October 24, 2006
In my fake trading account I sold Google short. But after making the trade (with a $25 per-trade commission times 2), I realized that Google's share price will have to fall at least $2 for me to at least make up the commission fees. This is yet another example in support of the efficient market hypothesis. In other words, all those stinkin' commissions you pay when trading frequently eat up the additional earnings you'd make compared to the buy-and-hold strategy.
On my fake $100K account I've made $3K in the last three weeks, only investing $60K. I'm going to work on investing the rest of it. (However, a 3% return in three weeks isn't bad at all, if my returns will hold.)
On my group's fake $10 million account, we've made $400K in three weeks' time, investing $9MM with the other $1MM in cash. Not a bad return, either.
The moral of the story is that you must have money to make money. So start saving.
Posted by megabeth at October 24, 2006 02:58 PM
