I love playing the stock market. I mean, really playing it. Of course with real money! I don't have any now but I did before. Back in 2000 or 2001, I took 10k that I had and didn't need right away and using one of those online trading sites I started to invest in stocks. Now, when I started, my style of investing was determined by watching CNBC and other sources. I would buy stocks that were at an all time low too. The problem was I didn't check out the company's financials and I got burned on the first 7000 that I invested. The good thing is I started to read Graham and Dood's Security Analysis. Now this book is huge and for the ordinary person without a degree in finance or accounting it will most likely be hard to read and boring (like an accountant, which I used to be). Because of the amount of reading it required I found a book I could substitute called Value Investing Made Easy by Janet Lowe. It basically condensed the book down and it's easier to understand. I read that smaller book and invested the remaining 3k. When I sold all my stocks in the fall of 2005 it was for about 11k if I recall. I sold all stock because I need a new vehicle and had no money (3 years unemployed). Now that doesn't sound like a lot, but let me tell ya that the first stocks that I invested in with the 7k, half of them went out of business and the other half either stayed near the buying price or tanked to some degree. If it wasn't for my change in investing then I would have lost more than I put in. Value investing folks, it's the way to go.
Since I still haven't any money that I can throw around like the good ole days, I tend to make up fake accounts using yahoo or google. I just found one that I did on November 2008 using only 4 companies and $1,972.00 dollars (I didn't account for commission costs and I have done dividend reinvestments). Just looking at it today after the DOW posted a huge loss again I find that the market value of my fake portfolio has grown to $4,031.26. If I remember right, I followed value investing principles. Now I think it says to stay away from penny stocks... maybe it was another book I read, but I also read about Warren Buffett and he buys things he likes and there was a company I really like and I find them to be innovated and the stock was under 50 cents. It's nearly a dollar now so that doubled, but because I was going on feeling more than value (the financials were good, not great) I had not invested much. My biggest gain came from a REIT that had solid financials and was at a good value. Pretty amazing since the housing market is so bad and you see closed stores everywhere.
Ohhhh, if only I had some real money that I didn't need. I would have to re-read the book of course. I have forgotten a lot of my accounting education and I haven't looked at a WSJ in 10 years.
Now if that has bored you and investing scares you, then check out my latest video. Be sure to watch closely at around 2:20 to 2:30!
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