New Scaratings

"Stock Market Central" begins...

I've been out of the investment business for seven years now, so I don't think I have to worry about being sued for giving bad advice anymore. Now that I feel safe, I'm sticking my neck out and starting a thread, where my 32 years of in the trenches experience might be of help to some of you. I've seen it all, been through it all, done it all, but admittedly I do not know it all, even though I should. However, don't worry, I still know a lot.

It will be interesting to see how this thread goes. It could wither on the vine from lack of interest, or it could grow into a Blue Chip thread like ICEMAN's have. Time will tell...

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"The game is afoot."

I understand that "Twitter" is about to release their IPO. I don't believe that "Twitter" has ever had a profitable year, and that the expected offering price is going to be something like $26.00 a share. The price could rise dramatically once it starts trading on the market, as people jump in because it's going up. However, I would say be cautious, and don't place a bet on it with your mortgage money. A stock that has no earnings, pays no dividend, and has no track record, is a big gamble any way you look at it, no matter how sexy it looks.

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"The game is afoot."

I can say with confidence I won't buy any.

Bet Dante has jumped in head first with a concrete block tied around his neck.

IPO price was 26. Twitter just opened at 45.10 and went past 50 in a few minutes and then back to 45. There are not many shares available unlike Facebook that had hundreds of millions of shares so it will be pretty volatile. I'd say it's over priced but will be a good trading vehicle for years.

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BUD - Stained Glass Pub Silver Spring MD
OC BUD - Grotto Pizza DE near Ocean City MD

LET'S GO ....Caps and Os!!!!

When the primary reason for people to buy a stock is "because it's going up", be careful. In time it will stop going up, at which point what reason will new investors have to buy the stock? The answer is fundamentals. If the stock has no fundamentals to support it's price, look out. Investors emotions of greed can quickly turn to fear, and a rapid reversal of the run up can occur, when this happens.

The underwriting syndicate will support the price of an IPO for about a month. After that the stock is on its own.

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"The game is afoot."

BUD, good trading vehicles with no fundamentals become a guessing game. I never tried to do it with my clients, but I know those who have. One wrong guess will often erase all of the right guesses.

Determinating if a stock is over priced is very difficult to do, when there is no way to measure it. It's a guess.

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"The game is afoot."

Anyone know if there is an online stock trading game? Somewhat of a Fantasy Stock Market game where players start with a certain amount of money and compete against each other to see who can make the most in a month's time?

I'm sure there is, and if you Google it, you will probably come up with at least one. However, because of the great deal of work any such web site would have to do to keep track of everything, and the expenses involved, it would be hard for it to offer it for free, unless it had a lot of advertising.

Make the most in a month's time...? (This type of client would be a stockbroker's worst nightmare in the real world.) I might suggest that online poker would be a more likely web site to look for.

If you do find an online stock trading game similar to what you are looking for, I have some advice. If you want a shot at winning, go with the most volitile stocks you can find, and guess your ass off. Better yet, don't buy the stocks. Instead, buy the the options on them to leverage yourself. Most of the time you will wind up losing all of your pretend money, but when your guesses work out, you will kick everybody else's asses.

p.s. Sadly, when your wild ass guesses don't work out, and you lose all of your pretend money, you won't be able to participate in the real class action law suits that follow.

p.p.s. Steer clear of utility companies. Unless they are involved in a buy-out, their price movement makes watching paint dry seem exciting.

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"The game is afoot."

(I am going to talk about regular, fixed interest, long term bonds. To discuss all of the variations of bonds would take way too long.)

I know that bonds aren't stocks, but they are investments that many consider as a safe haven for their money.

Traditionally that is true, but perhaps not today. Most bonds are very predictable. You buy one and lock in a rate of interest that you will receive for a long time, and barring a few possible exceptions, you can rely on receiving those interest payments until they mature or you sell them. However, there is something you should know about these bonds. Their market value is not fixed, and there is a nearly absolute inverse relationship between what their value is and what direction interest rates move.

When interest rate go up, the value of your bonds go down. When interest rates go down, the value of you bonds go up.

The track records of bond mutual funds look very good today. That's because interest rates have been going down for quite a long time. However, with interest rates currently sitting at close to all-time lows today, it looks like the party is over. In all likelihood, interest rates aren't going to go any lower, and it is just a matter of time before they start moving up again. When this happens the value of your bond investments will decline. The higher interest rates climb, the more you will lose. Yeah, you won't lose principal if you don't sell them. Just sit on them at the pathetically low rates they pay you for the next 30 years, and when they mature you should get your money back. (That is if you didn't buy them at a premium.)

My unofficial advise is to steer clear of bond investments today, and if you already hold them, think about getting out.

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"The game is afoot."

anyone up for a challenge?


http://www.wallstreetsurvivor.com/

http://www.marketwatch.com/game/the-lea ... ock-league

http://www.fantasystockbroker.com/signup.php



before you sign up, let's discuss.

I think I'll pass. I took a peek at the links you gave us, and I'm guessing that playing the games involves short term trading (guessing). That is something that takes too much time and effort than I care to get into. Worse yet, because it is basically guessing, I would probably lose, and I would destroy any credibility that I might have when it comes to the real world of investing.

Good luck, YODA, if you get into it, and feel free to ask me for advice when your guesses go the wrong way.

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"The game is afoot."

If short term trading is guessing, then what is long term trading?

Basically you choose stocks as an investment based on fundamentals, and that's fine. But it's still guessing. Short term traders pick stocks based on technicals as opposed to fundamentals, but whichever way you choose, there is still risk involved which is apparently guessing.

All investing is guessing.
If not, it's called insider trading and then they put you in a cell with shabby drapes and a deplorable wine list.

Nothing like gambling and calling it investing.

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Buzztime is a company full of dumbshits.

(I am not going to be talking about Wall Street gurus. I am going to be talking about the average Joe, who dabbles in the stock market in what follows.)

Of course there is always an element of uncertainty with investing, no matter what your philosophy might be. However, I think the questions here are the degree of uncertainty, how decisions are made to change investments, and how often.

Very few individual short term traders have the acumen to understand technicals, let alone make good decisions based on what they think they know. They are constantly hopping in and jumping out of stocks based on something they read on the Internet. Not only are they going to screw up a lot of times, they are also going to run up their transaction costs. They are attracted to the hot stocks of the day, which tend to be volatile. Volatility in these stocks subjects short term traders to surprises, which often cause them to start making decisions based on the emotions of greed and fear. At this point the average Joe begins guessing directed by his emotions. I know you can find exceptions to what I have written, but after more than a few years of experience, I can promise you that this is how it usually goes for the average Joe, who will have a lot of excitement, but will not do well over the long run.

Yes, long term investors also have an element of uncertainty when they build a portfolio, and every once in a while they will change the stocks they hold. However, their stock selection is normally based on fundamentals such as price to earnings ratio, earnings growth, dividend payout, historic trading range, basic company strength, and other unexciting things that make sense to consider. For the most part they don't react to hot tips from the Internet, and usually stay the course, unless there is a significant change in the fundamentals in a stock they hold in their portfolio. Though boring, this approach to the stock market will work over time. The guessing long term investors make is based on something real, rather than Internet silliness and emotional reaction to it.

"Long term trading"...? This sounds like something that is self-contradictory to me. Trading is normally associated with buying and selling stocks relatively quickly. (Sometimes on a daily basis.) If you were referring to the fact that long term investors will change stocks in their portfolios for fundamental reasons, that is NOT what most would call "trading".

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"The game is afoot."

So basically long term investors can correctly interpret fundamentals while short term traders cannot interpret technicals? Got it.

Simply having money puts you at risk, and anything you do with it is some kind of a gamble. You have to do something with it, so what are your choices?

You could put it in a cigar box, and inflation could cut it's value in half. You could put it in a savings account, and watch it grow at less than 1%, while the cost of a loaf of bread goes up by 10%. You could put it in the bond market, and have rising interest rates destroy their value. You could put it in the stock market, and see your portfolio decline for extended periods of time, even if you bought good stocks. You could roll the dice in the commodities market, short silver that seemed way over priced, when the Hunt brothers were driving the price up in their attempt to corner the market. You could put it into a guaranteed Baldwin United Annuity, only to find out that they were cooking the books, went bankrupt, and that all of your money was gone. You could put it into real estate at the peak of the market, and get your head handed to you. You could put it into baseball cards, and discover that there is a tremendous spread between the bid and the ask when you go to sell them.

Any way you look at it, simply having money puts you at risk, and anything you do with it is some kind of a gamble.

Of course you can also take it to the casino, which isn't a gamble. You will lose it all there, and quite quickly. The only benefit of this approach is that you will get the agony of losing your money over in a short time.

I've got a solution to the risk of gambling your money away. SPEND IT...!

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"The game is afoot."

BO, I know you love to argue, and that you are very good at it. However, that's not what I was trying to say. The difference between the results that short term traders vs. long term investors achieve is not an absolute that applies to all of them. My comments were based on over three decades of watching what happens to ordinary Joes, who have gone about managing their money both ways. I am sure there are some exceptions, however, long term fundamental investors have enjoyed much better success than short term technical traders from what I have seen.

I have no reason to lie about this.

I know that you are extremely intelligent, and I'm guessing that you have done well short term technical trading on your own, but most ordinary Joes aren't going to do as well as you have. In fact, most of them are going to lose their asses.

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"The game is afoot."

All I was trying to say is that no matter if you use fundamentals or technicals, you're still taking educated guesses. Which is better than simply throwing darts, but still guesses nonetheless.

I have no doubt that in your three plus decades of experience that long term fundamentals trumped short term technicals in the overall scheme of things. Do your research then buy and hold was the solid game plan. But let's talk about the market in the 21st century and bounce some thoughts around.

It is my belief that the market these days trades much less on fundamentals. Examples include the current hot dotcom's Facebook and Twitter, no earnings, no fundamentals, yet their prices are above the initial IPO's. Google had similar fundamentals when it went public and look at it now. Or what about a company like Microsoft that makes billions each year yet it's stock price hasn't budged in 10 years.

It seems that the overall market will go up and down on various rumors that might have no effect whatsoever on the market itself. Companies come out with good earnings and good guidance yet the stock drops. It just seems that fewer and fewer classic principles make sense these days.

Naturally I'm not saying the buy and hold method won't work for some stocks, but I believe the time has passed to hand that down as gospel. I think in this day and age you have to incorporate some short term trades into the mix when a good situation presents itself. Not only on the long side but the short side as well.

Anyway, that's basically where I stand on the market. You may or may not agree with some of my thoughts. But I think we can both agree that it ain't easy making money in the market regardless of method.

SCAR, you should have taken your mortgage money and day traded it. Damn, you could have nearly doubled your money, if you got in and got out at the right times.

Hell, I shorted the stock, but I'm holding on and hoping that I can cover my short sometime before I die. The only nice thing is that it doesn't pay a dividend, so I don't think I will have to worry about coughing that money up any time soon.

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"The game is afoot."

The "ScaRatings" logged me off again, with NO warning. It never told me that I was no longer logged on, and allowed me to waste a whole lot of time posting to this thread. All of which is totally lost, and I am totally pissed...! ! !

I'm not one, who has bitched about much, but this is something that really pisses me off. God Damn it, if I'm no longer logged on, I would like to know it, before I waste a lot of time banging on the keyboard. If I had some warning, I could have saved what I spent my time on, before the "ScaRatings" flushed it all down the toilet.

Shit, if this site is going to log me off, why the HELL doesn't it let me know, without sitting up on my monitor like it's still there. ...

Perphaps this will give you all a slight clue as to how pissed I am about this... Hell, I think we need a few more...



How about about a few more...?

Shit, not tonight. The "ScaRatings" will just log me off without any warning again, and all of this great composition will be lost.



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............................................................ "I was on my way to bed, until I got pissed too. This is what I think "

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"The game is afoot."

Insanity - doing the same thing over and over and expecting a different result. Just how many times have people here suggested to type everything into a word doc before copying it over?

Yes, you are most likely correct. Butting my head over and over again into a stone wall is probably stupid, insane, or both. However, when the stone wall gives way every once in a while, I am ecouraged to start butting my stupid, insane head into the next stone wall I run into.

"To type everything into a word doc before copying it over" to the ScaRatings isn't something we should have to do. As pissed as I am, this problem only occurs every now and then. I think this is a problem that can be fixed, and I'm hoping that DANTE is working on it.


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........................................................ "Cloudy, shut up and go to bed before you make a bigger fool of yourself."

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"The game is afoot."

If you think it's bad now just wait until Colossus and Guardian* get their act together.








*You see kids, before Skynet became the buzzword, there was this fun little book by D.F. Jones...