Stocks

The stock markets are a form of legal gambling. I'm looking at using stock markets analysis as a revenue stream for when I travel. In 2001 I was part of a start up that dealt with futures analysis. The start up did not generate any profits, but I did learn a lot from the efforts. I learned about a specific branch of Artificial Intelligence (that I will discuss in a future post), I learned that stocks can move only three ways, and that many people want to get rich.

Stocks can only move three directions. Stocks can move up, sideways, or down. The idea of predicting what a stock will do is very difficult. Attempting to determine that a stock will be exactly $114.57 on Tuesday seems folly. It seems much easier to decide if a stock will go up, down, or not move at all.

If you grant that the stock markets are a form of legalized gambling, you must be aware of any issues the "player" might have with the exercise. Browsing the Internet and in my personal email I have seen claims for a massive income. These sums present to the reader that income can be had easily equal to years of labor without the required time and effortlessly. This idea seems quite wrong to me and very stressful. If the person would choose to be satisfied with $500 per day rather than "trying to make a killing" there would be less stress and easier to accomplish goals.

If the idea of a $500 day is followed, this gain can be accomplished by purchasing 5000 shares of a stock and waiting for that stock to raise $0.10. To try and put this into numbers:

- 5000 shares x $5.00 / share stock = $25,000 investment

- watch this stock intently for movement

- when this stock moves $0.10

- the stock now has a value of $25,500

- sell the stock

- the resulting values are $25,000 investment, stock increase of $.0.10, current value of $25,500, sell the stock realizes a $500 profit

- realistically you must pay your investment house the transaction fees, some houses want $14 per side

- your final profit is $500 - $28 for $476 net profit

If this idea works three times per month, you have a gross revenue of $1,500. This is near the poverty level with only three hours work per month. I choose not to work with futures because of the volatility. I prefer over the counter stocks. I'm focusing on NASDAQ listed stocks and all less than $10 per share to limit my investment accounts. I choose to only buy long rather than sell short. If the stock goes away from me I still have the investment at a loss. If I sell short I could lose the entire investment.