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So at the risk of sounding like a tool, initially had some chats with a cousin who did well with stocks and shares, so I read this here book (http://www.amazon.co.uk/The-Naked-Trader-anyone-trading/dp/0857191705) about stock trading over the last year or so. And feel that the next 2 months will be the time to start buying and doing it for keeps.
I guess the main thing that swung me this way is that tax free savings accounts (ISAs) are crap but you can convert that money into a stocks and shares ISA which avoids any capital gains, stamp duty or income tax.
"Success" would technically be profit above a savings account (>3%) but I'd like to hope I can do better.
WIll be aiming for probably medium term investments.
I'll start reading more into where to stick the money in about a week and if there's interest will probably stick it up if theres any interest.
I guess the point of this one is to hear stories / experiences from people that have done similar so that I might learn a bit more (or just start some random discussion, it's all funsies).
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"Success" would technically be profit above a savings account (>3%) but I'd like to hope I can do better.
I'm not sure if you have index funds in the UK but it shouldn't be that hard to beat a savings account with one. It's also a lot less risky than just picking a few stocks and throwing money at them.
Also it hasn't really been hard to do well with stocks and shares for the past two-three years, so I don't know if you should just listen to your cousin for that reason alone.
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On December 03 2013 08:16 Chocolate wrote:
Also it hasn't really been hard to do well with stocks and shares for the past two-three years, so I don't know if you should just listen to your cousin for that reason alone.
For every dollar you make, someone else lost one. So you cant say its easy to make money with stocks.
And then there are the big guys, some of them have possibilities of influencing stocks that you do not have, so the odds are not in your favour.
Short term stock merket is basically just betting with an educated guess, long term is more reliable unless one ore more stocks you picked are crashing, which does happen.
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For every dollar you make, someone else lost one. So you cant say its easy to make money with stocks.
Stocks are not a zero-sum game, my friend. When any sort of equity (stocks, housing, land) increases in value it can be said that value has simply been willed into existence.
Also when the stock market is giving double digit returns across the board I still would not consider it particularly challenging to beat 3% per year ROI.
I agree with you that short term (day) trading is probably retarded in most amateur cases, since you likely 1. do not have the capital to offset the 2. penalties from making any sort of trade and 3. do not have enough intimate knowledge of the market to make any significant gains by flipping.
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Make sure if you're going to invest the money that you won't need it very soon.
Diversify.
Don't risk what you can't afford to lose.
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Here's something I never got:
Doesn't the SMP 500 Index fund have like a 10% return every year? That is - if I were to take $10,000 and leave in in for a year - i'd have roughly $11,000 by the end of the year.
I'm not sure if this is even true. But if it is, why would anyone choose to invest in individual stocks? Unless you know that companies stock is going to skyrocket for some reason. Why risk a stable 10% return on an index fund? More importantly, why would anyone put their money in like a Chase savings account when it returns 0.5% or some ridiculously low percentage?
I'm a complete noob at this, so bear with me here 
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Take a look at Tradimo, it's owned by Pokerstrategy, it's well made, they have nice tutorials (skip the first one as they pretty basic), and they give you a free 100USD to start trading.
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On December 03 2013 14:34 Abductedonut wrote:Here's something I never got: Doesn't the SMP 500 Index fund have like a 10% return every year? That is - if I were to take $10,000 and leave in in for a year - i'd have roughly $11,000 by the end of the year. I'm not sure if this is even true. But if it is, why would anyone choose to invest in individual stocks? Unless you know that companies stock is going to skyrocket for some reason. Why risk a stable 10% return on an index fund? More importantly, why would anyone put their money in like a Chase savings account when it returns 0.5% or some ridiculously low percentage? I'm a complete noob at this, so bear with me here
http://quicktake.morningstar.com/index/IndexCharts.aspx?Symbol=SPX
The short answer is risk.
If your bank folds overnight, the US government will cover your losses. If your stock investment drops to zero overnight, you're SOL.
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On December 03 2013 08:58 Chocolate wrote:Show nested quote +For every dollar you make, someone else lost one. So you cant say its easy to make money with stocks. Stocks are not a zero-sum game, my friend. When any sort of equity (stocks, housing, land) increases in value it can be said that value has simply been willed into existence.
oh my god do you really believe this
On December 03 2013 15:48 endy wrote:
Take a look at Tradimo, it's owned by Pokerstrategy, it's well made, they have nice tutorials (skip the first one as they pretty basic), and they give you a free 100USD to start trading.
because the house always wins son
remember op. trading stocks is gambling. if the economy is going well (which it isn't, hasn't been, and won't be) you can ride alpha, but what you are after is beta, and despite what our naive friend chocolate thinks, that is a zero-sum game and you will not be the one winning it
anyone thinking that now is a good time to invest in stocks needs to spend a few days reading about early 21st century monetary policy. don't be the greater fool friends
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My plan is to find some gold and dig it out of the ground. I want to be a value creator.
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On December 03 2013 17:43 sam!zdat wrote:Show nested quote +On December 03 2013 08:58 Chocolate wrote:For every dollar you make, someone else lost one. So you cant say its easy to make money with stocks. Stocks are not a zero-sum game, my friend. When any sort of equity (stocks, housing, land) increases in value it can be said that value has simply been willed into existence. oh my god do you really believe this Show nested quote +On December 03 2013 15:48 endy wrote:
Take a look at Tradimo, it's owned by Pokerstrategy, it's well made, they have nice tutorials (skip the first one as they pretty basic), and they give you a free 100USD to start trading. because the house always wins son remember op. trading stocks is gambling. if the economy is going well (which it isn't, hasn't been, and won't be) you can ride alpha, but what you are after is beta, and despite what our naive friend chocolate thinks, that is a zero-sum game and you will not be the one winning it anyone thinking that now is a good time to invest in stocks needs to spend a few days reading about early 21st century monetary policy. don't be the greater fool friends
Chuck me some links or references, I'm always up for an interesting read.
Also explain how it is a zero sum game (a la poker).
My understanding of the definition of zero sum is that there are a fixed number of chips in play that can never change. I guess if you use the Twitter and Royal Mail IPOs as examples when they grew in value, they didn't do it by sucking money out from the market or anyones hands. Everyone that bought in made a killing. The extra value gained did sort of "poof" into existense on the confidence of investors (like bitcoins).
While the "house" (market makers always win, brokers always win, and institutions nearly always win) nearly always wins, so the insitutions do it at the expense of private traders?
Next big IPO coming up is HIlton Worldwide on NYSE......
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when asset bubbles form there has to be value flowing in from something else... it doesn't just poof into existence... how can that possibly be true... If you find yourself thinking something like this warning bells should be going off in your head because you are somebody's sucker
as for zero sum games do you understand the difference between alpha and beta? alpha is not a zero sum game (it is, however, still capitalism and still powered by the exploitation of surplus value) but there IS no alpha right now (that is the entire point of QE and the idea that the "natural rate of interest" is below zero) so there is ONLY beta, and beta is a zero sum game by definition.
What we are in right now is a "crisis of overaccumulation" - what this means is that there is too much money and not enough stuff to put it in, everyone knows the value of their assets is going to crash at some point in the future and they are looking for vehicles to store their assets (again, this is the whole point of QE, the goal right now is not to make money it is to hold on to your money, that is what a low interest rate means), that's why you are seeing housing bubbles and crazy tech stocks and bitcoin. Because there is surplus value trying to find investments to prevent itself from being devalued, only there aren't any investments because nothing except zero-sum games is profitable (predatory finance, high frequency trading, etc).
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On December 03 2013 17:43 sam!zdat wrote:Show nested quote +On December 03 2013 08:58 Chocolate wrote:For every dollar you make, someone else lost one. So you cant say its easy to make money with stocks. Stocks are not a zero-sum game, my friend. When any sort of equity (stocks, housing, land) increases in value it can be said that value has simply been willed into existence. oh my god do you really believe this Show nested quote +On December 03 2013 15:48 endy wrote:
Take a look at Tradimo, it's owned by Pokerstrategy, it's well made, they have nice tutorials (skip the first one as they pretty basic), and they give you a free 100USD to start trading. remember op. trading stocks is gambling. if the economy is going well (which it isn't, hasn't been, and won't be) you can ride alpha, but what you are after is beta, and despite what our naive friend chocolate thinks, that is a zero-sum game and you will not be the one winning it anyone thinking that now is a good time to invest in stocks needs to spend a few days reading about early 21st century monetary policy. don't be the greater fool friends You don't sound like you know what you're talking about. Here are the points you're wrong on:
"Economy isn't, hasn't been, won't be" going well?
Pretty sure we're in a bull market, dawg. That means everything is going well and increasing in value, at least in the US. Things are going well now, and have been. Who's to say about the future?
bloomberg on our current bull market
dow jones upwards trend
The stock market is not zero-sum. In fact, it looks like you believe one of investopedia's five biggest stock market myths
"anyone thinking that now is a good time to invest in stocks"
It is, I would say. My portfolio agrees with me. Historical trends agree. Why would it not be? I'm much less likely to believe your advice considering your previous stances. You sound like you got burned in the market and think everyone loses.
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On December 04 2013 01:02 calgar wrote:
Pretty sure we're in a bull market, dawg. That means everything is going well and increasing in value, at least in the US. Things are going well now, and have been. Who's to say about the future?
no. please read my post concerning crisis of overaccumulation above.
do you understand what quantitative easing is?
On December 04 2013 01:02 calgar wrote: You sound like you got burned in the market and think everyone loses.
i've made a small amount of money in the market, but I don't do it anymore because it is dangerous and immoral.
anyway, the point is that this is all a bubble and y'all are suckers. don't say I didn't warn you.
On December 04 2013 01:02 calgar wrote:
Historical trends agree.
you haven't spent five minutes thinking about history kid, you just watch numbers go up and numbers go down and think you are looking at history
the reason that investopedia article exists is because they want you to think things that are true, aren't. obviously.
look. RICH PEOPLE WANT STUPID PEOPLE TO INVEST. that's the purpose of sites like that. the entire tone of that article is directed at a five year old, obviously that is an article designed to get suckers into the marketplace. if you need to read articles like that and you don't feel utterly insulted, you shouldn't be investing because you are a SUCKER. I could write an article called "five myths of gambling" and put it on a website but that doesn't mean gambling isn't gambling. And if I owned a casino or was a hustler, guess what, that's precisely what I would do
I can't believe anybody after five years of QE with no end in sight actually thinks this is a boom market. what a comedy. things can't be going well because THERE AREN'T ANY FUCKING JOBS. You realize the entire point of QE is to inflate asset prices to generate "wealth effect" and prop up a shitty economy in the hopes that it will naturally restart (which it won't, but don't tell that to the ahistorical "the economy goes in magic cycles with no connection to the real world, I know because History" crowd). You are literally a person who has been told multiple times "the economy is not doing as well as we want, so we are going to inflate asset prices to generate a wealth effect to try to restart it" and you sit there going "asset prices are going up, the economy must be doing well!"
when you go to the doctor and he gives you pain pills, do you think that you are really healthy because you feel so good?
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sam!zdat revealed as Tyler Durden.
Time-tested advice: invest in what you know.
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except he's a libertarian and I'm a communist.
how can anybody think the economy is going well when we are trying desperately to use monetary policy to increase employment (part of fed mandate) which isn't working, a policy explicitly designed to inflate asset values? These are people who literally believe that wealth is created out of nothing by tech IPOs. How can anybody be that thick? The fed deliberately creates a bubble, it tells people this, and still they don't believe in bubbles. It's just insane.
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IPOs don't make money from nothing, they are simply the transfer of privately held equity topublic equity, and then the public can decide if the IPO was overvalued (FB) or undervalued (Twitter). Of course there is speculation which perhaps causes the stock to be nominally worth more than what it is actually worth (I don't even think stock X is worth $20 but I'm buying it for $25 because I'll be able to sell it for $30. Bob doesn't even think the stock is worth $25 but is buying the stock at $30 because he can probably sell it for $35, and so on). In my opinion tech companies tend to be overvalued (at IPO and then exacerbated by the public), though, and many don't even have a sustainable way to make money.
We are probably in a bubble right now but if you have faith that the bubble is not going to burst then it might not be as big of a bubble as you think. When Bernanke said that the fed would greatly reduce QE once employment and inflation were reasonable, stocks fell by 4%, which was a lot (and which shows that the current value of stocks is greatly affected by QE) but not so much that you should think that QE is the sole reason for the current bull market.
Also employment may never go down below 5% ever again. Post-scarcity economy and all that. There are in fact fields that are still hiring, they just might not be hiring near you or they may require training that you do not have. The capitalistic model does not really care if consumers have jobs or not, so long as capitial can be turned into more capital.
I still hold that an increase in value of some sort of asset is creating value out of nothing. When a house increases from 100 to 105 units it means that you can now exchange the house for 5% more units. The value of the units CAN remain unchanged, in which case you have essentially created 5 units.
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On December 04 2013 05:04 Chocolate wrote:
We are probably in a bubble right now but if you have faith that the bubble is not going to burst then it might not be as big of a bubble as you think.
right, as long as everyone has faith the bubble will not burst, it won't, as soon as they don't, it will. are we talking about religion or economics? is there a difference anymore? has there ever been?
When Bernanke said that the fed would greatly reduce QE once employment and inflation were reasonable, stocks fell by 4%, which was a lot (and which shows that the current value of stocks is greatly affected by QE) but not so much that you should think that QE is the sole reason for the current bull market.
it's a crisis of overaccumulation. there is too much capital and not enough productive lines of investment. that is why the "natural rate of interest" is less than zero. that is why there is QE (to attempt to lower interest rates even further, to get banks to lend the money they don't want to lend because there are no good investments). that is why the banks spend all of their energy doing HFT and predatory finance. this kind of a crisis is when the capitalist system switches over from being a "rising tide" to a zero sum game, because when the music stops and capital starts being devalued, you don't want to be the one holding the bag.
QE is not the sole reason, it is an attempt to fix the problem by throwing liquidity at the economy, even though that will not help because there are not any productive lines of investment, just people desperately trying to find someplace to put their money. that is where bubbles come from.
Also employment may never go down below 5% ever again. Post-scarcity economy and all that. There are in fact fields that are still hiring, they just might not be hiring near you or they may require training that you do not have. The capitalistic model does not really care if consumers have jobs or not, so long as capitial can be turned into more capital.
I HAVE a job. this is not about me.
you are right that unemployment can't go down. but it must, because unemployment is probably the most important political pressure on the legislature (and, yes, the Fed). it must, but it cannot. does this sound like a good enough antagonism in the liberal capitalist system?
we will continue to hold interest rates low until unemployment falls. which it won't. so we will continue until the whole thing bursts open. meanwhile the creditor class gets to play with bubbles as the entire society goes to shit.
you are absolutely right that capital doesn't care if consumers have jobs. there is a whole history of this problem in political economy beginning from Malthus. we have solved this problem ever since the early seventies by ballooning consumer credit. but this just kicks the problem further down the road.
I still hold that an increase in value of some sort of asset is creating value out of nothing. When a house increases from 100 to 105 units it means that you can now exchange the house for 5% more units. The value of the units CAN remain unchanged, in which case you have essentially created 5 units.
don't be ludicrous, the value has to be created someplace before it can flow into the housing market and inflate asset prices.
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well my friend the problem with bubbles for speculators like us is that i quote " the problem with bubbles is that it makes us fools either before or after the burst"
if you dont invest now your missing the big rally, if you were vested in the burst you well done fugged up
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On December 04 2013 06:11 Kingsky wrote:
well my friend the problem with bubbles for speculators like us is that i quote " the problem with bubbles is that it makes us fools either before or after the burst"
if you dont invest now your missing the big rally, if you were vested in the burst you well done fugged up
yes of course. while the music's playing you gotta get up and dance. les non-dupes errent.
the thing is, I'm not an investor, I'm a cranky marxist and I look at all the crazy stupid contortions that society puts itself through so that investors can play their musical chairs game and I think they can all go to hell
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advice for moonfirespam
if you dont understand the underlying commodity, security, dont invest in that market
if you dont have a grasp of the current macro-state of the EM and DM's dont invest in the market
if you dont know the what is EBITDA and gearing ratios i dont think you are ready to invest in the market
if you think that investing is simple and anyone can earn big money easy over time dont invest in the market
if you have trouble understanding the acronyms i used i think your not ready to invest in the market 
if you want to speculate and dont really have a strategy i highly advice you stay out of the market
i recommend reading benjamin graham's the intelligent investor if you want a primer on value investing.
for views on macro trends etc i say just read your daily business times ( i dont know what is used in UK but i have a subscription to city AM for england)
the issue i have with some people is that they think their gurus after reading 1 book and start preaching on what to do in the market. i personally believe this sort of thing takes work and time so that you understand the markets, and then it might not guarantee a return as markets are fickle. it just gives you a higher opportunity to capitalize when you see certain criteria met
enter the markets with not the want to seek riches but to preserve capital and i think you will do fine
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On December 04 2013 06:27 Kingsky wrote:advice for moonfirespam if you dont understand the underlying commodity, security, dont invest in that market if you dont have a grasp of the current macro-state of the EM and DM's dont invest in the market if you dont know the what is EBITDA and gearing ratios i dont think you are ready to invest in the market if you think that investing is simple and anyone can earn big money easy over time dont invest in the market if you have trouble understanding the acronyms i used i think your not ready to invest in the market if you want to speculate and dont really have a strategy i highly advice you stay out of the market i recommend reading benjamin graham's the intelligent investor if you want a primer on value investing. for views on macro trends etc i say just read your daily business times ( i dont know what is used in UK but i have a subscription to city AM for england) the issue i have with some people is that they think their gurus after reading 1 book and start preaching on what to do in the market. i personally believe this sort of thing takes work and time so that you understand the markets, and then it might not guarantee a return as markets are fickle. it just gives you a higher opportunity to capitalize when you see certain criteria met enter the markets with not the want to seek riches but to preserve capital and i think you will do fine
On December 04 2013 06:27 Kingsky wrote:advice for moonfirespam if you dont understand the underlying commodity, security, dont invest in that market if you dont have a grasp of the current macro-state of the EM and DM's dont invest in the market if you dont know the what is EBITDA and gearing ratios i dont think you are ready to invest in the market if you think that investing is simple and anyone can earn big money easy over time dont invest in the market if you have trouble understanding the acronyms i used i think your not ready to invest in the market if you want to speculate and dont really have a strategy i highly advice you stay out of the market i recommend reading benjamin graham's the intelligent investor if you want a primer on value investing. for views on macro trends etc i say just read your daily business times ( i dont know what is used in UK but i have a subscription to city AM for england) the issue i have with some people is that they think their gurus after reading 1 book and start preaching on what to do in the market. i personally believe this sort of thing takes work and time so that you understand the markets, and then it might not guarantee a return as markets are fickle. it just gives you a higher opportunity to capitalize when you see certain criteria met enter the markets with not the want to seek riches but to preserve capital and i think you will do fine
Cheers for the book pick, will probably Amazon Prime it across tomorrow  It's a topic that I've been dabbling in and reading around the the last year or so.
Out of interest what's your thoughts on the Hilton IPO? Althought can't get all the numbers on Hilton Worldwide seens theres a lot of pluses making it look decent (Blackstone keeping it's holdings, stable exec board, expansion overseas, sector showing overall strength, etc).
It will be interesting to see how it compares to the other guys book. The basics actually seem fairly similar. He doesn't use the terms you have used specifically, but has talked about their principles and how they work and why the influence and good / bad pick.
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EPT
