Welcome to my blog. I am the Uneducated Trader also known as Adam. To tell you a little bit about me, I have been trading stocks actively since 2011 and I still don’t consider myself very good at it. I have however gained a wealth of knowledge over the past few years, I would like to share some of those experiences with you here.
Let’s start with how I even began to think about trading stocks. My father has always been invested in the stock market but did not actively make moves. He bought stock as a young kid and let it grow for 40-50 years. Guess what; split after split he now has a hefty nest egg from over the years. He has always been open with finances to me over the years because if there was one thing he taught me, was about money and compounded interest. I think he told me more about that over the years than anything. My parents would take half of my paycheck from me every time I was paid since the day I started working and put it in a savings account for me. I turned 18 and guess what, I decided I want to buy a nice car and sure enough I had enough money for it. At the time I didn’t think much of it but now that I look back, I learned a valuable lesson. Responsibility.
Anyways, so right after I turned 18, my dad landed me a job as a teller at a local bank and I started contributions into my first 401k plan. I never paid attention to it much after it was setup. Around 5 years later I looked and it was a decent nest egg, or at least I thought it was. That’s when I started to pay attention to it a little more closely. Never really made any changes to the account but it got me thinking about all the things my dad had taught me over the years about stocks. Looking back it really wasn’t much but I thought I knew it all.
I believe it was 2010 when I opened up a thinkorswim account (before merging with TDAmeritrade) and I put $1500 in the account. I started trading stocks with the paper trading account and let me tell you, I was amazing with the $100k they gave me. This was easy, I thought. Let’s do this. First stock I ever bought, SIRI. Yup the stock that moved .01 to .02 cents per a day. I waited weeks and watched it go down. Finally sold for a loss (under $100) and I thought, man maybe I picked the wrong stock (duh!). So I sat back and watch (no clue what) stocks for a few days.
That’s when it hit. The email that would basically change everything, a pump and dump! I had no clue at the time what it was. I got an email saying hey this stock was going to the moon, you need to buy it. Luckily I did not buy it at the time. I don’t recall the stock but I am sure I could find the original email if I tried. I just remember that sure enough that stock went up some 50% the next day and I thought, holy crap I am so in on the next one. Sure enough it came around again and guess what…this time it did nothing and went down and I lost the majority of my account. I was pissed.
There I am, pissed off because I lost a ton of money (to me at the time) in a matter of days. I was determined to find out why. I started searching google for the stock ticker and eventually stumbled across a website/twitter account that selected only the best picks. The subscription cost me about $49 a month or something along those lines. I thought to myself that I could follow him for a bit and I would make my money back. He seemed to pick some decent stocks. Needless to say I canceled within a week (even though I paid for the month) because I thought he was terrible. I luckily only lost a couple hundred but it basically wiped what remained in my account mainly due to the cost of trade execution through thinkorswim. I wasn’t as mad this time because I could only blame myself for not researching the guy more than I did. Back to google it was to find another stock trader.
That’s when I ran into Tim Sykes. Number one on covestor and all the trades are verified? “Too good to be true”, I thought to myself. I started researching him but at the time, Tim wasn’t as big as he is now a days, so the information was hard to come by other than his site. Going into November of 2010 I finally said screw it and pulled the trigger. I subscribed to Tim’s silver subscription and deposited more money with thinkorswim. Fresh start I thought and so began my “Tim Sykes Era” if you will.
Two months into the subscription and I found the Tim Challenge on his website. I had been studying all his video lessons at the time but I wanted more because I wasn’t ready to trade yet. So I applied. At this time it was a month process (I don’t know what it is now but will find out for my review). I had 4 interviews with Tim’s employees and I made the final cut for an interview with Tim himself. Awesome I thought, this is going to be a great opportunity. That’s when they hit me with the, “Well you know the teachings don’t come free”. Yup, it cost me around $5k to join if I wanted to be part. I was assured it was an exclusive group and we would receive the most attention. I contemplated it quite a bit. At the time I had just gotten a promotion at work and was making more money than I needed so I justified it that way. Of course I didn’t have the money, so I put it on a credit card (terrible mistake, avoid credit cards at all costs) and joined.
At the time, I was on top of the world thinking everything was going my way. I had just bought a house, met a girl, promotion at work and now a chance to make millions. What wasn’t going my way?! Come to find out, trading. Over the course of the next year and a half, I opened 3 brokerage accounts (more credit card debt) and lost probably a total of $10k maybe a little more on the stock market. I was terrible. I made up every excuse in the book as to why I was not good at it but in the end I lost a bunch of money and gave up. Looking back, I chalk this up to not following the strategy Tim provided and thinking I was better.
There I was low on funds and thinking maybe the strategy just doesn’t work for me. I join Investors Underground (IU) for a few months with my remaining money. I learned a whole new set of rules and type of trading other than shorting. It started to click. I wasn’t making money, but I was sure learning why I wasn’t and what I was doing wrong. Nate provided help whenever I needed it (that was a lot) and his chat was on point. Of course, me being me, I thought I would go against the grain, lost my shirt again and finally gave up. This had nothing to do with IU or Nate, in fact when I told Nate I was unsubscribing, he took the time to send an email asking why and if there was anything he could do to help me out. I basically said no thanks and that I would be back some day.
Defeat, one of the worst feelings in the world and honestly I had nobody to blame but myself. It sucks but it was the reality. I was tapped out on funds and I just wanted nothing to do with trading anymore. This is when I stopped writing in the blog, closed out a bunch of accounts and basically stopped trading all together.
Over the next few months, I plugged along at my 9-5 job and thought maybe I am meant to work for a living. That’s when I got the bad news. Yup company is getting bought out (was public at the time) and my position was being eliminated. Life sucks sometimes but I feel it always turns around. I got such a large noticed of my position being terminated I had lined up another job and collected my hefty severance check. Sweet deal!
As an added bonus, when the company went public years ago, I had bought a bunch of stock during the IPO and added some in my 401k. This turned out being one of my best financial moves ever. Boom my retirement exploded over night (really months) between the stock I bought in the IPO, my 401k shares, pension plan and lastly the ESOP. Role the film ahead to after I was able to transfer all my money together in one spot and I am looking really good on paper for retirement.
So here I am, its May of this year and I am looking at this huge sum of money that basically came out of nowhere (not really) and it is just sitting in Fidelity as cash reserves. That doesn’t sit well with me. I decide I want to invest it. Thinking back to my dad’s story, I think, I will diversify across multiple large companies and play the market that way. See if I can make some additional money. Guess what, it worked and is working. I have increased my account quite a bit in the last 5 months and will continue to trade like I have. Most people would advise against trading with retirement money and I would agree with them. I stick to pretty strict rules and make sure I don’t exceed certain position sizes ect.
There you have it. I am currently only trading my IRA through fidelity. This means no shorts (can’t nor do I want to) and no options. Which I am fine with. My goal in the end is $5m (go big or go home) and if I hit that I will quit my job and focus on trading. I also plan on re-opening a regular trading account to trade that as well.
Be sure to subscribe to my blog for updates along the way on my journey to retirement!