Stock market

[stray15]

I want in. What do I need to know?

Are these online trading places any good?

Which one is better?

Or is it better to find an actual broker and where would I find one that won't take advantage of a young guy?

I would rather do this all myself like online so I can learn to better manage my money.

How do you guys research new stocks/companies?

What kind of stuff should I look for or try to avoid.

I'm looking to take some risks, they don't scare me.

What kind of advice do you have for me?

I know its a bad time to buy stocks, that is why I want to do it. IMO it is the time to start buying, since most things are low. If I do my research right then I think I should be able to do alright.

Any books you would recommend. I just about finished "Rich Dad, Poor Dad" By Robert T. Kiyosaki. I thought it was a great book that really opened up my eyes. I plan on reading the next two of his books.

[tabs]

MY income is derived from the money I have in the stock and bond markets. The stock market for all intents and purposes put in the bottom in October 2002. There are ALOT of good quality companies that can be had at near rock bottom prices. So this is the bargain sale of the century......there aren't any other catagory of investment that is cheap right now. Bonds are expensive with interest rates at 40+ year lows, Real Estate has been booming at least here in SO CAL. Colllectables have been strong for years now especially Antique Guns.....it's almost like a feeding frenzy. So there is no other place to put your money, with any expectation of a good risk to reward ratio. Remember you want to buy when it's a buyers market, when everyone else is afraid to tred there.

Most Brokers aren't worth a $#!+... so you have to look far and wide for someone who knows what they are doing. They usually tow the party line....what the Brokerage recommends and only know what the company research department tells them. They might as well be selling used cars for what they know.

BUT I BELIEVE IN GETTING PROFFESSIONAL ADVICE......look if you needed an operation you wouldn't 0perate on your self would you?

What you are looking for is a PORTFOLIO MANAGER.....there fees are about 1 1/2% of the account value per year. That means that all trades whether it is 1 per year or 1000 per year are paid for out of that 1 1/2%. So there is no incentive for a Manager to churn your account to rack up trading fees, cause there are none. Also the more money you make the more money the Manager makes. In a sense you are creating your own Mutual fund, but having your own portfolio has some distinct advantages over a MF.


Here is the line as of now. Pick a nice large gona be here tommorow company such as Motorola or Ford at under $10 a share and pays a 4% dividend. Buy and keep buying for the next couple of years to creat yourself a large position in each... then in about 5 years look at the account value and say Geez I'm rich. Simple huh... no magic. No special insight needed.

In more normal markets you do have to have some expertise to minimize your risk...otherwise it is like going to Vegas and playing roulette. Also I would recommend watching Bloomberg Financial Network on cable. Just turn it on and start listening to what they have to say. It's a good education......just beware of the Greeks that they have on who are touting stocks. They allready have their postions in place and are advertising them to sell when they come on the program. Bloomberg is about business and not business/entertainment like CNBC has become.

[stray15]

Thanks for the great info Tabs!

So I want a Portfolio Manager, do I look in the yellow pages for them or do they have them online now? Is there any kind of start up fee or anything? I'm starting with very little money, will that matter to them?

[tabs]

Portfolio managers act like brokers do except for the differences listed above. They work for the Brokerage houses and Banks that have brokerage services. They are hard to find, as Wacovia bank has only 7 of them out of 7500 regular brokers. Sometimes they want a minimum amount....but it's an indivdual decision each is different. But they will be the wave of the futher as more people get tired of transaction fees. Call some of the big brokerage houses and start asking..... tell them you are looking for a portfolio manager rather than a broker... that really is the begining of your journey. Remember your going to get a lot of secratries and brokers who don't know a dam thing and are going to try and convince you they do ....so keep trying. No fees just opening a portfolio account which is the same as a brokerage account except it's classification. One other thing a portfolio manager basically has discreation over buying and selling in your account which is just the same as in a Mutual Fund. But you get to talk to your manager. Big difference. Maybe you will have to settle on a broker that you will feel comfortable with.... I don't know?

[jyl]

Some random thoughts:

1. If you feel the US stock market overall is a bargain at the present, you should consider an index fund. Low fees, low trading costs, will outperform the average portfolio manager, and if you are bullish on the asset class as a whole you may be willing to ride the broad market rather than stockpicking.

2. There are a lot of books on investing and trading, and some of them are genuinely worthwhile. There are also some good websites. There's also a ton of worthless books and websites where idiots throw around terrible advice, pump up stocks, and generally waste your time.

3. Seems to me one thing you should decide is if you are going to invest or trade. By "invest" I mean you have an asset allocation in mind (X% stocks, Y% bonds, Z% cash, etc), you're thinking fairly strategically and long-term in deciding where to put your money, and you're tending to keep your money there for years. By "trade" I mean you're actively playing the ups and downs of individual securities, and your holding periods are measured in weeks or days. And of course there's all kinds of points in between, and you could always choose to invest one part of your money and try trading with another part . . . I'm not saying one is better than the other, but the kind of research and books and so on will be different.

4. I rather doubt a personal money manager is going to be feasible or worthwhile if you only have a small amount of money. Like, under $100,000. If you are just starting out with a few thousand dollars I would be inclined to open an account with a discount brokerage that offers a large selection of mutual funds in addition to stock and bond trading (e.g. Charles Schwab), decide how much you're going to put in each asset class and where you want want to be on the investor / trader range, and proceed on your own with a lot of reading and asking people and learning. And if it is money that you can't afford to lose - such as the emergency funds you'll need to survive if you get laid off or the money you've been saving for a car or enagagement ring or whatever - then CASH is king. Just my opinion.

Hey,

tabs,

one area of bonds that still looks interesting to me is European government bonds. The idea is (a) European economies, particularly Germany, are in recession and need lower interest rates, even more so as the Stability Pact precludes the German government from using fiscal stimulus, (b) European Central Bank has so far resisted lowering interest rates like the US Fed has been doing, I actually recall only 1 small rate cut so far from the ECB, (c) when ECB finally does cut rates in earnest European government bonds should rise, (d) in the meantime you get some help from the weakening US dollar, assuming you are a USD investor. I know of one US mutual fund that invests 100% in European government bonds, ticker is BEGBX. What do you think?

[tabs]

Sounds Good to me John......your advice was right on the money.....I am not sure about index funds going forward.....simply I think one needs to pick his companies wisely, I think it's going to be a mixed bag for the next year or two. I also think this is going to be a trading market. My portfolio manager basically has a group of stocks she watches and buys and sells them in their trading ranges.....so you might own the stock a couple of times a year. Your right about asset allocation and even with your stock portfolio you have asset allocation.... It's all about risk management.... Try Ford at $10.50 @ a share with a $0.45 @ cents a share dividend. The low was $6.90 for about a minute and half, and the high was $60.00 @ a share in the 90's.


Since the stock market is an indicator of the confidence investors have in America.....I would have to say that the future of America is in doubt.....

[curtisaa]

stray15...it's sometime difficult to gauge a persons sincerety on these type $$ issues. After, reading your apparently honest question, I would have very serious reservations with what has been offered here.

Retirement by definition is a term of the past. Most that have dreamed of retirement have UN-retired. Learn a trade OR open a business and try to earn a living doing it. The business will be your BEST investment in the the next generations to come. ....FORGET THE STOCK MARKET..... Bonds, are for lazy rich people whom don't have any ambition and 2-6% return is not going to change their life-style. Most are members of the LSC (lucky sperm club) OR got lucky during the DOT-COM ard were smart enough to see that most were just playing with "funny-money" and at some point it was just a matter of time before there were not enough chairs for ALL to sit and when the music stopped (day-trading) there would lots of investors holding the bag.(ala, Enron,et,al)

The time now is to try to complete "short-passes" and not trying to throw deep. Keep your defense on the field as little as posssible, and take small amounts of $$ and try something that works. BE HAPPY, with 10% returns on incrimental investments. These will add up...

The key is NOT to follow the crowd, be a loner and follow your own intuition. And for GODS sake forget the $$-manager suggestion. If they ($$-managers) knew what was smart, do you think they'd tell you ???

Seriously...good luck !!

[tabs]

Well #42 I have to agree with some of the things U have to say about retirement. A good friend of mine who has since passed owned his own business, retired (BTW he was a great golfer and lived in Pasadena after golf he would go and hang out at the Peppermill restruant) was in the stock market, and was always dabbling in guns, watches or cars. On the side he repaired golf clubs and gave lessons till the day he died at 86.

Stocks are just another form of Asset....whether it be RE, Bonds, Cars (collectable), Guns, Art, Gold, Oil even Cash. THEY ALL Fluxuate in value and are cyclical in nature. It's funny that when one is depressed another one is doing well.....money flows to where a decent return can be made...Right now the stock market is HEAVILY DEPRESSED and it take a real act of faith to put money into it...thus the analogy of being a LONER.....the herd at least in SO CAL has been buying RE. Prices are very strong right now and the projection is that they will continue to do so for the remainder of the year. However in 1994 you couldn't give RE away, and the place to be was in the Stock Market.

Bonds in 1998 and 1999 were also at a nadir, today you have to pay a premimum for those Bonds......thus if U had bought Bonds you not only would have collected your Interest but you have had CAPITAL APPRECIATION on them as well. making well above your 3% to 6% return. But today the risk in Bonds outways the possible return.

From 1990 to 1998 the Collectable market was soft if not dead......with the decline in the Stock Market they have done well. Antique Guns seem to be the flavor of the day and have appreciated beyond belief. For instance a British made Whitworth Rifle that was used by the Confederacy as a sniper rifle in the Civil War recently sold for 72K, in 1992 a Whitworth rifle that was new in it's wooden case and had been in a Museum of Confederate artifacts sold for 5K. Quite a jump. Like all overheated markets sooner or later prices will peak the risk will out way the reward and the market will cool and fall.

By incremental "short pass" you mean a Trading market....where you buy a stock at the lower end of the trading range, watch it move 5% to 10% and run. I'm not talking about Day Trading either, which I have NEVER DONE. For instance another friend of mine bought Ford at $6.90 a share in late October today it's $10.50 a share and he has collected roughly $0.12 cents a share(1QTR) worth of dividends. He can now sell that and make a nice profit.

However at this point...incremental can mean that every month you purchase X amount of shares of Ford for example, you collect your dividend of 4% and you build a postion in that company. Since $10.50 is a lot closer to $6.90 than $60 you might assume that that the reward of holding those shares is greater than the risk. Your plan is to keep adding to your position till it reachs $20 or so. Your long term reward can be quite great...and is Ford going to go out of business? The last time an American car company nearly went under the goverment bailed it out remember Chrysler. If perchance Ford does go BK then U might as well kiss everything goodbye. Also check out how many continious QTRs Ford has paid a dividend and that will tell you the story. Thats more or less a buy and hold strategy.

Now I am going to talk about The USA Dollar as an asset.....we in America don't really appreciate how much the value of currency fluxuates in value, because our currency is so stable on the world markets (it is still the reserve currency for the world).....maybe Porsche owners do since they have to buy parts. But I can assure you people in Mexico and Brazil know that currency is like any other asset.

As I said in my orginal post most Brokers don't know anything but the party line is in other words what their employer tells them. They might as well be used car salesmen and I am sure a lot of them have gone back to that profession in the past 3 years. But their are people who have some idea or clue as to how money works .....no body has a crystal ball. If you don't know how the Stock Market works it can all appear to be a shell game or a gamblers delight.....there are no guarntees in life either except that we will all die. Real Cheery huh? But if you look at the chart for the Stock Market since 1934 it has been a nearly continious rise in value.....as America has grown economically so has the value of it's companies....and a stock is merely an abstraction for your partial ownership in a business.

Now if you really want to talk about the strategy that Proffessional Money managers (the guys who run pension funds) have used we can do that but it gets very esoteric?

I still am a believer that if you don't have any knowledge about investing your hard earned money than it is best to ask for and find some help. And it is best to ask 2nd and 3rd opinions until you have gained some experience at it, so that your not being snowed. The same thing is true in life.....if you don't know how to fix your car you find someone who does to give you some help or guidence until you learn to fix it yourself.

Now if I wanted to run a business I would ask #42 for help because he is apparently successfull at it and knows his way around the block.

[tabs]

Because I am deeply depressed when it comes to money issues...For example look at the chart of Motorola which was trading between $18.00 a share and $27.00 a share for the decade of the 90's excluding the 98-00 bubble. Now it's $9.00 a share. I don't think everything is deeply depressed but there are stocks that are undervalued and thats why I think it's a stock pickers market rather than an index market. I also think the length of time and the percentages of loss during this Bear market are only matched by the Great Depresson of the 1930's. There is a malaise that has fallen over the confidence in the American economy going forward as reflected by the Stock Market, which I think is caused by the uncertainity in our political system due to the 2000 election, and the ramifications of 911. I now think the 2002 elections helped to clarify the issue though and the country now has under gone a change of historical proportions. Thats why the Stock Market has been in a general up trend since those elections.....however the uncertainity of war with Iraq has left everyone hanging. We now live in a brave new world, 911 has changed America forever much as 12/7/41 did.

PS: Well I'm back to rhetoric, and what do I really know anyway? At this moment in time I just feel my critics are right and I don't know $#!+ from shinola.

[tabs]

Originally posted by tabs
what do I really know anyway? At this moment in time I just feel my critics are right and I don't know $#!+ from shinola.

Amen......

[pwd72s]

All I can tell you guys is that I think Curt's posting has a lot more value than any others I've read. But I don't read tabs...he's on my ignore list. I have read his investment posts on the S registry board, and putting it mildly, I disagree with what he says he thinks. I doubt that he thinks at all, but merely regurgitates what he heard on one financial TV show or another. This is coming from a guy who is married to an ex bank employee wife, who is my "financial advisor"...our investment portfolio has yet to suffer an annual loss, but we pretty much pulled out of equities in January of 2000, and the "gains" have been damned small since then. But at least they aren't losses. "financial advisors"? Beware of the fins swimming around you as you tread water with money in your teeth. Do your own study, do your own research. And this takes time...there is no easy answer. Believe me, no "financial advisor" cares more about your money than you do, and many of them only want to see a Ferrari in their garage, and they don't give a rat's ass whether you have a Porsche in yours or not...

[tabs]

Yes #15 aka PWDS72 is right I am a mindless idiot, who doesn't know anything......

[jyl]

So how, in general terms to avoid getting too deeply into private matters, are the people on this thread invested, if at all, and what's the rationale? I'm not arguing with anyone, but just curious.

I'll start. Currently I am more than half in cash, with the rest divided about equally between bond funds and a short position on the Nasdaq.

My rationale on the bonds is basically what I said to tabs in my prior message - (1) Central Europe is basically in recession and the governments have limited ability to use deficits to boost their economies so European interest rates need to be lowered, and (2) the euro is rising against the dollar for reasons that I admit I do not fully understand. Because I don't understand the FX movements, I'll be pretty quick to take off the position if the dollar reverses.

My rationale on the Nasdaq short is (1) I do not think technology spending is recovering yet, (2) the Nasdaq rally in Oct-Dec '02 was too fast and too strong, (3) over the past couple months the Nasdaq has done better than the S&P, so I think the gap is going to close by the Nasdaq falling to join the S&P, and (4) after today it looks like the S&P and Dow have broken support levels so I'm hopeful the Nasdaq follows (it is very close). I'm wary that the markets are getting whipsawed around as much by war fears as by economics and earnings, so I haven't yet been willing to make this a "big" short. All I'd need is for Saddam to catch a bullet and destroy my short position.

I'm by no means a perma-bear -- I went long the Nasdaq in October and November, not aggressively enough I'm afraid. But I see too few signs of economic recovery to be want to go to a buy long and hold approach. So I'm keeping most of my money in cash and doing sort of macro-trades with the rest.

I am, by the way, undecided about the stock market's valuation. Yes, the P/E now is significantly higher than in prior periods. But interest rates are much lower. Historically P/E ratios have tended to be high when interest rates are low. This may or may not be "correct" from a finance theory point of view, but it is how things have tended to be. So I am a lot less concerned about the market's valuation than I was a year ago. What is bothering me now is that this recession is proving stubborn and the Fed is almost out of bullets (Fed rate is getting close to zero), the Federal government is IMHO not proposing effective fiscal stimulants (exactly how does giving a dividend tax break to a small class of very wealthy investors boost the economy?), and as I look around the world I'm seeing a synchronized global recession (scary).

[curtisaa]

Hey John...what do you mean "world-wide" recession ?? Has there ever been a period like this where residential real estate has sold at apppreciative prices for this long? Do you see people driving "old cars" ?? Places like Lowes and Home depot are very busy...Step back John, forget about what's going on across the Atlantic because that's not going to make your cash worth more.

I don't know another time where $$ has been this inexpensive to barrow and as easy to barrow. It looks very apparent like the Feds are saying "come and get some". I know it can very taxing to some to figure out what it's like to be an Entrepenour, but if those of you who are "employed" ever had a notion to try to "have a go of it" on your own, NOW IS THE TIME !!

I think many are still feeling the residual effects of the DOT-COM..DAYTRADING days when guys like Tabs52 could even make $$. For those that are of the "faint of heart", it's time to awaken to fact that times have changed. If if you've got some cash, and just want to be safe... buy bonds. If you've got some cash and you want to make it work for you, youve got to do your homework and put the time in to really "have at it". Be brave !! There's lot of ways to make $$ in this country, just ask those at the borders waiting to get in......

[jyl]

It is true that many (most?) strong companies were born during hard times. I'm thinking the boom-bust cycles in Silicon Valley, as that's what I'm more familiar with.

I'm not sure I'm so positive about the real estate market. It feels kind of like 1991, which was the start of a severe real estate slump in California. I admit I don't know much about the real estate market outside of California.

[Rob McKibbon]

Dear Stray15,
Seems like you've got an interesting thread going here?
I would imagine with all these expensive cars these men have for toys; you could get some great advise!
From the format of your questions my first advice to you would be to get yourself educated!
"Rich Dad, Poor Dad" is a good book that will stimulate most unprofessional investors. (We gave them out for Christmas presents 2 years ago) Believe me, there is alot more to it and all you have to do to find out is read the following sequences of books by Kiyosaki.... Guide to Investing, Cash Flow Quadrant & Real Estate Riches. These books are much more in depth. Most large brokerage companies offer evening courses in Stock trading too which are very affordable as they are a promo to their services as brokers.
(You know why they call them brokers?
'cause you're broker after you've met them!)
Also Hume Publishing offers a very in depth 30 steps or so series of correspondence courses, these are very good for learning investment strategies.
As far as help, like a brokerage firm or investment manager, it's my opinion that you'll never find a good one who isn't already booked full with clients. You're taking a big risk and the term broker may become reality for you? So ask for referals from people who are doing well in trading already. Most agents will take on a new client with a referal from an already established client. Call up someone successful, some presidents of Oil companies, etc. and ask them who they use? Could you get a referal? Most successful people are always willing to help others become so. Be careful to interview people and find the right match; the courses I mentioned will also teach you how to self direct your investments at a much reduced commission.
(Success? What's your definition of it?)

Next, I strongly recommend that you find a mentor - someone you can model after, seek advice from, etc. Your mentor should be a role model in his lifestyle. Financial success isn't that hard to achieve? True success includes a balance in life - called Lifestyle! Find a mentor who has a good family life, loves his wife and children, treats others with respect and consideration, has a good balance with health, spiritual and finance. Life is a journey not a destination .... you can design your lifestyle, just educate yourself, set goals and never give up! (Note these are things that I define with success; you'll need to find a mentor who has the things you define as successful)

Become a people person: Successful people usually have very good people skills: Read "How to win friends and influence people" and "Personality Tree" to get a good start; a must read for every leader. Remember, If you lead but nobody follows, then you are merely taking a walk? (John Maxwell is also one of my favorite authors on the subject of Leadership- excellent stuff!)

As for myself, I now have true success! I spend more time with my wife and family than any person I know. I love my wife and she is my best friend. (Good relationships also take work and effort) I have 5 children, all whom I'm proud of. My investments are more towards things that will also provide us with enjoyment today and in the future. We have a beautiful home in the Okanagan area of BC, with swimming pool, decks and hot tub and dozens of mature trees, we overlook a beautiful lake. Our cabin on the lake has appreciated like mad in value, located in Blind Bay of the Shuswap Lake and our condo at Siver Star Mountain Resort offers the very best family time we have ever had, while also appreciating.
As for stocks, you can have 'em and the gray hair that goes with 'em too!
I have owned and operated over 30 rental units at one time
I have had invested over $100,000 in the stock market
I have been President of a multi-million dollar company
I have had over a Million dollars in cash in the bank (age 30)
There is NO get rich quick plan out there.... it's alot of work!

Get educated first, Get balanced and stay balanced, success will come. (Part of your education should include your definition of the word: Success?)

Oh yeah, and my Porsche? Well, if there ever was a car that was an investment, Porsche would be on the list.

Hope this helps........ get yourself a Chapters membership card and fall in love with reading! Leaders are Readers!





A shot of one of my later investments:



all the best,
Cheers!

[tabs]

Thanks for the stab Curtis.....getting even are U......or do you just think I am a mindless idiot to....... but between you and I.....I did get you to come out in the open and express you opinion about me on my big thread ... and that was part of my purpose BTW. I wanted you to step out of the shadows so that I know what your real opinion is.... Now I know.

I have a portfolio manager who is bank trust certified, the ONLY WAY to get to see her is by REFERAL. She's is a financial advisor to the Repblican National Commitee, it's quid pro quo.... has been in banking and the equities business for over 30 years...... do I need to say more..... I was refered by a very good friend who had been in the market for 50 years, had owned his own business and was a multi millionaire... his comment about her was that he had never met a more honest or intelligent broker in his life.... I have to concur.....

I've had 2 mentors in my life...one on the personal side and the other for the financial......let me quote myself.......It's out of the abyss of nothingness that insight into the dark side comes and it's by owning the darkness within that the light comes and with the light comes power.....what I now have is power. I have the power through words to effect everyone of you, and that comes from 30 years of hard won knowledge. So it's no accident what I do here. On the financial side I am still trying to learn everything I can, because I still don't know enough.....

But what do I know I am a mindless idiot...........

[curtisaa]

Tabs52...denegration is not MY deal. However, if you insist on being a "big-shot", you're going to have to take the cameras and the microphones...

Talk ALL the wealth and fame you want...you're "unemployable".
....period....That, in it's own defintion, speaks volumes..!!!

Buy ALL the junk (spoons and weapons) you want. Someone that spends the effort and time you do here, fix your damn car for a measley $5K and move-on....

BTW...I'm not really sure what the future lies for the Rgruppe w/o your humble blessing...

[tabs]

I am completely unemployable...and have no desire to go to work, just thinking about getting up in the mornining turns my stomach....even when my Daddy sent me off to college I never did anything... All I do is gamble.....play poker, drink 18 and 25 year old single malt scotch, play golf, complusively buy stuff.....spoons and I let mother take care of the finances...... U know I have never even balanced my own check book......my Dadddy wanted me out of the house so bad that he told me to go buy a house, he did say, "just stay under $500,000"......but I didn't want to move, so he went out and found one for me..... and it wasn't in Ontario either Curtis! It was in Upland.....he even did the landscaping for me.....Daddy and mother would be out there digging holes for the plants. I would come out and say, "Oh you put that bush in the wrong place." They would have to dig it up and move it. But they did seem to be happier once I was out of the house...... I don't see them very much anymore.....as they moved to a luxury condo with a nice view, it really is very peacefull where they are....especially since they are away from me....

[Rob McKibbon]

Hah ha ha - for what it's worth, I too am totally unemployable; that's why I've been self employed for most of my life?

I truly feel sorry for people who have to work for someone else, they are missing out on some of the best things in life!

Too funny though, I read your post about being unemployable and had to comment. People often ask me what I do and I often respond that I'm unemployable - so I consult.

Here's a mug shot in my formal attire: (the shirt matches my car - which I thought I'd mention because this is a Porshe BBS?)