September 19 - September 23

Learned This Week 

This week, I learned what it means to have a margin account, and how it differs from a cash account, and also the pros and cons of having a margin account. First, a margin account will allow you to get loans from the bank, essentially allowing for you to invest a greater amount of money, where as in a cash account, you do not receive loans and all money being invested is coming from your pocket. Now the positive of owning a margin account is that if all goes well, you have the potential of making a lot more money since you are able to invest a great amount of money (which is partially provided by the bank). This week I also learned that in order to short stocks, you need to be in a margin account, so another positive is that this option allows you to have the opportunity of earning money in different ways. This meaning that you do not have to be only dependent of a stock doing will. But, the down side to owning a margin account is that if things go bad (unexpectedly) you have the potential of losing a lot of money, especially if you are not able to pay up the margin call that the bank is asking for. Regardless if you have the money or not, if you do not pay your margin call in time, the bank will take money from you as a way to insure they are covered. 

This week, I continued to short stocks in which I believed would soon crash. For example on Wednesday, September 21, 2016, I shorted Infinera Corp. at its point in which I believed it had reached its peak. The picture below represents Infinera Corp. 5 day trend, the screen shot of this picture was taken at the moment I shorted the stock. 

                

As mentioned earlier in this weeks news, it was said that Twitter was a stock to watch, after it had released a new feature allowing for live streaming of NFL games. Using this information, I decided to invest in Twitter on Tuesday, September 20, 2016. My prediction was that on Thursday (Thursday night football), Twitter would go up a great deal. I decided to invest Tuesday, believing it would be the cheapest time to invest in Twitter. Luckily, my predictions where right and on Thursday, Twitter shot up. The picture below was taken today (Friday, September 23, 2016), representing the increase Twitter had, a total of 20.90%. Investing in Twitter allowed me to make my all time highest earnings in a stock, I gained approximately $4000.

     

September 12 - September 16 2016

Learned This Week 

This week I have learned a few other things to help me further understand what stocks are all about. I have learned first hand how beneficial it can be to put limit orders on stocks so that you are able to maximize profit made on a stock, especially with stocks that fluctuate quite frequently. I have also learned to be patient with stocks, most specifically stocks that have I have already purchased. An example of this is the following, about two weeks ago, I bought a few shares from Fit Bit, and I was losing a couple of thousands from having invested in this stock. At the start of this course, I most likely would have panicked and decided to sell the stock, even with all the money lost. But instead, I decided to be patient with this stock and sell it when I was actually making profit from it. It did take a while, but I think it was ultimately led me to making the most profit I have ever made. I was also able to learn something not to do, after purchasing stocks from Fit Bit. A few days after making the purchase, I was able to determine the reason why I was loosing so much money. I purchased the shares from Fit Bit when it was at its peak (big mistake), so as time progressed, even when Fit Bit was going up, it was not nearly as close to the point at which I bought it at. After this mistake, I now know that it is seriously not a good idea to buy shares when the stock is doing so well. Instead it is a better move to predict when the stock will do well, so that you can buy the shares at a much lower price, resulting in making a greater profit. 

What Have I Done and Why 

Regards to this week, I have taken on different approaches. I have focused on stocks that fluctuate specifically, I either shorted them when I thought they were at their peaks, or I bought them when I believed they were on their way of going up. I also applied this strategy to all the other stocks in which I invested in, regardless if they fluctuate frequently or not. Since some stocks can be very unpredictable, I also set limit orders on a few of them to prevent losing a great deal of money.

A while back, around September 7, Apple had been going down after the Apple event about the iPhone 7. Since Apple was not doing so well, I thought it would be a risky move to invest before the iPhone 7 was released incase if sales did not go well. So what I decided to do was wait the day of the release go by and see how Apple did, on September 13 it appeared as if Apple did very well. So I took the risk  to buy Apple on September 14, assuming that Apple would continue to excel at a constant rate. I was lucky that Apple continued to go up after the release, allowing for me to make a profit. 

Finance Timeline 

From the Start

Before the course started, I can honestly say I knew little to nothing about stocks, but as time has progressed, I have been learning more and more about stocks. The one thing I knew was that stocks have the ability to be constantly be going up or down, so when we first started the game, I would choose to buy stocks based on if they had the green arrow beside them and if the overall graph appeared to be increasing. But later on, I took on a different approach, I started to predict stocks instead. At first I would start to buy stocks if I believed they were going to go up, but later on I also learned what it was to short a stock. So recently I have started to buy and short stocks depending on how they were doing. At first, majority of the stocks i chose did not have as much reasoning as to why I chose them, it was just me predicting how they were going to do. To this day, I chose to sell stocks when I have made a good amount of money from them so I can keep the money made from that stock. 

For the most part, I can say everything I have been doing in this game is what I have learned from this course so far. But to be more specific, some of the things I find most outstanding of what I have learned to this point is the following; first, I was not aware of how fast you can make money, but at the same time, how fast you can lose that money. Another thing I have learned is that the gold industry, is an industry that fluctuates quite frequently, which can be both a good and a bad thing (a good thing if you can accurately predict its' rise and falls a bad thing if you can not do so). I have also learned about shorting stocks, this was something I was not aware of at first, but know that I have learned about this, I think it is pretty cool because it can diversifies the ways in which you invest in stocks. I also learned that stocks is all about predicting the market, trying to as accurately predict what will happen next, accurately predicting the market is something I still have yet to learn.