Buy Low, Sell Lower

As Facebook continued to spiral downward, I decided to cut my losses and sell my 800 shares.

If only I would have sold them on Friday.

I also decided to buy 6 shares of Walmart, as my mother often shops for groceries at the store, and everyone needs groceries. In addition, I purchased shares of Westminster Coal Company, as Patriot Coal Company has been doing very well lately.

Today, I noticed that despite my poor performance due to my Facebook stocks, Haverty Furniture Company has been doing rather well. I suppose that many individuals purchased furniture over Memorial Day Weekend due to the abundance of sales and deals.

Overall, I'm not doing so well. But, it's comforting that I can attribute my stocks' poor performance to bad luck, and when my stocks perform well, I can claim it's just my brilliance.

So, it's bad luck that I bought Facebook low and sold it lower.

You're Killing Me, Mark!

Facebook, Facebook, Facebook.

I quote myself: "I always did like that Mark Zuckerburg."

That has since changed.

Today, my Facebook stock has plummeted and I have lost over $2,000.

I read an article on marketwatch which claimed that Facebook stock will continue to plummet to around $20 as Facebook has encouraged its users to not engage with the advertisements on the site. Therefore, companies are not as willing to advertise on the site, therefore reducing the value of the stock.

So, I guess, I'll take one for the team tonight and click on one of those pesky advertisements that haunt my newsfeed.

And although it is killing me, I am holding onto my Facebook stock, hoping that it might rise and I may "sell high!"

The Grass is always Greener

As I have previously discussed, my energy stocks are doing very well.

I currently hold Basic Energy Services, Comstock Resources, First Solar, Patriot Coal, and Pioneer Drilling shares, all of which are "in the green."

I attribute the success of the energy companies to the holiday and the hot weather.

However, despite the success of my stocks, I am still struggling to overcome my initial loss from selling all of my stocks. Well, the grass is always greener.

On the topic of energy, I went to a conference last week, and the speaker was discussing research he had conducted about algae as a fuel. In fact, algae proves to be a better alternative to corn because it takes less space to harvest and grow algae than corn. Although it is not widely used as a fuel today, the speaker claimed that it will grow in popularity in the next twenty years.

So, I thought to myself: why don't I jump on the bandwagon early and invest in some of these algae biofuel companies?

However, as I searched online, I discovered that the majority of these companies are privately held. But, I'll keep it in mind because alternative energies really do make the grass greener.

The Unity of the Binary

I realized soon after beginning my new trading strategy that my results would be very binary: either off or on. Therefore, by extension, I assumed that the money I made off of my shares would mirror the overall results: each company would either provide me with great return or great loss.

Well, I always did like that Mark Zuckerburg. And I have always hated coffee.

Lately, although my energy companies have been keeping me afloat, Facebook has been the real winner.

I purchased 800 shares of Facebook stock very inexpensively on Wednesday morning, when the shares hit their lowest price. Since Wednesday, I have made over $1,100 off of my Facebook shares. Looking forward, I hope that the stock will continue its slow upward climb.

However, most of my losses were due to the poor performance of my Great Mountain Coffee Roasting stock, whose price has fallen below my initial purchase price.

I suppose individuals divided to skip the coffee this morning and decided to opt for Facebook breaks.

For now, I'll keep my shares and watch for my shares to align so I may pull ahead. Besides, as Buddha once said: "Unity can only be manifested by the binary."

King Coal

As Effie Trinket states in The Hunger Games: "If you put enough pressure on coal, it turns into pearls!"

Although a completely inaccurate statement, I do agree with the message.

Today, I jumped from the deep negatives to making a profit-a miracle in and of itself-much due to the success of my energy stocks.

As I stated yesterday, I purchased PDC (Pioneer Drilling Company) and PCX (Patriot Coal Company) at very low prices, and I have since made $650 and $332 from each stock, respectively.

Thank you District 12!

Although I was quite skeptical of my new volatility strategy around noon, my new stocks have made me $2,846.65 (without taking into account my losses from selling my old stocks).

So, as I sat, calculating my earnings, I couldn't help but ask myself: why are commodities so volatile?

I speculate that there are several reasons.  Commodities are very dependent upon demand, so speculation and optimism contribute greatly to the value of the stock. Furthermore, many uncontrollable events, such as mines collapsing, natural disasters, etc, may disrupt the supply.

Well, here's hoping that pearl-making conditions are optimal tomorrow and that King Coal still reigns.

Go Big or Go Home

I have decided to tweak my approach. 

Today, as I watched my portfolio drop into fourth place, I reached a state of brief enlightenment.  

"Why play it safe when there is nothing to lose?" I asked myself. 

I realized that I always try to play by the book. So why not break every investment rule?

I have sold all of my shares of Dell, Wells Fargo, McDonalds, etc, and have decided to invest in risky stocks. Specifically, I have decided to choose the most volatile stocks possible due to the game's short duration. 

Volatile stocks are ones that have drastic changes in their value, and therefore offer greater return (or loss) than safer, more stable stocks. 

Therefore, I have invested in the following companies: 

Pioneer Drilling Company-a drilling company ($7.24 per share). 

Patriot Coal Company-a coal company listed as one of the biggest gain and decline stocks ($2.25 per share).

Genworth Financial- an insurance company that has faced some troubles ($5.34 per share). 

Great Mountain Coffee Roasting-a coffee company based in Vermont ($23 per share). 

Although companies, like Patriot, faced drastic drops in the price of their shares, these stocks offer me a greater percent return on my investment. So, I bought 5000 shares. 

In conclusion, do not be surprised when you see me drop drastically. Do not be surprised when I suddenly jump into first place. 

Because I'm going big-not going home.  

Traveling Trading

I am writing this blog post from the Wilmington airport, among men in suits flipping through their newspapers and a man who is whining to his wife about having to use a pink suitcase since all of the others were taken. It is here where I made my first stock trades. I bought 1000 shares of Pfizer, 500 shares of Wells Fargo, and shares of Exxon. Why did I choose these? Pfizer is a pharmaceutical company and many people need/use pharmaceuticals. I bought Wells Fargo because it is a stable bank. I invetex in Exxon because it is nearing Memorial Day weekend and people who are not celebrating blossom travel to see friends and family for the long weekend. In terms of my emotions, I am glad that the $100,000 is not real as I have already lost a bit of it. Here's hoping it'll improve. But, overall, I feel quite like a businesswoman as I am sitting in the uncomfortable airport seat, typing away on my iPhone, checking the stock app and reading money magazine. The only thing that's missing is a seat in business class.

Source: Spain Defies EU on Deficit, Jonathan House, WSJ 3/3-3/4

According to the Wall Street Journal, Spain’s economy has worsened as its deficit (5.8% of its GDP) exceeds its pledge to reduce it to 4.4% of its GDP.  Despite the contractions in the economy and high unemployment (23% in January), Spain continues to spend as they believe government spending will benefit their economy and lower the high unemployment rate.

To date, increased government spending has not benefitted Spain’s economy. Instead, they must reform their economy, labor laws, etc., to reduce the deficit. 

Coach in the Year of the Dragon

WSJ
1/23 "Coach's Shares Should Remain in Fashion"

According to the WSJ, Coach's stocks, unlike high-end retailers such as Tiffany's, are a safe bet. Coach's popularity in China and its men's line of cases for various technologies have increased their earnings for the December quarter by 15%.

Clearly, innovating and appealing to new groups of people helps to increase demand and boost sales. Perhaps retailers such as Tiffany's should market in China and open more men's lines.

But until then, I know I'll be flying Coach.

No Trade Allowed

Economic trade with North Korea is not beneficial as it would help sustain a criminal regime.

North Korea would benefit from trading with the United States, as they cannot establish domestic markets for their products, as shown by their per capita GDP of $1,800 (versus $47,000 for the United States). 

Further, North Korea cannot establish domestic markets because their people cannot afford their products, due to the extreme income inequality and poverty.

However, if the United States were to trade with North Korea, the money would support the dictator and his regime, and in turn, further mistreatment of the North Korean people. Therefore, in order to encourage a collapse of North Korea’s dictatorship, countries should not engage in trade with North Korea. 

A Fact I Appreciate

(Market Structure #2) 

My father runs his own business, Government Loan Solutions, which values small business loans. His company is essentially a monopoly, but in a small niche industry.

Although GLS has great market power, they do not have complete control over their prices, as the product is not a necessity. In fact, although the company meets demand, they charge less than the price they could charge (due to demand).

Lastly, the company meets its costs and has a healthy profit margin, a fact I appreciate. 

To a Fifth Floor Apartment

(Market Structure #1)

I spent Christmas on the upper West side of New York City, where Christmas trees were sold at nearly every street corner.  These Christmas trees, which fall under the oligopoly mark structure, were about three to five feet tall and easy to drag down West 79^th to a fifth floor apartment.

My brother’s distress over not being home for the holidays, which led to a search for a small Christmas tree that would not be viewed as a fire hazard to the hotel staff, allowed me to observe the consistent pricing of Christmas trees on the Upper West Side. Nearly every vendor sold their trees for $35. Therefore, I believe that the few sellers colluded and established the price to allow all vendors to sell their inventory.

Although Christmas tree sellers did not have individual commercials encouraging New Yorkers to walk six blocks when they could buy one two blocks from their apartment, some vendors provided a delivery service, so one would not have to drag it down West 79^th to a fifth floor apartment.