I decided to play around with the stock market earlier this month. I noticed a few curious things.
First of all, just because a company is profitable, that doesn’t mean its stock is going up. I bought a bunch of Alcoa stock on the word that the company was going to be profitable this year. Sounds good! If you look at the charts, this was a pretty big improvement from last year, where it was NEGATIVE profits. So, the quarterly earning report comes around, the Alcoa guys go yep, business is great, things could never be better… and the stock value tumbles, and ACTUALLY TAKES DOWN EVERY OTHER NON-ALCOA STOCK WITH IT.
Why did this happen? Well, while the company made a profit of $5.95 billion, market analysts were all, “WTF Alcoa? We were expecting you to make $6 billion AT LEAST.” So the value goes down because it didn’t make money that a bunch of strangers expected you to make? And you only missed it by very very little? BS. The aftermath of the whole thing was overblown, too, with hundreds of article launched how the economy was going to tank and the sky was falling eventhough, in the end, Alcoa actually DID make money and only missed some arbitrary target by very very little.
However, a shining light to this story: I also have this thing I call stupid investments.
My system? Invest only in stocks with cool names.
And one of the coolest names is E-Commerce China Dangdang. Its name is cool enough, but its NYSE ticker code is even cooler: DANG. It’s basically the Amazon.com of China. Why did I choose it? Well, I’ve always wanted to say, “Hi, I own some DANG stock.” Unreal, right! I put some money in that stock and so far I’ve made something like $150 in only a couple of days. Which makes up for the Alcoa thing.
Long story short:
Picking stocks based on “expert” analysis, 0.
Picking stocks because they have a really silly name, 1.