“There is no other event where you’ll have the opportunity to hear 3 minute pitches from 50 startups in a day.” - Startup Riot

Once a year in Atlanta, GA there is gathering of  entrepreneurs from around the world itching to tell the anyone with ears about their business ideas. OK, well they really are trying to get the attention of some investors (institutional, corporate VCs, and angels). There is ever room for larger companies looking for fresh ideas to either acquire or work a partnership deal. Unfortunately I personally have not had a chance to attend yet, but I caught up with someone who has. Hear his story about Startup Riot 2010:

RedMaven: Who is Andrew (Andy) Watson?

Andy: I’m a software engineer originally from Orlando. I’ve worked for huge companies like Federal Express and Cox Communications and also at small startups like MindComet. I enjoy creating things and have a knack for solving problems.

RedMaven: Almost everyone thinks they’ve had a great idea for a product or business, but complained that no one would ever take them seriously, let alone give them money for it. What enticed you to attend StartUp Riot?

Andy: I’ve wanted to start a company for a long time.  I graduated from the Executive MBA program at Georgia Tech in December 2005.  As part of that program we built a business plan around technology developed at Georgia Tech.  I found the entire prcess fascinating and it was at that point that I decided I wanted to start my own company.  A friend invited me to attend StartupRiot in 2009.  While I was sitting in the audience that year I became determined to be a presenter in 2010.  This year I was up there on stage.

RedMaven: Were you nervous the first time you attended? How did you get past it?

Andy: The first time I attended StartupRiot I was just in the audience.  It was incredibly exciting and I was intensely jealous of the founders who were up on stage.  This year I was presenting and I was very nervous.  I had spoken at conferences and in front of large crowds before but I never had this much at stake before.  Add to that Robert Scoble, Bo Peabody, CNN and 400 people and it’s a little intimidating!  The best thing for me was going to Startup Gauntlet the night before.  I got great feedback on my pitch and a lot of encouragement from Jeff McConnell, Keith McGreggor and Paul Freet.

RedMaven: Describe the atmosphere at the venue.

Andy: The venue was electric.  It was literally buzzing with excitement.  At one point in the exhibit hall I had to shout to be heard.  You could feel the excitement from people as the met other entrepreneurs and thought of new ways to combine their technologies together.  It was frenetic.  If it had lasted for 24 hours I would have stayed the whole time.  I talked so much that day I almost lost my voice.

RedMaven: What did you do to prepare for the event?

Andy: We printed out lots of business cards.  I moved our database to Amazon’s RDS in case we got slammed with traffic.  I setup a special phone number to show off our features but I forgot to mention it during my pitch.

RedMaven: If your intentions are to secure funding, beyond the 3 minute presentation, how would you suggest approaching potential investors? What are some of your do’s and don’ts?

Andy: Well, we weren’t trying to raise capital this year but if we had been, I would have tried to network with investors in advance by talking to my advisors at ATDC.  Find out what investors have made investments in your space recently.  Find a way to get introduced to them before the event.  Find out what it takes for them to invest in a company.  Find a way to meet those criteria or have a plan to meet them. Be ready to demonstrate either proven experience (successful exit) or traction (paying customers).

RedMaven: Any funny stories that you have come across while at StartUp Riot? Either personal or something you heard about at the event.

Andy: When I showed up at the event I thought I was speaking in the after-lunch group.  I planned on having a few beers at lunch to calm my nerves.  I thought I would have time to rehearse, practice, re-write, rehearse again.  The only problem?  I wasn’t in the after-lunch group at all.  I was in the first group.  I was THIRD.  Somehow the lists of people had gotten scrambled.  Nobody was in the slot they though they were in.  So I was sitting up in the front of the theater going over my outline and I didn’t even realize I was sitting next to Ben Dyer who I’ve wanted to meet in real life for a while.  I was a little pre-occupied.  I thought I was ready to go.  I had even worked in a line that made reference to Bo Peabody’s keynote.  Then Ben was done.  He started walking off the stage and my mind went BLANK.  I did alright though and in retrospect it was good that I went early so I could get it over with.

RedMaven: Haha, wow! Ok, so looking to next year, if you plan to attend again, what, if anything, are you planning to do differently?

Andy: I would definitely invest in signage.  We didn’t have any and I think it made us harder to find and we didn’t show up in any of the CNN footage of the event.
We also could have done better about having our demo up and running on my laptop on the table.  We’ll get better at the trade show thing over time.

RedMaven: What is the best advice you would give entrepreneurs interested in attending StartUp Riot as a presenter?

Andy: DO IT.  Seriously.  It doesn’t matter if you think you’re not ready.  You’re as ready as you’re ever going to be.  Boil your business down to its essentials.  Come up with 4 VERY simple slides and apply to attend.  What have you got to lose?

RedMaven: Can you tell us about any future projects your are working on?

Andy: We’re currently working on extending OtherNumber into some vertical markets like Real Estate where we can build out special functionality to meet their very specific needs.  We’re also working on an integration with Chirbit to allow post audio clips on Twitter by making phone calls.

RedMaven: What is the best way for our readers to get in contact with you, follow you, etc…?

Andy: My twitter handle is @andrewwatson and we post company updates with @othernum.  Our company website is http://othernum.com/ and you can find a million ways to contact us on our About Page (http://othernum.com/about/)

PBS did a segment on Damon Williams, a 14 year old who has already learned how to invest and has a net worth over $50k!

One of the quick and easiest ways to start investing your money is in the stock market. History shows that over any 20 year period the stock market has outperformed every other asset class. One quick way to jump in the market is to use a long-term investing approach and dollar cost average in the market. What you will do is to put $50 dollars a month into the market until you retire. If you can afford to put more, that is good, but the goal is to be able to do this every month.

To start, you will have to open a brokerage account and I suggest Sharebuilder, now owned by ING Direct. It is an online brokerage that allows you buy pieces of shares of stocks. That way you don’t have to worry about not having enough money. There is also no account minimum, no inactivity fees and it’s services are targeted for the everyday investor. This is how I got my start in investing and it takes no more than 30 minutes to set up. Right now you can buy stocks for $4 with their automatic investing service. Once you set it up, it will deduct your amount each month from your bank account and invest it in the stock market for you. It’s that simple!

What stocks should I buy?

All of them! Standard and Poor’s, a market research firm, created a basket of 500 stocks that serve as a benchmark for the stock market’s performance. Named the S&P 500, this is what mutual fund managers use to gauge whether they are performing better than the overall market. Once you set up your account, you want to invest your $50 dollars each month into the SPY, which is the stock symbol for the S&P 500. The average return for the S&P since 1926 has been a little over 10%! $50 dollars a month would turn $15,000 dollars invested over the next 25 years into a little over $64,000! Not bad for 30 minutes of work! As you get older and start making more money, you can increase the amount you put in. Please note that about 70-80% of mutual fund managers fail to beat the market each year. So by buying the S&P 500 index you will be inline with the market and hence beating most people who manage money for a living!

While we wait for the markets to show it’s hand, there are a few trade setups that I am monitoring to see if they unfold. While the best case scenario is to trade in the direction of the market, I think these trades will still offer good risk reward.

Trade Ideas:
GOOG (Public, NASDAQ:GOOG) as a good swing going through the end of the month if it breaks and hold above $420. The catalyst for this is their July earnings. Google seasonally run up at the end of June ahead of it’s July earnings release. I am using the daily chart as my time frame.

BAC (Public, NYSE:BAC) as a long through the end of the month if the XLF breaks above its 200 day MA or a short if the XLF breaks below the 50 day MA. The financials are the heart of the market and they have wedged themselves between their 50 and 200 MA. BAC has the most potential for a big move either way so I am looking to play this.

Trade Reviews:
RIMM (Public, NASDAQ:RIMM) dribbled through earnings so I did not play it. Today was options expiration and not a good day to put on any trades.

I have been getting a lot of inquiries from people, who would like to make some extra money trading the stock market. It is only right that I tell you the good and the bad; First the bad, YOU CAN LOSE MONEY IN THE STOCK MARKET if you do not properly educate yourself. Alright, now the good stuff.

When you trade the market, you are looking to predict when prices will go up and/or down. Then, you must decide the time frame you wish to hold your stocks. The longer the time frame, the easier it is to predict prices. What does all of this mean? If you want to hold your stocks for 20 years, you could comfortably say the stock will be higher because history shows stocks trend higher over years. Therefore in 2-3 years (outside of a recession) you can also say the market will be higher. But, when you analyze a smaller time frame such as a day or even 3 months, it’s harder to predict the movement of the stock prices. However, most people looking to make quick money try to catch the short term movements in the market without educating themselves first. If you want to do short term trading, you have to do your research.

First: Where can I find basic stock information?
1. Go to Google Finance, http://www.google.com/finance, and type in your favorite publicly traded company. So McDonald’s (symbol MCD) is a good pick but not Chick-fil-A (since it’s privately owned). It will come up and you will see what their stock price was last traded at and some information on the company. Now your goal is to utilize whatever information you can to predict if this stock is going to go higher over some given time frame.

Second: How do I place an order?
Once you have decided to buy a stock, the easiest way to place the order is to open up an online brokerage account. Sounds scary but it really isn’t. It’s just like opening an account with an online bank (e.i. ING or HSBC). You can pick from Etrade, Charles Schwab, OptionsXpress, Sharebuilder, TD Ameritrade, etc. For those who are starting with a dollar amount less than $2,000 OptionsXpress and Sharebuilder I know does not require minimum balances. The application will ask for basic information along with your SS# for tax purposes and your level of trading experience for their demographics. The type of account you want is a cash account (NO MARGIN). Last thing is you want real-time quotes so read and agree to the terms.

Third: You have to read!!
If you have no clue about assets and liabilities, the first thing you need to do is read Rich Dad, Poor Dad by Robert Kiyosaki. Then read Jim Cramer’s Real Money: Sane Investing in an Insane World. You can purchase both of these books easily from amazon. I am not telling you to read these books for your health!! They will give you a nice foundation for you to build wealth. Rich Dad, Poor Dad gives you the basic mindset on what assets are and how to start building them. Jim Cramer teaches you about the asset class of stocks and how to go about picking the right stocks to buy. I like Jim Cramer’s book because it is a fairly easy read and he does a great job at breaking down the basics of stocks in an entertaining fashion. Lastly, you have to keep up with current business news. So watching CNBC and reading articles from Wall-Street Journal, Investors Business Daily, and Yahoo/Google Finance is necessary.

After you finish reading this post and you say, “man, I still don’t know what to do!” It’s because you did not read the books I supplied, explored Google finance, watch CNBC (especially from 4-6pm est: if you work, watch the clips online), nor did you open up a brokerage account. Once you do all those things AND read this post, will you the basic skills needed to trade the stock market.

What type of trader/investor do you want to be and what you need to do?

1. I have no clue about the stock market but it looks interesting and want to make some money. I really don’t have a lot of time to learn but I have a couple hundred dollars that I can put into the market. Maybe one day it will be worth a lot of money.

Answer: To be honest, to make a lot of money from a little without doing much work is called the lottery. But because of the times we are in, there is a couple of what I like to call hope plays out there. Research the stocks that have been beaten up the most, meaning their stock went from 80 dollars to like 50 cent or 1 dollar. Then research the company!! This is KEY! You have to find a company that you think will survive this recession we are in. Real Estate and Financial companies is a good place to start. A company who stock that has been sold off to around a dollar could possibly one day hit new highs. A hundred dollar investment could be worth $5,000 in about 10 to 20 years.

2. I have a 401k or Roth IRA and it is losing money. I don’t know what funds to put my money in. I want to learn about the stock market so I can better manage my retirement account.

Answer: The best way to manage your long term retirement accounts better is to learn business cycles and the seasonality of the stock market. You will have to keep up with business news, what sectors are growing and so forth. To do this, watch CNBC more often to understand business jargon. You want to reallocate your funds maybe once or twice a year. Also, moving your money to cash is just fine!! People who say dollar cost average in a declining market and never leave your money in cash is a broker trying to make money off fees and not performance.
a) One rule of thumb to follow is buy the market in October and move your money to cash in May. This one rule has beaten the market averages over time in a major way.
b) If you don’t have a 401k or Roth IRA, get one and put $25, $50, or whatever you can afford into your account every month. If you are young, this is one of the best things you can do. If you follow the sell in May rule, then during the summer months, you still deposit the money in your account, but leave it in cash until October comes. This way you stay discipline in depositing the money every month.

3. I have no clue about the stock market but I want to learn and spend 1-2 hours a week trading stocks. I have about $2,500 dollars that I can use to get started. I believe the more I work, the better my trades will be. I want to stay in a trade maybe 3 months to 2 years (this current market, it’s more like 2 weeks to 3 months).

Answer: Personally, I think this is where most people would fit. Anyone who has any wealth or wants to build wealth will have to interact with the stock market. So I say you might as well learn. To do this, you need to keep up with business news (via CNBC), Wall Street Journal, Yahoo Finance, etc and you also need to learn the dynamics of the stock market. Once you learned how to trade, it will only take you about 1-2 hours a week to manage your portfolio.
b) Open up an online brokerage account and learn the platform. It’s fairly easy to do.
c) Find one stock and follow it. Use this stock to see how economic news items and stock specific news items affect stocks movement.
d) It is imperative that you read the books mentioned in this post and learn market jargon through CNBC and Google finance.
e) Once you have done the basics, I will help you develop more skills to hone your skills using technical analysis, fundamental analysis, etc.

4. I have no clue or some clue about the stock market. I am really interested in it and want to be the best trader I can be. I see myself trading well and can possibly make a lot of money from trading. I will spend 10-20 hours a week working on being the best. I want to be able to trade stocks and invest in them well. I want to get to the point where I don’t have to work.

Answer: This will take about 3-5 years to accomplish. If you really want to do this, contact me. The first thing I’m going to do is give you a book list of 5-10 books to read and homework to do before we even get started. Why I say this. There are no secret tricks to learning the market, you just have to put in the time and effort. So I have to weed out the people who think they are going to make some quick money overnight.

Do you feel like investing or trading in the stock market is like betting it all on red in Las Vegas? When you hear about people building wealth from the stock market do you pass it off as a lucky streak? Do you think your broker is a crook? Well, I can’t answer that last question for you, but I can clear up a few misconceptions about investing and gambling. Below is a chart I found on Thedigeratilife.

Investing

• A good thing, involves risk
• Can be addictive and destructive
• Is business
• You save for a specific goal, such as retirement
• A Continuous process pf deployment of capital in search of continually increasing net worth. Delayed gratification is implied
• Ownership of something tangible
• Based on skill requires the use of a system based on research

Gambling

• A bad thing, involves risk
• Can be addictive and destructive
• Is entertainment
• You’re just having fun
• A specific act or series of acts centered around immediate gratification
• No ownership
•  Based on luck and emotions

Ok there are some common threads between investing and gambling; they both involve risk, both can be addictive and destructive. But, those common threads do not put investing and gambling in the same category. Risk is exposure to chance of loss or damage. Investing looks to manage risk while gambling takes no regards for it. Also, anything you do can become addictive depended upon the person involved. From food to prescription drugs and everything in between can become addictive and ultimately destructive.

So is investing in the stock market gambling?

Absolutely YES, only if you have NO idea what you are doing! It’s like trying to predict the weather a week from now. Your answer would be a pure guess.

So…is investing in the stock market gambling?

Absolutely NOT, when you are skilled, prudent, and disciplined. Now, if I asked a meteorologist, what the weather will be like a week from now, I would have more confidence in his or her answer. Why? A meteorologist would study past weather patterns, take into consideration current conditions, and then use specific tools to help predict weather movements.

The difference between your answer and the meteorologist’s answer is the meteorologist derived his or her answer after following a trusted process and system of thinking.