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How to “easily” get stock for free. Proletarian’s “free stock” strategy. April 15, 2006

Posted by deminvest in investment, investment strategies.
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My strategy is simple. Being an unsophisticated proletarian investor, I want my stock for free. Do you think it is impossible? Not really! It is just a strategy that professional investors consider simply wrong:

I buy a stock, and as soon as that stock has a price increase of 30%, I sell part of those shares to put back in my pocket all the money I spent in the first place. That Way I end up with free stock.

Professional investors consider it a wrong strategy, because that way I end up with lots of bad stocks (those which don’t grow 30%) and have small amount of the good ones (those which do grow 30%).

They are maybe right, but I still love to have my Portfolio packed with free stocks, and I see that every now and then stocks, which did not grow for years, start going up and overtake the famous 30% mark, that allows me to turn them in to free stock. Palm and Red Hat (RHAT) are good examples of a companies which did so, stuck for years suddenly went up 30%higher than the original price at which I bought them.

With this strategy if you invest $1000 in a stock, wait untill it goes up 30% then resell 1000$ worth of it, you and up with the same money you had at start in your bank account and free $300 worth of the stock you bought, corresponding in number of shares which are 23% of the shares you bought originally.

This strategy is linked to the “Sell, earn and cry!” strategy, but it makes you cry much less if the stock you have sold continues to go up!

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1. Democratic Investments by the people for the people » Google (goog) vs Ebay in a lowcost society. Who will win? - April 15, 2006

[…] I own stocks of both companies… What I like is that it is free stock (it is simple to get free stock!). I wrote an article about Google vs. Ebay on this blog, in which I suggested Ebay as better investment because of its Paypal amazingly successful payment system. Now I am reconsidering my suggestion. Google is softly starting to start a low cost version of Ebay called Google Base. It is also softly and slowly starting to experiment with its sellers a payment system that may be called something like Google wallet or Google pay. […]

2. Democratic Investments by the people for the people » GM: General Motors, symbol of the disaster of “Old Economy” in the simple times when proletarians were just proletarians and not yet “democratic investors” like us. - May 3, 2006

[…] I got GM at 29.4 about a year ago attracted by the interesting dividend yield that it offered and that later has been reduced to contain losses. Fortunately, after getting GM, its price soared and I had just the time to sell part of it to get back the money invested. Now my 5 GM stock is free and worth 22.35 only. I keep them, mainly to live in first person the epic adventures of this huge ill giant. […]

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