Soon after the oil spill happened, I sold my BP stock as I saw it plunge below $50 a share (from $60 a share just a week ago). Sadly, I lost money, but I was pretty happy a few weeks later when it dipped below $40. As I saw it plunging further, I started wondering whether it made some sense to buy it back again. I decided that if it got below $30, I would buy more shares. Lo and behold, I am the proud owner of BP stock again (I bought it for a little under $31), and it’s looking like a good idea right now – BP closed at $37 on Friday and the oil spill looks kind of sort of contained. Now I just have to hope that (a) the cap stays in place and (b) there are no hurricanes coming through that region.
Of course, this is how I imagine amateur day traders are born. You make a few good calls and all of a sudden it seems like making money on the market is pretty easy. Luckily, my broker charges commission for trades. Otherwise, I would probably be trying to beat the market left and right and would most likely fail. Or would I?