What stocks to buy? How to research?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:just buy a low cost, broad market index. you will do better than about 80% of people in the stock market.

That's one approach, but you'll never grow and evolve as a capitalist and that is really your goal. Index funds are for lazy minded people with no imaginations and who are unwilling to take responsibility for their own financial security and independence.

It's about more than beating the indexes. It's about being active and involved in your own financial future. If you just mindlessly put your money in a vanguard fortune 500 index fund and forget about it, you'll be fine, but you may never attain the status of being independently wealthy.

When you are an active investor you will use and expand your body of knowledge because you're are tuned into the goods or commodities which you can envision growing over time and creating great wealth. Some investments will richly reward you and on others you'll lose money, but win or lose you'll be gaining a valuable education. Gradually, you begin to accumulate more win miners and wealth than losers. These are also valuable skills you'll pass on to your children. Be a CAPITALIST not just one more mindless index fund customer!

Are you the Seeking Alpha day trader? I second the PP who said that anyone can have *one* good year...you don't talk about beating the market for 30 years... because you didn't. Few people do, and the ones that do aren't posting on DCUM, they're off looking at 10 computer screens because the markets never sleep.

I am a so-called capitalist, to use your turn of the last-last-century term, and smart enough to know not to muddle around with real money trying to pick winners in the market. I'm no dummy either. The OP didn't say he wanted to start being a full-time finance guy, I'm sure OP has a day job, he wants to park his money in stocks. Index is the way to go, then.

I'm not lazy. I keep a very good eye on my family's portfolio. I liquidate when I have to. But I don't actively trade, that's for fund managers and fools (which one are you).

My DH is the one who lost $60,000. Bless his heart, he kind of sounded like you at times. Very smart man too. He even had a "plan," and a "theory," he made some good returns, got excited, traded every damn day, researching, researching...then started to lose money, saw his theories were shit, and realized he was nothing but a gambler.

You're a gambler on a winning streak. You totally sound like one, too. Drunk, high and delighted at your own unforeseen good fortune.

I'm just afraid OP is going to drink your cool-aid and lost his little nest egg.

No, you have not described me correctly at all. Sure, I've tried day trading and I got slaughtered. I'm not fast enough, smart enough, or indifferent enough to compete with computerized logarithmic trading of the big boys. However small observate prudent investors with balanced portfolios of growth, income, and speculative positions in the stock market can and do become independently wealthy over a period of years. If an individual's goal is living comfortably and to avoid living in poverty, investing in an index fund is perfectly adequate. However, those who don't ever enter the market never learn how it works and they will never be able to pass those skills on to their children.

Investing in an Index Fund is like being an hourly wage earner and knowing you'll be paid every week, but never being sure about the profitability of the company or from where the money is really coming.

So no, I'm not a gambler on a winning streak. I have a balanced portfolio of growth, income and speculative positions which has been on a growth trajectory since 2009 which will withstand any turbulence in the markets.

If I can be consistanly successful and share these skills with my children anyone else can do the same.

BE A CAPITALIST and never allow anyone else to manage your finances. No one cares more about your money than YOU!!!

as others pointed out, a monkey picking stocks blindfolded would have made some great gains since 2009. how is your track record over the last 20-30 years? or did you just start investing a few years ago? if the latter, be sure to come back after you have lost your ass (it will happen).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: I have a balanced portfolio of growth, income and speculative positions which has been on a growth trajectory since 2009 which will withstand any turbulence in the markets.

This is meaningless. The entire market has been on a growth trajectory since 2009. You would have really had to work to lose money in the market since 2009.

I had exactly the same thought when I read this. After a crash, it's hard to go anywhere else than up.

Why do I bother you so?

This is not about me, ithis is about a young investor looking for investment ideas. I've told them they can do it on their own using a very simple Templeton Statetgy that has a track record dating back to the 1930s. Templeton purchased one share in 100 of the top dividend paying companies in the US in the 1930s and did nothing but reinvest his dividends during the next 30 years. His investment eventually grew to be worth millions.

Becoming independently wealthy is possible in this country. It won't happen overnight, but with a willingness to learn, a bit of discipline, and a fundamental strategy anyone can become an dependently wealthy CAPITALIST living in America.

Never let anyone else manage your money! No one cares more about your wealth, comfort, and family than you do yourself! Every dollar you pay someone else to manage your money is a dollar which will never have an opportunity to multiply exponentially as those 30 years pass.

Money managers are financial parasites who drain off 1-2% of your total wealth every year for themselves doing what you can do yourselves. They make it sound as if investing is sooooo complicated you could never possibly do it yourselves. Geez ... what a crock of shit!

Use the Templeton Method of dividend reinvestment and begin building your wealth TODAY!

[Anonymous]

You bother us because you are giving bad advice to someone who might fall for it.

No one cares your health as much as you do. That doesn't make a DIY appendectomy a good idea.

[Anonymous]

Anonymous wrote:You bother us because you are giving bad advice to someone who might fall for it.

No one cares your health as much as you do. That doesn't make a DIY appendectomy a good idea.

Come on now ... please! Say what you really mean - you are a financial parasite claiming to be an advisor who benefits by feeding the fears of others to manage their own retirement funds. You siphon off the profits of others investment at no risk to yourself. You are no better than pond scum and my presumption is this may be the reason I trouble you so.

[Anonymous]

Anonymous wrote:There's no doubt that someone wanting to learn "how to invest in to invest in stocks" faces a daunting task. There's no shortage of reading material for that, but I'll provide my quick thoughts as someone who has spent several years in equity research at an investment bank, and is now a senior equity analyst at an institutional asset manager with billions in AUM.

1) Have a diversified portfolio. In general, I would definitely recommend most investors have a balanced portfolio, invest in ETFs or mutual funds, and avoid individual stocks. You need to pay closer attention to individual stocks and most individual investors don't do that.
2) ETFs over mutual funds. Fees are much higher with mutual funds and most mutual funds underperform the broader indices, as they have cash drag (they need to hold cash for redemptions and indices don't) and it's very difficult for large asset managers to outperform since good ideas are scarce and once you hit a certain level of AUM, there aren't enough good ideas to invest in. That's generally why smaller asset managers can outperform firms like Fidelity. It's a lot easier to find good ideas with only $100M to invest versus $50B...you become restricted in the investments that you can actually build a position.
3) You get rich by being concentrated, not diversified - but, as risk-averse investors, most individuals should be diversified.
4) In general, small-cap stocks will outperform large-caps, but volatility will be much higher.
5) You should only invest the $8k in stocks if you already have other investments, but honestly any amount will suffice to get started. Heck, I started investing in college with $3k, before I really knew anything about it.
6) Before you invest any money, you should think about the type of investor you want to be: value, growth, style agnostic, special situations, etc...
7) For most individual investors, I would employ a "buy-and-hold" approach and try to find companies you'd be comfortable owning for years.
8) Read a few investing books before you invest any money into individual stocks. Here are some of my favorites:
Little Blue Book that Still Beats the Markets by Joel Greenblatt
- Very easy read and pretty short
Random Walk Down Wall Street by Burton Malkiel
- Classic book that for me was a good introduction to investing and provided a nice history of investing and how investors make the same mistakes. However, it basically recommends sticking to investing in an index.
Margin of Safety by Seth Klarman
- You can find this book in PDF online, as hard copies sell for over $1k on Ebay. It's a must-read for value investing. Klarman is a very successful billionaire value investor.
Finding the Next Starbucks by Michael Moe
- This is a good book on growth investing (of which there aren't as many...much more literature devoted to value investing like Buffet)
Reminiscences of a Stock Operator by Edwin Lefevre
- It was written over 80 years ago, but it has timeless rules to live by, even though it was more about trading and speculation than investing. It shows how human nature, fear and greed never really changes. This is a favorite by several hedge fund billionaires like Paul Tudor Jones.
9) Try to read a lot, whether it's WSJ, Economist, Financial Times, etc... You just get a better understanding of how the world works and how things are related.

I personally find investing very exciting and stimulating, but it's not for everyone. Hope this helps.

Thank you, PP! That was good advice. I probably would have for it IRL.

[Anonymous]

Anonymous wrote:You bother us because you are giving bad advice to someone who might fall for it.

No one cares your health as much as you do. That doesn't make a DIY appendectomy a good idea.

Hahaha! Couldn't have said it better myself.

Let's not rain too much on PP's parade, though. It sounds like he had an unexpected good year in the market. Ahhh, investor exuberance...

[Anonymous]

Anonymous wrote:

Anonymous wrote:You bother us because you are giving bad advice to someone who might fall for it.

No one cares your health as much as you do. That doesn't make a DIY appendectomy a good idea.

Come on now ... please! Say what you really mean - you are a financial parasite claiming to be an advisor who benefits by feeding the fears of others to manage their own retirement funds. You siphon off the profits of others investment at no risk to yourself. You are no better than pond scum and my presumption is this may be the reason I trouble you so.

Whaaaat? Listen, I was a PP who yelled at you too, and I have money, some of which I manage, and some which are offloaded for others to manage (because I have neither the expertise nor the time to do so). I agree that most financial advisors, you really wonder what they bring to the table. But you seem to have issues with professional money managers. They have their place.

[Anonymous]

Anonymous wrote:

Anonymous wrote:There's no doubt that someone wanting to learn "how to invest in to invest in stocks" faces a daunting task. There's no shortage of reading material for that, but I'll provide my quick thoughts as someone who has spent several years in equity research at an investment bank, and is now a senior equity analyst at an institutional asset manager with billions in AUM.

1) Have a diversified portfolio. In general, I would definitely recommend most investors have a balanced portfolio, invest in ETFs or mutual funds, and avoid individual stocks. You need to pay closer attention to individual stocks and most individual investors don't do that.
2) ETFs over mutual funds. Fees are much higher with mutual funds and most mutual funds underperform the broader indices, as they have cash drag (they need to hold cash for redemptions and indices don't) and it's very difficult for large asset managers to outperform since good ideas are scarce and once you hit a certain level of AUM, there aren't enough good ideas to invest in. That's generally why smaller asset managers can outperform firms like Fidelity. It's a lot easier to find good ideas with only $100M to invest versus $50B...you become restricted in the investments that you can actually build a position.
3) You get rich by being concentrated, not diversified - but, as risk-averse investors, most individuals should be diversified.
4) In general, small-cap stocks will outperform large-caps, but volatility will be much higher.
5) You should only invest the $8k in stocks if you already have other investments, but honestly any amount will suffice to get started. Heck, I started investing in college with $3k, before I really knew anything about it.
6) Before you invest any money, you should think about the type of investor you want to be: value, growth, style agnostic, special situations, etc...
7) For most individual investors, I would employ a "buy-and-hold" approach and try to find companies you'd be comfortable owning for years.
8) Read a few investing books before you invest any money into individual stocks. Here are some of my favorites:
Little Blue Book that Still Beats the Markets by Joel Greenblatt
- Very easy read and pretty short
Random Walk Down Wall Street by Burton Malkiel
- Classic book that for me was a good introduction to investing and provided a nice history of investing and how investors make the same mistakes. However, it basically recommends sticking to investing in an index.
Margin of Safety by Seth Klarman
- You can find this book in PDF online, as hard copies sell for over $1k on Ebay. It's a must-read for value investing. Klarman is a very successful billionaire value investor.
Finding the Next Starbucks by Michael Moe
- This is a good book on growth investing (of which there aren't as many...much more literature devoted to value investing like Buffet)
Reminiscences of a Stock Operator by Edwin Lefevre
- It was written over 80 years ago, but it has timeless rules to live by, even though it was more about trading and speculation than investing. It shows how human nature, fear and greed never really changes. This is a favorite by several hedge fund billionaires like Paul Tudor Jones.
9) Try to read a lot, whether it's WSJ, Economist, Financial Times, etc... You just get a better understanding of how the world works and how things are related.

I personally find investing very exciting and stimulating, but it's not for everyone. Hope this helps.

Thank you, PP! That was good advice. I probably would have for it IRL.

^^^ Uh, probably PAID for it, IRL, I meant. From someone less savvy then you as well.

OP, pay attention!

[Anonymous]

Anonymous wrote:

Anonymous wrote:You bother us because you are giving bad advice to someone who might fall for it.

No one cares your health as much as you do. That doesn't make a DIY appendectomy a good idea.

Hahaha! Couldn't have said it better myself.

Let's not rain too much on PP's parade, though. It sounds like he had an unexpected good year in the market. Ahhh, investor exuberance...

Your analogy could not possibly be more wrong or self aggrandizing. You mascarade as an individual with some special insight to the markets when you know nothing more than the average joe can learn with a little practice yet you equate yourself with a board certified surgeon.

Stop being a parasite taking the financials gains of others. If you have some special knowledge about the stock maket that is far beyond the abilities of we poor simple minded mortals why bother with us at all. Invest your own money and become wealthy. Isn't the truth that you know nothing more than anyone else and that you are unable to support yourself with your investments.

You can't survive on the proceeds of your own investments so you must siphon off 1-2% of other peoples investments in order so your own family can eat.

Please, young investors out there do not let anyone else but yourselves manage your money for you It's not very difficult and no cares more about your financial security and your families than you do yourself!

[Anonymous]

It's not very difficult and no one cares more about your money and your family than you do yourselves!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You bother us because you are giving bad advice to someone who might fall for it.

No one cares your health as much as you do. That doesn't make a DIY appendectomy a good idea.

Hahaha! Couldn't have said it better myself.

Let's not rain too much on PP's parade, though. It sounds like he had an unexpected good year in the market. Ahhh, investor exuberance...

Your analogy could not possibly be more wrong or self aggrandizing. You mascarade as an individual with some special insight to the markets when you know nothing more than the average joe can learn with a little practice yet you equate yourself with a board certified surgeon.

Stop being a parasite taking the financials gains of others. If you have some special knowledge about the stock maket that is far beyond the abilities of we poor simple minded mortals why bother with us at all. Invest your own money and become wealthy. Isn't the truth that you know nothing more than anyone else and that you are unable to support yourself with your investments.

You can't survive on the proceeds of your own investments so you must siphon off 1-2% of other peoples investments in order so your own family can eat.

Please, young investors out there do not let anyone else but yourselves manage your money for you It's not very difficult and no cares more about your financial security and your families than you do yourself!

PP, I am just curious. Are you from Eastern Europe? Where were you born, and how long have you been in the US? To start, I too am foreign-born, and I have been in the U.S. 40 years.

[Anonymous]

I am not a money manager. I am someone who learned enough about the basics of finance to understand that while I can figure out how to budget and how to balance my investments, I don't know enough to pick individual stocks and bonds to create a sufficiently diverse portfolio. And OP certainly doesn't, even if that's possible with $8,000, which I doubt.

If your best evidence is that your portfolio has improved since the market bottomed out, all you have proven is that you are no stupider than the average investor.

PS I love capitalism. And knowing the limits of my abilities.

[Anonymous]

Why bash me for encouraging a young investor to learn what it takes to become a successful investor. Even Warren Buffett started small, but he's done well.

As for me, I actually liquidated 75% of my portfolio on a single day in late September 2008 one day after the Fed lowered their rate 1/4 point and the market was up 150 points on that given day. Sorry to disappoint you, but my investment success unlike most financial advisors is not just a matter of throwing darts at The Financial Times.

I admit, I began buying again when the Dow was at 9,000 and I continued to buy until I was fully invested again at Dow 6,000, but rest assured, I made a ton of money as a result of this past recession.

To young investors, always remember, no one cares more about your money and your families than you do yourselves!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no doubt that someone wanting to learn "how to invest in to invest in stocks" faces a daunting task. There's no shortage of reading material for that, but I'll provide my quick thoughts as someone who has spent several years in equity research at an investment bank, and is now a senior equity analyst at an institutional asset manager with billions in AUM.

1) Have a diversified portfolio. In general, I would definitely recommend most investors have a balanced portfolio, invest in ETFs or mutual funds, and avoid individual stocks. You need to pay closer attention to individual stocks and most individual investors don't do that.
2) ETFs over mutual funds. Fees are much higher with mutual funds and most mutual funds underperform the broader indices, as they have cash drag (they need to hold cash for redemptions and indices don't) and it's very difficult for large asset managers to outperform since good ideas are scarce and once you hit a certain level of AUM, there aren't enough good ideas to invest in. That's generally why smaller asset managers can outperform firms like Fidelity. It's a lot easier to find good ideas with only $100M to invest versus $50B...you become restricted in the investments that you can actually build a position.
3) You get rich by being concentrated, not diversified - but, as risk-averse investors, most individuals should be diversified.
4) In general, small-cap stocks will outperform large-caps, but volatility will be much higher.
5) You should only invest the $8k in stocks if you already have other investments, but honestly any amount will suffice to get started. Heck, I started investing in college with $3k, before I really knew anything about it.
6) Before you invest any money, you should think about the type of investor you want to be: value, growth, style agnostic, special situations, etc...
7) For most individual investors, I would employ a "buy-and-hold" approach and try to find companies you'd be comfortable owning for years.
8) Read a few investing books before you invest any money into individual stocks. Here are some of my favorites:
Little Blue Book that Still Beats the Markets by Joel Greenblatt
- Very easy read and pretty short
Random Walk Down Wall Street by Burton Malkiel
- Classic book that for me was a good introduction to investing and provided a nice history of investing and how investors make the same mistakes. However, it basically recommends sticking to investing in an index.
Margin of Safety by Seth Klarman
- You can find this book in PDF online, as hard copies sell for over $1k on Ebay. It's a must-read for value investing. Klarman is a very successful billionaire value investor.
Finding the Next Starbucks by Michael Moe
- This is a good book on growth investing (of which there aren't as many...much more literature devoted to value investing like Buffet)
Reminiscences of a Stock Operator by Edwin Lefevre
- It was written over 80 years ago, but it has timeless rules to live by, even though it was more about trading and speculation than investing. It shows how human nature, fear and greed never really changes. This is a favorite by several hedge fund billionaires like Paul Tudor Jones.
9) Try to read a lot, whether it's WSJ, Economist, Financial Times, etc... You just get a better understanding of how the world works and how things are related.

I personally find investing very exciting and stimulating, but it's not for everyone. Hope this helps.

Thank you, PP! That was good advice. I probably would have for it IRL.

^^^ Uh, probably PAID for it, IRL, I meant. From someone less savvy then you as well.

OP, pay attention!

OP here: thank you! Just to clarify, I have maxed our retirement accounts and college funds and have healthy cash savings, a 6 month emergency fund and 20% for house down payment. Want to get in to the stock market as an experiment. Also, am not very young. 34 and female.

[Anonymous]

Are you sure you seeking investment advice, because on some level you seem to be looking more for a husband.