who here plays the stock market?

[dantheman8328 10+ year member]

alright great, im a jim cramer fan but would Mad Money be a good book to start out with or would it be too technical?

 

[Flipx99 5,000+ posts]

Good info.
Few questions though. You two seem to be quite on top of your game, so instead of asking random questions about stocks ill ask this one. What direction could you point those of us that want to learn to?

Most would love to learn this on their own (myself included) and ask questions when necessary. What sites, books, ect. would be best to learn from? (other then what has been said already)

As flip mentioned earlier, due diligence needs to be put in, and thats fine. However personally im still not too sure what/where to look to put time into researching.

One up on Wall Street is an excellent book by Peter Lynch. I have read others and they are all about the same.

If you are in for a long read, you could read Security Analysis. It's no page turner though. It is a book you study.

Investing is very similar to playing chess. It takes about 5 minutes to learn the rules and years to get any good.

It is hard to say what is good and what is bad because of there are so many styles to investing. I like the more value approach. I don't invest in individual stocks because I am a top-down investor. I look at the economy as a whole and try to figure out what industries are poised to make a run in the next couple years. For my longer term plays, I don't look at as much. I have a couple index funds that run counter-cyclical and rebalance quarterly. Not fooling around with a bunch of trades is important for long term growth. For short term plays, I look for options within 20 days of expiry that I think will beat earnings and I get a good bounce. It is pretty high risk, but because it such a levered position, if I win one in four, I still come out ahead. ( I average 1 successful trade for every six losses. Like I said, it's not for the faint of heart and the learning curve is steep and expensive)

I do not reccomend trading options until:

1. You fully funded (or have a systematic plan such as withholding) a roth IRA, regardless of whether you have 401(k), pension, etc.

2. Have played the market for atleast 2 years. If gives you some idea of the ebb and flow of things. Plus you will amass some etfs or other funds along the way.

3. Can throw the money in the garbage and not worry.

Trading options like I do is speculation. You will lose money at some point.

That is my style. You will have another style that fits your personality.

DISCIPLINE IN YOUR STRATEGY IS THE KEY TO ITS SUCCESS

What your strategy actually is, is much less important.

There are many books. Investing for Dummies. Many newbies learn a lot from Jim Cramer, he is a little unorthodox but has a lot of knowledge. I learned the hard way by studying for the Series 7. There are many websites. Options express, CBOE.com for options. I dont recommend options unless you are a pretty educated investor, but to each his own. For a beginner, ETF's like XLE and a few others are good, but I also like Mutual funds. Many pay really good returns without as much of a risk. Nobody is going to get rich the way the market is today, unless you already have money.

I disagree with that statement. You may not get rich in one day like George Soros, but there is value available. It is harder to find, but it is there.

alright so im a freshman business admin major and this summer i wanted to get a head start on some of this, if you guys could pick one book to start off with for me to read this summer what would you recommend? Investing for Dummies?

ive been playing cnbc's million dollar portfolio too and in the last like month ive had an 8percent return(not after todays close though prob lol), i know the way to trade for this competition is with short term trades but ive been using it to just try some long term options, how would you rate an 8 percent return so far if i was in it for the long run?

Here is what is problematic about that game compared to real life.

In real life you don't have a million dollars to allocate. When I started, I started with ~$300. You can't do very much with $300. I bought into some ETFs and 1 common stock (IRBT). You get strangled because you can't take opposite positions and you can't afford to take much risk, therefore you return is pretty low.

The fact you can get 8% with a million dollars is not as impressive of return 8% with $300.

I have about $6,000. in my roth IRA. I return about 11% YTD. Is that good or bad? Well, you have to compare it to the risk I accept. I think it is pretty good because my portfolio is only slightly more risky than the S & P which has only returned about 6% YTD.

You can read a couple articles on the web to learn to invest.

In short,

If you want a great return, it takes a lot of work, time, and luck. If you want an average return, you can stick your money in a plain vanilla fund and go to a baseball game. Investing is not hard. It's all about developing a strategy and keeping with it.

 

[Flipx99 5,000+ posts]

alright great, im a jim cramer fan but would Mad Money be a good book to start out with or would it be too technical?

What do you mean by technical?

This all depends on your approach. Are you interested in investing in specific stocks, ETFs, or Funds?

 

[bigbirney420 10+ year member]

Getting rich is so subjective. Nobody with 1000.00 to start is going to get rich in todays market, even in a years time. Especially in value investing. It takes a lot to be the next Warren Buffett, and many people disagree with his investing strategies. Anything around 10% return is pretty good. I managed my fathers last year and it averaged around 17%, but he has a lot more money to play with, and is well diversified. Start early, educate yourself, and build for the future. Everyones different. When you are younger you can take a few more risks, and reap more rewards, and it may not hurt you as much to lose, as somebody thats a few years from retirement.

 

[Flipx99 5,000+ posts]

Getting rich is so subjective. Nobody with 1000.00 to start is going to get rich in todays market, even in a years time. Especially in value investing. It takes a lot to be the next Warren Buffett, and many people disagree with his investing strategies. Anything around 10% return is pretty good. I managed my fathers last year and it averaged around 17%, but he has a lot more money to play with, and is well diversified. Start early, educate yourself, and build for the future. Everyones different. When you are younger you can take a few more risks, and reap more rewards, and it may not hurt you as much to lose, as somebody thats a few years from retirement.

I was basing on the assumption that he starts with $1,000, adds to it, and lets it compound for ~40 years.

 

[bigbirney420 10+ year member]

I was basing on the assumption that he starts with $1,000, adds to it, and lets it compound for ~40 years.

I wasnt disagreeing with anything you said, I was just stating that some beginners go in with the idea that you will get rich quick. There is lots of value in many investments. You just have to research and hunt. I also watch people daily dump all thier Roth into 3000.00 worth of a penny stock thinking its going to be the next Berkshire, and then 6 months later the company tanks and they are broke.

 

[Flipx99 5,000+ posts]

I wasnt disagreeing with anything you said, I was just stating that some beginners go in with the idea that you will get rich quick. There is lots of value in many investments. You just have to research and hunt. I also watch people daily dump all thier Roth into 3000.00 worth of a penny stock thinking its going to be the next Berkshire, and then 6 months later the company tanks and they are broke.

Oh I see. And Berkshire was never a penny stock from what I understand. When Buffet took control it was at ~$8/ share IIRC.

I do get your point, however.

 

[bigbirney420 10+ year member]

Oh I see. And Berkshire was never a penny stock from what I understand. When Buffet took control it was at ~$8/ share IIRC.
I do get your point, however.

The initial offering to the public was around 1000.00 a share for the A's, that are more than 70k now. The B's also opened at 1000.00 and are now close to 4k. Being from Omaha he has spoken to our class a few times, and gave my team an award for getting 8th pace nationwide in AT&T stock investment challenge. My family owns some shares so we go to the Shareholders meeting every year. Hes just a regular guy though, has a Ford Pickup, and drives a Lincoln, but is worth 40 billion.

 

[Flipx99 5,000+ posts]

The initial offering to the public was around 1000.00 a share for the A's, that are more than 70k now. The B's also opened at 1000.00 and are now close to 4k. Being from Omaha he has spoken to our class a few times, and gave my team an award for getting 8th pace nationwide in AT&T stock investment challenge. My family owns some shares so we go to the Shareholders meeting every year. Hes just a regular guy though, has a Ford Pickup, and drives a Lincoln, but is worth 40 billion.

I thought it was a takeover from a New England Textile company in the late 60s.

I new he had regular cars from a spot on Forbes magazine.

EDIT: wikipedia confirms this

The Hathaway Manufacturing Company was founded in 1888 in New Bedford, Massachusetts by Horatio Hathaway as a cotton milling business. The company was successful in its first decades, but it suffered during a general decline in the textile industry after World War I. At this time, the company was run by Seabury Stanton, whose investment efforts were rewarded with renewed profitability after the Depression.

In 1955, Hathaway merged with Berkshire Fine Spinning Associates, another textile company that was founded in Valley Falls, Rhode Island (and earlier called the Valley Falls Company) by members of the Chace family in the early nineteenth century. After the merger, Berkshire Hathaway had 15 plants employing over 12,000 workers with over $120 million in revenue and was headquartered in New Bedford, Massachusetts. However, seven of those locations were closed by the end of the decade, accompanied by large layoffs.

In 1962, Warren Buffett, convinced that Hathaway was trading at less than its real value, began buying stock in Berkshire Hathaway. After some clashes with the Stanton family, he bought up enough shares to change the management and soon controlled the company.

Buffett initially maintained Hathaway's core business of textile milling, but by 1967, he was expanding into the insurance industry and other investments. Berkshire first ventured into the insurance business with the purchase of National Indemnity Company. In the late 1970s, Berkshire acquired an equity stake in the Government Employees Insurance Company (GEICO), which forms the core of its insurance operations today (and is a major source of capital for Hathaway's other investments). In 1985, the last textile operations (Hathaway's historic core) were shut down.

 

[bigbirney420 10+ year member]

I wasnt debating where the company came from, just the 8 dollars a share part. In 1965 When he took majority control it was at 18 dollars a share. He did a large offering later on to raise funds at 500 and 1000 a share to a few select friends, colleagues, in the early seventies.

 

[Flipx99 5,000+ posts]

I wasnt debating where the company came from, just the 8 dollars a share part. In 1965 When he took majority control it was at 18 dollars a share. He did a large offering later on to raise funds at 500 and 1000 a share to a few select friends, colleagues, in the early seventies.

No contest here. I could be wrong and forgot the $1x.xx . And you have atleast heard him speak. All I get is his letter to shareholders (although I own no shares, it is a great read. He is a teriffic writer to John Q. Citizen.)

 

[HitManSE 10+ year member]

One up on Wall Street is an excellent book by Peter Lynch. I have read others and they are all about the same.
If you are in for a long read, you could read Security Analysis. It's no page turner though. It is a book you study.

Investing is very similar to playing chess. It takes about 5 minutes to learn the rules and years to get any good.

It is hard to say what is good and what is bad because of there are so many styles to investing. I like the more value approach. I don't invest in individual stocks because I am a top-down investor. I look at the economy as a whole and try to figure out what industries are poised to make a run in the next couple years. For my longer term plays, I don't look at as much. I have a couple index funds that run counter-cyclical and rebalance quarterly. Not fooling around with a bunch of trades is important for long term growth. For short term plays, I look for options within 20 days of expiry that I think will beat earnings and I get a good bounce. It is pretty high risk, but because it such a levered position, if I win one in four, I still come out ahead. ( I average 1 successful trade for every six losses. Like I said, it's not for the faint of heart and the learning curve is steep and expensive)

I do not reccomend trading options until:

1. You fully funded (or have a systematic plan such as withholding) a roth IRA, regardless of whether you have 401(k), pension, etc.

2. Have played the market for atleast 2 years. If gives you some idea of the ebb and flow of things. Plus you will amass some etfs or other funds along the way.

3. Can throw the money in the garbage and not worry.

Trading options like I do is speculation. You will lose money at some point.

That is my style. You will have another style that fits your personality.

DISCIPLINE IN YOUR STRATEGY IS THE KEY TO ITS SUCCESS

What your strategy actually is, is much less important.

I'll definitely look into those, thx.

 

[bigbirney420 10+ year member]

No contest here. I could be wrong and forgot the $1x.xx . And you have atleast heard him speak. All I get is his letter to shareholders (although I own no shares, it is a great read. He is a teriffic writer to John Q. Citizen.)

No problem, its nice to talk to someone on here with some knowledge on the subject

 

[scarolina 10+ year member]

My parents made 50g off of force protection, bought in before they went public, Its a very fast grower. They make armored vehicles for the war, and mine destroyers.

Do any of yall play in the regional markets, thinking about getting into those. The risk reward is supposed to be high. Im just not quite educated enough in them

 

[Flipx99 5,000+ posts]

My parents made 50g off of force protection, bought in before they went public, Its a very fast grower. They make armored vehicles for the war, and mine destroyers.
Do any of yall play in the regional markets, thinking about getting into those. The risk reward is supposed to be high. Im just not quite educated enough in them

Liquidity may be an issue in smaller markets.