Everyone loves a "get rich quick scheme." At least, I do.
So, it's a natural human tendency to look for momentum, and figure out how to capitalize on it. The trouble with most people, however, is the delusion that momentum lasts forever, when it doesn't. Delusions of grandeur cloud judgement. Exit strategies go by the wayside. The tech and the real estate bubbles are the examples.
And now, there's a gold and commodities bubble. They definitely offer a moment in time where the potential to make a ton of money is there. So, my question is, "How do you trade oil, gold, or corn futures?"
Also, I'm not saying you can't make money in real estate or the stock market anymore. I'm just they aren't what's hot right now, and you have to be really smart--all the idiots have been wiped out.
For a long time, I dismissed Jim Cramer (Smart Money on CNBC) because I don't particularly like it when someone throws out 100 recommendations a day, and I still don't. I just take what he say with a grain of salt. But, the one thing I like about Cramer is he's good at "telling the story" of what's going on in our economy, and how you can make money from all it's twists and turns. He's obsessed, and I like it--there's always a golden opportunity somewhere. So, you want obsession in an advisor because the market is constantly changing. It shifts, and like a game of musical chairs, it's easy to be the odd man out--No one wants to be that guy.
Moreover, the hardest part of trading stocks is figuring out when a stock is "over bought and over sold." I've made 4 times more money "on paper" than I've taken out of the market--the stock went up, and I still hadn't sold when it came back down. There's no worse feeling than the feeling of "the money you could have made."
It never works where you're happy you held on because the stock is still going up. People are greedy, they want their money, and they want it now. Stocks fall 10 times faster than they go up. So, they sell, and it drives down the price quickly. Inevitably some joker is there to jump on the bandwagon only they're "a day late and a dollar short." So, instead of a 50% profit, you make a 10% profit, or you lose your shirt, and you feel like a chump.
I was following Apple when the news of the iphone came out 6 months prior to its release. It was $80 bucks a share. You might of heard the expression "buy on rumor, and sell on news," or variations of that. Well, I was telling my trader friends that this stock is about to take off like a rocket, and it sure did.
The Apple scenario was one where I would have said, "sell the farm, and load up." Why?? It's simple; no one wants to work forever. If the market presents a golden opportunity, which it does about once or twice a year, why not "jump on the bandwagon" and take full advantage of your foresight--that's why you became interested in the stock market in the 1st place, but recognize--bubbles and bandwagons don't last forever. Apple's back down from $200 a share to about $130. You'd still be up about 70%, if you bought the stock outright at $80.
But, why bother buying it outright, when instead of 70% you can make 1000% trading options. I know, I'm a gambler, but then again, who wants to work forever?
So, my fascination is finding "the perfect storm of opportunity" and positioning myself to be the big winner. It happens yearly, only thus far, I've haven't fully capitalized on one of my hair brained schemes, but mark my words, I will. It's the eternal optimist in me that says--the next golden opportunity is right around the corner. That's always the case. So, I'm always learning, watching, and scheming. Every now and then I place a trade.
Earthlink
Sirius Satelite
JDSU
ZIXI
Delta
Apple
Delphi
American Airlines
These are just a few that I was following and trading, and I could have or did make money on--in all cases, however, I didn't make as much money as I could have made, but I did learn some things.
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