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Couple of Q'sCouple of Q's
zak875 said: "Hi i'm new to the stock market well ive been following it for quite some time iv'e just sold 200 shares i had in a building society and i'd like to invest more money into different stocks, just wondered how you pick which stocks to buy and how can you tell they will rise? ill be investing around £100 of my wage each week into different companies, could you give me a head start on who you think will do well.
thanks in advance.
Zak"
JohnL said: "Stocks go up for one of two reasons: speculation or value.
If a stock rises on speculation, people are putting money into a stock because they feel it will yield some unexpected result. For example, investing in a small pharmaceutical company because you feel it will get a drug approved by the FDA and it will go on to be succesful is a speculation, such as Titan Pharmaceuticals (TTP). Or if you think a company will be a takeover target by a larger company (although that gets into merger arbitrage) and you purchase the stock only on these grounds.
If a stock rises on value, that is because the company has underlying assets, pipelines, products, inventory, or operations which generate some kind of worth. For example, when you purchase stock in General Electric (GE), you are probably not speculating. You understand that General Electric has multifarious products, businesses and sources of revenue across many diverse industries. You might also purchase a smaller company's stock, such as Midwest Airlines (MEH), because their profits, margins and revenues are increasing.
Usually, a stock will represent an approximate value of the company's operations. When these valuations become skewed, there are buying and selling oppurtunities.
The best way to invest if you do not plan on spending time is to decide what kind of portfolio you want: a conservative, fixed-income portfolio? A high-risk small/mid-cap growth portfolio? The answer is probably somewhere in between. If you don't have the time to figure this all out, you should probably go to a financial advisor. You seem to be European so I won't talk about 401(k) and IRA (I don't know if they have them in Europe), but I would check out the investment services bancorps at your bank to see if they will invest for you. Or maybe you want to invest yourself and not pay fees? Consider investing in ETFS (electronically traded funds, such as iShares) or mutual funds (pools of capital invested by fund managers, such as Fidelity or American).
Stocks are the ultimate wealth-building tool. The return on stocks is unmathced by any other equity...as long as you research and know what you're doing.
*I do not hold positions in any of the companies mentioned.
** I do not advocate the purchase of any of the companies mentioned. If you choose to, do so at your own research and discretion."
zak875 said: "how do u know so much for a 17 year old. what is your portfolio worth (if u dont mind me asking) well when i rung up and sold my shares i got a £20 commision charge i'd like to avoid this in the future if possible? I'd like to nvest in companies and hold my shares for a couple of months max and see how it goes. I just really wondered how u guys get hunches on certain stocks? Think ill get some books and start reading the financial newspaper.
also where can i find accurate info on whos approachin who for a takeover/merger?
thanks.
Zak"
Rickster said: "He's actually 71. He's dyslexic. :D"
dumaman said: "[QUOTE=Rickster]He's actually 71. He's dyslexic. :D[/QUOTE]
really lol.. i had wondered the same"
thezster said: "He was going to admit it - but it kept coming out slysdexic......."
JohnL said: "[QUOTE=zak875]how do u know so much for a 17 year old. what is your portfolio worth (if u dont mind me asking) well when i rung up and sold my shares i got a £20 commision charge i'd like to avoid this in the future if possible? I'd like to nvest in companies and hold my shares for a couple of months max and see how it goes. I just really wondered how u guys get hunches on certain stocks? Think ill get some books and start reading the financial newspaper.
also where can i find accurate info on whos approachin who for a takeover/merger?
thanks.
Zak[/QUOTE]
I know so much because I love finance and the markets. Just like teenagers who could tell you stuff about a video game they love, it's the same thing.
I don't only invest in stocks. I also speculate on S&P500 futures, interest rate futures, currency futures and do other things like eurodollar time deposits and mortgage-backed securities.
I will tell you my current positions but I'd like to withhold their value.
Advanced Micro Devices (Long)
Dell (Long)
Investors Financial (Long)
ICO Inc. (Long)
EuroZinc Mining (Long)
Japanese Yen (Long)
I've just recently gotten into AMD, Dell and Investors Financial. I've held ICO Inc. and EuroZinc for a few months each. I've been shorting the dollar (going long euro and yen) off and on the entire year.
Commission charges are unavoidable unless you get a few free ones from special deals from your bank or brokerage. It's how the brokerage firms make their money. I'd definetly start reading your financial newspaper and any financial magazine (Forbes, The Economist, etc.). I'd reccomend the following books:
Peter Lynch - One Up On Wall Street
Jim Cramer - Real Money
George Soros - The Alchemy of Finance
Norman Fosback - Stock Market Logic
Benjamin Graham - The Intelligent Investor
Those will start giving you perspective on the markets and how to invest.
If you want a place to track stock rumors, [url]http://www.stockrumors.com/[/url] is a good place and offer a free trial. I'd be very wary though. Blind speculation is a great way to lose money."