OT Online Stock Trading - saving for my next boat

Stick to what you know-maintenance on boats.
BTW many people regard those who repair boats etc. as parasites taking advantage of other's misfortune.

Impish-I've done it all (metals,commodities,currencies,stocks,options,futures,bonds) and honestly trading on your own is very difficult/impossible for the vast majority.


I've had many people ask me this kind of question,and I always advise them to find a great options advisory service. Find one with documented past trades,try a month's subscription and google their name all over to find any good/bad info on them.
Pay attention to seasonalities as well.

 

I feel that way too in a way. I don't believe in things like split-second-trading to take advantage of fluctuations. Maybe I don't understand, but these seem like perversions to me and dangerous.

I'm trying to invest in companies I think will be successful and watching for low points to buy in at. I think of what I'm trying as "honest investing." Maybe I'm a fool

 

Thanks for the advice. I have much to learn, but will start reading now.

 

Liquidity is essential to functioning markets.

 

Hmmmm....................... speculation and liquidity. Hmmm, is that how speculation in the housing market functioned ?

 

Higher risk means higher rewards

Have been involved in many start-ups : they don't have the money so they float shares for 1 cent,a fraction thereof,or more and sold to raise money.
I will invest...may end up with 100k to a million shares.Then they can hire workers,drillers,machinists etc etc and go about their business.
If it doesn't work out- oh well.
But if it does,the price will rise. Then others notice this-the company value rises ( I make money,and others make money),more people are hired etc.

Will sell off an amount to cover much of my costs-other people buy these and make money.And that's Ok with me.


Hundreds of people are employed due to my investing and being willing to accept risk. If that's being a scumbag parasite, so be it

 

Nothing wrong with long term investing. "Scumbag " terminology concerns the destructive, demoralizing, money making strategies a company must take to satisfy the speculators who care little for the long term company health , only their own short term money making needs. Many companies are ruined or stunted by investors each year.

Investors, speculators ,inflated the Dot Com bubble.

 

It is a common misconception that the difference between 'investing' and 'speculating' in a security is defined by term.
Suggesting morality in stock purchasing behavior?
I don't buy it.

 

Morality ? I do buy it...somewhat.....in my extreme right wing ,socialist way. I am confident that Investing makes the world work better and that speculating does little to benefit society. Id be interested in hearing what Americans think of the Tobin Proposal ?

 

The difference between speculating and investing is that speculating is implied to have higher risks,but there is NO difference based on time.
An investor may be in a stock for 3 days, a speculator may be in it for 3 months.


Yes many co.s are ruined by hedge funds BUT behind most of them are pension funds vested deeply into them.
People demand and expect a pension and good ROI,so the funds are under the gun.
Better not look too closely at the retirement or pension funds- lest an awkward truth emerge....


Moralistic spec/investing? How about a start up recycling co.? Or an organic food company,or a new health product?
Just be careful you don't profit too much.

 

Hmm...sixty percent of all trades are high speed, computer driven. Pure speculation.

http://www.bloomberg.com/news/2010-...ofit-drives-high-frequency-s-new-cowboys.html

Sure my pension plan must provide decent growth. Will it ?

Is the stock market composed of investors or speculators ?

Can an investor ever possibly compete with a speculator ?

Will the concentration of wealth and power in the financial trading sector completely sideline the investor ?

Do the crashes these speculators precipitate benefit my pension fund ?

 

This is just semantics/vocabulary.

By definition there is no class of stock which may be termed to be an investment.

ALL stock purchases are speculative in nature and simply vary by degree.
Term as I mentioned earlier has little to do with speculation.

Consider how the market works:

All companies change in value over time. All of them. The market knows this and alters the market capitalization to match the value/static assets of the business and its ability to make money with those assets.
Stocks are speculative as they make the required presumption that the business will continue to be a going concern at a known or calculated yield.
The degree of speculation in stock valuation has to do with the predictive nature of market participants- knowing that ALL companies change in value over time the market attempts to evaluate this change and is willing to purchase a stock based on a price with is a multiple of current assets and yield. The degree of this multiple may be defined as the degree of speculation in the price structure.

One can easily see this activity when appraising stock values. Mature stocks of businesses which have developed their full market share tend to stabilize in price and are traded against yield and assets to a fairly fixed multiple. Growth companies can be purchased up to very high multiple as the market is not fully informed of real value into the future and speculation is higher.

Start up pharms, biotechs etc can be highly speculative in as they are traded when no product exists, are loosing money and there may not even be a market yet (take the nascent computer companies of a few short years ago).
So term- a highly speculative stock may be held for years while a stock which is as near to investment grade as is possible in the secondary market may be traded for seconds, minute or days, weeks etc. Term is irrelevant.

Liquidity- the market requires a high degree of volume and its resultant liquidity to function. In its absence securities may suffer high price drops and advancements which exceed the market appraisal of value. So in effect if all stock is held long term as an "investment" by your terms, value may be subject to large price distortions until sufficient participants are present to normalize price.

So short term traders provide a required function in the markets. This function is so necessary that the markets have long employed "market makers" whose role is to provide trading volume and insure the required liquidity.

High frequency trading- computer trading etc- I don't do it or really know anything about it. It is bandied about as being toxic to the markets. I don't see how it effects me or the price activity of securities. One can still trade on market behavior which has been recognized for as long as there have been markets.

 

Michael, I think you are trying to make a distinction without a difference. I am just not sure how you would separate the difference between speculation and investing, or what advantage that would provide in a theoretical discussion. During the recent mid-western flood my investment manager bought a few hundred thousand dollars of lettuce from non mid west growers thinking that the lettuce fields would be flooded. I made a pretty good profit on that deal, but at no time did I ever want a truck to show up with tons of lettuce on my doorstep.

So was this speculation or investing? And assuming it was speculation, what were the effects?

A lot of farmers got to ore-sell their crops, reducing financing costs on this years crops, so they made more money. Since their primary concern was in reducing their downside exposure to a financing costs they are pretty pleased.

I made money off of owning a inch of lettuce for some period of time.

The supermarkets were able to buy at a definite price from me since I only wanted to hit my investment goals, and didn't care how much further up the prices went.

Consumers of lettuce paid No more for a head of lettuce than they otherwise would have, and perhaps less since I took the risk not the farmers of the financing. And prices would have gone up anyway as demand outstrips supply.

In oil and other long term commodities the numbers are even More in favor of speculation. Since speculators can't effect supplies, or demand, at best they can act as holders of debt for short periods of time, but cant effect the real market, in short they may get the advantage of a change in price, but can't effect one.

So what has driven up oil prices? How about instability in the middle east, companies hoarding supply out of fear that supply will dwindle, the failure to find new major oil reserves, massive increases in demand from china and India. All of these things combined have to do with the long term increase in oil, not commodities speculators. Because at the end of the day a speculator has a must sell by date - that date on which he has to take physical possession of the commodity, or pay others to store it for him.

 

IMP-ish

Trading yet?
How is it going for you?

 

Not very fast. I have a fidelity investment account now. I've funded it with $10,000 to test the waters. I've been up, down, up, down, and up and have a realized gain of 2.1% from where I started. At least I am slightly ahead as I type this instead of slightly behind but I will be doing a lot more testing before I put any more money at risk.