The Stock Market from my point of view:

The year of 2005 I spent almost every waking minute outside of my full-time job learning everything I could about the stock market.  My original goal was to learn as much as possible about the stock market and make some smart investments as a hobby.  I was going to take a measly $500 and put it towards some up coming companies in hope of a future return.  

My first stock I purchased was (BMD) Birch Mountain Resources based out of Calgary, Alberta Canada.  BMD has the rights to metallic and industrial minerals, including limestone, on approximately 1 million acres north of Fort McMurray.  They are currently harvesting limestone from a quarry that is 400+ acres and has limestone reserves up to 131 feet thick.  This limestone quarry is strategically located in an area central to current oil sands mining and institute development.  Over 86 billion dollars in oil sands development is planned for the region which gives them a long term involvement.  

These key notes above about BMD are the basics to every stock.  BMD has what newer investors with limited cash are 

looking for.  It is developing company with a great future.  It has a large supply for an area in high demand.  Best of all it has the potential to supply to an industry with an estimated 86 billion dollars in growth.  So I invested into a great idea and assumed I would see profits based off of the above information.  Wrong, this stock had no action due to no sales.  It is a great long term play but not much fun to an investor who plays the stock market as a hobby.

After watching Jim Cramer's Mad Money daily I tried a few other long term plays.  After spending months of reading company quarterly reports, yearly financial reports, following trends, watching CNBC, FOX, etc, waking up early to listen to conference calls I found myself extremely overwhelmed.  I had learned all the basics to stocks and stock trading but couldn't piece all of this together to make a smart buy on my own.  I started to question whether stock trading was something I could ever make money with.

Soon I found a new style of stock trading - day trading penny stocks.  The thrill of making quick money slowly started to creep in as I found multiple message boards and chat rooms with people making sometimes up to $3000 a day.  I started following these stocks that people mentioned and noticed large spikes in positive and negative directions.  I learned very quickly how low-level day trading worked.  It was as simple as finding fluctuations in any high volume stock, buy on breaking news or hype and sell as soon as the train slows down.  

I decided to take $5000 I had and try my above learned skills to turn it into $15K to $20K.  I wanted to pay off both of my vehicles and credit cards.  I think this is the typical goal of most penny stock day traders and short term investors.  The problem with this goal and the day trading technique I used is you are in complete competition with all the other penny stock trader.  The person that gets the latest tip, catches the breaking news of a hyped stock, or pre-press release news wins the game.  Getting my hands on this information proved similar to my long term attempt.

In an hours time I was able to find 10 stocks or more that I was interested in buying.  After realizing how difficult making good buys was going to be I made a foundation of rules.

1. Buy into the hype and sell when the train dies.

2. Rate every stock on money making potential vs. risk.

3. Never hold onto a stock overnight.

4. Accept losses, learn from them and move on.

These simple rules worked well and I was able to make flips for $100, $200, and sometimes even up to $700 dollars in one hour.  It didn't take long before I lost similar amounts.  My greatest downfall with my stock flipping was trying to recover from every loss.  I would double down on the next stock hoping to make a few thousand.  Enventually I went through almost $10,000 with one stock left.  

I went into JPHC with my last $3,200 all in.  I heard the hype on this stock and knew it was going to merge soon which could mean a buyout.  My 3,200 dollars bought me roughly 2.8 million shares at an average of $.0011.  April 25th a few days after I finished buying in the great news came out.  JPHC was going to buy back shares at $.005 a share.  That meant my $3,200 dollar investment was soon to be worth $14,000.

Well sure enough the stock ran like a race horse leaving me feeling awesome and jumping up and down for joy.  I left for work the afternoon the news came out thinking I was back in the game for good.  I soon found out the bad news.

Turns out over the next few days everyone found out from a press release that the stock was going to be restricted to selling for up to 2 years.  We had two weeks to sell or be locked in to a penny stock for quite some time.  My $3,200 investment now tanked to a value of around $300 at one point.  Everyone was selling in fear of their small investment being tied up with no option for withdrawl.  I knew at this moment that I was in for a big decision.  Sell my shares before the cut-off date and come out with a few hundred dollars or make for the long haul.  

I decided to ride it out and since then have watched my shares change in price from $300 up to $200,000+.  (Yes, believe it or not at one point they were worth this amount and I couldn't sell them.)  For what it is worth my current stock PAVCE is worth a total of around $6000 and changes daily.

The moral of the story here is the stock market is a rough ride.  There are so many factors that influence the worth of your stock.  I have not lost my hope in making it big and I believe one day when the time is right I will give it another shot.  I believe anyone with a "go getter" attitude can learn and make money but the safer road is to listen to the old timers.  Stay away from the penny stocks and pick the safe road.  The S&P Standard and Poor's 500 Index has a historical return of 10% and some mutual funds can give you even higher returns.  We all need to invest for retirement and choosing mutual funds are our best options.  If you don't have an hour or more a week to spend researching on each stock you own then you should think about letting someone else manage your money.

Your friend,

EaglezEye