WineMDineM - First Ever Trade to Present

Discussion in 'Trade Journals' started by WineM.DineM.CryptoMineM, Jul 15, 2022.

  1. WineM.DineM.CryptoMineM

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    Hello, all. New to the site as a member/contributor.

    Let’s get right into it with a little down and dirty background.

    I am a 35 year old father of 1, electrical engineer, helicopter pilot, vet, and a completely green investor. Other than my weekly 401k contribution and a 4 day stint mining Bitcoin with a $700 laptop (hence the stupid name), I’ve never “actively invested” until 6/24/2022 when I executed my very first trade with my brand spanking new TDA account. With that said, please excuse my… well….. general lack of knowledge about everything, including the lingo. I know absolutely nothing about investing as of the publication date of this post, but I am hooked and I intend to learn everything I possibly can! Plus I’m very good with math, so I’m thinking maybe I can factor that into my strengths somehow.

    Why did I decide to start investing?
    On 6/23/2022, the day before I opened my first position, I was having lunch with my bosses and the conversation turned to the inevitable upcoming recession and mitigating losses in margin accounts. I noted that I save, but I don’t invest because I’m afraid to lose it. Then they dropped some knowledge on me, and two statements were made that really stuck with me.
    1. Cash in a savings account will never grow.
    2. The market is down right now, but that means securities are on sale!
    I’m a very conservative guy, so I thought ‘hey, I only buy things on sale, and I would really like stable growth on that savings cash on top of my 401k.’

    Thus, the journey begins…

    I wanted to create this journal so I could track my own progress, catalogue my mistakes, and share the general concepts I’ve learned throughout the process. Who knows, maybe some other newbie down the line will come across this thread and gain some kind of insight. If I can help myself and someone else then I’ve achieved my goal, even if it’s helping a seasoned guy take advantage of newbies like myself knowing how we think.

    Also, I’d like to note that I’m on my own journey to acquire knowledge and I’m not here to ask for advice or pester anyone for tips, BUT, if you notice something I may be overlooking, or if you think I’m on the wrong path or anything else you’d like to comment on, I would thoroughly enjoy discussing it with you and I’m sure others would really enjoy reading it! All I ask is this: If you feel the need to point out the fact that I’m an idiot, which is very likely hahaha, please accompany your insult with a book suggestion, or post a link to an article that will provide the much needed information I am lacking.

    Also also, shout out to WXYZ. “The Long Term Investor” thread he does is an awesome read, and his insights are well thought out and extremely helpful. There are a few other good ones in here too, but I’ve learned a lot just by reading through that one. I suggest you check it out if you haven't already.

    RECENTLY LEARNED:

    Below are a few things I’ve learned over the last few weeks that I believe are very important. Please forgive the formal numbered layout and overall format of this post. Engineer + military really created some hardcore organizational OCD habits. Me likely numbers and clean lines.

    1 - I’m a friggin moron when it comes to investing, and I have no clue what I’m doing. I’m probably going to lose my house before Christmas!

    2 - Taxes on capital gains suck! They suck even more if you sell < 1 year after opening.

    3 - “Do not invest in anything you don’t fully understand.” -Buffett. You will get burned (holding the empty bag). The market is unpredictable to a newbie like myself, but knowledge is power! The non-researched trades I've made since 6/23 to now felt like gambling, but when I actually sat down and dug deep into a company the stock performed as expected. I also need to get a feel for when to enter/exit and develop a strategy, but that will come later with greater understanding and experience. Right now the plan is to just get a feel for it.

    4 - Day trading is a full time job, very risky for beginners, and from what I’ve gathered the odds are strongly against you. I’ll leave day trading to the professionals and $500,000 quantum computers. Investing for long term sustained growth is the foundation for wealth, but I’m also interested in short term growth trading stocks and ETF’s.

    5 - Don’t believe everything/anything you read on the internet. All these analysts and market watchers are working and receiving pay from someone, and it’s not you! Additionally, 3 out of every 4 people not only make up 80% of the population, but are complete morons just like me! Disregard advice you gather on social media! The news cycle does seem to have some sort of impact on certain things, but most of what they are telling you is something you can gather from your own research, and if you're paying attention you can make educated predictions on what they will say, although, I never would've guessed they would say men can get pregnant, but I digress. Pretty much everything coming from a media source about the market that isn't fact is speculation from people looking out for their own interests. Also, Jim Cramer is a complete jackass and I don’t trust a word he says, but it seems like a ton of investors follow him closely as well as a lot of the other garbage plastered around the internet, so maybe I can use that to my advantage.

    6 - Technical analysis strategies seem somewhat useless. Do you agree, or am I completely missing something here? I get the concept of ceiling/floor and testing limits, but drawing lines on a chart to make predictions seems too risky and unreliable. I’ve found some tools that I think are useful, but I need to do a little more research before I can rely on chart data. Therefore, I am focusing on learning the basics of fundamental analysis. Main takeaway - using historical data to predict future outcomes, regardless of what you think you know about the future, is always unpredictable. Making educated predictions, however, can reduce the risk involved.

    7 - Bear markets don’t last forever. Consider a price drop a “blue light special” sale on securities. Thanks Dave Ramsey!

    8 - Losses are not realized until you sell, however, if higher risk is involved always have a stop limit in place.

    9 - Never, ever, EVER buy into meme stocks or crypto. Do you agree?

    10 - Put a plan in place, stick to the plan. Try not to monitor every 1 min tick when you’re looking to hold for a while. I got spooked on a few of them, and got out way too early. I really missed out on some good gains, and I’m kicking myself for not trusting my research. Also need to know when a bad thing is just bad, and if it's worth selling to get back what you can, or hold in anticipation of it going back up. Investing for long term would always suggest holding unless it shares of say Blockbuster, Kmart or something destined to go to 0 sometime in the future.

    CURRENT FOCUS:

    As I stated above, I think the first thing I really need to learn is how to analyze financials. Balance sheets, return on investment, revenue and profit margins over time, small/mid/large market caps and their associated risks, etc… I’ll provide a detailed update on what I’ve learned as I progress.

    Books I’m reading, in order:
    All-In-One Investing for Dummies (Been getting a lot of flak from my coworkers about this one)
    The Intelligent Investor - Benjamin Graham
    Essentials of Investments - Zvi Bodie (Textbook)

    I also want to read The Art of War again. Not sure if relevant to investing but it’s a quick read and I don’t think it will hurt.

    Okie dokie, time for the fun stuff…

    TRADING: 6/24/22 - 7/15/22

    After creating my account, I watched a couple educational videos and used the TDA research tools to generate a filter specifying market cap, ROI, profit margins, and current trade price under $10. I found a company called Catalyst Pharmaceuticals (CPRX) within my search, and did some reading on their business model. I read a few news articles and tried my best to make sense of the fundamentals. I also looked at the insider trading activity and noticed a lot of insiders were acquiring shares over recent months. All indications pointed to a good buy, so I looked at the chart and noted it was at a 2 week high. The next day the price dropped mid-day and I opened a position at $6.5x. The price went down, up, down etc… very volatile, but I decided to hold over the weekend. On 6/27 I sold for $7.0x. Gains! Nice! Current share price is $8.57 as of 7/15, whoops! Gotta know when to hold ‘em and know when to fold em am I right?

    That night I randomly came across a news article about an acquisition war between Spirit, Frontier, and Jet Blue. At the time it looked like Frontiers bid was going to be accepted, so I bought into Frontier (ULCC) at $9.4x the next morning, 6/28, planning to hold the stock for a couple years until their debt from the acquisition was paid off and they were profitable again, hoping the share price would increase dramatically. While holding this position I made the mistake of closely monitoring the share price, got spooked by a down trend and news they were delaying the acquisition vote, and sold on 7/5 at $10.6x. More gains! Nice! Current share price is $11.05 as of 7/15….. Dammit! Looking back I should’ve snagged Spirit (SAVE) shares. If they get acquired there will either be a stock conversion into Frontier shares, or a cash buyout from Jet Blue (JBLU).

    Did some more research, this time looking into the semiconductor market. Solely looking at charts and that sweet 3.8% dividend I somehow decided Intel (INTC) was reasonably priced, and at a 2 year low. Stocks on sale! Got in at $37.5x on 7/8. The price tumbled, then back up. More volatility. I planned to hold this one for years, but I got spooked again and sold on 7/11 at $37.5x. Small gains! Nice! Current share price is $38.56 as of 7/15.

    So now I’m feeling a little more confident, and thinking maybe it’s time for a long play on an IPO get rich overnight strategy. Did some research and found Phoenix Motors (PEV) an EV manufacturer in the prototype phase. They have sold a few commercial EVs to a shuttle company, but they are definitely not profitable at this point. I checked out a few of the other top emerging EV companies, and PEV seemed to be ahead of them all. They are in the process of passing some standard test at a proving ground with one of their prototype commercial vehicles, so I thought this was a good opportunity to get into a future behemoth on the cheap. Got in at $3.3x the morning of 7/11. Volatile all day. Sold at $3.2x near 4pm. Losses! F*** me!!! Lesson learned! Current share price is $2.77 as of 7/15. I hope they fail that damn test!

    Down but not out!
    So the eve of the big June ‘22 CPI report, I was doing some research on shorting, and came across inverse ETFs. I thought “this is a for sure deal, the indexes are going to punch through the center of the friggin earth tomorrow. I can’t lose!” I found Proshares Nasdaq 2X Ultrashort (QID) and figured I would make a killing when the tech market reacted to the horrible CPI report due out in the morning. I checked the charts for activity when the May and April reports came out, which all showed a strong down trend day of and day after the report release, so I determined it was a definite win as long as the CPI showed above 9.0%. 8:30am I saw 9.1% yoy and bought into (QID) at $25.8x. Well, guess what, the Nasdaq went immediately green and I was waayyyyy down on the inverse ETF. Losses! WTF happened!!!! Still trying to figure out why the Nasdaq went north. I’m assuming everyone else including me expected another bad CPI, but they sold off the day before and then the Nasdaq corrected? Looks like I missed my chance. I decided to hold overnight to try and recoup some of my losses tomorrow. Hoping to see sharp rise, but not sure what’s going to happen. Gambling again, something I said I wasn’t going to do. I have a stop limit in place so if it gets any worse I’ll get out with minimal loss as long as after market doesn’t skip my limit. Probably shouldn’t hold an inverse ETF overnight but hey, still hoping it will rise tomorrow. Still gambling. Lesson almost learned. The good news is I was introduced to the concept of hedging after my coworkers grew tired of my bitching about Nasdaq. So much to learn. Sold the next morning 7/14 at $25.8x and got my money back. Current share price is $24.03 as of 7/15.

    Did some research that evening 7/14 and landed back on Intel (INTC). Looking again at their financials and everything is reading as a very strong company that is consistently growing and striving to become the worlds leading manufacturer of semiconductors. From my assessment they seemed to be more profitable than AMD which is their direct competitor. Then I came across their plans to build a huge factory in Ohio to develop vast amounts of semiconductors, and the CHIPS act that is currently in the works which would be huge for the US semiconductor manufacturers. I took another look at the 180D, 1Yr, and 3yr charts, and determined the share price is well below the 2020 dip. Zooming out to 10 years It seems the stock is somewhat volatile, but also that the share price hasn't been this low since 2017. They are showing good profits, debt to income, etc.. so why is the share price so low? I did some more research, avoiding bullshit analyst articles and couldn't find a reason not to buy into INTC as a long term investment. The morning of 7/14 I opened a position in INTC at $36.5x, and I plan on holding this for years. Current share price is $38.62 as of 7/15.

    CONCLUSION:

    Looks like I should stick with basic fundamental research to choose stocks and ETFs, and stay away from IPO’s, shorts/inverse ETFs and all other high risk trades for now until I can grasp a better understanding of how and why the market fluctuates. Get rich quick strategies don’t work for me apparently. Fundamental analysis is key! I also need to develop a better enter/exit strategy if I’m going to trade on a daily/weekly/monthly basis.

    If you’ve made it this far I commend you! Thanks for reading! If you have any comments or anything you want to share/add please do! I look forward to reading what you all have to say!

    RECAP: 6/24/22 - 7/13/22

    CPRX - In $6.4x / Out $7.0x
    ULCC - In $9.4x / Out $10.6x
    INTC - In $37.5x / Out $37.5x
    PEV - In $3.3x / Out $3.2x
    QID - In $25.8x / Out $25.8x
    INTC - In $36.5x / Holding 'til I die or lose my house....

    My 401k is 100% Vanguard mid-cap growth (VOT). Not touching this.

    I still have my house as of 7/15.
     
    #1 WineM.DineM.CryptoMineM, Jul 15, 2022
    Last edited: Jul 17, 2022
    T0rm3nted likes this.
  2. StockJock-e

    StockJock-e Brew Master
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    Damn, big intro!

    Welcome to the forums!
     
    bigbear0083 likes this.
  3. Value543

    Value543 Well-Known Member

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    Welcome -- I, too, find trade journals to be a great way to hold oneself accountable to what we say we're going to do, what we say we think, etc...so I, for one, applaud you! I look forward to reading more -- and hope you had a good weekend.
     

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