Thursday, November 29, 2007

Into the fray...


After several years of neglect, I finally got motivated to get my finances in order. I've had money sitting in a few different retirement accounts and I never really bothered to check and see what they've been up to. It turns out they were automatically dumped into money markets for some reason, which are good for, say, loose cash you don't need, but bad for long-term growth. So I rearranged everything and now I'll be a multi-billionaire when I retire in 10 years.

Relatedly, I've also gotten interested in stocks. After only two weeks or so of research, I've come to the realization that playing the stock market isn't too much different from playing roulette. I don't gamble at casinos except for roulette, and when you play you get an energizing sense of anticipation as you watch the ball go around and around until it lands on "00" and you lose $50 in 45 seconds. Stock investments seem to be kinda like that, though it's much different because you at least have an opportunity to make an informed decision about your investments rather than blindly choosing "red" and "black".

Does anyone know what these people actually do?

Yesterday I plunked some change into E*Trade, having been watching it oscillate between $3.50 and $6.00/share over the last two weeks, and having read about potential buyouts by other firms. I couldn't help but check the ticker every 30 minutes, expecting it to shoot up. Of course it didn't, but I did know that going into it.

Sure, a financial firm with a big mortgage debt doesn't seem like a great pick right now, but that's why I think it is. The chance of it going under is slim, and before it does it'll very likely be bought out. It's been crippled with debt and has seen its stock tumble from $26.00/share in June to where it is now. If it's bought out, I win, and if it recovers over the next few years, I win. I think the same strategy will work for Citigroup, though it's probably more of a long-term investment than E*Trade. Of course, I'm a blind novice, so I'll probably lose my shirt, but hey, it's a good way to learn, and the more I try, hopefully the more successful I'll be.

I have some other stocks I'm eyeing, and I'll probably be updating the ole' blog as I buy in.

For those interested, I bought 100 shares of E*Trade on 11/28/07 at $5.30/share.

Here's the latest ticker.

3 comments:

adspar said...

With years of experience playing the small time stock trader and professional gambler, based on everything you wrote here I would strongly advice you against buying individual stocks.

Brice Lord said...

I'm curious why what I wrote would lead you to such advice.

In any case, I have a host of mutual funds and other investment packages funded in my retirement accounts. I'm not expecting to make a living off of stocks, just trying to play a couple hands and see where that gets me, so to speak.

Erm said...

TAVIX WGRNX NSTK - long-term winners