Intro to Mike – Crazy Day

6 May

Hello

My name is Michael.  I like apples.  I also like swedish fish.  Anyways, this blog is a joint project between my roommate and me.  We like to have lots of discussions in our room, and I think it would be cool to take our discussion online – so here we are.

More about me.  I’m majoring in Electrical Engineering and Computer Science at the University of Texas at Austin.  In one week, I will complete my freshman year.  I am very interested in the intersection of technology and business, so I’ll be talking a lot about that.  I love food too – so you may see some of that.

Anyways, there was some craziness in the markets today.  We saw Accenture drop from $40.00 to $0.01 for a few moments.  P&G dropped from $60.00 to $30.00 momentarily.  The DOW was down more than a $1000.00 at one point.  The source of this volatility is still unknown, but rumors trace the source back to a trader at Citigroup who apparently put in an order for a billion instead of a million.

At the end of the day, the DOW was down about $350.00.  I think this is a really good time to buy.  I think we’ve been on a strong upward trend recently and today (and this last week) was just a small arbitrary setback.

I bought a Financial ETF from Direxion today that goes by the symbol FAS .  It’s a 3x Financial Bull, offered by a company called Direxion.  Basically, for every $1 I invest in the ETF, Direxion borrows an additional $2.00, then takes those $3.00 and invests it in an array of financial related stocks/indexes.  So I lower my risk since the money is invested in a bunch of companies, but then the risk increased because it is 3x.  The net effect is really negligible.  A downside to the ETF is that if it goes down a lot, the creditors who loaned Direxion the additional $2.00 may ask for their money back, in which case the fund could lose all it’s money and I would lose all of my investment.  I’m interested to see how it plays out.

That’s all for today. I look forward to writing more posts in the future.

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