Anybody know about investing/stock trading?
DjArcadian
3,632 Posts
I got questions!
DjArcadian
3,632 Posts
Comments
Buy low, sell high.
For real though, I wouldn't wade into this pool without doing some reading, taking a class or something. I got burned baaaaaaaad by strolling into the market circa 2000, overinvesting in tech stocks and then getting smashed on when the bubble burst.
I've made some decent calls since: bought some Apple back in the spring when it was around $30/share. I've held onto UPS stock for about 4 years now, but only because I overpaid for it when they first went public.
Safest way to start is in some modest risk mutual funds: let someone else figure out what to buy and then cross your fingers otherwise.
buy Merck,
AAPL 71.65 Today.
Good job, O! We invested in Apple recently, too. Here's to hoping that everyone gets iPods for Christmas.
I've been saying this for a while. The trials are all hype, Merck used to be untouchable as far as drug companies go and it stands to reason that they will be strong in the future.
but my all time kill was GLW Corning at an average share price of
wait for it.....
$2. I had 5,000 shares and sold at $17.
but the industry as a whole has been in the dumper for what seems like five years now. You have to be patient, but Merck is beat up enough that I think you can make some money off it in the next year or two even.
Buy Lockheed Martin.
I think both MO and GLW are still great plays right now.
You know what you are doing, SABADABADA!!!!
bought AAPL at 18/19
sold at 30
forever I cry.....
BABABABOOYAHHH.
PIGS GET SLAUGHTAHOUSED!!!!!!
PFE, BABY
I'm out of the game for now. I just kept about $50K in MO, JNJ, MSFT, GE and IBM. I just started going back to school so I have to come up with $25K a year in tuition, so im only investing in me now.
$25K a year? That's nuts. I'm at one of the top three schools in Canada and my tuition is under $8K and those are Canadian dollars. Of course I'm also in Fredericton...
I'd rather pay the extra 17K
Actually Oliver it's buy high and sell higher. No one on this board is good enough to catch a stock at the bottom of a downtrend (except apparently for Sabababababa catching MO at 28, the 5 year low), you're better off buying as a stock makes 52 week highs and then selling into strength. That's one way to do it.
I'm not one to quibble, but according to the journal today 28.10 in March of 2003 was the 5 year low. Looks about that way on a yahoo 5 year chart too. Unless you're talking about before 5 years ago, but either way it doesn't matter. Corning is a good look, my pops is looking at that right now and he's pretty solid on picking longs.
I had MO somewhere the last couple years at 42, but sold it at 55. I can't remember when, but I know I bought it when some litigation was going on based on the hunch that they would come out of it without a scratch.
on Febuary 22, 2000 I'm looking at a confirmation from MSDW for 102 shares @$20 per share even.
boy I had some losers back then.
Sonera
Charter
Palm
stocks arent really my game, but i could answer any questions you might have about entry/exit points ... price targets, etc, as well as whether or not it looks like a decent buy based strictly on recent price movements. sween is much more well-versed in the stock game. i'm interest rate derivatives all the way duke.
but just as far as general advice goes - assess your own situation before you assess the markets. do you want to trade, or are you looking to invest? how long do you want to hold your positions? and most importantly, USE STOP LOSS ORDERS on EVERY single position you enter. my advice as far as that is concerned is to place them at an appropriate level that will give your trade time to breathe (don't want to get stopped out prematurely based on an arbitrary dollar value in terms of losses) and do so based on the technicals of the market that you are trading. in other words, if the stock you decide to trade has been trading in a range for the past few weeks, make sure to place that stop BELOW the range, so you at least have some confirmation that you're wrong before you get stopped out. and make sure that the dollar amount attached to the trade isn't so much that you will sustain heavy losses if you do get stopped out. but each of your trade must have three components: your entry, your exit on the upside and your exit on the downside. DO NOT enter a trade unless you know these three things beforehand (although if your trade is working very well you should let some of it go - be sure to lock in some profits, and don't get greedy ...).
i can't give you a jim cramer-style breakdown of individual stocks, because that's not what i do, but i do trade for a living and would be willing to help if you need it ..
mutual funds are also pretty overrated. don't buy into the illusion that they're "safe." i lost half my IRA in a damn mutual fund. i would only advise you invest in a fund if it's something specific you want to try without exposing yourself to too much risk, ie. a market sector (in which case ETFs are probably your best bet), a region, emerging markets, etc etc.
hedge funds don't actually hedge much anymore. they used to be much more specific about balancing long and short positions, or at least having a counterweight to their more risky positions. hence the name. but they've evolved into being unregulated vehicles for wealthy investors and a way for managers and traders with a good reputation to make sickening profits, risk free (think 1-2% fee of assets managed up front - which is often several billions - and 20% of profits, with no penalty for losses. not a bad hustle at all.).
but the truth is that what the hedge funds actually do, individually, is highly proprietary and nobody really knows. they're very good about placing their orders with different brokerages - most of their trades tend to have multiple legs, especially when it comes to currencies and interest rates - so you might see them place an order worth several hundred million dollars, but by itself it means nothing.
i'll be honest and say that the nature of many of the trades hedge funds enter into these days are completely foreign to me. a lot of the complex derivative trades, like credit defualt swaps, are pretty esoteric. think relatively riskless trades with extremely high notional values - a small change makes for big profits, and the downside risk is fairly low. that's why in the late 90s the biggest hedge fund to date at that point, long term capital management, thought they were invincible and nearly brought the entire global financial system down in the process.
hedge funds are starting to become more open to the general public by lowering their minimum investment requirement (most were usually at least a million, often going up to a minimum of 10 million). but even at that you should only put money in a hedge fund if it's money you can be willing to lose.
i need to let my money work for me.
-rich
I would attend seminars (hosted by brokerages) open to the public - if they enable you to sign in as a guest on-line, do so and familiarize yourself w/ the different aspects of trading... And then start out by charting your trades ON PAPER only - no real trades executed - see how you do for a long enough period such that you become more and more aware of the nuances and idiosyncracies of the market: e.g. buying before a dividend is paid out to take advantage of what likely will be a spike in the price of the equity/etc.
You also need to gauge your risk sensitivity - it can be harrowing for some and I've seen people fail to realize a 25% gain (as opposed to 10) b/c of cold feet - that said, it doesn't pay to be greedy either...
As an aside, the late '90s were crazy. I once had a 19 year old student in one of my classes at Berkeley who had started some 3D imaging company with a few friends and on paper, this kid was a millionaire. Of course, that was on paper and he was never able to cash in.
Personally, I don't invest in much at all these days because I'm gunshy of dipping too far in. My Roth IRA is diversified in a variety of mutual funds which have done ok. Buying Apple in the spring was a good call in hindsight: at the time, it just seemed lower than it should have been, plus my wife works there and I figured, well, it's all in the family.
We're mostly lucky though that my wife worked, for a year, at a start-up (pre-IPO) and even though she didn't like the job that much, that one year was good enough to have 2500 shares vest at $4/each and it closed at 35 today. That was kind of a fluke though: the stock could have tanked post-IPO and it's not like we made the choice to buy it outside of my wife getting them as options.
well, 'investing' is a pretty charitable way of saying you bought tech stocks in the late 90s ........
my best advice to anyone interested in playing the game on the side would be to put aside some money that you would be willing to lose completely and go all out. it sounds funny, especially because i'm a relatively risk-averse trader when it comes to cash/position management, but seriously ... if you have 5, 10 thousand to play with and you can live without it ... just go balls out. margin the shit up and trade for real (after doing all the homework, of course. don't dive in head first - read up on the markets/fundamentals/technicals and make sure your system wins on balance before you start risking real money). the guys who do that are the ones who manage to turn a few thousand into millions. look into the futures markets. the shit is possible.
if your goal is to get a decent return on your money without incurring any risk you might as well just buy bonds.
(over 2 years, btw)
does this mean that it'll (likely) just keep going down? I don't know.
it all depends on what approach to want to take. it sounds like you may be more interested in something about fundamental analysis ("company X should go up because they're developing such and such product, have a good balance sheet, are established in their industry," etc etc). i'm almost exclusively technical in my approach, which is to say i go off price action, charts, etc., so i'm probably not going to be able to recommend anything that would help you out too much. you should start with something very general though. learn the basics about cash management before you learn the hard way (ie. losing your ass in the market).
BLDP is kind of a heavy stock right now. i knew a kid who had some at a cost average somewhere in the teens and he's strugglin. taking a look at that chart, you have to ask yourself when the last true bullish period was - it put up a bit of a fight going from 12 back to 16, but since then it's consistently been under pressure. those are trades you want to avoid if you're a buyer (now if you want to short ballard, thats a different story ...) - you'd be fighting the market, and every bounce in that stock for the past two years has been fool's gold. and buying a stock on the way down like that one dude did with corning (GLW) is great when it starts to work for you and you have a great cost average, but that's really not sound trading. that's gambling. glad it worked out and dude made money, but for every corning there's more than a handful of shit stocks that won't come back like that. i've got a little bit of this one piece of shit at a cost average around 1.50 .. a few years ago it was trading in the high 20s. now it's 76 cents.
like i was saying, i don't really know shit about the fundamentals, but i do know that the fuel cell industry isn't quite as promising from that standpoint as you might assume. from what i understand the stocks are kind of in a holding pattern until they get some kind of government money for R&D ... in which case the stock would obviously look much different.
but taking a quick look at the chart without knowing anything about the stock, i'd just mark a few key points that might indicate that the tone of the trading in that stock has changed. really simple shit .. just little signals that it might at least be worth a shot with something small. you can see there's a bit of a crude trendline from the peaks at 17, 16, and almost at 8 (where it tried to test it and failed) - see if the stock starts to get above that line as a key that it might be time to at least try buying it (bear in mind that you're still buying a stock that's been taking a beating - no need in trying to find the bottom .. wait for a little confirmation first). beyond that, there are just a few key prices i'd watch ... 8 ... slightly above 10 where it peaked out before .. and 12, where it hit a short term low and where it dropped off to 8. those are the points where you'd have to be ready to either take some chips off the table or add to your position, depending how things are looking. also watch the double-bottom forming slightly above 4. that might be a bit of a catalyst for some buying, but i wouldn't try to step in front if it unless you're feeling pretty confident about it or want to go in really small (if you're long the stock and it breaks those lows it's gonna hurt). it's not a good sign that it's currently trading below the bottom of that little mini-rally from 6 up to 8. in other words, i'd probably expect a little more pressure on the downside before it starts to look bullish.
so yeah ..... if i were playing it, i'd probably start small if i see a reason to buy it, and wait until it starts pressing the 8-ish level before aggressively buying. but that's just me ... i'm pretty conservative when it comes to my entries and i never put everything on the table at once. to be honest though, i'd advise against ballard for now unless you're of the patient, buy-and-hold variety. but yeah dude, stocks really aren't my game at all ... especially nasdaq .. so don't put much faith in my opinion.
I got a whole shelf full of stuff that I've read that I can recommend, but like FGlory said it depends on what you're interested in. Books by William O'Neil are a good place to start. Anything published by Wiley is good too, but highly academic and not easy to read if you're not a novice.
Cosign on everything FGlory said above. He does this shit for a living, while I'm strictly a trend chaser who catches price swings all year round and works off of a Treo600, the Wall Street Journal, Investors Business Daily, and Bloomberg Radio. I make (or sometimes lose) fast money and get out and look for the next thing that's happening. For example, after the hurricanes hit I loaded up on options for natural gas related companies and made a nice chunk. Did it again as soon as the cold weather hit a few weeks ago.
I don't have the patience to sit on a stock for a long period of time when I know I can be catching price moves in other areas and making larger returns. The only stocks I own that I plan on sitting on for awhile are VLO (Valero Energy), CHK (Chesapeake Energy), GOOG (Google), UNH (United Health), and that's it. There are some other stocks I'm holding too but don't plan on holding them for long and can turn around and sell them anytime. I'm up a considerable amount in all of them.
See what he said above about "going for it" if you have some money you can afford to lose? That's great advice, especially if you're young and have very little responsiblity at home. That's what I did in my early 20's (I'm 30 now) and did well for myself, took a lot of lumps but learned from them and now have a pretty good side business going.
I read last week that Options Xpress has a feature on their website where you can "paper trade", meaning practicing trading without putting up any money. I've personally never tried it nor did I even check to see how it worked, but it might be worth a look.