Online Stock Trading

I will start, nobly, with a defense. Why should I defend myself? Simply. Because most sensible people will take offense to what I am about to say. In other words, by saying what I have on my mind, and have had on my mind since I started this project, people will invent one idea in particular that I don’t even so much as plan on talking about. But the human nature is there, so by starting off by exposing that, perhaps I can dampen the hostility. And for anyone who is unsusceptible to this kind of reaction (which would be very few), accept my apologies for the lengthy preface.

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Bob’s at work one day, and Ted, a coworker, asks Bob what he thought of that funny Geico commercial. When Bob tells Ted that he’s not familiar with the commercial, because he doesn’t watch television, Ted, at first, thinks Bob is lying. Ted interprets what Bob says as “I don’t watch much television.” Ted admits (hastily) that he too doesn’t watch much, but just happened to catch that one commercial while he was doing crunches. Bob insists that Ted has misunderstood him, saying that no really, he watches no television at all. Ever. That he rarely, once every month or two or less, watches a movie that he rents, but that’s it. The one television that he has hides in a bedroom, always off. Ted, offended, asks various questions about what Bob could possibly do with his time, and defends his own use of the television: it relaxes him, he only watches educational stuff, etc. Both Bob and Ted however, know the truth. Ted is both lying, and has a bad habit, and Bob exposed them both. But Ted, being so often among people who all watch television, was caught off guard. Bob and Ted both know that Ted goes home plops down in front of the tube and let’s the television engage his mind. Ted is a sloth. The problem is, Bob doesn’t care that Ted is a sloth. Bob recognizes that he is surrounded by them, but is happy enough simply by trying to not be one himself. Ted, the exposed sloth, instinctively, subconsciously, reacts defensively because somewhere deep down, he knows he could do more productive things with his time, if he really had a reason to.

Facts:

1) Most people watch television

2) Someone who does not will be seen as unusual by those who do

3) For those who choose to watch no television, watching no television is just another choice, like what kind of clothes they choose to wear

Values:

1) Watching television is bad for you

2) People who watch no television think people who do watch television behave badly

Ted, in line with his expectations of the validity of the correctness of crowd mentality, assumes that the things most people do, because most people do them, are good things to do. Ted is the one who really cares, and from Ted’s view it seems to Ted that Bob, by telling Ted how Bob behaves, is actually telling Ted how he should behave. Ted thinks Bob is really expressing an opinion, but the opinion turns out to be Ted’s.

*****

Why do I hope to never sell a stock at a loss? Mostly because I think it is something that will work for me, personally. Here’s why. If I buy a stock and it falls, my first instinct would be to assess whether or not, were I to sell it, I could take those proceeds and invest them somewhere that will make gains. However, what’s the guarantee that I could do this? None. I just bought one that lost; I could do that again just as easily. Also, my comprehension of sunk cost is salted to the depth of my very bones. If I bought a stock of a great company, and it fell, I might be thinking that I would have liked to have really bought it at the newer, lower price. It’s the whole hindsight=perfect clarity problem. The good thing is, that by having such an overwhelmingly unusual admiration for the concept of a sunk cost, I can buy the stock at every newer, lower price. In fact, every time a stock does fall, that’s exactly what I’ve done. I cannot roll back the clock. If the company is truly solid, then I just bought a truly solid company at a lower cost or for a lower price.

The only time I could foresee changing my mind would be the potential insolvency of a company. Fortunately, this has not happened yet, and by choosing to admire the kind of stocks that I do, the likelihood of this happening in the future is low. Combine that with my preference for minimal time exposure and the risk becomes even lower.

As strange as this might seem to some, I’m so united with this perspective, that when a stock I buy does fall, I actually get a little excited. I sometimes buy more. I am perfectly comfortable with a falling stock.

Here’s another major reason: I think that taking losses can be addictive. This is just a personal belief. I also think that taking gains can be. The latter feels much better. I always assume that any typical trade can yield results on a continuum: on one end heavy losses all the way to the other end with heavy gains. Any time a loss is taken, is offsets an equal gain. By eliminating the losses, the continuum is much more favorable: minimal gains on one end all the way to significant ones, but no losses to offset any of them. The only way this could be disadvantageous would be in the case where taking a loss would guarantee you a gain, but if they were close, they would offset each other. Gains offsetting other gains is the constant offset I hope to experience.

I better go for now, I’ve got more thinking to do. And after all, you know, people who don’t watch television must find something to do…