I've had some money (not a lot) in the stock market and played Gordon Gecko with it over the last 5 or 6 years... just putting a little money into the account when i got a good commission check from work.
This play money was taking a real BEATING in the last couple of years. So one day, almost 2 years ago, Sirius satellite radio was on the brink of bankruptcy. I'm not intelligent to summarize why other than big debt, not profitable, etc. The stock dropped like an anchor in the great depths of the pacific ocean. It literally dropped down to 5 cents. A friend we shall call Friend 1 whom also loves the service and I were running together a lot at the time. We talked about sirius often and we also talked about how the chances of the company actually going under were very slim. (in our opinions). After all, this company has multiple satellites in the air, has huge potential and it's not just going to die. Someone will buy it, or it will rise from the ashes. Or, i guess it could just die. I kept telling Friend 1, I wanted to put my money into the stock, and he kind of wanted to too.
I wussed out at buying at 5 cents because news of bankruptcy looming and the company shutting down was rampant, and I just got cold feet. I clearly remember sitting at my desk looking at the price, my scottrade account open, and just not being able to bite the bullet and buy. Within 24 hours, in the 11th hour, the CEO did some crazy good business maneuvers, got multi hundred million dollar loans and got the company a new temporary lifeline. Fast forward quarter by quarter and the company's resurgence has been spectacular as has been it's stock price.
Earlier this spring, another running friend that we will call Friend 2, came back to running after he took some personal time off to work on a new personal venture which turned out to be some heavy duty stock trading classes. I shared a Boston hotel room with him and my coach last April, and as he sat there telling me about "Iron Condors" and "stochastics", and "candle"s and god knows what other stock stuff. I simply said: "All my play money in the stock market sits in SIRI. Mark my words, SIRI will hit $1.60 by end of year" Please note that I really have no idea what I'm talking about, other than I read news and other about the stock, and I love the service.
Long story short, this little stock I pulled the trigger and bought at 13 cents, a couple of days after it bottomed out at 5 cents, and went on a fun little upswing. Friend 1 bought in shortly after me at 17 cents.
At the end of year one (2009) it closed at 60 cents! And now, my little prediction of $1.60 from back in April came true with SIRI closing 3 cents over my predicted close price ending 2010 at $1.63!!!
Friend 1: Ended up buying at 17 cents after I told him I got in at 13 cents and has no plans to sell. We continue to send each other stock prices and a smiley face in emails every couple of months.
Friend 2: The new stock trader wizard eventually liked it enough and got in at 95 cents (it was at 60 cents in april). He later told me he got impatient and sold at $1.40 in early November for almost 50% profit as he didn't see it moving up any more. Little did he know, $1.60 would come just 3 weeks later!
Me: The money i've made on it has taken me back well over the original total amount of money I have put into my Scottrade account over the years, but certainly hasn't made me wealthy.... yet. I'm not planning on selling this stock any time soon as I think it has plenty of growth left in it. Especially with the automobile industry slowly recovering which is their bread and butter market. Maybe once it hits $13, I'll consider selling and pay off most of my house! I think I'll be OK with a sale at $13. Maybe. Then again, $26 sounds even better so maybe I'll hold off even longer. ha!
**I'm NOT telling you to invest in SIRI. I am no expert and was simply sharing a fun little story.**
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