I used to own stock. 2 of the 3 I've sold and made money the other I still have and pays dividends but not much. In order to really make money you have to invest a lot of money or get in on the ground floor of something and us common folk rarely ever find that kind of chance.
The only thing you need to figure out if a company is a good investment is all provided for free. Look for a company's 10-K or 10-Q (annual and quarterly reports, respectively). All the numbers you need to run analysis are there. MD&A and notes are also extremely important to read. All this talk about needing money to do investment research is false. Paying for it just makes it faster, since most of the important analysis is done for you.
The only thing you need to figure out if a company is a good investment is all provided for free. Look for a company's 10-K or 10-Q (annual and quarterly reports, respectively). All the numbers you need to run analysis are there. MD&A and notes are also extremely important to read. All this talk about needing money to do investment research is false. Paying for it just makes it faster, since most of the important analysis is done for you.
Not to mention all the information in those reports will most likely have been read by everyone else before you, which will mean it's already reflected in the share price... Trying to apply a rational model to investing in stock is naive because at the end of the day it's just like betting on a beauty contest, what you're essentially doing is buying a stock (betting your money) on which company (girl) is going to appreciate most in value (perceived to be the prettiest by the crowd).
Um... well.. ok..You realise the analogy I was using was alluding to Keynesian theory right, not just something I pulled out of my ass? My point is when you're investing a stock it matters little what the company's "true" value is (if such a thing existed), all that matters is how much people think its worth, which is why most people are kidding themselves if they think they're good at investment.
Um... well.. ok..You realise the analogy I was using was alluding to Keynesian theory right, not just something I pulled out of my ass? My point is when you're investing a stock it matters little what the company's "true" value is (if such a thing existed), all that matters is how much people think its worth, which is why most people are kidding themselves if they think they're good at investment.
The stock market is not a zero sum game, it's possible for everyone to turn a profit due to the general historical trend of economies growing over the decades/centuries (apart from the odd exception like the Japanese bubble). However statistically it's a bell curve with some people having a greater than average return and others less, so you can define "winners" and "losers" in that sense. Essentially then, there are three classifications of "winners":
a) A small minority of exceptionally gifted players.
b) Inside traders.
c) The inevitable outer fringe of the bell curve, many of whom delude themselves into thinking they're there because of talent, rather than luck.
I'd imagine that group C is an order of magnitude larger than group A, and part of my reasoning for this is the fact that actual managed funds for the most part do not beat the market, and the fact there is no rational methodology for valuing a stock's potential due to it being entirely subjective. You really need to understand things like EMH and its limitations and the resurgence of Keynesian economics in response to the crash in recent years before you go tossing your money into the stock market.
Also, I'm not disagreeing with you tp4tissue, your posts are probably the best advice given in this thread.
Make sure to hedge your stocks. Don't buy a stock naked....use options to your advantage to lessen your losses.
Make sure to hedge your stocks. Don't buy a stock naked....use options to your advantage to lessen your losses.
Very true!!
boost ninja'd me!
I was going to say...look up protective puts, straddles, strangles, etc. I don't know how much you are investing but you can also use T-bills as a sort of guaranteed income/hedging tool as well.
Um... well.. ok..You realise the analogy I was using was alluding to Keynesian theory right, not just something I pulled out of my ass? My point is when you're investing a stock it matters little what the company's "true" value is (if such a thing existed), all that matters is how much people think its worth, which is why most people are kidding themselves if they think they're good at investment.
The stock market is not a zero sum game, it's possible for everyone to turn a profit due to the general historical trend of economies growing over the decades/centuries (apart from the odd exception like the Japanese bubble). However statistically it's a bell curve with some people having a greater than average return and others less, so you can define "winners" and "losers" in that sense. Essentially then, there are three classifications of "winners":
a) A small minority of exceptionally gifted players.
b) Inside traders.
c) The inevitable outer fringe of the bell curve, many of whom delude themselves into thinking they're there because of talent, rather than luck.
I'd imagine that group C is an order of magnitude larger than group A, and part of my reasoning for this is the fact that actual managed funds for the most part do not beat the market, and the fact there is no rational methodology for valuing a stock's potential due to it being entirely subjective. You really need to understand things like EMH and its limitations and the resurgence of Keynesian economics in response to the crash in recent years before you go tossing your money into the stock market.
Also, I'm not disagreeing with you tp4tissue, your posts are probably the best advice given in this thread.
I've always felt that Keynesian is just a very loquacious of saying we can't know everything, and if we can't know everything, we're too stupid to balance all the equations.
Not sure how this is remotely helpful. :D It's like saying, let's have religion in economics, and wooo hooo, FAITH....
Um... well.. ok..You realise the analogy I was using was alluding to Keynesian theory right, not just something I pulled out of my ass? My point is when you're investing a stock it matters little what the company's "true" value is (if such a thing existed), all that matters is how much people think its worth, which is why most people are kidding themselves if they think they're good at investment.
The stock market is not a zero sum game, it's possible for everyone to turn a profit due to the general historical trend of economies growing over the decades/centuries (apart from the odd exception like the Japanese bubble). However statistically it's a bell curve with some people having a greater than average return and others less, so you can define "winners" and "losers" in that sense. Essentially then, there are three classifications of "winners":
a) A small minority of exceptionally gifted players.
b) Inside traders.
c) The inevitable outer fringe of the bell curve, many of whom delude themselves into thinking they're there because of talent, rather than luck.
I'd imagine that group C is an order of magnitude larger than group A, and part of my reasoning for this is the fact that actual managed funds for the most part do not beat the market, and the fact there is no rational methodology for valuing a stock's potential due to it being entirely subjective. You really need to understand things like EMH and its limitations and the resurgence of Keynesian economics in response to the crash in recent years before you go tossing your money into the stock market.
Also, I'm not disagreeing with you tp4tissue, your posts are probably the best advice given in this thread.
I've always felt that Keynesian is just a very loquacious of saying we can't know everything, and if we can't know everything, we're too stupid to balance all the equations.
Not sure how this is remotely helpful. :D It's like saying, let's have religion in economics, and wooo hooo, FAITH....
I don't think you understood what I was saying then, since you're saying almost the exact same thing as me.
So, say it with me people, STOCKS is GAMBLING... if you're not too stupid to go to a casino, don't be stupid enough to buy stocks in things you have no in depth knowledge of. I refer specifically to options.
So, say it with me people, STOCKS is GAMBLING... if you're not too stupid to go to a casino, don't be stupid enough to buy stocks in things you have no in depth knowledge of. I refer specifically to options.
It isn't gambling to people like you and I who understand how the financial statements work together, and the implication of each ratio in relation to the metrics they're tied to. Just look at AMZN. They're trading at a P/E ratio of 300x. How long do you expect us to hold that stock before breaking even? But yea, too complicated for most.
You're completely right about the options. I think that no one that hasn't passed the CFA Level I or equivalent should be touching derivatives. That's straight up gambling right there, unless you're privy to inside information.
So, say it with me people, STOCKS is GAMBLING... if you're not too stupid to go to a casino, don't be stupid enough to buy stocks in things you have no in depth knowledge of. I refer specifically to options.
It isn't gambling to people like you and I who understand how the financial statements work together, and the implication of each ratio in relation to the metrics they're tied to. Just look at AMZN. They're trading at a P/E ratio of 300x. How long do you expect us to hold that stock before breaking even? But yea, too complicated for most.
You're completely right about the options. I think that no one that hasn't passed the CFA Level I or equivalent should be touching derivatives. That's straight up gambling right there, unless you're privy to inside information.
So, say it with me people, STOCKS is GAMBLING... if you're not too stupid to go to a casino, don't be stupid enough to buy stocks in things you have no in depth knowledge of. I refer specifically to options.
It isn't gambling to people like you and I who understand how the financial statements work together, and the implication of each ratio in relation to the metrics they're tied to. Just look at AMZN. They're trading at a P/E ratio of 300x. How long do you expect us to hold that stock before breaking even? But yea, too complicated for most.
You're completely right about the options. I think that no one that hasn't passed the CFA Level I or equivalent should be touching derivatives. That's straight up gambling right there, unless you're privy to inside information.
This is my point with the beauty contest analogy. You really think the P/E ratio is the be-all, end-all of how a stock is going to perform? It's one tiny factor amongst thousands, maybe millions of others. P/E ratio is elementary school stuff, if you think you can reliably predict performance based on stuff like this - which everyone else knows as well, rendering the information useless anyway - then you're deluding yourself. It's like thinking you can reliably bet on a horse race by measuring the length of the horse's tail.
Whoa, when did this turn into a contest about portfolio theory and advanced accounting concepts? I thought the thread was titled noob to trading?
I'm done with this thread. Have fun guys.
So, say it with me people, STOCKS is GAMBLING... if you're not too stupid to go to a casino, don't be stupid enough to buy stocks in things you have no in depth knowledge of. I refer specifically to options.
It isn't gambling to people like you and I who understand how the financial statements work together, and the implication of each ratio in relation to the metrics they're tied to. Just look at AMZN. They're trading at a P/E ratio of 300x. How long do you expect us to hold that stock before breaking even? But yea, too complicated for most.
You're completely right about the options. I think that no one that hasn't passed the CFA Level I or equivalent should be touching derivatives. That's straight up gambling right there, unless you're privy to inside information.
This is my point with the beauty contest analogy. You really think the P/E ratio is the be-all, end-all of how a stock is going to perform? It's one tiny factor amongst thousands, maybe millions of others. P/E ratio is elementary school stuff, if you think you can reliably predict performance based on stuff like this - which everyone else knows as well, rendering the information useless anyway - then you're deluding yourself. It's like thinking you can reliably bet on a horse race by measuring the length of the horse's tail.
This entire thread has been them noobing it up...no talk of betas, dividend policies, NOL carryforwards/carrybacks, EBIT, cash flows & in depth financials analyses, etc. Options= leverage....but they aren't that dangerous if you use them to hedge, not to profit. Also...wtf does Keynes have anything to do with stocks besides beauty contests?! By his logic...we should be shorting the crap out of shares that we think other people find value in...which is precisely what these noobs just said was sooo dangerous and only to be handled by professional investors. smh.
So, say it with me people, STOCKS is GAMBLING... if you're not too stupid to go to a casino, don't be stupid enough to buy stocks in things you have no in depth knowledge of. I refer specifically to options.
It isn't gambling to people like you and I who understand how the financial statements work together, and the implication of each ratio in relation to the metrics they're tied to. Just look at AMZN. They're trading at a P/E ratio of 300x. How long do you expect us to hold that stock before breaking even? But yea, too complicated for most.
You're completely right about the options. I think that no one that hasn't passed the CFA Level I or equivalent should be touching derivatives. That's straight up gambling right there, unless you're privy to inside information.
This is my point with the beauty contest analogy. You really think the P/E ratio is the be-all, end-all of how a stock is going to perform? It's one tiny factor amongst thousands, maybe millions of others. P/E ratio is elementary school stuff, if you think you can reliably predict performance based on stuff like this - which everyone else knows as well, rendering the information useless anyway - then you're deluding yourself. It's like thinking you can reliably bet on a horse race by measuring the length of the horse's tail.
This entire thread has been them noobing it up...no talk of betas, dividend policies, NOL carryforwards/carrybacks, EBIT, cash flows & in depth financials analyses, etc. Options= leverage....but they aren't that dangerous if you use them to hedge, not to profit. Also...wtf does Keynes have anything to do with stocks besides beauty contests?! By his logic...we should be shorting the crap out of shares that we think other people find value in...which is precisely what these noobs just said was sooo dangerous and only to be handled by professional investors. smh.
Alright Akimbo, what do YOU suggest? Put this uber economic prowess to where your mouth is. :eek:
So, say it with me people, STOCKS is GAMBLING... if you're not too stupid to go to a casino, don't be stupid enough to buy stocks in things you have no in depth knowledge of. I refer specifically to options.
It isn't gambling to people like you and I who understand how the financial statements work together, and the implication of each ratio in relation to the metrics they're tied to. Just look at AMZN. They're trading at a P/E ratio of 300x. How long do you expect us to hold that stock before breaking even? But yea, too complicated for most.
You're completely right about the options. I think that no one that hasn't passed the CFA Level I or equivalent should be touching derivatives. That's straight up gambling right there, unless you're privy to inside information.
This is my point with the beauty contest analogy. You really think the P/E ratio is the be-all, end-all of how a stock is going to perform? It's one tiny factor amongst thousands, maybe millions of others. P/E ratio is elementary school stuff, if you think you can reliably predict performance based on stuff like this - which everyone else knows as well, rendering the information useless anyway - then you're deluding yourself. It's like thinking you can reliably bet on a horse race by measuring the length of the horse's tail.
This entire thread has been them noobing it up...no talk of betas, dividend policies, NOL carryforwards/carrybacks, EBIT, cash flows & in depth financials analyses, etc. Options= leverage....but they aren't that dangerous if you use them to hedge, not to profit. Also...wtf does Keynes have anything to do with stocks besides beauty contests?! By his logic...we should be shorting the crap out of shares that we think other people find value in...which is precisely what these noobs just said was sooo dangerous and only to be handled by professional investors. smh.
Alright Akimbo, what do YOU suggest? Put this uber economic prowess to where your mouth is. :eek:
I suggest looking at more than just PE ratios. Like ferociousfingerings said...there's a crap ton of data to look through, the importance of which varies with market conditions. I commented last night to point out how people have contradicted themselves in this thread several times (re: the evil of options and then propounding a theory of market movement where options provide the best profit). If boost doesn't have a crap ton of money to invest or the time to really study this stuff to get semi-comfortable with it then he should just invest in mutual funds. MFs are already hedged...you just need to learn what securities the MF portoflio is comprised of and make sure you don't invest in multiple MFs that have a big overlap of securities.
^TP....I haven't seen you post one investment strategy, etc. You can take you "highschool econ" bs and shove it. Mutual funds are the easiest way to diversify a portfolio. I <3 U even if you're a bad troll.
^TP....I haven't seen you post one investment strategy, etc. You can take you "highschool econ" bs and shove it. Mutual funds are the easiest way to diversify a portfolio. I <3 U even if you're a bad troll.
Wha.. my very first post was the best strategy for novices..
Trade AMD, INTEL, or APPLE
They have clear and concise competitors, product lines that are avidly watched, and their product performance matters as much as their perceived financial performance.
What have you posted?
I've also mentioned I like AMZN because of the consistency of American Christmas expense.
And I've cautioned the people against new year plays because they're too volatile and full of surprises.
^TP....I haven't seen you post one investment strategy, etc. You can take you "highschool econ" bs and shove it. Mutual funds are the easiest way to diversify a portfolio. I <3 U even if you're a bad troll.
Wha.. my very first post was the best strategy for novices..
Trade AMD, INTEL, or APPLE
They have clear and concise competitors, product lines that are avidly watched, and their product performance matters as much as their perceived financial performance.
What have you posted?
I've also mentioned I like AMZN because of the consistency of American Christmas expense.
And I've cautioned the people against new year plays because they're too volatile and full of surprises.
I've told Boost several hedging strategies to look into (re: covered calls, protective puts, straddles/strangles, zeros to guard against interest rate declines, etc.).
AMD's stock has been taking a nose dive recently...I should know...I'm loosing money on it right now. Its revolving door of executives isn't helping investor confidence (re: Keynesian beauty contest). Intel recently reduced expected quarterly earnings so I'm still curious as to its stocks long term movement, but right now is upward trending. AAPPL I don't follow since its stock is too rich for my blood.
The residential housing market is going to boom/has been booming the last few weeks. Same with sugar futures....rains in Brazil and India having to import being the cause. I steer clear of futures based trading though since they are way too speculative and the cost of futures securities means its limited to commercial institutions. Boost could trade the stock of a company involved in the sugar business though.
Retail should be good for the holiday season like you said.
Presidential elections also have a historical short term effect on stock prices. Democractic win causes stocks to tank the next day (so you should short)....Republican win causes stocks to rally the next day (so you should hold a call).
Show Image(http://i50.tinypic.com/2rr6xrt.jpg)
No google...just a whole lot of this dude....j/k :p