Hello everyone, I'm a soon to graduate engineering student, with all of my core engineering courses out of the way now. Unfortunately at no point in my education (high school or college) did I learn any real valuable skills regarding investments. The most I learned regarding economics was in one of my engineering classes in which half a semester was mostly covering the economic side of starting a chemical production factory etc. So I know about compounding interest and some other calculations, but not in depth investment types or any advice on choosing the right ones. Once I graduate I'm projecting that I will have some 10k capital yearly left over to either save or invest. I intend to start a portfolio in which 20% of the money is put on a savings account and 80% goes to investing. From that 80% allocated to investing, 20% would be invested in some long term investment/stock while the rest of the 80% would be invested in small cap stock trades, something I can go in, in the morning and get out before the market closes. Could also be some mid stock if it's on a weekly time span. I've been doing research on several different investment types and I'm mostly interested in stocks. It's hard to find good information online on how to really evaluate and understand the behavior of stocks though. If anyone can give me some pointers on what I can read or watch (video series) that would be great. So far I'm trying to understand all the statistics given on stocks by yahoo finance. I imagine If I can understand all the data given including income statements etc. I will have some better understanding. I also plan to try and understand all the data given by FINVIZ on a given stock after. FINVIZ seems even more accurate with values aside from income statements and cashflow. My sources so far are investopdia and youtube. If you know any please give me some pointers on where to gather knowledge about stocks. Thanks.
Welcome aboard JC.CSPB. and you have landed on a good website to learn. Some of your online sources are good but not so sure about Youtube. Even news that makes stocks move one direction or another can be misleading. It is important that you do your own DD (due diligence) and kick the tires on the stock you are interested in buying in other words see that the fundamentals are strong and or if it just a short term trade, learn TA (technical analysis) where you will know where to buy and sell at There is so much more to it but that is some of the basics. As you are a new trader I suggest that you wait for a market meltdown where you can get some bargain prices. As meltdowns can last for more than a day, ease into those trades as the next day could be just as bad. Right now we are in the middle of a big rally and a market pull back could happen at any time. Good luck in your trading...TTT
JC.CSPB., is a welcome aboard form me as well... totally agree what Tiptoptrader post... and look at his work threads-posts) and you not only will learn a lot but get many winners as well.. you will find many other here as well... we are a serious bunch... I am the only one out (I scalp) in my memories lane I found this links that I hope will help you http://www.topstockresearch.com/ http://stockcharts.com/school/doku.php?id=chart_school this video is quite good as well ... (I agree as well youtube there are many good but many bad as well .... today any one can do a youtube but know less then me and you JMO) learn then we tell you about a strategy-plan-money management-psychology that any good traders should have good luck
Thank you guys. Yeah I'm expecting a bear market soon like other people and then I can jump on the new bull market hopefully a year or two from now which is also when I will begin to have actual capital to invest. Right now I'm just trying to get all the knowledge I can to prepare myself for that. I will probably make some fictitious account with 10k and keep score by myself once I get some solid foundation. Thank you guys for the sources: http://www.topstockresearch.com/ http://stockcharts.com/school/doku.php?id=chart_school and the video. I will also do research on technical analysis and see what I can find with that.
Welcome aboard. You are already on the right track. You've got portfolio allocation and diversification down pat and understand that paper trading is a good way to go. Investopedia is a pretty good learning source if you search for things. I'd suggest you learn fundamental analysis as well so you can judge a good sound company then apply technical analysis to get in and out. Fundamentals are not that hard and are based on a company balance sheet, income statement and cash flow. The data that makes up the ratios like PE PB PS etc come from those reports. Investopedia can help you with how to read financials, what the ratio's mean and which ratios to use for investing style
Hello, I've been lurking and just following posts, but haven't posted in a while. During this meantime I did some research and learned about: Stock investment vocabulary (IPQ, ROI, Bonds, Mutual Funds, Bear Market, Bull Market, Blue Chip Stocks, Equity, ETF's, and TIPS), some fundamental analysis [Economic Forecast, Group Selection, Company Analysis (Business Plan, Management, Financial Analysis Ratios, Income Statements, Vertical Analysis, Liquidity Ratios, Asset Management Ratios, Debt Management Analysis, Profitability Ratios, and Market Value Ratios)]. I have some surface understanding of those points now and I'm glad I took notes because that's quite a bit of material to really digest. I have some questions if anyone can answer: Is there more terms or points I may be missing? Am I looking at too many points and maybe I should focus on only the most important ones? if so which?
Something else I would like to get some pointers in is how to do good economic forecast and group selection. My limited information of economic forecasting is: You can use interest rates as an indicator to gauge the trend of the economy. You can try and follow the trend of the economy using a chart. That's about it. On group selection I just have: Using the economic trend to gauge group selection such as rapid growth trend sectors (tech, biotech, cyclical stocks). I know you can use overall growth rate, market size, and importance to the economy, as indicators also, but I'm not quite sure how. That's about it. So clearly I have very limited knowledge on how to gauge the economy and make appropriate group selections. I would really appreciate some pointers. Also the other day I asked on the chat what is the best way to receive a good feed of information to make decisions and the consensus was using Twitter. Am now following: Zerohedge, CNSnews, AP, YahooFinance, JimCramer, CNBCinternational, CNBCnow, CNBCclosingbell, MadMoney, FastMoney, CNBC. Which Twitters do you guys follow for good fast trustworthy information? Are some of the ones I have just noise?
It is generally a good idea to not look at too many criteria when screening for stocks but once you screen for candidates the more through look is quite appropriate. Since you seem to be willing to do homework I'm going to refer you to a long post I made in the educational forum: http://stockaholics.net/threads/stock-picking-strategies.753/ It is a longer read but as you get into the posts it shows you the types of criteria to look at for different strategies depending on what type of investing you are using for that particular purchase.
I follow none. IMO you are better off without pointers and better off with very limited knowledge. All those information sources are produced by the 1% who need the public's involvement in the market. If they just traded their big accounts among themselves they'd just be pushing money around. But enter the public with all their vagaries of belief and they have a huge source of wealth to draw upon. So think about what the agenda is in those news sources and be very skeptical. The markets have always been devious; there is nothing new under the sun. Also, there is no end to tips and pointers. Read Reminiscences of a Stock Operator and the writings of Richard Wyckoff to get you started on the right track. P.S. Been a P.E. since the 80s. (Get your P.E.) Started actively trading about 15 years ago and tried many methods.
Yea well, let's agree to disagree. You are never better off with very limited knowledge. Getting pointers in here from those with some experience is sort of the purpose of being involved in a site like Stockaholics.
Knowledge is rarely truth, particularly in the business of financial markets with the exception of price and volume data. Another classic book is The Battle for Investment Survival (1935, updated 1957 & 1965) by Gerald Loeb, founding partner of E.F. Hutton. He advocated NOT investing for the long term but rather taking profits and moving to a more favorable stock in your corral (watch list). He also advocated NOT diversifying, saying something like it's best not to have too many eggs in your basket; it's better to have just one egg and watch it very closely. I may dust it off and read it again.
Thank you for the link to that post Jerry, it looks like a good read with a lot of information which I really appreciate. Thank you for the recommended books Onepoint, I just got me 4 books on my to-read list now. I understand what you mean with having less information being better sometimes, but I still feel uncomfortable not having "enough information", and since I'm new, I don't know where the "enough information" line is therefore I'm grabbing all the information I can digest for now. Also I'm the kind of person that rather shoot darts in a room full of mirrors and projections rather than a dark room. What I mean by that is that I understand many sources of information can be very unreliable, but I rather see them anyways because I may be able to see the intention behind it or decide myself if it sounds true or not and that way have some sense of direction instead of being in a vacuum. I guess that would just be a personal preference. Either way as I get more experience I will start dropping sources and unnecessary knowledge/information to get rid of noise and speed up my trading. P.S. Funny thing with your picture and name. Is there anything special to that number?
You must be some kind of rebel, go against the flow kind of guy which I do respect, but I tend to let logic creep in. If you have just one egg and "watch it very closely" you will see the exact time it tanks. Or you have your egg safely tucked into zero risk at which point close watching is not necessary.
That's right Jerry, I don't run with the herd and actually Jerry I am very logical, it is a necessity of my vocation, and useful for my avocation. Perhaps if you read Loeb's book you wouldn't be so quick to judge. The book, "The Battle for Investment Survival" is apparently now in the public domain and can be found on the Internet Archive: https://archive.org/details/battleforinvestm00gera Here is a taste from pages 32 and 33:
JC, So, 1.272 is, as my avatar indicates, the square root of the inverse of 0.618. If you have a line for A = 0.000 to C = 1.000, where would you place B such that AB/AC = BC/AB ? |------------|-------| A...........B......C We know AC = 1.0000 so: AB = BC/AB and so BC = (AB)^2 and we know that BC = AC - AB = 1 - AB substituting for BC we have 1 - AB = (AB)^2 re-arranging into the familiar form: (AB)^2 + AB - 1 = 0 Solving with the quadratic equation yields the root AB = 0.618 It's a harmonic ratio found in nature and discovered by the ancients. In fact it is found in the Egyptian pyramids in the ratio of the base to the height....and it is found in the harmonic movement of market prices. There are many interesting harmonic peculiarities with 0.618 and its complement 0.382. For example the inverse of 0.618 is 1.618. The significance of 1.272 is this. If a stock price moves up from A to B and then retraces to C then the price can normally be expected to move up to D where AB = CD. If it does not make it that far that could be judged as weakness. If it makes to AB/CD =1 that is a normal move in a bullish market. An extended move of CD = 1.272(AB) is strong but likely a turning point. If it continues to 1.5 that is really strong. But if it extends to 1.618 of the AB move that is way oversold condition and the price is likely to retrace all the way back to A. I don't normally pull Fibonacci grids much anymore as this stuff is second nature to me now and I just see it. So I should explain about Fibonacci, an Italian mathematician, came up with the Fibonacci series which can start at any whole number; I'll start at zero: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233........ Note that the next number in the series is the sum of the previous two numerals. Also note that the ratio of a numeral to the next numeral approaches 0.618, e.g., 144/233 = 0.618026.
Well I respect your nobility, but no need to apologize. I am strong in my convictions, just as you are in yours. We're real men after all; I don't think they make many of our kind anymore and I have the utmost respect for you or anyone with enough knowledge and guts to make their own investment decisions because when I look around at the people I know in the physical realm there is only a few who have a clue; and of them, just barely a clue.
Sorry for the late response, I've been busy these last couple of weeks due to school. I liked those pages from "The Battle for Investment Survival", looks like a really good read. I will start by picking up that book. I find the harmonic movement of market prices really interesting, It seems like a good way to gauge momentum. What software did you use to incorporate Fibonacci grids to your charts? I could do it manually or make a spreadsheet, but if there's a tool that allows you to pull a grid onto your chart that would be convenient. Also do you know of some kind of data bank where I could look at daily and weekly charts from past years so I could apply this theory to it? I would like to test it out on real data, see how it behaves.
