there isnt any one book for stock, just like there isnt one for real estate.
1. welcome to my trading room - alexander elder
2. how to make money in stocks - william o neil
3. new market wizards - jack swagger
4. getting started with technical analysis
you'll also need a book on fundamental analysis but off the top of my head i dont remember any.
I am sorry to offer you nothing but my suggestion in these times is to stay away from the market. It seems to be responding to Psy pressures only with very little reliance on Economics. You are at the mercy of too many incalcuble future events. I would pass.
I suggest if paper is your game. Play in Real Estate Paper. Buy seconds or take positions on seconds which are being stirred by activity from prior mortgages. Like the first is in foreclosure and the speculators want to buy the second to control bidding at the foreclosure sale. You hold an option on the second and you then sell your position. Should be good for a constant 15 to 20% profit per annum. Sort of fun. Just write a check and then you get a check. Kid stuff.
what are you looking to do. day trade,swing trade, long trade or ect. i day traded for 2 yrs. broke even really felt lucky in hindsight. went back to r/e.....ggod luck...kenmax
[ Edited by kenmax on Date 04/08/2004 ][ Edited by kenmax on Date 04/08/2004 ]
The Intelligent Investor by Benjamin Graham. Latest edition with comments.
Learn patience, due dilligence, and how to be unemotional. DON'T talk stocks a cocktail parties because more than 90% of people have no idea what the true value of ANY stock they own is.
I think you need to decide what approach you are wanting to take. are you trading or investing. There is a big difference. I trade stock, options, and futures to generate cash to invest with. so the books you will need to read should be on which way you are interested on cashing in on the markets. I have a book list that I have read over the years, drop me a PM with your e-mail and i'll send you the list.
I think you need to find a forum on stocks, because these are real estate investing forums.
I appreciate your desire to better your financial position, but you are poking around in the wrong area. Whie some folks may have stock investing experience, your message is not being directed to the right market - Marketing 101
"The market seems to be responding to Psy pressures only, with very little reliance on Economics"
First off, the market always reacts to psychologial pressures.
That's no revelation, Lufos.
And those emotional responses are nothing more than blips on the radar screen. And anyone worth his salt knows how to profit from fear and greed.
And I beg to differ as to economic data not driving the market. One look at the reaction to the March job reports disputes that claim. We've been in a cyclical bull market since the March 11 double bottom, and the gains have all been driven by good economic data.
As for your original question, Jay, I say stay away from individual stocks as a rookie investor.
Take a long hard look at ETF's or exchange traded funds. Like a mutual fund, they are a basket of individual stocks, thereby diminishing your exposure to risk. But the advantage of an ETF is, unlike a mutual fund, they trade like a stock. In other words you can trade during market hours rather than waiting until after the 4 pm close. They also have no loads.
I recommend you take a look at basic ETF's like SPY, DIA and QQQ. These ETF's mimic the S & P, the Dow and Nasdaq composites respectively. If you want to get more specific, they have ETF's for every major and minor index, be it stock or bond. They even have ETF's for gold, short sales, and even real estate investment trusts or REIT's.
Take a look at Morningstar's site, for a comprehensive list:
First and foremost, read all the books mentioned in the prior posts.All of them are excellent and will give you a great primer.Here are my suggestions if you are interested in daytrading
1. Make certain that you have paid off all credit card debt and all other debt aside from mortgage and car payments.
2. Do NOT day-trade or buy individual stocks with your nest egg. Day trade with your DISCRETIONARY money --- money that you can afford to lose without pain or hardship. This may certainly not beapplicable to your situation.
3. Invest your nest egg in a basket of diversified, defensive mutual funds --- funds that will maintain their value and/or prosper in a bear market for equity funds. Remember --- in a bear market, all the rats drown with the sinking ship. It will not matter how skillful you or anyone else is at daytrading. And, oh yes --- shorting stocks profitably is MUCH more difficult than you think it is. It is a quick way to lose your savings.
What funds should you invest in? My recommendations are:
1. Hussman Strategic Growth Fund (HSGFX): this fund hedges market risk and has already proven that it can make money in both bull and bear markets. This guy Hussman is much smarter than you or I --- let him do the market timing for you. I would make this the anchor of your portfolio and put 25%-30% of your savings in it.
2. Aegis Value fund (AVALX): this is a small cap, deep value fund that will lose some money in a bear market, but MUCH less than the indices or 99% of other funds. Over the last 5 years, including the 2000-2002 bear market, this fund has AVERAGED a 23% return each year. Additionally, in overvalued markets, AVALX will raise and hold up to 40-50% cash rather than dump it into a bubble market. I guarantee that you will not do this with neophyte day-trading. Put 10%-15% in this fund.
3. Third Avenue Real Estate Value Fund (TAREX): this is NOT a fund that invests in interest-rate-sensitive
REITS. Rather, it invests in deep value and distressed real estate holdings which they gobble up at vulture prices. This is another great fund to hedge bear market risk while still participating in the market during upturns. Since it began 5 years ago, it has NEVER had a losing year while averaging a 20% per year return over the past 5 years. Put 5% here.
4. Third Avenue International Value (TAVIX): a deep-value small cap fund that invest abroad. It is only two years old, but only lost 3% during the 2002 bear market carnage. Last year it gained 55%. When we return to a bear market in the U.S., there will be better investment opportunities abroad which this fund will participate in. 5%-10%.
5. Fairholme Fund (FAIRX): this fund invests in "great businesses run by great people who have a significant long paper trail of making money". In short (no pun intended), it invests in the best money-makers and managers in the world. It has only 15 holdings but has 15% of its portfolio in Warren Buffett's Berkshire Hathaway and another 15% in Leucadia National, a vulture holding company which buys distressed companies and restores them to health while making a nice profit. It is a smaller version of Buffett's Berkshire Hathaway. 5%-10%.
6. Tocqueville Gold fund (TGLDX): gold is in a secular bull market which will probably last most of this decade. You do not have the money (nor can you assume the risk) of buying boom-or-bust junior gold stocks. This fund will smooth out the volatility of investing in gold. It has averaged 28% return per year over the past 5 years. Invest 10% while we are still in a gold bull market.
7. RS Global Natural Resources Fund (RSNRX): energy (oil, natural gas) and commodities are both in secular bull markets and are likely to remain so. This fund invests both in the U.S. and abroad and is quite nimble and eclectic, a great way to add energy exposure to your portfolio. 5%
8. PIMCO Commodity Real Return Strategy "D" (PCRDX): this fund is run by the other genius at PIMCO, John Brynjolfsson. It invests in commodities (PMs, wheat, sugar, cattle, etc.) by investing in commodity-linked derivative instruments and using the "excess" cash to back the commodities portfolio with TIPS and other income instruments, taking advantage of inflation. 5%
9. ProFunds Rising Rate Opportunity Fund (RRPIX): this fund acts inversely (with leverage -- 125%) to the interest rate on the 30-year bond. If there is one thing you can be certain of, interest rates on the long bond(s) will rise over the next 5 year. This fund will take advantage of that. 5%
10. cash: hold 10% cash (minimum) for life's emergencies.
If you are ROTFLYAO at this post and are dead set about trying to earn a living by day-trading, please consider the following:
(1) print out this post and store it for future reference. Trust me, you will need it.
(2) take NO MORE than 5% ($10,000) of your next egg and, after training yourself in the art of technical analysis and day-trading, see how you do versus the basket of mutual funds I have given you above. After you have lost your $10,000, consider it the price of your investing education and DO NOT day trade with any more of your savings.
(3) pull out the advice I have given you above, re-read it without smirking or laughing, and begin investing over again.
there isnt any one book for stock, just like there isnt one for real estate.
1. welcome to my trading room - alexander elder
2. how to make money in stocks - william o neil
3. new market wizards - jack swagger
4. getting started with technical analysis
you'll also need a book on fundamental analysis but off the top of my head i dont remember any.
I am sorry to offer you nothing but my suggestion in these times is to stay away from the market. It seems to be responding to Psy pressures only with very little reliance on Economics. You are at the mercy of too many incalcuble future events. I would pass.
I suggest if paper is your game. Play in Real Estate Paper. Buy seconds or take positions on seconds which are being stirred by activity from prior mortgages. Like the first is in foreclosure and the speculators want to buy the second to control bidding at the foreclosure sale. You hold an option on the second and you then sell your position. Should be good for a constant 15 to 20% profit per annum. Sort of fun. Just write a check and then you get a check. Kid stuff.
Lucius 8-) 8-)
what are you looking to do. day trade,swing trade, long trade or ect. i day traded for 2 yrs. broke even really felt lucky in hindsight. went back to r/e.....ggod luck...kenmax
[ Edited by kenmax on Date 04/08/2004 ][ Edited by kenmax on Date 04/08/2004 ]
The Intelligent Investor by Benjamin Graham. Latest edition with comments.
Learn patience, due dilligence, and how to be unemotional. DON'T talk stocks a cocktail parties because more than 90% of people have no idea what the true value of ANY stock they own is.
Jay,
I think you need to decide what approach you are wanting to take. are you trading or investing. There is a big difference. I trade stock, options, and futures to generate cash to invest with. so the books you will need to read should be on which way you are interested on cashing in on the markets. I have a book list that I have read over the years, drop me a PM with your e-mail and i'll send you the list.
Jay,
I think you need to find a forum on stocks, because these are real estate investing forums.
I appreciate your desire to better your financial position, but you are poking around in the wrong area. Whie some folks may have stock investing experience, your message is not being directed to the right market - Marketing 101
Absolutely Grahm and Dodd. Understand it and you'll see what Lucius is saying.
"The market seems to be responding to Psy pressures only, with very little reliance on Economics"
First off, the market always reacts to psychologial pressures.
That's no revelation, Lufos.
And those emotional responses are nothing more than blips on the radar screen. And anyone worth his salt knows how to profit from fear and greed.
And I beg to differ as to economic data not driving the market. One look at the reaction to the March job reports disputes that claim. We've been in a cyclical bull market since the March 11 double bottom, and the gains have all been driven by good economic data.
As for your original question, Jay, I say stay away from individual stocks as a rookie investor.
Take a long hard look at ETF's or exchange traded funds. Like a mutual fund, they are a basket of individual stocks, thereby diminishing your exposure to risk. But the advantage of an ETF is, unlike a mutual fund, they trade like a stock. In other words you can trade during market hours rather than waiting until after the 4 pm close. They also have no loads.
I recommend you take a look at basic ETF's like SPY, DIA and QQQ. These ETF's mimic the S & P, the Dow and Nasdaq composites respectively. If you want to get more specific, they have ETF's for every major and minor index, be it stock or bond. They even have ETF's for gold, short sales, and even real estate investment trusts or REIT's.
Take a look at Morningstar's site, for a comprehensive list:
http://www.morningstar.com/Cover/ETF.html
In my opinion, this a very good way to get your feet wet, without exposing yourself to the inherent risks of individual stocks.
Take care.
[addsig]
First and foremost, read all the books mentioned in the prior posts.All of them are excellent and will give you a great primer.Here are my suggestions if you are interested in daytrading
1. Make certain that you have paid off all credit card debt and all other debt aside from mortgage and car payments.
2. Do NOT day-trade or buy individual stocks with your nest egg. Day trade with your DISCRETIONARY money --- money that you can afford to lose without pain or hardship. This may certainly not beapplicable to your situation.
3. Invest your nest egg in a basket of diversified, defensive mutual funds --- funds that will maintain their value and/or prosper in a bear market for equity funds. Remember --- in a bear market, all the rats drown with the sinking ship. It will not matter how skillful you or anyone else is at daytrading. And, oh yes --- shorting stocks profitably is MUCH more difficult than you think it is. It is a quick way to lose your savings.
What funds should you invest in? My recommendations are:
1. Hussman Strategic Growth Fund (HSGFX): this fund hedges market risk and has already proven that it can make money in both bull and bear markets. This guy Hussman is much smarter than you or I --- let him do the market timing for you. I would make this the anchor of your portfolio and put 25%-30% of your savings in it.
2. Aegis Value fund (AVALX): this is a small cap, deep value fund that will lose some money in a bear market, but MUCH less than the indices or 99% of other funds. Over the last 5 years, including the 2000-2002 bear market, this fund has AVERAGED a 23% return each year. Additionally, in overvalued markets, AVALX will raise and hold up to 40-50% cash rather than dump it into a bubble market. I guarantee that you will not do this with neophyte day-trading. Put 10%-15% in this fund.
3. Third Avenue Real Estate Value Fund (TAREX): this is NOT a fund that invests in interest-rate-sensitive
REITS. Rather, it invests in deep value and distressed real estate holdings which they gobble up at vulture prices. This is another great fund to hedge bear market risk while still participating in the market during upturns. Since it began 5 years ago, it has NEVER had a losing year while averaging a 20% per year return over the past 5 years. Put 5% here.
4. Third Avenue International Value (TAVIX): a deep-value small cap fund that invest abroad. It is only two years old, but only lost 3% during the 2002 bear market carnage. Last year it gained 55%. When we return to a bear market in the U.S., there will be better investment opportunities abroad which this fund will participate in. 5%-10%.
5. Fairholme Fund (FAIRX): this fund invests in "great businesses run by great people who have a significant long paper trail of making money". In short (no pun intended), it invests in the best money-makers and managers in the world. It has only 15 holdings but has 15% of its portfolio in Warren Buffett's Berkshire Hathaway and another 15% in Leucadia National, a vulture holding company which buys distressed companies and restores them to health while making a nice profit. It is a smaller version of Buffett's Berkshire Hathaway. 5%-10%.
6. Tocqueville Gold fund (TGLDX): gold is in a secular bull market which will probably last most of this decade. You do not have the money (nor can you assume the risk) of buying boom-or-bust junior gold stocks. This fund will smooth out the volatility of investing in gold. It has averaged 28% return per year over the past 5 years. Invest 10% while we are still in a gold bull market.
7. RS Global Natural Resources Fund (RSNRX): energy (oil, natural gas) and commodities are both in secular bull markets and are likely to remain so. This fund invests both in the U.S. and abroad and is quite nimble and eclectic, a great way to add energy exposure to your portfolio. 5%
8. PIMCO Commodity Real Return Strategy "D" (PCRDX): this fund is run by the other genius at PIMCO, John Brynjolfsson. It invests in commodities (PMs, wheat, sugar, cattle, etc.) by investing in commodity-linked derivative instruments and using the "excess" cash to back the commodities portfolio with TIPS and other income instruments, taking advantage of inflation. 5%
9. ProFunds Rising Rate Opportunity Fund (RRPIX): this fund acts inversely (with leverage -- 125%) to the interest rate on the 30-year bond. If there is one thing you can be certain of, interest rates on the long bond(s) will rise over the next 5 year. This fund will take advantage of that. 5%
10. cash: hold 10% cash (minimum) for life's emergencies.
If you are ROTFLYAO at this post and are dead set about trying to earn a living by day-trading, please consider the following:
(1) print out this post and store it for future reference. Trust me, you will need it.
(2) take NO MORE than 5% ($10,000) of your next egg and, after training yourself in the art of technical analysis and day-trading, see how you do versus the basket of mutual funds I have given you above. After you have lost your $10,000, consider it the price of your investing education and DO NOT day trade with any more of your savings.
(3) pull out the advice I have given you above, re-read it without smirking or laughing, and begin investing over again.
[ Edited by hardcore on Date 04/10/2004 ]