May 16, 2008

$$$ and aging and smartness

I’m not posting this to divulge financial information or even for you to continue reading beyond this paragraph.  Just LOOK at this email that Rob just sent to my work account (see below).  At first glance I was worried that I wouldn’t understand it, but I totally do.  I feel like a 60 year old bald man—a smart one though!  This is what elderly people talk about.  What ever happened to racy emails that could get you fired?  Well, I suppose this is getting me into the right state of mind for spending tonight at the country club in my version of a “country club casual” outfit.  I’ll be sure to talk about my awesome stock pick over dinner with Rob’s family.


Check out my TD Ameritrade Account info for ETrade stock.  It shows that on April 14, 2008 I purchased 100 shares of ETrade (symbol: ETFC) at $3.40 per share for a total cost of $349.99 (that includes a $9.99 transaction fee, without which the cost would have been $339.99, which is approx $3.40 * 100 shares = $339.99, give or take a penny in rounding.)  Then approximately 1 month later, on May 16, 2008 (today), I sold 100 shares of ETrade (ETFC) at $4.41 per share for a total gain of $431 (which would have been about 10 bucks higher without the 9.99 fee - $4.41 per share * 100 shares = approx $441.00).  So, excluding the two 10 dollar fees, my gain in one month on this transaction was approx. $101.00, or about a 30% gain.  Not bad, except since I held for less than a year before selling I get taxed at approx 40% rate (I think that’s my income tax rate) rather than the lower capital gains tax rate - so that kinda sucks actually.  Darn.  Anyway, I finally MADE REAL MONEY in the stock market, for the first time, ever – even though I’m up about $800 dollars in the last two months in Apple and Visa stock, because those are only “paper” gains since I haven’t sold anything.  Note that I’m still only up about $100 overall in my investment career, due to an unfortunate $700 LOSS (real, not paper) last year when I panicked and sold my Apple stock as it was plummeting from $200 to $120, and only 1 day before it shot up like $15 bucks a share…but then fell back again in the weeks that followed.  I kinda suck at this investment thing…but I’m glad I was able to finally make something real here: Without taxes and transaction fees I made $101.00 in about a month.


Now, you own LeapFrog and which you purchased at $6.02 (50 shares) = $301.00 (without accounting for the 9.99 fee) on January 29, 2008.  The stock closed today at $8.98, so you are up 49.17%, or $148.00 (without accounting for fees and taxes), in only about 3 and a half months.  If you hold on to this until January 29, 2009, then you will be taxed at only 15-20% I think (the capital gains tax rate) rather than your normal tax rate when you sell it.  That could be great...even better if it continues to skyrocket.  50% in around 1/3 of a year!  Imagine that we were so happy getting 4-5% from ING accounts in A FULL YEAR.  *Of course, my 30% gain in 1 month is greater than your 50% gain in 3.5 months…but you are still up more money than I am in your 3.5 months of “investing” – and I invested more than 10 times the amount of money you did – actually 20 times the amount you did, and I invested for nearly a year!  So nice work. -Rob


Anonymous said...

If you are smart just because you can understand what Rob wrote, then doesn't that make Rob a genious for having written it in the first place? - "R"

crayz said...

Generally you want to avoid buying stocks in low values, unless it's mostly just for fun, because you´ll get killed on the fees. Let´s say you buy $400 worth of stock and pay $10 each to buy & sell - now you need the stock to go up 5% just to break even, and that's the simple math. Factor in inflation, capital gains taxes and lost interest on the initial $10, and you're pretty much screwed compared to a savings account unless you pick really well

Anyhow, you've got nothing on my worst stock decision in history - I broke even selling AAPL back when it was around 25 before the split... not even going to say how much I had because it still makes me feel sick

Hilarious that you've finally got a blog, btw

JMG said...

Capitalism is great

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