Lamar:
RE: "I don't have the money to buy the Yahoo's and the Dell's. But I can take a small amount of my "PLAY" money and buy several thousand
shares of a BB stock. If I am lucky I will make a small
profit all the while I am learning about the stock market..."
Not to make this a confessional, but many of us here have lost money on BB's and the deck is stacked against you. Your point, as written above, is the fallacy that dwells in the minds of all new BB investors, myself (earlier last year) included.
First of all, it is clear to me that what you lost was/is not play money - read your post again. That is mistake #1. Secondly, while there is a lot of behind the scenes manipulation with listed stocks it is clearly not to the extent of BB stocks, especially ones that do not report: they have a license to steal.
Secondly, stop thinking about your money in terms of price per share and think in terms of "quantity x". With the right choices you can double to "2x". With the BB's, the spread is so great, you can't get out easily to cut your losses.
****
People like Tim are daytraders for a living and they are good at it. Listen to what he says: he makes money both on the way up and on the way down- and he is in 100% cash at the end of each day. That is because he is monitoring momentum AND his finger is always on the trigger. He chooses his busses to ride one at a time (sometimes more, but not many).
My point here is that if you have a day job, you can't do what Tim does unless you put in the hours he does THE WAY HE DOES IT. You may be able to do this, I don't know, and please do not take this as personal criticism, I am only putting together a group of ideas I have about trading. Tim is out of the market in CASH every night. Can you do that? If not, please evaluate what percentage of your portfolio you want to day trade. Again, I am not criticizing you personally because these are decisions I also have had to work out. There are some safe investments out there that will work out long term. There are also intermediate term investments that are technically good and fundamentally good stocks for people who do not have time to be good day traders. Check out www.marketgems.com, Jenna's popular site.
"Fun is fun", but "losing money is no fun", whether it in is big board or BB stocks. I have lost before and am open to new ideas, but there are fallacies and unknowns to BB stocks that are almost insurmountable to the average investor. In a phrase: good DD does not exist because nothing is truly verifiable. That is why Tim himself does not touch these things anymore - he is a pro and realizes the deck is stacked. One of my friends said to me about one of my BB company investments, "hell, why don't you just SPEND your money?" - he was right. All that said, I do admit to several BB stocks where I have made several baggers, but in aggregate they are too few and far between. If you have to invest in a BB, make sure it is reporting, and be wary of Canadian companies and Nevada companies.
**********
People really need to be realistic about what "risk capital" really is.
Best of luck to all:
Howard |
