commonly known as "press releases" or "stockholder information". Now, unfortunately, we can't all be everywhere on the stock market at once, but what we can do is try and corner a market. the key to finding these cheap stocks and hounding them is very simple: Just keep track of what they're sayin.

For example, say we found...oh, I don't know. 10 different dog grooming companies. (I have no idea why dog grooming is such a popular example in blogs... I guess it's just that the writers can't think of anything else.) The key would be to, after closing bell of each day (and using your google tickers) to check the stock's progress: Usually jumps last a day or two, and if you can't get in on the ground floor, what's to stop you from hopping in on floor 3 and riding it to the top?

Simple, sweet, and short post for today: Find some range of companies that you're interested in, and search for a couple penny-and-dime stocks: If dogs are your favorite, then find some dog companies, I dunno. But, start to build a mock portfolio. Once again, a short post, but these are baby steps that both you and I are taking to start our financial careers.

1st Day of Class

2008-01-15T22:44:00.000-08:00

Alright class, settle down, settle down. I hope you've done your homework, because now it's time to turn it all in, and learn something from me for once.

Today's stock is IDGJ: IDGLOBAL CORP. You can find a ticker of them here, here, and here.

Now, with that out of the way, I would like you to take a look at that stock over a week's time, then the YTD time scale.

If you've never read a stock ticker report, let me go ahead and clue you in: The small jabs and gaps are the market influences on IDGJ, and that subsequently raises and lowers the stock value. In the 5d time scale, (I.E. for day traders) time is crucial - they don't plan on owning it for long, and if they think it will peak in an hour, they'll already have their sell orders made. (more on that much later).

Switching to the YTD scale, you begin to see the overall performance of this stock - at the time of writing this, it is currently at $0.16 a share. Anyone can afford this stock, no? But, please note what happened from January 4th to the 9th - The stock shot from $0.09 a share to $0.23 a share! Although volatile, if you had invested say... 200.00 into this company at the low point of $0.09/share, and sold at the high point of $0.23 a share, that would have netted you a profit of $111.08 (before brokerage fees) or a total value of 311.08! (2,222 shares * $0.14 gain/share)

That's 110.00 (I'm rounding, give me a break) that you made by... clicking your mouse a couple times. That's the stock market for ya, ladies and gents. Do I have your attention now?

This will be a short post: it's 2AM and I can't really be bothered to take any more time away from my busy schedule (My day planner says "sleep sleep sleep sleep" for the next 5 hours) but, there is something you can do. Make a free account with any financial tracking program available (for example, Google Finances, Yahoo Finances, or anything else that you like) and familiarize yourself on it. Tomorrow, methinks we will take a look at why stocks behave the way they do, and what prompts them to jump, or crash. We'll also continue to use IDGJ as our company of choice: So, add that as your first stock to track on your ticker. See you tomorrow/today!

The other white meat,
E

Cleaning House 2: The Revenge of the Dirt

2008-01-14T21:06:00.001-08:00

Welcome back, reader(s). We left off yesterday with you creating a list of your incomes and cash assets, did we not? We've basically cleaned the floor of your financial home: now it's time to deal with the crap growing in the fridge.

With your list, I would like you to take a cold hard look at what percentage, or dollar amount you decided to put away for investing. Please, and I can not stress this any harder, Please make sure that you're not cutting into your necessities: food, shelter, internet (so you can read my blog) and school all come first. This money you have written out is the Beer money. Remember that.

So, let's say, for math's sake, you can invest $200.00 a month. Well, congratulations! Take that 200, think about it, and then imagine two scenarios: One where you give your 200 to a total stranger, and he gives you back 500, and another, where you give him 200 and he hands you back 50. Ask yourself if you're fine with both outcomes.

The problem with investments, and investors today, is that they get too emotionally attached to their money. This is something that you have to grow out of: the only way you can make your money earn it's keep is through some trial and error. There is no investment out there today, (that beats inflation and makes it worth your while) that does not carry some risk. The reason you're reading this blog is, of course, to minimize that risk.

So, you have 200.00 to start building your retard helmet. Good! You now need to ask yourself how much risk are you willing to take? I could start listing off some penny stocks, where you could earn a fortune or lose your shirt in a matter of days, or I could list off a couple mutual funds that require a much higher financial burden (but with much much lower risk.)

This is when the cluttered floor looks nicer and nicer: nobody wants to "think" or "worry" or "dwell" on money, because they either get lost, frustrated, or think for some reason that money is evil. Two words: Wake Up. You think about money all the time: how much is this lunch going to cost? How much is gas? Did my rent go up again?! This Retard Helmet that you're building now is not just to protect your earnings from being useless, but also to protect your noggin from those inevitable holy-crap-I-just-ran-face-first-int0-a-financial-brick-wall moments.

Don't let this "dirt" of the mind creep back onto your financial floor. You're playing with money that would otherwise be sitting around, doing nothing but being useless. Play money, really. And, if you go into this investing world with the thought that "it can only get better from here" then whaddya know, it will.

I know I spent a whole day just drilling into your head that yes, you can lose some money in investing. It is that important to me, and it should be to you, to understand this. But, through it all, stay in the game - the stock market traditionally outperforms everything else you could possibly invest in. Trust me - it will be worth it in 5, 10 years when your investments are bringing you a monthly check, when your money works for you, for free.

Tomorrow, I will actually get into the meat of things, and list a penny stock that has climbed very high - and has plummeted. Consider that your first lesson in cheap investments: You can get rich if you know when to pull out, and you can lose everything if you ride it out.

The man who knows how many licks it takes to get into the center of a Tootsie Roll Pop,
-E

Cleaning House, Part One

2008-01-14T00:16:00.001-08:00

Well, I've done it - I've accomplished a feat every mother would be proud of: I've cleaned my room. This in and of itself is an achievement paralleled with man setting foot on the moon - I discovered that I have a desk, and it's made out of wood. Until now, I thought the sheer amounts of receipts were holding up my computer. I also now know how many business cards I truly do have - far too many. And you remember the Starbucks/iTunes deal a few months ago? The one with the "free song download every day"? I had about 50 of those cards.

This got me thinking, "what state of turmoil is my financial house in?" (Yes, that's a crappy introduction to my main point, but pay attention anyway.) Where is any of my money coming in, what kind of situation is it in, and how can I best use it? To answer some of these simple questions, let me give you an illustration:

Say for instance, at the beginning of the year, you take out a 5K student loan. Turns out, you only need 3K - which leaves you with 2K in loan money. If you work as well (as most college students do) then you have an additional income. Mine, after taxes, food, and rent, will leave me with roughly 300.00 every month to do with as I please. So, first month into the new semester, I have 2,300.00 in cash. That's an important distinction to make - it's cash, the easiest asset to liquefy.

I am about to say something that is so heretical, that uttering it aloud is enough to make most financial consultants bleed out their ears and spontaneously explode: Do not pay back that 2K into the student loan. Just don't do it.

The reason for this is very simple: If you keep it liquid, I.E. in cold hard cash, you can invest it in some relatively safe stock - another asset that's easily converted to cash. By doing this, you make your money work for you - every dollar that that stock earns, you didn't have to. When the next semester comes around again, pull out the money, plus the interest you gained, and use it for school expenses.

"But E" I can hear you say, "shouldn't you shut the hell up and tell me what to dump my money?" "Balderdash!" I would invariably reply, with such force as my monocle would pop right off my face. It is more important to know where you're starting before you can know where to go. Unless you're pulling in massive amounts of money (I.E. enough to pay for college and all expenses) college debt is something we can not pay off while attending a university. It's best to use any excess cash you might make as a "retard helmet" (my version of a nest egg).

Yes, a "retard helmet". No, I'm not being PC here, because the people who would come after me are entertained by jingling keys. This helmet is to protect your delicate self when you step out of college - when your mom and dad aren't footing any more bills, and where you may need a nice asset... or two so a bank can look at you.

So, what can you take away from this article, if it was Tl;Dr for you? Make a list of all the cash and cash-like assets you have. Stuff that you are willing and able to invest. Tomorrow, I'll continue where I left off tonight, and start to show you how to prioritize that cash to make it work for you.

Biodegradable,
-E

What is the purpose of E?

2008-01-12T21:15:00.001-08:00

Watashiwa E-desu. My name is E, and I am good.

And, as you can tell, I am a student investor. I go to a traditional public college, and I work part-time when not going to class. After cutting out a lot of superfluous expenses in my life, I realized that I was in a wonderful position: I had cash. For any college student, that's a wonderful thing!

After drinking for a few days straight, I realized a few things:

I had to pee.
Money is good, but there's only so much I need as a student.
Women like money. They like men who have money.

So, I set about finding where I can invest my extra couple-hundred dollars every month. Where I could make my money work for me, and where I can start building a financial future for myself where I can choose when to retire. That, and a couple of sports cars wouldn't hurt.

I've spent months combing the Internet and magazines, financial institutions and my friends, trying to figure out what to invest in. And, as it turns out, there is nothing out there to help people like us. There are either sites and magazines telling your parents how to invest, telling how you can get rid of your loans, or tell you how to save for retirement, but nothing out there telling a student pulling a shift at the local pub in between classes how to save. How to make their money work for them.

That's what I'm trying to do, through trial and error, through example, and through what I learn from both Professors, C.P.A.'s, and other investors. Follow me along the journey of my own wealth, and hopefully, the journey of your own. In this blog, I'll be condensing everything I learn, adding my dry wit to arguably the most boring of subjects, so you can have one place to stop and get your information - info made by students, for students.

And before you make any judgments, know this: I will never ask you to buy anything from me that will not benefit you. I will never have a "get rich scheme" or promise "massive returns". If you read my blog, you won't make millions in a month. Neither will I. But, I can tell you, with all honesty, that I'll show you what I'm doing, in real time: what investments I make and why, and you can draw your own conclusions as to whether or not I'm sane.

Happy Earning!
~E