Insomnia (insomnia) wrote,
Insomnia
insomnia

  • Music:
Materialism doesn't really interest me much... except in all the ways that really matter.

I must have turned a corner somewhere along the way, or just finally met my needs... the little things that I value in life aren't little things anymore. I have my computer, a warm robe and slippers, a nice television set, a wonderful bed, and all my CD's. I can eat out at decent restaurants and justify paying a bit extra for frozen veggie meals. In short, I have most everything I need that I could easily afford, and I don't really need much else.

All the little things I really value in life are things like watching cartoons in bed with Kirsten, being able to relax at the computer with a cup of tea, spending quality time with my cats, trips to the coast, San Francisco, or practically anywhere green... that kind of stuff.

That leaves me in a bit of a quandary. Lately I have all this money I don't spend... I don't want more stuff cluttering up the house we rent, and it was getting pretty silly to have more than a few thousand spare dollars in my bank account, and I want to save up for a house someday, so I broke down and started buying stock lately.

The first few trades were arduous... It was hard to decide anything... to commit... to trust my feelings regarding a stock. If you pay a bit of attention, you'll notice stocks that you feel will do very well in the short term... and you very well might be right...or not. There was one stock that was about 60 cents a share I was very curious about... and when it jumped up to $1.50 a share I was kicking myself. However, in retrospect, it would have been a bad decision to buy it, because the stock was pretty risky and might never become profitable.

I have a basic premise about stocks that a lot of people don't seem to grasp. Find a company of inherent value that isn't too risky and buy it when the price is low and the stock is undervalued. I do this for two reasons... first is that everyone says you should buy for the long term. I don't necessarily believe that. I believe you should buy a stock to make a profit. If you buy a good stock at the low end of its price range, then a good profit could potentially be secured in the short term (nice), or in the long term (also nice). Find a good company with a high probability of surviving the current problems in the economy and then take a look at how the stock has done over time, and also over the last 10 days or so. If the stock price is low over both the long and short term for no really valid business reason, consider buying it.

Lots of people are saying lately "Will tech stocks fall?" My answer is yes... they will fall... and go up... and fall... and go up. That's what stocks do. Fortunately, the general trend is usually upwards. Be very happy if you are a shareholder, because the deck is stacked in your favor. If you have a diversified portfolio that you bought at a low price per share... a price that is good in comparison to the real worth of the companies you invested in... then you are almost certain to make money... eventually.

In other words, being a shareholder isn't like gambling... if you are wise and patient, it's more like owning the casino. The mantra for all shareholders right now should be as follows: Have faith. Buy low. Sell high. The only thing to fear is a complete market collapse, and frankly, that will only happen if people let it happen. If that happens, we're all screwed, period. It's like that scene in "It's a Good Life"... you can pull your money out and screw over your entire community, or you can ride out the storm, invest gradually in good stocks at good prices, and enjoy the ride back up. Your choice...

Meanwhile, for all those of you who don't own stocks... please do those of us who do a favor. Go on a spending spree and paint the town red! You deserve it! (So do we...!)

Personally, I think it's time to spoil yourself with high speed broadband access from Covad. MmmMmmm. Covad DSL. Yup. Not that I'm biased or anything... ;->
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