Anyone else invest in the stock market?

[endzone_dave]

What strategies do you use?

I buy stocks that get beat up and sell them when they bounce a little. I use Williams %R to tell me when to buy and sell.

To me, the stock market is legalized gambling. It's just as fun putting money on a company than it is to put money on a horse. Cheap online investing has allowed little investors like me to get into the game.

[DeanCollins]

What strategies do you use?

I buy stocks that get beat up and sell them when they bounce a little. I use Williams %R to tell me when to buy and sell.

To me, the stock market is legalized gambling. It's just as fun putting money on a company than it is to put money on a horse. Cheap online investing has allowed little investors like me to get into the game.

I haven't moved anything of mine in a long time, but I'm tempted to do what your doing with 10% of it. I wish I'd bought apple when it was $4 (before imac and ipod)

[redwoody86]

What strategies do you use?

I tried a little bit of buying companies after their stock dropped a few points after a lower than expected earnings report, and then selling shortly after because people had oversold and true price was somewhere in the middle.

I had success. Then again, I wasn't using real money as this was a project for my finance class... groups get to invest $100,000 over two months.

If you wanted to invest, the time is two months ago, because the market was booming for most of it... record high again yesterday.

But all of the theory that I have learned tells me that it is impossible to pick stocks, since everyone has all of the same knowledge (or probably more) than you do. A random walk of stocks performs as good or better on average over time as so called experts picks, and over time mutual funds do not outperform the market consistntly.

Its easy to make a lot over a short period, but in the long run, all you can expect is a slow and steady return.

[iheartskins]

Ah I see the efficient market hypothesis is alive and well.

If you're an "accredited investor," and are willing to invest far more than $50K, then there are plently of other investment vehicles that you can pursue that may provide far more than a slow and steady return.

And some mutual funds do outperform the market--see. Bill Miller at Legg Mason who beat the S&P for 15 years straight (and finally had his first down year).

Granted I have a different perspective because I deal with investment managers all of the time...

[Kilmer17]

I find one of the best ways to invest is to not look at the company per se, but rather at the overall view of what they do, and what they can do in the future.

You should certainly have a good portion of it in "safe" stocks or mutuals, but for fun, I like to think outside of the box.

EX- I bought Elan stock about 3 years ago when it dropped from appx 70 a share down to 4. They make a MS drug that killed 2 people. However, I found out through very little research, that MS patients were still beggin their doctors to prescribe it. It was such a good drug to help their symptoms, that they were willing to risk death to feel better. 3 years later, the stock is up to 17 a share.

[project myu]

Buy low. Sell high.

That's my strategy. Of course, it's easier said than done, but since it's a bull market, I've matched or beaten the market for the most part.

The one time I decided to speculate (on Sirius), I lost 20%. Oops.

[project myu]

The real test to see who the "good" investors are will be during a bear market, which I have a suspicion will come around next year.

[Dan T.]

I've often said that if I spent as much time researching stock picks as I did my fantasy football teams over the years I'd be a f*cking billionaire by now.

[ashburnskinsfan]

It's index funds, dollar cost averaging and minimum fees for me. While a very rare fund manager such as Bill Miller may beat the market over the long term, increased costs usually erode any higher level of performance. And for every Bill Miller there's an army of underperforming and overpriced fund managers who give you the double whammy of underperforming the market while charging higher fees. :doh:

I use various Vanguard products 'cause their costs are so low. S&P Index, medium and small cap domestic, international equity, emerging markets and REITs. Dollar cost averaging, trickling funds in every week. Rinse and repeat.

[Mark The Homer]

I got lucky and hit a ten banger in 1991. IGT - International Game Technology. I think it split four times. That one stock set up my whole retirmement.

[SkinInsite]

Corner the frozen orange juice market.

[iheartskins]

It's index funds, dollar cost averaging and minimum fees for me. While a very rare fund manager such as Bill Miller may beat the market over the long term, increased costs usually erode any higher level of performance. And for every Bill Miller there's an army of underperforming and overpriced fund managers who give you the double whammy of underperforming the market while charging higher fees. :doh:

I use various Vanguard products 'cause their costs are so low. S&P Index, medium and small cap domestic, international equity, emerging markets and REITs. Dollar cost averaging, trickling funds in every week. Rinse and repeat.
Very true.

Check out the monthy Mutual Fund report in the WSJ for the best performing mutual funds.

When you say index funds, are you talking about ETFs?

[ashburnskinsfan]

Very true.

Check out the monthy Mutual Fund report in the WSJ for the best performing mutual funds.

When you say index funds, are you talking about ETFs?

Not ETFs, just index funds like VFINX, VTSMX, VGTSX, VEIEX, VGSIX.

From what I recall these all have expense ratios of less than 0.2%.

I'm a simple individual and haven't investigated the Vanguard ETFs although they look very interesting. :)

[the burgundy and gold]

i was just gonna make a thread about this. If anyone has a good amount of knowledge in stock, could you share your ideas or PM me or something. I have some cash just sitting around in the bank and i think it'd be smart to invest it.

[redwoody86]

And some mutual funds do outperform the market--see. Bill Miller at Legg Mason who beat the S&P for 15 years straight (and finally had his first down year).

Thanks, they don't teach us this in class.

But I just read up on this fund; it lost 3 years in a row, but not at much as the S&P, and it has underperformed the market if you look at the last 3 years together.

Just like those commericals saw, past performance does not gaurantee future success :)

Anybody who consistently beats the market is just getting lucky, or is cheating (read: insider trading, collusion). And statistics show that there will be some that do get lucky over and over.. just not that many, and there are no gaurantees that it will continue.

[Mark The Homer]

Anybody who consistently beats the market is just getting lucky, or is cheating (read: insider trading, collusion). And statistics show that there will be some that do get lucky over and over.. just not that many, and there are no gaurantees that it will continue.

So Peter Lynch was just lucky?

I think there is a little more involved than just blind luck.

[Burgold]

I tend to be value oriented. I look at things that are underbought, relative to their pe and a bunch of other metrics. Works pretty well for me.

[Zen-like Todd]

So Peter Lynch was just lucky?

I think there is a little more involved than just blind luck.


Warren Buffett used voodoo magic! Some dude standing on a crate in Times Square told me so.

[PleaseBlitz]

Older brother and father are both financial advisors for Wachovia Securities, so i just give my money to them and let them do whatever they want with it.

Right now im mostly in funds. I'd have to look to see which ones.

[ashburnskinsfan]

i was just gonna make a thread about this. If anyone has a good amount of knowledge in stock, could you share your ideas or PM me or something. I have some cash just sitting around in the bank and i think it'd be smart to invest it.

The most important idea is to think about how long you want to invest for. Historically, over the long term (like ten years), the braod stock market has always given a higher rate of return than bonds or Certificates of Deposit (CDs), but like we've seen recently stock markets can have big falls and down years. Individual stocks can crash and burn and become worthless. Investing in the broad market such as the S&P 500 has less risk, but still will have down years, and you could end up with less than you started.

If you put your money into the market now there is a decent risk that in two or three years time your investment would be worth less than you paid for it. Over ten years you're very likely to come out well ahead of a lower risk investment, but at your age that probably seems like an awfully long time.

I'm guessing that you will want to use the money for car/college or some other major purchases within the next few years. If so, stock investments are not a good option for you.

If your timeframe is a few years, I'd suggest looking around and investing in the best rate CDs you can find; the longer term ones should give you a higher rate of interest, but your investments should match the time frame for when you want to use the money.

Let me know if you have any questions.

[Fergasun]

No idea what any of you are talking about. I've got stocks passed down to me by my grandfather and some mutual funds. I prefer to hold onto stocks for the long run, mainly because my grandfather did that and I think he's close to a millionaire or half millionaire.

I plan on just looking at some top blue chip companies and investing in those, and then reinvesting the dividend. I'm not sure if that is a good strategy... but it seems like everyone here is talking about buying a stock at X, waiting until it goes up to Y and then selling it.

Maybe I don't have the right perspective, but I figure most private companies will survive and be run well so I'll get a decent return on my investment. You're going to tell me the Walmarts, Targets, Home Depots, etc are just going to up and disappear in the next 10 years? They won't try to evolve or whatever?

I'm going to have some money to play with this year, and I'm going to randomly select Fortune 500 stocks and invest in them.... you need losers too so you can reduce your taxes as well.

[PleaseBlitz]

No idea what any of you are talking about. I've got stocks passed down to me by my grandfather and some mutual funds. I prefer to hold onto stocks for the long run, mainly because my grandfather did that and I think he's close to a millionaire or half millionaire.

I plan on just looking at some top blue chip companies and investing in those, and then reinvesting the dividend. I'm not sure if that is a good strategy... but it seems like everyone here is talking about buying a stock at X, waiting until it goes up to Y and then selling it.

Maybe I don't have the right perspective, but I figure most private companies will survive and be run well so I'll get a decent return on my investment. You're going to tell me the Walmarts, Targets, Home Depots, etc are just going to up and disappear in the next 10 years? They won't try to evolve or whatever?

I'm going to have some money to play with this year, and I'm going to randomly select Fortune 500 stocks and invest in them.... you need losers too so you can reduce your taxes as well.


Looking at your age, sounds like you have the right strategy.

As far as blue chippers being no risk, look at Kmart, AOL, and Enron.

[Darth Tater]

When I've gone elephant hunting, I usually get burned. I do find that companies that don't treat their employees justly (I'm not talking about how those employees want to be treated, just treatment often includes treatment that some employees might think is unfair) tend not to perform well over the long-haul. I find it helpful to at least undertand and approve of the companies business-model.

[ashburnskinsfan]

No idea what any of you are talking about. I've got stocks passed down to me by my grandfather and some mutual funds. I prefer to hold onto stocks for the long run, mainly because my grandfather did that and I think he's close to a millionaire or half millionaire.

I plan on just looking at some top blue chip companies and investing in those, and then reinvesting the dividend. I'm not sure if that is a good strategy... but it seems like everyone here is talking about buying a stock at X, waiting until it goes up to Y and then selling it.

Maybe I don't have the right perspective, but I figure most private companies will survive and be run well so I'll get a decent return on my investment. You're going to tell me the Walmarts, Targets, Home Depots, etc are just going to up and disappear in the next 10 years? They won't try to evolve or whatever?

I'm going to have some money to play with this year, and I'm going to randomly select Fortune 500 stocks and invest in them.... you need losers too so you can reduce your taxes as well.

If you're getting started, you're better off with an index fund. With the S&P 500 you're investing in a large number of companies so your risk is spread, you have a lot of good blue chips, and the stocks usually pay decent dividends. Motley Fool has a good overview at:

http://www.fool.com/mutualfunds/indexfunds/indexfunds01.htm?source=InvAg

The Vanguard website has good info too. I use Vanguard because they really focus on keeping costs to a minimum. Some brokers and fund managers charge fees that make it very hard to get decent returns.

[iheartskins]

Anybody who consistently beats the market is just getting lucky, or is cheating (read: insider trading, collusion). And statistics show that there will be some that do get lucky over and over.. just not that many, and there are no gaurantees that it will continue.
What about KKR or Cerberus or Citadel or Blackstone? Are they "just getting lucky"?

What about SAC Capital Advisors?

What about Tiger?

And Pequot...

I see you've bought the efficient market hypothesis...but it doesn't hold up.

Look up the concept of "alpha."

[iheartskins]

If you're getting started, you're better off with an index fund. With the S&P 500 you're investing in a large number of companies so your risk is spread, you have a lot of good blue chips, and the stocks usually pay decent dividends. Motley Fool has a good overview at:

http://www.fool.com/mutualfunds/indexfunds/indexfunds01.htm?source=InvAg

The Vanguard website has good info too. I use Vanguard because they really focus on keeping costs to a minimum. Some brokers and fund managers charge fees that make it very hard to get decent returns.
ASF is correct...

Always check the "load" or fees of the fund, withdrawal terms.

Ensure you engage in due diligence in your investing.

[Mark The Homer]

The most important idea is to think about how long you want to invest for. Historically, over the long term (like ten years), the braod stock market has always given a higher rate of return than bonds or Certificates of Deposit (CDs), but like we've seen recently stock markets can have big falls and down years. Individual stocks can crash and burn and become worthless. Investing in the broad market such as the S&P 500 has less risk, but still will have down years, and you could end up with less than you started.

If you put your money into the market now there is a decent risk that in two or three years time your investment would be worth less than you paid for it. Over ten years you're very likely to come out well ahead of a lower risk investment, but at your age that probably seems like an awfully long time.

I'm guessing that you will want to use the money for car/college or some other major purchases within the next few years. If so, stock investments are not a good option for you.

If your timeframe is a few years, I'd suggest looking around and investing in the best rate CDs you can find; the longer term ones should give you a higher rate of interest, but your investments should match the time frame for when you want to use the money.



This guy knows what he's talking about. It's all about getting in early. Really. That's the whole secret.

Other than that, I would add:

1) The most important issue is the market itself. If you strongly believe it will go up, you should invest. Doesn't matter in what. Just invest.

2) The second most important issue is the industry you want to invest in. If it's highly competitive, it may be best to avoid it. Look at the industry, not just the company or stock.

3) The final issue is the company or stock itself. But this is relatively unimportant compared to the two issues above.

MHO

[Ron_Man]

I have found this info very interesting. I've always wanted to know more about this but have never been able to learn or been helped out. Would anyone mind telling me how to get started with this? What do I need? What do I do? How do I do it? Etc. I once attended a stock market seminar but nothing happened with that as they wanted money for you to learn more info (Learn to Trade I believe they were called if anyone is familiar with them). If anyone doesn't mind trying to help a bro out without me having to start a new thread, I'd like to know more about the stock market. Thanks :)

[iheartskins]

Check out the Wall Street Journal's Guide to Money and Investing.

[Ron_Man]

Check out the Wall Street Journal's Guide to Money and Investing.

Just to be sure I know what you're talking about, this is a book right? And this will tell me everything from basic info into what you guys know and are already doing? Thanks

[iheartskins]

Just to be sure I know what you're talking about, this is a book right? And this will tell me everything from basic info into what you guys know and are already doing? Thanks
http://www.amazon.com/Street-Journal-Guide-Understanding-Investing/dp/0743266331/sr=8-1/qid=1166399304/ref=pd_bbs_sr_1/105-7975292-4818837?ie=UTF8&s=books

[ashburnskinsfan]

I have found this info very interesting. I've always wanted to know more about this but have never been able to learn or been helped out. Would anyone mind telling me how to get started with this? What do I need? What do I do? How do I do it? Etc. I once attended a stock market seminar but nothing happened with that as they wanted money for you to learn more info (Learn to Trade I believe they were called if anyone is familiar with them). If anyone doesn't mind trying to help a bro out without me having to start a new thread, I'd like to know more about the stock market. Thanks :)

A very decent place to start with free information is:

http://www.fool.com/school/basics/basics.htm?source=InvAg

But if you're going to put your money into any type of investment, I'm sure paying a few bucks for the book IHS recommended is worthwhile.:)

[redwoody86]

What about KKR or Cerberus or Citadel or Blackstone? Are they "just getting lucky"?

What about SAC Capital Advisors?

What about Tiger?

And Pequot...

I see you've bought the efficient market hypothesis...but it doesn't hold up.

Look up the concept of "alpha."

I'm not saying that it's entirely luck, but for the most part, yes. Everyone does the same research and most make the same assumptions, and then they pick. Then they will all end up on a distribution and they just happened to end up on the right tail.

SAC Capital: a hedge fund that made 40% a year in a booming market. After a 50% (FIFTY!) fee, you make 20% a year investing millions while taking on a lot of risk. Why not just go and buy some small caps.

Citadel was one of the best for over 15 years, I see, and then didn't follow up in 2005.

Hedge funds are tough to analyze because they are so private. Who knows what they're investing in.

I can't look up any of the others without some more information.

You've given lots of examples, should I give the example of the hedge fund that lost what, 6 billion? In a month. Amaranth.

I should have properly stated something. Yeah, anyone can take on huge levels of risk and get the big returns for a long time, but odds say that eventually you will take the big hit. Some people just get lucky and that doesn't happen as often. Just probability.

[iheartskins]

I'm not saying that it's entirely luck, but for the most part, yes. Everyone does the same research and most make the same assumptions, and then they pick.
That's simply not true. Do you realize how many research issuers there are? It's not like it's just the large banks and a few large mutual fund shops. There are THOUSANDS of research companies out there that come to hugely different conclusions.

Then they will all end up on a distribution and they just happened to end up on the right tail.
But that debunks the whole efficient market hypothesis that you're holding so fastly on...if the market were completely efficient, there'd be no bell over time. There'd only be a single statistical category for all managers. As soon as there are tails, there is positive or negative alpha.

SAC Capital: a hedge fund that made 40% a year in a booming market. After a 50% (FIFTY!) fee, you make 20% a year investing millions while taking on a lot of risk. Why not just go and buy some small caps.
How is small cap investing any less risky than hedge fund investing? It all depends on the underlying portfolio.

Citadel was one of the best for over 15 years, I see, and then didn't follow up in 2005.
So one bad year means the market is efficient. Please!

Hedge funds are tough to analyze because they are so private. Who knows what they're investing in.
My firm represents close to 500 hedge funds and private equity funds. If your theory holds true (i.e., people are right just as often as they are wrong), then it wouldn't matter what they invest in so I'm not sure why you're raising that.

You've given lots of examples, should I give the example of the hedge fund that lost what, 6 billion? In a month. Amaranth.
And that's relevant, how?

I should have properly stated something. Yeah, anyone can take on huge levels of risk and get the big returns for a long time, but odds say that eventually you will take the big hit. Some people just get lucky and that doesn't happen as often. Just probability.
If that's true, why try to find the best performing manager? Why not just give it to Agnes at your local bank?

[redwoody86]

That's simply not true. Do you realize how many research issuers there are? It's not like it's just the large banks and a few large mutual fund shops. There are THOUSANDS of research companies out there that come to hugely different conclusions.
I actually wasn't aware of that. I would assume that the majority come up with the same conclusion based on their research and the rest are trying to go against the grain to try to beat the emt.


But that debunks the whole efficient market hypothesis that you're holding so fastly on...if the market were completely efficient, there'd be no bell over time. There'd only be a single statistical category for all managers. As soon as there are tails, there is positive or negative alpha.

The reason that there is a bell has to do with statistics and a small n. My argument here is that if all of these people were investing over an infinite time, we would see them all get just about the market premium. We just have too small of a sample size. If you flip 100 coins, its not going to go H T H T H T, but you will still get 50% heads as n goes it infinity.

These men are just the examples of those who have gotten lucky in their lives and picked stocks that went up, and did it multiple times.


How is small cap investing any less risky than hedge fund investing? It all depends on the underlying portfolio.
I agree that it depends on the portfolio. But why pay someone a huge fee to something that you can do yourself?

So one bad year means the market is efficient. Please!
What does a 'bad year' mean? That stocks and prices which they are not in control of didn't go the way that they expected. What stopped them from having 50% bad years, or 100% bad years?

My firm represents close to 500 hedge funds and private equity funds. If your theory holds true (i.e., people are right just as often as they are wrong), then it wouldn't matter what they invest in so I'm not sure why you're raising that.
You are correct, that is my argument. It doesn't matter what they invest in because they will get the expected risk and return which has been determined by the market.


And that's relevant, how?
To show that just as smart and intelligent people who are supposively geniouses in the field can just as easily end up on the left tail if they have bad luck instead of good luck.

If that's true, why try to find the best performing manager? Why not just give it to Agnes at your local bank?
You have to give it to anyone with the correct level of information and the same investing viewpoints (risk) as you require.

[iheartskins]

red, I'd admire your stranglehold on the EMH. :)

But I imagine, that as you get more knowledge and experience in this area, your opinions will change.

The market isn't run on pure statistics and isn't always efficient. It's just not.

And there are literally thousands of different investment vehicles. Check out ISDA.org, or for a sampling of perhaps .01% of the types of derivatives out there, check out a book about any of the currency crises that took place in the 1990s, and how they relate to arbitrage strategies and their volatility trading.

[endzone_dave]

You are correct, that is my argument. It doesn't matter what they invest in because they will get the expected risk and return which has been determined by the market.



Since I put my short-term trading sytem in place in 2002, I've gotten about 20% a year with little variance year to year. I have much more flexibility than a fund manager and can jump in and out of a stock when I need to. A fund manager has to buy stock and hold it, hoping events in the future (which can be difficult to predict) work out his way. I can set exact buying and selling points and execute them immediately.

[iheartskins]

Since I put my short-term trading sytem in place in 2002, I've gotten about 20% a year with little variance year to year. I have much more flexibility than a fund manager and can jump in and out of a stock when I need to. A fund manager has to buy stock and hold it, hoping events in the future (which can be difficult to predict) work out his way. I can set exact buying and selling points and execute them immediately.
That isn't exactly true.

Mutual fund managers (i.e., those that manage funds that are registered with the SEC as mutual funds), are more restricted in the manner in which they trade than other entities, but individual investment managers and the investment managers in other fields have few, if any (aside from those they've contracted to abide by), restrictions on their trading activities.

[endzone_dave]

That isn't exactly true.

Mutual fund managers (i.e., those that manage funds that are registered with the SEC as mutual funds), are more restricted in the manner in which they trade than other entities, but individual investment managers and the investment managers in other fields have few, if any (aside from those they've contracted to abide by), restrictions on their trading activities.

Would it be difficult to move the large amount of shares they deal with?

I'm starting to invest more and now get hit when I trade 1000 shares of a stock and usually the price goes up while all the shares are being bought. Level 2 trading takes care of this, right? How do you set it up to buy blocks of shares in an IRA?

[iheartskins]

Would it be difficult to move the large amount of shares they deal with?

I'm starting to invest more and now get hit when I trade 1000 shares of a stock and usually the price goes up while all the shares are being bought. Level 2 trading takes care of this, right? How do you set it up to buy blocks of shares in an IRA?
I'm not sure what you mean by Level 2 trading. Depending upon who's acting as your IRA Custodian, you'll be offered a different selection of portfolio management tools. Usually, but not always, the more money you are managing and the better the brokerage firm, the better the tools and the better the execution you'll get.

Your question also turns on the equity in question. Are you trading something like IBM or Ford or something that on any given day has enormous trading volume or are you trading something that's OTC and thinly traded? The further you get toward the latter, the more likely you are to have to break up the trade at different prices.

But, generally speaking, there's no reason that 1000 shares couldn't be traded as a single block if you're trading something with a lot of volume.

[endzone_dave]

I'm not sure what you mean by Level 2 trading. Depending upon who's acting as your IRA Custodian, you'll be offered a different selection of portfolio management tools. Usually, but not always, the more money you are managing and the better the brokerage firm, the better the tools and the better the execution you'll get.

Your question also turns on the equity in question. Are you trading something like IBM or Ford or something that on any given day has enormous trading volume or are you trading something that's OTC and thinly traded? The further you get toward the latter, the more likely you are to have to break up the trade at different prices.

But, generally speaking, there's no reason that 1000 shares couldn't be traded as a single block if you're trading something with a lot of volume.

I'm buying Gymboree (GYMB) today but at $38 with a million shares a day traded I won't have to worry. I'm also buying 2000 shares of Planar Systems (PLNR) whose average volume is only 100,000. Like you said, I'll have to break up the trades not to take a hit buying it. Also like you said, I'll have to check with Fidelity to see what options there are (if any) to buy blocks of shares without getting hurt on the bid and ask.

[iheartskins]

I'm buying Gymboree (GYMB) today but at $38 with a million shares a day traded I won't have to worry. I'm also buying 2000 shares of Planar Systems (PLNR) whose average volume is only 100,000. Like you said, I'll have to break up the trades not to take a hit buying it. Also like you said, I'll have to check with Fidelity to see what options there are (if any) to buy blocks of shares without getting hurt on the bid and ask.
Another thing to consider is that often, especially when working with both small lot trading and with a large brokerage firm (like Fidelity), when you make a trade, you aren't going out into the market, and instead you are buying from the proprietary account of the brokerage firm which they are marking to market as they "trade" it with themselves. This might not be the case for you, but check your account agreement. Also, give a call to the lead broker and ask him if you can get access to a trading platform (like this program offered by Goldman (via the old SL&K) http://www.redi.com/rpdesc.html), which allows you to directly access the market as if you were sitting on the trading floor. I should note that you probably won't be able to access that kind of program unless you are managing close to 5-10 million dollars, but it's worth investigating if they have another program that's similar that you can utilize.

[endzone_dave]

Another thing to consider is that often, especially when working with both small lot trading and with a large brokerage firm (like Fidelity), when you make a trade, you aren't going out into the market, and instead you are buying from the proprietary account of the brokerage firm which they are marking to market as they "trade" it with themselves. This might not be the case for you, but check your account agreement. Also, give a call to the lead broker and ask him if you can get access to a trading platform (like this program offered by Goldman (via the old SL&K) http://www.redi.com/rpdesc.html), which allows you to directly access the market as if you were sitting on the trading floor. I should note that you probably won't be able to access that kind of program unless you are managing close to 5-10 million dollars, but it's worth investigating if they have another program that's similar that you can utilize.

Thanks for the info! (Although I'm not even close to the $5M needed for that account)

[gbear]

I saw some love for Home Depot in the thread as a "Blue Chip." Not basing this on anything stock related, I have a hard time going for this over the long term. As some one who shops there when I have to, it remind me a lot of Hechingers back in the 80's. Everybody seemed to think that was the hardware store for all time, but everybody also thought it was a pain in the you know what to shop there. You couldn't get help to save your life. Things weren't put back. The lines wre terrible, etc. In general, it was an entire franchise understaffed to save money. Having gone to Home Depots on the East Coast and West, it seems history is repeating. I can't think of a PE ratio that would encourage me to overlook what seems to be a system wide failure for that company that I watched take down another giant in the same industry. Now Lowes or ACE Hardware are two franchises I generally prefer to shop at, but again I haven't looked at their stocks. I just have a hard time investing in places long term that aren't selling things in a consumer friendly manner (maybe that's why I'm not rich). I say this being totally in index funds for retirement and Vanguard money market for short term investments (lazy man's way).

[Burgold]

Actually, I've heard a ton of bad things about HD. I rode it for a while, but have no plans to rebuy. The Warren Buffet theory makes me tempted, because the one around me is always flooded with customers, but the metrics and noise look pretty bad.

[ashburnskinsfan]

I say this being totally in index funds for retirement and Vanguard money market for short term investments (lazy man's way).

Lazy, pragmatic, smart ... calll it what you will, I have the same view.:)

I avoid individual stocks because of how difficult it is to reliably predict future value. As one example, I know the enterprise software market pretty well having worked in it for twenty years, and even perfect inside information on competitive position does not translate into consistently being able to assess company prospects, especially where mergers and acquisitions are common. Given what I know of the software market and how that does not help me predict which companies will do well, investing in individual stocks in other market sectors would be little better than a roll of the dice.:doh: :laugh:

[Air Force Cane]

I would bet a lot of money that as an overall average-

those who have a widely distributed and varied portfolio in their 401K with asset allocation for mutual funds

do better over the long haul than those picking individual stocks as a hobby..

[redwoody86]

But I imagine, that as you get more knowledge and experience in this area, your opinions will change.

The market isn't run on pure statistics and isn't always efficient. It's just not.


I bet your right. I'm just a college student who happened to rather read the extremeskins board than study for the two finance finals that i have today :doh:.

But if they ask about the real world applications (or lack thereof) of the efficient market hypothesis, I think I'm ready for that one. Thanks for the edumacation!

i should go study...

[iheartskins]

Good luck red. Give em EMH hell! :)