Stock Market?
anyone currently in the stock market ... day to day trades?? or long term trade??
if so can you suggest any forum or site i can read up on??
forum like this one would be great where theres alot of active member
thanx
if so can you suggest any forum or site i can read up on??
forum like this one would be great where theres alot of active member
thanx
Comments
www.superiorinvestor.net
http://www.stockhouse.com/bullboards/
just remember, "most people involved in stocks are like waiters, everyone gets a tip." But whatch how many buy in for themselves. If certain stocks were good enough to get tipped out to, ya gotta think "If it's that good, wouldn't ya keep your mouth shut and buy for yourself?"
on my own. About 10 years ago, I subscribed to Canadian
Business Magazine. I don't still have a sub anymore, but it
got me started along the right path.
I prefer Warren Buffet's approach to investing. It isn't as
glamorous (or fast) as day trading, but "value investing"
is what interests me. That's the term they use to describe....
Buying stock in a company, that is undervalued in the
marketplace, and selling it when it isn't undervalued
anymore. And it's easier said, than done.
Any new investor can help themselves greatly by taking
the time to learn ALL the terminology used in investing.
That's the first step if anyone hasn't done it already.
1. Price. I don't go after higher priced shares yet. Price
multiplication is what I want to see for now. Long term or
short. (It's somewhat 'easier' for a $0.10 share to hit
$5.00, than a $1.00 share to hit $50.00)
I keep stuff in the pennies to $2-3 range when I buy in.
My goal for now is to sell in the dollars, not buy in them.
This is a pure growth strategy. As my portfolio grows, I'll
eventually be buying the higher priced, dividend paying
entities like Coke or Microsoft and shifting some risk
into income from dividends alone. Be careful with true penny
stocks. Buying at 1 cent and selling for 5 cents, is a 400%
profit. Sounds great, but lots of price swings happen, and
lots of sharks out there playing those swings. Being careful
with most stuff under 20 cents/share, is a good rule of
thumb. If you're buying for the long term, it's less of a
factor, but still good to watch them awhile before buying.
2. Sector. Lots to choose from, but they don't all rise
at the same time. Oil is hot now, but the time to buy it
was before that happened. Still some potential but you
have to do your research. I like resources because
they've been good to me. My first mining stock purchased
about 9 years ago is up about 700%. So I sold 1/3 of my
shares recently, to secure a profit. (3 times my original
investment) The rest I'll let ride longer term. They will
probably have a mine in production within a year. When they
start processing ore and selling the minerals, it could go
up another 500% to 1000%. We'll see.
Many sectors to choose from though. I like resources,
biotech, technology, and manufacturing mainly. I have only
1 holding in the oil sector right now. It's up 30% in price,
and paying me dividends equal to 20% annually, based on the
original purchase price. I look for innovative products or
companies. I try to decide if what they sell may have future
value. If I like it, I research it all I can before buying
though. Reading is free. It can save you money!!!! An easy
tip is to pick sectors that interest you. It makes it easier
to read (learn) about them, if you have an interest in that
particular field. As always, don't put all your money in one
sector. Diversify. I currently hold 6 mineral resource
companies, 3 diamond exploration companies, 3 biotech
companies, 2 technology companies, 1 oil and gas investment
trust, 1 banking/financial company, 1 real estate company,
and 1 special products manufacturer. Spread your money
around and try to buy into good stuff before the masses do.
Then wait and see.
3. Financial history. Would you lend money to someone who
never pays it back? Then why invest in a company that keeps
issuing more stock but shows no profits year after year?
Unless they have a product or service of value coming to the
marketplace soon, avoid them until they get their finances
in shape. (I broke this rule a few times, and it's paid off
a few times, and also cost me money too) Also check for name
history. If they keep changing their name and stock symbol
every few years, avoid them.
4. Share volume. Share volume is average trades per day. If
a company has 50 million shares, but only small amounts
are trading each day, this is probably just small time
speculators just dabbling or maybe even day trading.
Large share volumes bought and sold each day indicate much
bigger fish playing the game. Mutual funds, banks, investment
houses. I use it as a guage to judge interest in a stock at
the time. If very low volumes are trading for extended
periods of time, I consider it off the radar of the big
investors. This could be good or bad news though.
Time to do more research. lol
5. Charting share price ranges. Most investment websites
offer free stock charting. I use Globeinvestor.com and
Yahoo Finance regularly to chart stock prices. You can
research a stock's price for a day, a week, the last few
months or last 10-20 years. Again, use this as an indicator
of where it "might' go in the future. Some sectors are
cyclical too, and fluctuate up and down each year. Food
companies (wholesale suppliers) are like that. Prices
usually rise at a certain time each year based on sales, and
then fall at another time of the year when sales are down.
I plan to use this cyclical strategy more in the future as
my portfolio gets bigger.
6. P/E ratio, is used as a guide to the present price value
of a given stock with respect to what it's forward
(projected) earnings will be for the next fiscal year. Is is
a multiple of the current share price vs. future earnings.
All things being equal, a lower PE ratio is usually better
than a higher PE value. ie: Company A has a PE ratio of 25,
while Company B has a PE ratio of 10. This means Company A's
shares are trading at 25 times the projected earnings for
the coming year, vs. Company B who's share price is
currently trading at 10 times future earnings. By itself,
the P/E ratio means nothing, but it's something to keep in
mind as you research any company. ie: During the dotcom
bubble, some of those tech startups were trading at 100 to
200 times future earnings or more. And most of those that
did, don't exist anymore!!! Their prices rose on pure hype.
No sales. No products. Just a name and some venture capital,
and a lot of gullible investors.
7. Research. You have to be willing to regularly read about
investment related material, and follow news about any
company you are invested in. When doing a stock price
charting, or getting a price quote, there are usually links
to the companies news releases. I read these news releases
regularly for my own holdings, but I also read as many as
are available before I buy a new stock. (think of it like
buying a car with the service record attached) Same diff.
8. ROB Television. Everyones cable tv is different, but mine
offers a channel called ROB Television. It's short for
Report on Business. It's an investment channel out of
Toronto, and I watch it regularly. They have guest
analysts on all the time. Excellent learning tool for the
novice investor, once you've learned the pesky new language.
9. Hot tips. Everybody and their dog thinks they know what
the next hot thing will be. I tend not to trust anybody but
myself when deciding what to buy, and when. People at work,
or friends, or family might tell me about something they
heard is going to go up. Instead of being a lemming, and
going with the herd, I usually research the company and if
I don't like what I see, I pass. Growth is best achieved
by buying something BEFORE everyone else starts talking
about it, not after.
10. Income Trusts. Years ago these were mainly only used by
the wealthy or investment institutions. Now they are held
by many individual investors. The risk is that lately, the
government has been considering taxing them differently. I
hold an oil and gas trust in an RSP account, so I don't
really care how they change the corporate tax structure, if
they do at all. They've (GOV) been taking heat in the media
lately for announcing their ideas to look at tax changes to
that sector. All I'm worried about is collecting the steady
tax free dividends in my RSP. If I held these in a cash
account (taxable) I'd be a little more worried about future
tax changes. And if you don't already know what an income
trust is, here is the laymans explanation. They are similar
to a mutual fund, but with distict differences. Mutual funds
own stocks in many companies. They pay you dividends based
on any profit from those investments. Income trusts however
don't own shares, they own the companies directly, within
the trust itself. They use huge capital pools to startup
trusts, and buy up any companies they like. A large
percentage of the profits from these companies get paid
back to the unit holders in the form of dividends, which
they usually announce every 3 months, in advance. They pay
a lot better return than most mutual funds, but I still
would be careful about diversity. Most big money managers
don't hold more than 20% of their portfolios total value in
income trusts. Mine is at about 7-8%, for what it's worth.
Also, all income trusts trading in Canada, have a ticker
code that ends in the suffix (.UN), such as ABC.UN, because
they are UNits, not shares.
11. Buying stock. Do you like to pay retail? No, who does.
Well if you buy a stock at market price (the current asking
price) that's exactly what you are doing. Take advantage of
limit orders. It simply limits what price you are willing to
pay for that stock. If a stock is trading at $3.50 or so,
you can set a limit order to buy at $3.25 for example. What
that means is your broker will try to get it as cheap as he
can, but you won't pay any more than the $3.25 limit you set
when you posted the trade order. Of course the downside is
if you don't see the price fall that low, then you're trade
won't go thru.
12. Nervous about stock market. Consider paper trading for a
year or two. Write down amounts of money you would spend to
buy stock, and then keep track of it as if you'd actually
spent the money on that stock. And be honest with your
results. Lying to yourself only hurts you. It's a great way
to learn though, without investing a dime.
13. Outstanding shares. Avoid companies with more than
100 million shares outstanding. I've noticed that they will
invariably do a share consolidation where you'll end up with
less shares, but at a higher price to compensate for the
dollar difference. 10,000 shares at .10 each can easily
become 1,000 shares at 1.00 each. You lose your price
multiplication ability somewhat when this happens, and it
is very often seen as propping up their shares on the
market. The small investors lose the most potential imho.
Added 1 more oil holding, but it's in my cash account as
it's not RSP eligible. They just announced a well going into
production soon. I got them at less than 5 cents US. Be nice
to sell them at 1 or 2 dollars in a year or two.
will tell though.
Also getting 1 more holding for free. A new spinoff from an
existing holding is issuing shares to holders of shares in
the original company. It's going to be the international
subsidiary of a diamond exploration company that just found
promising drill results overseas at a possible mine site.
Dontcha just love free stuff?
pause (I'll add more when I have time)
* The disclaimer. Use this info at your own risk. I'm not
a professional, or giving any advice. These are my opinions
and observations only, and your results may vary. I also
won't discuss which specific companies I hold either. Sorry.
This isn't intended as a hot tips post.
Sold the income trust after they dropped a bit. Thanks Ralph.
Still made about 25% in 6 months though, so it ain't all bad.
Used that cash to buy 3 more resource companies.
1 in gold exploration
1 in uranium exploration
1 in gem and precious metals exploration
Another thing I look for while reading a company's news
releases and/or financial statements...
Do the directors or executives own any shares? Nothing says
"focused management" better than when they have their own
money at stake too.
Have any stock options been announced just before or after
a major news release? Sometimes a good sign.
In 2 out of the 3 company's mentioned above, a much bigger
company has staked the land surrounding the small company's
mineral claims. When I see this happen I always smile. It
tells me the potential is there.
Now the boring, "waiting for years" part, comes into play. lol
Thanks, sometimes words can be used to drill your point home. lol
Add me to MSN sugardady112@hotmail.com