Tuesday, April 29, 2014

Fad of the Day Stocks and Why You Won't Make Any Money ...

The other day a friend shared a "High Times" article about marijuana stocks.  This is what I told her ...

I'll warn you, I don't think they will pan out.

It's like we think it's our chance to be Steve Wozniak, Steve Jobs or Bill Gates.  Except we forget.  None of those people bought a penny stock.  What they did was build something that had only been a dream in their imagination and a company grew out of it.

At the same time, I think most of us spend at least a short time thinking that way.  We think of the stock market as a place where if we could only get the right tip, we would buy the next Google and ride that rocket to wealth.  While there very likely could be somebody who bought GOOG at the IPO (Initial Public Offering) and who still holds it and a very impressive return, almost no one actually becomes wealthy that way.

In fact, let's take apart the Google myth right now.  Before there was an IPO, private venture capitalists were the shareholders.  The first outside funding for Google came from a $100,000 contribution from Andy Bechtolsheim, co-founder of Sun Microsystems.  Needing more funding, the next rounds came from Venture Capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital.  Five years after that first contribution, Google announced their IPO which was offered at  .....  $85/share.  (Google Info as per Wikipedia.)

Not exactly that penny stock you were dreaming about, is it?  In fact, if you didn't know what you already know about Google, the IPO happened today and you had a chance to buy shares, would you? At $85/share, you probably still wouldn't.

That's because it isn't about Google or the money.  It's about the dream and the dream isn't really about wealth.  It's about recognition.  It's about finally being recognized and rewarded as the special deserving individual you instinctively know you are inside.

Like an over-the-top wedding, it is about one supernova moment in the sun.  Your moment.  Your day.  Even if it is just a millisecond, it is the superlative you think will redeem the rest of your poor life.

I'm sorry to burst your bubble, but life doesn't work that way.

Let's tackle your life's redemption first.  Nothing.  Not a soul mate.  Not buying Google at $85/share or AAPL at $22/share (AAPL's IPO price.)  Not a bigger house, nicer car or a speedboat will make your life seem like shinola if it currently feels like sh&t to you.

Happiness is an inside job.

I'll tell you something I recently learned that helped me.  I always looked at the world ... let's say like a big oatmeal cookie.  I would look at it, full of hunger and anticipation, and spot all the little negative raisins.  So I was constantly noticing and focusing on all the things that made the world less than.  Why does this have to be here?  Why do you have to be like that?

The Law of Attraction teaches us to focus on what we want NOT what we don't want.  Besides that, life is just much more fun if you are noticing the good stuff.  So now, I just assume the world around me is probably having a little bit of a rough day.  I assume someone will launch into a negative rant at any moment and I don't take any notice.  (I try not to.)  Instead, I notice positivity.  Or, I ignore the raisins I'm not so fond of, and when I discover a chocolate chip there instead, I celebrate.

The bigger the celebration.  The better I feel.  The bigger the celebration, the more my good mood seems to rub off on the people around me.

It really is a beautiful thing.

Now, let's look at actually buying stocks.

Once upon a time, someone told me that "day trading" is roughly like walking behind a cart carrying a huge palate of coins and the trader is stooping, picking up and pocketing anything that drops off.  While a not very glamorous, yet colorful metaphor, it is also quite accurate.  Like any other way of making money, trading stocks is only inherently fun for somebody who is naturally attracted by it.  All others will find it dreadfully boring.   That's why wealthy people tend not to invest on their own.  It's why they have financial managers.

Remember being in school?  Remember the first time you played volleyball, basketball, tennis or football?  Some of those sports you wanted to play all day every day.  Other ones you would have paid money for an excuse not to suit up.

Life, and for that matter love, is about about finding the things that make you excited to suit up.

If you can always be excited by your partner, even when they have a bit of snot outside their nose or are being a bit of a a$s, there is an excellent chance you will always love them.

Confucius said, "Choose a job you love, and you'll never have to work a day in your life."

There is a way to make more money than you do out there.  You just have to figure out what it is.  That soul mate?  They're out there too.  The perfect job.  Everything you want is waiting, but you have some leg work to do.

Find out what you love.  C'mon.  Think about it.  There is NO bad there.  You try things and just decide whether or not you like them.  Your life's job, becoming YOU, IS a dream job!

Meanwhile, if you are like me and believe that trading stocks will be one of the tools in your "I love doing this" arsenal.  This is how I began.

1.  Accumulate $6000.00 of disposable wealth.  This simply means $6000.00, you don't WANT to lose, but would not feel like the world was ending if you did lose.  Don't give me any of that "if I could do that, I wouldn't be looking for help" nonsense.  You save the $6000.00, paycheck by paycheck, a little at a time.  If it is something you really want to do, you will set the money aside with the same enthusiasm you have when spending it on shoes, games or DVDs.

2.  Deposit the money in an online, low cost, stock trading account.  I use Scottrade.

3.  This is backtracking a bit, but while you are accumulating the wealth, begin researching stocks.  Aka:  read my blog, watch Mad Money with Jim Cramer or a similar show, watch CNBC, Fox Business or Bloomberg.  Seek out things around you that can teach you about stocks.  (Or whatever else you are gearing up to try and see if it is one of the things you love.)  DON'T get emotionally hung up by fretting that you can't buy this or that right now.  Don't watch it with an eye to every opportunity that you are missing.  Opportunities are like ocean waves.  There are always more building up on the horizon.

4.  I'll explain more in depth in a future blog entry, but at this point, just follow these rules:

* Do not buy any stock for less than $6/share.

* Do not buy any stock that is traded as an OTC (Over the Counter) or a Pink Sheet stock.  Only buy stocks traded (assuming you are an American) on the NASDAQ or NYSE.  If you don't know what those are yet, you haven't been reading enough.  If you are from another country, here is Wikipedia's list of stock exchanges:  http://en.wikipedia.org/wiki/List_of_stock_exchanges

*Limit yourself to 5 or 6 different names.  Each name should come from a different type of business.  For example:  A tech name, a product you would buy at your grocery store, a business you do business with (I like to buy names that make me pay money to them that give dividends.  It's like making them pay me to pay them.)  Some sort of financial.  The last name, number 5 or 6, should be that wild hair Google/fad shot in the dark.  A completely speculative name that you believe is a great idea.

*Don't buy all those names in one sitting.  If you truly end up loving the stock market, you will enjoy building your portfolio and choosing those names just like other people enjoy picking bridesmaids or Fantasy Football teams.

*Businesses report their earnings on a quarterly basis.  Be aware when your companies are reporting and keep your eye open for anything that may indicate things have changed in your company's outlook.

*If any of your stocks drop 8% or more.  Sell them.  We'll talk about how to refine your stock purchases and highs/lows later, but keep in mind, the only reason anyone lost all their money with a stock like Enron, is because they never sold it.  If they had sold after losing 8%, they would have still had money to aim at some other name.  They would have been holding that other name while watching other people moan and cry.  When I started trading in the stock market, I began to look at money like a big pool of water.  I can choose a name that makes my pool smaller, but as long as I don't overstay my welcome, I can always move to another name that will make my pool larger again.

*Just like gambling in Vegas, if you haven't sold the stock, you haven't banked the gains.  If you ride fictitious ticker symbol up from $6/share to $600/share, you will never have actually gained any of that money if you ride it all the way back to $5/share.

*Unlike gambling in Vegas, never "double down" (or buy more shares of an already losing stock) expecting things to get better or change.  It is just begging to lose more money than you already have.

*Never resist selling a stock because you have made a profit and you don't want to pay the tax.  That is essentially telling the universe you don't really want any money.

*Some places, including CNBC when they have their portfolio competition, let you build a Fantasy Stock Portfolio and track your progress.  That can be an excellent way to test whether or not you enjoy the stock market without actually putting any money at risk.

Tuesday, April 22, 2014

aha Moment

How can I say this?  My mother used to discipline the family dog with a broom.  She used to throw cats into our swimming pool, with me playing "catcher" in case they got into trouble, for entertainment.  At a very young age I felt the awkward discomfort of being a partner to what I felt was a cruel act with which I was not in agreement.

The worst punishment I ever dealt an animal when I was a child was singing to the dog.  My hand shaped like a microphone doing my best Judy Garland.  As a young married woman, people told me the best way to get our Siberian Husky puppy to stop howling in the backyard was to slap her in the jaw.  Hating the idea, I tried it only to be reduced to tears.  I have had moments where my pets felt like the only friends I had.  I would never ever abuse them. No rubbing their nose in a mess that they made.  No screaming at them or striking them for breaking or soiling some possession of mine.  It is simply an inanimate object and my pet is my friend and a creature to which I have made promises.

Today, my cat Peabody, the absolute love of my life, climbed onto the desk while I was working on the computer.  Photographs I found in my deceased parents estate went sailing to the floor as his little kitty paws tried to find a comfy spot.  I was smiling as I gently lifted him off the desk and set him into my lap, but then I was treated to the most wonderful of aha moments.

Trying to finish up my work so I could give him my undivided attention, I suddenly could hear his purr over anything else in the room.  I could feel his purr rumbling my lap.  Peabody is not really a lap cat and usually can be expected to settle on one for only a minute or two.  Today, he seemed quite content to stay there indefinitely.

I ruffled the fur on his head until I could see his inner eyelids.  Contentment.  For both of us.

Noticing the scattering of my parents photos, I thought of my mother.  "She could never have experienced this," I thought.

She would have yelled at her cat.  No doubt throwing something or waving her hands to dislodge him.  He would have run in fear from her and trusted her less the next time.  My mother's cats had to be locked in the bedroom with her when she wanted them to stay.  Peabody leads me through the house like he is guiding the presidential motorcade and sleeps with me every night, door open.

I am not a stranger to anger issues.  If I did spring from the womb as enlightened as I am now, I spent many years lost from myself.  I did have one cat who, while I never ever struck him, did hear far too much of my voice raised.  I hated myself a little more each time I noticed how much more skittish he was becoming.  I don't believe in anger management.  I believe in not being angry.

No matter how normally placid you are or how volatile, in that moment when you feel the beast rising up your chest and calling voice and limbs to act, what if you stopped?  Just waited.  Pretend you are in a separate place where time has frozen.  In that moment, there is raw potential.

Think about it.  Why are you angry?  It has everything to do with you.  You feel like you have been slighted or ignored; treated to an injustice; been pushed past a threshold; or don't have a voice.  Someone has inadvertently rubbed salt in your interior wounds.  You have been triggered.

You can build an army of creatures who tiptoe around you, careful of your broken parts, but it will never make you feel any better.

Feel the solid heaviness in your chest.  Feel the anger sting with near physicality.  It hurts.

You really do have to do something different to make your life change.  Do something different to feel something new.

What if, instead of the world letting you down, you are the one letting you down?

In that moment, while your anger is building, think of yourself as a god.  Think of yourself as Poseidon or Neptune.  You can be the storm that leaves wreckage in its wake, leaving everyone, including yourself, a little worse off than you were before.  Or you can observe the anger just as if it was a hurricane or tsunami.  Powerful, finite, meaningless.

It's just an emotion.  It's just a hiccup of a ghost of the way someone once made you feel and you didn't like it.  Depending on the circumstances, you didn't like it and you didn't feel right again for hours or maybe weeks afterwards.  Worst of all, you actually served someone you love and care about a big steaming plate of something you would never want for yourself.   Like my mother's cat, you trusted someone less and you passed along the baton by nurturing people who trust you less.

That trust is what you want.  In that trust is love, respect, admiration, all the wonderful gifts you feel you are being denied.  You build that trust.  Each time you pass up the opportunity to "tear someone a new one," you lay another brick on the foundation.

Anyone who has to ask whether it is better to be feared or loved, has never felt love.  If you have lived a life where creatures are free to love and trust you, guess what happens?

They love and trust you. I've found my pets even seem to instinctively know when I need a few more furry passes against my leg or a rumbling purr in my ear.

It's a beautiful thing.

You might be thinking.  "But Angela, the title of this blog is 'No One Taught You About Money' and the only thing my anger has to do with money is how I feel when there's not enough of it."

Money responds to a quiet faith in its abundance.  Money wants you to spend it.  Not frivolously, but with kindness, intelligence, generosity and the faith you will always have more than enough.  Those are all quiet and gentle mindsets.  Consider them butterflies that will never land on a volatile surface.  Have you ever trained a dog to come "off leash?"  The miracle happens because the dog believes that you are the best and happiest experience to be had against the enticement of all other possibilities.  Things happen when you can set aside dwelling on yourself and your own pain and focus instead on being kind, gentle and nurturing of others.

Your life changes and along with the change, come opportunities and possibilities for all the things you ever wanted.

Tuesday, April 15, 2014

The Rule of 72

I'm going to have a short blog entry this week.  I came down with a sinus infection or the flu or something, so I'm going to post something I posted on my Facebook page "Angiece"   because, frankly, it bears repeating.

The Rule of 72

If you divide 72 by the interest rate you are earning on your money, you can find out how long it would take to double your money.

To make it easy to understand, use 10% (although pretty much nobody is earning that.)

72/10% = 7.2
so you would double your money every 7.2 years ....

Back before 2008, ING and other online banks were offering 4% ...... so we can guesstimate you would have doubled your money about every 16 years .... but .... the high interest rates only lasted a couple of years.

Meanwhile, if you think about your debt, your mortgage or your credit cards, those interest rates represent how quickly the financial institution making the loan stands to DOUBLE THEIR MONEY.

For a lot of Americans, even if they do have savings, it is in a bank earning less than 1% nowadays.

While the wealthy have the knowledge and resources where, if the savings accounts only pay what they are paying now, they move their assets someplace else.

Sometimes the stock market actually has dips simply because the wealthy have seen an indicator that told them it was time to move their money.

Tuesday, April 8, 2014

The Decoy Effect, Mondays and Marketing

I'm not feeling very inspired today.  I've promised a blog entry every Tuesday and today's post is work.

I meandered around, trying to write something intelligent.  Trying to find something I knew to share with other people who might not know it.  I had about five or six, stumpy, inadequate little sentences that added up to a bunch of nothing when I started scrolling through Facebook.

Inspiration came from a video shared by a friend who is studying at university.  The Decoy Effect, an irreverent youtube offering that compares marketing to anal rape.

I'd never really heard of the decoy effect before, but I recognized it immediately.  Essentially, you have three products offered for sale.  The cheap, "Economy" model which works but offers the lowest variety or quality acceptable.  It is the one day, one park Disney pass or the smallest memory iPhone.  Then you have the high quality item.  It is the one you really want.  It is the most memory, the biggest screen, the Disney all park pass where you can switch parks mid-day as many times as you would like. In between those two, you have the Decoy.

The Decoy is a middle model.  It has more than the cheap model, but not as much as the top model and yet the cost is closer to the top by comparison.  The Decoy's job is to convince you what a bargain the top model really is.  Except one of the examples used was buckets of popcorn at the theater.  That got my mind wandering.

First, I think (the) youtube(r) got it wrong.  The middle size of popcorn is NOT a decoy for the large size.  With theater food, generally the individual item prices are the decoy and the economy pack is what they're trying to sell.  Rather than just popcorn, you get a soda in a "collector" plastic cup, along with a hotdog or red vines or french fries or chips.  You get a whole lot of food, but hey, you're paying less than you would have if you had only purchased that same size of popcorn by itself.

For an instant I realized, we could construct an argument and blame the Decoy Effect for single handedly force feeding Americans into obesity.  Of course, that would be considering an entire population to be nothing more than mindless victims.

Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling that product or service.  Source: Wikipedia

Now, right here, I need to interrupt myself and admit I have been instructed before in the humor of jokes about Mondays, Fridays, weekends, vacations, hair loss, weight gain and aging.  BTW, nothing will make you feel like you are quite as humorless as someone explaining why something is funny to you.  And yet .....

Let me explain.

We create our own worlds.

Back in photography classes, we would go on "shooting" field trips.  The first time or two, I would worry about originality.  How could we each get unique, individualized work, if our cameras are all aimed at the same square mile of material?  Yet we always did.  Oh sure, go to Notre Dame, and probably every camera will have the prerequisite "gargoyle" shot.  There is something about seeing an image you've seen in photos a million times before.  It is hard to avoid shooting your own clone version.  But other than a handful of "must shoot" shots, the variety was astounding.  I always saw some images of things I hadn't even noticed as having been at the location.

We create our own worlds by what we see, what we notice, and how we perceive it.

Let's go to back to the jokes about Mondays.  (Here's a simple one:  I've heard of history repeating itself, but this Monday thing has got to stop.)

We all experience Mondays.  A Monday is simply 24 hours that falls before the 24 hours we have labeled Tuesday and after the 24 hours we have labeled Sunday.  One seventh of your life will be spent on Mondays.  Monday is frequently the day you have to go back to work, school, or jury duty.  The jokes depend on the notion that nobody wants to do any of those things.  But ... I grew up an only child.  Not only an only child, but at an early age, one who lived in the country nowhere near any other kids.

Monday was my favorite day of the week.  It was the day I got to visit with my friends rather than hang out with my mother.

Lemme ask you.  Picture someone who owns their own business and who seems to love their work.  Maybe picture Steve Jobs?

How many awful Monday morning jokes do you suppose he told?

Now for that other "m" word.  Marketing.

Nobody likes marketers, even if their first name isn't "tele."  I've found people in business dislike them because they are said to promise impossibilities simply to make the sale and, frequently, they have actually underbid those impossibilities should engineering and production actually achieve them.    Meanwhile, the public eyes marketing like a half dead possum spies a vulture.

Now that's a joke I've always enjoyed.  (Two vultures watching a long empty highway vacant of road kill.  "To hell with patience, I'm going to kill something.")

I suppose there is a lot of similarity between marketers and impatient vultures, both are hungry and have families to feed and are sick of waiting for things to happen.  Just like everybody else, they want to control their world.

Lemme ask you, though, there is a big difference between "I was dying anyway" and a vulture killing you, but is there really that much difference between "I'm at the movies and I want to buy some popcorn" and "I'm at the movies and they sold me the "Blockbuster Movie du jour Collector's Pack?"  They sold you exactly what they advertised, even if it does mean more food than you could eat while watching five movies.  You wanted more "bang for your buck" and you got it.

While I was watching The Decoy Effect, I couldn't help but think of all the times I had noticed the attempt and laughed while I purchased whichever model I actually wanted and had intended to purchase in the first place.  You see, if you subtract all the emotion and drama, every transaction becomes very simple.

What is it that I want to purchase?

How much popcorn do I want?

How much popcorn do I need?

How much popcorn can I eat or, in other words, how hungry am I?

It may not be as funny as a "the salesman should have told me to bend over and spread 'em" jokes, but perhaps it is a little bit more useful.

Tuesday, April 1, 2014

Self Awareness and Miracles

Has a miracle ever happened in your life?  How did you react?

I am the quintessential Pollyanna.  On Facebook, I am one of those over sharers.  My timeline is filled with cute kittens and motivational sayings.  I know there are people who have unfriended me or blocked me because the sugar sickens them.  I know because I have been one of those people.  My entire life I have been a "Love is a warm puppy" kind of person, while intentionally mocking the saying "Love is a warm puppy."

One of those motivational sayings I posted to my timeline was:   "You can be the most beautiful delicious peach, but you will still find someone who doesn't like peaches."

So we try to become apples.

My dad told me a story about his last plush toy.  Born in 1933, boys were raised a bit differently.  Playing some form of cops and robbers or war was not only accepted, it was expected.  Frankly I was surprised to hear he had some sort of Teddy Bear in the first place, but he did.  Somewhere around the age 4 or 5, playing with a neighborhood girl, she began to suggest games that all involved Teddy's gutting.  My dad told me he thought about it.  He told me he realized his age and that Teddy was probably going to be the last toy of that sort he was likely to receive.  He told me he still loved it and hadn't wanted to lose it.  He wished he had left it in the house.  He wanted to take it back inside.  But .....

We learn at a very early age to sell ourselves out.

My dad's story breaks my heart a little.  I picture the little boy and his war torn bear and I want to pull him into my lap.  Hug him with my entire body.  The realization he has only himself to blame actually can bring a tear to my eye.  The desire for him to stand up for himself, for him to tell himself it is ok to love whatever and whoever he loves, aches inside me.

I used to think miracles involved escaping death.  Moments that leave you standing with your jaw dropped open and cause you to shout out, "It's a miracle!"  In my life, the miracles are quiet, good things that have happened to me.

If you listen to someone talk about the Law of Attraction, you may hear them mention the notion of a person having one foot on the gas and one foot on the brake.  That is exactly where I have been.

It's because of the people.  With the exception of my cat Peabody showing up on my doorstep, every good thing I wrote down on a Law of Attraction Vision Board came because other people delivered it to me.  One of those people even told me this, "you're nothing without people."  Still I struggle with an Eeyore-esque "don't worry about me" feeling of not wanting to be a bother.

It's selling myself out.  It's believing I'm unworthy on a pathological level.  Worst of all, it is scarcity thinking of the sneakiest order.  It is the lingering belief that just because something good happened for me, it was at someone else's expense.

It's the word "but" that precedes the words "you shouldn't have" after the words "thank you."

Thank you.

Thank you for all of the wonderful things that have come to me.

Thank you so very much.