KAZEY JOURNAL

ok here i go again with my crazy ideas. well first of all i do have many friends of mine who think by investing in stocks, they can strike it big.
they have a very interesting ideology of raising money through stocks or what i term meagre stocks.

To begin with i would like to cite an example. i have a friend who invested arround 5000 dollars in the banking sector. His reason for investing in the bank is that the bank is “safe” and rich in terms of “profitability”.now this same person is still investing as in building up his portfolio in various companies, buying stocks here and there. though he is still a student.now i know most of you guys would say that is a “good investment” this guy would strike it big in no time.

now i would like to first tackle the reasons my investor friend had for investing in one of his portfolio. THE Bank. now he says and believes The Bank is a “safe company”. now the first question i asked the guy is that can he borrow the same amount of money from the same bank to invest in their stocks? the answer he gave me was No. the same bank does not lend out money for stock investment. i said interesting. why?. He said because its in their policy. i asked why do u think the bank designed a policy not to lend people to invest in stocks , even their own stocks? he couldnt answer my question. now he asked me why do i think they dont lend out money to stock investors?
i said because the stock market can plunge anytime. which means the idea of his safety is not a good idea at all. so the first reason of safety is not a tangible point at all because the bank now believes its own stock its at risk.

Now i know many of my enterprenure friends would say “Risk” is a good thing. i would say cool. i buy the idea. i mean am i contradicting myself? well if you think so, think again.

Now back to his second reason for investing into the stock market especially the banking sector, “Profitability”. i looked up and asked him. Are u sure about profitability?. he said yes of course. i said how profitable is it in terms of dividends. he replied about 1% – 1.3% divident per annum. i laughed. he said i am crazy. well you think i am crazy? think again. He said what about the capital appreciation?

Firstly i dont invest for capital appreciation only, and the stock market increases in value because of market momentum and capital appreciation. which even is a maybe. Not for certain. And it is infact gambling with your money.Do you love gambling i asked him. he said No.

Now what do i invest in? i invest in cashflow. so back to our bank investor, how much cash flow per month does his 5k dollars generate for him to spend. 1%-1.3% divided by 12 or even less. lolz is that profitable now? hahaha oh Goodness i have to sell my stocks!! Great now you are thinking wisely. buy and sell. thats another better type of investment. He has graduated the first level of understanding the stock market investment world as in terms of profitability.

Now maybe you as another investor would say no i dont invest into stocks to give me monthly cashflow. the purpose of my investment in stocks is to have all the capital appreciation, and of course invade taxes. because you are not taxed for the things you do not have directly. hehehehe. now think again the word “Capital Appreciation” means you are praying hard, not even under certainty that it is going to appreciate. And well for me thats not a way to invest into a profitable means of future income.

Now instead of that i would give you a fast alternative of even getting a better capital appreciation and your money back after the year. Do we all know what they call the fixed Deposit in the Bank?. now here he goes again with his crazy idea. i am not advising you to invest in fixed deposits, i am just giving you an alternative to stocks. since you are so crazy about capital appreciation. now the same 5000 dollars, invest in a fixed deposit and i am sure you would be able to negotiate with the bank into getting atleast 5-8% interest or even more in a year. now is that not a better investment. you get your 5-8% and at the end of the month you still have your 5000 dollars plus your 5-8% interest for certain unlike stocks which even the 1-1.3% is a probability. because not all investments even in the banking sector give fixed amount of dividents yearly. Most of the time they dont give anything at all.

now back to a better profitable investment since we sticked to the ideology of capital appreciation. didnt we?
ok now you have your 5-8% plus the 5k . now re-invest into the same fixed deposit the sum of everything you had plus the interest and maybe if possible re-negotiate with the bank for a better interest and keep doing it for your target years. now compare what you have to the stock investment you did. is it the same now am i crazy?? lolz so why invest in stocks??. why not invest in Fixed Deposits?

well i do not even invest into fixed deposit because the profit is limited and fixed, besides my money is even tied down for a whole year.well actually if you really want to know i would prefer trading in options. buying and selling what i dont have might be very risky but very profitable (thats if and only if i must play with the exchange market). well thats all for now.
Good Day. enough of my crazy ideas