THE BORE

General => The Superdeep Borehole => Topic started by: Propagandhim on October 08, 2008, 06:22:09 PM

Title: I want to learn about the stockmarket
Post by: Propagandhim on October 08, 2008, 06:22:09 PM: With all the fuss about the economy, I've been reading up on the stuff surrounding Lehman Bros, and Dick Fuld (lulz), and bank acquisitions, and understand it all for the most part. However, I really want to understand things in more than just the broad perspective the media presents it as. I'd like to learn a bit about the stockmarket and maybe even make a little money after things pick up out of this mess. I'm out of college for now..is there a good primer I can pick up and study on my own? I did not study business in school, but I did take a Macroeconomics course that touched upon some stuff - is there a beginner's manual for this sorta thing? Thanks.
Title: Re: I want to learn about the stockmarket
Post by: Bildi on October 08, 2008, 08:33:54 PM: Regarding books on investing in shares, I'd go with something that sticks to good basic principles such as:

1) Buy low and sell high (in other words, when you say "make a little money after things pick up out of this mess", that is really the reverse of what you should ideally aim for. You want to buy while the market is depressed (like now and in the immediate future), and sell when the market recovers);
2) Encouraging long-term investments (say in 'blue chip' shares) and holding your position over time rather than buying shares in startup companies, quick buys and sells, and jumping whenever the market fluctuates (all of which are more akin to gambling than investing);
3) Diversify;
4) If it sounds too good to be true, it probably is.

Books which feature titles like "Unleash your inner investor" or "How to become a millionaire" are the ones I'd steer clear of. Honestly, it really isn't hard if you're looking at long term (5-20 years) growth investments - if you're really uncertain I'd try to find a good financial planner who can advise you on a plan depending on your requirements for the remainder of your life.

As for economics, I suspect almost any economics textbook will do the trick.
Title: Re: I want to learn about the stockmarket
Post by: Propagandhim on October 08, 2008, 08:35:14 PM: Thanks - Can I ask what you're putting your money in while everything is depressed?
Title: Re: I want to learn about the stockmarket
Post by: muckhole on October 08, 2008, 08:39:31 PM: http://www.investors.com/howtoinvest.asp?tn=top (http://www.investors.com/howtoinvest.asp?tn=top)

I've got another link, but it's on my other PC. I'll throw it in here if I get over to it this week.
Title: Re: I want to learn about the stockmarket
Post by: Brehvolution on October 08, 2008, 08:42:02 PM: I wish I had money to ~~burn~~ invest.
Title: Re: I want to learn about the stockmarket
Post by: Propagandhim on October 08, 2008, 08:45:54 PM: Quote from: muckhole on October 08, 2008, 08:39:31 PM
http://www.investors.com/howtoinvest.asp?tn=top (http://www.investors.com/howtoinvest.asp?tn=top)

I've got another link, but it's on my other PC. I'll throw it in here if I get over to it this week.

Thanks, duder.
Title: Re: I want to learn about the stockmarket
Post by: Propagandhim on October 08, 2008, 08:46:14 PM: Quote from: Zero Hero on October 08, 2008, 08:42:02 PM
I wish I had money to ~~burn~~ invest.

I don't at the moment, but I think I might in the near future.
Title: Re: I want to learn about the stockmarket
Post by: Cormacaroni on October 08, 2008, 09:08:17 PM: Learning about investing is to a large extent shooting at a moving target. That is, as soon as something becomes 'received knowledge', it loses much of its value as investment advice simply because everyone that is not you in the market already knows it. You can't expect to run to a financial adviser and say 'I want you to buy low, sell high!' and see immediate gains. If you want to beat the market, you'll have to innovate yourself, or just be lucky. If you just want to see market-average gains, invest in a big-ass (i.e diverse and capable of moving the market by itself) mutual fund with low fees and don't dick with it for 10 or 15 years. Any gains you make during that period can be fed back into the same fund.

wikipedia really is all you probably need right now. Just search for 'Finance' and you'll get more useful material than you'll know what to deal with. You're not going to get all your answers in this thread, I can guarantee that.
Title: Re: I want to learn about the stockmarket
Post by: Propagandhim on October 08, 2008, 09:19:47 PM: Quote from: Cormacaroni on October 08, 2008, 09:08:17 PM
Learning about investing is to a large extent shooting at a moving target. That is, as soon as something becomes 'received knowledge', it loses much of its value as investment advice simply because everyone that is not you in the market already knows it. You can't expect to run to a financial adviser and say 'I want you to buy low, sell high!' and see immediate gains. If you want to beat the market, you'll have to innovate yourself, or just be lucky. If you just want to see market-average gains, invest in a big-ass (i.e diverse and capable of moving the market by itself) mutual fund with low fees and don't dick with it for 10 or 15 years. Any gains you make during that period can be fed back into the same fund.

wikipedia really is all you probably need right now. Just search for 'Finance' and you'll get more useful material than you'll know what to deal with. You're not going to get all your answers in this thread, I can guarantee that.

I'm just looking for general information that can enable that sorta innovative thinking. For example, how often do Google-esque companies (in terms of growth) pop up and in what industries. If I knew that sorta information, I can stand to bank more risk in stuff.
Title: Re: I want to learn about the stockmarket
Post by: Cormacaroni on October 08, 2008, 09:22:56 PM: oh, i forgot to mention: the next google is a firm called Pie2Go.com - they make fresh apple pies and deliver to your door. They have a really neat 'website'. I think this thing is going to fucking ROCKET when they do their IPO

::)
Title: Re: I want to learn about the stockmarket
Post by: Bildi on October 08, 2008, 10:00:17 PM: Quote from: Propagandhim on October 08, 2008, 08:35:14 PM
Thanks - Can I ask what you're putting your money in while everything is depressed?

My position hasn't changed - all my money is going into my home loan. In Australia the home loan interest rate is around 8%. If I were to take that money and invest it in shares instead, I'd have to see growth of more than 11.5% to be in a better position (considering I'd pay 30% tax on earnings).

So putting money into my home loan is effectively like earning a guaranteed 11.5% on investments (which is a very good return especially when you consider there is effectively no risk).

In terms of the few share investments that I already have, they're long-term investments so the downturn is irrelevant because over time the overall growth will be good.
Title: Re: I want to learn about the stockmarket
Post by: Cormacaroni on October 08, 2008, 10:04:38 PM: (http://i35.tinypic.com/dheofa.jpg)

the man is a Senior Member, best listen up
Title: Re: I want to learn about the stockmarket
Post by: Bildi on October 08, 2008, 10:07:43 PM: :tophat

spoiler (click to show/hide)
I'm so jealous that you're a member, but have a custom title. That's so cool.
[close]
Title: Re: I want to learn about the stockmarket
Post by: Propagandhim on October 08, 2008, 10:14:47 PM: Well thank you folks for the info - I have some reading to do.
Title: Re: I want to learn about the stockmarket
Post by: Cormacaroni on October 08, 2008, 10:31:00 PM: Quote from: Propagandhim on October 08, 2008, 10:14:47 PM
Well thank you folks for the info - I have some reading to do.

Yep. You're not going to find the next google without a LOT of reading. And even then, you'll need a lot of luck. In general, you shouldn't even be contemplating those kind of investment risks until you have a reasonably solid career and have taken care of the essentials (marriage, mortgage, car, insurance) first. Your best commodity right now is time. If you blow your first investment stake on a long-shot high-growth/high-risk stock, you could end up with dead money for years. I'd highly recommend starting off in a very conservative fashion, and only investing any returns above a predetermined amount in fun high-risk stuff.

This is exactly what you should do in vegas too btw. Also, do not invest in stocks recommended to you by drunken bunny girls, no matter how cutely they blow on your dice.
Title: Re: I want to learn about the stockmarket
Post by: Bildi on October 08, 2008, 11:11:14 PM: Cormacaroni - telling it how it is. :bow2

If you want to take part in speculation (which can also be called high risk/high return investment, or gambling), you should do it with your disposable income. For example, put 80% of your money into investments and leave 20% for speculation. If you lose the 20%, it doesn't matter, if you strike it lucky, then great.

But regardless of the outcome on the speculation, 80% of your money is still in investments that are going to make money all the time and ensure you have provided for your retirement, early retirement, or whatever.

What you do depends on your risk profile - how averse you are to risk.
Title: Re: I want to learn about the stockmarket
Post by: Cormacaroni on October 08, 2008, 11:13:57 PM: Quote from: Bildi on October 08, 2008, 11:11:14 PM
Cormacaroni - telling it how it is. :bow2

you know, that'd be a pretty cool custom tag
Title: Re: I want to learn about the stockmarket
Post by: Fresh Prince on October 08, 2008, 11:14:32 PM: Quote from: Bildi on October 08, 2008, 11:11:14 PM
But regardless of the outcome on the speculation, 80% of your money is still in investments that are going to make money all the time and ensure you have provided for your retirement, early retirement, or whatever.
Like what exactly? Term deposits, Blue Chip Stocks, property etc.
Title: Re: I want to learn about the stockmarket
Post by: Cormacaroni on October 08, 2008, 11:16:58 PM: Basically.

but bear in mind that: 1) the definition of what is a 'blue chip' changes more regularly than you might think (anyone want some General Electric or Ford stock? thought not. 2) not all property is equal. Today it's an attractive beach front property in Thailand, the next it's 10 feet underwater.
Title: Re: I want to learn about the stockmarket
Post by: Fresh Prince on October 08, 2008, 11:20:06 PM: Thanks I really should start investing now.
Title: Re: I want to learn about the stockmarket
Post by: Cormacaroni on October 08, 2008, 11:23:10 PM: Personally I'm still holding off from investing in anything....i don't think we're near the bottom yet. But for sure, get ready to invest before things start to climb again. You've got a while to work on your stake.
Title: Re: I want to learn about the stockmarket
Post by: Bildi on October 08, 2008, 11:29:15 PM: Quote from: Cormacaroni on October 08, 2008, 11:16:58 PM
Basically.

but bear in mind that: 1) the definition of what is a 'blue chip' changes more regularly than you might think (anyone want some General Electric or Ford stock? thought not. 2) not all property is equal. Today it's an attractive beach front property in Thailand, the next it's 10 feet underwater.

Agreed. Property has as many permutations as the stock market - you can invest in high or low risk property. As a very rough rule of thumb when the property market is going up, the stock market is going down and vice versa, so theoretically it probably isn't a bad idea to have investments in both types.

Realistically though, people are usually drawn to either the stock market or property market depending on "which one they like". If you're into shares and similar, you can always invest in a fund that in turn invests in properties for example - you'd gain some diversification in that way.

If you're investing for your retirement, most people would go for reasonably safe, reasonable yield investments for the majority of their investment - blue chip stuff usually falls in this category. Banks, supermarket chains, that sort of thing. As long as you're reasonably diversified, you'll generally be fine over the long term. One company might tank and go under occasionally, but overall you'll see decent, sustained growth.

Putting money in the bank is of course extremely safe, but the returns are lower as a result. It certainly pays to have some money in the bank, but I think it's fair to say the average safe investor will put most of their money in blue chip shares for example, rather than a bank.

Again, it depends on how much you want, when you want it, and how risk-averse you are.
Title: Re: I want to learn about the stockmarket
Post by: Kestastrophe on October 09, 2008, 08:24:02 AM: A good financial read: "Fooled By Randomness" by Nassim Taleb
Title: Re: I want to learn about the stockmarket
Post by: Olivia Wilde Homo on October 09, 2008, 11:53:03 AM: I'll be investing if the Dow gets to 8500. At that point, I don't see it going too much below that most impulsive investors would have long since dumped their stocks, putting myself in a perfect position to make some money.

Right now it is 9150.