Can anyone point me toward good books or information on investing in stocks?

Hmmm...Maybe I should arbitrage with Iraq money. The way I see it, Iraq's economy can't get any WORSE than it is right now....Time for me to go get some Dinars.

Oh yeah, I heard that Iraq currency with Saddam Hussein's picture on it is becoming a collector's item...

 

I don't know, I figured that if the value of gold went up, then the value of gold funds would likely go up. Even though there is a lot of risk, the performance of the funds is still very closely tied to the value of gold. I don't really have time to go into buying futures.


Here's what I found about gold funds (I bought #1 on the list in 2001):

Mutual Fund rating service Morningstar.com recently ranked the top-performing mutual funds for the year-to-date 2002. Out of the top 50 funds ranked, gold mutual funds overwhelmingly dominated the list, along with a few bear market equity funds (e.g. Prudent Bear Fund).

The ranking of funds includes the following top-performers along with percentage gain for the year:

First Eagle SoGen Gold (+83%)
Monterey OCM Gold (+68%)
Tocqueville Gold (+64%)
Gabelli Gold (+64%)
...

 

I hear Confederate Slaveholdings is a good stock...

 

The funds have done well recently, but that has nothing to do with the valuation of gold.

I'm just trying to make sure you understand the difference.

 

A-Train

I, too, have always had an interest in arbitrage, but the more I learn about it, the more I realize how difiicult it is to be good at it.

In a broad sense, it is similar to other markets in that you invest in hopes that your investment value will fluxuate in your favor (instead of a stock, you invest in a currency).

In order to make a smart investment, you'll need to fully understand what influences a country's global currency value, you'll need to be able to interpret that info to make a smart investment decision, and you'll need to monitor the activities of several companies and their economics/finances globally. On top of that, there's always the mystery of governments who do stuff secretly to influence the value of their currency.

In addition, if you want to make any money, there are two basics to arbitrage (and other investing, for that matter).... If you invest in a Euro, wait for the right time, and then move it to a Yen, you will only make money if:
A) the change in values was huge, and you invested at least a small amount of money
or
B) the change in values was small, and you invested a whole ton of money

Ugh - this post it too long...

I found it to be pretty intimidating... If you find some newbie-friendly info on it, could you post a link?

-- droxford

 

I think I do. My stocks are basically gold mining companies hoping to find lots of gold. The value of gold is independent of that.

Although, would it be wrong to think that these gold funds' performance is tied to the value of gold?

 

Hey Robbie I'm 19 a student at UH and am already investing in the market. I would like to talk to you more about it -I can give you some info, do you use AOL IM? If so my screen name is Omar23.

If not email me at omar23@houston.rr.com

 

Yes. Arbitrage is something else (specifically buying and selling immediately to take advantage of tiny differences in exchange rates).

Arbitrage: a definition

 

Many individuals do fine on their own, don't they?

No, they don't. Listen to F.D. Khan. Read Asset Allocation: Balancing Financial Risk by Roger C. Gibson. Retire rich.

 

Bailey: I'm fully aware of the arbitrage definition. However, those in the business use arbitrage to define currency fluctuations, also.

My answer was assuming he was talking about short term fluctuations, and not long term.

 

Anyhow...are you telling me that an individual can't figure out of a stock is a good buy or not if they have educated themselves well enough?

The very best stock pickers oversee stock mutual funds, where they get paid the big $$$. Over a ten year period, only 10% of the actively managed stock funds can beat the S&P 500 index. Think about this. Stock fund managers have the best education, have the most detailed, current information on stocks, and spend their entire work day managing their portfolio. They as a group can not beat the index.

The odds are even more against the part time non-professionals.

Investing in a S&P 500 index stock fund has many advantages. For the initial investment of $3000, you get the diversity of owning 500 different stocks. Due to the low turnover, you also get tax advantages viz-a-viz other stock funds.

 

Actually, the first ten years of the Better Investing Top 100 Index tracked the SP500. The index does appear to have rode the tech bubble of the late 90s better than the SP 500, though it does look like the index is converging back to the SP 500 in 2000 and 2001.

BTW, I am not saying that you should never invest in stocks, either by yourself or in a club. The smart move would be to limit the amount that you speculate on stocks, leaving the bulk of the money you need to retire in a diversified, risk managed portfolio.