Taking Stock(s) – Is being simplistic necessarily bad?

Let me preface this post by saying that my mother and I foresaw the mortgage crisis 5 years ago. She’s the lady in the high school library who tells you not to eat at the computers, and I’m a massage therapist whose exposure to the world of finance comes in the form of naked, stressed-out bankers. Admittedly, we’re both way brighter than the jobs we do, but we don’t read the Wall Street Journal or Warren Buffet’s latest book (well, she probably would if the library had them, but that sort of thing is not exactly in demand with today’s teenagers). Interest-only, balloon payments, ARMs, down payment financing…we knew that when things got hairy, Plan B for all of these unqualified homeowners would be to refinance or sell, and that would kick in with a tidal wave of houses on the market. Unfortunately, we were right – but that prescience wasn’t directly relevant to us as renters, so our smugness has been nullified by our inability to capitalize on it.

Today, after reading FruGal’s “Frugal: So Hot Right Now“, something clicked and now I’m having another common sense moment – one I can actually do something with. Here’s how my strange little brain works:

* Look at all the books and Oprah shows about decluttering your life that have come out in the past year or two. Apparently, literally cleaning out your closets translates to tidying up your life metaphorically.

* People are turning frugality into a hobby! Even those who have nothing to worry about are getting into the game, and the evening news is actually covering the popularity of Good Will stores. So people haven’t stopped buying – they’re just shopping differently.

* There’s hardly a personal finance blogger out there who isn’t selling off their unwanted stuff online to either boost their emergency fund or pay down more of their debt. It’s a popular idea that even the big financial gurus like Suze Orman advocate. All the cool kids are doing it!

All of this leads me to my nugget of simplistic investment logic: eBAY. It lost a third of its share price in last week’s crash, and their business model is to take a little piece of every transaction and even get a little fee when things don’t succeed in selling. That’s the full extent of my “market research”, but since the market isn’t exactly behaving logically, I don’t feel bad about my laziness. Anyway, I anticipate that they’ll be able to at worst sustain current activity levels on eBay and Half.com, which should mean… yeah, you get where I’m going with this. I’m contemplating a little foray into the market feeding frenzy if my recent brokerage deposit has cleared.

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One Response

  1. Hey thanks for the mention! I’m thinking of getting into Ebay too. I’ve half-heartedly tried a couple of times, but I think you’ve got to be really 100% into it to make it work and earn real money from it. Good luck!

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