Stocktracking Essay, Research Paper
This stock-track portfolio really kept me interested in class and I had a lot of fun doing it. Throughout the semester I made 40 different trades. The day I received my cash I bought 15 different stocks. I purchased 500 shares of each stock. Coca-Cola was my first. I didn’t know much about the market, so I wanted strong, low-risk stocks. Next I bought Tommy Hilfiger Corp., because I really like their clothes and I felt that they were going to sell a lot more with the new line of kids clothing they were putting out. MCI communications was my next choice. My mother’s cellular phone is hooked up with them and I figured I might as well support the company. Inter-Tel was next. I thought I was buying Intel, but after I realized that I hadn’t I kept it to see how it did. Then I bought the real Intel. I didn’t actually know anything about the company, but people in class were talking about it so I figured I would give it a shot. All the kids in class were buying stock in computer software and upcoming telecommunications companies. I really didn’t know anything about them so I bought a stock called Nextlink communications. I have no idea what the company is about, but it did pretty well so I was happy. Then I bought NPC International Inc., just because I wanted more stocks and it sounded good. I bought Music Land stores because I play the guitar and I love music so I had to buy that stock. I already own Walt Disney stock in real life. My grandfather bought it for me for my 10th birthday. If it’s good enough for him it’s certainly good enough for me. K-Mart had changed their name to the Big-K about a week before I bought the stock. Maybe this would bring in some new clientele. I thought that just because Marlboro sold so many cigarettes that naturally the stock price would always do well. I don’t know what I was thinking, because like you said there are always those non-smoker movements and laws being passed but I learned my lesson. My mother and girlfriend always buy shoes from Nine-West shoes, so I felt that they were doing something right. I bought Newport News Shipbuilding Inc. Because I thought I was buying stock in Newport Cigarettes, but I didn’t care. I then bought American Eagle Outfitters because I love their clothes. That concluded my first day on the stock market. I spent almost $315,000, and I was just warming up.
The next week I came back, and this time I was buying stocks in groups of 1,000 shares. I bought NYMXE Pharmaceutical Corp., and I think I was just picking at random because I can’t think of one good reason on why I bought that or my next choice, Digene Corporation, I don’t even know what they do there, but that’s alright because it just adds to the diversity of my portfolio. Norwest Corp is another random selection. On a day when you’re just picking names and you see something you’ve heard of, you buy I t. That’s what happened when I saw Mobil Corp. Electronic data System. It sounded like a good high-tech stock.
The following day I realized that I was over my budget so I started selling some stocks. I sold Coca-Cola because it was up two points, so I was happy with that return. Fruit of the Loom was down two points so I got worried and sold it. Tommy Hilfiger was up almost 2 points, so I got rid of it. MCI also went up so I figured I would take profit when I can get it. Next Link went up a little but I sold it right away because I had a bad felling. NPCI went up two points and I didn’t even know what it was, so I was content with the money I made from it. And Music Land Store went up a little but I was in a selling mood so I got rid of that also.
My next sets of purchases were also made in groups of 1,000 shares. My uncle owns a 1969 36 foot Chris Craft fishing boat and if you know anything about boats, Chris Craft is the elite in fishing boats, so I bought a thousand shares. I was following IBM and it was down so I bought it to see if it would balance out. Micro Soft was also a little low so I bought it with the same reasoning in mind. The Intel that I had bought previously was down but I had a feeling it was going to go back up so I bought more. I made a typo error and ended up buying 500 shares of it, but I was felling risky so I left it and kept a close eye on it. The next day I went back and checked it out and it was up almost a point. I sold it then and was happy with my earnings. Also the 1000 shares of IBM was up 2 points so I sold that too. I don’t know why I did but I bought another 1,000 shares of Micro Soft at 2 points more than I had paid for it the previous day, I guess I just had a feeling or something. My next purchase was not a typo; I bought 5000 shares of Lo-Jack because I had just read that all Pontiac and GM cars are going to offer Lo-Jack as an option on all the 1999 cars. Also I think it is a great investment anyway. I wasn’t joking when I said I had a felling with Microsoft. A week later it was up 6.5 points from my second purchase and 8 points from my first. I quickly sold it and was very happy with the profit I had made. The rest of the stocks in my portfolio have been going up and down for the past 4 weeks, but I haven’t really been touching them. I am happy with my portfolio as it is and I am going to sit on it and see what happens. If I were your financial advisor I think you would be happy with me. I earned 3.53% in less than 2 months. I have to admit that I didn’t really know what I was doing at first, but I’m starting to get the hang of it.
The remaining securities still left in my portfolio are there for different reasons. American Eagle Outfitters has been food to me. I t has made me a lot of money so far, and I like the stock very much. Chris Craft is another one that I have personal reasons for keeping. I’ve lost money overall with it but I really like the company. Digene Corporation is there for no apparent reason whatsoever. I lost money, and I still have no idea what the company is, but I’m holding onto it anyway. Electronic Data System is there because it sounds like it’s going to be big one day, probably not any day soon. Fidelity Magellan is there because I can’t get rid of it. I bought it by accident and I can’t sell it back. Intel Corp. is there because I made so much money from it earlier with 5000 shares that I flipped, so now I’ll hang onto it just to see if it will spurt up again. K-Mart is there because it refuses to move. It doesn’t go up and it doesn’t go down, so I’ll just hold it and collect on it. Lo-Jack is going to be big one day, and I’m going to have 5,000 shares of it and say “I told you so.” I’m holding onto Phillip Morris with the hope that one day it will return to the price I bought it at. Mobil Corp. is still there because I’m making good money with it and it slowly keeps going up. The only reason I still have Nine-West is because my girlfriend gets a kick out of it. She thinks its great that I bought their stock and won’t let me sell it. Newport News Shipping is still there because I’m hoping it’s going to go back up. It used to be up a lot and I should have sold, but I didn’t and now it’s down so I’m going to wait and see what happens. I’m in the same situation with Norwest. I want to hold on and see if it rises again. MYMXE is there because I lost way too much money to let go now. I know that one day it will rise again.
I feel that my portfolio is very diverse. I have money invested in all different types of fields. The only potential risk in my portfolio is all the money I have invested in Lo-Jack. But I’m not worried because I am certain that the stock is going to go through the roof. I guess you could say that my stock in K-Mart is like a fixed income security. I am collecting dividends and that’s the only reason why I still have it. I have hardly any cash that is not invested.
Earlier in the semester I had said that I would like a 15 to 20% return on my investments. I have earned 3.5% in 2 and a half months. At that pace, I would earn a little over 1% which is exactly what I had hoped for. I also said that I would take big chances if I felt the return was great enough. I feel that 5000 shares of any stock is taking a chance, and I believe that the return will be well worth it. And in my investment strategy I said that I was willing to lose up to half of my total capital due to the fact that I am so young and have plenty of time to make it up. I think that both of the statistics show a close similarity between my investment strategy and my actual portfolio.
My only regret is that I didn’t mail in my money soon enough. If I could have had another 3 weeks I think it might have made a difference. I don’t think I would do anything differently but I do feel that it took me a while to get the swing of things. I am going to do some stock-track again on my own time, just for fun, and now I think I will be a little more prepared for it. I learned how the stock market works from hands on experience. I see how easy it is to lose your entire savings, or double or triple them. If you play smart and use your head, there is a lot of money to be made out there.