What do you have invested?

[LucyDuke]

No, my father pays me to process his orders and whatnot. My labor for his cash. Fair deal.

I think you're misunderstanding. He deals parts now. Orders come in and invoices/estimates must be made. I make those and that's what I'm paid for.

I've been talking about this:

I also pocket the change from when I buy things for my parents

I have no idea what you thought I was talking about. Extra pickles, hold the explanation.

That's the logic everyone else has, and that's why I'm able to pick up so many.

The first quote wasn't for decoration. I pick up coins on the sidewalk too. Whatever the hell you're doing "subtly behind the scenes" to somehow ensure that your parents will write it into their wills that any leftover goddamn penny will go to YOU, by god, not your siblings... is 1) not worth a penny 2) petty, insane, and the most literal type of unbelievable.

 

[Tani Coyote]

I've been talking about this:

Ah, now it makes sense... I thought you were talking about my mini-job this whole time. My mistake.

They don't have a problem with the pocketing... and I only do it when I run errands for them. So, more or less, it could count as a bit of compensation. They don't want to be weighed down with change anyway.

And they don't mind, so, it all is good to me.

Whatever the hell you're doing "subtly behind the scenes" to somehow ensure that your parents will write it into their wills that any leftover goddamn penny will go to YOU, by god, not your siblings... is 1) not worth a penny 2) petty, insane, and the most literal type of unbelievable.

I know, I know, it's silly.

...but I don't have anything better to do.

Though it all goes down to the fact neither of them seems very aggressive about it.

Well, except my sister. She holds the 1% right now because she declared herself a Republican.

...I crap you not.

 

[Perfection]

Wait, your parents dedicate 1% of their will to stupid sibling rivalry?

 

[Mise]

skimmed... WTH is wrong with you Tanicius? I know I have absolutely no expectation of getting a penny inheritance, my parents treated me well as a child and are helping me with college, asking for any more is greedy. I'm totally capable of taking care of myself monetarily (or at least will once I graduate college), and if I wasn't I wouldn't deserve anything.

Anyway as for investments, I currently have a tutoring job making a few hundred a month and no expenses so I can save all of it. I have about two grand in a credit union account currently making about 2.8%, but I've been putting some thought into a decent way to beat that with the stock market. I don't have the interest in or stomach for serious long term investing, but I think that by applying basic statistics I could make a marginal amount by riding variance.
The idea goes something like this, I collect data on various stock then select several that have above average day-to-day variation. I then create a running index based on say the performance over the last 14 days, and calculate the mean and standard deviation of that stocks price. Then I create a variable k based on how big a margin I want, what I need to beat fees etc. Then I create auto buy/sell orders so if [price <=mean - k*(s.d.)] then sell buy shares, and if [price >=mean + k*(s.d.)] then sell shares. Assuming basic variation I should make a good bit off of white noise fluctuations.

Except I know it cant be that easy, so how will this end up screwing me?

nc-1701--There's something called Bollinger bands and fast/slow stochastics that may accomplish all of that.

The Bollinger band uses three bands (high, low and middle). The middle band is a moving average (a kind of reversion to mean type trend) and serves as the base for the upper and lower bands. The interval you set for the upper and lower band is the standard deviation of the moving average (or volatility) and are typically for 20 intervals and 2 standard deviations but you can adjust them for interval or # of standard deviations to suit yourself.

If you're day trading then a 1, 5 or 15 minute graph would suffice. The stochastics will signal momentum up or down.

More simply put, as I said earlier, the trend is your friend until the end when it bends.

Great trader John Henry would say that all trends tend to go further (either direction) than people expect and he relies on the fact that other investors are convinced that they can predict the future, and most trend followers believe that’s where their profits come from. Investors who try to predict the future rather than follow prices.

Yeah, bollinger bands do what you want, ncc-1701, however it's not obvious that your strategy is a sound one. Try googling (or wiki) for technical analysis, or technical indicators. You're a mathsy kinda guy, so you should be able to follow it. Your idea, however, is potentially flawed, in that it models it as if changes in price were always purely random. Lets say a stock has a certain volatility: it deviates by more than 1% from its mean less than 5% of the time. Now, if a stock rises above 1% from its mean, what does that really tell you? Does it mean that the market is wrong, and that the price will fall back to its mean (in which case you should sell)? Or does it mean that the market has learnt of news that the company has sealed a massive order that will send its profits skyrocketing, and is pricing that in to the stock (in which case you should buy)? Afterall, your s.d. tells you that it's highly unlikely that this would happen by pure chance! Perhaps, then, it's not by pure fluke that it breaks the upper 2*sd limit, and that it's based on some sound fundamental reason. You just won't know, so you won't know whether the price breaking through the upper band is a "buy" signal or a "sell" signal. Same goes for the bottom band -- it could indicate a trend based on fundamentals, or it could indicate irrationality in the market. You simply can't tell from your proposed indicator.

What you gotta realise is that the stock market is not a physical system that naturally regresses to the mean. It's also driven by fundamentals, which is why technical analysis can fall on its face an awful lot. Fortunately, there are a whole bunch of technical indicators you can use. Unfortunately, none of them are 100% effective 100% of the time, and can tell you pretty much whatever you wanna hear.

 

[LucyDuke]

...but I don't have anything better to do.

Here's some more unsolicited advice. Learn to do something useful. A skill, a craft, something. Then do it for money. You'll be contributing to society, and the economy, and you can make an honest buck in the downtime you don't spend begging and hallucinating about the S&P. Skills are better assets than even giant piles of pennies.

Though it all goes down to the fact neither of them seems very aggressive about it.

Well, except my sister. She holds the 1% right now because she declared herself a Republican.

...I crap you not.

IT'S A GODDAMN PENNY WHAT THE HELL

5char

 

[really]

Any updates?

For the record all my wealth is cash in the bank (covered by government guarantee until the end of the year) and a small pension I am contributing to.

 

[Abaddon]

I am going back to uni and having to fork out anything I had saved up

 

[Maimonides]

For the record all my wealth is cash in the bank (covered by government guarantee until the end of the year) and a small pension I am contributing to.

Ireland has a time limit on federally insuring bank accounts?

I am going back to uni and having to fork out anything I had saved up

My grandfather had a saying he repeated to me allot:

"An education is expensive, but ignorance costs much more."

You'll be investing in your own future rather than in something more tangible like stocks & bonds. In one way or another, it should pay off for you.

 

[really]

Ireland has a time limit on federally insuring bank accounts?

Most (all) our banks are probably insolvent and to stop any potential bank runs the government upped the level covered from €20,000.00 to €100,000.00 in 2008.

This was then upped to an unlimited guarantee that has to be reviewed frequently.

I think it will be pulled back a bit so that bond holders who lent to the banks could loose their money (which I would prefer to taxpayers taking the full hit)

 

[Maimonides]

Most (all) our banks are probably insolvent and to stop any potential bank runs the government upped the level covered from €20,000.00 to €100,000.00 in 2008.

This was then upped to an unlimited guarantee that has to be reviewed frequently.

I didn't realize things were that bad there.

The unlimited insurance seems drastic, but it makes sense in that it keeps the wealthy from moving their accounts offshore.


To the OP, I don't really understand you very well & I'm not willing to list my investments here, but I will add some advice.

You shouldn't be day-trading @ all. That game is for the experts & even they get burned & jump out of their office windows every now & then. My father-in-law quit a very lucrative job @ Honeywell because his personal day-trading was so successful, but he's very intelligent, has decades of business experience & has a rock-solid discipline.

JerichoHill & Whomp have given fantastic information & advice in this thread, but that will be more useful to sophisticated investors with some real-world experience, not to teenagers.

When I was in high school, I used some of my Bar Mitzvah & birthday money to buy stocks. I didn't buy large amounts & I didn't buy companies I didn't know. For example, I bought into the local power company. I've held onto those stocks over the years. They've split & grown & payed dividends. I've always looked at them as long-term investments. Eventually, they'll help with either my son's college tuition or my retirement.

It's hard to see 30 years into the future at your age, but I urge you to view any investments as long-term. 30 years from now, you'll be very glad you did.

 

[Mise]

To be fair, I don't think they'd be insolvent if the government had taken the less stringent approach to bank bailouts that the UK did. IIRC, the Irish government forced banks to write down bad loans immediately and raise capital to cover losses up front, whereas in the UK, the government sold insurance to the banks that protected them from all but the first 10% of the losses. In the long run, the Irish solution is better, but it does make it difficult for banks (and government) in the short term.

This is from memory though, so please correct me anyone if I'm wrong!

 

[Whomp]

A friend from Ireland sent me this article regarding the Irish economy and banking. I think the authors view is a debt to equity swap is what's needed for the Irish banks and the bottom in housing is nowhere near complete like many countries.

http://www.irishtimes.com/newspaper/opinion/2010/0522/1224270888132.html

But when you translate from the leviathan that is America to the minnow that is Ireland, it would be equivalent to the Irish Government spending &#8364;7 billion on Nama, and eventually losing &#8364;1.5 billion in the process. Pocket change by our standards.

Instead, our Government has already committed itself to spend &#8364;70 billion (&#8364;40 billion on the National Asset Management Agency &#8211; Nama &#8211; and &#8364;30 billion on recapitalising banks), or half of the national income. That is 10 times per head of population the amount the US spent to rescue itself from its worst banking crisis since the Great Depression.

Having received such a staggering transfusion of taxpayer funds, you might expect that the Irish banks would now be as fit as fleas. Instead, they are still in intensive care, and will require even larger transfusions before they can fend for themselves again.

http://www.voxeu.org/index.php?q=node/5040

 

[Mise]

So how's this going, Tanicius? You started this thing yet?

 

[Hygro]

I just finished reading More Money Than God, by a journalist for the Economist. He makes a strong case that individuals can, in fact, beat the market, w/out insider knowledge, and using skill instead of luck.

 

[JerichoHill]

I just finished reading More Money Than God, by a journalist for the Economist. He makes a strong case that individuals can, in fact, beat the market, w/out insider knowledge, and using skill instead of luck.

Well yes, you can.

The odds are tough, however. Even good investors have bad periods

For instance, I'm down 50% on 1 stock this year. Wrong time to get in. Adjusted my valuation for it. Moved on. I hit on 3 stocks this year so I'm up about 30% net expenses.

 

[Masada]

If it were easy everyone and his dog would be doing it.

 

[Mise]

So how's this going then? Genuinely curious here.

 

[Tani Coyote]

So how's this going then? Genuinely curious here.

Oh my goodness it was a disaster I invested like 10K and now we only have 7K!

Of course, I kid.

So far, the net gain after taxes has been about 737.60; that is merely growth. Short-term investments also yielded 13.90 in dividends due to timing. Net profit - 751.50. That includes three days in a row where I had successful day trades of 0.5% net profit each.

This has been since the October 1st, so 74 days.

Stocks are generally held for no more than two weeks and sell at a net profit of 0.5%-1.5%. Generally, short-term investments consumed 10K for most of the period, but recently, they're consuming 17-20K. So overall, probably 7% net in two and a half months. At this rate, we could easily look at 30% or so by October 2011. Possibly more given compounding profits.

There's just a few problems: it's immensely more stressful than long-term trading as you have to keep an eye on it constantly, and it also limits me since I have to build my schedule around the market.

 

[JerichoHill]

So, net profit of 750 on a initial capital outlay of 10K?

For comparison, the SP500 in the middle of September was 1125. Today it is 1240. That's a net change of 115. Since Index fees are negligible, I'll guess at .5%, (115/1240), or 9.25% , net of fees, 8.75%

The passive SP500 Index has beaten your (by admittance) stressful trading by a full point. This is important because what's the point of actively trading if you aren't beating a passive portfolio?

Extrapolating based on trends when you are assuming the macro-environment remains the same is quite a difficult assumption to justify.

(Note: My semi-passive stock fund has seen a 20% rise, net, since Sept, mainly because I bought a bit of Chipotle in early September and the people decided they like it so it kinda went up by kind of alot. Got lucky with that)

 

[Patroklos]

Since my last post in this thread the purely stock portion of my portfolio is up 35%. The big drivers have been NFLX, CRM, F and JWN.

Speculation buys that payed off on gold were NG and SLW, which I recently got back into as I anticipate further oportunity in gold, though I don't want to own physical gold.

Stocks that did not pay off were C and BAC, both of which I bought cheap to cash in on an eventual rebound of the names, but these were long term investments so I am not sweating the current lack of performance. C has at least made it back to even, BAC is still down but as I progressively bought it as it went down I should make my money back easily when it finally turns.

Mutual funds are up 40%, lead by USAGX.