Books? Magazines? Toiletry?

[Q-Unit]

whats a good basic book to get someone started on the stock market. To learn from scratch that is.

I see "stock markets for dummy" and as a dummy, i actually think about buying it, but I know there has to be better qualified ones out there?

thanks!

[Kevin]

Go to fool.com

Subscribe there. They have some great reading.

Weird name for a stock site eh?

[Q-Unit]

Originally Posted by Kevin

Go to fool.com

Subscribe there. They have some great reading.

Weird name for a stock site eh?

[Fish2006]

Originally Posted by Kevin

Go to fool.com

Subscribe there. They have some great reading.

Weird name for a stock site eh?

Second that - fool.com is good.

Stay away from Jim Cramer on cnbc. That dude is a clown - someone analyzed his picks over the long term since the show has been on, and he is 2 percent short of the S&P 500 - before including trading commissions - which are substantial if you trade as much as he does. Think of him as a tout who is always screaming L O C K.

That said, the only reason to watch him is to do what they call "fading the cramer pop" - which is shorthand for waiting a week after he makes a recommendation, then shorting the stocks he recommends for the following week. That, my friend is a great strategy, a little like fading every ******* that comes into the forums and starts touting crap.

FYI, shorting is a way you can make money on stocks going down. You need something called a margin account to do it, but that is available at most brokerage firms. If you short a stock, you make money when it goes down. For example, if you short 100 shares of Bear Stearns at $100 per share, you start with -$10,000 (you are actually borrowing the 100 shares of stock and immediatley selling them, with an obligation to buy them back at some point in the future). You then close the trade (technically, you are "buying stock" to cover the short") - if the stock has gone down, say to $90, you only pay $9,000 to pay back the stock that you borrowed for $10,000, pocketing the difference.

Of course, the risk with shorting is that the stock goes up, and you have to pay out more than what you paid for the stock to cover the short. The risk here is, in theory, infinite, since a stock going down can only go to zero, but a stock can go up to anything, but in reality, a financial stock like BS or something like that (short of an internet or a biotech that can go up really fast) - can only go to a certain point until fundamentals kick in. Especially with large companies, they will trade in a certain range (called a range of multiples).

In other words, a company like Bear Stearns, like we used in this example, is never going to do more than a doubling in something like a year. The multiple to earnings that financials trade at is, at most, perhaps 25, and at the least, something like 7 or 8.

Anyway, hope this helps.

[Underdog88]

Originally Posted by Fish2006

Second that - fool.com is good.

Stay away from Jim Cramer on cnbc. That dude is a clown - someone analyzed his picks over the long term since the show has been on, and he is 2 percent short of the S&P 500 - before including trading commissions - which are substantial if you trade as much as he does. Think of him as a tout who is always screaming L O C K.

LMFAO! I know little to none about the stock market, & my first impression of that tool was TOUT!


I told my fiancee while flipping through the channels "That's what you call a tout!" Thanks for the recommendation Kevin, this is something I've been interested in for a while...

[Q-Unit]

great stuff guys

thanks fish and kevin.

I'm gonna have to read over what fish just said about shorting, cuz ive had a few to drink and i cant read all of that at once right now.

[Q-Unit]

btw I'm P.O'd

a couple weeks ago, Google was trading at 485, and today its at 515, you mean to tell me, if I bought one share at 485, I coulda had a 30 dollar profit by now?!?!??! LMAO.

(all I could have afforded was prolly one share)

[fitter]

minus brokers fees...good stuff guys. like the shorts on Cramer....he is getting obnoxious. tend to think the buy ups from Cramer could push, then reality hits and there is a good chance to make on a short. never considered looking at that. may have to follow this.

[Fish2006]

Originally Posted by fitter

minus brokers fees...good stuff guys. like the shorts on Cramer....he is getting obnoxious. tend to think the buy ups from Cramer could push, then reality hits and there is a good chance to make on a short. never considered looking at that. may have to follow this.

lol - google for "shorting the cramer pop" - lots of hits probably.

As for GOOG going from 485 to 515, dont sweat it - you have to think in percentages with stocks, not absolute numbers. If a stock went from 48.5 to 51.5, it doesn't make news, and almost nobody gets excited. You just tend to own 10x more shares - and the effect is the same. With GOOG, and other high price stocks, use the "divide by 10" rule when buying, and watching it move. Or better yet, dont watch it move, and simply buy more GOOG whenever you can afford it - I think the youtube ad revenue will start to kick in within the next year and send it on another growth leg.

[Horfin]

Are you interested in daytrading or buying and holding for long term investments?

If you are interested in long term, I'd suggest a Dividend Reinvestment Program.

I do this with US Bank (and from that I have bought other stuff). If you goto their site:

U.S. Bank - Personal banking including checking accounts, online banking and much more and click on shareholder information then in there somewhere there is a link to melloninvestor. At melloninvestor you can set up an account and set up for all dividends to buy more stock (you don't have to do us bank, but usbank waives the most fees. I like the investment in usbank becasue they are big-time advertising toward spanish speaking and there is a market for it. They advertise it more than any other bank. If you join the program, most of the fees are waived). If you put your $500.00 toward a lower priced stock like $10.00 a share you'd get 50 shares. Each quarter the company declares a dividend say 0.05 a share. So each quarter you would get $2.5 or 0.25 shares. at the end of year 1 you'd get one share "free"

If you go there you can pick from 100s of companies and the fees vary. The best one I found was US Bank. Almost all of the fees are waived.

Just my two cents. If you want day-trading or the ability to sell whenever you want this is not the right program. You have to read the fine print becasue it will say all stocks are bought on the 2nd tuesday of every month (for smaller companies) or on Tuesdays at 3 pm the stocks are bought (for bigger companies)

Horfin

[Horfin]

One more thing about DRIPs. If the value of the stock goes down you are benefited. As the stock goes down when your dividedn buys more shares you get more shares:

$0.05 per share times 50 shares = $2.50 in dividends

If the price of the stock goes to $9.00 then you get 0.27 shares ($9/$2.5)
If the price og the stock goest to $8.00 then you get 0.312 shares $8/$2.5)
If the price of the stock goes UP to 15.00 then you ONLY get 0.166 shares ($15/$2.5)

-----------
If you look into this program make sure you read all the fine print, because so of the companies pay the commissions and account fees and everything and some dont'

Horfin

[Kevin]

Another great thing about drips is that you dont have to pay any commission when you get your quarterly dividends awarded to ya.

I ABSOLUTELY LOVE drips for retirement accounts. Especially holding fat stocks like procter and gamble and budweiser, stocks that have nice hefty divs. Over time, this is a great way to accumulate shares.

I dont think Id do it with a regular stock account though. Your cpa may shoot ya. I would think it's a hell of a lot of work to deal with as those are taxable in a regular stock account, unlike a retirement accont where you dont have that issue.

BTW, if anybody out there makes some decent loot and doesnt have a retirement account, GETCHA one, youll be glad you did. It's something in life that doesnt get addressed properly and is super necessary.

Dont depend on social security for retirement unless you wanna live in a studio apt in oklahoma with a black and white tv and a kitchen table you got at a garage sale. It simply aint enough to live off of.

No offense to the okies here.