Too High A Risk | ** An Anonymous Journal **

Saturday, November 28, 2009

Too High A Risk

A friend, Jason, tipped me off on a stock on NASDAQ and told me to invest. The price was US$4.12 when he told me about it. The following day, Jason managed to buy a couple of hundred units of this stock at US$3.99 when prices dipped upon the opening of NASDAQ which fell by 192 points.

Jason is optimistic that the price will go up to US$5, even though the 52-week low was US$0.97 only while the 52-week high was US$9. And if the price does reach US$5 and he cashes in on his profit, he would gain US$200 in profit for his investment.

Although I had wanted to invest in US stocks, after monitoring the counter for him throughout the night, since we are 13 hours ahead of New York right now, I don't see it as worth the risk to take. Jason's capital for this stock is US$800 and if he does gain US$200 in this volatile market, it would mean a gain of 25% of his investment.

At the end of trading, the price closed at US$4.07 which means that if Jason sold his shares, he would have gained US$14. US$14 only, after so much trouble! I don’t know, of course Jason thinks it’s worthwhile but I think there are better ways to make US$14 without as high a risk!


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