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Does anyone here actively play the market?

Discussion in 'Tilted Philosophy, Politics, and Economics' started by Borla, May 27, 2014.

  1. Borla

    Borla Moderator Staff Member

    Anyone at TFP invest in the stock market, aside from pension/401k/IRA type investments?

    Until recently I never directly dabbled in the market. I have a 401k and IRA that I contribute to, but I've never been one to specifically set money aside to invest in particular stocks. Over the course of the last several years I've tried to be more forward thinking about finances than I did when I was younger, including upping 401k participation, specific regular transfers into long term savings, etc.

    The most recent step I've taken was to pull a small amount of money out of a low interest savings account and set up a brokerage account with it. I take a small amount from each paycheck and have it automatically kicked over into that account as well.

    So far I've mostly bought and held stocks, with a longer term view in mind. I mainly wanted to see if I could make good choices with casual research, and if it was worth doing on an amateur level using modest sums. So far so good. Overall the Dow is up 1.2% since I started this little experiment. My investments are up 4.1%. All of the stocks I originally bought I have held onto except one. That particular stock I made 5% on in 8 weeks (after trading fees), so I cashed out. It has since fell 2.5% and the stock I bought with that money has already increased in value to exceed my trade fee plus 1%. Now, none of that means very much since these are percentages of stocks I only put a few hundred bucks each in (any less makes the trading fee a not worth it usually). But it has been a learning experience and interesting. As I kick in a few bucks every couple of weeks and start making larger trades I could see some long term potential here. The key (IMO) is the ' long term' part.

    Anyway, I've found it to be interesting, and it has started to get me dialed in on a different piece of the news than I usually pay attention to.

    So....anyone else here do their own investing?
    If so, any insight to share?
    Where do you do your research?
    How active are you?
    What successes or failures have you had?
  2. snowy

    snowy so kawaii Staff Member

    Not yet to any real degree. I have some money in ETFs that just sits there; it was a deal through Sharebuilder. I figure if it grows, great, if it doesn't, it was free money. I'll be watching this thread, though, as these are things we have to start thinking about in the next year. IRAs first, then everything else, of course.
    • Like Like x 1
  3. Borla

    Borla Moderator Staff Member

    I've been using Sharebuilder as well. Pretty simple interface, I like it.
  4. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    I don't do my own investing because I have a negative net worth. When I get into the black one day, I will certainly invest in markets.

    Despite my lack of assets, I have rudimentary knowledge of investing as a result of editing several books on personal finance. Many of the books were by "contrarian" investors, which is a breed of investor worth learning about, as they actively go against the herd mentality. They're selling what the herd has bought, and buying what the herd has sold. Much of it is based on large groups of investors failing to follow the most basic rule: buy low, sell high. When emotions get involved, it can be ruinous.

    You have the right mindset when it comes to having the longview. Buying and holding works, but it is most effective when you have set buy-and-sell parameters that you follow despite what your feelings tell you. You can set these based on research and basic knowledge of markets. People who check their stocks every day, who worry about the news headlines, etc., are typically those who fail to keep their emotions out of it, and they make stupid decisions in the process.

    I have a lot of respect for value investing. A seminal work in this respect is this book: The Intelligent Investor - Wikipedia, the free encyclopedia
    The book is considered by Warren Buffett (heard of him?) to be the best book on investing ever written.

    It's a wealth of knowledge, but the key takeaway is distinguishing the difference between value investing and speculation: the former is simply investing intelligently, while the latter is no different from gambling. Value investing includes mitigating the risk through various decision-marking processes, looking at a spectrum of low risk (but with low return potential) to high risk (but with high return potential). Risk is inherent in every investment decision, but the difference between value investing and speculation is that the former is a calculated risk while the latter is a gamble.

    Value investing is essentially the evaluation of stocks to determine whether they're undervalued based on their current price vs. what they're worth in terms of the attributes of the stock. If a stock is deemed undervalued in this respect, then that indicates a buy decision. Speculation, on the other hand, is a gamble (usually short-term) based on market fluctuations. It's a best guess on the outcome of market mentalities, which are largely driven by emotions. It's a very risky proposition.

    So if what you're doing is considered speculation, realize that you're basically gambling. The outcome is largely beyond your control, and it's easy to get burned. I've heard some advisers suggest that if you want to speculate, then limit the funds you place in such a practice to something that won't ruin you. Kind of like when you limit the funds you use when you go to a casino.

    Anyway, I could go on....but realize what I say is based on book smarts rather than any direct experience.

    I find the thread title interesting though. I think there is a difference, too, between "playing the market" and "investing in the market."
    Last edited: May 27, 2014
    • Like Like x 1
  5. ralphie250

    ralphie250 Fully Erect

    At work..
    I used to dabble in penny stocks, I invested about .85 in a mining company and ended up making like $90.00. I thought was good, after I sold those I ha went gotten back into it. I need to though. Think about how much I would have made had it been a big company
  6. Borla

    Borla Moderator Staff Member

    Good stuff, feel free to go on. I'll likely pick up that book.

    The semantics in my title were not intentional, though I guess for the purposes of this discussion I'll take input from players or investors. ;)

    My purpose is to invest, not speculate. Obviously there is some speculation involved regardless, but I'm trying to look for value priced stocks, as opposed to timing market fluctuations. The one stock I bought and sold was bought based on information that it was undervalued, and there was a legal ruling pending that had the potential to give it a good bump. Even if the legal ruling was not as positive as expected, there were some factors at play over the next 18 months that should've kept the stock attractive. When the ruling was positive and the stock got a bump, I decided to take the instant profit (had a predetermined sell price in mind for a couple weeks, and when it hit my order went through). And the proceeds went into another stock I think (after research) was/is value priced. That one I expect to hold on much longer term.

    I did buy one stock as a novelty (couple shares of HOG just to say I did, they've went up $4/share+ since then and are still rated a 'buy' by many experts), but other than that I am trying to base my investments on solid data and calculated expectations as opposed to emotion or speculative timing.
  7. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Here & There...I go for the long-haul as Buffett does.
    I'm fairly good, always make gains, good percentages...I've only busted on Lucent years ago, when the Telecomm bubble burst.
    I tend to go for those that are public commodities that will be used for some while on a national/global scale...things people will always need.

    But previously, there was a challenge of resources.
    They have been diverted in the past few years.
    I'm hoping to gain more momentum now that I'm not distracted.

    I never day trade, I never short, I never buy on the margin.

    WM has been a decent one that I'll allow out.
    There will always be trash. ;)

    One I'm keeping a future eye on is the North American rare earths...for a potential time to dive in.
    If Molycorp could get it's act together...it would be worthwhile, with the potential to explode. (as you can see in its max trend)
    China has the corner on the global Rare Earth market...and is now investing in Africa...but MCP being the only one in the US, could break them in time.
    But mgmt really screwed the pooch...and there are too many lingering production issues...including pricing volatility.
    I need to see some consistency before investing.
  8. RedSneaker

    RedSneaker Very Tilted

    I don't but I'd like to start.
  9. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

  10. Borla

    Borla Moderator Staff Member

    The logic makes sense. That seems like a perfect strategy for IRA money or the like, something you want to invest and count on, even if it means shaving off some of the peaks at certain times.

    Though it did keep suggesting I invest in Canadian funds, so it might've all been a propaganda trap. ;)

    I guess I'll have to add researching Index Funds to my 'to do' list.
    • Like Like x 2
  11. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    One of the things people need to get their head around is the realization that you'll very seldom, if ever, get in at the very bottom and get out at the very top. Waiting for "the peak" can lead to getting caught holding the bag, and I hear it can be painful having to let go of your losers.
  12. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    If the market can correctly get to 17,000 Dow and 2000 S&P,
    then we've made it back up to where we were at before The Great Recession. (this has been adjusted for inflation)

    Now, we'd just have to get corporate mgmt, back into some old-school investments that work.
    They've lost the mindset, they're bit timid now and they're sitting on tons of money. (waiting for the shoe to drop...it's not dropping.)
    • R&D (find the new Coke, the new Microwave, the new Windows...anything that has lasting power that becomes ubiquitous)
    • Service marketing (leveraging trend analysis or profiles for catering to more individualized flavors...I think the world of Wal-Mart is fading)
    • Staff training (new & existing, there are good people who simply need reorientation and updating...this also helps resolve or sniff out the bad)
    • Compensation (real value, not market or political, stop wasting, propping up preening execs & short-gain players)
    • Healthy Productivity (not one person wearing multiple hats being driven into the ground, time to breathe, think creative & strategic - Link)
    • Healthy Benefits (merit bonuses, not stock options and such, flex hours, telecommuting, easy food access, commute costs, family assistance)
    The middle-class would strengthen again...this would give benefits of additional purchasing power...and the desire to buy, not restraint.
    This would turn into revenues...a building cycle...not a vicious cycle.

    We have the potential to explode...we just have to stop, nit-picking and lingering.
    Business would thrive even more.

    I'm looking at those companies that are actually reinvesting.
    These seem to be the players that are healthy.
    Last edited: Jun 4, 2014
  13. Aceventura

    Aceventura Slightly Tilted

    North Carolina
    "Play" is not a good word for what I do in the market. I am not technically a day trader, but I am very active and monitor my activity closely.

    1. Read books on the investment subjects of interest. Learn how the markets work. Read about successful investors, of all types. Read about successful and failed companies, commodity spikes, collectibles, all things where people have made and lost money. Read company filings with the SEC. Read business publications. Read trade publications. Read things like People magazine, get in tune with consumer markets. Read. Read Read.

    2. Observe. Be more than a consumer, when you have lunch at an restaurant, note the traffic, note what people order, note how efficient the operation is, when you go to the mall see where the traffic is, note what bags people have - note how many people you see with the latest phones, etc., etc.. Have a conversation with the owner or manager - how is business? How are you going to handle Obamacare??? Well, if ask that question, do so at your own risk...or reward - after an hour of venting the owner might buy you a beer.

    3. Profits from your experiences. If you work in an industry, you will know more about the industry than the talking heads on CNBC, I guarantee it.

    4. Track your trades. Learn from your mistakes and your successes. Know why you buy, know why you sell. Develop a discipline, and adapt and change when needed - be flexible.

    Generally, I have what I consider core holdings - Good companies, with stable predictable growth, paying dividends. These are long-term holds and I monitor them quarterly. I have some aggressive growth companies - they tend to be volatile, perhaps a +-10% based on some event occurring - I monitor these daily. I have some speculative companies - is Twitter going to be the next Google? What is Tesla going to look like 10 years from now - with these I will buy a small number of shares and just wait and see what happens. In addition, I trade options - I do this to earn income. I would not recommend options for beginners or to those who can not handle the risk (or understand the risk) - ironically with options you are in total control of the amount of risk you want to take - but it can get complicated. I first started with covered calls and expanded from there - I also did a lot of dummy trading (paper transactions with no money at risk) before getting deeper involved.

    One other thing, there are no secret short-cuts. Many so called investment secrets are actually old cliches - assume if you know it everyone in the world knows it too - these things work until they stop working - you don't want to be the last to know. For example - sell in May and go away...May 2014 was a pretty good month - and serious investors do not go on "vacations" from their investments.
  14. rocnrichy New Member

    All very good advice, I might add that you'll want to learn how to read the technical charts, Stockcharts.com would be a good start. Some of the indicators I use are the Moving averages, 50 day and 200 day ,Slow stochastic, MACD, RSI, Bollinger bands, Learn where resistance and support are these will help you decide entry and exit points. and remember most stocks move with the market. Of course the idea is to buy low and sell high which is easier said than done. Don't chase a stock, they will come back down. Watch how a stock trades and in what ranges they moves. Start out small and have fun. Like gambling only "bet " what you can afford to loose.
    • Like Like x 2
  15. Borla

    Borla Moderator Staff Member

    @Baraka_Guru , I have started reading The Intelligent Investor. I bought a revised edition with commentary by Jason Zweig. I'm only a couple of chapters in, but thanks for the recommendation. It is an easy read and so far seems to very well fit what I'm trying to do.
    • Like Like x 1
  16. genuinemommy

    genuinemommy Moderator Staff Member

    I do not, but my husband has since high school. At the moment we have very little in the stock market because his life has become too hectic to keep up with it as much as he needs. Some years we have done very well, with an average 20% return.
  17. Joniemack

    Joniemack Beta brainwaves in session

    Reading, UK
    Try as I may, I find the supermarket much more like work than play these days.

    Oh, not that market?

    Silverfox and I are still working at paying off credit card debt we incurred when we were both out of work for 9 months. We hope to be in the black soon but any investment (at our age) will likely come down to paying more into our pension funds.
    • Like Like x 1
  18. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    hmm...I find it interesting that the fictional genius "billionaire" on House of Cards is just as interested in Rare Earths as me.
    Damn those Chinese monopolies. ;)

    If only the US could get its act together...they could break it. (Canada too, BTW...I think)
    Fortunately for me, Americans don't have an attention span...and it "rare" that they remember rare earths.
    So, not much competition for me if they ever do. :p

    Duh, oh yeah...that means I have to have money to invest...
    Damn, foiled again.
  19. Borla

    Borla Moderator Staff Member

    Haven't made any trades, but in the time since I started this thread I'm up another percent and a quarter or so.

    Right now I plan to leave everything be until I accumulate a few hundred more bucks in cash from the automatic transfers I set up. Once I get $500-600 in cash I'll pick a good ETF to throw it at. Any less of an amount than that and it is hard to justify the $6.99 trade.
  20. Aceventura

    Aceventura Slightly Tilted

    North Carolina
    Don't be so dismissive on this. My wife and I started couponing a few years ago - partly motivated by our income going negative from our business. And, yes I am the kind of guy who tracks this kind of stuff - we average a savings of about 25%, over $1,500/year on our grocery expense. Even Warren Buffet doesn't get average annual returns like that. We would save more if I didn't go shopping with her.

    We are not at a point where we stockpile goods, but on many occasions on sale price items, double/triple coupons we make a profit on "buying" an item.

    There are also some patterns on when certain stores and when certain items get you the best deals - there is a science to it and again "play" is not a word I would use to describe it.