Faisal Ali Addabi

Summary of the Problem: Mr. Zozo heard from one of his friends that the Red Demon share, owned by the Demons’ Company which specializes in producing excellent Indian masala, was the best share on Zeze Stock Exchange, and that many people had won millions from buying and selling that magical share. Suddenly, Zozo decided to jump into the lake of Zeze Stock Exchange, hoping to reach its golden bottom and win the biggest and fastest profit. He jumped into the lake of Zeze Stock Exchange without a detailed investment plan, or an opt-out plan in case of partial loss. He did not study the product, or obtain basic information about the Demons’ Company, nor did he save an emergency fund to meet his monthly obligations in case of losing his money in the Stock market. Zozo did not set a price ceiling for shares, and he decided to limit his investment to the red demon share only. He bought 500 red demon shares when the share price was high, after paying brokerage fees to a broker who helped him complete the purchase transaction. Zozo started checking the news of the red demon share in the stock market over ten times a day, to the extent that it afflicted him with tension and anxiety. The price of the share went down rapidly, and consecutively, Zozo was afflicted with panic. He sold all of his red demon shares, and lost a huge amount of money. Zozo came out of the Zee Stock Exchange in anger after getting the biggest shock of his life, and swore to not approach the Stock Exchange under any circumstances.

Summary of the Solution: The Stock Exchange is the place where you can make the biggest profits, or suffer from the biggest losses. In order to make reasonable profits and avoid big losses, you have to avoid the ten errors committed by Mr. Zozo by adopting the following corrective procedures:

Firstly: learning how to do self-trading in shares online, and not resorting to a broker, in order to avoid paying the brokerage fees.

Secondly: not buying any shares based on any advice from any friend. It is better to obtain advice from a financial expert.

Thirdly: trading on Stock Exchange with a detailed investment plan.

Fourthly: adopting a clear opt-out plan in case of losing a specific amount.

Fifthly: studying the product and obtaining basic information about the company which owns the share.

Sixthly: saving an emergency fund for meeting monthly obligations in case of loss.

Seventhly: putting a price ceiling for shares.

Eighthly: buying the share when its price is down.

Ninthly: diversifying the investment by purchasing different shares and not putting all your eggs in one basket.

And Tenth: following up the Stock Exchange news once or twice in each month in order to avoid tension and anxiety.

Any person who wants to win a lot on the Stock Exchange and laugh at the end of the day must follow the above ten commandments, otherwise, he or she will be in the same predicament which upset Zozo and drove him crazy!!