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$10000 to invest. Zero or 1 million in 5 years.

Discussion in 'Economy' started by Youngdan, Nov 29, 2015.

  1. Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I have recently returned to following the markets. I used to follow them very closely but when the accepted rules of engagements in a sense were suspended I just went to static positions and waited to see what would happen. I never could imagine that 10 years about could go by with artificially suppressed interest rates, without a rise and of course, they can't be raised now without blowing the system apart.
     What is fatal in investing is letting emotions get in the way so I wish to follow common sense rules and see how I get on. My grub stake will be 10000 and I will see how it goes. I am 3 months in and have $5350 put in thus far. I am using margin to it's fullest and have paid $9321 for positions in 6 stocks. 5 of these stocks have declined and 1 has gained. They are all mining related and now I will be looking at other sectors. I am not alarmed or overly surprised as the dollar has been falling due to the refugee problem hurting the euro and now the plane thing.
      This is not advice(so far it would be bad) but fun. I will assign numbers to these stocks and will pm ergo2 which they are and anyone else that has any interest in following this tale. I do not expect much interest but that is fine. However anyone can make a suggestion and why they think it would be a good idea and we might give it a flutter. The only provisio being that it be less than $10 a share so a 100 share lot would not bust the bank.
      I will not be buying options, I am not a great believer in short selling in an age of quantitative easing as that can be very dangerous. I might sell some covered options(not naked) at some stage. I will be looking for volatile stocks. So it will be a bit aggressive but not wildly speculative which I did in the past.
    My positions at the moment are.
     Stock 1. 100 shares at 6.24, present value 7.58 :) :heart:

    Stock 2.  250 shares at 2.81,  present value 2.44  :( 

    Stock 3. 600 shares at 2.01 plus 400 shares at 2.27. present value 1.86  :huh: 

    Stock 4.  1300 shares at 0.55. present value 0.46  :s 

    Stock 5.  100 shares at 15.20 plus 100 at 13.44. present value 13.41  :cry:  

    Stock 6.  300 shares at 7.54 present value 7.13 :(

    So Buffet has nothing to fear at the moment.

    The 1st golden rule is not to average down. Stock 5 is an ETF so I averaged down. Stock 3 I was averaging up but it turned against me so in future I must formulate a sell point for this eventuality.

    At the moment I can not buy any more of any of the 5 stocks, unless or until they climb higher than my buy price. That is good, as the yearning is to buy, as they now appear better value. That of course is a very common fault.

    I will now search for a few more stocks. I will not bother with technical analysis at all or indeed much with fundamentals either. Instead I will be following a series of forced decisions that I will discuss in the fullness of time. 
    In time I will be either reduced to close to zero by a margin call which can't be met for this experiment or I will luck out and do fine.
    If anyone else wishes to know what the stocks are I will pm them but this is not advice, it is a bit of fun.
     
    Kershaw likes this.
  2. ergo2

    ergo2 Well-Known Member Political Irish

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    Thanks YD

    that should be an interesting thread

    For those who haven'e met YD before, when everything was collapsing  c 2008 there was a view that Bank of Ireland shares were safe, they might be dipping but would recover -  sound, bricks and mortar and all that.

    They went down from a high of about €18 to about one euro.     Many, including some stock brokers were saying that they would not go lower, good longtem buy at that level etc.

    YD disagreed, saying they could go much lower.   Which they did, to just below 10c

    That and similar falls hammered everybody's savings - the fund for education, the pension fund etc.

    So, folks, whatever YD says is worth listening to.
     
  3. Count Bobulescu

    Count Bobulescu Well-Known Member Political Irish Donator

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    1st highlight: There's lots of spec that the FED will raise interest rates in Dec, so if it's goin to blow up..........maybe now is not the time.........

    Fed Tipping Toward December Rate Hike, Minutes Show
    Wall Street Journal-Nov 18, 2015
    ... two-day gathering turned to the economy and the looming rate decision, Fed ... The equilibrium real interest rate—meaning the interest rate, adjusted ... As a result, Fed staff argued the Fed's target interest rate will rise only ...

    The Fed is dancing around its decision on a December rate hike
    Quartz-Nov 18, 2015

    Interest rate hikes likely in December, Federal Reserve minutes reveal
    The Guardian-Nov 18, 2015

    2nd highlight: $ has strengthened not fallen, from 1.39 in June 2014 to 1.06 today

    http://www.xe.com/currencycharts/?from=EUR&to=USD&view=2Y


    3rd highlight. EU is getting into QE just as the US is exiting. More likely to strengthen than weaken the $, maybe to E0.95 or more.
     
  4. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Well thanks for the kind words but I was lucky maybe(not emotionally attached). Being aggressive pays off when a market makes a big turn, assuming it turns in your direction of course. My failing is that I am too aggressive, options, and of course the worst market then is a static or slow moving market as then you can be right but lose as you run out of time.

    The premise for this bit of stock buying is the general assumption that the system now is such that liquidity will always be supplied to keep the show on the road, regardless of how much the value of the currency falls. There will always be $800 million for terrorists in Syria and Ukraine from the US, 600 million euros from Ireland for foreign aid and 20 billion euros for refugees. Note, I am not commenting on these being right or wrong, an opinion anyway, but this thread is only interested in the effects on the currencies here, or a stock price if we were talking about a defense company likely to get a big contract etc. This will eventually come asunder but eventual has already been 8 or 9 years and could be who knows how much longer. Many the investor learned the hard way the old saw, one of a great many
    "the market can be wrong longer than you can be liquid"

    The secret is to learn the basics, easy, and adhere to them, difficult. This is emotion again and is referred to as "married to the stock"

    I see Count has commented, thanks for the input, in real life I enjoy getting differing viewpoints and I will be back later to reply. I will pm you the stock symbols to represent the numbers. You can pray they will move(UP ya hoor, not down)

    If anyone wishes to pick a stock on the NYSE or Nasdaq, less than $10, and why they think it will move then I will consider it for 100 shares next.

    I will be setting out a rule for selling next if anyone has ideas
     
  5. cyberianpan

    cyberianpan Well-Known Member Political Irish

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    Short term equity trading is quite challenging. ..even the best brokers charge significant fees which leveraging can only do so much to overcome

    That said there is plainly "money on the table" at the moment...as too much money is in cash/bonds rather than equity

    My theory would be to avoid most tech and fin stocks...but otherwise there are rich plunderings


    Cyp
     
  6. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I have sent the names of the stocks to Ergo2, Nutter, Count Bobulescu and cyberianpan and if anyone else wants to follow and partake in the saga then well and good. All suggestions, opinions and assorted wisdom is welcome regardless of spiffs anyone have had on other threads
     
  7. Nutter

    Nutter Active Member Political Irish

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    Much appreciated Youngdan, I expect you think Mining stocks are close to turning around?
     
  8. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Yes I do, however I have held mining stocks till they went to zero so the only thing worse than losing money is losing even more money, so I can't buy any more of the 5 pure mining stocks no matter how much I want to. I will look at your suggestions for the other stocks now this evening.
     
  9. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Jesus Christ, The 1st one trades at $2.64 but some lad paid $205.63 for it back in 2005. Imagine being the seller  :D
     
  10. Nutter

    Nutter Active Member Political Irish

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    Falling knife, if you can afford to wait its a winner longer term as long as the world survives its current turmoil.
     
  11. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Maybe it is a guillotine, the 2nd stock trades at $2.11 but once sold for over $1300. Well they are certainly  fitting the low part of buy low sell high. I will designate these 2 stocks Nutter1 and Nutter2 respectively and likewise to other posters with suggestions, and I can pass them along to the other 3 posters.
     
  12. Nutter

    Nutter Active Member Political Irish

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    The buyers at those levels were obviously wrong, that's not to say buyers at this level are wrong.
    Not sure about the 1300 price......I think it went close to 20 before the arse fell out of it with dilution ....the reduce it study could be a game changer or you could be on a hiding to nothing with it.
    You could get apple at 3 dollars way back before Jobs came back :)
     
  13. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I normally use yahoo finance to look up stocks and it will give you the range on every stock. Nutter2 had it's hayday in the early 90s
     
  14. Count Bobulescu

    Count Bobulescu Well-Known Member Political Irish Donator

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    Ah now Dan, there's no accounting for political views, we won't hold those against you. Though I almost accidently hit the report button when replying.  :D

    Other than my professionally managed IRA, I haven't been in the market for several years, so haven't been paying close attention.

    Everyone has their own favorites for doing research etc., mine is Seeking Alpha, I like the crowd sourced aspect, and the fact that it is written from the perspective of people who are primarily buying stocks, as opposed to selling, or just getting a commission on trades.

    Even though the people writing are technically "amateurs" analysis of the performance of recommendations shows that it compares very favorably with the professionals. That said you can find all sorts of negative commentary about it on the interwebs. I put that down to "professionals" having time on their hands due to lack of clients.

    You can sign up for all manner of alerts etc. on the site. Here's what Wiki says about it.

    Seeking Alpha - Wikipedia, the free encyclopedia

    Here's the sitemap page, which is usually my first port of call when visiting a deep website for the first time.

    http://seekingalpha.com/sitemap
     
  15. Neutron

    Neutron Well-Known Member Political Irish

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    I don't have anything like a 1000 to invest, Can I do the same say with a 100?
     
  16. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Hi Neutron.
      I am not looking for anyone to put their money at stake, I am going to use my own 10000. The purpose of the thread is several fold. 1. To have a bit of fun and follow the saga. 2. To formulate a series of investing tools to see if they work in a real life situation. 3. For posters to pick a stock on their hunch or whatever, give their reason, and then perhaps I would buy some of that stock, for myself. 4. General chat about investing/losing money.

    Having said that, I would strongly urge posters to set up an investors club in ireland, toss in 100euro each or whatever aND have a bit of fun. At the very worst it is a low cost pasttime.
     TThe poster Nutter has suggested 2 stocks but I am not naming them as the lads who own the site are concerned so I am calling the stocks Nutter 1 and Nutter 2, and later will pm the names to whoever is following the thread, which is 4 other posters plus I assume you which is 5.

    Perhaps this site will set up a private forum when they get their act sorted a bit better and then it would be easier.

    If you wish to be involved, and have a fancied stock and I buy say 700 dollars of it, then I will spot you your 100 dollar portion and we shall see how it goes. For a once off, it makes no difference to me and I would not wish the rigmarole involved with actually collecting money. If it rises great, and if it drops it is not the end of the world. So if you have a specific stock, send it by pm the name and we will have a look
     
  17. Count Bobulescu

    Count Bobulescu Well-Known Member Political Irish Donator

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    Dan, ya oul Goldbug ya. When you said mining, I expected some diversification.


    According to WSJ, the 2016 outlook for Gold is not rosy.


    http://www.wsj.com/articles/gold-set-to-drift-lower-in-2016-1447757031
     
  18. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Yes indeed. I have about 50% of my stake there but 100% at the moment so I need to branch out. Nutter suggested 2 bio medical ones so I will pm them to the other 4 so you know what we are talking about. One of them is up 5c and one of them is down 5c both are circa 2 dollars
     
  19. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Both nutter 1 and nutter 2 are down but I am having a nice day. No surprise after many less than pleasing days in a row
     
  20. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Time to ponder on when to buy a stock. Sounds easy, buy low and sell high and I like to add don't buy unless it goes up. And of course that is the hard part. So Nutter has suggested 2 stocks and I will likely buy one to see how it goes. I have designated them Nutter1 and Nutter2 and the 6 posters following know what they are.

    Nutter1 is up 1c to 2.65. Ten years ago it had a high of 196 dollars. Clearly this is a very long shot.

    Nutter2 is down 3c to 2.08. It once was more than a 1000 dollars a share, even a longer shot than the other. Someone bought a very large number of December call options today at a 2.5 strike so someone other than Nutter thinks there is a rise coming. They are likely wrong.   

    I am going to try a simple rule of thumb. I will watch both and if either rise 10% from here I will buy some. If neither rise 10% then they are turkeys and I will have avoided them.

    Once you buy a stock you have 3 future options, sell it, hold it or add more to it. Selling a loser is very difficult. Riding it down to zero is very stupid, only exceeded by adding to a losing position ie averaging down. It is important to admit defeat and have a sell point. I am going with 20% for the time being.

    If anyone thinks these bands are too wide I would love to hear it. These stocks are volatile so 10% is not that much.

    Now adding to a winner is a tricky kettle of fish.

    Today was a good day. Up $140 or 4881. I own stocks worth 8856 and that is margined at 55%. Margin can hit 50% so I have 455 buying power if I choose to buy 200 shares of either of the above stocks. All that will change on the open tomorrow of course.
     

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