There's a pretty good chance you've seen the following E*Trade commercial with Kevin Spacey on TV lately. I love this commercial, mostly because it shows the most common scenario in which people are drawn to the stock market: they see a product flying off the shelves at a store and then they check to see if the company is publically traded.
I completely agree with this practice, in fact I highly encourage more consumers to really consider this the next time they visit a mall. This is what I consider "opportunistic trading."
What does this look like?
You see that the lunch line at Chipotle (CMG) is much longer than the lunch line at McDonald's (MCD) so you assume that CMG would be a stock worth considering. Walt Disney Co. (DIS) owns the rights to the new Star Wars movie which is shattering box office records left and right - might be worth considering owning shares of DIS if they plan to also make 2 more equally successful movies over the next few years. More and more of your friends are telling you to fly Jet Blue (JBLU) when given the choice. An oil company recently started diversifying into cleaner energy. All of these are examples of being an opportunistic trader.
While I highly encourage this practice for beginners, it is worth noting that it is very difficult to get a real edge in the market this way. However, if you are not a day trader and your stock picks are going towards your retirement for the long term, knock yourself out!
See a trend? Investigate it further! This is how you can outperform much of the pros over the course of your life.
Greetings, GradMoney Readers!
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