Welcome to my new blog. My name is Jim, but I go by the name “Jimbo”. This happened when my son, who was six at the time was striving to gain my attention. Dad wasn’t good enough, so he then used Jim, which still wasn’t good enough, so he shouted out “JIMBO”. It’s kinda stuck from then.
I love trading stocks, but I think the most important aspect of trading is that I have control of my own money.
I would like to share with you some of the things that I’ve learned over the past ten years trading stocks. It might save you some time and money.
Once I get my introduction out of the way, I’ll start on a regular basis, monitoring the pulse of the market, show you what I’ve bought or owned, the stocks on my watch list and hopefully get your feedback with some of the stocks that your watching, own or going to buy.
Let me just give you a little background of myself. My wife and I have owned our own service business for thirty-three years. We have been married for thirty-five years. We have two kids, a daughter who is thirty with special needs who lives on her own and a son who is twenty-five and still lives at home (amen), I love this kid. I started trading in the height of the Tech Boom. I was using Ameritrade for my executions, but their software was very limited as far as charts and indicators. I actually used a program called “Windows on Wall Street”, for my real time charting. They were bought out by TradeStation and I’ve been using them every since 2001.
During the Tech Bubble, you could have bought anything and made money, as long as it had a dotcom behind it. The trick was when to get out. I really didn’t know that much, except that I was buying and selling and making money. My first strategy was the concept of Dollar Cost Averaging. I learned this lesson the hard way. Of course this method is totally up to you. Dollar Cost Averaging is a method where, and I’ll keep it simple: Let’s say you buy 10 shares of XYZ, for $100 per share, which equals $1,000, and for some reason you bought at the wrong time. XYZ goes down to $80 per share and you think now is my chance to buy it cheaper and I say to my self, I'm in it for the long run anyways. You go ahead and buy 10 more shares at $80 per share. Now you own 20 shares of XYZ at an average of $90 per share. This is where I made my biggest loss. Someone once pointed out to me that Dollar Cost Averaging is like going to the Horse Track. Let’s say you bet on #9 to win. They pull out of the gate and number 9 is in third. You then go back up to the window and throw some more money on him. You can see he’s got a long ways to catch up but your in it for the long run, Yeah. All the money I made I lost on Mercury Interactive (MERQ). It was a tip from one of those flyers you get in the mail. You can’t lose. I’ll never forget the day, December 31, 2000. It was my birthday, the last day of the year. I owned 500 shares at $110 per share. I was up maybe a hundred bucks by the end of an early close but didn’t sell. I just figured I’d deal with it in the New Year. I never saw $110 again. If fact, I was able to Cost Average down an additional $50K and rode it all the way down to $17 per share. I’m not proud of this, but it can happen. I needed some education. This isn’t gambling, this is investing, your savings, something you’ve worked hard for. Within the next year and the help of some education I was able to sell (MERQ) at $47 just before HP bought them out. One other little glitch in Cost Averaging, is “First In, First Out”. Lets say you own a Thousand Shares that you’ve been buying over time as the price has been going down and the shares you bought at $50 are now $60. It looks like it’s starting to go back up so you decide that you’d like to make the $10 profit from the shares you bought at $50. Don’t push your mouse yet. Make sure you call your Broker, because the very first set of shares you bought is the first set of shares that are sold. Like XYZ above, you would be selling the very first shares you bought at $100.
