the Stock Market

[Seraphim]

I don't think it would help to read all those reports, I think they're basically useless. I invested in AMZN because I figured Jeff Bezos knew what he was doing. A great stock for me has been SHLD (Sears), which is a really bad company, but they're controlled by Eddie Lambert, and fast Eddie doesn't own all that stock so he can lose money. Alibaba (BABA) was a no brainer, Chinese internet company that's making money? They've all been good stocks. If you really like mutual funds, take a look at FCISX. They've been around since 1995, but beware. When you sell, they keep a 1% back load.

An understanding of balance sheets, income reports, statements of cash flows and other required reports offers not only an accurate understanding of a company's current status, which may look healthy on the outside but is actually rotting on the interior, but also offers a good look at the company's future stability. They are extremely eye opening, if one takes the time to learn their way around them. Beats buying based on trends, or assuming past performance is a good measure of future profits. It isn't. Read every investment statement you've ever signed - it specifies that concept. As for market timing - some of the best financial minds in the business advise against it. It's gambling.

There's no reason to buy A shares (front loads) or C shares (back loads). Both are expensive, and generally have high ERs as well - especially C shares. They get their money from you one way or the other. Both Fidelity and Vanguard, as well as others, offer excellent no load funds with great track records at low costs. I have four C shares, because of a payout which mandated specific fund companies and I couldn't change it, and they are all expensive funds with ERs between 1.6% and 2%. I've no doubt they're going to have expensive transfer fees when I contractually ditch them. In comparison, my similarly constructed Vanguard funds average about .08% ER. Please note the decimal point. There are NO other fees.

If you hold a fund for 25 years, paying a 1% ER, that's 25% of your returns - your money - you've paid that fund manager. At 1.6% that's probably around 40% (estimating in my head).

Do NOT engage funds with these type of fees. Unless you can afford to throw money away...

 

[gojo]

I think we should start a new thread on Stock Options, because it might be confusing to some. Options are not like stocks, they expire.
I'd love to hear about some of you guys trades on Stocks Options. Might learn something...............

 

[Seraphim]

Can't help there - I've no experience with options.

 

[66788]

The stock market is a giant ponzi scheme and unless you are one of the big players, you might be better off betting your money in Reno. At least you would get free drinks!

Quite honestly the last place I would be right now with any investment is in the stock market.

 

[Bdog1]

I'm surprised there's so many of us interested in stocks. Pleasantly surprised.

 

[IGBT]

Win some lose some on Seadrill, but at least the covered calls I sold collapsed in value (went from $6 to $2.75 while the stock went from $21 to $16). Eases the pain some. Long term I think Seadrill will be better off using the dividend money to get better refinancing terms. I also am skeptical we will have cheap oil for years and years.

 

[gojo]

The stock market is a giant ponzi scheme and unless you are one of the big players, you might be better off betting your money in Reno. At least you would get free drinks!

Quite honestly the last place I would be right now with any investment is in the stock market.

Anything is a gamble, if you don't understand it.

 

[Seraphim]

The stock market is a giant ponzi scheme and unless you are one of the big players, you might be better off betting your money in Reno. At least you would get free drinks!

Quite honestly the last place I would be right now with any investment is in the stock market.

Hardly.

But investing needs to be viewed long term. As I've stated before, if ones trying to time the market, looking for quick gains, it's gambling. Because you have guess right two times: once when you buy and again when you sell.

Long term buy and hold strategies provide fairly consistent returns, but one mustn't be put off by volatility, and have confidence that no matter how low the dip - or recession - it will rebound. The day it doesn't, we're all screwed anyway. Won't matter.

The problem occurs when investors jump I to the market with bad assumptions, and don't understand investing. Sure, brokerages will milk investors for all they can get, buying from investors at a discount and selling to other investors at a premium. There are always ignorant investors willing to throw their money away, and every tme they sell and buy, they're reducing their own returns and feeding the brokers.

And don't get me started on financial advisors lol.

But it's not a Ponzi scheme, though it may seem that way to a burned investor. They're burned, generally, by their own lack of education in investing.

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And the market is a fine place for investing at the moment, if you know what you are doing. Might not be the best time for new money, but if you're a dollar cost average fan, things will be fine in the long run.

Always think about the long run.

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And I don't drink...

 

[gojo]

Hardly.

But investing needs to be viewed long term. As I've stated before, if ones trying to time the market, looking for quick gains, it's gambling. Because you have guess right two times: once when you buy and again when you sell.

Long term buy and hold strategies provide fairly consistent returns, but one mustn't be put off by volatility, and have confidence that no matter how low the dip - or recession - it will rebound. The day it doesn't, we're all screwed anyway. Won't matter.

The problem occurs when investors jump I to the market with bad assumptions, and don't understand investing. Sure, brokerages will milk investors for all they can get, buying from investors at a discount and selling to other investors at a premium. There are always ignorant investors willing to throw their money away, and every tme they sell and buy, they're reducing their own returns and feeding the brokers.

And don't get me started on financial advisors lol.

But it's not a Ponzi scheme, though it may seem that way to a burned investor. They're burned, generally, by their own lack of education in investing.

---

And the market is a fine place for investing at the moment, if you know what you are doing. Might not be the best time for new money, but if you're a dollar cost average fan, things will be fine in the long run.

Always think about the long run.

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And I don't drink...

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I think fear and greed is a big problem for new inexperience investor. I can speak from experience. Back in 1994 when I starter trading stocks, I made around 11,000 in a couple months in a penny stock. Greed took over and I lost a little over 9000 of it in about a week. That's probably the best schooling you'll get from the stock market. lol. Yeah I laugh today, different story back then. One thing good about that, I didn't have to pay taxes on the 9000.

I like the old saying: Pigs get slaughter.

 

[Seraphim]

A guy I worked for had retired from a government job, and was working full time in another position. His wife worked also, so they'd been investing his retirement check for about fifteen years. Just before I retired, he confided he'd lost about $80k in the recession. I was in shock, and asked him how he'd lost money, since he had no need to withdraw money, and the market eventually rebounded. He looked at me rather sheepishly and said, honestly, "I got scared." So he withdrew his funds when they had lost so much value.

That's one of the problems with trends and hot stocks. The time to buy them is BEFORE they become trends or hot stocks. That's when the money is made. A lot of people jump onto these trends, right before they peak, and by the time they get out they've lost money.

The ones who made money were the ones who identified a company as having growth potential before they take off. Back to the value of balance sheets, cash flow statements, etc.

 

[HarmonicaBruce]

Win some lose some on Seadrill, but at least the covered calls I sold collapsed in value (went from $6 to $2.75 while the stock went from $21 to $16). Eases the pain some. Long term I think Seadrill will be better off using the dividend money to get better refinancing terms. I also am skeptical we will have cheap oil for years and years.

I feel your pain, been there, done that. When do your calls expire? If SDRL stays at $16, and your calls expire, you'll be $1 in the good if you bought at $21.

Selling covered calls minimizes risk, of course.

I look at balance and income statements but I don't look for good companies based on what they say. For example, if a company has a lot of debt, like Ford, and that debt is increasing, I wonder if it would be better for them to pay off some of that debt instead of issuing a little dividend. That would depend on what interest they're paying, and the balance sheet doesn't show that. Sears loses a billion dollars every quarter. They're going broke, everyone knows it, but I make money trading their stock.

How about the price of oil? Do you think it's going to keep going down? An eft of oil is traded as USO. It's at a 5 year low, $27.90. I claim it's going back up. I think it has to. Of course we might figure out how to drive cars and trucks without oil, but I don't think that's going to happen soon.

Here's my stock tip of the day: Buy USO at $27.90, and sell a January 17 $29 call for .83. Between now and January 17 you'll make 3% return if the price of oil stays the same, or possibly 6% if the price of oil rises 3%. But if USO goes down, say to $26 (not very likely) then you sell a $27 call. It's mathematically possible to lose money like this, but not likely, as the price of oil is not likely to collapse much further.

Day traders all lose their money eventually. Wall street has computers that buy and sell the same stock within a minute's time. They see your order, and before it can be filled, they've already bought the stock they're going to sell you. You can't beat their computers day-trading. But, buy and hold doesn't really work either. Conditions change and a good stock today isn't a good stock in the future. It's a gamble, but then again it always it.

 

[Spirituallifetime]

Warren Buffett model of investing: buy a good business and hold on for the long term. Through all the ups and downs a good business is a good investment. I use the word business in place of stock because people have a disconnect here thinking of stock as just a certificate of some thing.Think of it as buying business, you couldn't buy a business today and sell it tomorrow for a profit. When I bought stock in Wallgreens and Home Depot I walked into the stores and asked my self would I buy the products here, You also can see how the customer service is.

 

[gojo]

I feel your pain, been there, done that. When do your calls expire? If SDRL stays at $16, and your calls expire, you'll be $1 in the good if you bought at $21.

Selling covered calls minimizes risk, of course.

I look at balance and income statements but I don't look for good companies based on what they say. For example, if a company has a lot of debt, like Ford, and that debt is increasing, I wonder if it would be better for them to pay off some of that debt instead of issuing a little dividend. That would depend on what interest they're paying, and the balance sheet doesn't show that. Sears loses a billion dollars every quarter. They're going broke, everyone knows it, but I make money trading their stock.






There are signs when the market makers are playing their games in the option market. One is, you'll see a wide spread on the bid and ask. Specially when the stock starts making a big move. They have to feed their family too. There's a lot of books on mm. This is only for the buyer in the options market.
For those who don't know, weekly options expires every week. They started trading in 2010......

How about the price of oil? Do you think it's going to keep going down? An eft of oil is traded as USO. It's at a 5 year low, $27.90. I claim it's going back up. I think it has to. Of course we might figure out how to drive cars and trucks without oil, but I don't think that's going to happen soon.

Here's my stock tip of the day: Buy USO at $27.90, and sell a January 17 $29 call for .83. Between now and January 17 you'll make 3% return if the price of oil stays the same, or possibly 6% if the price of oil rises 3%. But if USO goes down, say to $26 (not very likely) then you sell a $27 call. It's mathematically possible to lose money like this, but not likely, as the price of oil is not likely to collapse much further.

Day traders all lose their money eventually. Wall street has computers that buy and sell the same stock within a minute's time. They see your order, and before it can be filled, they've already bought the stock they're going to sell you. You can't beat their computers day-trading. But, buy and hold doesn't really work either. Conditions change and a good stock today isn't a good stock in the future. It's a gamble, but then again it always it.

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Will someone give me step by step instruction on replying to someone.

sorry about my mess ups.

thank you in advance

 

[Seraphim]

Buy and hold works but requires diversification. The only discussion I've seen here, and no one had mentioned the word 'portfolio'. You don't buy just one stock. You diversify.

No one has mentioned asset allocation and rebalancing, or the function of fixed income ( bonds) in the portfolio.

And yes, stock worth changes, which is why you do your homework, find a stable stock and, if it has a place in your portfolio, purchase it. Eventually you'll probably replace it, but if you did your homework you will hold that stock for a long time. Buy and hold doesn't mean hold forever.

Haven't heard anyone mention total returns, just dividends. Dividends are good, but not the end all. They don't replace bond yields in a portfolio though.

Buying one or two stocks is a gamble. A well designed buy and hold portfolio with a long event horizon isn't.

 

[gojo]

Buy and hold works but requires diversification. The only discussion I've seen here, and no one had mentioned the word 'portfolio'. You don't buy just one stock. You diversify.

No one has mentioned asset allocation and rebalancing, or the function of fixed income ( bonds) in the portfolio.

And yes, stock worth changes, which is why you do your homework, find a stable stock and, if it has a place in your portfolio, purchase it. Eventually you'll probably replace it, but if you did your homework you will hold that stock for a long time. Buy and hold doesn't mean hold forever.

Haven't heard anyone mention total returns, just dividends. Dividends are good, but not the end all. They don't replace bond yields in a portfolio though.

Buying one or two stocks is a gamble. A well designed buy and hold portfolio with a long event horizon isn't.

Maybe, I shouldn't be.
Few days ago, I send a message if anyone here traded Weekly Options. It seems like there is a cut down here on what everyone should do on investments. When I traded stocks long term, I did all the above. Subscribe to IBD, went to the local library, did research thru their publications such as Value Line and etc.
It doesn't look like any one here knows what Weekly Options is all about. So, I'll let you all have it back....

 

[HarmonicaBruce]

It doesn't look like any one here knows what Weekly Options is all about. So, I'll let you all have it back....

I trade weekly options. What do you want to know about them? Actually I don't really pay attention to weather the option is a weekly or not. And the only "real" option trading I've done is selling covered calls. Before I traded options I set up a "practice" account at optionshouse.com. It really is a lot of fun, and anyone can set up a practice account with no money or credit card or anything.

 

[Dust-In-the-Wind]

May I suggest the Tasty Trade website? Lots of free education, dedicated to option trading.

 

[gojo]

Oil nose dives as OPEC hold off on production. Looks like the Arabs is trying to screw up this country's shale production, by bring the prices down.

 

[HarmonicaBruce]

Oil nose dives as OPEC hold off on production. Looks like the Arabs is trying to screw up this country's shale production, by bring the prices down.

The thing to do right now is to fill up your tank. I bought SDRL too soon, but how was anyone to know that OPEC would fall apart? Cheap oil is good for the economy. It cuts production costs for many things and leaves people with more money in their pockets to spend on things besides gas / heating oil. So by all means, fill your tank. But, don't buy a gas guzzler for the long term. The price will go back up.

 

[Seraphim]

Oil nose dives as OPEC hold off on production. Looks like the Arabs is trying to screw up this country's shale production, by bring the prices down.

Reduced production = scarcity = HIGHER prices

Generally when OPEC wants prices to rise, they cut down production. There's a bit of an internal competition going on within OPEC at the moment. At a time of global prices dropping, Saudi Arabia has continued producing at the same rate,to keep prices low, in an effort to hurt some it's competition.

Don't know if its working.

But gas prices are nowhere near as dependent on Arabian oil as it once was. US now produces the majority of its own oil, and our biggest importer - about 40% of our foreign oil - is Canada. IIRC