How The Stock Market Saved My Life

When I first started in stocks I did not know the difference between a bull and bear market; that’s how naive I was. But I girded my loins (whatever that means!) and opened a trading account.
My first buys were very tentative. I literally felt sick to my stomach as I hit the buy button.
I bought some big market cap names (market cap is the share price multiplied by shares outstanding). I was lucky enough that my first buys were during a market dip. At that time it was the “Asian contagion” and worries over China. These were pressuring the overall market.
These funks are as frequent as bad moods in a teenager. If you look at the market historically it could be considered a teenager: rapid growth over the last 30 years, still feeling its oats or what the Street calls “animal spirits”, ups and downs.
Soon enough, I had stock market profits. Within six months I had a 30% gain in my portfolio. I read more every day, principally Investor’s Business Daily, and watched CNBC obsessively.
Within a year I owned 30 different stocks. I was making enough for us to live on as long as we lived frugally.
Most importantly, this new interest sparked a greater curiosity in the world outside my little milieu. I noticed what people ate, what they wore. When taking the occasional Saturday errand drive the stock tickers of various businesses I passed would flash in my mind much like when clues light up on Psych or the BBC’s The New Sherlock Holmes .
I would wake up no later than an hour before the market opened, 9:30 am, and scan the headlines on Yahoo! Finance while glancing at CNBC or Bloomberg. When the bell rang for the commencing of trading, I would always say out loud in my superstitious ritual,”And they’re off!”. I had a purpose to get up in the morning and stretch my mind.
Trading small speculative positions was my life. While the majority of my portfolio were companies that offered a yield, the big money I was making came from small caps(just over $200 million in market value), not penny stocks, no, never, penny stocks.
The work didn’t end on weekends, or holidays, either. Those were times to drill down on my respective positions and check out promising additions.
After a few years of trading and reading and studying I started writing articles for The Motley Fool on stocks and investing. I loved it, writing as an investor for other investors taught me more in eighteen months than six years of investing.
Why should you care what I think? I am not a hedge fund owner nor do I pretend to have a degree in finance. I do think a motivated investor can make money, I know she can. At the very least by frugal living and prudent investing you can start amassing pots of money.
I made mistakes you can avoid.
Oh, yes, I made mistakes. Mistakes that, looking back, were such boners that I can barely think of them without cringing. I want you to know about the boners and the blessed trades, both.
The understandable desire not to publicly reveal a failure is one of the drawbacks of how-to investing books. I won’t even say this is a how-to or even a how not to. Draw your own conclusions but after writing approximately 500,000 words, the equivalent of five, count’em, five novels I know I can teach you some basics.
Stay tuned.

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