Online Stock Trading

[Abaddon]

I'd try a "fake" portfolio first before playing with real money.

My biggest fubar is Centamin Egypt. I bought that baby years about at 13p. It went up and down, but never by much, and eventually i needed the money and got cold feet and sold up when it rose from 9p back up to 13p.

Even with the Egypt Chrsis it is 140p, with a high recently of 160p! I had £4000 worth of shares.. if only i'd held on!

http://www.iii.co.uk/investment/det...ator4=&chartwidth=500&buylines=on&triggers=on

 

[JerichoHill]

I don't understand a lot of it. Where does someone go to learn it all? I can't find any decent courses in the area that teach it, and as far as books there's tons of them to choose from.

I'd rather invest than day trade myself. I'm not a gambler in the least bit, and the thought of that much daily risk frightens me. I also wouldn't be able to maintain a $25k minimum account. But before you dive in to it all you have to learn right?

Holy,

What I tell folks starting out in my Coffeecents program is that a great place to start is to read Warren Buffett's Annual Report. It is very easy to read, and you can get a great insight into how he thinks about investing.

I'd then pick up a book about the many various strategy types of equity investing. A good starter guide is Motley Fool's Million Dollar Portfolio. I think from this and a good examination of your psyche you can figure which of the many different strategies is the best fit for who you are. For instance, my personality meshes well with value investing but say, that wouldn't be right for Whomp.

A "fake portfolio" is a good way to familiarize yourself, but I think you can start with 1 stock, and say, a safer one, just to get the idea of placing an order, following it, selling it, its a good way to start.

 

[Holycannoli]

Ok I've seen that Motley Fool's book. It's a question of learing the basic terms and the various options available. I have money invested but it's not a large amount and it's passive, I never touch it. If I got more involved and was able to learn what you guys know I'd be able to put this small amount of money I have sitting in the bank to work for me.

 

[Whomp]

Holy--Any chance you get, read interviews and thoughts of great investors like my 3 B's.
Warren Buffett, Bernard Baruch and Fairholme Fund manager Bruce Berkowitz.

http://finance.fortune.cnn.com/2010/12/10/bruce-berkowitz-the-megamind-of-miami/

Though I use research from the "sell side" analysts (firms that sell investments) I have an even greater respect for "buy side" investors (investors who put their money where their mouth is) like Berkowitz.

Investors like this can put things into words that help you understand how they tick and what makes them successful.

Baruch--Buy straw hats in winter.
Buffett-- Be fearful when others are greedy and greedy when others are fearful.
Berkowitz -- Kill the company. Figure out what it would take to destroy or impair a company’s ability to generate cash flow.

In the U.S., there is one common link you'll find with most every great investor of all time. Most of them have either read or were taught by Benjamin Graham. Graham and David Dodd wrote a 726 page book called "Security Analysis".

I would buy the book, I refer to it quite a bit, but since it's so long I would start by reading the "Foreward" by Warren Buffett. Then skip to Part IV "Go with the Flow" on pages 339 to 347. Bruce Berkowitz writes this section of the book about one of my most important filtering processes, "free cash flow". Cash does not lie and you need to understand why and how to reduce the noise level of all the other distractions (IE Egypt).

 

[Theige]

"In general" is "too general". What is one's selection process?

The better question is what makes "market capitalization" a better strategy for investing than doing fundamental research? If a company's market cap is going up doesn't that mean you're buying high and selling companies when they are low? Didn't it force you to buy too much technology leading up to March of 2000, financials in 2007 and energy in 2008? Put another way, I read the 4 worst stocks to own in the S&P 500 2009 happened to all be in the top ten to own in 2010.

So, no, I would not choose an index fund over any money manager I own. As I may have said before "passive investing" is an "active investment strategy" to choose based on market capitalization. Market cap is not an investment metric I choose to use in my selection process.

Sorry actively managed ETFs versus their corresponding actively managed mutual funds, is the comparison I was looking for.

I completely agree that doing fundamental research is far superior for investing, and believe that most people can do this on their own, they just have to maintain that consistent time commitment. And that investing in individual stocks, which you have researched on your own exhaustively, is definitely the way to go, especially for most of us here at CFC, as our time horizons are 20+ years.

Before i ever invested on my own, when I was 19, I did about 6 months of research, until one day I got drunk, told myself to stop being afraid, and pulled the trigger. I did incredibly well that first year; I definitely had a bit of beginners luck

 

[JerichoHill]

Graham seminal text is "The Intelligent Investor" It is an amazing read.

 

[Whomp]

Thiege--Most of the smaller mutual fund companies don't have the resources to bring their fundamental research to ETF's. Fairholme and Yachtman funds are great examples since they are one fund companies.

We'll see firms with deep pockets continue to bring ETF's to market like new entrants Pimco and Dreyfus or firms that bought ETF companies like Invesco (bought Poweshares) and Blackrock (bought iShares) and the already big ETF firms like State Street and Vanguard.

The good news is these new ETF's will kill off most of the mediocre active managers that don't produce alpha. The bad news is it will only accelerate the "CNBC mentality" some investors have regarding asset management.

What will be more interesting to see is how huge firms like T.Rowe Price/Eaton Vance/Janus/Federated handle this change since they don't seem interested in changing towards the ETF model. ETF's are now pursuing the $3 trillion 401(k) market so this would be a game changer for these firms.

 

[Kruelgor]

Ok I've seen that Motley Fool's book. It's a question of learing the basic terms and the various options available. I have money invested but it's not a large amount and it's passive, I never touch it. If I got more involved and was able to learn what you guys know I'd be able to put this small amount of money I have sitting in the bank to work for me.

Do the opposite of whatever the rest of the crowd is doing, or at least the road less traveled and you'll be better off. That's the approach I take, and YES I absolutely recommend that you try it out with pretend money first in a fake portfolio. http://www.howthemarketworks.com/ The main reason why stock advice is worthless is because no one is going to tell you the fine details of their secret if it's a good one. The only tips you will get are mediocre ones. That's why you need to experiment yourself and find a strategy you like, take bits and pieces of advice from others but realize no one is going to tell you their secret if it's a good one. Just know that there are many people who have becomed filthy stinkin rich off the stock market, and that's because they know something that very few know.

It really boils down to this. Imagine the stock market as a pyramid scheme where people put in their money. In the stock market game you want to get into the xyz stock before everybody else gets into it, then once they get into it, you leave before they leave. That's really all it is. Now you just need to find a way to achieve that. The Internet makes it possible for you to figure it out. You have everything you need at your fingertips to be successful. It's there. Good luck!

 

[JerichoHill]

But, the stock market isn't a pyramid scheme and its not a game.

 

[Incodcito]

Ehh, I used to trade stocks... but in the end I realized that it was glorified gambling, and eventually I would lose big.

Maybe in the future I will buy some ETF's as a long term investment, but I am pretty sure I will never again buy single stocks or any derivative of a single stock.