Investing 102

[GregWeld]

Here's what is addicting.... my Schwab account is UP over 100 grand in the last two days... and I just sat here watching CNBC and blabbing on Lat G....

Now - those are "paper gains" -- but over all -- my account in that particular brokerage (I use a few) -- is UP "on paper" more than I've spent this year... That is CAPITAL GROWTH.

Some days the account is DOWN -- some days up a little -- some days it's up OMG... but overall -- that "chart" I'm always referring to is low on the left and climbing to the right.

Here's another little "funny". I invested in a company (start up money) 7+ years ago. Bought a bunch of shares dirt cheap -- they are not "liquid" because they're not publicly traded so it's really "dead money".... then the company went public -- and "on paper" that investment was HUGE (imagine buying at .56 a share and watching it go to $28 a share!)... then the "market" had it's hiccups -- and I watched those shares "on paper" drop to $1.70 a share.... oh the horror -- right? But I still had a 300% gain on them at that low ridiculous price! So I watched millions turn into "not much".... but I didn't spend those "paper gains" -- I didn't borrow on those "paper gains" -- and when those "paper gains" weren't so much - it was just a sigh.... Then a year or so more of time goes by and the shares are at $5 -- then $10 -- then $17... then somebody buys the company out and those paper gains are REAL MONEY paid in cash.... @ $34 per share....

My point -- it took lots of TIME (7 or 8 years!)..... and there was lots of "paper gain" (which means nada!) and there was lots of "woulda/shoulda/coulda".... but I knew the company - believed in the original investment -- so rather than selling at the bottom - I just held on.... and bingo THE LUCKIEST MAN ALIVE comes knocking...

The other "point" is that you have to take the good with the bad --- the highs and lows - keep your wits about you - don't panic - UNDERSTAND what you have invested in and WHY.... (in this case it was some "gambling" money so I was okay with them being down and the investment being worth zip).

Had I NOT played the game (think of an ante in a poker game - can't play if you don't ante up!) I would never have gotten the reward. And trust me - for every "winner" I can tell you about MANY losers!

BUY GOOD STUFF -- DO NOT GAMBLE -- UNDERSTAND WHY YOU BUY -- GIVE IT SOME TIME (not a half hour!).

I have enough NORMAL investments that I can afford to dabble in RISKY stuff.... DO NOT GO THERE because you will LOSE more than you will make. This thread is about SAVINGS and INVESTING - not gambling and getting rich quick. Please don't lose sight of that. It's also about THEORY not actual names to invest in. Do your research - KNOW WHY YOU BUY -- have the investments meet YOUR requirements - and that depends on age - knowledge of the industry your investing in - what type of account it is, i.e., is it a retirement account or an account for college for kids - or are you just wanting to play around and TRY to make some money (please don't tell me about this!)....