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Talking stocks, trading, and investing in general

Discussion in 'Business, Careers & Education' started by mikeman, Feb 2, 2011.

  1. heartworm

    heartworm Senior member

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    How do you guys feel about buying for long term holding right now? Many good companies are down 20% right now compared to 3 months ago.
     
  2. HgaleK

    HgaleK Senior member

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    What's your goal, what's your risk tolerance, how actively do you plan to trade, and how much do you know about the stock market?

    Edit: Javyn- that's why I don't like penny stocks. Mass market behavior is reliable.
     
    Last edited: Aug 11, 2011
  3. heartworm

    heartworm Senior member

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    I'm new to investing. My risk tolerance is high since I'm young and probably won't need the money in the next 5 years. I'm not sure what you mean by how actively I plan to trade... I want to hold on to these shares for years, they're businesses that I consider worth investing in anyways, they're just cheap now because the whole market is down.
     
  4. HgaleK

    HgaleK Senior member

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    "I want to hold on to these shares for years, they're businesses that I consider worth investing in anyways, they're just cheap now because the whole market is down."

    I wouldn't be surprised if the market completely eats shit in the next 5 years, but if you believe in the companies and view them as cheap then there's no reason not to buy...
     
  5. heartworm

    heartworm Senior member

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    Okay, so would you place them somewhere else instead? It's not a lot of money right now, but I'm planning to invest a big chunk of my paychecks the next couple of years in stocks and bonds. Maybe commodities as well, but don't feel that I know enough to invest in them, the whole gold/silver thing seems quite risky right now.
     
  6. HgaleK

    HgaleK Senior member

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    I wouldn't touch commodities unless you really really really really want to get to know your individual markets.

    I love stocks. I think they're at a great price right now for long positions. I also think it's a bad idea to buy and forget. I don't like bonds simply because I haven't studied or traded them.

    My big issue with going really long is the way that the chart of the SPX looks (it's a little clearer if you use a log chart). We aren't going up at a steady rate at the moment like we were between '50 and '66 or '75 and '95. It's up/down/up/down/up. We're either going to bust out of the high and move on up, or go hard down again and then move up. That being the case, you want to make sure that you're getting fundamentally sound companies with excellent management, that put out a good dividend. It's also important to have a decent appetite for risk, loss, and learning about the market.

    Gold is likely to be an excellent investment for the foreseeable near future. Silver may get a pretty jump in speculative investment, but that's just gambling. Gold is heavily overbought, but should settle down in price as the market recovers. GLD's channel range right now has it between 170 high and 140 low. If it hits 150-160, it's probably going to make you money pretty quickly (a month or two) (though it's important to realize that unrealized gains aren't gains until they're realized). Gold won't be risky until it starts exhibiting later stage bubble behavior, which is a change in growth rate.

    What stocks are you looking at buying?
     
  7. heartworm

    heartworm Senior member

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    Thanks for the reply, it was very helpful. I'm only looking to buy danish stocks right now, since these are the ones I understand the best. The only one there's a chance of you knowing is Carlsberg, the beer company. I was also looking at Lundbeck, a medicinal company, but they're already too expensive again in my opinion. Also, I'm a medicinal chemist so I know a bit about how these companies work and I'm not sure it's a good idea for me to go into the medicinal industry before I have more experience with investing.
     
    Last edited: Aug 11, 2011
  8. stevent

    stevent Senior member

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    Get some ETFs or just a basic S&P index fund. That's probably your best bet depending on how much as you have. Don't play with commodities / derivatives or anything until you have an idea of the basic market.

    Historically the S&P has gone up 7% (-1% for risk fre) so it's been 6% since the 1800s. Some call this the Equity Premium Puzzle although I'm not sure I believe in that.


    Yeah I have Vector group debating whether I want to get rid of it, they are borrowing to pay dividends...wish I picked up Phillip Morris a year ago, way better returns compared to Vector group that hasn't really moved for years, but the dividends are hard to beat and I hold nothing against the tobacco industry.
     
  9. heartworm

    heartworm Senior member

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    Can you explain why you recommend buying index/ETFs instead of stocks?
     
  10. stevent

    stevent Senior member

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    One of the most important things to do when investing is to diversify, with a little amount of money you can't really reach the 20 stocks level of diversification. Holding one stock carries a lot of risk, and if you are looking in pharma that can be huge swings depending on development of new drugs and whether they get approved or not.

    Can you access different markets in Denmark? Do you have access to cheap brokerages?
     
  11. heartworm

    heartworm Senior member

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    Well the money that I have right now isn't a lot, but I will keep adding to that every month, so I think reaching 20 different stocks shouldn't take too long. I pay 0.10% on the nordic markets (OMX), I have no idea if that is cheap or not. For US stocks I'll have to pay 0.50% with a minimum of $12, which is a bit steep in my opinion, but I haven't found any cheaper options so far.
     
  12. stevent

    stevent Senior member

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    $12 plus the percentage is kind of steep. Check out http://www.investopedia.com/ for the basics it should give you a good overview. Just think it over and look at basic ratios and news before buying. Just because you drink a type of beer does not mean it's a attractive stock to buy.
     
  13. heartworm

    heartworm Senior member

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    I certainly have more reason for buying it than that. Besides, Tuborg is better.
     
  14. HgaleK

    HgaleK Senior member

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    "Thanks for the reply, it was very helpful. I'm only looking to buy danish stocks right now, since these are the ones I understand the best. The only one there's a chance of you knowing is Carlsberg, the beer company. I was also looking at Lundbeck, a medicinal company, but they're already too expensive again in my opinion. Also, I'm a medicinal chemist so I know a bit about how these companies work and I'm not sure it's a good idea for me to go into the medicinal industry before I have more experience with investing. "

    Have you taken a look at the books of the companies that you're looking at investing in yet? Earnings growth, debt ratios, etc? I'm pretty sure that the investopedia link info on the basics of fundamental analysis. If they've got sound fundamentals, a history of excellent performance, good management, and you understand the industry, they're probably good stocks to pick.

    stevent recommended ETFs as a means of investing in the market instead of companies. It gives you the advantage of a big enough mix that you're unlikely to pick a complete loser. On the other hand, the losers will keep any major winners in the ETFs from from pulling you forward either. I'm not a huge fan of diversity for the sake of diversity, but a diverse portfolio of hand picked, fundamentally sound stocks is never a bad thing to have.
     
  15. stevent

    stevent Senior member

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    Even if he read through the basic stuff, it's not as simple as buying and profit automatically even in fundamentally sound stocks. Also hard to really say given that we don't know how much he's planning to invest, but then again he said he's not too worried about risk. If I didn't care about risk I'd say buy some oil derivatives right now along with maybe some wheat futures.
     
  16. GusW

    GusW Senior member Dubiously Honored

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    My bank called me yesterday early in the morning when things were bloody and said they were buying blue chips that pay good dividends and did I want anything. Their feeling was the market is oversold and it would be a good day to buy. "Sell when others are buying and buy when others are selling". They think there will be more days like yesterday, you just have to be ready to act when things are scary and when you have done your research.

    Turns out there were a lot of companies and executives buying their own stocks today, per Bloomberg.
     
  17. HgaleK

    HgaleK Senior member

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    At the end of the day, a stock that won't go under when shit hits the fan, pays a steady dividend, and has the capacity to thrive when things are good is all that one can ask for if you don't want to be an active investor. Trading short term I know that I can turn a profit when the market makes a big move, so losses don't cause me to panic. In a money dump position, seeing as one doesn't have the security of mobility and set time frames, a really pretty balance sheet, income statement, and cash flow help weather the volatility. The sort of shit where you laugh and continue sipping your champagne when the Titanic hits a glacier because you inspected the hull yourself and know that it's going to be fine.
     
  18. otc

    otc Senior member

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    lol...my aforementioned "not-a-penny-stock" that trades over the counter is a danish company--Vestas

    I would be wary about investing too much in foreign markets. an S&P index fund might not be the best option as it exposes you pretty heavily to exchange rate risk and I am sure there are broad indices covering more local markets.

    IIRC, the danish kroner are pegged to the euro (along with sweden, but not norway), so any euro-denominated funds would have zero currency risk. Funds are better diversified than stocks and keep you out of those "oh shit" moments where a single stock kills you. Also, trading fees on small quantities are killer (though it sounds like you pay a percentage so it might not matter) since you have to pay it twice (once to buy once to sell) and it becomes a large fraction of your total when you are only buying a few shares.

    FWIW, when I first opened my account, I put the largest portion of my money into an S&P500 index fund and then bought 2-3 stocks for "fun". One of which was vestas (which has done terribly), another being AAPL which more than doubled my money before I accidentally sold it (stop order in the flash crash)
     
  19. heartworm

    heartworm Senior member

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    otc > What are your thoughts about Vestas right now? Investors are quite pessimistic here in Denmark... I think it could do well, but the fact that so few orders determine so much makes me stay away.
     
  20. idfnl

    idfnl Senior member

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    Wanted to research Societe Generale's stock but dont know what the correct symbol is. Is it EPA:GLE or PINK:SCGLY ?
     

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