Honestly, FD Khan, I've just about had it with your elitist, dismissive attitude. I'm not sure what you are trying to prove, but I will say that you are not very secure in yourself. Otherwise you wouldn't have to insult people. To say that I invest based on "short term speculation" or on "factors aside from true company value" is just downright insulting. If you don't realize this, then either you have a deficiency with the English language (which some of your incoherent posts would confirm) or you have horrible social skills. Have I attacked your investing strategy? NO. Am I about to now that you've attacked mine (with your baseless, unsubstantiated claims) three times, YES. 1) I have not been recommending going into these leveraged funds for the past two years, so your broad-based generalization that people would have lost 80% or 90% of their money had they listened to me is WRONG. 2) With some refinement and the addition of logical reasoning, this statement may one day MAKE SENSE. Right now it is again a broad-based, unsubstantiated claim. 3) You go on and on about how you should evaluate stocks based on their cash flow generation and their cash flow multiple, then you make a RIDICULOUS statement like this. What, praytell, is a "very strong company"? What, praytell, is "strong brand recognition"? sigh. 4) This is just downright juvenile. "Trader Man"? "Hiding in my closet"? Are you 10 years old? 5) Valuing stocks based on cash flow is one of MANY criteria to be used in succesful stock selection. It is not the ONLY one, as you have implied. To name a select few others: management effectiveness, operating track record, market size, market share, dividend policy, multiples of peers in the industry, transaction multiples, discounted cash flow analysis, P/E ratio, insider buying, technical analysis, I could go on and on. To use only one is to limit yourself. GAME. SET. MATCH. Thanks for playing, rookie.
I'm sorry, I just can't take anybody with the name "TraderJorge" seriously on a Basketball BBS and website. Drop you're subscription to www.supertraders.com and go buy a simple "Beating the Street" by Peter Lynch. Or go on the Motley Fool website. I think i'm done with you in this thread but if anyone else has any comments, I'm all ears.
D*mn, you never know when blows will be traded in a thread during the offseason. Stock timing...who'd a figured Anyway, I don't see what ya'll are getting in a huff about. You both raise good points worth considering.
I would also recommend "The Intelligent Investor" by Benjamin Graham. Be forewarned, it's very dry reading, but Warren Buffett was a disciple of Graham's and he's done pretty well for himself. Not well enough to be known as Trader Warren, however, but well nonetheless.
Yes, you both are being very helpful to a beginner like myself. Another couple questions... What would you recommend for a beginner to do that will only be starting out with about a grand? In regards to tax issues, when selling a stock at a loss, it's my I understanding that one shouldn't get back into it for at least 30 days after you've sold it to claim a capital loss. Do I need to keep track of those losses? I think MS Money(my finance software) will keep track of that for mo. What tax issues for gains? These questions may seem broad, so please forgive me for lacking knowledge of the subject.
Pimp, do a search on the Internet for the "wash sale rule". I swear it's the most pain-in-the-ass thing you'll have to do if you trade a lot. Fairmark's website has some good info on it if you're interested in turning your head into mush. It's not difficult to understand in theory, but figuring out during the tech craze when people were executing 10 and 20 trades a day would cause me an aneurism. lol. But to be honest, I wouldn't invest money in anything until you've read some books on investing. Vanguard's founder, John Bogle has some really good books out. He's a no-nonsense type that believes in sound fundamental investing over a long period of time, as opposed to the "get rich quick" schemes other people put out. A pretty good book for beginners that I saw at Barnes & Noble was "Mutual Funds for Dummies". I noticed online that they're on their 3rd edition (get the latest edition, whatever it is). Read that book before you invest. Whatever you do, don't invest money in mutual funds or stocks until you've learned and researched. There's also an "Investing for Dummies" book that is supposed to be pretty good. Another place I'd turn to is Vanguard's Investment Basics website. They have some good beginner info on investing. Another good site to turn to if you're interested in mutual funds is The Mutual Fund Education Alliance's site What you have to understand is that no one person on this bbs can recommend a stock, fund, or whatever to you without knowing you and what you want to do with your finances. No one here knows how much you can afford, how much you can afford to lose, how risk averse you are, etc. My suggestion is to read up on investing basics. You may be asking all the wrong questions, but you may never know unless you educate yourself. Then at least you can ask the right qualified questions. I used to read the Motley Fool website and have read their books in the past, but I hated the way they basically pissed all over mutual funds. It seemed as if they shunned funds in favor of pure stock plays. But then I'm nuts about mutual funds, so maybe I'm just biased in the opposite direction. And get that undisputed crap out of your sig... everybody knows I beat your butt both times we met in that league and I also beat fadeaway's butt... the so-called "runner up".
Good god that wash sale rule is confusing! Thanks for the advice DoD. I really appreciate the help. Beat my butt?? Hardly my 3rd place friend! I won't even bother making any excuses because The Platinum Pimps deservedly have the hardware while The Ladies of the Blacktop have rugburn from collapsing to their knees for the second consecutive year. Man I'm already excited about getting next season underway!
My Dynegy sale was a wash(I believe) because I sold just about a week after I bought it. Fortunately I didn't take too big a hit and was able to turn that into a pretty damn good month so far. I'm curious, what are the pros/cons of buying and selling on a daily/weekly basis? I'm making decent profits considering I didn't have much to start with.
Are you accounting for commissions and the 28% tax on short term capital gains? After those costs I wonder how much profit you really made...
Yes I am taking commissions into consideration and opened a savings account to put aside money to the capital gains taxes. I guess since I am new to this I am just happy to still be on the plus side of things.
Well, you're doing better than I am. I'm not so new to this (<2 years), and I'm down around 20-25%. I wouldn't put much weight in what I say.
I am curious about one thing Trader Jorge said, which was that no one was proposing buying and holding. I don't have a huge portfolio (mostly mutual funds) and obviously buy and sell much less that some of these other guys, but why not buy to hold? I mean, sure, maybe the market still has a few holders to shake out, but some of these continued losses in the market are from insurance companies dumping large amounts of stock for payouts, others from those selling short. The overall value of the market is certain to go up, so if you CAN buy and hold, would there be a better time to do it? I don't think anyone on this board or anywhere else would say you can predict the ACTUAL bottoming out of the market, so a relatively short term chance of loss should eventually pan out, right? I mean even if stocks have been massively overvalued in the 90s, the stock market is now what it was in '98, and there is NO TECH BUBBLE. So its like getting in when the worst has already happened. We all know nothing is absolutely safe, but why not buy now for the long term?
HayesStreet, I may be mistaken but I think that is largely the Warren Buffet-type perspective FD and Grummet alluded to. Pimp, I am no financial guru nor is it my industry, but I think the 1 no-brainer out there is if you can (most of us are not near the limits) stock away that extra money (up to 3K per year) in a ROTH IRA brokerage account and then go with mutual funds or more specific investments. You can access your principal in case of an emergency w/o penalties and all earning grow tax free (assuming you won't touch it until retirement though I think you could use it for some others things before then like a child's education). I think all the investors here agree a could of strategies that will always increase you take is to lower your taxes on what you earn and to ensure you are maximizing your company/workplaces retirement options (e.g., matching funds if available). I just maxed out what I can this year for the ROTH IRA and I'll decide where to put it by this weekend. I’ll probably put it in diverse, including international, stock funds, but I don’t plan on touching the $ for 30-35 years unless there is a great reason.
OK, I was a little confused about that. I like a quote I heard recently from Buffet... that 'Wall St is the only place that people who ride to work in limos ask advice about where to put their money from people who ride to work on the subway.'
The buy and hold method is what I use for the most part. The only time I ever deviated from that was during the telecom and dot com boom. I just felt it was silly sitting on the sidelines talking about price-to-earnings ratios when deranged folks were helping stocks fly sky high... I wanted a piece of that. Dollar cost averaging is also a good way to get into and stay in stocks. Day-trading when you have little money to invest is dangerous and a good way to decrease your potential gains.
Forgot I wrote that post Then I notice noone gave me props for guessing the horrendous second slide, especially with others stating everything had gone as low as it could go. Not that im rubbing it in......... : ) 7-3-02 9055 DJII 7-17-02 8542 DJII
Today's market is a bit difficult to tell, since the disconnection of the market and the economy due to the burst of bubble. Bottom fishing is never a good idea unless you have tremendous wealth to adjust your portfolio, but some market timing about when to establish your position is possible. I will say, it's about time to gradually establish position in the index funds/stocks. IF greenspan has any idea about the economy, we will start to see the earning in the third quarter. And I observe that NASDAQ has great resistence in the past weeks of earning scandal. Personally I am not allowed to trade stocks in short term, but I believe diversified portfolio can reap handsome return two years from now, barring new terrorist attack.
TRADECUTTINO, nice call, it continues to be I think by sunday (if the weekend goes through w/o an attack or terrible corporate news and friday the market is down or stable) I might move some money from cash reserves to stock funds. Of course I am looking for growth over 30-35 years.
Unemployment in Texas and Austin seem to be supporting Greenspan's recovery; both dropped 0.4% in June. That's a pretty substantial drop for one month.
Since this is a great thread and I want it to continue. Can anyone think of a good reason not to max out a ROTH IRA with whatever you are thinking of investing if you havn't done so (see example and question Pimp mentioned)??? Inherent in this is 1) that you can quality (I think the limits are only phased out at over 150K per year or something as a single filer), and 2) at worst (emergency) you only plan to access the principal in the near term, 3) you are doing this investing for long term growth (otherwise you probably should be investing it in stocks or stock funds anyway). Also, I came across a quote in the paper last weekend (maybe in the Motley Fool column). It was essentially this: A question was asked to Warren Buffet (actually I think it it someone else but it doesn't matter for this purpose). "Warren, why should novice as well as everyday investors be so cautious when they are investing in stocks". Response: "Because I am their competition." I know I didn't get the quote quite right, but you get the picture. If there was easy and consistent money to made it probably already was.
