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     patch
Member
Username: patch
Post Number: 15
Registered: 02-2003Rating: 
Votes: 13
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| | Monday, September 01, 2003 - 03:13 am: |  
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Stage 1: The Excitement Stage
When starting in the market, EVERYBODY thinks that they are cleverer, know better and will beat all records previously set by other traders. The rules obviously do not apply to them and they will without doubt find a sure way of making more money, more quickly, than all the others have done. After all, the rules apply to everyone else, but “I” am an exception.
At this stage the most important activity is deciding how to spend all the money that you are going to make. A lot of time is spent on the web pricing new Ferraris, comparing the merits of Russian vs Czechoslovakian brides and deciding if Noosa really is the better place to live as opposed to Sydney.
Quote from this period:
“Microsoft shares were trading around $55 at the beginning of January. If I were to buy 1000 shares at $47 now, and let's say in a month's time they go up to $55, when I sell I'll make $8000 profit! Can anybody recommend a brokerage to use?”
Approach: Fundamental. Visiting as many websites as possible, wondering why they all have different PE ratios, trying to figure out why the stock falls like a MF when Morgan has just upgraded it and it’s earnings are going to be shooting through the roof according to the CEO. Reading Peter Lynch and trying to figure out what the next “hot trend” is going to be.
Estimated time to being rich: 3 months maximum!!!
Trigger for your buying decision: Disney has just released a follow up to Cute Puppies III and it will be a smash!!!
The bad news: You will probably make more money in this stage than you will in the next three years.
Wall Street word of wisdom you like to use:
Did you know that if you were invested in stocks from 1902 to 1999 you would have made a return of 6500% or whatever.
Stage 2: The first loss
After you have completed what seems like the most important part, opening an account with YOUR broker, you can then proceed to back the ute up and load the money.
Most important activity: Letting all your friends know that you are now a player. Talking loudly about YOUR broker and what the market is doing at the cousin’s 21st birthday party. The fact that you mix up bull and bear doesn’t bother you but it bothers your uncle who is still paying off HIS broker.
Approach: Buying some research sheets or newsletters and if you are REALLY lucky, getting the research from your brokerage. (After all, Shonky your broker has promised to give you the inside line next time he has some news and he assures you that his brokerage has PROPRIETARY research that they will share with only you and their other 250 000 suckers uhhh I mean customers).
Estimated time to being rich: well, maybe 3 ½ months. Let’s not be unrealistic now.
Quote from this period:
These brokers control the market. They are the ones with all the information. That’s why I want to get in with them.
Trigger for your buying decision: Shonky calling to tell you about an upgrade. (The fact that you hear their traders in the background dumping as much of this POS stock as they can feels strange but, hey you are new and you must have misunderstood the terminology.)
When it plummets 10 points seconds after you buy it you realize that Shonky must actually have said Sell and you somehow heard Buy. Ah well, doesn’t matter. You will make it up on the next trade.
The bad news:
You are in the stock market.
Wall Street word of wisdom you like to use:
Responsible investors are in it for the long term.
Stage 3 The first BIG loss.
You and Shonky are getting on like a house on fire. He laughs at your jokes and explains that it just takes a bit of time to get the hang of this game. Some of his clients are making a fortune at it but only the ones that hang in there for the long run. These wimps who get out usually don’t make it and the way to do it is to be aggressive. If a stock doesn’t perform, sell it!
Most important activity: Reading the financial papers, cruising the chatrooms to get the “inside story” checking to see how much stock the CEO is buying or selling. (The fact that in the corporate world today, the last person to know anything about his company is usually the CEO hasn’t come to your attention yet. However the CEO is an expert in the highly specialized field of stock options and Panamanian tax havens.)
Quote from this period: You’ve got to spend money to make money and boy, is Shonky going to help you spend money.
Estimated time to being rich: 3 ½ months but starting now though.
Trigger for your buying decision: Shonky is really giving good service. He calls you every day with helpful tips like suggesting that you move out of this sector because it doesn’t have any momentum at the moment. Well_Hung from the Yahoo board confirms that this stock is on the way to the moon so you agree. At this time the only thing you know about churning is that it is the feeling you get when you open your brokerage statements and see how much is swallowed up by commission.
The bad news: You are getting a sinking feeling that stocks can go up as well as down.
Wall Street word of wisdom you like to use:
What’s a margin call?
You can’t work out:
Whenever you send in an order before work, you always seem to get filled at the high of the day.
Stage 4 Taking control}
Wall Street word of wisdom you like to use: F@£%*ing broker!!!
OK, you realize now that it may be a lot better if you take control and make the trades your self. The internet has levelled the playing field etc etc blah blah blah.After all, how hard can this gig be.
So you open an account with Ameritrade or some such company where you learn that you can now sell stocks short, you don’t only have to go long. You also subscribe to a serious newsletter which tells you how the whole corporate world is a bunch of crooks and all companies are bankrupt on paper because their PE’s are too high and you should short anything with an INC in the name... (Coincidentally the Herald has a whole supplement about bear market investing in it on Sunday!) Wow, this is so cool; it’s like karma, all coming together here. (Unknown to you, the Herald article is a clear sign to the pros of the end of the bear market and prices rise virtually vertically. The lucky Herald readers follow the highly qualified financial editor and short the market all the way to the poor house) Funny how these articles get in the paper huh? It looks like a lot of the brokers have paid for space in the supplement. They couldn’t be trying to shake out the last of the week hands now could they?
Quote from this period: “The current fundamentals do not justify these prices” or “It’s only a loss if you sell it.”
Most important activity: Trying to hide the losses from your wife
Estimated time to being rich: 5 months now because you have to make up the losses your bastard broker caused you.
Trigger for your selling decision: The start of the war because global demand for Disney products will dry up (You don’t realize that Disney consumers couldn’t give a damn if Hitler came to power as long as they could buy the latest Little Mermaid video.
The bad news: You are probably more qualified now than Shonky.
You can’t work out why:
It takes Ameritrade 10 seconds to fill your order. Their website must be really slow! ( I wonder why???)
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spider
Member
Username: spider
Post Number: 970
Registered: 10-2002Rating: N/A
Votes: 0
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| | Friday, September 05, 2003 - 03:05 pm: |
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Patch,
don't tell me the story ends there, I want to hear more!
spider.
.
"Everyone seems normal until you get to know them."
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mbes
Member
Username: mbes
Post Number: 35
Registered: 11-2002Rating: N/A
Votes: 0
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| | Friday, September 05, 2003 - 11:14 pm: |
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Ditto. I can relate to everything written here.
More please.
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susieq
Member
Username: susieq
Post Number: 108
Registered: 12-2002Rating: N/A
Votes: 0
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| | Friday, September 05, 2003 - 11:30 pm: |
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Patch
Anxiously awaiting the next chapter.
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jerrymaguire
Member
Username: jerrymaguire
Post Number: 7
Registered: 07-2003Rating: N/A
Votes: 0
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| | Wednesday, November 12, 2003 - 08:05 pm: |
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C'mmon patch don't stop there
the story must go on
Even Matrix got part 3
Regards
Jerry
(Message edited by JerryMaguire on November 12, 2003)
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gundy
Member
Username: gundy
Post Number: 15
Registered: 06-2003Rating: N/A
Votes: 0
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| | Wednesday, November 12, 2003 - 09:26 pm: |
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Patch,
Do you know how many people make it on to Spider's Wall?... and being that he has just had a birthday on the charts,you have got to give us the the next chapter!If not for Spider, then for a fellow "QUEENSLANDER".
Patiently Waiting................
Gundy
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patch
Member
Username: patch
Post Number: 18
Registered: 02-2003Rating: N/A
Votes: 0
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| | Sunday, January 04, 2004 - 03:50 am: |
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Thanks fo the kind words al. I will post more as soon as I have a chance to write some
Take care
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deanrosario
Member
Username: deanrosario
Post Number: 167
Registered: 11-2002Rating: 
Votes: 1
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| | Sunday, January 04, 2004 - 04:59 am: |
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Can't believe it's taken me so long to read this thread!!
Absolutely brilliant story...
Thank goodness I'm not paranoid, or I would think that Patch had been spying on me when I started trading and then penned his thoughts!!! 
Colin, may I suggest you advise all new members to read Patch's story.
Regards
Dean
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shawky
Member
Username: shawky
Post Number: 132
Registered: 11-2003Rating: N/A
Votes: 0
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| | Sunday, January 04, 2004 - 10:20 am: |
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Patch
Just catching up on all the queued posts.
That was great, I gave you 4 stars, the 5th will come when Stage 5 and 6 goes to press
regards
Shawky
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shawky
Member
Username: shawky
Post Number: 133
Registered: 11-2003Rating: N/A
Votes: 0
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| | Sunday, January 04, 2004 - 10:26 am: |
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Patch
Just realised I can't send you this privately for you to take credit, so here it is. I liked it enough to put it into word so that I could print it and stick it up on the wall!!! Forum post don't seem to print very well for me.
All yours to take credit for:
regards
Shawky
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new2waix
Member
Username: new2waix
Post Number: 433
Registered: 10-2003Rating: N/A
Votes: 0
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| | Sunday, January 04, 2004 - 12:08 pm: |
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What a great story patch! Those stages read like my trading diary.
I guess it all ends by us taking control of your own destiny and relying on our own analysis to make buy/sell decisions and not some suited broker or Well_Hung from Yahoo Chat.
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gundy
Member
Username: gundy
Post Number: 19
Registered: 06-2003Rating: N/A
Votes: 0
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| | Monday, January 05, 2004 - 09:26 pm: |
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Hi Patch,
Thanks for taking the time out to post for us its good too have you back.
PS: As I always print your posts I still have the DT by....and my lips are sealed.
Again many thanks for your help and guidance on trading and psychology.
Regards
Gundy
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iwillwin
Member
Username: iwillwin
Post Number: 37
Registered: 10-2004Rating: N/A
Votes: 0
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| | Sunday, November 21, 2004 - 02:36 am: |
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Hi Patch,
i know this is an old post but i havent been arround long and man this post is the BOMB!!!
its been nearly 9 months when the next chapters coming?
EXCELLENT, one of the best posts i have read!!
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A short rendition by Patch