Lessons from the Stock Market (Day 3): how many great ideas have you pursued?

my second day at the stock market further quadrupled my paper losses the day before to 2%. the philippine market, as with the rest of the world, got jittery with all this European debt crisis shit. i was not able to take advantage of the falling prices as the remaining stocks i wanted to buy didn’t quite go lower as i have thought. oh well, seems like a typical day at the stock market for me.

things improved a little bit on day 3. My paper loss went back down to 0.51% due to huge dip on BPI and PCOR stocks. BPI dove 3% since i last bought it while PCOR fell by 2%, wiping out the nice climb of my other stocks since Wednesday.  i got lucky and bought First Philippine Holdings Corp (FHP) at a price lower than i set.  i tried buying another stocks of JFC but prices climbed up towards the end of the trading day that no one wanted to sell their shares at a price i wanted to buy them for.

what am i getting from all of these exercises? that i am one stubborn-headed piece of a thing. i have been advised over and over again that if i am investing in the stock market, the day to day fluctuations should be irrelevant to me. the day to day fluctuations are all noise to my cause; i am not selling after a few days or weeks, so why would the price of my stocks on a particular day that i am not selling important to me? i have heard those advises- solicited or unsolicited- a lot. and here i am, watching the stock movement multiple times in a day in the first three days as if the length of my hair is dependent on it.  but then again, this is not the first time that the realization that i am indeed one hardheaded person dawned on me. early this year, my banker advised me- pushed me, in fact- to invest in yen. it was in its all time low and it was the perfect time to put some extra cash in it. i thought it was a great idea but i didn’t quite see it through. fast forward a few months later and i got some good scolding from him on how i had let a good opportunity passed. if i heard him out on that time he posed that investment idea to me- i would have had earned a lot on that investment by now.

it seems to me that a lot of people are like me. everyday, a great idea dawns on us and we get excited about the thought of pursuing it. but a lot of these initial enthusiasm are stuck in the glass walls of our head. we rarely pursue it and when we looked back and realized how good the opportunity we let passed was, we justify the loss by all sort of reasons from the lack of time, the lack of resources, the lack of discipline, the lack of confidence and all sorts of shit. my head has been ground zero of a lot of ideas that never saw the light of day and i have spent a lot of coffee time talking to people about these ideas but it never materialized. reflecting as to why this is, i realized that although we may all think it was a great idea to begin, we are all waiting for the other to start the ball rolling before we even bother to make the first move.

i believe the entrance to the stock market for a whole lot of us (the normal working class) are like this- a lot of it depends on what we hears, not so much on what we understands that we are much pretty dependent on the bandwagon effect kicking in that we are at solid idea of why we want to enter the stock market and what it can provide us.

as for my day to day monitoring of the stock market, i don’t quite think i will ever grow out of it. not yet at this point, anyway. my banker- who is a trader in all bones of his body than he ever is an investor- probably has a lot to do with this behavior. i am quite interested and excited about how it works and i always enjoy the coffee conversations with him about these things. he always tell me that even though the market movement is never quite rational, there is a science to its irrationality- the method to its madness.  and from where i am standing right now, it may be quite a long shot for me to earn shitloads of money from trading stocks- that burning fire of learning that method, that science interest me immensely. it is quite a great idea to pursue- and unlike most great ideas i have came across with, this is going to be one of those i will definitely do something about.


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