Strategies for low-dough MoFos

AlfredSokol said: "Something common we see here is a new person with small amounts of capital ($500 or so) are looking to invest. What is the best strategy for these folks? You can't expect a huge return from that money, but you almost have to get some sort of gain to advance. Let's talk about what strategies these people should consider."

Anaphylaxis said: "I'm in that exact situation, having started out with $500... I tried to work with picks that I thought would be good on the regular market. What I ran into was not so much that my picks were terrible but my cost basis was so high that I couldn't make any money... Right now, I am invested 2/3rds into TNOG and 1/3rd into PLNI. My hope is with them being undervalued significantly and a lot of good news just over the horizon, they will raise significantly. My overall stragety is to sell off once they hit about $1500-2000 in value so I can go after more stable stocks in the regular maket again. This time at a much reduced cost basis. Good idea for a thread, BTW, looking forward to hearing all the ideas out there..."

kazana said: "i'm also a low $$ player, but i just like to see my money doing something, and using this starting cash to learn. looking at it from a mathematical point of view, with $500, it almost seem a better choice to go to a casino and put it down on red. the chance you'll lose is 5.6% higher than winning (19 vs 18 - 0 means you lose) assuming gaining 100% or losing 100% is 50/50; you'd need a comission of only $27 to achieve similar probabilities - and more time. i know, this is not correct at all, just a nice little mathematical mind game.... so, if you wish to do so: flame now. :) cheers, kazana"

thezster said: "I have to admit, when I started out playing the market, it was with around $3 - $5K..... and to make any $$ - I played pennies..... Even then though, I did what I do now.... I found one or two companies..... studied their history, became familiar with their mgmt....... and traded them on a daily/hourly basis. Looking back, I consider myself lucky - as I finally accumulated enough to start playing "spendier" equities.... with less volatility and associated risk. Would I do it now? Not on your life...... Am I glad I did it then..... well, sure....... I also played in the casinos back then too.... actually trying to make money rather than simply enjoy the entertainment value of giving them all my cashola........"

jasperg357 said: "I haven’t been on this site long but I see there is a lot of interest in the Penny Stocks, the current heated discussion on the PLNI thread would be a good example. My question is where do people come across these companies? Are there specific web sites dedicated to Penny Stock companies? What to look for in one of these companies to see if they are worth investing in? I realize there is much more risk in investing in a penny stock company but if you pick a winner the rewards seem greater."

LanceJ said: "[QUOTE=AlfredSokol]Something common we see here is a new person with small amounts of capital ($500 or so) are looking to invest. What is the best strategy for these folks? You can't expect a huge return from that money, but you almost have to get some sort of gain to advance. Let's talk about what strategies these people should consider.[/QUOTE] I say the odds are so stacked against you with only $500 that as a rule in general, don't do it. Like zster I started with around $3,000. That's a good starting amount. Also like zster, I doubled that initial $3,000 in about a 4 month period by trading them constantly. When a stock went up 3% or more, sell and wait for it to drop back down an do it again? What? It didn't drop down? That's okay, there's always a stock that did drop down somewhere that day and so I'd do it again with a different stock. One of the difficulties with such a little amount of startup money is that you can't diversify really, let's say you bought 5 stocks with $500, so that an equal $100 amount was put in each. At $10 per trade, a stock would have to go up 20% just for you to break even! Those odds are not good. In fact they are terrible odds. I say hold off until you can get around $2,000 to $3,000 in the market."

thezster said: "[QUOTE=LanceJ]I say the odds are so stacked against you with only $500 that as a rule in general, don't do it. Like zster I started with around $3,000. That's a good starting amount. Also like zster, I doubled that initial $3,000 in about a 4 month period by trading them constantly. When a stock went up 3% or more, sell and wait for it to drop back down an do it again? What? It didn't drop down? That's okay, there's always a stock that did drop down somewhere that day and so I'd do it again with a different stock. One of the difficulties with such a little amount of startup money is that you can't diversify really, let's say you bought 5 stocks with $500, so that an equal $100 amount was put in each. At $10 per trade, a stock would have to go up 20% just for you to break even! Those odds are not good. In fact they are terrible odds. I say hold off until you can get around $2,000 to $3,000 in the market.[/QUOTE] :eek: Hold on... Wait a Minute.... Somebody get a Camera...... Lance and I totally agree on somethin?????????? :eek: He hit it right on the head.... I traded those pennies daily, often multiple times during the day... Never looking for the home run..... just wanted to cover my commissions and add a few $$ to the main pot. Today, you can buy 500 shares.... tomorrow 525..... the next 550........ and so on...."

alhamid said: "what do you look for if you buy and sell same stock in same day?"

thezster said: "Truly not trying to be a smart-a _ _........ but, a profit.."

thezster said: "Do you mean what type of stock? I always played with $1.00 - 1.50 range stocks that would fluctuate $0.10 - $0.25 or more during most trading days. They would have a nice history of staying around the same overall range for the past couple of months (no surprises hopefully). When it would go down, I'd buy.... when it would go up.. I'd sell. A thousand shares at $0.10 is a quick $100 less commissions... Get lucky and clear $0.25 or more... ------- well, it adds up."

Anaphylaxis said: "[QUOTE=Anaphylaxis] Good idea for a thread, BTW, looking forward to hearing all the ideas out there...[/QUOTE] Well, I guess it was a good idea -- until it turned out to be a thread discouraging anyone with less than $3k from trying... So with the usual disclaimer that it's unwise to start with under $2-3k or invest more than 20% in .PK stocks, is there any good advise for those of us starting out with very little?"

thezster said: "Not sure if we're discouraging you from trying with less than $3000.... but letting you know it's discouraging to try with less than $3000.... A fact is a fact......... not an opinion.. I'm sorry if that fact is discouraging... I could suggest you throw all of it at penny stocks until you find the right one to pay off... but, typically, by the time you find it.... you can't even afford that one... then I would blame myself for steering your hard earned cash into the dumpster. IMHO, you would be just as well off, if not better off, to find a good poker game with $500. At least the house doesn't charge you $20.00 per hand like your broker does."

jasperg357 said: "[QUOTE=thezster]Do you mean what type of stock? I always played with $1.00 - 1.50 range stocks that would fluctuate $0.10 - $0.25 or more during most trading days. They would have a nice history of staying around the same overall range for the past couple of months (no surprises hopefully). When it would go down, I'd buy.... when it would go up.. I'd sell. A thousand shares at $0.10 is a quick $100 less commissions... Get lucky and clear $0.25 or more... ------- well, it adds up.[/QUOTE] Are there rules about buying and selling a stock in the same day? If so what?"

Anaphylaxis said: "[QUOTE=thezster]Not sure if we're discouraging you from trying with less than $3000.... but letting you know it's discouraging to try with less than $3000.... A fact is a fact......... not an opinion.. I'm sorry if that fact is discouraging... [/QUOTE] I think you are misinterperting the intent of my post. I'm not one to get butt-hurt or discouraged in the least if someone wasn't agreeing with me. To be for sure, in the ideal world I would have at least a couple thousand going into this -- but I don't. I was just hoping to get some suggestions on how to make unfavorable prospects a little more likely. This was the original intent of the thread, unless I'm reading the OP completely wrong... [QUOTE=thezster] I could suggest you throw all of it at penny stocks until you find the right one to pay off... but, typically, by the time you find it.... you can't even afford that one... then I would blame myself for steering your hard earned cash into the dumpster. [/QUOTE] If this is your hypothetical advice, (not that you would ever suggest owning 100% pennies), this is what I have done already. Either they go up and I graduate to safer, more transparent stocks, or I just paid $500 for a class in business, economics and a whole host of other topics I was clueless about before. Either way I'm better off for having done it... At any rate, I fully believe in Big Boy Rules: if something bad happens, I've been warned and I'm accountable for that having happened. If something good happens, I take all the rewards... [QUOTE=thezster] IMHO, you would be just as well off, if not better off, to find a good poker game with $500. At least the house doesn't charge you $20.00 per hand like your broker does.[/QUOTE] Well, I don't know poker in the least so I would be pretty well screwed anyway. LOL! :D"

thezster said: "[QUOTE=jasperg357]Are there rules about buying and selling a stock in the same day? If so what?[/QUOTE] There is a 3 day rule for your account. I'll try to explain in simple terms. Think of your account like it is a checking account. You have (for example) $1000 in it. When you buy stocks, it is like writing a check against your account. If you buy $1000 worth of stocks on Monday - your account is empty. If you sell those stocks the same day - you are in essence, accepting a check from someone else for those stocks, which is automatically deposited in your account. Now--- here it gets interesting. Your "bank" (the broker) will "trust" you enough to let you write another check on the same day for up to $1000 (or whatever amount you sold your stocks for), even though those funds from the check you accepted hasn't cleared yet. However - he will not let you sell that second batch of stocks until the check you accepted clears (3days).. Hence, the 3 day rule. Simply stated: and assuming you spend your entire account on one transaction: You may buy/sell/buy all in the same day. But you cannot sell that second batch of stocks for 3 days - to allow the account to "settle". Clear?? As Mud???"

thezster said: "[QUOTE=Anaphylaxis]I think you are misinterperting the intent of my post. I'm not one to get butt-hurt or discouraged in the least if someone wasn't agreeing with me. To be for sure, in the ideal world I would have at least a couple thousand going into this -- but I don't. I was just hoping to get some suggestions on how to make unfavorable prospects a little more likely. This was the original intent of the thread, unless I'm reading the OP completely wrong... If this is your hypothetical advice, (not that you would ever suggest owning 100% pennies), this is what I have done already. Either they go up and I graduate to safer, more transparent stocks, or I just paid $500 for a class in business, economics and a whole host of other topics I was clueless about before. Either way I'm better off for having done it... At any rate, I fully believe in Big Boy Rules: if something bad happens, I've been warned and I'm accountable for that having happened. If something good happens, I take all the rewards... Well, I don't know poker in the least so I would be pretty well screwed anyway. LOL! :D[/QUOTE] Good attitude: Okay - the only advice I would give kinda mimics what I said earlier.... Buy those penny stocks.... but don't just wait forever for them to skyrocket. When/if they go up enough to clear a profit.... sell them... and repeat the process... Oh... and, Learn Poker -- I doubled my investment last night in 4 hours.... of course - it was at my house --- with my rules :cool:"

Anaphylaxis said: "[QUOTE=thezster]Good attitude: Okay - the only advice I would give kinda mimics what I said earlier.... Buy those penny stocks.... but don't just wait forever for them to skyrocket. When/if they go up enough to clear a profit.... sell them... and repeat the process... Oh... and, Learn Poker -- I doubled my investment last night in 4 hours.... of course - it was at my house --- with my rules :cool:[/QUOTE] Thanks, that's pretty much what I had in mind. Sell when they turn a profit, even if they are good long term prospects. Buy on the pullback, rinse and repeat... On the poker thing: card games are not my thing. I have enough trouble winning solitare. ;)"

jasperg357 said: "[QUOTE=thezster]There is a 3 day rule for your account. I'll try to explain in simple terms. Think of your account like it is a checking account. You have (for example) $1000 in it. When you buy stocks, it is like writing a check against your account. If you buy $1000 worth of stocks on Monday - your account is empty. If you sell those stocks the same day - you are in essence, accepting a check from someone else for those stocks, which is automatically deposited in your account. Now--- here it gets interesting. Your "bank" (the broker) will "trust" you enough to let you write another check on the same day for up to $1000 (or whatever amount you sold your stocks for), even though those funds from the check you accepted hasn't cleared yet. However - he will not let you sell that second batch of stocks until the check you accepted clears (3days).. Hence, the 3 day rule. Simply stated: and assuming you spend your entire account on one transaction: You may buy/sell/buy all in the same day. But you cannot sell that second batch of stocks for 3 days - to allow the account to "settle". Clear?? As Mud???[/QUOTE] Thx for the info."

thezster said: "[QUOTE=Anaphylaxis]Thanks, that's pretty much what I had in mind. Sell when they turn a profit, even if they are good long term prospects. Buy on the pullback, rinse and repeat... On the poker thing: card games are not my thing. I have enough trouble winning solitare. ;)[/QUOTE] You stated you had 1/3rd into PLNI.... With Hindsight being 20/20 vision.... Had you bought 30,000 shares at $0.005 a few days ago ($150)... and sold it on Thursday for $0.007 - you would have made $60 bucks - comissions... Then, had you bought back in on Friday at $.006 - you would have been able to buy about 31,666 shares with your initial $150 + $60 (less commissions). That's how the game is played. Trouble is - when you sell a holding - and it continues to go up... you start saying: I would have held on if I knew it was going to keep going up. I could have made a lot more if I had waited. I should have waited.... Hence: Woulda/coulda/shoulda...."

Anaphylaxis said: "[QUOTE=thezster]You stated you had 1/3rd into PLNI.... With Hindsight being 20/20 vision.... Had you bought 30,000 shares at $0.005 a few days ago ($150)... and sold it on Thursday for $0.007 - you would have made $60 bucks - comissions... Then, had you bought back in on Friday at $.006 - you would have been able to buy about 31,666 shares with your initial $150 + $60 (less commissions). That's how the game is played. Trouble is - when you sell a holding - and it continues to go up... you start saying: I would have held on if I knew it was going to keep going up. I could have made a lot more if I had waited. I should have waited.... Hence: Woulda/coulda/shoulda....[/QUOTE] Yup, tell me about it. I'm in PLNI at over .01, break even for me is .0123; at least with TNOG I'm about even now... That's been my biggest problem so far: getting a good entry point."

HappyHarry said: "Getting a good entry point is tough for everyone. My though is this: if you have $500, you really cannot afford any losses for your first few trades. So research your pick extensively."

thezster said: "[QUOTE=Anaphylaxis]Yup, tell me about it. I'm in PLNI at over .01, break even for me is .0123; at least with TNOG I'm about even now... That's been my biggest problem so far: getting a good entry point.[/QUOTE] Okay - next step. First and Foremost - I am NOT suggesting anyone follow this methodology.... simply explaining it. All of us have made a bad "buy". (well, all except LanceJ :) ) We think something is a good deal so we jump in - only to have the price continue to drop. At this point, you have to ask yourself "Am I an investor or a speculator?" A good investor, who believes in his pick, will simply hold a position until it pays off - assuming conditions suggest the postion will pay off someday. A speculator (myself included) will often do the following. Say I buy 1000 shares at $43.00. The price dumps, for whatever reason, and begins to settle in the $40 - $41 range. I'll sell (at a loss) around the $41 range, hoping it will drop back to the $40 range, at which time I'll pick up that 1000 shares again - and begin the game (it "is" a game) again - selling around $41, buying around $40. It is total speculation - playing the day in/day out prices rather than investing in a companies future. I could care less whether or not, for instance, HD is going to eventually hit $100/share (by the way - it will...... someday). I'm playing the daily ups n downs of the market - betting against other investors, rather than the company itself. Make sense????????? As a speculator, I would have dumped my PLNI after the latest announcement that caused it to run up to the $0.007 range - expecting/hoping it would head back down a day or so later (it did) as things settle out. Then again.... it could have continued an upward spiral, causing me to say "Woulda/coulda/shoulda"...."

Anaphylaxis said: "I guess my goal with going into the two penny stocks was that I was in an investment mode, where I was trying to also save money off of not going into and out of a stock at $7 a pop... Granted coulda/woulda/shoulda applies but I really should have cashed in on the fact that both did drop down. Heck, if I sold at a penny, bought in at .07 or so, and sold again at a penny... That in itself would have made up for the loss... This not to mention that I might be able to sell far over a penny, which would have made some money by now... I don't know if I wasn't making the cognitive leap or what -- but I guess theres something to be said for watching a few good stocks and going cash until theres a definite good entry point. Thanks for the valuable lesson in any case..."

Anaphylaxis said: "Make that "...bought in at .007..." :cool:"

LanceJ said: "[QUOTE=Anaphylaxis]Either they go up and I graduate to safer, more transparent stocks, or I just paid $500 for a class in business, economics and a whole host of other topics I was clueless about before. Either way I'm better off for having done it...[/QUOTE] A man who grabs a bull by the tail knows 70 times more than the man who hasn't, although I prefer to be the man in the crowd watching."

LanceJ said: "[QUOTE=thezster]All of us have made a bad "buy". (well, all except LanceJ :) ) [/QUOTE] Babe Ruth held the record for years for having the most homeruns. But another record that few know about is that he also held the record for the most strike-outs. We all have strike-outs. The important thing is that you train properly and then after training, that you step up to the plate. Whether you go for singles, or whether you go for homeruns, at least you are at the plate and swinging. Remember, a man has no ears for that to which experience has given him no access."

DaJulian said: "A failure is a man who has blundered, but is not able to cash in on the experience. Play for more than you can afford to lose and you wil learn the game."

HappyHarry said: "Entry point is the whole game. Any stock you buy at a "good price" will end up paying off."

thezster said: "Lance has a theory that BBE" (big bad events) are in the form of : earnings announcements, press releases, etc. He is 100% right. Thought I would share this - use it as you deem fit. HD announced today (it's been scheduled for months).. that earnings are "outstanding" (beat all forecasts) and went on to raise their earnings outlook for the year. The announcement came out hours before the market opened. Pre-market activity reacted strongly to the news, raising the price from $42.57 (previous close) to, at least (while I was trying to monitor), $44.10. Then a strange thing happened. The price started dropping prior to the opening bell. This trend continued throughout the morning, with the stock continuing to drop to below the previous day's close. (still watching). Even with all the great news, market conditions dictated a drop in price to this point. Rationale??????? Not a clue (well, some clue - but would take too long to write here). The mark of a good speculator (note I didn't say "investor") is the ability to "sell" when things are "in the black" - knowing the price could continue to rise..... but being satisfied with the profit "in hand" - and having the ability/luck to predict that the stock in question will be available another day at a lower price."

HappyHarry said: "Being disciplined enough to sell is very tough for most people, especially new investors."

justkidn said: "So thezester and LanceJ started in pennies and made significant $$ in a few months? Im in the $3000-$5000 range and so far I’ve done nothing but struggle to keep even. Any tips strategies that may work or sometimes work with low $ stocks. Im the plague for stocks, they seem to be at least moving (up or down doesn’t matter) I buy and BAM nothing but stagnant. I end up not losing a great deal, just the commission fees. (save the few cases where I get beat down) Thanks, justkidn"

thezster said: "[QUOTE=justkidn]So thezester and LanceJ started in pennies and made significant $$ in a few months? Im in the $3000-$5000 range and so far I’ve done nothing but struggle to keep even. Any tips strategies that may work or sometimes work with low $ stocks. Im the plague for stocks, they seem to be at least moving (up or down doesn’t matter) I buy and BAM nothing but stagnant. I end up not losing a great deal, just the commission fees. (save the few cases where I get beat down) Thanks, justkidn[/QUOTE] Don't know if I was lucky or good - probably more of the former than the latter. I was lucky as the era I started playing stocks was the dot.com era. Seems anything with a .com attached was a "sure bet". You wouldn't believe some of the companies I played with back then (they're all defunct now). The one I remember most fondly ($$$$) tried to sell art work online. What a joke! My strategy back then, as now, was to find just a few companies that had a nice "daily spread" in their history. I played stocks that ranged in the $1 - $2 range with daily spreads of around 25 - 50 cents per day. I consistently bought in around the previous day's low.... and was able to sell around the previous day's high - regularly and consistently. I never went for "home runs" but was happy to slowly build my account in bits and pieces. At that price range, I could buy 1 - 5 thousand shares at a time (avoiding the penny premium for orders above 5,000 shares). With 1000 shares - even a dime rise in price would gross me $100 (less commissions, $80). Very basic, very boring, and very time consuming as I was working full time also. Back then, I had to get my stock quotes over the phone - and probably would have been fired had my employer tracked the number of calls I made to the e-trade trading desk every day. If you looked at my tax forms back then, you would be amazed to see how much I paid in commissions compared to how much I netted. Then again, I had no problem paying $10,000/year in commissions if I netted the same amount in my account. Even today, most people would be surprised to see my yearly commissions (quite a bit over $10,000/yr :eek: ) compared to my "net"(before taxes). However, I believe that you have to spend money to make money - so I have no problem with E-Trade taking their fair share (Uncle Sam is another matter entirely - I hate paying taxes when I'm the one taking all the risk). What it boils down to is "slow and steady" - for me. I have no dreams of "striking it rich" overnight (or even "over year"). A 25% - 30% return on my capital is just fine with me. With enough capital - it provides what most would consider to be "a fine lifestyle". Know when to cut your losses - and don't be afraid to sell when you're "UP"........"

justkidn said: "I liked the statement "The one I remember most fondly ($$$$) tried to sell art work online. What a joke!" I have a good friend back in the states (vegas) who is trying to start the very same business. He thinks he is the inventor of such a prospect and expects to make a killing. I'll let him know its been done. I usually dont have a problem cutting loses ( except one stock lost 1/3 of my $500, but its a pet business and wife loves animals...so I keep it and say well thank goodness I only bought $500) As far as selling....well I'm getting better. :cool: justkidn"

wildmandan32 said: "would be to invest a percentage of your money into a proven performer or a couple, you need to be in it for the long haul. Take a percentage for speculation and trading, excersice exit strategies so you don't loose everything. Invest what you can every month so that your positions grow overtime, then you will have opportunities to buy at different price points...bla bla there is lots of info on this I will leave it alone. just keep at it. Don't go for the grandslams, go for steady growth overtime, there is no get rich quick strategy, it's work stay at it and get rich over time."

AlfredSokol said: "I think you should put your money in one of the market leaders, like ISRG, CHS, or CUTR. Concentrate all your money in one stock, and use margin."

srtricky said: "[QUOTE=thezster]Don't know if I was lucky or good - probably more of the former than the latter. I was lucky as the era I started playing stocks was the dot.com era. Seems anything with a .com attached was a "sure bet". You wouldn't believe some of the companies I played with back then (they're all defunct now). The one I remember most fondly ($$$$) tried to sell art work online. What a joke! My strategy back then, as now, was to find just a few companies that had a nice "daily spread" in their history. I played stocks that ranged in the $1 - $2 range with daily spreads of around 25 - 50 cents per day. I consistently bought in around the previous day's low.... and was able to sell around the previous day's high - regularly and consistently. I never went for "home runs" but was happy to slowly build my account in bits and pieces. At that price range, I could buy 1 - 5 thousand shares at a time (avoiding the penny premium for orders above 5,000 shares). With 1000 shares - even a dime rise in price would gross me $100 (less commissions, $80). Very basic, very boring, and very time consuming as I was working full time also. Back then, I had to get my stock quotes over the phone - and probably would have been fired had my employer tracked the number of calls I made to the e-trade trading desk every day. If you looked at my tax forms back then, you would be amazed to see how much I paid in commissions compared to how much I netted. Then again, I had no problem paying $10,000/year in commissions if I netted the same amount in my account. Even today, most people would be surprised to see my yearly commissions (quite a bit over $10,000/yr :eek: ) compared to my "net"(before taxes). However, I believe that you have to spend money to make money - so I have no problem with E-Trade taking their fair share (Uncle Sam is another matter entirely - I hate paying taxes when I'm the one taking all the risk). What it boils down to is "slow and steady" - for me. I have no dreams of "striking it rich" overnight (or even "over year"). A 25% - 30% return on my capital is just fine with me. With enough capital - it provides what most would consider to be "a fine lifestyle". Know when to cut your losses - and don't be afraid to sell when you're "UP"........[/QUOTE] would you like to post a few picks your working with right now?? something that doesn't drop as fast as gzfx did and rape me on my money lol :o"

thezster said: "[QUOTE=srtricky]would you like to post a few picks your working with right now?? something that doesn't drop as fast as gzfx did and rape me on my money lol :o[/QUOTE] This week I bought and sold LOW/HD/FRO/CLX repeatedly. Trouble with my picks is..... you need to be able to buy a minimum of 500 shares at a time (preferably 1000+) to play the daily swings and make any money.... This morning was buy 3200 shares of HD on the downswing and sell it just before the bell... a decent day, all in all....."

AlfredSokol said: "Zster is making little profits that add up big because of the shares and he's not using penny stocks to do it, either."

TheShadowWRX said: "TheZster I like the idea of tracking spreads and making money on it that way. With regards to the 3 day rule if I were to invest all my money in a stock, it went up 10cents in an hour and I sold it. Then it went down 5 cents 45 minutes later so I bought it again, am I understanding correctly that I couldn't sell that stock (for the 2nd buy) for 3 days? Also do you have any good methods you could share with me/us for how to find stocks with good spreads? Thanks a lot, Mike"

thezster said: "[QUOTE=TheShadowWRX]TheZster I like the idea of tracking spreads and making money on it that way. With regards to the 3 day rule if I were to invest all my money in a stock, it went up 10cents in an hour and I sold it. Then it went down 5 cents 45 minutes later so I bought it again, am I understanding correctly that I couldn't sell that stock (for the 2nd buy) for 3 days? Also do you have any good methods you could share with me/us for how to find stocks with good spreads? Thanks a lot, Mike[/QUOTE] You are correct in your interpretation of the 3 day rule. Not sure how to suggest finding good spreads.... I'll think about it..... I don't imagine you're interested in 40 - 50 dollar equities......"

TheShadowWRX said: "[QUOTE=thezster]You are correct in your interpretation of the 3 day rule. Not sure how to suggest finding good spreads.... I'll think about it..... I don't imagine you're interested in 40 - 50 dollar equities......[/QUOTE] Nah I'm only starting off with a tiny amount of money, just want to get my feet wet before I invest my full 10k in about 3 weeks. Small being 100 bucks lol Where do you find spreads in general and how do you read them is more what I was looking for. Is it like a channeling stock? Mike"

AbsoluteZzZero said: "What about Index funds? It would take care of the diversifying problem...."

trickynick said: "My take on this discussion is that it should not focus so much on how much money you need to get started so much as how much money you should keep in cash. Depending on your income situation and your lifestyle you can identify a target amount of money that you would like to be able get a hold of if you need it. This way you don't need to cash out investments you originally intended to hold onto for the long term if you suddenly need a new washing machine or a new timing belt for your car, or God forbid your income becomes reduced or non-existent for some period of time. For me, I have decided that I like to have suffient cash to be able to keep my normal life going with minimal adjustments if the wheels fell of everything for six to eight months. I never invested a dime in anything that wasn't essentially cash equivallent until I had this amount of money. Many people think that this is too much money to have tied up in cash, but it is largely a matter of opinion and personal preference relative to what the individual's comfort level is. What was great about this for me is that in the process of striving to saving this money I learned exactly how I would handle the tough times for which I was preparing and learned that I really did not need as much money as I originally thought. There appears to be a resistence to this approach probably because the idea of putting money into something that is really just going to sit there for as long as is necessary to do what I am talking about isn't very exciting to new investors eager to see large gains. But just like a lot of what goes on in the financial world, acting based on what seems sexy and exciting can you in some trouble. I agree that nobody should be getting involved at $500, but what the amount is should not be the key issue but rather the overall position the investor wants to be in."

BenHouston said: "[QUOTE=trickynick]My take on this discussion is that it should not focus so much on how much money you need to get started so much as how much money you should keep in cash. Depending on your income situation and your lifestyle you can identify a target amount of money that you would like to be able get a hold of if you need it. This way you don't need to cash out investments you originally intended to hold onto for the long term if you suddenly need a new washing machine or a new timing belt for your car, or God forbid your income becomes reduced or non-existent for some period of time. For me, I have decided that I like to have suffient cash to be able to keep my normal life going with minimal adjustments if the wheels fell of everything for six to eight months. I never invested a dime in anything that wasn't essentially cash equivallent until I had this amount of money. Many people think that this is too much money to have tied up in cash, but it is largely a matter of opinion and personal preference relative to what the individual's comfort level is. What was great about this for me is that in the process of striving to saving this money I learned exactly how I would handle the tough times for which I was preparing and learned that I really did not need as much money as I originally thought. There appears to be a resistence to this approach probably because the idea of putting money into something that is really just going to sit there for as long as is necessary to do what I am talking about isn't very exciting to new investors eager to see large gains. But just like a lot of what goes on in the financial world, acting based on what seems sexy and exciting can you in some trouble. I agree that nobody should be getting involved at $500, but what the amount is should not be the key issue but rather the overall position the investor wants to be in.[/QUOTE] My dad has the same mentality as you. People would think hes CRAZY in the cash he has sitting in a bankaccount/Term Deposits (We call them GICs in Canada, Guaranteed Investment Certificates). But he wants to have the security, in case he lost his job, he could support the whole family for a year."

Harry said: "[QUOTE=TheShadowWRX]Nah I'm only starting off with a tiny amount of money, just want to get my feet wet before I invest my full 10k in about 3 weeks. Small being 100 bucks lol Where do you find spreads in general and how do you read them is more what I was looking for. Is it like a channeling stock? Mike[/QUOTE] DO NOT INVEST THE WHOLE 10K at once in three weeks! I've made a similar mistake. If you think you can get the best price on all your pics at the same time you are sorely mistaken. If you wait and lurk great buys will come around eventually. They won't necessarily be the onces you wanted in the first place. Stalk and pounce only when the time is right. Please on a max 10-12 stocks. Buy on inevitable pullbacks. Put a little down on each stock...if it goes up just watch it. If it goes down that's a buying opportunity for more. Always calculate potential sell targets with broker fees. A small quantity may not have the potential to overcome the buy-n-sell fees."