Interview: Bulls Make Money, Bears Make Money...

Nicole is a 29-year-old woman living in Florida. Married in 2009, Nicole and her husband are expecting their first child this summer. While many Americans have a negative view of Wall Street, Nicole has made over $30,000 from Wall Street in the last two years. She plans to use the money to help her and her husband pay off their mortgage ahead of time, and also to set aside money so her child can attend college. In our first original interview, we asked Nicole a few questions about her success and how someone who is just an average American can make money off Wall Street.

The Report: Can you give us a little background on your education and what got you into investing?
Nicole: I graduated in 2004 from the University of Florida. I was a biology major and now work in corporate communications. I got into investing as a kid when my parents opened a savings account and I realized that I could make more money by saving up and collecting the interest. What got me into more investing in stocks, though, was when I saw that the stock market had fallen so much and I thought that there could be an opportunity just like how people made lots of money in the boom after the 1980s recession.

The Report: So you had no formal education in finance or business and didn't work on Wall Street?
Nicole: I took a college math class that involved some finance, but that was all. I lived in Florida my entire life.

The Report: You made $30,000 in two years. How did you do it?
Nicole: People sold out of their stocks during the recession and I think the average person kept hearing on TV about the bad things the Wall Street bankers were doing and about how the economy was terrible. I felt like it might be a chance to make some money.

The Report: How did you know what stocks to buy?
Nicole: I felt like the successful companies would be ones that kept people buying during the recession. People cut back on travel and eating out so I avoided airlines and food companies. But I saw that iPods and iPhones were flying off the shelves. So I took around $5,000 and bought shares of Apple stock at around $100 in 2008. I also noticed people were getting more into being fit and exercising, and Lululemon was a company that fit into that boost and so I bought shares in 2009 for $8 a share. I sold off at $85. I've made some mistakes, though, and taken some losses, but overall I've made money.

The Report: You oct-tupled your money on a stock?! 
Nicole: I did. I bought 250 shares at $8. That cost around $2,000 and then when it hit $85 I sold it and the profit there was $15,000. Apple I sold off at $200 a share, so I made $5,000 on it. I should have kept it, because I could be up over $10,000 that way.

The Report: Why do you think many Americans look at Wall Street as evil and blame economic problems on big banks?
Nicole: Investing can be scary. A couple months after buying Apple, the shares were down over 10%. I held onto the shares thinking it would go up later. Really, I should have bought even more. What Americans need to do is read into investing and learn what they can do. Watch CNBC and FOX Business Network. Read the Wall Street Journal and Financial Times. Look at the public reports companies file. Our government forces public companies to file reports and you can get them on the internet and learn about the company's finances. Wall Street bankers are making money while you're sitting back missing out, so instead of missing out get into investing.

The Report: Some say President Obama is weakening the dollar and that sends gold higher and stocks lower. Do you agree?
Nicole: I bought gold when we were seeing a price of $1,000 an ounce and I still have the gold investment. I could make a profit of over $400 an ounce right now. Barack Obama doesn't seem committed to stopping it. However, the economy is recovering and so my strategy is to have stocks and to have gold because I think both will go higher.

The Report: Many of the big Wall Street investors are able to buy thousands or millions of shares. How can an average American have an advantage without lots of money?
Nicole: One strategy that I started to use last June was options. You basically pay a fee to control 100 shares and have the arrangement to be able to buy the 100 shares in the future at an expiration date and a set price. A stock that costs $50 a share, 100 shares would be $5,000. But if you can pay 10 cents a share for the right to buy that stock at $51 in 3 months, and the stock goes up to $52, you'll make a 90 cent profit on the 100 shares. That's $90 in profit without having to put up the $5,000 for the stock. So using options lets you control a lot more in terms of shares with less money.

The Report: You suggested we title this post "bulls make money, bears make money." Why?
Nicole: One of the shows I watch is Mad Money with Jim Cramer. There was a phrase he says of "bulls make money, bears make money, pigs get slaughtered." It means that you can make money when the market goes up, make money when it goes down, but if you are greedy you'll lose.

The Report: Gordon Gekko tells us greed is good. But greed will make you lose money?
Nicole: It certainly can. A stock that you buy for $10 goes up to $15. You could sell it and profit $5. But if you get greedy thinking it'll go to $18 and you can make $3 more a share, you'll might end up a loser if the stock falls instead of going up. It's better to take a small profit than a small loss when you invest.

The Report: What do you say to those who claim that Wall Street is a sham, rigged so that the rich get richer. Have you heard of Michael Moore's war on Wall Street and capitalism?
Nicole: I don't listen to Michael Moore because I don't think he understands how the world works. Wall Street isn't a sham. It's just that people think it's too complicated or too elite for them when it's really not. You don't need millions or billions of dollars to make money.

The Report: What was your biggest loss in investing?
Nicole: I bought 300 shares of Borders for over $4 a share and the company went bankrupt. Had I realized book sales were shifting to online and e-readers, I would have bought Amazon stock.

The Report: What are your political leanings?
Nicole: I like a hands-off government. The American people are smart and resilient, we don't need people telling us how to run our own lives. I'm a big fan of the Tea Party movement's agenda of cutting back taxes. If people have more money due to paying less tax they can invest more into American business and make more money. In 2004 I voted for George W. Bush, but then in 2008 I voted for President Obama. I didn't think John McCain could represent younger voters as well. I'm registered as an independent.

The Report: We recently wrote about how President Obama is losing independent voter support and many who voted for him in 2008 regret it. Do you regret that vote?
Nicole: I don't. I think Barack Obama had a tough situation, but I don't agree with everything he has done. I would like to see good candidates run against him in 2012 and I will vote for whoever will be best for the nation.

The Report: Any final tips for our readers?
Nicole: Don't be afraid to invest your money. The possible gain is far more than what a savings account or savings bonds will give you. Start off small to build your confidence. That wasn't really something I did, but you can start off by buying your stocks in small lots. Something like Citigroup, 20 shares can be purchased for under $100, for example. The Wall Street bankers got rich because they weren't afraid to take risk and they invested their money into stocks while most Americans just put theirs in the bank with an interest rate so small that their money was losing value because of inflation.

The Report: Thank you for taking the time to chat with us. 

Eliminating Oppression in Higher Education

As the debate continues over allowing students, faculty, and staff at institutions of higher education to protect themselves from criminals, the Huffington Post has a slideshow highlighting a few things that should be allowed on college campuses before firearms. Some of the ridiculous prohibitions colleges and universities in the United States have had:

• Christmas Trees: A ridiculous prohibition that infringes on a student's ability to freely express their religion.
• Lobsters: An absurd prohibition that prohibits people from cooking fresh seafood.
• Snowball Fights: An absurd prohibition on clean, relatively-safe fun.
• Bubble Machines: Another absurd prohibition on clean, safe fun.

Some other institution of higher education have come up with almost oppressive student codes of conduct. At some schools, students are prohibited from drinking under the age of 21, even if they are in a country where it is legal. Others curb free speech, and some even try to curb sexual activity amongst their student body.

It is pretty clear these these restrictions go against the American ideals of freedom and democracy. They restrict personal choice and are an attempt to indoctrinate young American voters into the idea that they can and should be told what they can and can't do without due process or proper representation. 

In order to stop colleges and universities from these ridiculous, left-wing practices, the government should mandate that no school that engages in these practices will be considered eligible for federal funding of any sort. This includes research grants, but also would prohibit financial aid or loan funds from the government to be used towards attending these institutions. Schools would either need to change their policies, or they would find students transferring away to places where they can use federal financial aid and loan money.

A House In Denial

While House Democrats deny the proven concepts of supply-side economics and that Washington has a spending problem, a panel of House Republicans today denied that the world's temperature has risen over the past 150 years. While one cannot prove that climate change is the result of human action (or inaction), the fact is that if take a graph and plot temperatures and years, as we move towards today the points on the graph move higher and higher. Below is such a graph (click it for a full size / clear view):

The blue dots are the data points, the x-axis year, the y-axis is annual mean temperature (degrees Celsius), the solid red line is a trend line, and the bold black line is the 25-year moving average. When the trend line and the moving average both show upward motion, that is a clear indication that the temperature has been rising.

The far-left, scientists, environmentalists, fellow conservatives, and even fourth-graders who have learned how to make scatter plots / trend lines have made a mockery of the Republicans for their inability to understand simple mathematical concepts. While it can be argued that the government should not be concerned with climate change, you can't really argue against the laws of mathematics. How can Representatives be taken seriously when they push for deficit reduction when they screw up like this?

Guns Make Us Safer

Liberals and others opposed to the American people being able to own and use guns often argue that the guns lead to murders happening, and that if we got rid of guns, people wouldn't be killed. Yet, history tells us that people were murdered well before guns existed. Julius Caesar, for example, was killed in 44 B.C. The fire-lance, which could be considered the first guns, didn't exist until the 10th century. Murder took place without guns, and gun-free murders continue to take place guns today. Reading the news, there are stories of murder by stabbing, murder by drowning, murder by strangulation, and other means. Criminals do not need guns to kill!

Guns, rather than leading to more crime, actually serve as a deterrent to crime. If you were a criminal on a street with four houses looking to commit a robbery, knowing the owners of three home are armed and that the owners of another are defenseless, you would use common sense to rob the house where the homeowners are defenseless. Further, if someone enters a school looking to kill in a Columbine or Virginia Tech style massacre, they will be able to kill dozens of people if no one is able to stop them. If a majority of people are armed, they'll be stopped after killing just a few people. While every life is precious, it is a better situation for a few people to be killed than dozens to be killed.

If guns led to crime, the leaders of America would never have submitted the Bill of Rights to be added as amendments to the United States Constitution. The 2nd Amendment states that "the right of the people to keep and bear arms shall not be infringed." This amendment doesn't force anyone to buy or own a gun, rather it states that people have the right to have guns if they want. It is irresponsible and ignorant for anyone to try to undermine the 2nd Amendment. Further, it is improper: the Constitution can be amended, meaning that if the American people no longer want the right to have guns, there is a proper process to bring about that change.