Week 6 Market Recap

Week 6 Market Recap

Week 6 was a bad week for me as I lost even more of my money. The week before on Friday I bought a gold ETF named NUGT, hoping that the gold price would go up, and I could sell to profit. My strategy was to keep buying and selling with a 1-2% profit, so I can slowly make back the capital that I had lost. Unfortunately this week the price of gold crashed and the stock I was in fell 38%. This was a huge hit for me and I lost a ton of my money. I made the decision to not sell the ETF this week and see where it would go next week. I did not want to take such a big lost from this crash, so I plan to wait till the price of gold goes back up until I sell it. With this gold crash I was able to learn that gold is very volatile. There are many things that can cause the price of gold to move, and it is important to keep up with the factors causing the price of gold to move. I also learned the importance of diversification in a portfolio. Most of my portfolio was made up of this ETF so I was not able to balance my losses with gains from other stocks. Hopefully the price of gold will go back up and I am able to make some money. 

The other company that was in my portfolio was Twitter. I made the decision to buy shares of Twitter because there were rumours about multiple companies trying to them out such as Google and Disney. From the market recaps in class there were a few times where companies were bought out and the stock went up a lot so I thought of this as a good opportunity to buy in. I was right as the stock went up by 4% mid week. I should have sold out because the stock price crashed the rest of the week, but I was greedy and wanted to make more because I was losing a lot of money from gold. The reason the stock crashed was because more rumours were released that the companies are no longer interested in buying out Twitter. Investors quickly wanted to sell there shares, but I unfortunately did not. I thought that the stock price would only go down a bit so I can still sell for a profit. I was wrong about this as it crashed 30%. I learned that as soon as big buyers are no longer interested in buying a company I need to back out quick and sell as the value of the stock will crash. 

Overall I am disappointed with my progress in the market this week. I made bad decisions and often held onto my shares for too long. I need to find new companies to invest in and learn when to let the stock go. I am not sure how I can make back all the money I lost ($46,965.86). 

Week 5 Market Recap

Week 5 Market Recap

Week 5 in the market was another unsuccessful week for me. I made no progress and lost some of the money that I earned back last week. The main reason I lost a lot of money is because of the Nike stock (NKE). Nike released earnings after market closed on September 27th, so in the morning I bought 1219 shares of the stock for $54.92, expecting the share price to go up, as I knew Nike had been doing well this quarter with the releases of their Roshe, LeBron, Air Max and KD shoes. I was waiting for the earnings report that night, and I was very satisfied to see that earnings per share were $0.73 which is $0.17 high than what was expected. On top of that they also announced that revenue was up 8%. I thought for sure that with a good earnings report like this the stock will shoot up. I was wrong. The next day the stock dropped 3.83%. I was devastated and did not know what happened. I followed through with some research and learned that the reason the stock declined is that the investors were not happy with the companies future orders. Nike expects worldwide orders between September 2016 through January 2017 to rise seven percent after excluding the impact of foreign exchange. If this is true, it will be the companies lowest future orders growth rate in the past year. Although the stock crashed I felt like this was another very good learning experience for me. Prior to the crash of Nike, I thought that the earnings were everything. My mentality of investing has totally changed as now I know that there are other factors that can effect the value of a stock aside from the earning per share. I know that there are a lot of times where if the earnings per share of a company is doing well then the stock will go up, but now I learned that there are exceptions, therefore I need to be careful when investing in a stock. The decline of the NKE stock was very disappointing for me but I am glad I was able to learn a good lesson out of it. I currently did not sell the NKE stock yet as I think that it might recover at least a bit next week. It is currently down 4.12% from when I bought it and if it drops below 4.5% my stop loss order will automatically sell it. 

This week I did not do a lot of trades as Nike and Disney were holding up a lot of my shares, but another stock that I did invest in was the S&P MidCap 400 Dividend Aristocrats ETF (REGL). This was a VERY VERY stupid of me because this ETF is for Dividends. I bought 1789 shares of this stock for $46.18 and decided to sell it at the same 3 days later when I realized what this stock was for. After the Nike stock I was really just so fed up, and googled ETF's to make quick money in. The first we websites that came out said that REGL was a good ETF to invest in, and with only looking at the stock chart, I bought it. This was so stupid of me and I wish I had never done it because it wasted my time and buying power. The only good part that came out of this situation was that I learned what the S&P MidCap 400 Dividend Aristocrats and the ProShares S&P 500 Dividend Aristocrat are. Like the Dow Jones that collects the top 30 stocks in the NYSE the Dividend Aristocrats collect the top 400/500 for dividends. You can actually invest in them and make dividends off of it.   

Overall the week was another bad week and it is essential for me to stock making reckless trades. If I want to climb back up, I need to put in a lot more research in stocks and the market before investing in something. 

Week 4

WEEK 4 MARKET RECAP

This week was a very very bad week in the market for me as I lost lots of money. The main reason I lost a ton of money is because of the stock ASNA (Ascena Retail Group). ASNA is a retail company that was expected to announce positive earnings. I found this stock on the earnings report calendar and saw that they were going to announce their earnings soon. Knowing that, I researched the stock and many analysts predicted that the earnings would be better than last years and therefore the stock will go up. When I bought 11050 shares at $8.05, the stock was going up, but when they actually announced their earnings it was very disappointing and the stock crashed. This resulted in me having to sell the stock at $6.02. I lost a ton of money from this. For the first time I took a MAYJOR lost and it felt terrible, although it wasn't "real money". I fell from 13th place to 70th. I felt as though this was a very good learning experience for me. I was getting very carried away as I was getting lucky with some of the other stocks I bought and put a lot of money into a company I did not know much about. I learned that I can't always trust the analysts online, and that I shouldn't invest in a company or industry I don't know much about. I never heard of this company and decided to try my "luck" with this stock because I was greedy and wanted to get back into the top 10 spot.

Upon losing my money I knew I needed to save myself from my loss and I decided to invest in what Mr.Whalen taught us in class which is called is called an ETF fund. I thought that this would benefit me because I would be investing in a diverse amount of companies instead of just one. DUST was the ETF that I invested in, and they were an ETF for the gold industry. I didn't know much about the gold industry but I started to look for trends on the stock charts. I noticed that it can go high and low really fast, so when I saw that stock was around its low I bought 2078 shares for $30.00 and sold it for $32.00. That profit helped with recovering my losses. I then bought the stock 2141 shares of the stock again for $30.98 and sold it for $32.50. It helped me climb up from 70th place to 59th place. 

Overall this week was a realization for me that the market is not a safe place. I need to be sure before I buy and I need to remember that one mistake can lose me all my money. I made some big mistakes this week and lost all my profits. It was a terrible feeling but I need to earn it back! 

Week 3 Recap

MARKET RECAP WEEK 3 

This week I didn't get enough time to research and invest as much as I liked to. I made a total of 11 trades on 7 different companies. Starting the week I decided to buy 725 shares of the EA stock for $80.26 a share. I made this decision because I knew about that the company would do well this week because of the release of their new NHL game and the anticipation for the release of their FIFA game. The sales for the NHL game did really well, lots of people loved the game which caused the stock to shoot up to $82.97 a share 4 days later. I sold the stock because I was already happy with the return I received. Currently the stock price for EA is $83.20 so if I kept the stock I would have made a bigger profit, but I am already happy about the return I received. 

Another stock that I was invested in this week is Keryx Biopharmaceuticals (KERX) which is a company that is trying to develop a new drug for patients of chronic kidney disease that need extra doses of iron in their system. I bought the 6015 shares of the stock at $4.60 and sold it for a loss at $4.52. The reason I did sold the stock is because I didn't want to take such a big loss on it. There was potential for the stock price to go up again, which it did to $4.80 today, but I did not want to risk taking a huge loss. I think it was a bad decision to let go of this stock so early because I did not keep in mind that stocks at such a low price can be very volatile, and just because I suddenly took a loss it does not mean that the stock is done. I learned from this experience that I shouldn't be so quick to sell a stock without doing research on why the stock price fell. The Keryx stock price fell because of the orders going on in the market, not because of any major news against the drug. I was too quick to decide and misjudged the situation causing me to take a loss. The next time I decide to take a loss on stocks I'll make sure to do research to see why the stock price dropped instead of blindly selling it.

Lastly a stock I bought during the week that I'm still holding is Durect Corporation, a pharmaceutical company. I bought this week because it was getting closer to the PDUFA date, and it had the potential to get approved.. I did a lot of research on this company and many analysts said that the drug is doing really and the stock price will increase, although it did decrease during the week. The earnings weren't doing too well for this stock. I bought this stock after the earnings were released in early September and it was actually lower by $0.01 compared to last quarter. I still decided to buy this stock because the drug was still developing well and it could be approved which will skyrocket the price of the stock.

Overall this week I did not have as much time to invest and research because I was sick. I fell from 10th place to 13th place but still made $3000 this week. Next week I plan to climb my way back into the top 10 spot and trade a lot more. 

MARKET RECAP WEEK 1-2 

Investing in the stock market has been a very new and fun experience for me, and during the past two weeks I have learned a drastic amount about the stock market. When the stock market challenge was first introduced to me I was very intimidated as I knew nothing about the market. The first stock I bought was Disney (DIS). I made this decision because I thought that it was a safe stock to buy. Disney is a major company that has been doing well in their theme park revenue, they have a new line of movies coming out, and had recently acquired a parts of a new company named BAMTech which would help with the amount of subscribers they are losing with ESPN. BAMTech is an online streaming service, and Disney believed that by offering the services to stream sports online ESPN would do better. The price for Disney was already at a low, which was $95.95 a share, so I bought 530 shares of it. I thought of Disney as a long-term investment. I knew that Disney was not going to be a stock that would shoot up overnight and I wanted to put money into a stock that would be steady, and make me money in the long term. A few days passed and I found out I was wrong. The stock for Disney crashed 1-2% because of the news released about the crocodile incident in their Florida theme park. Till this day the stock did not recover, but I did not sell the shares as I have faith in Disney to improve the company and make the price of the stock go up. 

At this point everyone else in the class was making money and I knew that I had to start making some moves so that I don't fall too behind in the challenge. I started to read different articles online about how to invest, and make money in a safe way. From reading these articles I learned that it is important to have a diverse portfolio to balance my gains and losses, that a lot of companies releases their earnings every quarter and by reading articles about this we can anticipate if the stock is going up or down, that sometimes it's better to let go of a stock with a loss rather than holding on to it for longer which can result in a greater loss and that it is very important to do your research before going into a stock. 

I decided to follow the strategies I learned and invested majority of my money in big companies such as Pfizer, Fedex, and FitBit. The remainder of my money I put into more risky stocks such as Mylan, United States Oil Fund and Alcobra. I was doing well in 11th place, but over the weekend I dropped all the way to 25th as everyone else started to make a ton of money. Again, I did not want to fall behind and started to read about how I can earn money quickly. By doing research I learned that investing in the biotech industry can make you a lot of money, but is very risky. I made the decision to get into this industry because I knew that if I ever wanted to catch up to everyone else I needed to be risky. I put about 30% of my buying power into a new drug that is in development by Aralez Pharmaceuticals. I chose this company because the development of the drug has been doing very well, and after looking at the FDA calendar I learned that the date in which they were announcing if the drug would get approved was coming up soon. This stock eventually increased about 20% and I bought out and I didn't want to get too greedy. On the side I was also making small profits off smaller companies and it helped me climb up to 8th place. 

Overall, being in the stock market challenge the past two weeks has been an incredible learning experience for me. I was able to learn by myself hands on about investing and the risks that come with it. Although it's not real money, the thrill of gaining money in the game was astonishing and losing money was a terrible feeling in my gut. I look forward to seeing the development of my knowledge in the stock market, and how far I'm able to go.