Growing up Catholic, there are certain milestones one reaches. As a baby, you’re baptized. In grade school, you receive your first communion, and later, you become officially confirmed in the Catholic Church.
One of the things that makes the years of Saturday school worth it in a child’s mind is not often the possibility of salvation, but the money we get. At least, this was the situation in my case.
After my confirmation, I was the fortunate recipient of over $400. Unlike my communion money, which went toward college, my dad said it was mine to invest. He then began my education in the stock market.
Dad’s Initial Advice on Picking Stocks
As I perused the financial section of New York’s Newsday, I became very excited over the prospect of owning shares in Playboy and McDonald’s.
That’s when dad said that it’s always best to own stock in something people need. So I thought, what do people need? The phone rang, and I knew that everyone had a phone. Nynex was currently trading at about $90 a share, and with dad’s agreement to match whatever I put in I could buy about 9 shares.
Early Success Made me a Bull Market Genius
Mind you, I was about 13 when this was all going on. I was slowly adding money into my account, and over a couple years the money had split, doubled, split and doubled. I had more than $5,000 all due to my prowess in hearing a ringing telephone.
At this point, my father told me what a mutual fund was. Having learned what one was, I put all my money into it. When the market crashed in 2001 I was left with about $3,000, a portfolio loss of 40% and a cash-on-cash gain of 18%, seeing as I only lost my father’s money.
Investing on My Own With Ameritrade
At the age of 21, my father closed my joint account, leaving me with $3,000 to invest. Having worked at a company called Commerce Bank (now TD Bank), I had firsthand knowledge of their market growth and knew my money would grow there.
My $3,000 turned into $5,000 again, and I was investing $500 every month into Commerce and JetBlue Airlines. Then, it occurred to me: with an oil-hungry President in the White House, I should get into some form of energy investing.
Rather than do any real research, like why BP Oil would be better or worse than ExxonMobil, I Googled “energy companies,” found three firms I’d never heard of, and chose the one with the best press releases.
Good Press Releases Are Just Advertising
What I didn’t know about press releases is that they are sometimes from a company’s publicity department. This is why when Paris Hilton went to jail for a DUI there was a person on the news talking about how talented and smart this “best-selling author and movie star” is.
Well, when I read the press releases about Canadian Superior Energy and how they had access to untapped areas off the coast of Nova Scotia, I knew that at $2.23 I was all set to be a mogul.
I test-purchased 100 shares, and it soon went up to $3.56 a share. Having heard of things like this happening, I knew (like any bull market genius) it was time for me to catch the wave and get rich. I sold all of my other stock and put $8,000 into Canadian Superior.
Another press release came out, but not from the company itself. Despite all of their internal reports to investors of having found oil and natural gas 96% of the time, they had actually found it less with an actual success rate of 0%.
I sold at $1.12.
My Lessons Were Not Yet Learned
Taking this loss in stride, I had then heard from a friend that Paris Hilton (who just had her most well-known film released) signed an exclusive modeling contract with some agency that today I can only recall the ticker symbol WNMI. Their stock (based on this press release) had gone from less than a penny to something like 20 cents a share. I then rushed in with my $2,500 and purchased before I missed the wave.
Needless to say, I caught it as it was breaking, and someone that day was a couple thousand dollars richer for my ignorance.
I Still Invest in the Stock Market Today
If those were the last of my mistakes, I’d have been lucky, but I learned a few more lessons, totaling the cost of my “Associates in Throwing Money Away” to $16,500 from 2003-2008.
Last year, when the US auto industry was in the can, I noticed a few things about the Ford Motor Company. They’d made a profit, they didn’t need any money from the US government, and their stock was very low.
I bought and sold within the year, taking a gain to pay off credit card debt. If I’d have held, I’d have made about 500% to date, but I didn’t know that then, and I wasn’t ready to try and ride another wave yet. But, now I’ll know for the next time.
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