Try My Luck Using Zecco
When I opened a Zecco trading account and made my first trade a little over a week ago, my choice of stock was Xinhua Finance Media (XFML), the stock I also bought on its IPO day for $11.10 a share. So how’s my latest addition doing?
Currently, XFML is traded at $8.57, a gain of $1.62/share (I purchased 143 shares at $6.95 a piece) or more than 23% in over a week or so.
After I posted my first trading experience, reader TY left this comment at the post:
chasing a stock in trouble? you don’t offset losses by “adding more shares”. you just get more junk shares.
My initial intention was indeed to make up some ground after the stock dropped to below $7 after being hammered by alleged violations. Yes, the stock is in trouble lately and there are at least 8 pending class action law suits against XFML (well, the lawyers will seize every possible opportunity to make money for themselves), but to answer TY’s comment, I will have to ask whether anything has fundamentally changed before and after the revelation of irregularities. My answer is no and I don’t think I am adding “more junk shares.” In contrast, the company has done a couple of things recently that boosted the stock price:
- Bought an advertising company, Singshine Hongkong Ltd, to extend the coverage of its radio program
- Acquired Beijing Mobile Interactive Co., Ltd to provide program to mobile users
- Bought back $50M of its shares
In addition to XFML, I actually have some other plans with my Zecco* account and will add more funds to it soon (I only put $1000 when I opened the account as I thought that was the minimum required, but there’s actually no minimum to open an account). Since Zecco* doesn’t charge commissions for stock trading, I’d like to use the account and a few thousand dollars (“play” money) to buy stocks that could make me a few quick bucks. I used to do a lot of tradings in my early days of investing, but haven’t been active for a long time. With Zecco* I could restart the activity without worrying about the costs, whether I can really make money or not is another story. I don’t have anything on my mind yet, but it could be interesting to see how my stock picking *skills* (if I have any ) work.
BTW, China Life Insurance (LFC) was also sued shortly after its IPO three years ago for violations. LFC was traded around $7 at its lows in May 2004. Now the stock price is around $48 a share.
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