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    Veteran Member miss cleo's Avatar
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    Default Learning about the stockmarket

    Can anyone recommend a straighforward place to start educating myself about the stockmarket? I have looked on various websites such as The Motley Fool and Dawn Traders but i dont really understand alot of it and i think i should start with the basics. Also how do you decide who to listen to; i have read about so called fantastics investments on The Motley Fool but then when i search on other sites there are many people who dont place alot of faith in them, its all very confusing! Thanks in advance. xx

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    Default Re: Learning about the stockmarket


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    Default Re: Learning about the stockmarket


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    Default Re: Learning about the stockmarket

    The sad fact if one does not have inside information being a trader will not work.

    The secret to successful investing is to buy and hold. The easiest way to do this is with a no load mutual fund that invest in an index; the Dow Jones Industrial Average is one. As there is no buying or selling by the fund unless a stock is dropped and another is added so commissions and fees are low.

    One could build one's own fund by buying one share of stock in a cross sample of stock in an index then using that one share buy more stock directly from the company.

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    God/dess Deogol's Avatar
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    Default Re: Learning about the stockmarket

    ^^^ That said, there is some question about the buy and hold question these days.

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    Default Re: Learning about the stockmarket

    ^^^ SOME question ???



    IMHO these days the only way to make money on most US stocks and all US stock indexes is to bet the long side on the way up, bet the short side on the way down, and watch for signs from the gov't / FED / US Treasury as to which direction the markets will be manipulated next. This means a 'long term' investment horizon of perhaps 3 months at most !

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    Default Re: Learning about the stockmarket

    With trading one spends money on commissions and one bad guess can wipe one out. If one likes to gamble it can be fun; it is not for the average investor though. Remember a buyer needs a seller so someone has to be thinking 180% opposite.

    For a long term investment that will pay 12% per year over many years buy and hold is a sure thing. Much as buying a house is a sure thing if one is not looking to flip it and make fast money.

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    God/dess Zofia's Avatar
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    Default Re: Learning about the stockmarket

    Rather than buy and hold, I study and buy low. When the stock appreciates substantially, I sell. I may buy back in, I may not all based on my continuing research. Stock buying comes down to research. You have to learn the companies you buy, and you have to keep up with them. You have to sell them to lock in your gains.

    An example. There was a time when Enron was a good safe stock to own. Buying made sense. But, as time went on Enron changed. A smart investor continued to follow the company and when the price got high enough or when the company's business plan changed enough from what the smart investor wanted to see, it was time to sell and buy something else. Just because a company is a good investment today does not mean it will be forever.

    HTH
    Z

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    Default Re: Learning about the stockmarket

    Quote Originally Posted by Zofia View Post
    Just because a company is a good investment today does not mean it will be forever.
    When one invests in an index fund one does not invest in a company but in the broad market; one invests in the US of A.

    Many professional paid advisers do not beat the average; can it be done of course but it takes work and luck. For no worry no work an index fund is the way to go.

    Enron’s stock price (former NYSE ticker symbol: ENE), which hit a high of $90 per share in mid-2000, plummeted to $0.10 in October 2001. The drop in Enron’s stock price is estimated to have caused its stock holders to lose $11 billion.
    That is $11,000,000,000.00 lost in that stock; many did not see it coming. As I said for every seller there has to be a buyer.

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    Default Re: Learning about the stockmarket

    Quote Originally Posted by Earl_the_Pearl View Post
    When one invests in an index fund ....
    You pay management feels, taxes and someone who is not the investor gets rich.

    That is $11,000,000,000.00 lost [on Enron]; many did not see it coming.
    But all one had to do to see the Enron debacle coming was read their annual report. Year after year, the management letter to shareholders grew longer and more complicated to the point that it was all but indecipherable. When a company cannot explain its business, then it either has something to hide, or does not understand its business. Enron is an easy example as the annual report was a clear clue, but the stock price alone should have been a clue to the reasonable investor to take her profits.

    Z

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    Default Re: Learning about the stockmarket

    Just one post on Dollar Den for the year; Because that's all the space & time it takes to distill all the investing knowledge

    * Dollar Cost Average on a broadly diversified (US + International) Diversified Index fund will still beat 99% of the investors (including many self-claimed experts) over 20+ Years
    * Don't have to read the millions of Garbage articles that are written by clueless idiots who can't value an asset to save their lives

    Commodities are not assets. Gold doesn't produce any income(Govt. can easily tax windfall profit taxes on commodities ). But you can invest 2% on commodities as a protection.

    * Just because someone made a right call doesn't mean they make money.

    This is the David Swenson way of investing (asset allocation)

    Zofia,
    Yours is the Buffett way of investing. There is definitely value in what you are doing. It needs somebody to read 10-k reports. Not many people have the overall business sense + intelligence to asses balance sheets, margins, growth, probabilities & time value of money. So for a general population the Swenson way is better (In fact in a circular way, if everybody uses your approach, the market will become more efficient and there will be no value)

    If you had Dollar Cost Indexed on the Total International Stock Market starting at the peak (around Jan 2008 ), you would have lost only 15%. Remember Indexing pays Dividends and the best part is you would be sitting on absolutely cheap stocks (Earnings Yield of almost 6% compared to cd rate of 0%)

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    Default Re: Learning about the stockmarket

    Quote Originally Posted by Zofia View Post
    You pay management feels, taxes and someone who is not the investor gets rich.
    Index funds have very low fees because there is no thinking involved. As for taxes any stock investment that shows a profit is subject to taxes.

    Look at the Madoff debacle; some very savvy people lost billions.

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    Default Re: Learning about the stockmarket

    If they were that saavy, why did they not see through the Madoff scam?

    Is it because when you see tha much apparent gain, you lose your disbelief mechanism?

    How about the "Dogs of the Dow" does it still work?
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    God/dess Zofia's Avatar
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    Default Re: Learning about the stockmarket

    Quote Originally Posted by Earl_the_Pearl View Post
    Index funds have very low fees because there is no thinking involved.
    They still have fees. Even the best index funds charge a fee of .18% per year, for as you admit not thinking.

    As for taxes any stock investment that shows a profit is subject to taxes.
    Not so fast. The gains in my Roth IRA are not subject to taxation. The gains, even trading gains (profits if I was a mutual fund manager) in my IRA are not taxed until I start withdrawing them. Conversely, the profits of a mutual fund are taxed each year and then if they are held by my IRA, or any IRA again when I or the owner starts to withdraw the money.

    Look at the Madoff debacle; some very savvy people lost billions.
    Yes, but if you invested in individual issues about which you understood the business you would have been immune to the Madoff problem.

    Z

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    Default Re: Learning about the stockmarket

    Quote Originally Posted by Zofia View Post
    They still have fees. Even the best index funds charge a fee of .18% per year, for as you admit not thinking.

    Yes, but if you invested in individual issues about which you understood the business you would have been immune to the Madoff problem.
    How do you buy and sell stock on your own without paying a commission?

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    Default Re: Learning about the stockmarket

    Quote Originally Posted by threlayer View Post
    If they were that saavy, why did they not see through the Madoff scam?
    Many were referred by friends and family; they thought they were on the inside. Big time pension fund managers were suckered into this; it is called greed.

    What is the saying? "Bulls make money, bears make money, and hogs get slaughtered".

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    Default Re: Learning about the stockmarket

    Online trading companies will allow trades at around $7 per trade. That's almost free unless you're 'pitching pennies.'
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Learning about the stockmarket

    I would rather spend my time in clubs getting drunk and stupid instead of reading annual reports. Time is short; spend it with dancers not financial reports.

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    Default Re: Learning about the stockmarket

    I went through the PhD program at Investools.com It took me 2 years of consistent studying, but I made back the entire tuition in February 2009 when the market tanked and I had loaded up on SKF and FAZ calls, and was short 5 S&P 500 Emini-futures.

    Then I flipped on March 9th (I cannot claim to have caught the bottom, but I was pretty darn close) when I sold 2 naked calls on SKF and went long 5 Emini Futures and had my very first $10,000 day.

    I started shorting again too soon, and lost 10K, but I'm still up 60k for the year....and I'm just sitting with Bear Call Spreads on the Russell for income (roughly 7%ROI in 8 weeks) I'm not comfortable with an Iron Condor right now. I wrote out my Iron condor plan on this forum last year.

    The problem with traditional "investing" advice is that you can only make money when the market goes UP. I LOVE when the market goes sideways because I can put on high probability trades like Iron Condors. I'm also loading up on some longer term short trades because I'm traveling a lot this summer and can't daytrade. We have had 4 months of closing up...July is going to be a down month, and we will have another repeat of Sept 08.

    The blogs I read are www.slopeofhope.com, evilspeculator.com, xtrends.blogspot.com for free insight from top traders.

    I subscribe to incometrader.com and retracementlevels.com

    Commissions at my broker www.thinkorswim.com are $1.50 for options, $3.50 for futures.
    Rebecca Avalon







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    God/dess threlayer's Avatar
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    Default Re: Learning about the stockmarket

    ^^ WOW That is SOOOO sexy!
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    God/dess Zofia's Avatar
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    Default Re: Learning about the stockmarket

    Quote Originally Posted by britneyireland View Post
    I went through the PhD program at Investools.com It took me 2 years of consistent studying, but I made back the entire tuition in February 2009 when the market tanked and I had loaded up on SKF and FAZ calls, and was short 5 S&P 500 Emini-futures.

    Then I flipped on March 9th (I cannot claim to have caught the bottom, but I was pretty darn close) when I sold 2 naked calls on SKF and went long 5 Emini Futures and had my very first $10,000 day....
    Damn girlfriend that is sexy!!!!!!!!!!!!!!!!!!!!!

    XOXO
    Z

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    Default Re: Learning about the stockmarket

    Quote Originally Posted by britneyireland View Post

    Then I flipped on March 9th (I cannot claim to have caught the bottom, but I was pretty darn close) when I sold 2 naked calls on SKF and went long 5 Emini Futures and had my very first $10,000 day.
    It was the naked that did it.

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    Default Re: Learning about the stockmarket

    Short future, receive bacon Easy!

    (Since we're off topic anyway...)
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Default Re: Learning about the stockmarket

    I'm fully loaded short now.

    I opted to buy puts on SPY instead of shorting futures. I also bought puts on GS.

    I also loaded up on FAZ and SKF January Calls.

    The great thing about options is that you can make money even if the stock doesn't move with volatility spikes, and they don't cost as much as purchasing the 100 shares of the stock itself.
    Rebecca Avalon







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    Default Re: Learning about the stockmarket

    At a minimum, you need to keep an eye on how much you're giving up in brokerage though, and how much premium you're buying/selling. Might be instructive for a beginner to buy one call or put and then track its worth and what the market is bid/offered at, while learning about options. But you're paying up quite a bit when crossing the spread to trade an option, then add brokerage and clearing fees. Damn brokers get rich off this stuff
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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