How To Buy A Coffee With A Single Stock Trade In 10 Minutes

I’ll admit, I struggled with the title for this post. Mainly because it puts a lot of pressure on me. As I write this, I’m just at the start of the strategy. That said, I have full faith in the strategy, and wanted to give myself something to push me forward. The strategy that I’m talking about is trading stocks (surprise) with Robinhood.io. Why Robinhood?

Free commissions.

Moo, bitches...

Say what?

That’s right. Free commissions. I’ve talked about Robinhood.io before, but it wasn’t until this week that I was able to finally trade with the app, because it took them this long to get an Android app put together. I invested $10 to test it out. That’s where the title of this post comes in. My goal isn’t to make millions, it’s to trade enough in a single trade to buy myself a cup of coffee.

My coffee costs $2.80.

So there we have it, I have to trade 28% of my original $10 in a single trade. Will I do that in a single trade? Hell no. It’s going to take some build up. And in fact, I’ve actually already been working on that.

I deposited my initial $10 on August 18th, 2015. Today is August 26th, 2015 as I write this. My portfolio sits at $10.72. For those keeping track at home that’s a 7.2% of the original invested amount. And I’ve even lost money on a trade. Once. Just once.

So what’s my strategy? It’s actually really simple. Small gains. I head over to Yahoo Finance or Capital One Investing (Previously Sharebuilder) and look for penny stocks that are showing high fluctuations for the day. I want them to be pretty consistent spikes, or at least trending one direction or the other. Once I know the trend, I aim to buy at the low end of the spike, and sell at the middle of the spike.

Why the middle?

I don’t want to risk too much, so I put a limit sell order on the middle price, and then I watch. I do the middle because it let’s me change the price if I think it’s skyrocketing again, but it also let’s me have a point to hold out for if the spike is slow. You see, I want to be in and out of a stock within a few minutes. I don’t want to hold for an hour or two. That’s too risky. I want to be able to pick it up at $0.40/share, and sell it at $0.425/share within a few minutes.

I’ve made some decent trades this way. Once I make a profit, I buy more stock. This let’s me compound the benefit. The plan is to cash out once I hit $20, which will let me risk as much or as little as I want, because at that point my initial investment, my cash capital, is out of harms way. I will only ever break even at that point. Thus, I can’t lose.

Yea, yea, but what about the Coffee?

My average profit on a trade is 6.5%, which means to make the $2.80 in a single trade, I will then surpass my $20 goal, and be able to cash out. Do I think that’s going to happen soon? Who knows. You’re only as profitable as your last trade.

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State of the Stock – February

This February we got quite a bit of money from our tax return. As discussed, I took that return and invested quite a bit of it. The idea was to minimize the commission fees, by investing hundreds at a time using the 3 Months to Profit formula. So I did. Granted, it’s a bit of a misnomer calling it that, because it doesn’t guarantee anything. As you can see here, stock prices fluctuated, and profits are all negatives.

Another reason why you’ll notice a change between INTC and INTC from January, is because I realized in doing my math that I was figuring the profit incorrectly. I had been “re-adding” the commission to the value of the profit field, but I re-added about 200% more commission than I needed to, thus initially creating a false profit. This is why I don’t pretend to be an expert, or that anything you see in my portfolio is solid gold advice.

That said, I also let it be known when I make a mistake, and when it’s fixed. So here are the updated numbers as of this morning. End of day values may change, but as of 11am these were accurate within a few pennies.

STOCK TOTAL PURCHASED TOTAL SOLD PROFIT
TEU 126.4225 65.0221 (-$5.98)
BAB 13.682 4.0772 (-$26.11)
INTC 3.0778 3.0778 (-$9.94)
O 11.6080 1.5408 (-$8.27)
PGH 40.7213 0 (-$10.95)

ShareBuilder and the Capitalist Cares Google Doc Don’t Agree. Here’s Why…

I’ve known for a while that there was a discrepancy between what ShareBuilder says my portfolio’s profit is, and what my personally designed portfolio says. You would assume one of us is wrong.

You’d be wrong.

See, the thing about numbers is that numbers never lie, but sometimes they bend the truth. ShareBuilder is a business, and in their business you need to be making money, or at least not losing a lot of it. So if you happen to sell off every share of stock that you own–or even just one share–they remove it from the calculations. Poof. It’s gone. Does not exist. Cannot be used to calculate a loss.

In the Capitalist Cares Stock Portfolio I keep a running total of every single trade that I’ve ever made. I do this to know exactly how my portfolio has performed over a lifetime. That means that the value you see in my portfolio doesn’t just include stocks that I currently own, but stocks that I have ever owned. So when you see that portfolio in the green, you know that the profit is lifetime, and not just this one time thing.

I do this portfolio wide, but I also do it individually for each and every stock symbol I purchase. This lets me know which stocks are performing, and which aren’t. I know which stocks I need to start cutting my losses on, and which stocks are holding up the value for the entire portfolio.

So if you happen to use the same portfolio for your own trading and you see this discrepancy, don’t worry, you’re right. The numbers are different.

But they’re also both correct.

Make George Washington Work For You

If you work, you most likely get a tax return. If not, I feel sorry for you, now go stand in the corner and feel shunned.

Kidding.

Anyway, what I’m doing this year with my tax return is this: Making it work for me. I worked my ass off for that tax return, and now I’m going to give it the same treatment it gave me. Hard work, and a bit of flogging.

I’ve taken $1,000 of my return and sent it up to my stock portfolio. That’s about 10 times the amount I invest on a normal basis, but that’s the point. Investing is long term. Which means, if you’re doing it a little at a time, even fucking longer. I love it though. I love to watch the little numbers go from little numbers to big numbers, growing up and spitting out little numbers of their own.

Yes…I did just refer to my dividend paying stocks like they were children. And that’s how I treat them. I watch over them, I make sure they’re growing and doing the things they should, and I guide them as needed, but for the most part I let them do what they do, and live their own lives.

You can expect that this month’s portfolio evaluation will be greatly in the negatives, but don’t let that fool you. Negatives are fine. Negatives below cost-basis are not. And that’s the idea.

What’s cost-basis you ask, oh digital reader who I can apparently hear?

Cost basis is the price that you paid for those stocks. Meaning, if you dropped $1,000 on stocks, your cost basis is $1,000. Now, if you’re smart like me (which you are, because you’re here) you know that you need to also figure in commission. So, for this $1,000 investment I’m losing $4 per trade, on 4 trades that totals $16. But the total amount I’m spending is $1,000 for that cost-basis, meaning only $986 of it is going towards actual shares of stock.

So if you decide to go ahead and use the Capitalist Cares Stock Portfolio as your way of tracking stocks, you’ll need to know a few things. When you look at cell B3, you’ll see it’s labeled Portfolio Profit. You might believe that’s simple cost basis with current value subtracted. That is not the case. That is all expenses subtracted from Current Portfolio Value. By all expenses, I mean I include future expenses into it. The value there is the dollar amount that I would have as profit if I were to sell every share that I owned at the current prices without any change. It sounds hard to calculate, but really all I did was add the sell commission to the cost basis. I did that by subtracting that from the value for each row. You can see that figured in on the F row. The part of the formula that reads “- $E$2” is the defining calculation for removing the sale commission.

This post has gotten a bit long and boring. So here is a picture of a cow. Because, you know…cow.

Moo, bitches...

Moo, bitches…

State of the Stock – January

So I decided to do a run down of my current situation with my stock portfolio, where I have decided to change how I buy my stocks. Since I made that decision, I have purchased no new stocks outside of the automatic dividend reinvestment. I can already see growth, and potential with this method of investing, in a short period of time.

Some of you may wonder how I get my figures, and I have explained this in the past. In short, I do not consider dividends to have a dollar value, simply because they are free to me, and cost no commission to reinvest, thus they are a zero dollar amount stock share. For this reason, the value of the Average Price Per Share can, and will, creep closer to $0. This allows me to build up a portfolio of solid dividend shares, sell off all of the shares that I have purchased to that point, a piece at a time, and eventually leave myself with a dividend of $0 share stocks.

This is akin to a gambler walking into a casino with a $100 bill, winning at roulette for $500, and then depositing that $100 into his account and playing with the $500. Is it really losing money if you lose it all? Of course, it is. But it hurts much less, because you’re not actually at the negatives, you’re at the break even point.

STOCK TOTAL PURCHASED TOTAL SOLD PROFIT
TEU 65.0221 65.0221 $6.84
BAB 4.0772 4.0772 (-$17.40)
INTC 3.0778 3.0778 $13.24
O 4.9486 1.5408 (-$40.69)

Robinhood – A New Trading Platform

So a friend of mine sent me a link today for a new trading platform called Robinhood. I’m a skeptic, but I thought I’d detail a bit of what it’s supposed to be here. Commission free stock trading. They don’t really have a clear explanation on how they’ll make their money without commissions, but they’re venture funded by Google and others, so I’m giving them a bit of leeway there.

I signed up to become one of the first adopters, and I’m hoping to get my link before long. If you’re interested, sign up yourself. I’m not going to be putting much faith in them until I see for myself what to expect. I’ll probably gamble $100 on trades.

I emailed their support email an hour ago, but haven’t heard back yet. I’m looking to find out if they’re going to support automatic investing like ShareBuilder does, which would be one in their favor. If they do, then my previous posts about 3 months to profit would not be required at all, since they’re all about limiting the commission fees.

They’re working currently on implementing Margin trading, which I would never use because I find it insanely risky. I’m a much more conservative investor. I like to have my money work steadily for me, not do crazy shit and expect it’s going to come back rich.

Happen to know about Robinhood? Leave your knowledge in the comments so we can all bask in the glory that is your hubris.

The Capitalist Cares Stock Portfolio

So I decided that, since I talk about it so often, I might as well show you my portfolio. The link I’ll post below is a direct link to the Google Doc that I use for my own stocks. I buy / sell through ShareBuilder, but I found that they don’t figure in sale commission into their own profit calculations, and once you sell it removes the stock from all equations entirely. I didn’t like that. So I started putting together my own system. This system keeps track of all profit / loss, portfolio-wide, and as long as you never delete a sheet, you can track the total profit / loss forever, and use one investment to cover the losses of another, and get an idea of total portfolio value.

Currently you’ll see that my value is in the negatives. This may appear bad for someone who’s sitting here with the hubris to talk about finances, but it’s actually just plain math. I spent money to purchase stock, and in those instances you are starting in the negatives, not at 0. The first step to profit is finding your break even point, the next step is finding the point where you can cash out with shares left over. From there, you can get your risk out, and let the rest build up as much as you want.

CHECK OUT THE PORTFOLIO HERE!

One major thing you’ll notice is that I’m heavily invested in only a single stock. That goes against all the advice on diversification, and I’m well aware of that. I have faith in the stock, though. It has a proven track record. I also have a back up plan, which includes BAB and INTC, which you’ll also see in my portfolio. Will I be revisiting TEU? I haven’t decided yet. It’s a very volatile stock, which has quite a bit of risk associated with it, but I can fit it into a 6 months to profit formula fairly cheaply, so I might consider it again.