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401(k) Day Trading by Richard Schmitt

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CHAPTER 7

Getting an Edge

Buy Low and Sell High

In prosperity prepare for a change; in adversity hope for one.

–James Burgh

Kurt was an ambitious young freshman attending The University of Michigan on a needs-based Evans scholarship. Since his scholarship covered only room and tuition, he figured he would work to earn some spending money for books, food, and possibly some bar tabs. He needed to keep a car on campus, so he said, to commute to his weekend job some 40 miles away at the Birmingham (Michigan) Country Club pro shop. Anyone who has ever tried to keep a car on campus in Ann Arbor for any length of time knows what a hassle it can be and how expensive it can get to park it. Add the cost of gas to the parking fees and tickets (otherwise known as government tax revenue), and Kurt's fraternity brothers questioned whether Kurt was taking home any money from his job after paying car expenses. They viewed Kurt's break-even work venture as a consequence of being in an endless circle of needing a car to get to work and needing work to cover his fuel and other maintenance costs.

Instead, imagine, if you will, that Kurt lived in a car-loving land (like Michigan) that paid for his car maintenance and fuel costs regardless of how much he used his car. This land also allowed him to park his car anywhere at will, with payment for the parking deferred until his graduation. Kurt just might find himself tooling around town a little more with some extra money in his pocket. That Michigan ...

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