First one. 

I'm not new to trading by any means. I started looking into stocks and investing in 2007 when adjustable rate mortgages were popular, and I couldn't for the life of me figure out why anyone would take such bad deals.

I know the answers now and I am far more educated and experienced in the understandings of the economy as a whole. Back then I read everything I could find on stocks trying to learn as much as I can about investing. Unfortunately my lack of experience and confidence investing in companies that were leveraged more than 1:1 prevented me from wanting to get my hands dirty. I decided to have someone far more competent than me manage my money for me. Ultimately, it came down to Bruce Berkowitz and David Einhorn. I sided with Berkowitz with his mutual fund “The Fairholme Fund” (FAIRX)

The fund had a pretty good track record showing solid gains throughout it’s existence. The fund dropped sharply and I bought it all the way down. The idea was to invest for 5-10 years watching the account grow.

The account did grow. I turned $11k into an unrealized 22K from 2008 to 2013. I had just graduated from college and after having taken a couple economics classes, I decided I would look into getting back into the stock market game, because it was becoming very clear to me that the economy was in a bubble and I was not going to let this opportunity pass staying invested long term in financials. I planned to wait until after the beginning of the year since I would be getting my capital gains and usually you get a sharp drop then a spike around the first of the year. Well… The stock dropped and did not spike. It had hit a high of $43 in 2014 and I although I knew $43 wasn’t going to happen due to the news about FannyMae, I was hoping for at least $40. It never got there. I spent the year waiting on a spike that never came. Instead it hovered around $35 almost the entire year. Around October, I committed to selling after the first of the year. #1 so I can postpone tax until 2016. #2 because I wanted my capital gains.

In December 2015, The fund dropped 50% after they decided to pay $12 per share dividend. I was forced to pay the tax anyway because of this. In January, I waited for the spike to $20 that never came. By mid-January, I gave up and cut my “losses” at $16k. My losses were minimal because although the stock price dropped, the dividends and capital gains negated the majority of my losses.

I immediately wanted to get into highly undervalued gold mining stocks, but because I was not an expert on the industry, I decided to go with another mutual fund. Peter Schiff’s EuroPacific gold fund (EPGFX). I learned from my mistake and rather than risk a large unexpected tax bill again, I immediately dumped $11k into a Roth IRA so that all gains would be tax free… including ridiculous unexpected dividends and capital gains. That is my long term account. I expect continuing devaluation of the dollar relative to commodities and foreign currencies, and I expect inflation to pick up over time. I chose gold mining stocks instead of gold because gold stocks had been clobbered on gold going down over the last couple of years and as gold rises in price, the value of these companies should rise faster than gold. I chose foreign stocks as a hedge against the dollar falling. So far, I’ve had my best year ever up 45%+ over 3 months. I think the dollar has a long way to go down, because as the markets continue the downtrend and bad economic news keeps pouring in, the Fed will ultimately be forced to increase liquidity in the markets to keep them afloat. In short, if the markets go down, gold and gold related stocks will be seen as a safer and more profitable investment than the bubble in the bond market. If the Fed decided to go with QE4 or some other pseudonym for money printing to save the markets, gold and gold related stocks will go up as people hedge against high inflation and an either nominally or real falling stock market prices. I expect to stay in these stocks until I can either spot a better investment, or interest rates normalize without a collapsing economy.


This brings me here. I only recently learned about shorting stocks. I had incorrectly assumed shorting a stock meant a short term buy and being long in a stock meant holding for more than a year. Once I found out that you can borrow a stock, wait for it to go down, then give it back at the lower price keeping the change, I saw an opportunity for greater profitability than my long term investing. Tim’s name comes up pretty quickly when looking up short selling stocks. I watched a few youtube videos, saw he was giving 35 free tips that he uses in his trading, then decided to check him out a bit more with his all day trading event he has coming up May 16^th. I also signed up for his trading challenge, but his tuition is far more than I’m willing to spend at this time, so I declined. I doubt I’ll ever be a challenge student simply because… either his lessons work and I won’t need his tutoring by the time I’ve made enough money off of them to pay for itself, or his lessons don’t work and I won’t need his tutoring at all. Overall, I’m convinced they work based on his youtube vids, but unfortunately I cannot afford to spend $1000 per video. Being the resourceful person I am, I decided to hunt down used copies on craigslist and ebay. I was able to obtain most of his videos and I’ve already plowed through PennyStocking 1&2, ShortStocking, Level 2, and I’m currently on How to Make Millions. TimRaw, TimFundamentals 1&2, SEC Filings, and TimTactics are next (not necessarily in that order). I can’t find Spikeability used anywhere, so I may have to just do without until more profits come in.

I’ve learned very quickly that day trading is far different from the investing I’ve researched and done over the last decade. My comfort level with investing in stocks based on economic fundamentals is on par with Tim's on Short Selling. I'm hoping to beef up this area as well.