How I turned my family’s Covid Stimulus check into over $40,000 thanks to WallStreetBets
Last summer, my wife was pregnant, Covid was running rampant, I wanted my wife to have some time off when her maternity leave ends, so I set out to maximize the Stimulus check we received from the government. I know I got extremely lucky and this is a rare story. But here’s how I did it.
So we received $2400 jointly. I knew that after our baby was born, I would be able to claim an extra $500 back in taxes that year. And I just added an extra $100 I made working overtime to bring the number to a nice and round $3,000. I wanted the money I risk to be purely a bonus and not make a difference in our lives if it was lost since I had no clue what I was doing.
I went on WallStreetBets and I found out about how to open up a TD Ameritrade account and how the ThinkorSwim app would be my best bet as a beginner. I had heard about RobinHood, but heard some horror stories about the app crashing and how some people were unable to sell off during the downturn in March. So I set everything up and even practiced a bit on the app.
I read some posts, did some research asking some friends and reading some finance blogs and articles. I came to the conclusion of spreading my money out to 3 different stocks: PLUG, NET(Cloudflare) and T(AT&T). I had heard PLUG and NET being pumped up by everyone on Reddit and thought I’d give them a shot. I bought $1,000 worth of each stock.
AT&T I heard had been heavily invested in recently at the time.
It made sense during the pandemic to invest in these companies. PLUG, hydrogen energy, might be the future of some vehicles. Cloudflare (NET) is a cloud company and at the time I could not afford something like Amazon for its web services, so thought this was a good one to bet on instead since everything was moving online and to the cloud. AT&T I figured everyone is at home and using the internet and its services, so it might be a safe bet.
During the next few months all these stocks went up and down a little and didn’t move much. But out of nowhere PLUG kept having great days on the market. And currently I’m up about 600%, although I was up more a few weeks ago.
By the end of the year my daughter was 3 months old and I had turned my $3,000 investment into about $10,000. I thought to myself, another stimulus is coming although its only $600 this time, maybe I should buy some more stock and see how I do. That’s when I learned about trading on margins. It is very risky so I don’t suggest you do it unless you are careful. I gave it a shot since I had so much equity in PLUG. I thought if anything were to happen I would just sell some PLUG and pay it off (I was up 700% at the time). So I wanted to see how far I can stretch that original stimulus check.
I follow a couple investors and economists on Twitter and noticed them posting about a few stocks when they would make gains. I kept those stocks in mind and any time I had free time I would study the companies a little. And to be honest, I just looked at the cheapest possible ones. So at the beginning of January I started margin trading. I was very careful with my picks, I only chose stocks that were cheap and made sense to me on a basic level why they would go up. I also told myself, I couldn’t buy another stock on margin unless the previous stock I bought on margin went up.
My first order on margin was TLRY. This was soon after it was clear the Democrats would control the Senate and it made sense that a marijuana stock would have a potential high (no pun intended) upside in the future. My second stock on margin ordered was CEI, basically an energy penny stock which I soon sold after a small and meaningless gain.
On January 14th I decided to buy on margin again since TLRY had gone up some. I bought 100 shares of GME and 50 shares of FUBO. Talk had started about GME on social media and a few of the respected people I follow were posting about their positions on both GME and FUBO. I bought GME and FUBO at $35 a share. I bought a little more of GME based purely on instinct. They both went up a little bit and a week and a half later I decided to buy the newest talk of the town on social media, 200 shares of AMC at $4 a share.
To be honest, I thought I would see modest gains if I was lucky and maybe a little loss since some of my positions had not done so well. I told myself if my positions went down, I can pay off some margin with my PLUG gains and the next stimulus check. To my surprise, days later…the whole GameStop fiasco went down and my equity grew to as much as $46,000.
I’m all for the cause of the WallStreetBets movement and internet social media speculation trading, but this caused a serious talk with my wife. Should I sell? Should I hold my position with “diamond hands”? After some fluctuations I came to the conclusion that the guaranteed money was too much to not cash out a bit on. I sold 80 shares of my GameStop position at various prices to pay off 100% of my margin owed and pocket about $20,000. This left me with over $20,000 in stocks still. For a total of over $40,000 of liquid cash and stocks owned outright, no margins owed.
I’m not on a crusade to “stick it to the man”, I’m not an internet troll, I’m just a normal guy trying to do good by my family. I’m a son of immigrants who fled Iran during the revolution, I’m an IT Analyst for the Department of Veteran’s Affairs, I have dedicated my life to serve those who have served. My wife is an immigrant to this country from a young age with a State Government job who has dedicated her life to serving her community. Her love and guidance was just as big a part of this story as the stocks I chose. We are just a young couple with a newborn trying to find extra income so we can provide for our family.
It was a slap in the face when I saw Lee Cooperman on CNBC saying “people are sitting at home getting checks in the mail…this fair share is a BS concept”; it hit home. He was talking to me. He was telling me I’m not allowed to make money the way they do. I truly believe if RobinHood and others hadn’t restricted buying, I would have more than $40,000. The people who control the levers, do not want to see normal folks like us having the resources to do things like this. My wife and I are both college educated professionals, we are not some lazy people laying around trying to stick it to wall street. We may have gotten lucky, but our gains were earned…not given.
Shout out to WallStreetBets, sorry I sold most of my GME shares, if I didn’t have a family I probably wouldn’t have sold and held on for dear life like most of you (I’m still holding on to 20 shares). Shout out to a few people I follow on social media who I gained knowledge from and the guts to do this: Graham Stephan, Meet Kevin, Puru Saxena, and Logan Mohtashami.
Gains as of 1/31/21