Stamps

You all know that I'm not a very risk-adverse person.
I mean, I do Sudoku puzzles in pen for goodness sake.

Lately the stock market and the government have been conducting operations in what seems to be the depths of Benjamin's diaper, so my risky decisions have not been yielding high returns.
Or moderate returns.
Or, let's be honest, any returns at all.
(Except for my long-term stuff. I'm an excellent long-term investor.)

I've decided that when things get creepy, I need to get creepy, which means developing a slightly different investing strategy.
Do you remember what my current one is?

"Allie J only sells at a gain."

That's right.
I've been investing since April 2012, and have currently only been successful with this strategy one time.

However, my new strategy incorporates a timeless virtue with an eye for opportunity.
In German: Meine Katze ist ärgerlich.
In Spanish: Mis manos huelen bien.
In English: Hold off on buying until it's low. LOW low. Like reeeeeeeeeeeeal low.

My problem in the past has been *thinking* that a stock was low, buying then, and then having it go even lower. The problem here is two-fold:
1. Opportunity cost:  missing out on potential gains when it goes back up.
2. Inner turmoil: having to hope that it goes back up and having to see red like all day erry day.

So now instead of researching stocks that will go higher, I'm looking into stocks that are going lower.
This is where the patience part comes in. Waiting, waiting, waiting for things to keep sucking and sucking until they reach or almost have reached the ballet floor barre.
(It's not really called that, but that's the term I'm going to use.)

This "ballet floor barre" is the point that the stock price hasn't seen in years. This is the price where it kind of bottoms out- where, if it has ever gone below this price, it hasn't been for long. A great example is with American Eagle Outfitters. The floor barre here is about $10.

With my new strategy in place, I'll wait until AEO goes to close to $10, buy 200 shares, and then revert to strategy number 1, and sell at a gain of $600 when it goes back up to $13 per share like it is right now.

"How do you know it will go down to $10 and then back up to $13?"
I don't.
I'm not a psychic. I'm not a monk or a prophet. And I'm not tirerack.com.

But since you bought it at the ballet floor barre, there's a good chance it won't go lower, which means you pretty much win no matter what.

The old me would have bought as soon as it dipped at $17 and waited until it went back up to $20.
Baaaaaaaaad monkey. That could take years to happen.

But the NEW me is going to wait until it hits the ballet floor barre.
The keys to success are:
1. Have a buy price in mind
2. Have a sell price in mind
3. Don't get greedy

For example, when you've made your projected gain, GET THE HECK OUT, MAN.
sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell sell

If I could go back in time and tell myself to sell IBM July 26th, oh, I sooooooooooooo would.
But, instead I got greedy. I wasn't "happy" with my $150 gain and wanted it to go to $250.
And now, months later, I'm swiveling in my swivel chair, holding onto a $420 loss.
It just dropped another $10 from the time I started writing this post.
Rawr.

I looked into selling put options for the stock I already own, but the tutorials made me wonder, "Why would anyone agree to do this with me?" In economics class, it might have been a good idea, but once you factored in commissions and such, it just wasn't worth it.
But such is life.

So now you may be wondering, "What does this mean for me? Do these strategies actually work? How can I minimize my risk? Why do I ask so many questions?"

I don't know what this "means for you". I am not you. You are not me.
I don't know if this strategy actually works.
You can minimize your risk by not doing anything I suggest.
But you can be whimsical, like me, by doing everything suggest.

I have currently not had the resources to experiment with this new strategy, and now that I have a baby on the way, I don't want to be tying my cash all up in a boulevard of broken dreams.

Baby on the way:

Isn't she adorable?

However, I am "paper trading" which means making imaginary trades with imaginary stocks.
Which basically means just making crazy spreadsheets and tracking stuff.
I'll let you know how it turns out.

Maybe when I get my new car, I can plaster it all over Facebook. You know, like, put pictures of sonograms of it up there and be like, "Looks just like me!" and get like 50 thousand "likes" and then 26 comments congratulating me on my newest contribution to this world.

Then again, it didn't come out of my nether regions, so maybe it doesn't qualify for all that kind of attention.

Who really likes Ray Charles anyway?

He can't see why anyone wouldn't,
TWS