[quote]Aleksandr wrote:
Yeah, I’m really not about to start giving “hot stock tips” on the internet. Not for free, anyway :P[/quote]
Nor would I take them. The problem with buying stocks instead of funds is you have to know when to sell the stocks and what to buy next. With funds you are counting on your fund manager.
[quote]Aleksandr wrote:
AccipiterQ wrote:
pork bellies…
Personally I’d throw it all into oil companies. I have friends that could buy a hummer and fill it up every week for the next 20 years just on their exxon profits from the last 2 years
That would be a great idea if you had a time machine. In general, I would avoid chasing after “hot sectors”.
The oil party may continue indefinitely, or prices may stabilize. Both opinions are just speculation. In any case, I might consider oil a hedge investment if I were invested in industries that were strongly influenced by fuel prices. I’m not, though, and I’d prefer to take a less speculative approach. Plus, the next US administration may be less “oil friendly”, and that adds risk.
[/quote]
Yup
[quote]Zap Branigan wrote:
Aleksandr wrote:
Yeah, I’m really not about to start giving “hot stock tips” on the internet. Not for free, anyway 
Nor would I take them. The problem with buying stocks instead of funds is you have to know when to sell the stocks and what to buy next. With funds you are counting on your fund manager.[/quote]
“Knowing when to sell” is only an issue if you are trying to time the market. I don’t believe I have this ability, and I am skeptical about the ability of the typical fund manager to do it.
Instead, I prefer to worry about “knowing what to buy”, and then I only have to worry about selling if something about the company changes. It’s a lot more boring, but I sure sleep soundly at night (even with a 50% leveraged portfolio in the middle of a bear market).
[quote]Aleksandr wrote:
Zap Branigan wrote:
Aleksandr wrote:
Yeah, I’m really not about to start giving “hot stock tips” on the internet. Not for free, anyway
Nor would I take them. The problem with buying stocks instead of funds is you have to know when to sell the stocks and what to buy next. With funds you are counting on your fund manager.
“Knowing when to sell” is only an issue if you are trying to time the market. I don’t believe I have this ability, and I am skeptical about the ability of the typical fund manager to do it.
Instead, I prefer to worry about “knowing what to buy”, and then I only have to worry about selling if something about the company changes. It’s a lot more boring, but I sure sleep soundly at night (even with a 50% leveraged portfolio in the middle of a bear market).[/quote]
How long have you been playing?
Buy yourself a lift kit and some nice tires. It will be a stretch with only a thousand but you can usually find the lift kit for a couple hundred and then just install it yourself. You may have to prostitute yourself for another 1500 for a nice set of tires.
I had five grand set aside to lift my truck/buy tires. Got married and five years later still no lift kit/tires. Consider it an investment in cool.
[quote]Zap Branigan wrote:
Aleksandr wrote:
Zap Branigan wrote:
Aleksandr wrote:
Yeah, I’m really not about to start giving “hot stock tips” on the internet. Not for free, anyway
Nor would I take them. The problem with buying stocks instead of funds is you have to know when to sell the stocks and what to buy next. With funds you are counting on your fund manager.
“Knowing when to sell” is only an issue if you are trying to time the market. I don’t believe I have this ability, and I am skeptical about the ability of the typical fund manager to do it.
Instead, I prefer to worry about “knowing what to buy”, and then I only have to worry about selling if something about the company changes. It’s a lot more boring, but I sure sleep soundly at night (even with a 50% leveraged portfolio in the middle of a bear market).
How long have you been playing?
[/quote]
Investing, you mean?
8 years. Direct investment in stocks has been much more recent. Why do you ask?
[quote]Aleksandr wrote:
Zap Branigan wrote:
Aleksandr wrote:
Zap Branigan wrote:
Aleksandr wrote:
Yeah, I’m really not about to start giving “hot stock tips” on the internet. Not for free, anyway
Nor would I take them. The problem with buying stocks instead of funds is you have to know when to sell the stocks and what to buy next. With funds you are counting on your fund manager.
“Knowing when to sell” is only an issue if you are trying to time the market. I don’t believe I have this ability, and I am skeptical about the ability of the typical fund manager to do it.
Instead, I prefer to worry about “knowing what to buy”, and then I only have to worry about selling if something about the company changes. It’s a lot more boring, but I sure sleep soundly at night (even with a 50% leveraged portfolio in the middle of a bear market).
How long have you been playing?
Investing, you mean?
8 years. Direct investment in stocks has been much more recent. Why do you ask?[/quote]
Curiosity. Direct investment in stocks scares me. Buy and hold is great for solid long term companies or young companies that you are VERY familiar with but I don’t see a whole heck of a lot of opportunity for long term high return. A lot of risk if you don’t know what is going on.
I work for an employee owned company and plough as much as I can back in because I fully understand the risk.
My last company I did not have that opportunity and I wouldn’t have taken it if I did because I knew the problems they had. Hard to see that from the outside.
I am no expert and am always willing to learn.
[quote]tmay11 wrote:
Ok, well to those who said invest in your future/career that is an excellent idea. Right now I’m a first year apprentice electrician, I have a vehicle/tools/money for school ect so the need to invest in myself so to speak is at the moment minimal. Thanks for the help. [/quote]
I’m a lurker, but this thread hit home for me:
As a fellow tradesman (age 21) and nearby neighbor from alberta, I started at your age and have been saving 20% off my cheques for the past 3 years (10% long-term, 10% for emergencies) putting them into a high interest account from ING (isolates the money, makes it harder to spend, easier to save). Depending on your living circumstances, just bank as much money as you can. Plan a budget that incorporates your 20% savings as a fixed cost, and by the time you know it, the interest starts really adding up (starts paying for cell-phone bills, half a truck payment, etc etc).
Just don’t be a damn idiot and buy a $50,000 truck like most of the people here, put your focus on being debt free. If you keep your debts to 0, all that money just goes straight into your savings. You can make those 4 years of apprenticing quite worth it financially if you save intelligently.
[quote]Zap Branigan wrote:
I work for an employee owned company and plough as much as I can back in because I fully understand the risk.
My last company I did not have that opportunity and I wouldn’t have taken it if I did because I knew the problems they had. Hard to see that from the outside.
I am no expert and am always willing to learn.[/quote]
Good point Zap.
I prefer to invest in directly as opposed to mutual funds and overall it’s worked fairly well so far. But I’ve also been burned by poor corporate disclosure/accounting abnormalities. I would never invest in stocks with funds I may need at a certain point although I feel save in the long term.
[quote]Aleksandr wrote:
Investing, you mean?
8 years. Direct investment in stocks has been much more recent. Why do you ask?[/quote]
Aleksandr,
For some reason I get the impression you are in your early 20’s. Your mentality is similar to mine a few years ago, only I believed in near 100% leverage.
I like your thoughts on holding for the long term, your obviously a “student” of Warren Buffet ideology. It’s a good idea, just remember that public disclosure for companies is mostly after the fact and although I agree with the idea of holding a company until the reason you initially bought it no longer applies, sometimes that may be too late.
Also the unthinkable does and will happen again and again.
Get a hooker
This is a good article from last week:
[i]Is Bear’s Woe a Good Sign for the Market?
March 15, 2008; Page B2
Financial crises don’t end until something gets broken. From the evidence of Friday, it looks like the something in question is going to be Bear Stearns.
What does that mean for your investments? The likely answer: The market may well be nearing its bottom.
A spectacular bankruptcy usually brings a crescendo of panicked selling and forces concerted intervention. Often, it marks the beginning of the end of a crash.
In this situation, the liquidity crisis is so bad that at one point early Friday a major bond institution couldn’t even sell Treasurys for a bit. A senior figure there told me his usual buyers among the Wall Street houses had shut their windows in panic.
Successful investing isn’t easy, but it’s simple: Buy low, sell high. Steeling yourself to buy low, when everyone else is selling, is what makes it hard.
Think of how many people were telling you to buy the Dow at 14000. Think how few are telling you to take a look now at 11900.
Like many contrarians, I tend to call market turns early. I was certainly early in some of my bearish calls on certain overinflated assets, like housing, in recent years. Markets tend to overshoot in both directions.
But if you are trying to save college funds for your 8-year-old, or to retire in 20 years’ time, that’s a detail.
Large-cap U.S. growth stocks are, on the whole, looking like a pretty reasonable value right now, and if you are investing for the longer term, instead of chasing next week’s stock performance, that’s positive.
You’re buying top-quality companies on historically reasonable valuations. That’s rarely a bad bet to make. Simple exchange-traded funds Dow Jones Wilshire Large Cap Growth ETF SPDR and Vanguard Mega Cap 300 Growth Fund will spread your money across a basket of high-quality blue-chip growth stocks, from Procter & Gamble to Microsoft.
As ever, I make absolutely no predictions whatsoever about short-term performance. Wall Street could jump 1,000 points or fall 1,000 points next week. That’s why you shouldn’t commit all your funds at once.
As for current talk of a “depression,” no less, remember that another sign of a market bottom is when apocalyptic predictions become widespread.
The Great Depression wasn’t caused by the financial panic of 1929. It happened only because of a string of policy blunders including tariffs and a tightened money supply that followed the panic. Fed Chairman Ben Bernanke, a student of the Great Depression, knows this full well.
The worse the situation now, the more the federal government will have to step in to provide liquidity. And that can mean only one thing for inflation.
The big losers over time won’t be those holding equities, which after all offer some hedge against inflation. It will be anyone rushing into Treasurys.
[/i]
[quote]BostonBarrister wrote:
This is a good article from last week:
[i]Is Bear’s Woe a Good Sign for the Market?
March 15, 2008; Page B2
[/i][/quote]
Good article…or maybe I’m just saying that because it agrees with my own views. 
But I do think he’s calling the bottom a little soon. I think we’ll see about 6-12 more months of bad news, likely highlighted by a couple rebounds and subsequent quick drops in the market.
Most people really have no idea how serious the credit crunch is since it doesn’t impact our daily life.
I have a question If someone buys stock now at a low price will it eventually rise?
Also for people who hold stocks over long periods of time what type of problems would they face? Obviously it can and will fluctuate in price but, how can you lose your shares completley? the company goes belly up?
I am 19yrs old and would really like to learn how to invest. Books, advice, anything would be helpfull.
[quote]xXSeraphimXx wrote:
I have a question If someone buys stock now at a low price will it eventually rise?
[/quote]
mmm, when you think about it, it’s actually kind of irrelevant. Market price is decided by what people think it’s worth, and people are idiots.
If you invest in a company that is somehow able to increase earnings by exactly 10% every year, what does this mean?
Ok, say current earnings are $1/share, and it’s trading at $10/share, the price to earnings ratio (P/E) is $10/$1, or 10.
If earnings keep increasing at 10%/year, in 20 years, they will be $1*(1+0.10)^20, or $6.73. Assuming people still feel the same way about the company, and the P/E is still 10, shares should now be trading at 10*$6.73, or $67.30/share.
What if the P/E drops to 5? the stock price is now only 33.64 but who cares? You are still earning $6.73 per share.
[quote]
Also for people who hold stocks over long periods of time what type of problems would they face? Obviously it can and will fluctuate in price but, how can you lose your shares completley? the company goes belly up?
I am 19yrs old and would really like to learn how to invest. Books, advice, anything would be helpfull.[/quote]
Absolutely. If the company fails, you can lose all (or a big chunk) of the money you’ve invested. In general, the greater the risk of this happening, the greater the rate of return will have to be.
To start with, read an intro to corporate finance textbook.
i was gonna say a roth ira (just recently opened one), but a couple people beat me to it. cd’s would be a good idea as well.
[quote]Aleksandr wrote:
rsg wrote:
You might not make much investing it, but I would save it until you have extra money to add to it - it’ll make a nice deposit when you have an initial amount to invest.
You really don’t need to spend it.
And yeah, 15%? You can perhaps find up to 10%, maybe 1% more if you do some diversifying, but 15%?
How in the world is diversifying going to increase your return by 1%?
Diversifying reduces risk. It does NOT increase returns. 15% is a low-end estimate. I can get an extremely low-risk 15%. If Berkshire Hathaway can get over 20% on around $75 Billion worth of common stock (not to mention all the private acquisitions), what makes you think that 15% CAGR is even a challenge when managing less than $100,000 (or $1 million, for that matter?).[/quote]
Diversifying can actually increase portfolio returns and reduce total risk at the same time depending on the correlation of the individual investments.
Anyone who claims they can get an “extremely low-risk” 15% return is living in a fantasy world or is involved in an illegal activity.
[quote]Mr2Geez wrote:
Diversifying can increase returns at a given level of risk, sure. But that’s not the same thing as just “increasing returns”. If an investment is expected to give me 20%, investing in uncorrelated (or negatively correlated) investments expected to yield 15% may substantially decrease my risk (and would be a brilliant move), but would not necessarily “increase my returns”.
I have no doubt that you’ve mastered modern portfolio theory, but this is an ignorant statement. Buffett has said that, were he managing $1 million, he is sure he could get returns of over 50%/year. I’m inclined to believe him, considering his CAGR managing tens of billions.
[quote]Aleksandr wrote:
Mr2Geez wrote:
Diversifying can increase returns at a given level of risk, sure. But that’s not the same thing as just “increasing returns”. If an investment is expected to give me 20%, investing in uncorrelated (or negatively correlated) investments expected to yield 15% may substantially decrease my risk (and would be a brilliant move), but would not necessarily “increase my returns”.
I have no doubt that you’ve mastered modern portfolio theory, but this is an ignorant statement. Buffett has said that, were he managing $1 million, he is sure he could get returns of over 50%/year. I’m inclined to believe him, considering his CAGR managing tens of billions.[/quote]
I am no master of modern portfolio theory, but I don’t need to be in order to be skeptical of an extremely low-risk 15% return. I am not saying it is impossible to achieve that type of return, just that it is not low risk. Buffett stated that he could get 50%/year managing <$1MM by investing in small-cap value stocks. In what risk/return distribution is small-cap value on the extremely low end?
Perhaps I’m wrong, in which case I’d love to open an account with you.
[quote]Aleksandr wrote:
xXSeraphimXx wrote:
I have a question If someone buys stock now at a low price will it eventually rise?
mmm, when you think about it, it’s actually kind of irrelevant. Market price is decided by what people think it’s worth, and people are idiots.
If you invest in a company that is somehow able to increase earnings by exactly 10% every year, what does this mean?
Ok, say current earnings are $1/share, and it’s trading at $10/share, the price to earnings ratio (P/E) is $10/$1, or 10.
If earnings keep increasing at 10%/year, in 20 years, they will be $1*(1+0.10)^20, or $6.73. Assuming people still feel the same way about the company, and the P/E is still 10, shares should now be trading at 10*$6.73, or $67.30/share.
What if the P/E drops to 5? the stock price is now only 33.64 but who cares? You are still earning $6.73 per share.
Also for people who hold stocks over long periods of time what type of problems would they face? Obviously it can and will fluctuate in price but, how can you lose your shares completley? the company goes belly up?
I am 19yrs old and would really like to learn how to invest. Books, advice, anything would be helpfull.
Absolutely. If the company fails, you can lose all (or a big chunk) of the money you’ve invested. In general, the greater the risk of this happening, the greater the rate of return will have to be.
To start with, read an intro to corporate finance textbook.[/quote]
When buying stocks to hold on to them, why do people just now make the same buys that someone like Warren Buffet does?
Also this will not be for a while but when buying stock what are some good places to do this with? full service brokers? or would an online broker like e-trade be good enough?