Why I Just Bought Facebook (FB) Stock

I just bought Facebook (FB) to be contrarian because of the way the IPO "fizzled".

I first started to think about buying Facebook because, for the last several weeks, I saw lots of news stories warning against buying Facebook when it went public.

Everywhere I looked, reports and columnists warned how the stock is over-hyped, the insiders want to cash out, people are foaming at the mouth to buy it, etc.  The stock would run away at the open and, if you were foolish enough to try and buy it during the first day, you would end up getting burned.

I've learned to be skeptical of all these financial stories.

Then, this afternoon, I saw that Facebook did go public this morning at $38.  The stock only opened at $42 (so much for the "frenzied pop"), touched $45, and now is around $40.

Also, the last couple of weeks have been bad for stocks, and it looks like Facebook failed to rally the over all market.

At this point, I don't feel like Facebook is overpriced.  I think that, over the next several months, it has a good chance to go up because, as the uncertainty with Greece works itself out, and the markets put it behind and start to recover, individual investors and funds will start to revisit Facebook.

On the other hand, I don't see a lot of room on the downside for Facebook.  Google Plus doesn't appear likely to do to Facebook what Facebook did to My Space - at least not yet.

As always, I bought Facebook as a long term investment, and plan to manage the position and harvest it for cash by trading around a core position according to my Stock Trading Riches system.

Naked I Trade, Naked I Live

No - I don't literally trade naked or live out my day running around the house naked!

I had a zen shift after getting zen slapped - I can't grasp, hold onto concepts anymore - I'm free.  That's what has made me a successful stock trader.  I no longer hide behind technical analysis or look for patterns, or expect the market to do what i think it should - I m no longer attached to the outcome.

 I just use my Stock Trading Riches system.

All I care about is the stock fluctuates - I then play the stock.  I follow it in and out - reset constantly.

That is how the rest of my life is now  - old patterns are shifting, changing.

I want to be reborn every time I trade or write.

CFD Trading – What is it and Why is it Popular?

A CFD or Contract for Difference is an agreement between a “buyer” and a “seller”, where the seller agrees to pay the buyer the difference between the current price of a financial asset, and its price at a pre agreed point in the future. The CFD is a relatively new financial derivative that has many similarities to spread betting and many CFD Brokers offer both services. Spread betting still remains the most popular derivative instrument in the UK due to the tax free status is enjoys. When you agree to a Contract for Difference, you are required to pay the broker in question a fee and this will be taken in the form of a commission and/or spread.


Why is it popular?

There are a number of reasons why people choose to trade CFDs rather than purchasing ownership of financial assets:

Shorting. When you purchase a company share or any other financial asset, you are essentially betting on its price increasing in value. The problem is, if you think the price is going to go down, you cannot put money on this outcome happening. This is where CFDs come in. A Contract for Difference broker will allow you to take either side of the contract which allows you to bet on its value going up or down.

Leverage. When you trade CFDs you are likely to be doing so with leverage (margin). This means you can take out positions that are worth considerably more than the value of your bet which allows you to receive a much higher return if the market moves in your favour. Conversely, if your position turns out to be unsuccessful, you will end up losing at a higher factor.

Market choice. Large CFD providers tend to offer a vast selection of financial markets. You can take out positions on a whole host of company stock, commodities, energy prices, interest rates and much more.


Where can I trade CFDs?

There are an ever growing number of CFD brokers on the market and it is important to choose one that is competitive with its fees and financially secure. As we saw with the recent downfall of World Spreads, you do not want to trade with a company where you can end up losing your money. IG Markets is the largest derivatives provider and probably the best service provider too. If you are looking to sign up with a company, they might be worth a look.


This article was written by Greg Bassett, editor of the online trading guide www.blueIndex.co.uk. Check the site out today for a comparison of the top CFD brokers on the market.

The Pitfalls of Currency Exchange that Tourists should Avoid

The foreign exchange market is for many, a confusing one. Wherever Tourists go, they find themselves being offered the very best rates, 0% commission and more often than not, people lose out as they are not educated on the topic. This short guide has been written to make sure you do not suffer the same fate.

The problem with the tourist currency market is that it is quite unregulated and companies can (within reason) say whatever they want to, to win business over their competitors. If you need to exchange currency at some point in the near future, follow the following five steps to make sure you are getting the best foreign exchange rates:

1. 0% Commission doesn’t mean you’re getting the currency for free. Too many people fall into the trap of thinking an advertised 0% commission means they are not paying for a foreign exchange service. The phrase “commission free” is a very powerful one which is why most bureaus use it but you will often find that companies advertising such, are as expensive, if not more so than the competition. Companies that do not charge commissions will tend to charge a very wide spread which is the difference between their buy and sell prices and is essentially the same thing as a commission. The only thing you need to do when comparing companies is look at the actual rate they are giving you.

2. Don’t get suckered by your bank. High street banks are one of the most expensive places you can go to exchange currency. They prey upon their customers and are able to get away with the rates they charge because so many people trust them. If you can, try to avoid using a bank as there are much cheaper options out there.

3. Plan your currency needs in advance. Rather than leaving it until the last minute, plan how much you are going to take and weigh up the various options you are faced with. By giving yourself time, you will be in a position to research rates and choose the best method for you.

4. Consider using a currency card. Currency cards are a relatively new innovation to the world of foreign exchange although they are becoming more and more popular all the time. You simply preload your card with currency and can use it in restaurants and shops, the same way you would use a credit or debit card. The great thing about them is that the rate you will receive is far superior to what bureaus offer and they are much more secure than carrying cash.

5. Compare Rates. If trouncing around various bank and bureaus isn’t for you then you might want to think about using a rate comparison website. There are many out there that will check the latest rates and tell you which company will give you the most foreign currency for your money.

This guide was written by Marcus Holland, Editor of the currency rate comparison site ExchangeCurrency.com.

Instant Zen Article on Stock Trading As A Martial Art

On my Tao of Simplicity blog, I used the instant zen writing technique to bang out a quick article on Why Stock Trading is A Martial Art.

Zen Simplicity in Stock Trading

I developed the Stock Trading Riches system when I became fascinated with the idea of a pure Zen trading system. It would use no news reports, indicators, charts, or parameters to distract you from Now. It would be able to handle any market condition.

I turned to jazz, improvisation, Taoism, simplicity, and minimalism for inspiration.

I ended up building a simple and minimalist trading system around an old, obscure, 19th century Wall Street formula called constant value investing.

Author Interview on "SellingBooks.com"

Here is an interview I did for my book "Stock Trading Riches" on the book site "SellingBooks".

Here is a nugget from the interview:

What inspired you to write this book?

Years ago, I became passionate about stock trading, and spent hundreds of hours and thousands of dollars on books, DVDs, seminars, etc. Those techniques never worked for me and I got frustrated. A light bulb went off when I read a book called “Zen in the Markets.” I decided to focus on the present moment and simplicity, and developed a successful trading system that almost feels like meditation. I love sharing it with others who are interested in trading and investing.

Paying the Bills

Thanks for the post from Barney Crosby

I’ve got to find a way to streamline all these bills we are paying on our business every month. Luckily our t1 internet bill includes all of our technology packages (phone, internet, fax, etc). If I can just figure out how to streamline the other bills we will be good to go. It is a lot to keep up with all the different expenses, when they are due, and where to send them. I have actually been late on a few payments because of this. My sister mentioned that maybe I should hire someone to be specifically in charge of the bookkeeping, and maybe she’s right. When you own your own business, one thing you learn pretty early on is that you’ve got to be good at delegating tasks to others, because you just simply cannot do everything running a business requires on your own. I guess this is another one of those areas where I need to delegate the task, and hire someone to be in charge of keeping up with bills and payments.

Investing = Stock Picking + Buying Low and Selling High

If you want your portfolio to beat the market over time (generating a better return with less risk), then picking good stocks is just part of the answer. In fact, you don't need to hit home runs by picking the next potential Microsoft or Apple.

You need a trading system that buys low and sells high (Looking for chart patterns is not a way to do it).

Here are 3 reliable ways:

1. Identify a stock that is about to undergo a dramatic shift. This goes beyond studying fundamental data to find good companies. You are also trying to time big moves up or down. This is the hard way to trade because, not only do you need to study the facts, but you have to figure out how the market will respond - not an easy task.

2. Evaluate the stock like a business. You calculate the intrinsic per share value of the company, and compare it to the stock price. Buy when a good company is under valued and sell when the company is overvalued. This is the system that Warren Buffett uses. It requires you to possess a high degree of financial and business knowledge. You also must spend a lot of time doing research. Unless you have an MBA and/or a background as an analyst, it is hard to really get a good edge.

3. Have an automated formula that scales in and out of stocks. This is the method that I use for trading, and I believe it is superior because anyone can use it. You don't need a lot of financial knowledge and time spent in research - only the discipline to stick with the plan.

With this method, you always have a base position in a good company, and increase or decrease the size of your position, depending on the change in the current stock price. Because you are not making a few large trades, errors caused by buying too high or selling too low are self corrected over time.

My Trading System

I became a very successful trader after I developed my trading system.

My complete system, along with information on possible variations, effects of commissions, and beneficial tax strategies, are detailed in my book, Stock Trading Riches, which is available on Amazon.com.

I don't want you to just follow my system - I want you to start thinking critically, and develop your own system, that you feel comfortable with.

My system is like zen or tao. The market fluctuates and I am at peace with whatever it does. The system has no optimized parameters - it simply uses the formula for each stock to see how many shares it should own NOW. It makes no assumptions about the future or remembers the past.

I am "one with the market" in the present moment, and buy low - sell high.

Here is an example with Amazon.com yearly prices. Just imagine having a whole portfolio, where you buy some stocks at the top, some in the middle, and some at the bottom, all feeding and pumping cash, as the markets cycle over years!