Final AssignmentMoney, Markets and Democracy

AHSS2140DEDr. A. Younger

Chris Henry 0767728March 14, 2015

Trade JournalJanuary 10 2015

I have just started looking into the assignment and have found out I am to set up a virtual investing account on Investopedia. The assignment seems very beneficial for someone like me who doesn’t know too much about investing and the stock market so it will be a great way to learn. The initial assignment document stated to start with $100,000 dollars but after following the instructions I was given $250,000. At first I thought I must have made a mistake but after trying with three different emails and the same thing happening each time it started to get a little frustrating. So I gave up trying to get the amount to $100,000 and sent the professor Dr. Arthur Younger, an email regarding the issue and he said that’s fine go ahead with the $250,000.

January 15 2015

I am going to start some research as to what I should invest in. One thing that I learned form taking a personal finance course was that stock markets are efficient. That means they always reflect all relevant information from the past and present. This makes it almost impossible to beat the stock market. Another skill I learned from my past course was to diversify your investments as much as you can. I did a Google search of what stocks to invest in, and also what stocks are hot right now. One of my searches led me to a website called thestreet.com and barchart.com.

January 19 2015

After watching a few of the stocks on Investopedia’s top rated stock charts for a week I thought I’d try to purchase some. One that was highly rated and seem to have a consistent increase was Courier Corp. It was marked as strong buy and shows very promising results. As I was completing my first trading transaction the website showed me the top 5 biggest gains in the stock market. Two companies which had some pretty big gains and consistent upward climbing bar charts were in the drug industry. After doing a little research I found that the drug industry is ever growing and I felt like these two stocks should be a fairly safe bet. These are my first trades so I didn’t want to use to much of my virtual money so I spent about $35,000 on the three investments I made and plan on monitoring these to see how they prosper and depending on results I may decide to invest more into them later.

Jan 21 2015

My account isn’t doing so well so I’ve decided to buy some new stocks – Netflix has gone up 16.1 percent and I figure it will continue to rise therefore I thought it would be a reliable purchase. I bought 111 stocks valued at 407.60 with a grand total of $45,258.59.

Currently my other investments: Juno has gone down - $1,271.70(-8.32 %)

From my purchase price of 300 @ $50.95

Kite - $1,894.00(-11.62 %) from purchase price of - 200 @ $81.47

I will hold on to these for a while longer hoping that they will increase over my purchase price at minimum. I have learned that buying the top gains may not be a great strategy as it would make sense they are top earners for a relatively short period of time and then the price drops. This could be due to people selling stocks when it hits a high point therefore reducing the amount of stock price.

Jan 22

I checked in on my portfolio today and what I see is a little more promising than what I’ve seen the last few days. The two pharmaceutical companies I invested have gone down another percent and three percent but my big purchase of 111 stocks of Netflix at $407.60 has increased by 2.41 percent. I performed some research on yahoo.finance to see if there were some other potential stocks to purchase and I found that the Dow Jones Industrial average has been doing very well so I decided to try out the watch list feature on Investopedia and track it’s progress for a few days before I decide to purchase. I also found that Nike was doing well so I added it to my watch list as well. I also heard from word of mouth that banks are fairly low at this moment in time and are expected to go up in the next while so I figure that buying a decent amount of stock and hanging on to it for a while could be profitable. I decided to go with BMO and Credicorp Ltd. The reason I went with BMO was because it had been at about $77 three months ago and now it’s at $62 so I am hoping that it will begin to climb back up to $77 or more in the next month or so. Credicorp on the other hand has had a more consistent stock price so I feel that it should raise a little bit more.

Jan 27

Looking at my stocks today I was very happy to see that one of my stocks, Courier Corp, has gone up a whooping $1,468.00(18.77 %) just from today!

Jan 29

I saw that Facebook was slowly increasing and had lumps like shoulders previously so I bought in hopes that it would make a jump up to another shoulder soon. I am unsure if I should sell my Netflix stock as I have made $3798 on them so far but it seems to be consistent so I think Ill hang on to them for longer. My two pharmaceutical companies are still in the negatives since I bought them so I’m going to hang on to them until they raise in price.

Jan 31

It is now the first time my portfolio has been negative; I am thinking I may have to trade my pharmaceutical stocks and cut my losses. Netflix has also gone down a little since last time so I think it may be a good time to trade it too and cash in while

I’m up about $4500. The word of mouth information I received about banks going up seems to be losing me some money instead of gaining.

Feb 3

Today I decided to sell 100 of 111 Netflix stocks, as they were my extreme gainers, they have been fluctuating up and down recently; today they went up $1,759.91(3.59 %) and total sense I’ve purchased them $5,474.52(12.10 %) therefore I thought it was a good time to cash in.

Feb 9

My portfolio is still lingering in the negatives because of the two pharmaceutical companies I purchased stocks for. I am going to have to cut my losses soon and sell them even though I’ll come out at a loss. I have been monitoring them closely to see if they rise in price a fair amount so that I can drop them when they’re at a high. To offset my losses and hoping to gain some money I decided to purchase 300 stocks of Costco Inc at $147.40. The reason I purchased these is because they seem to be rising slowly and from the look of the graph there is a left shoulder so hopefully a right shoulder decides to appear and I will gain some of my money back. The two stocks I have on my watch list (Nike and Microsoft) have both been decreasing since I’ve been watching them so I’m glad I did not purchase them.

Feb 23

I have decided that it is time to cut my losses on one of the pharmaceutical company’s I invested in called, Juno Therapeutics. I originally purchased 300 stock at $50.95 and they are now currently trading at $44.61. In the grand scheme of things it went down by 11.87% and I lost $1815.00. The main thing I learned from this purchase was that even though it may be doing really well one day, (and even be one of the top 5 gains of the day) it may not be having those same high gains the next day. It may have peaked before my purchase and could only go down since I bought so I will try to avoid using that strategy in the future. By the time I was ready to sell Juno stocks the stock price increased and therefore I only lost $1,693.92(-11.08 %) which is nice when you’re cutting your losses.

Feb 25

Would be cool to look into : A call option is essentially a levered bet that the underlying security will rise. A put option is essentially a levered bet that the underlying security will fall.

If I knew more about the industry and what stocks are likely to rise and fall I would attempt to use options as they seem like a good way to cash in large on an investment.

Feb 27

Today I looked at the different sectors of stock trading and found that electronics is providing the greatest returns to date. I believe that this makes sense as in my opinion I would think if you could manage to pick the right technology companies you have the ability to bring in a large return. Technologies, new technologies and advancements in technologies are huge in today’s world as these are what is driving a lot of the workforce in developed areas. Therefore I think investing in new age technology companies is a great way to earn some large profits. On the other hand if a company has a new technology but it’s a bust you could easily loose a lot of your investment. I was feeling lucky today so I decided to invest in two technology companies all of which have been raising stock price slowly in hopes that they might increase drastically soon. The first investment I made was into a company called Micron Technology Inc. for $30,719.30 for 1000 stocks at the price of $30.72. The second purchase I made was into a company called Xcerra Corp. for $71,004.01 for 7777 stocks at the price of $9.13. This stock in particular shows a lot of movement in the performance graph therefore I am expecting some significant movement in the near future hopefully to increase my portfolio. The last company I decided to swing my luck with is a Oil company called Semgroup Corp. They have had a recent uplift in stock price by about six dollars in one day, therefore my plan is to hold them for a short period of time in hopes that they continue to rise in stock price so I can make a quick gain with lower risk. I purchased 1000 stocks at the price of $77.68 for a total of $77,675.00. With those three trades I think I have made enough movements for one day and now it’s time to see if my investments will pay off.

March 7

As this will be one of my last days trading I decided to purchase stocks from a company I support and am interested in the products they have to offer. Apple has been the most researched and the most active stock by volume for about a month. Recently over the past 2 months it has gone up from $110 per stock to the current price of $126.60 and within the last week it has reached a market high of $133.60. I decided to purchase 100 stocks at the price of $126.60 for a grand total of $12,660. I am going to closely monitor this one in hopes that it will make a nice jump into the $130 zone; if it reaches this I will trade them, if not I will hold on to them until the end of the project. I am a little annoyed at myself because a couple of the stocks I purchased were gaining money (and they were risky investments I was unsure about) and I passed on the opportunity to sell them. I was extremely excited because when I looked at my portfolio that day all I saw was green! Coincidentally green is a great sign and it means that you are gaining on your investments. Almost every one of my investments was earning money and even the ones that were loosing were loosing at a much lower rate. Now that I look back on this it would have been a great time to sell a lot of my stock and I would have made over $3000 that day. What appears to have happened is that the whole stock market must have been booming that day and the prices of all stocks increased. For future I now know if I see all of my stocks increase in a single day it is probably a good time to sell some

of my investments. When I saw this I believe my thought process was that all my stocks are going to continue to increase but that was not the case and I should have jumped on the opportunity when I had the chance. Now my goal is to monitor the stocks I have that are loosing and sell them when the loss is not so tremendous.

March 10

Looking at my portfolio today and I am not happy with what I see; as opposed to seeing all green I see all red which is never a very good sign or a settling thought. There is not much time left for the project so my plan is to see green hopefully on all of my investments or at least a good portion of them and cash out. As I’ve learned previously and again today, the stock market has good days and bad days, clearly this is a bad day so I will not be making any trades. It might be wise to buy some stock right now as it could be under valued and the stock market will rise again within the next few days but that is not a risk I am willing to take at this moment. If in fact the stock market is not just having a bad day and everything keeps decreasing in value then I am going to have to sell my remaining stock and newly acquired stock for a lot less than I hoped. Therefore I am just going to hang onto my stock and be optimistic for a better day tomorrow.

March 11 + 12

I have been keeping a very close eye on my portfolio and the amount of movement it makes in one day is actually insane! Last week (when I should have sold out) my portfolio was in the gain of $3,727.00; over the last two days I have seen it anywhere between -$5808.00 and currently - $2,913.67. In my opinion anything under -$3000 isn’t to bad and I would be happy to cut my losses as I would still come out on top overall. But because this isn’t actually my money I am going to extend my holdings as long as possible hoping for some drastic changes that really bring my portfolio balance up. This is a very risky strategy but it could turn out in my favour so I’m going for it.

As time is running out for this project I have decided that a couple of my stocks best be sold now as I believe they have hit their high point before tomorrow’s close. I sold all my 400 stocks from Courier Corp at $24.80 per stock for a total of $9,920.00 and a total gain of about $2,276. The rest of my stocks I am going to hang on to until tomorrow and try to get rid of them when they peak. I am disappointed with my Sem Group stock that I did not sell when it was in the gain of $3,210 when now it is only at $190 (and it was losing for majority of the day).

March 13

Today is the last day of trading and it is not looking good for me. Yesterday at close after I sold my Courier Corp Stock my portfolio went into a loss at $4,800; when I woke up today it was down to a loss of $7,200. It seems like we are having another bad day in the stock market so all I can count on is that it improves a lot by day’s end or I am not going get a great return.

It was now time to sell my remaining stock, I wish I sold it yesterday but there is nothing I can do about that now. My loss has minimized from $7,200 to $5,500 so at least I can be happy about that.

SummaryAfter a month of trading I am proud to say that I came out on top and made a

grand total of $185.59. I am saying I am proud of this because at the beginning of the last day of trading I was going to loose about $2000. I am still upset that I didn’t cash out on the day that the stocks were doing so well as I would have ended up making about $5000 but that’s the way the stock market works.

This brings me to the first lesson that I learned; timing is everything. You do not want to hold on to a stock for too long because of the fact that once it reaches a market high it is likely to decline after that point. Multiple times I extended my holdings, in part because of the hope that they would continue to rise, but this was not the wise thing to do and I should have realized that they were in the gain and take my opportunity to make a profit.

Another huge lesson that I learned was that the stock market has good days and bad days. There are days when the entire market prices increase and there are days when the entire market prices decrease (and drastically). I learned this the hard way by not capitalizing on my opportunity to cash in on one of the good days. If I were to come across a situation like this again I would be sure to sell my stock while it’s in the gain.

From my experience the best way to choose stocks is there isn’t really a best way unless you can spend all day researching and trying to find insider information. Best said, choosing stocks is an extremely difficult task. I found that going with my instincts ended up working best for me, On the other hand I was less successful when I went with the hope that a successful stock would continue to rise even when my instincts told me otherwise. I should have listened to my own advice on holding my Sem Group stocks for a short period of time. Instead I sat on it too long and I ended up incurring a loss of $3000 when it could have been a gain of over $3000.

The stocks I purchased through word of mouth information lost me money, so maybe I was just talking to the wrong people. When I purchased stocks that were on the highest earnings chart it went both ways by helping and hindering my portfolio. I found using the highest earnings chart to pick stocks to bet one of the best ways to have a more educated choice especially with the added research of looking into the company further to find out more details on their history.

A strategy I tried to use that didn’t work out too well was analyzing the graphs for shoulders, but it could be in part that I didn’t have long enough to see the second shoulder appear. One thing I realized was that there are a lot of stable stocks that will give you a small increase in profit and are likely not to incur a large loss, and vice versa there are risky stocks that you can incur large gains. Because it was

virtual money I tended to invest in riskier stocks; if it were my money I probably would not have been getting nearly as risky as I was.

A suggestion that I would have for a friend looking to invest would be to start with this simulator so they could get a feel for how the stock market works and how to trade. I found that this project tied in very well with the course as a lot of the lessons had tips about what to look for or how to analyze stocks in a meaningful way. With all the lessons I learned from this project I hope and believe that when I begin to trade on the market that I can be classified as one of the rational investors and not irrational.

AppendixGains and Losses Summary Chart

Stock Number of Stocks

Purchased

Buy Price Sell Price Commission Gain Or Loss

XCRA 7777 $9.12 $9.40   $2,177.56

AAPL 100 $127.96 $123.09   -$487.00

SEMG 1000 $77.50 $77.26   -$240.00

MU 1000 $30.69 $28.72   -$1,970.00

COST 300 $147.16 $149.17   $603.00

FB (FB 0 - Mon 2001) 200 $76.40 $78.04   $328.00

BAP 150 $148.35 $138.65 $14.99 -$1,469.99

BMO 250 $62.89 $59.30 $14.99 -$912.49

NFLX 11 $407.60 $438.65   $341.55

NFLX 100 $407.60 $455.29 $14.99 $4,754.01

JUNO 300 $50.95 $45.43 $14.99 -$1,670.99

KITE 200 $81.47 $63.18 $14.99 -$3,672.99

CRRC 400 $19.11 $24.80 $14.99 $2,261.01

Total $185.59

Trade History

DATE TRADE TYPE

SYMBOL

QUANTIT

YPRICE COMMI

SSION

TOTAL CASH VALUE

ACCOUNT VALUE

03/13/15 16:03

Stock: Sell at Market XCRA 7777 $9.40   $73,064.92 $250,030.59

03/13/15 16:03

Stock: Sell at Market SEMG 1000 $77.26   $77,260.00 $250,030.59

03/13/15 16:00

Stock: Sell at Market KITE 200 $63.18   $12,636.00 $250,030.59

03/13/15 16:00

Stock: Sell at Market BAP 150 $138.65   $20,797.50 $250,030.59

03/13/15 16:00

Stock: Sell at Market BMO 250 $59.30   $14,825.00 $250,030.59

03/13/15 16:00

Stock: Sell at Market NFLX 11 $438.65   $4,825.15 $250,030.59

03/13/15 15:57

Stock: Sell at Market

FB (FB 0 - Mon 2001) 200 $78.04   $15,608.00 $249,870.82

03/13/15 15:57

Stock: Sell at Market COST 300 $149.17   $44,751.00 $249,870.82

03/13/15 15:54

Stock: Sell at Market AAPL 100 $123.09   $12,309.00 $249,882.48

03/12/15 15:30

Stock: Sell at Market CRRC 400 $24.80   $9,920.00 $250,851.04

03/09/15 9:58

Stock: Buy at Market Open AAPL 100 $127.96   $12,796.00 $253,617.10

02/27/15 14:39

Stock: Buy at Market

SEMG 1000 $77.50   $77,500.00 $252,670.67

02/27/15 14:30

Stock: Buy at Market XCRA 7777 $9.12   $70,926.24 $252,865.72

02/27/15 14:30

Stock: Buy at Market MU 1000 $30.69   $30,691.20 $252,865.72

02/23/15 16:12

Stock: Sell at Market JUNO 300 $45.43   $13,627.50 $252,817.67

02/09/15 15:12

Stock: Buy at Market COST 300 $147.16   $44,148.00 $249,317.29

02/04/15 9:58

Stock: Sell at Market Open NFLX 100 $455.29   $45,529.00 $249,252.74

01/29/15 12:40

Stock: Buy at Market

FB (FB 0 - Mon 2001) 200 $76.40   $15,280.00 $250,055.16

01/22/15 13:15

Stock: Buy at Market BAP 150 $148.35 $14.99 $22,267.49 $246,941.50

01/22/15 13:15

Stock: Buy at Market BMO 250 $62.89 $14.99 $15,737.49 $246,956.49

01/21/15 11:18

Stock: Buy at Market NFLX 111 $407.60 $14.99 $45,258.59 $246,919.33

01/20/15 10:04

Stock: Buy at Market Open JUNO 300 $50.95 $14.99 $15,299.99 $249,034.02

01/20/15 10:04

Stock: Buy at Market Open KITE 200 $81.47 $14.99 $16,308.99 $249,945.01

01/20/15 10:04

Stock: Buy at Market Open CRRC 400 $19.11 $14.99 $7,658.99 $250,000.00

This should have been included in the Trade History, but I was a minute late on selling before the market closed.

Screen Shots of Portfolio

@ March 5, 2015 – When I should have sold a lot of my stocks, if not all!

@ March 10 2015 – Drastically worse and nothing but red!

@ March 12 2015 – All green and should have sold out again, but I took my chances.

@ March 13 2015 1:00 PM – Drastically worse again, should have been rational yesterday.

@ March 13 2015 @ 3:52 PM – Some improvement but not what it could have been.