Friday, November 09, 2007

Please Click on Google AdWords

Now I remember why investing in stocks was always so unnerving to me....days like yesterday, walking past the TV into the kitchen at work to learn that (at that point), the DOW was down 200 points again, and Google was down $50 a share.

When I had no money in stocks individually, and my security investments were limited to my 401k, I wouldn't pay it any attention. I would diligently record my 401k contributions in Microsoft Money, and make adjustments to my allocations once or twice each year.

During my previous experience with online trading, I remember doing well with XM Satellite Radio early on, and losing 95% of the money I invested in Starnet (an Internet gaming and porn company, I believe). This was 1998-2000 - Internet gambling was nothing compared to where it is today.

Finally this year, I decided to re-enter the market as an individual investor. I transferred some money from a high-yield saving account into an online brokerage account, and bought a few stocks whose products I believed in - Apple, Google, and Starbucks. I went with one more, PetroChina, on a whim - I figured oil and China were a good mix.

Fast forward five months. My portfolio is up almost 60%. Starbucks is the only loser. If I had doubled up on Apple with the Starbucks money, the whole portfolio would be up over 80%. In five months. I'm digging this once again!

PetroChina becomes the largest company in the world, market capitalization-wise. My shares were up about 115% at one point.

Then things take a slight turn. World markets freak out, sub-prime lending crisis, US dollar weakens, consumer confidence drops, oil is $100 a barrel, US gas prices are nuts....

DOW ping pongs a couple hundred points each day. Down 200, closes up 15. Huh? Down 150 at 3pm, closes down 300 an hour later. Next-day rally, it's up 250 again.

I put a Stop limit on PetroChina at $200 per share for insurance, and the trade is executed (I kind of wish it hadn't). In six months, this one stock went from $128 to $266, back down to $200 (where it is currently). I jumped off, took my earnings, and went to BJ's Wholesale.

This is worse than the swings on a poker table. My life was more harmonious when I didn't watch the market multiple times each day.

So, I encourage you to do your part.

Please note...iPods make lovely holiday presents. The Christmas blend and associated holiday products are in Starbucks stores now...go buy lots of them. And click on lots of Google AdWords when searching online....screw the natural search results. Make them pay for your attention!

More clicks, more coffee, more clicks, more coffee.

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