Yeah, about that...

I wish I could tell you that I have spent the week researching or trading... or even paying attention to the financial markets. Things have been busy here at SMT Inc. I have just had a chance to look back at what has been happening and I am pleasantly surprised.

My move to buy ATVI seems to be finally paying off. Though not as fast as it would have if I invested in Rosetta Stone, but we all know that story. The video game market is doing very well as a whole and there is a lot going on at ATVI for investors to be excited about.

I have been saving my pennies and dimes for next Friday, in the hopes of diving in on this Stock Advisor that will publish by then. Ideally I would like to invest larger quantities of money, because it is hard to see gains when almost 30% of the purchase is commission costs. I know I have sang this song to you before, so I will save you the rant... sigh.

Who knew investing would take so much money...

But then again, a 10% gain is nothing to sneeze at.

-tCT

Dr. Dollar

Every once in a while I will stay up late, and watch infomercials... I know its dumb, they are just so, so enticing.

Anyway... One that I see all the time (no not the CD to teach me to use Ebay) is for selling how-to videos on option trading. They always claim that "people like you" are making money hand over fist trading options. I had no idea what options were, and I like making money. So I went over to my friends at fool.com and read up on it.

Options Trading is appropriately named, due to the fact that you are generally buying or selling the option to buy or sell... Is that right? Yes. Here is what may happen in an option trade.

Lets say you like Intel and you think they are going to go up, you would enter an agreement with a seller to determine a strike price (this is the price you agree to buy at, at a later date). That means that anytime with in the option time, you can buy (but don't necessarily have too) at that strike price and the seller must sell at the strike price. Making these option agreements isn't free, you have to buy the option to buy.

So if the stocks go up, then the value of the option you have goes up. Now that you have this option, lets say Intel is doing very well and the contract is worth more to others then what you paid for it, you can sell that option to someone else. Now that person holds the option to buy at the price you initially determined.

So in option trading, you are literally trading the option to buy and sell shares, which you can either trade on again, or use or never use.

Weird, huh?

So lets sum up.

Option trading is trading the option to buy or sell at a certain price.

When buying, you can make money on share price gains, and lose money on share price losses (max loss is the amount you pay for the option).

Here is an example of a table you'd see when trading options.

The "Last Price" is the price you pay, per share, for the option. Options are sold in 100 increments. So that means if you wanted to buy the option to buy at $90 in July, you would pay the seller $870.00 for that option ($8.70 per share).

So if you bought that option and bought the shares at the agreed price your total purchase price would be $9,870 ($90 x 100 + $8.70 x 100), meaning the shares would have to increase past $98.70 a share for you to make money.

Or you could try to sell the option for more then $8.70 a share to someone else, or do nothing and take the $870 loss.

Options are very confusing and even after reading all there is to know... I still hardly get it.

So to sum up, don't mess with options.

-tCT

If spam equals revenue...

So as you may or may not remember I have been frequenting Fool.com. I have already discussed how they recommended Rosetta Stone (RST),which is up 27% from just yesterday.

While that pick was a more formal recommendation, they also offer informal ones to anyone who wanders their way over to fool.com and reads the free articles. I thought it was interesting to note that one of the picks was for Pfizer, the company who manufactures the product our spam boxes know and love.

Now don't get me wrong, they talk about a whole lot of factors in their promotion of Pfizer, which are probably justifiable. But that leads me to a question.

Should I invest in a company like Pfizer?

I know they do more then just make Viagra, but that is hard to overlook when my email boxes are loaded with thousands of Viagra related spam. Should traders be concerned with moral issues, or should they focus on making money?

As for myself I am torn.

Luckily I do not have to invest in Pfizer because the plan was to purchase only the official recommended companies, and this is unofficial. But what if Pfizer becomes the official pick?

We will just have to wait and see where my conscience takes me.

"Wait, you like girls and money! Your freaking me out..."

Hopefully soon their will be some real action to write about.

-tCT

So far, so bueno

Well as you can see I am working up on my Spanish. Why, you wonder? Well because the first recommended stock pick I was given was for Rosetta Stone (RST) and was dated February 19th (the new recommendations come every 3rd Friday of the month at fool.com).

On the 19th RST was trading at about $16.85. From the time they recommended it to the time I saw it (Feb 24th) it had already jumped to about $17.45. Today (Feb 25th) RST has just published their 4th quarter results, and are now trading at about $18.55 after hours. That is a 10.2% increase in 1 week.

...

1 week.

...

While that settles in...

I will let you know that, NO, I did not buy Rosetta after it was recommended to me. I know, I know I should have gone with the recommendation instead of buying more ATVI. How was I supposed to know they would be so right, it was my first time using it...

So it looks like I have missed the Rosetta boat this time, but next time I will actually put my money where my mouth is, and see if I can make money doing exactly what the Fool's tell me. That is the whole point of this project, seeing what works and what doesn't. Not going off and actually investing...

So to you readers, or perhaps reader, I am sorry. The next one will be for real, no take backs.

Tune in next time, same slotmachinetrader time, same slotmachinetrader channel! (probably not as catchy as the original)

-tCT

PS: Literally in the time it took me to write this post RST is now trading at $19.60 after hours...

...

WOW

He shoots...He scorecards!

So I have been messing around with the Motley Fool website and it is pretty cool. Most of the features available are like anything you would see on Yahoo or Google Finance. The one difference is the community and the Caps Scores. This site is all about community and helping people invest in good companies.

You can also put your portfolio information on and it will track your portfolio against S&P*. As you can see my gains are about 2.5% versus the S&P gains of about 1.98%.

Also you will notice that I have two different prices for ATVI. I know its not the trade you thought I would make, but... well I think its just too good to pass up. I consider ATVI a part of my core, and having fun with trading has to take the back burner to my serious investing (not to mention it has a 5 star caps rating... hint hint).

With that aside I promise that with the next trade I will purchase something off the recommended buy page they gave me. So far the site seems really good. It follows two founders of the website portfolios and shows their gains vs S&P. For instance one of them has seen a 67% gain on his portfolio! That is huge.

Don't get too excited, those guys are pros. We will have to just wait and see if their site will be beneficial to a novice trader like me.

"Not all that glitters is gold."

-tCT

*S&P 500 (Standard and Poor's) is an index on 500 large-cap, common stocks, that are actively traded. It, like other indices (such as the Dow Jones), are used to gauge the overall market.

A Fool

So as time goes on, I find I study so much that by the time I make a move the short gains to be had are gone. So I have called in the assistance of a Fool. The Motley Fool to be exact.

Motley Fool is a website that has its users rank companies. You can go on there and rate the companies you have shares in, and ones you don't. As time goes on, the website tracks your picks to how the shares prices fluctuate. So if you are accurate with your picks, then you will have a higher rating.

The site also shows ratings for companies. For instance after looking up ATVI it has a 5 star Cap rating. 5 stars is the most, meaning almost all members think the company will be strong (bullish), where as 1 star would mean most members think the company will be weak (bearish).

This is very cool because you can find out when people rated them, and at what price, and for how long. It will show you who rated the company, and also that persons rating. So if someone with a rating of 100 (highest you can get, I think means you are correct more than 85% of the time) says buy, then that is more credible then someone with a low rating.

Of course you have to take this with a grain of salt... No one really knows how well a company will do, but this is a good starting point. Since the whole point of this project is to see if money can be made by someone who doesn't know anything about trading, I am going to do exactly what this site tells me, and see how that goes. I have purchased a 1 year subscription, and while I have just started looking into it, it seems pretty good.

Legally I can not disclose anything that is only for paid members (though I doubt anyone would ever notice or care). I will try to give information that will teach how this service works. I have just started looking into it, but its fairly extensive. It gives you recommendations on stocks you should buy, hold or sell. It even tells you which companies should be in your core (timeless stocks to hold).

Though I can not tell you which companies they suggest, I will be able to tell you which companies I purchase. I will keep you posted, and together we will see if this service is worth it.

Keep your eyes peeled, and we will see what I purchase next.

-tCT

US beats Canada Appreciation Day!

Preface: I know this is supposed to be about trading, but you will have to forgive me, because sometimes something special comes along that just needs to be talked about.

Where were you when the US beat Canada? OK, so your probably saying "what else is new... its Canada...?" Your right, in most things the US beating Canada is no big deal, but this is about hockey. I don't know if you knew, but Canada, well they love hockey... Who knew...?

Its been said about the 2010 Winter Olympics that if Canada only wins one Gold, well it better be in Hockey. So they put together one of the best most star ridden teams in history to take them there.

And this team hits a WALL known as the United STATES. The US played with relatively young and inexperienced players, and were written off before the game by all of the announcers... even Jeremy Roenick (One of USA best former hockey players).

If you were unaware, like my sister was, the stars of the NHL are made up of mostly foreign players, and during the Olympics the US isn't a hockey power house. They have only won gold twice and the last one was in 1980. The US has only medaled once since 1980 and it was for Silver (after losing to Canada) in 2002.

I have never watch a game with so much excitement and trepidation as the game I watched last night. It was not about the gold, it was not about stars, it was a prequalifier that, win or lose, both team would move on to the next round.

No it wasn't about that, it was about Pride. It was about both teams proving themselves.

And well, after last night, I am proud to have watch one of the best most hardest fought games I have ever witnessed. I can not explain to you how amazing that game was. The last few moments were so exciting that you can hear "DOC", a professional announcer, actually loses his voice from calling the game.

NBC Olympics Highlights of the US vs Canada

What sums this game up for me is after the final goal, the US is in a dog pile behind the goal going crazy and the announcer says the lamest, stupidest, and yet most meaningful line I have ever heard...

"And those are a bunch of happy humans, right there!"

I was happy too. And that, Charlie Brown, is what the Olympics is all about.

-tCT