Heads up, I love (abuse) parentheticals, use strikethroughs as a desperate laugh gag legitimate literary mechanism, often use ellipses as an excuse to trail off, change the subject, or pretend I’m funny or buy time… Hold on, I just got some free-help from a nice (allegedly competent, possibly British?) fella that I Twitter-stalked long enough to get him to chat with me about his algorithmic method of trading and… well just hang on, you never know where solid, actionable trade ideas will come from…
…sorry, $TWER had some news. I’ll put details at the bottom just in case picking apart stock news is a fetish of yours (like it is for me).
Anyway, the 1st thing that crossed my mind while deciding to put actual cash money into a “brokerage account” (it was on the Robinhood app, and many traders I’ve encountered on Twitter made it known that they see RH as something of a amateur’s slot machine novelty… so take it with a grain of salt if ya like) was shit like: What stocks do I buy? What companies do I like? What companies do I even KNOW a goddamn thing about that made them worth investing in? Which one’s going to make some money?
In retrospect, I’m kind of disappointed in myself for not recognizing that, while some of these questions are relevant, they only play a small part in how stocks work – in the market specifically, but also in respect to the companies that offered them up for trade. This seems obvious now that I’ve been trading for a few months (with profits rivaling my day job, because free-help and Twitter-stalking and beginner’s luck and no other reasons), but it’s becoming clearer that my limited view of trading/investing going into this shit probably isn’t that far from the average millennial’s.
I don’t know, but if so, then maybe the tips and lessons I’ve picked up along the way could help them. No judgement, but I’ll probably be writing on the subject with a tone similar to talking to my buddy Epicsauce (you don’t need to know his name) with Down syndrome about his favorite WWE match ups – as in I’ll spell it out like I don’t know how you’re going to understand it, so I’ll overly explain and justify it for you. I’m assuming that you are just as ignorant as I was and revel in the possibility that you may not get my thinly-veiled sarcasm. If this is actually read enough to be considered relevant, I’m sure one of you smart-mouthed, post-modern cunts (God bless you) will let me know in a way that’s oozing with irony and self-entitlement. With any luck, you’ll make me laugh at how fucking unnecessary it is for me to explain x, y, or z. Or for using someone with something other than typical mental development as an example (I looked up preferred language use because I care about EpicSauce).
What? I don’t know what offends you.
Introductions aside I want to put down some reasons why trading stocks seemed like the best thing I could be doing with my (and my family’s) dollars. Again, I’m hoping for something from the readers, but I also want to put it out there because fuck you I need to see it in writing. Here goes:
1.) My wife and I have vastly different ideas about what counts as a justifiable purchase, and I hoped some supplemental income could help loosen up the box-tight definitions we have about what makes sense to buy or at least give us some breathing room to unite through other means.
2.) ADHD-grade intellectual stimulation. I’m pretty confident ADHD (grain of salt again, some folks don’t see ADHD as an easy way to tell their boss/professor/pilates instructor they forgot to set the alarm after binge-drinking in the woods to celebrate Arbor Day… or just an epic Tuesday) has limited my potential from high-school (Super-Senior here!) college (Frat-Boy Dropout here!) and job-options (Aspiring Screenwriter… you get the picture), I’ve finally found some relief from a counselor recommending some life changes, a doctor recommending some meds, and (subjectively) a better doctor helping me figure out an effective dosage. Becoming a student of the market has been the best life change I’ve tried by far. The unending amount of variables that could/can/will effect the price-action of a particular stock are an amazing tool to keep all the noise aimed in one direction —> making money.
3.) The money is great and, at my most optimistic times, I see that it could provide opportunities for my kids to go places and see things that they could use to separate themselves from the chaff… and my seven year-old could rub in that little bitch SecondGradeSheHitler (probably shouldn't use a 7 year old's real name) bullying, judgemental face.
4.) Autonomy. I work a day job and it blows. At any given point of the day, I have anywhere between 3 and 7 "bosses" that I may be expected to answer to. I need a method of providing for my family that is requires me to answer to NOBODY BUT FUCKING ME. It's a confidence booster to go from CAN'T REMEMBER WHERE THE SALES PLANNER SHEET IS POSTED IN 1 OF 6 BINDERS at a job that makes about $140/day after taxes to SCREEN, TRACK, READ, ANALYZE, MONITOR, SET STOP-LIMIT BUY & EXIT PRICE in a part-time "job" that's made upwards of $800 before breakfast. Pretty epicsauce if you ask me.
That's all I got for why's this time, so…
…as promised, the stuff going on with $TWER*:
$TWER (Towerstream Corp.) is a very cheap penny stock desperate to regain NASDAQ compliance (a stock can be delisted for trading under $1 for 30 consecutive trading days) had announced a 1-for-20 reverse-stock split, essentially buying back shares.
The idea being: the less shares outstanding a company has for trade, the more value provided to investors in each individual share. Something to discuss further in this blog, but for now places like investopedia.com or even browsing through Yahoo? Finance headlines could give you ADHD enthusiasts plenty of insight if you’re so inclined.
Looks like that RS Split story hit at about Noon on the East Coast (7/6/2016), midway through the trading day. According to my handy chart apps (I dig the “5min Chart” and "Candlesticks" iOS app for #STUDIES), Noon was about the time the ~5% short interest sellers tried to push down the price-action, but it only lasted 'til about 3:15pm, resurfacing back to the (still extremely cheap) .13-.14 level of support.
If I had spotted it before market close I could've gotten a couple thousand shares for less than $300 risked, but I imagine it'll gap-up pre market because…
…that rise back to the stock's current support level (>.14 after hours) came after news of an independent appraisal of their earth station assets in the greater Miami area valuing it between $22 and $33 million. Even on the bottom end, that price is well above their current market cap of ~$11 million. The RS split is in effect as of market open tomorrow (7/7/2016), shrinking the Float from ~90 million shares down to ~4.5 million shares. So lets split the difference from the $22 million value and current $11 million market cap, assuming some amount of market efficiency is in effect:
$16,500,000/$4,500,000=$3.67
$3.67/share x 2000 shares = $7,340 equity value
Then we subtract our (let's say) $300 risked on the trade, and we get ($7340-$300=$7040) roughly a SEVEN-THOUSAND DOLLAR PROFIT!
My guerrilla math is equal parts optimistic and pretty damn conservative. Not to mention there is no way to know if the market would be efficient enough to come to a similar conclusion, let-alone what kind of timeline it would take to get there.
I do think there's short-term profit in this play though, considering penny stocks often spike (HARD) on very little news, a small Float is one of the biggest factors in big price-action moves, and at the (hilariously) cheap closing price (of less than a stick of Juicy Fruit), pretty much anyone can get in on it if they move fast enough.
So yeah, probably going to get me some $TWER in the morning.
I apologize for any/all formatting inconsistencies/errors. This was written partially on PC and partially on Tumblr's iOS app, so God knows what it'll look like.
* My trading education/experience is limited, going back only to late March, so feel free to pick apart my analysis and shove it up my ass if you see any gross oversights. I dig arguing so I'll probably get back to you shortly. Cheers.
