Any stock traders?

[Eomer]

Jesus, that stock I mentioned above continues to fly up. From $0.50 a share to almost $1.20 in about 24 hours. Why did I only put 500 in dammit?

[Lyrical]

Originally Posted by Ashes Emberblade

I invest in the market, have been for nearly a decade with a consistent 30-50% return rate per year. Maintained that even during the tech "bubble" bursting. I follow what I call the "Warren Buffett" method.

Basically, Warren Buffett made a shitload of money buying really good companies when they were flying under the radar with a really low share price. So, I try to do the same thing. I use the stock searching tool here: http://prosearch.businessweek.com/bu...?mode=advanced

I look for stocks with a really low P/E ratio, good cash flow, good EPS, and a good return on sales. The last three show that the company is doing well, has a decent amount of capital, and is making a return on its investments. The P/E ratio, if low, means the stock is underpriced relatively speaking. Out of the list that search brings up, I select stocks that I've actually heard of, so that I know they have a good brand name and "recognizability." This assures me that, if this really is a good company, other people are going to realize its value and buy it.

Now, after I've narrowed my list down with the steps above, I look at the charts for the stocks with which I'm left. This is called technical analysis, and it lets me know whether I should buy, or wait for the price to retrace a bit to buy. If you do anything, read up on technical analysis. I do this on a quarterly basis.

Keep in mind that there is a huge difference between trading and investing. It's much easier to predict what will happen in the next year, than it is to predict the next two hours.

P.S. Using this method I bought ET, FIA, TRU, and GT at the beginning of this year. I sold GT after losing 10% on it. I'm up 30% on the first three. Last September I bought HAL, SID, HSVLY, INTC, and GGB. Made 100% on HSVLY and about 45% overall for the entire quarter.

In my MBA program, I took enough coursework to be a mutual fund manager (even though I had no intent on doing this). I just have a problem with the 90% of Americans that are breaking their backs trying to make a buck for their employer, while they ignore their own family's needs. Why can't you make money for yourself? I think real freedom is not based on the car you are driving or the size of your house (which tend to be liabilities), but having the cash flow to be able to do what you enjoy. Anyone above the poverty level can be a millionare if they work the markets right (and have a long enough time period).

I was blessed by the fact that my Investment Theory class was taught by someone who ran a mutual fund that was about $80 million (not a large fund, but not a small one). So I learned from someone who did it for a living, rather than some Prof trying to teach Modern Portfolio Theory (there is a reason it is called theory). Right now, I can imagine everyone that has a BS in Finance is going to flame me, but so what. What they are taught in school is alot different than what Mutual Fund Managers use on a daily basis. Another example is technical analysis (which is shunned in most college and b-school classrooms) but is used by Mutual Fund Managers (although they try to hide it).

Warren Buffett was required reading. It's good stuff and more realistic than most of the crap you will see on the net. I highly suggest his readings. And yeah, beware anyone telling you that they can make you 15% a week (like 12daily). You are going to lose bad. Warren Buffett is considered one of the best investors of our lifetime and he has had like a 20% return on average (although he is having problems now because his fund has gotten too large).

I also agree with many of your philosophies, but with a caveat. You better understand why a firm's stock is on the bottom. A company can still look good as far as profits but still be on the verge of bankruptcy. Remember that bankruptcy has a simple definition: the firm doesn't have enough cash to pay its bills. Some firms can look so great on the financial statements, but have very little cash flow.

So bottom line, I agree on your philosophy, but believe that in today's environment, you should avoid firms that have bankruptcy risk, severe litigation or that are being investigated by the SEC.

I am not doing investing in individual stocks by myself (and am happy with mutual funds). One of the things I got from my Professor is that when he was a mutual fund manager, he watched the market all day, and did research at night. It is more work than I want to put into it right now.

I plan on continuing to grow my base funds in my 401k and mutual funds. I may put in more cash to trade with later, but after the amount of $ I have invested in my education, I want to build a more stable base. Investing in individual stocks can be brutal.

[Lyrical]

Originally Posted by Eomer

Jesus, that stock I mentioned above continues to fly up. From $0.50 a share to almost $1.20 in about 24 hours. Why did I only put 500 in dammit?

You are going to lose your rear in penny stocks eventually. There is too much risk in that type of market.

[Lyrical]

Originally Posted by hamrlik

Lots of people saying read books on this, but does anyone have any recommendations? Also any recommendations for books that talk about investing/saving?

Investing: Any books by Warren Buffett

Saving:

Rich Dad, Poor Dad (but take some of it with a grain of salt as he lets his opinion takeover)

The Millionare Next Door (a quantitative analysis on how wealthy people actually got wealthy - done by two Professors)

Money Came Walking by the House One Day (A Christian book that probably helped my finances more than any other book, classroom or otherwise)

[Eomer]

You are going to lose your rear in penny stocks eventually. There is too much risk in that type of market.

I realize, like I said the vast majority of my money is in stock index mutual funds, err, fund (TSX). A teeny it is in a dividend fund (mostly Canadian financial institutions). And then I tossed a grand or so at 3 stocks, two of medium risk, and then the high risk one (all recommended by an economist friend of mine who's working for a start-up fund, I think, maybe an investment trust, whatever).

You're right, it's high risk, but it's high return. Like I said, that particular one is a company involved in technology research in the oil sands, and there's a metric fuckton of speculation going on in that area right now cause of the price of oil. The money invested is in an RRSP, so I instantly get a 35% or so ROI because I can deduct my contributions from my gross income.

May as well take some risk on a small fraction of my portfolio.

[Eomer]

Fucking boards are dieing.

[Lyrical]

Originally Posted by Eomer

I realize, like I said the vast majority of my money is in stock index mutual funds, err, fund (TSX). A teeny it is in a dividend fund (mostly Canadian financial institutions). And then I tossed a grand or so at 3 stocks, two of medium risk, and then the high risk one (all recommended by an economist friend of mine who's working for a start-up fund, I think, maybe an investment trust, whatever).

You're right, it's high risk, but it's high return. Like I said, that particular one is a company involved in technology research in the oil sands, and there's a metric fuckton of speculation going on in that area right now cause of the price of oil. The money invested is in an RRSP, so I instantly get a 35% or so ROI because I can deduct my contributions from my gross income.

May as well take some risk on a small fraction of my portfolio.

Ok, that makes a little more sense. You'd be surprised how many people in rl approach me asking me to agree with them that investing 100% of their money in penny stocks is a good idea. I have seen too many people put 100% of their portfolio in penny stocks, and then proceed to lose their ass.

[Eomer]

lol yeah, I'm not that dumb, although I am definitely a rookie when it comes to this kind of shit.

Put in a limit order at 1.00 per share, it peaked at 1.19 today (should have acted sooner), but it's dropping down to around a buck. Since I only had 1000 shares and the price was so low, a lot of my profit will be eaten by commission: about 60 bucks in commission for the buy and sell, but if I sell the shares for 1.00 per after buying for 0.52 per, that's still 420 profit in just over a week on initially investment of 520.

*edit* Said screw it, put in a market sell order, got 0.98 for em. Seems like they're still falling, may as well ditch em now.

Turns out they just signed a contract yesterday to supply some oilfield in Kuwait with their technology, hence two successive days of up trading at volumes 20 times higher than normal.

I intend to leave the majority of my RRSP is mutual funds as they're fairly secure, and if the market starts to nose dive I can quickly sell them off (<3 all the idiots who made record mutual fund RRSP contributions in 2005, when the market's been flying up since 03) after having made 10-15% annually on them for the past few years.

And again, this is all in a retirement plan, and I can't touch that money without have to pay income tax on whatever I take out. Perhaps I'll start dabbling a bit with "cash in hand" over the summer after I get my bonus, for now I'm satisfied just learning the ropes playing with a bit of my retirement fund, that I won't need for 30 years anyway.

[TheGoat]

Looks like a typical penny stock pump and dump

[Eomer]

http://www.torrcanada.com/modules.ph...article&sid=24

Yeah, pretty much. I can't believe that people would actually invest large amounts of their savings into stuff like that, if that's their only retirement nest egg. I had a neighbour couple who dumped all their money, along with taking out a mortgage on their house, into something similar. They lost pretty much all of it. Worst part was that a) they were in their early 50's, and both were looking towards retirement b) their house HAD been completely paid off and c) a group of friends had all gotten some tip and gotten into the stock, and most had been smart enough to get the fuck out earlier and made quite nice money, but they got greedy and hung on.

The husband was a teacher, so he took his retirement as soon as he could, and now tutors 60 hours a week for cash along his pension to keep the bank at bay.

[Lyrical]

Originally Posted by Eomer

http://www.torrcanada.com/modules.ph...article&sid=24

Yeah, pretty much. I can't believe that people would actually invest large amounts of their savings into stuff like that, if that's their only retirement nest egg. I had a neighbour couple who dumped all their money, along with taking out a mortgage on their house, into something similar. They lost pretty much all of it. Worst part was that a) they were in their early 50's, and both were looking towards retirement b) their house HAD been completely paid off and c) a group of friends had all gotten some tip and gotten into the stock, and most had been smart enough to get the fuck out earlier and made quite nice money, but they got greedy and hung on.

The husband was a teacher, so he took his retirement as soon as he could, and now tutors 60 hours a week for cash along his pension to keep the bank at bay.

It's a sad story, but too frequent. For some reason, there is so much bad investing advice out there that if you don't have a degree in business or are VERY discerning about business, you are in trouble. My dad is a scientist, so I have spent time with many Phd scientists that have lost their ass in the market. A friend (a physicist) of ours who is in his mid-40's lost about $500,000 by not diversifying his portfolio. He put 100% of his money in his company stock (Lucent) before the crash. Did he talk to me about it? No. And he refuses to admit that the concept of diversifying came about any earlier than the year 2000 (lol) when it has been around since the 40's.

There are too many scams out there (like 12daily) who tell you they can make you 15% a week by doing very little.

I have lost a ton in the market, but made much much more. I have heard it said that it is better to have your biggest losses in the beginning of your work life (in your 20's), because it makes you more conservative about investing in non-sensical deals. People that have big failures early tend to do better than people that fail later (like your couple in their 50's). When you screw up like that, there's just no way you are going to make mistakes like they did again (unless your a moron, and then you deserve what you get). And since you have decades left in your work life, you will live to invest again another day. But you make a big mistake like that at the end of your career and you are going to be living in a cardboard box.

Hopefully you people that put money in 12daily learn from that mistake.

[Malakie Torsade]

Originally Posted by Lyrical

Investing: Any books by Warren Buffett

Techincally, he hasn't written any books. :P I think there is one that was a compliation of things he wrote, but, AFAIK, he has not authored any.

Rich Dad, Poor Dad (but take some of it with a grain of salt as he lets his opinion takeover)

I agree on both counts here.

The Millionare Next Door (a quantitative analysis on how wealthy people actually got wealthy - done by two Professors)

I'll summarize this book for you : Live below your means.

Other books :

Beat the Street - Peter Lynch. I've heard "A Walk down Wall Street" by him is good as well.

Think and Grow Rich - Napolean Hill. Some of the stuff he writes is way out there (like the sexual tendancy stuff) but good.

Richest Man in Babylon - Haven't read, but gets recommended all the time.

As for Google... actually, they have been doing big sell-offs since the stock went public... them doing it again is no suprise. Oh, and the stock is skyrocking bc they are being added to S&P... Go Google Go!!... so I can sell out.

[James]

*Screeeech*

Sorry, John, I think you're using the wrong word here, "arbitrage" is making money via the discrepency between markets. For example, IBM stock is $100 per share on NYSE and $95 in London, you buy 1000 shares in London as you sell 1000 in NY making $5000.

What's all this about? It's from a thread in the MMO general section, but I thought it more fitting for here. Is this a feasible way to make cash without too much risk?

[Eomer]

There's no "feasible" way to make large amounts of cash with little to no risk, otherwise everyone would be doing it. There's no magic bullets.

If you want guaranteed returns with little risk, they're called bonds and GIC's, and they return next to nothing.

[Lyrical]

Originally Posted by Malakie Torsade

Techincally, he hasn't written any books. :P I think there is one that was a compliation of things he wrote, but, AFAIK, he has not authored any.

You are right. It was a collection of essays he sent to his shareholders. I am not going to go digging it up in my library. I did get some insight into his thinking and learned alot. I believe he has had more than one collection released, but not too sure.