My First Stock

Jul 22, 2022 6:06 am

👋

TL;DR

Volatility teaches patience
Gordon Gecko is real
With luck you might make money, with patience and diligence probably way more!
You can forget all of that and keep it simple.

Dear all,

two years ago today I bought my first stock. It was a pure coincidence, a typo on the search bar and a chart that made me react like this

🤑 If it hit that price, and now it’s half of what it was, then it will definitely hit that level again. What do they do, actually? 🤑

The company was Northern Data, based in Frankfurt am Main and they develop and sell high-performance computing (HPC) infrastructure solutions worldwide. Think cloud computing and bitcoin mining.

I did not learn much about the business model, but did learn about two other things:

Volatility: one day you are chilling on the top of the mountain, next day BOOM you wake up at base camp, and this goes on and on... This behaviour is caused, amongst other things, by a lot of speculation around a stock. Solid companies grow stable and steady. So do almost all ETFs.

“Short attacks”: to short a company means that you are betting (your money, of course) that its stock price will drop. And this can even be induced: company or institution A starts a defamation campaign against Company B, investors panic-sell massively, the stock price tumbles. How crazy is this?!

🤑And after André saw that 40% tumble he thought it was a great idea to buy the stock.🤑

A few months later and to make it even more exciting, the Federal Finance Supervision also came knocking at Northern’s door, not convinced with the boasting and somewhat questionable optimism of the company’s financial forecasts.

Do I still own the stock? No.

Did I make a profit? Yes.

Bought 6 shares for 285€ in July 2020 and sold them in December and January this year for around 468€ in total. Around 60% profit out of luck and hard earned patience. I was not ready for the amount of stomach you need once you start investing in stocks. I made other mistakes and bigger losses during that time and became an even bigger fan of ETFs.