I’ll never forget the first time I sat in a casino.
I specify “sitting” as an achievement because there were several prior visits when I was afraid to sit down. I was of legal age to gamble, but the whole casino experience was overwhelming. There were so many tables representing so many games. And there were so many guys wearing so many vests dealing so many cards to so many old ladies. Everyone, but me, looked like they belonged.
I didn’t feel comfortable “sitting down” until I, too, had that feeling of belonging. I wanted to know “what I was doing, how I should do it and against whom I should do it.” In a very confusing way, that meant I was going to play poker (I wanted to play against other players and not the “house”).
Even though I now felt relatively comfortable with “what I was doing” (I knew how to play), I thought I could still ease myself in. I thought that, once I sat down, I could watch a few hands go by before I made any kind of stressful decisions. The stress-free feeling lasted all of 10 seconds.
My very first hand was dealt: AA
“Oh baby! The twin peaks! aka American Airlines! aka Pocket Rockets!”
In case you didn’t know, this is the best starting hand you can receive in a game of No Limit Texas Hold’em. There was no way I could fold the “best hand” and watch the rest of the players play. Before the action even made it around to me, another player went all-in (put all his chips in the middle). In other words, I would have to risk all of my money ($300) on the first hand if I wanted to play. Knowing that I had the best hand at this point, I had to call.
And I lost.
I lost all of my money on the very first hand. How could I ever feel comfortable playing after that traumatizing experience? How could I ever regain enough courage to sit back down at the table? One word:
After many hours of practicing with play money, I slowly got back into it. I researched strategies. I watched other players. I studied the game. And, as a result, when I sat back down at the table, I made a lot of money.
The Stock Market is One Giant Casino
My first experience at a casino and my first experience investing in the stock market are actually very similar.
At a young age, my father told me about the idea of investing. He said, “let your money work for you.” Truth be told, once I found out that my money could work so I wouldn’t have to…I was sold! There wasn’t much else I needed to hear.
As soon as I was old enough (in college), I deposited some money into a brokerage account. My hopes were that I could make some quick cash, so I did some research. Five minutes later, I had a genius idea.
Since it was October, I was going to buy Hershey’s stock. I thought that, since people would buy Halloween candy soon, the stock would rise (I kid you not, this was my justification). So, I bought one share. I lost 16% just from the cost of placing a trade! The stock fell over the next few weeks, so I decided to sell my share. I lost 16% going in, 7% from sticking around, and 19% going out.
“What kind of game is this? At least the casino gave me free drinks!”
I decided to regroup and take the same approach that I had with playing poker. Rather than risking real money while still “learning the game,” I decided to practice with play money. There were a few stock market simulators online that allowed new investors to feel what it’s like to invest without the possibility of getting burned.
What is Olim Dives?
Since that first stock market simulator years ago, technology has come a long way. There is a website, Olim Dives, which combines social media AND investing. Imagine a Facebook where all of the users are interested in investing and, in place of baby pictures and statuses divulging too much information, picture a mini feed reflecting all of your friend’s recent trades. I would strongly recommend it to new investors and young adults looking to learn about the stock market. I would also recommend it to anyone that would like to test out a new investment strategy.
This allows you to “learn by doing, but without losing.”
Readers: How did you get started in the stock market? Do you remember the first time you made money or lost money?