copyright1997reloaded
Thinks s/he gets paid by the post
I found it funny, and just *knew* when I read your post that he would be quickly responding.
Shooter, I hope you know we are just having some fun with you.
How to pick stocks
- Thread starter 4nursebee
- Start date
I found it funny, and just *knew* when I read your post that he would be quickly responding.
Shooter, I hope you know we are just having some fun with you.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
OK. myfatherplaysdominosbetterthanyourfatherplaysdominos. You are both forgiven.
Oz investor
Full time employment: Posting here.
i am not against passive ( index ) investing , i have some index funds , which i use as an insurance strategy .
but i need to force growth , so i decided to try to 'cherry-pick '
after all the local ASX top 200 ( XJO ) is the 200 largest companies measured by market capitalization and some of these companies still haven't made an after-tax profit , since listing , so includes companies a careful investor might choose to avoid
but i need to force growth , so i decided to try to 'cherry-pick '
after all the local ASX top 200 ( XJO ) is the 200 largest companies measured by market capitalization and some of these companies still haven't made an after-tax profit , since listing , so includes companies a careful investor might choose to avoid
Bamaman
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Research. Common sense. A good set of dice.
Ready-4-ER-at-14
Full time employment: Posting here.
It has been discussed before but there is a book entitled the little book that beats the market whose author was a very successful fund manager.
The author explains his logic simply on how his stock are picked. A small amount of my money is invested using his screening of companies on his website. (free to use if registered).
He also explains why most people will not use his method even if they believe in it over time.
I did a scan yesterday and his site came up with 30 suggestions. I threw out the outliers and the ones that did not have a dividend. I looked at market cap, average volume, dividend yield, earnings per share, and price/book to come up with my five.
Of the following 5 stock I will probably buy into one in the next week or two.
dlx, gild, omc, pets, viab. Or I might buy fixed income.
The author suggests baskets of things where the duds are overwhelmed by the winners and has rules on when to get in and out. The problem with a stock tip, even if it is great, you never know when the tipster gets out. Also it is likely that people profit when we buy this way as in earlier than us.
It's sort of a fallen angel picking method. Right or wrong as to as effective as an index the main benefit to me is it gives me something I am willing to buy even if I think the overall market is too high for my comfort.
Finally some say no one should buy stock if they have less than 50k total to buy diversification (not just among these five, but entire types of investments),. keep % of investments low so a bad choice with not torpedo your efforts.
With enough rules of safety and what is a worthy stock to own you get a bit mutual fundish, but cost of transactions are much higher for you.
The author explains his logic simply on how his stock are picked. A small amount of my money is invested using his screening of companies on his website. (free to use if registered).
He also explains why most people will not use his method even if they believe in it over time.
I did a scan yesterday and his site came up with 30 suggestions. I threw out the outliers and the ones that did not have a dividend. I looked at market cap, average volume, dividend yield, earnings per share, and price/book to come up with my five.
Of the following 5 stock I will probably buy into one in the next week or two.
dlx, gild, omc, pets, viab. Or I might buy fixed income.
The author suggests baskets of things where the duds are overwhelmed by the winners and has rules on when to get in and out. The problem with a stock tip, even if it is great, you never know when the tipster gets out. Also it is likely that people profit when we buy this way as in earlier than us.
It's sort of a fallen angel picking method. Right or wrong as to as effective as an index the main benefit to me is it gives me something I am willing to buy even if I think the overall market is too high for my comfort.
Finally some say no one should buy stock if they have less than 50k total to buy diversification (not just among these five, but entire types of investments),. keep % of investments low so a bad choice with not torpedo your efforts.
With enough rules of safety and what is a worthy stock to own you get a bit mutual fundish, but cost of transactions are much higher for you.
allegra3201
Dryer sheet wannabe
First start investing with a Vanguard/Fidelity/Schwab S&P 500 or Total Stock Market index fund (or ETF equivalent). Stick with that until you have at least $10,000 in the fund.
Then while you are building that, "invest" on paper by pretending to buy $2,000 each in a variety of stocks, actively managed mutual funds and $2K in your 500 fund. Then keep track of these equities including news items, quarterly/annual reports and conference calls and dividends.
By doing this, you will learn investing terms and how much time you actually have to track investments. You will also learn your risk tolerance (as in a tendency to want to sell when the equity dives or buy more when soaring). You will also find out if your picks do better than just the boring S&P 500 fund. Until they do on a consistent basis, just stick with index funds.
You may also want to listen to various finance related podcasts like Paul Merriman, Bogelheads On Investing, Investing Insights, Mad Money with Jim Cramer, etc. To learn terms and increase your knowledge. But still, no matter what you hear is a great deal, do not invest any further until you have that 10K.
I have had one of my stocks for more than 40 years and a few I bought last month. I usually only buy 1-2 times a year. But I am in the process of going through my holdings and selling/buying ETFs (except ths that are currently beating the S&P 500 average). This is for tax efficiency and simplicity. As you get older, you need to structure things not only for heirs but in case you need to have someone handling your finances for a while. So the simpler, the better. I will have my equities structured so I draw down my traditional IRA first followed by my taxable portfolio and then my Roth. I am looking at the Paul Merriman strategies with the most volatile ETFs in the Roth.
Then while you are building that, "invest" on paper by pretending to buy $2,000 each in a variety of stocks, actively managed mutual funds and $2K in your 500 fund. Then keep track of these equities including news items, quarterly/annual reports and conference calls and dividends.
By doing this, you will learn investing terms and how much time you actually have to track investments. You will also learn your risk tolerance (as in a tendency to want to sell when the equity dives or buy more when soaring). You will also find out if your picks do better than just the boring S&P 500 fund. Until they do on a consistent basis, just stick with index funds.
You may also want to listen to various finance related podcasts like Paul Merriman, Bogelheads On Investing, Investing Insights, Mad Money with Jim Cramer, etc. To learn terms and increase your knowledge. But still, no matter what you hear is a great deal, do not invest any further until you have that 10K.
I have had one of my stocks for more than 40 years and a few I bought last month. I usually only buy 1-2 times a year. But I am in the process of going through my holdings and selling/buying ETFs (except ths that are currently beating the S&P 500 average). This is for tax efficiency and simplicity. As you get older, you need to structure things not only for heirs but in case you need to have someone handling your finances for a while. So the simpler, the better. I will have my equities structured so I draw down my traditional IRA first followed by my taxable portfolio and then my Roth. I am looking at the Paul Merriman strategies with the most volatile ETFs in the Roth.
Motley Fool, Morningstar, Schwab, and GuruFocus are my idea sources and evaluation tools. I also read engineering and technical magazines and follow stocks from there.
Work load varies. I've jumped into positions I understood completely in 15 minutes. Some take me years to understand before I pulled the trigger.
Due to early mistakes in the 90's, I lagged the S&P badly. But I have done better over the years. I am just under 10% per year for 30 years, net worth after taxes fees food beer.
Good thing I over saved for retirement, with the career wipeout I should still be fine if I can avoid mistakes and stay on target.
Work load varies. I've jumped into positions I understood completely in 15 minutes. Some take me years to understand before I pulled the trigger.
Due to early mistakes in the 90's, I lagged the S&P badly. But I have done better over the years. I am just under 10% per year for 30 years, net worth after taxes fees food beer.
Good thing I over saved for retirement, with the career wipeout I should still be fine if I can avoid mistakes and stay on target.
NoMoreJob
Recycles dryer sheets
- Joined
- Feb 8, 2012
- Messages
- 410
Strictly broadly diversified index funds here.
I've been buying stocks here in Australia for my partner and myself all our working lives. That's about 38 years. Generally I've looked for stocks that will pay a regular and increasing dividend as the foundation to the portfolio.
I've kept an eye on stocks that have been historically good, but in a touch of trouble at the moment. I've watched which stocks respond to the whatever trend is happening at the time, be it gold boom, mineral boom, milk powder to China boom, medical technology boom. Over the years there have been 3 or 4 stand out stocks that have made a huge difference to the portfolio value. 2 of those have been medical related. In terms of how our assets compare to our peers who worked and invested in managed funds, we are about 6X better off.
After paying off the house, we've always invested nearly all our spare cash into stocks.
Having said that, there have been times where I've worried if a stock has gone down after I bought it. I had to actively stop that sort of thinking, and instead concentrate on what it is about that company that makes it worthwhile or not.
If you are planning to buy your own stocks, I'd suggest you to make friends with someone who can mentor you.
I've kept an eye on stocks that have been historically good, but in a touch of trouble at the moment. I've watched which stocks respond to the whatever trend is happening at the time, be it gold boom, mineral boom, milk powder to China boom, medical technology boom. Over the years there have been 3 or 4 stand out stocks that have made a huge difference to the portfolio value. 2 of those have been medical related. In terms of how our assets compare to our peers who worked and invested in managed funds, we are about 6X better off.
After paying off the house, we've always invested nearly all our spare cash into stocks.
Having said that, there have been times where I've worried if a stock has gone down after I bought it. I had to actively stop that sort of thinking, and instead concentrate on what it is about that company that makes it worthwhile or not.
If you are planning to buy your own stocks, I'd suggest you to make friends with someone who can mentor you.
target2019
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
That is an idea I agree with.
Do you follow anyone in particular who publishes articles?
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Not an article, but a short video with advice from Harry Markowitz, inventor of Modern Portfolio Theory and Nobel winner.
https://youtu.be/TbMjIn1p-i0
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
NoMoreJob
Recycles dryer sheets
- Joined
- Feb 8, 2012
- Messages
- 410
Excellent advice!!
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thanks. Here is what William Bernstein has to say on the subject:Excellent
“Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy?
“Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine”
“Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine”
I have a few stocks. AAPL, MMM, CASY. I bought AAPL @96 at the advice of a forum member here. I bought MMM because it's a local company and I got wind of a big expansion (that bet has not paid off lol) and CASY which is a local convenience store company that also sells Pizza. They serve rural america and my mom used to work for them.
I use somewhat of a 80/20 rule...because I strongly feel even if I picked 100% of my own stocks I would fail much more than if I only pick 20%. I have little confidence in my picking abilities after busting on TASR, CAT and XOM.
The only reason I outperform the index is if AAPL is on a tear. If AAPL is down, we all are.
Also, I feel like managing the 80% of my AA side of the house takes little to no work, whereas managing individual equities takes alot more day to day engagement and involvement. For me, this is the best of both worlds. It satisfies the "what If I aim for the moon with equities itch" and "but I am way too chicken to play this game with my entire retirement portfolio" balance I look for.
I use somewhat of a 80/20 rule...because I strongly feel even if I picked 100% of my own stocks I would fail much more than if I only pick 20%. I have little confidence in my picking abilities after busting on TASR, CAT and XOM.
The only reason I outperform the index is if AAPL is on a tear. If AAPL is down, we all are.
Also, I feel like managing the 80% of my AA side of the house takes little to no work, whereas managing individual equities takes alot more day to day engagement and involvement. For me, this is the best of both worlds. It satisfies the "what If I aim for the moon with equities itch" and "but I am way too chicken to play this game with my entire retirement portfolio" balance I look for.
I can remember CAT, XOM and TASR well. It's basically that feeling of...I gotta cut this loss loose, just cut it loose and move on. Not a great feeling, that feeling of losing...but I admit, I've lost on individual equities. (Except AAPL )
If you've ever been on a boat...and it's moving along great nice sunny day out, and then all of a sudden you get stuck on a sand bar...you have to jump out, squirm the boat rocking side to side, back tracking, just trying to get the damn thing off the sand...sure that warm sun all around you is there, but damned if you aren't up to your knees in muck. That's how I relate my individual equities experience. Cruising along fine, until I am not. And then realizing I need to toss some weight overboard to get out of the situation.
If it was a slam dunk, wouldn't everyone be doing it? I once watched a PBS Frontline special on a rougue trader. Basically after revealing that even some of the top hedge fund managers are essentially willing to break the laws to get insider info, I realized it wasn't the game for me.
)If you've ever been on a boat...and it's moving along great nice sunny day out, and then all of a sudden you get stuck on a sand bar...you have to jump out, squirm the boat rocking side to side, back tracking, just trying to get the damn thing off the sand...sure that warm sun all around you is there, but damned if you aren't up to your knees in muck. That's how I relate my individual equities experience. Cruising along fine, until I am not. And then realizing I need to toss some weight overboard to get out of the situation.
If it was a slam dunk, wouldn't everyone be doing it? I once watched a PBS Frontline special on a rougue trader. Basically after revealing that even some of the top hedge fund managers are essentially willing to break the laws to get insider info, I realized it wasn't the game for me.
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