Wes Stone Posted July 31, 2012 Report Share Posted July 31, 2012 So I was one of the stupid people who thought they needed facebook stock. I bought in at $39.98 @ 60 shares. I know big spender right. I have an etrade account with like 40k in it that I play around with. I also bought Zynga stock at $13 @ 75 shares thinking well when facebook goes public and if facebook does well Zynga will follow suite. The 2 stocks do mirror each other quite a bit. Anyway my question is what the hell do I do with these stocks? Just keep riding them out? Cut my losses because I don't see them coming up anytime soon. Just sucks to watch them in the portfolio. FB today $21.93 Zynga today $2.94 Quote Link to comment Share on other sites More sharing options...
Supplicium Posted July 31, 2012 Report Share Posted July 31, 2012 You have options, since it sounds like you dont need the money at a drops notice. I would either cut the losses or cost average and hold for the long term. I like Z here but man that IPO offering should be criminal. (you could say the same about FB). You could also cost average and buy downside puts to hedge. Personally I would get out of both and buy SOCL ETF to have some exposure to both along with the rest of the sector. Whenever you buy straight up equities you need to use options as protection. Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted July 31, 2012 Author Report Share Posted July 31, 2012 My problem is I only know enough to be dangerous. This is my wife's Etrade account, i've been playing with it since we got married though. Her father set it up for her back in like 2005. Bought some stocks and just left it sit and well the only thing holding all this together is he bought XOM at $51.76 @ 207 shares, now trades for $86.98. She had Nortel at $58.79 @ 64 shares, now trades for $.008 lol. Another big loss is Ameritrade at $22.92 @ 340 shares, now trades for $15.81. The oil stock holds it all together. I sit and play google and apple. I bought apple the day there earnings came out and they tanked. I only had enough for 27 shares but so far its been a pretty good pay off. Other than that I'm just trying to find a way to grow the account more and cut these losses out. Thanks for the reply too, I been thinking about cutting the losses too. Quote Link to comment Share on other sites More sharing options...
Supplicium Posted July 31, 2012 Report Share Posted July 31, 2012 its tough to cut losses but a stock that declines 50% must increase 100% to break even. i struggle with it everyday looking at my long term account. i have a bunch of csco at 35 its at 16 now.. but im planning on needing the money 40 years from now so i buy more to get my price lower because i think its a good long term stock. if i felt differently its usually best to sell to minimize future loss. checkout active etf's they are fun to play Quote Link to comment Share on other sites More sharing options...
TurboNova Posted July 31, 2012 Report Share Posted July 31, 2012 Most are jumping ship on FB right now, however I'd ride it out for a bit longer and possibly hedge a little loss. I am currently watching two super cheap penny stocks (fun to play with) ECOS and PEIX. Both are interesting to see how they turn out, I have been spending more and more time looking into the energy sector and technology sector as of late. I like the possibilities of alternative energy as technology evolves Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted July 31, 2012 Author Report Share Posted July 31, 2012 can one of you explain the hedge thing to me? Quote Link to comment Share on other sites More sharing options...
TurboNova Posted July 31, 2012 Report Share Posted July 31, 2012 not in the true meaning of hedge as to invest in another to offset the loses in fb, just meaning to hold onto it for a little while and see how things shake out instead of shorting it right now. but just my .02 Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted July 31, 2012 Author Report Share Posted July 31, 2012 ooo yea, i've covered all my loses playing apple and google. Been lots of ups and downs this month Quote Link to comment Share on other sites More sharing options...
Tractor Posted July 31, 2012 Report Share Posted July 31, 2012 I'm in the car right now so can't say much except that you need to stop trading for awhile and just invest in longer term stable companies while you learn the why and how of trading, stock picking, and timing. If your interested you can do well but it takes time. Quote Link to comment Share on other sites More sharing options...
zeitgeist57 Posted July 31, 2012 Report Share Posted July 31, 2012 You could also cost average and buy downside puts to hedge. His E*Trade Baby account might not allow options trading? I like where your head is at, tho... Quote Link to comment Share on other sites More sharing options...
Akula Posted July 31, 2012 Report Share Posted July 31, 2012 Buying stock in a technology company is risky. I just watched Revolution OS last night and it talked about VA Linux's IPO at $299 opening trade. Crazy right? 2 years later they were out of business because the company isn't producing huge value. It made some VC guys super rich, no doubt, but the company couldn't back it up with revenue. Since you bought the stock you have two options. Keep or Sell. Either way you are probably never going to see $40+ so I would say, how do you want your taxes to come out this year? Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted July 31, 2012 Author Report Share Posted July 31, 2012 I've thought about the taxes, and I've made $1940 so far this month, my losses on fb and zynga are currently $1862. Quote Link to comment Share on other sites More sharing options...
Supplicium Posted July 31, 2012 Report Share Posted July 31, 2012 I would sell and take the wash asap Quote Link to comment Share on other sites More sharing options...
Tractor Posted July 31, 2012 Report Share Posted July 31, 2012 Taking your gain/loss this week into consideration I'd sell apple, fb, anything with a loss and start fresh. There are profits to be had and you'll just miss it waiting if you hold. Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted July 31, 2012 Author Report Share Posted July 31, 2012 I bought apple at $572 after the quarterly earnings. Its running $610 right now, so i'm good there. Plus they are paying dividend in Aug, I saw news about a split and moving to the Dow, and all the new apple products in the fall I should be good here. What should I do with the long term failures that she has? GE Purchase Date 1/20/06 @ 33.40/26 Shares Currently $20.82 -330.20 Nortel Purchase Date 2004 @ Various Prices Currently $.009 -3876.87 (Up 10% today lol) Ameritrade Purchase Date 2006 @ Various Prices Currently $15.92 -2422.75 Sold Zynga so far.... Quote Link to comment Share on other sites More sharing options...
Supplicium Posted July 31, 2012 Report Share Posted July 31, 2012 I would keep GE and cost avg over the long term, the dividend will smooth it out. Same could be said about AMTD but a lil riskier (atleast they pay a dividend though). I would save the nortel for the future when you hopefully have a huge chunk of profit or slowly reduce shares as you take profits elsewhere. Im not sure what the best way to play nortel with your position.. I apologize if it doesnt make sense ive been jumping around different ideas in my head. Quote Link to comment Share on other sites More sharing options...
2highpsi Posted August 1, 2012 Report Share Posted August 1, 2012 I've thought about the taxes, and I've made $1940 so far this month, my losses on fb and zynga are currently $1862. Is $1940 real trading income this month? Like you bought the stocks less than a year ago, and sold them this month realizing an actual $1940 gain? Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted August 1, 2012 Author Report Share Posted August 1, 2012 Yes, like i said a lot of google and apple ups and downs last month. Quote Link to comment Share on other sites More sharing options...
Tractor Posted August 1, 2012 Report Share Posted August 1, 2012 I would keep GE and cost avg over the long term, the dividend will smooth it out. Same could be said about AMTD but a lil riskier (atleast they pay a dividend though). I would save the nortel for the future when you hopefully have a huge chunk of profit or slowly reduce shares as you take profits elsewhere. Im not sure what the best way to play nortel with your position.. I apologize if it doesnt make sense ive been jumping around different ideas in my head. I agree with Supplicium. Keep GE, I'll also second keeping AMTD. The Investing market isn't so hot right now and should pick up over time as things continue to improve slowly. AMTD isn't actually in all that bad of a situation, just average for banking/investing companies and probably won't get a lot worse. As for Nortel, I did some quick research on it and its finalizing selling off all its assets and going out of business. Personally if I found myself with a stock in this position I think I'd just have to take the loss and get back what ever its still worth. Maybe buy something to make you or your wife smile just to cheer you up over it. Quote Link to comment Share on other sites More sharing options...
Tractor Posted August 1, 2012 Report Share Posted August 1, 2012 One thing to remember about the investing industries, people tend to invest when they have money and when the markets are really booming. This lends to getting stuck when prices come down, panic selling, and just plain not thinking. Now if you learn to invest in the downs and cash out when things look "too good", you can do really well over the long term. My uncle is a day trader, and got me involved over 15yrs ago while I was still a teen. Life hasn't gotten me to the point where I can trade with a lot of cash yet, but with what little I've had at my disposal I've done very well (mostly because I can't afford not to.) I have had plenty of losses, but over all I've been able to beat the indexes many times over just by paying attention and I've purchased a lot of fun toys over the years without having to spend family money. I'm currently going through a major overhaul of things and am preparing to maximize my savings which will equate to maximizing my investment cash. With any luck I'll actually be able to retire someday and if I do I'll write a book because it'll be a good read;-) Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted August 1, 2012 Author Report Share Posted August 1, 2012 Since I've owned that stock for over a year and take the loss how does that effect my taxes? Nortel is worth .55 lol There isn't anyway another company could buy it or anything and I could regain anything is there? Quote Link to comment Share on other sites More sharing options...
Tractor Posted August 1, 2012 Report Share Posted August 1, 2012 Since I've owned that stock for over a year and take the loss how does that effect my taxes? Nortel is worth .55 lol There isn't anyway another company could buy it or anything and I could regain anything is there? Nope, its been all but sold off and is still posting >65million per year losses (well loss for last year anyway, its totally out of business now it seems.) Sinking ship thats up to its rudder. Quote Link to comment Share on other sites More sharing options...
Supplicium Posted August 1, 2012 Report Share Posted August 1, 2012 Since I've owned that stock for over a year and take the loss how does that effect my taxes? Nortel is worth .55 lol There isn't anyway another company could buy it or anything and I could regain anything is there? Basically short term gains are taxed to the max and long term gains are taxed at a lower rate. http://www.smartmoney.com/taxes/income/tallying-your-capital-gains-and-losses-9868/ Nortel is done, imo all the assets have been sucked out. these spikes you are seeing is typical during the liquidation process. Get out while you can is my opinion. Quote Link to comment Share on other sites More sharing options...
Wes Stone Posted August 1, 2012 Author Report Share Posted August 1, 2012 Anyone have anything good I can watch for future purchases? I been watching VMWare. I like the software itself and think it has a lot of potential. Its currently down quite a bit too. How do you guys make decisions on what you buy and don't buy? I guess I just need to keep learning. Quote Link to comment Share on other sites More sharing options...
2highpsi Posted August 1, 2012 Report Share Posted August 1, 2012 Anyone have anything good I can watch for future purchases? I been watching VMWare. I like the software itself and think it has a lot of potential. Its currently down quite a bit too. How do you guys make decisions on what you buy and don't buy? I guess I just need to keep learning. For short term technicals, for long term P/E and Market Cap. Take FB for example. For FB to have been a "long term buy" @ 39 you would have to believe that company was worth MORE than 84 BILLION dollars. This is a company that doesnt even make a half a billion a year...... Quote Link to comment Share on other sites More sharing options...
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