The Lesson I Learned Makes This My Best Trade
For those
of you who know me, I am the author of the Money Blog “Discovering Undervalued
Growthâ€, and I have recently been added to the home page under “My Favorite
Strategyâ€. However, I am here today to speak about my “best tradeâ€. However
unlike most people who tout a great stock pick they’ve made, I will not go
there. It is easy for anyone to pick a stock that goes up 20 points or more
regardless if they are a “professional†or a not. What I am here to talk about
is the fateful week where I blew up; and with reasons of why I am
labeling this as my best trade at the end of this article.
It was
January of 2006, my second year of actively investing in the market after
venturing on my own into the financial world in January of 2005. Prior to that
time, I had merely watched the indices fluctuate to factors such as economic
news/earnings/ hype. After my father had shown me the statement to my mutual
fund he had kept for me when I was young with the hopes of using the profits
from the fund to pay for college. Yet, after reviewing the gain/loss statement,
my net fund value of only $16,000 had stayed $16,000 for five or so years. I
decided to take matters into my own hands. The idea of someone else managing my
money kept me awake for the following fortnight.
It was
during winter vacation that I started to read any market book I could find my
hands on. Luckily for me, the first book I ever read was “How to Make Money in
Stocks†by William O’Neil. And ever since, I have grown my library to about 73
texts/novels pertaining to the market—