Three Day "Stock Success Course" ROI

The other day I wrote a not-very-favorable review of the Rich Dad's Education Stock Success Course. I stand by what I said, and I'm still not going to pay for the advanced courses, but I thought I would report on the results I've obtained with what Amy and I learned in the three day course. Per the instruction we received, we're "paper trading" for the first two weeks, which is too bad, because I would love to have actually made these returns.

While I was searching for a stock to "invest" in, my daughter Mara asked me what I was doing, so I started to explain the candlestick chart, the Stochastic chart and the MACD chart to her. We looked through several of the stocks listed on the top and bottom 100 fundamentals in the "Edutrader" software. Nvidia corporation, a manufacturer of video hardware for computers and video games was listed on the top 100 with a fairly strong score, but when we looked at the technical analysis charts, the Stochastic was sending a clear sell signal, and the MACD was sending a soft sell signal. The candlestick indicated that the stock was near resistance levels and likely to fall. So Mara and I decided to "short" sell it.

Our strategy was to sell 1000 shares at $8.50/share. The stock was trading about 8.70 at the time and we thought this would give us a market confirmation that the stock was going down. We set our stop-limit originally at $9.50/share. This limited our losses to $1/share or a maximum of $1000. We later narrowed this to $9/share. We forecast that the stock could go as low as $5.50 per share, which is the prior support level. If it goes that low, our investment will return $3,000. With the narrower stop, this is a risk return ratio of 1:6.

We enetered the position last Thursday. Today NVDA closed at $7.51, or $0.99/share down from where we entered. If we were to buy the stock today, we'd have a $990 profit, but the signals don't indicate that the trend will change any time soon, so we're hanging out in this position for a while longer. If we'd put actual money into this trade, we'd have paid for the three day stock course almost twice over with these returns. So, the three day course was worth the $499 we paid for it.