Youth in need of some help

Stuart said: "Hey guys, I'm quite new to trading and such. I have mutal funds and some shares in Sun Microsystems but would like to know more about the market and how it works. I have one newbie question as well. With oil prices close to $70 a barrel?, how much or little does this affect the market? What segments of the market does it affect (directly and indirectly)? Do you investors take into account oil prices when making decisions on purchasing stock? Thanks for the help and have a good day of trading (or just a good day if you don't day trade:p )."

AlfredSokol said: "Hi Stuart, High oil prices affect certain companies real bad. Anyone that has to pay a lot for gas is going to suffer in earnings, so their stock will likely fall. An example would be a company like UPS. Funny enough I checked and UPS is doing great, even with high gas prices. Companies that are smart about gas price arbitrage may have no problem."

Stuart said: "I was thinking about UPS and transportation services and how they are affected by the gas prices. Like you said, it should affect UPS, but they have been doing very well. But that makes sense that companies utilizing gas a certain way will not get hurt during these times. Thanks Alferd for your thoughts."

RupertB said: "Stuart, My best advice on learning about the market is: Read & practice. The Intelligent Investor - Ben Graham (newest edition with Jason Zweig) Real Money - Jim Cramer Taking On The Street - Arthur Levitt (don't stop with just these) Spend some time reading the primers & articles at [url]www.investopedia.com[/url] ,[url]www.thestreet.com[/url] & [url]www.theonlineinvestor.com[/url] Practice: Research a few stocks. Pick some you like. Write down why you like them & write down a purchase date & price (ie: no money, just practicing). Track the stocks price & market news. Figure out what works & what doesn't. Too many people do this part with real money. Regarding oil prices: My (rookie) opinion is that eventually these costs will have to be passed on to consumers in the form of higher prices, particularly for consumer goods, services, & commodities, or companies will see their margins squeezed & take the hit in earnings (or both)."

Stuart said: "Thanks Rupert! That is a good idea to track stocks without using money. And as for the reading, i'll try to pick some of thoes titles up next time i'm at borders. Regarding your response to oil prices. I went down to the local pizza store where I was talking with the owner. He was telling me that lettuce prices have gone up as a result of gas prices. In order to make rent, he's had to increase prices."

Gemini said: "The only problem with paper trading (not using your own real money) is that you have absolutely no affect on the market. Real life doesn't work that way. Every time you buy a stock, it drives the price that much higher and can either help it to go further higher, or trigger someone's sell, causing the shares to drop. Every time you sell a stock, you help increase the opposite effects. Secondly, not using any money at all allows you to play with a 'pretend' $25,000. "Ah, what the hell, this looks good. Think I'll toss $5000 in this one!" is often the result. Just like playing poker for plastic chips, you take on much bigger risks (allowing you to capitalize on the bigger rewards). It also allows you to be completely unemotional about your 'money'. When a stock drops, you think, "I'll wait", and watch it drop to 50% of what you bought it at. But who cares? You're not using real money. A month later, the stock shoots up to four times its original value and then your mind convinces you that you're a financial genius for having waited it out. You just KNEW it would go back up. Ha ha. Try watching your own $1000 sink to $500 and see if your iron stomach doesn't rust out a hole real quick, causing you to sell at a loss. On the opposite side of the coin, lack of emotion allows you to cash out with a predetermined plan easily. Depending on the type of person you are, either greed never gets the better of you, or fear doesn't. One more. If you ever start to play pennies, in real life, you can just sell as you wish for the price you want. Sometimes, you just can't get rid of your shares because the present bid is much lower than what you want. Paper trading ASSUMES you can buy/sell your shares (as many as you want) at the current price. This is simply wrong. My suggestion is to first start by reading and educating yourself as much as you can for a few weeks. Then start with real money, but go very small for a couple of months and see how they go before increasing your investments. You'll learn more in a month of using real money than a year of paper trading!"

Stuart said: "You have a point Gemini. Everything I have right now (mutual funds and some stocks) my father bought for me, so I don't have any first hand experience with the market. First things first, like everybody has said, I should get some reading material to learn the ways of the market and how it works. Between reading and discussing stocks here, I hope my knowledge increases with leaps and bounds, I hope anyways. Thanks gemini for the help! Off to the books for me, any more advice would be appreciated."