For all the investors out there......

[CLOONEY]

If you want one good book to read, to make money quickly and relatively securely, with cold, hard facts and methodology (not this, "Rich Dad, Poor Dad" or "Think and Grow Rich" motivational stuff that in the end, doesnt actually teach you how exactly to make money), read:

The BUFFETOLOGY WORKBOOK, by Mary Buffett and David Clark.

Teaches you to learn the difference between a great company and a great undervalued company. How to use short-term traders trying to make money quickly, in order to increase your wealth. How to judge long-term, consistent, investments and how to perform the financial calculations Warren Buffett (argueably the richest man in the world, up there with Bill Gates, both donating incredible amounts of money) uses, and applying them to your own Stocks your interested in.

I have read this lately (it is brilliant), and traded shares since I was 12 (started out with $635), now Im in my mid-twenties, and have amassed just shy of $100,000. The more that pile goes up, the quicker it is to make money. BTW, I dont trade on credit (basically the same as trading futures), I only trade shares with my own Capital. Guess I am somewhat risk adverse, but hey, the rate I am going, I will be retired by 40. So Im doing ok. You start out only making small bucks, but that incrementally grows quicker and quicker.

Definately the best book I could recommend for those interested in investing in stocks. One quick note though, its probably also good to have an understanding of economics, to be able to read the markets and understand cycles, but thats not a must.

Good luck! Hope this book helps some of the young hopefulls out there.

 

[Oxide]

what the hell, you are a successful investor and had been quiet all that time?!!!

im reading the intelligent invesotr and random walk down wallstreet... dry. as. hell.


post more fool, i thought the only thing you knew was boxing and drinking

 

[CLOONEY]

what the hell, you are a successful investor and had been quiet all that time?!!!

im reading the intelligent invesotr and random walk down wallstreet... dry. as. hell.


post more fool, i thought the only thing you knew was boxing and drinking

Yeh, I dont really like getting into debates, and there are so many kids here who flame war eachother. I only give my advice and get out of here.

Plus I am a Financial Analyst by profession, all day long I look at investments, so in my free time I try to keep to my sports and woman (my other two passions).

I dont read too many books on investing, as I have read probably 50 on economics (plus those books like "think and grow rich" just to get the motivation pumping, but they arent really overly useful), I more read magazines like BRW and internet journals, articles, my trading website, and annual reports to get the latest, most upto date information on companies. But beleive me, there is SERIOUS money to be made out there, you just have to build up that base first (as all the investors here know). My cousin and his friends (they are all traders), used to invest professionally for themselves, but in futures (like borrowing money), and they had a very bad experience (futures arent as secure as stocks, let alone property), so I beleive in using my own money to invest and doing it relatively safely. Just as Buffett did. My cousin and his friends (they are all around 35), lived like kings for over a year by trading for themselves, but one day hit a crash in the market, and each lost $150,000 in that very day. Cant say I ever want to experience that kind of a loss, and unlike shares, futures contracts have an expiry date!

 

[Oxide]

I am trying to learn how to look at the companies and see if it is a good investment. It seems you have to know a lot about what the company actually does, not what the PE ratio looks like.

Cramer books, recommended?

I watch CNBC pretty much all day, that is the only thing i watch besides NBA (And the march madness).. trying to learn but those "experts" are just always contradicting each other.

 

[CLOONEY]

I am trying to learn how to look at the companies and see if it is a good investment. It seems you have to know a lot about what the company actually does, not what the PE ratio looks like.

Cramer books, recommended?

I watch CNBC pretty much all day, that is the only thing i watch besides NBA (And the march madness).. trying to learn but those "experts" are just always contradicting each other.

The book above is the one I recommend as vital!

You have to know many ratios, the PE ratio is the very very basis. You also have to know what the company does, that is crucial, but easy to find out. All that information, is in the book. Another thing you can look out for is successful small banks (such as state banks, like in Australia, Adelaide Bank), these will most likely be aquired by larger corporations, and this will generally cause a sharp rise in the stock price. There are many things to look for (look up "trend lines"), these are cyclical investment trends you can observe by studying a companies share price graph. Its not just a few variables to look at if you want a relatively low risk, with high reward opportunithy. You must look at various things, and this book is one that explains nearly all of them.

 

[~attrACTION~]

Thanks for the book recommendation, I'll check it out. I'm studying finance/accounting in school, so I love this sort of stuff.

I have done some trading with E*Trade. I know you said you are a financial analyst, but what trading platform / website do you use for personal investing?

I still have an E*Trade account, but I'd like to hear what you would recommend.

Thanks again.

 

[Oxide]

I will get the book, thanks.


I get tips on stocks from a few people that know how to do all this shiet, slowly trying to learn wtf they are doing

 

[Celadus]

Here are a few quick things I've learned in the last 6 months as a professional trader:

Stay away from Cramer and CNBC. Cramer is alleged to engage in insider trading and shadier stuff that isn't available to the average person, to get where he got(http://www.youtube.com/watch?v=ZTt7IQB9rc0. What he says on TV is pretty much blabber to fill time. CNBC is financial Sesame Street. Watch Bloomberg. Its on most cable services and its free on www.bloomberg.com

Read Barron's. Its probably the best financial paper out there. Stocks are affected by it on the Monday afterwards.

Keep an eye on the tangible Price to Book. My mentor is one of the greatest traders ever and he suggests a book. Can't remember the name right now but it shows statistical facts to show how much you would have made over the last 30 years if you invested in companies solely based on one fundamental indicator. 1,000 would be worth over 1 million if you invested solely on Price to Book. There are a lot of things you have to keep an eye on. I'll ask him and post the title on Monday.

Don't take tips. Make your own conclusions. Especially if its from an Analyst at a bank. Its a corrupt industry. That advice goes along with the conflicting people on TV. No one really knows whats going to happen in a year to 2 year time period. You either invest for the long term or trade in and out for fast money.

Don't waste your time on academic books like Random Walk. They are written by people that sit in Ivy Towers and have never invested or traded. Theortically they are right when market mechanics are perfect but its not an even playing field for everyone.

Get a direct access broker like Interactive Brokers. Not sure what the minimum is..5,000 maybe.

And most importantly, Keep it simple. There are a lot of smart people with great ideas that are very wrong everyday.

 

[Bible_Belt]

Those are the same things I learned as a professional trader as well, Celadus. Good advice.

 

[Last Man Standing]

Clooney - the stock market is manipulated!!! Have you ever heard of the "plunge protection team"?? Google it!!!

 

[CLOONEY]

Clooney - the stock market is manipulated!!! Have you ever heard of the "plunge protection team"?? Google it!!!

Lol, the stock market is definately manipulated! Never heard of that team though, who are they?

One HUGE peice of advice I can give to all the novices, is dont do what managed funds traders do, what 95% of traders do, and that is invest based on the heard mentality, as in, dont invest because a company is "expected" to perform well this year. This is what most traders do, and it can make you money, the trouble is, its very unpredictable, and you have to be the first person to have the information.

Find out firm companies, who hold monopolies, either selling or buying monopoly power. Usually a strong monopoly has both. I.e. Woolworthes (supermarket) in Australia manipulates price it buys its products off producers for, as it is such a huge buyer, buying cheaper and gaining higher profit margins. Also invest in brand name products, or companies with strong positions. Not simply investing in commodity companies (either way, this books explains all this in detail). Then look at the financial stability, its valuation and if its undervalued or not. Once these short sighted traders (who expect the stock to fall because of sometimes true, or misleading information, that can come in all types of complexities (including takeovers)) push the price down, this is WHEN YOU BUY! If the company is financially sound, has a strong position in consumer markets, and these short sighted (95% of investors) push the price of the share below what it should be valued at, this is the time to pounce. You are buying against the trend, but you will make great rewards. Searching out GREAT, UNDERVALUED companies is how all the great traders make their money. The rest of these guys are simply playing the market, which involves a LOT more luck.

 

[CLOONEY]

Read Barron's. Its probably the best financial paper out there. Stocks are affected by it on the Monday afterwards.

You obviously trade completely different to me. These are the short-sighted traders I am talking about who allow me to make money. Sure Celadus, if your good at it, you can make a lot of money that way also, and it can come quicker, but its far more risky, and the vast majority slowly transfer their money towards guys like Buffett over time.

Quick information leading to quick surges in stock price, is a very very risky way to trade. You cannot predict the high, and you can barely ever get in consistantly before the heard does. There are just too many people playing the market this way.

 

[CLOONEY]

Don't take tips. Make your own conclusions. Especially if its from an Analyst at a bank. Its a corrupt industry. That advice goes along with the conflicting people on TV.

And most importantly, Keep it simple. There are a lot of smart people with great ideas that are very wrong everyday.

Great advice there!

 

[Last Man Standing]

This is part of The Matrix - on the financial side!!! The key word is privatization/consolidation - control through deception - The Matrix!!!

http://www.rense.com/general52/secretsoftheplunge.htm

 

[CLOONEY]

This is part of The Matrix - on the financial side!!! The key word is privatization/consolidation - control through deception - The Matrix!!!

http://www.rense.com/general52/secretsoftheplunge.htm

hahaha, funny as ever Rico! (not sure if people know the real you are on this site!).

Yeah, all Markets are regulated these days in established economies. Sure is the Matrix! But I can still get enjoyment out of it! I would agree from my limited knowledge of US stocks, that they are definately overvalued also, in general. But that article is definately a bit of a paranoia theory. Sure, we could experience a crash, but paper money will definately not be used to burn in the furnace. If there is a crash, it will correct itself, just as all crashes do, that is history, and this is the best time to get into the market. It is only the futures traders who will loose, not holders of solid shares.

 

[Celadus]

Good short term traders don't look to pick tops. You set a profit target and get out before the top otherwise its difficult to exit your position. If you sell when everyone else is still buying, you have no problem getting out, but if you try to sell when everyone else is selling you screw yourself. Bears make money, Bulls make money, but Pigs get slaughtered. Guys in my office make hundreds of thousands scalping large companies. Buy 5,000 shares at 39.01 and sell it at 39.04. Quick and fairly riskless $150. Good short term traders just look for slow moving and predictable targets. You have to be willing to use leverage to take advantage of this strategy though.

I short term trade day to day but carry a long term portfolio. I'm allowed to carry leverage up to 6 times my account overnight for free.

I wasn't suggesting playing the Barron's bubble. I don't play it. It was just a point to show how influential it is.

 

[CLOONEY]

Sure, I get what you are saying. However, if you are leveraging considerable amounts of money, and those shares fall by those 3 cents, you are in big, big trouble! It is still far more risky than using a longer-term oriented strategy of investing when these short-sighted "bad news phenomenons" begin to sound companies.

Short-term trading can be adrenaline pumping, and its great fun, but there is no fairly riskless short-term trade, and like you say, you need considerable amounts of money to get anywhere off a share movement of 3 cents (assuming the stock is worth $39, as most safely traded companies are).

Good to see there are other knowledgable traders on here though. Most of what I read on Financial threads, was kids talking about trading, but never doing it. Like I said, I did it since I was 12, and only started with $635, so if you really want to trade and make money, there is no time like the present! Just make sure you thoroughly educate yourself, before you simply throw your money in on a whim, because you got over excited about beginning to trade. I have done that myself a few times, and mostly it ends in catastrophe (one gold mining company I bought in went bankrupt, and I invested nearly everything I had in that company at a young age), that was a setback for 2 years for me!

 

[GQ_Confidence_1]

I've read alot of books on investing. Here are a few thoughts...

-I would go straight to the top when learning about investing. Why go anywhere else? It doesn't make sense.

If you wanted to learn about how to become a successful attorney, would you ask advice from a 2nd year law student, clerking for a summer? Or would you learn from a successful attorney making millions of dollars a year?

I've never understood why so many people pay attention to amateurs in the market.

There are some great books on Buffett's life,

The Making of An American Capitalist. The best biography of his life. He was a millionaire in the 50's. He had like $15,000 saved up as a teenager! This was back in the 40's. Great book.

Essays of Warren Buffett by Cunningham. This is a collection of Warren's letters to shareholders. Again, must reading for everyone. This is like Tiger Woods telling you about golf, or Michalengelo telling you how to paint. Buffett is worth $60 billion, some countries aren't worth that much.

One of Buffetts key points is knowing your circle of competence. You have to know what your game is, and what your game isn't. Most people don't.

You see guys on tv all trying to predict oil, the economy, the FED, interest rates, big cap vs small cap. The S&P vs something.

It'd be like going to a casino, and there are 10 or 15 games that you can play. And they're all different....craps, roulette, blackjack, poker. Don't bet money on a game that you don't know how to play.

I've read different books on Buffett and alot of them try to pin him as a stock picker or some oracle that knows all the answers. But actually, he invests in what he knows. Its such a subtle point, but he doesnt gamble. Only play when you have an advantage.

Other big investors are Charlie Munger, Jim Rogers, John Templeton. Some good profiles are in Money Masters of Our Time and Market Wizards.

Something they all have in common is that they bet very seldom, only when the odds are in their favor. You don't make money by going after mediocre opportunities.

Great book I've been reading by Charlie Munger, Poor Charlies Almanack. Big 500 page compendium of his speeches and thoughts. Its also a great book for general wisdom. Bill Gates says that Munger is the broadest thinker he's ever met.

In investments, I think there's a few dozen people that get it. And there are 10,000 wanna be's, guys that write newsletters, sell subscriptions, go on tv, tell you to buy futures on the radio, lol.

Like 10,000 AFC's talking about girls, but they've never gone on a date, or they've crashed and burned badly.

-I think alot of what's written about investing in general gets caught up in technicalities, it can get sort of petty. Like "value investing" vs "growth investing". Or, my strategy is better than yours. People sort of wall themselves off and think they're so superior.

All strategies co-exist. Like in basketball, some players are good at 3's, some at jump shots, some at little turn around hooks. Buffett, Munger down to the day trader all play on the same field.

-Think outside of investing to come up with answers. Most of whats written is too deep in the stock world, you dont get much perspective.

On TV, Cramer, etc will tell you opinions on a 1,000 different companies. They think they know where they'll all be in 2 or 3 years. Whether its a bank, a retailer, a car company.

But go to a mall and try to predict who's going to be there in 2 or 3 years. You cant do it, its crazy. Look at all the companies that go out of business...Department stores, KB Toys, Jewelry stores. On TV, no one goes out of business. Everything always goes up, its crazy. Out of touch is putting it nicely.

Some other books I've gotten some use out of...

Money Game by Adam Smith. About the market of the 60's. Eerily similar to what happened in the 90's. The only thing that changed where the ticker symbols.

Adventure Capitalist by Jim Rogers. He took a really cool around the world trip a few years ago. Hes made a fortune in commodities.

Investment Biker by Jim Rogers. Another round the world trip in the early 90's by motorcycle. Great lessons. Great lessons on world economics and how things really work.

 

[RedPill]

There are some great books on Buffett's life,

The Making of An American Capitalist. The best biography of his life. He was a millionaire in the 50's. He had like $15,000 saved up as a teenager! This was back in the 40's. Great book.

One of my favorites.

 

[azanon]

97% of the population has no business (attempting to) buy and sell individual securities, be them bonds or stocks. Most people are far better off buying mutual funds.

Unless you're, say, a financial analyst by profession such as Clooney, ignore any advise to read any book that would have you buying individuals stocks and bonds. There are so many other better things to do with your time. The chance of an ameteur beating a vanilla index stock mutual fund(s) over a long period of time are very slim.

Also, avoid reading scam-artist books suck as any written by Kiyosaki. Right this very moment, many people are learning the hard way about the fools gold in real estate "investing" (which is much more accurately described as a job, than an investment). With mere investments, you don't actually do much of anything.

Most people need more help learning how to manage money, budget, and learning save vs. spending discipline than on how to get the highest return on their money. It kills me how people will spend so much of their day studying how to invest in stocks when they don't save enough to even make the effort worth their time! Because of my saving discipline, I don't need super high returns to have a lot of money. Saving discipline is where it's at. Your rate of return is ancillary compared to that!