Investing

Dubious

A few things...

1. I am not a broker aka salesman. I am a professional trader, mostly day trading, and I trade the market to make money since I am only paid on commission.

2. I don't think he is trying to get rich. I think he is just looking to start a retirement account. which I think is great as long as this 4000 is the start of something and not a one time deal.

3. stocks don't just go up on the greater fool theory. if you believe that then I have no clue how to convince you otherwise.

4. picking stocks is not gambling. it just takes time to learn how to put yourself in good situations. day trading can be similar to gambling because you are constantly dealing with reward and risk, but there are situations where you know you will far more than likely be correct. I only trade NYSE stocks because it is easier to guage the market and define your risk due to the specialist and the fact that I can see the order flows. so you put yourself in situations where your risk is limited and upside is high. it takes time to learn what those are.

further when I pick stocks for long term stuff I am usually right, but those situations are rare and it takes experience to know when they happen. also, I quit trying to hit homeruns with investments and just concentrated on putting my money in places where I know I am probably correct.

finally even if you believe that the US economy will breakdown then there are other places in the market to put your money. gold, euros, other foreign markets/ADRs listed in the US.

 

OK

It's different points of view that make the market go round, it's just the balance between caution and greed where we differ. I'm probably the only one on this thread that has seen significant market losses, aside from speculating losses. And because I'm older I have a different risk tolerance and time horizon, I forget young people always think they are bullet proof.

Why don't long horizon guys look at some zero coupon bonds, or you risk tolerant guys buy some developing countries bonds.

(You still ought to do what ever you can to improve your own active income, at least then you can control your on destiny instead of be at the mercy of the men in suits, The ones that run all the ads on TV to get you spend your cash, The ones that pay themselves millions of dollars in severence..when they get fired! but still don't fund the corporate retirement fund, The Enron boys..they will **** you whenever they can)

 

I'd put half of that money in an interest bearing CD, and during that time it makes that 70-80 bucks in six months to a year start to pick out stocks with your fake money and learn the ropes.

A CD is like a loan you give to a bank. Some will say you're pissing away money in earnings potential with the current interest climate, but there's a big difference between having money at stake and thinking in abstract. If you're attracted to greed, it'll motivate you do research more and take your fake stocks more seriously. If not, you'll let that CD roll over on a monthly basis and earn a little more money than not spending it at all.

A financial planner will look at how much you earn and how much you normally spend. Most likely they'll ask you to put it all in an IRA and give you little to spend. Which makes Dubious' advice the soundest...

 

I don't see how you can say the stock market is nothing like gambling. The stock market is based on people's perception of something. Sometimes a company has some great stats (good cash flow, revenue etc.,low debt) yet there is some other stock that people think will do good will show while this other stock sits in the obscurity never increasing.

 

not really too sure exactly what you are referring to. sometimes stocks that are illiquid might be unfairly valued by the market because they are so small and institutions have trouble getting into them. but other than that I'm not too sure what you are referring to unless you give me an actual example.

also if you are putting yourself in situations where you are gambling then you probably won't be making consistent money. you put yourself in good situations and control your risk by having stops on your initial entries. since trading is my job I am able to keep up with the companies decently. I have a general idea of the good companies with good management, growth potential and that are actively followed by institutions.

examples of this can be seen with a few of my recent longer term plays with SHLD, NYX(i bought before the AX merger was complete), and UPL. those are all I have got into in the past 12 mos., so that gives you an idea how rarely the situations come along that I like long term.

right now I am also in UVN long. its not homerun trade but its one where my risk is defined and the percentages look to be in my favor. plus it is market neutral since it is a buyout play. I am "gambling" that events will go in my favor and that the buyout will still happen but I guess you can call a lot of things gambling. further I have limited my risk by buying the options instead of the stock because if the buyout does not happen then I would lose more with the stock than with the options.

I am kind of rambling but I am trying to show how its more than flip a coin and hope.

 

I am a firm believer in efficient markets and I doubt anyone can make money over a long period of time trading in and out.

Are you "employed" by a real company or are you doing this with your own money?

 

I trade their money and I am technically part of a partnership when it comes down to tax time. the type of business is called proprietary trading. my firm is different because we don't have to put up funds. most shops make you put up between 10 to 25k but you get a lot higher split, I think around 90 percent at most places. I take home 58 percent of my gross. I do well there but I am by no means the best. I am not even the 30th best trader at my office. the best traders there are consistently the best traders too.

further the markets are efficient for the most part, but that doesn't mean they aren't volatile. and just because institutions may know a lot and they may have a lot of money it doesn't mean they trade it well or that they don't make mistakes. a funny one that happened was MVF. yes it really traded 3 points up because some idiot probably sent a market buy to the specialist for over a million shares lol. if that only happened every day.

anyhow, since we can see the order flow on the NYSE and since there is a specialist who creates a central market for the price then it is easier to trade the NYSE/AMEX over the pure electronic NASDAQ. basically, a lot of what we do is arbitrage and momentum trading. its not rocket science but its difficult to explain because its completely different from how most people understand the market.

there is a lot more than buying low and selling high to trading.

 

http://www.streettalklive.com/

Register for free, read all the free stuff (University and Myths specifically)


The guys that run this site are my commercial brokers; not an ad for them or for Lance's talk show, they just have a lot of very good free information.
Free is good.

 

Maybe yes. Maybe no.

I have not read enough personal info to know for sure. For all we know, Lil Pun has $9600 in credit card debt, pulling a nice -22% return on investment. Or Lil Pun has a wife and a small child, with no will and no life insurance to cover his future financial obligations. And we still don't know what Lil Pun financial goals are and how he prioritizing them.

Thus, an IRA is NOT a slam dunk (though Roth IRAs are one of the very best retirement vehicles).

Now most financial planner are in the business where "assets under management" is the bottom line. There is a tendency for planners to suggest savings like in an IRA before other goals, since savings will likely add to their bottomline. Similarly planners are also guilty of setting retirement goals higher than needed.

BTW I do agree that Dubious has been a voice of reason in this thread.

BTW2 what robbie380 does for a living involves buying and selling stock but is NOT investing. More power to him if he can make a living "day trading".

 

Don't invest in restaurants. They'll burn you every time.

 

I'm young (24, going onto 25), but I agree w/ Dubious in a lot of ways.

I believe in flexibility and liquid income for self-investment outside of stocks. I think it has more upside. Maybe it's because I am asian and have a strong belief that investment in yourself and your kids pay off in the end. Plus, the kids will be the retirement fund. That's how we Viets do it.

I get my 401 match and invest the rest of my money in stocks, CDs and mutual funds with an eye on self investment when the opportunity arises.

I don't max the 401 and I don't do a Roth IRA because I'm cocky enough to believe that I will find better opportunities to invest my money in. I don't like being locked in for a number a years. I am not convinced that the tax break I get from it is worth it.

 

Invisible Fan,
Sorry for the tardiness of my response.
The best thing about this job is that there are opportunities every day.
Of course there are different time frames/risk tolerances for every trade/investment.When it comes to trading(or investments for that matter) many variables come into play.It could be cause and effect economics,buying or selling patterns,geopolitical unrest,developing countries like India,Russia,China,etc.etc.etc.,but as to longterm investing,I have certain beliefs.
Just look at the world we live in.The US has stepped into the vacuum left by the fall of the Soviet Union.Post 911 has brought even more of the same....We have extended our military power,our intelligence......our influence.The world and our country are safer because of it.The economic benefit of this and fiscal conservative policies has put investors in an enviable position.Look at the price of oil...There can be no doubt we are headed North of $100...The spice must flow and the price will be repeatedly tweaked upward.Take a look at the Dow and where it sits historically at the moment.Big US bluechips will rule the day along with oil stocks for quite awhile.Remember,even though uncertainty is looked at as a bad thing...It is during these times usually that one should buy in for the market really starts to move.Gold,Silver,Platinum....precious metals will continue to rise in these times.How about real estate?Good land has become precious.(esp. those on the coasts and places like Lake Tahoe for example)Yes,there might be another 5-6 months of drop while many warn of a bubble,but this is a buy in.Big US stocks,real estate,oil,precious metals.....The powers that be have these on the move and they are going nowhere but up in the short and longterm.

 

Dr. Strangelove,

I don't like the idea of a $100 barrel from a macroeconomic standpoint, but that'll be one crazy day for all futures trading.

NYTimes ran an op-ed piece, Freakoutnomics, that shares the same feeling as you do. It's a very interesting read about our paralells to the late 1800s.

Medium or well-done?

 

The 2% is an annual percentage rate. So you would get 1/4 of the $30, or you'd have $1507.50 after the 90 days.

 

I've no idea. There are much better investments out there than a 90 day 2% CD.

 

how's the leg, man?? you doing ok?

 

As FFB said, you can certainly get better than 2%. For that matter, you can throw it in an ING savings account and earn around 4.5%.

We are in the process of buying a house and we have some money that we will be paying on it. I wanted to put it somewhere relatively risk free for a couple of months (we don't close until August) so we put it in T-bills and are getting around 4.85%. If we weren't using it to buy a house, we would have continued invested in the market. (more than likely some mutual funds)

If you do have money you plan to invest but are doing some investigation, you should throw it in some interest bearing account until you take the plunge. Generally, money in a checking account or regular bank savings account earns next to nothing.

 

Thanks for asking. The leg is healed up, but the ankle is still severely swollen, and my upper foot is partially numb. I now walk around with a limp. I've been told it could be up to a year before the ankle is fully healed.