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  • Writer's pictureIshfaaq Peerally


My investing life is public, I tell you about all my investments, my analysis, I make videos on YouTube, Instagram, I have a Facebook Group, a blog and considering writing articles on Seeking Alpha. I also manage assets for other people. Therefore, I need to be honest and transparent when I make a mistake.

One recent mistake which I made was to try some short-term trading. It was an experiment and I didn't do it with much money. But I did try some short-term trading, although I always said not to do it. I already talked to you about workouts. These are investments which would last less than a year and also arbitrage. This is more or less the definition of workouts that Warren Buffett $BRK.B gave in his partnership letters of the 1960's. But I tried something different: Some day trades and some swing trades.

It started with Facebook $FB . One day, Facebook was volatile and was down by 5%. I made a small investment of $100. After 30 minutes, it was 1% up and I closed for a $1 profit. It may look small but it is still a 1% profit in 30 minutes, the average return of the S&P 500 $SPX500 for a month is less than that. I began thinking, maybe I can do the same thing with other volatile companies. A 1% profit a day is not bad. I was looking for companies which I was sure were going to grow in the coming months such as $CMG $NESN.ZU $LMT $AMT $MC.PA and wait for them to dip and buy then sell at a small profit. It worked in the beginning. Then, when Donald Trump starts tweeting about a trade war. Those stocks can fall by 4% in a day and remain there for weeks. I am then stuck in a position. On some of them, I lost money. For example, with $AXP , I closed with a 5% lost. The recovery was not going to happen anytime soon. Overall, I broke even with these short-term trades. To be exact, I made a 0.63% profit but it is not worth it.

It is not worth the time. I have to constantly look for these stocks. I won't say that I feel bad about it. It was an experiment. I learnt a lesson from this: Short-term trading, day trading, swing trading is not for me. Why change a strategy which is working. The worst part is that it changes my mindset. When I began making money on these trades, I began thinking putting more money. I didn't do it. But if I did, it could have been a disaster.

You need to choose, you're either a short-term trader or a long-term trader/investor. You can't do both. I certainly can't. Maybe you can but I can't.

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