Ramblings of Charles Prier – Writer-Insomniac-General Know-it-All

Well that’s almost true. Most of my success in investing has been due to ignorance. For example, part of my incentive pay was once from stock options. At the time I didn’t know what to do with them. Fortunately they were good for five or so years. I felt a little foolish thinking about them from time to time but because of the complications and my low tolerance for confusion I just let them sit. Over time the options increased in value, the stock split several times and continued to grow in price. Before the first batch expired I had to do something. I got up enough nerve to ask a few questions of my friends at happy hour. I learned that you didn’t really have to have the cash to buy the options to start with. You could sell them short and then pay for them from the proceeds. It worked out well I made it a good piece of change by being ignorant of the process.

I had learned another valuable lesson, which was that I could ask a few questions at happy hour while everybody was happy, without appearing too ignorant. So I asked how day-trading works. The know-it-all from Finance said, “That’s easy, here’s the deal. You select the stocks you will buy somewhere in the $10 to $15 or $20 range and set aside $20,000, or there about, to play with. You buy 1000 shares of a stock near the close or the next morning. Then you watch it for a one dollar uptick in price, then sell it. Don’t get greedy waiting for a higher price and don’t fall in love with your selections. If it hasn’t gone up a dollar within a week sell it anyway and pick another stock. You could make $1000 to $2000 a week without much effort or a lot of risk.”

I picked some stocks and pretended to buy them just to check out the system. It worked! I made and imaginary $28,000 in less than a month. Lost some too, also imaginary thank goodness. It was obvious that I needed to know a great deal about the companies I selected and the businesses they were in if day-trading was to become a major income stream. I put my Happy Hour University Diploma away in my Someday Pouch along with all the fun things I was saving for someday. I think of it from time to time . . .  between fun things.  –CP

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