Tuesday, March 24, 2015

Unconventional Eduation: My First Stock Investment

No, it was not Croesus Retail Trust that I bought back in March 2014.

In fact, it was much much much further. Think back to maybe.... Year 2000.

I'm not sure exactly when, but my first time having anything to do related with the stock market was when I was playing Neopets. Back in primary school, that's what all the nerdy people did.

I know it was kind of ridiculous, but the neopet's stock market was where I made all my millions of neopoints.

That's right. Millions.

The stock market in the world of Neopets was a pretty simple and easy game.

Every day, you would be allowed to buy a maximum of 1,000 shares on the stock market (cutely named the Neodaq).

For a stock to be purchased, it had to have a minimum value of 15np. There did not seem to be a maximum value to how much each stock can go up to. Stocks could go up to face value of 100np+. If a stock fell below the 15np value, it could no longer be purchased until it increased in value to 15np or higher.

But here's the funny thing: Stocks never go bust.

So, my strategy was simple. Every single day I would log on, buy the maximum amount of 1,000 shares in any stock selling at 15np face value. That is a capital outlay of 15,000np a day.

Since the stock prices seemed random, but could never go bust, all I had to do was wait until the price of the stock I bought rose over 15np, and all the excess would be profits. If I wasn't in a rush for my capital back, I could sometimes wait until I had made 300% profits before I sold.

Although the expected returns of this strategy is hard to forecast because it depends when you sell, this strategy was practically risk-free. It wasn't a fast strategy for quick riches, but it was a sure-win strategy if you could wait for it.

From this silly game, I learnt how to formulate a strategy to make crazy amount of profits in an entirely risk-free way, but it only worked if you had the patience. Sure, it's not like the real stock market, but it's a game for little kids.

I didn't just learn about the stock market. I learnt about savings and interest. About consumption items vs assets. About working hard to earn money. Developing a skill to make more money.

In a very weird sense, it was a microcosm of adult life. Optimizing my time online (my daily 24 hours), earning neopoints playing games (earning money) which depends on my skills (gaming skills) and spending my free time and money doing other things that I enjoy. Looking back, as much as it sounds like a silly game, it taught me a lot of things, gave me exposure to what real life is like as well as exposure to many other things, like history, culture and geography.

All in all, I think it was a pretty educational "gaming" experience for me.

Who said that learning and education should be only restricted to classrooms and schools?

1 comment:

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