Any Stock Market Junkies Out There?

[johnnyhangover]

I am.

My RRSP's are self-directed and I dumped a whack of coin into the NYSE shortly after its demise back in the fall. I basically bought all the companies you heard about that were responsible for the financial mess. AIG, Citigroup, Morgan Stanley, Bank of America, and I recently bought some Ford and Bell Canada. My theory was this: It's not as bad as everyone is making it out to be, and the companies who are going to make a killing are the banks (they always do). So I dove in. Even with the market so depressed at the time, I still lost a bunch; but recently I'm back in black.

Anyone else dabble?

 

[johnnyhangover]

On a side note: CC should add an economics forum, I'd have posted this there instead.

 

[L Gilbert]

We have a few stocks. We decided that a few would be cool to spend part of our allocated play money on. So we steadily buy a little here and there. Found out a long time ago buying low and selling high isn't really the best way to invest. We also invest in stuff that is forward thinking, like a couple companies developing technologies for energies (sold our oil shares), BC companies into deep sea technologies, recycling companies, etc.

 

[SirJosephPorter]

Johnnny, there is no way you can time the market perfectly; it is very difficult to accurately judge the bottom. The most one can hope for is to buy somewhere near the bottom. And you succeeded in doing that.

I have been investing in the market since 1994 (to give you some idea of how far the market has come since then, TSE was around 3500 at that time, I remember buying Royal Bank for 7½ dollars). When the market was riding high, I sold considerable amount of equities. For the past year I have been slowly putting the money back into the market.

While the market has recovered considerably (TSE has gone from 7500 to more than 10,000), it is still much lower than the all time high (15,000 for TSE). There are still plenty of good bargains to be had in the stock market.

 

[Stretch]

I do Options Trading....tis very exciting :lol::lol:

 

[L Gilbert]

Hey!! Welcome back, Stretch.

 

[SirJosephPorter]

I do Options Trading....tis very exciting :lol::lol:

That is a bit risky, isn't it? You have to know what you re doing. Good money in it though, if you are successful.

 

[johnnyhangover]

I do Options Trading....tis very exciting :lol::lol:

Is that when you wager a stock will decrease in value? You basically borrow the stock today without putting up the dough, sell it, and then pay for it later when the price has dropped. Or do I have it confused with something else?

 

[SirJosephPorter]

Stretch, I have a friend who plays options with 10% of his assets. He tells me that he earns more with that 10% than he earns with the remaining 90%.

 

[Liberalman]

Stock tip
General Electric trading around thirteen dollars for the past five years, they were at forty dollars a share but because of their financial exposure they were dragged down with the rest of the financials for the past two years they have been making money and paying a dividend.

When the financial crises is over and people regain confidence in equities General Electric or GE on the NYSE this stock will go back to the thirty to forty dollar range.

I own this stock so I am biased so check out your stock market web site pull up the company financial and stock history and see for yourself.

 

[SirJosephPorter]

[FONT=&quot]Liberalman, I also own General Electric. I think they pay good dividend (or they used to, I haven’t checked in the last few months). And you are right; the stock has been pummeled in the recent months. But I am hanging on to my stock[/FONT]

 

[SirJosephPorter]

These days I am concentrating on dividend paying stocks. I am heavily invested in Canadian banks; all of them pay hefty dividends (BMO pays almost 10% dividend). Last month I bought Bell Alliant, it pays 12% dividend.

I am also heavily invested in the index in different forms. That is a reliable, long term investment.

 

[Ariadne]

We have a few stocks. We decided that a few would be cool to spend part of our allocated play money on. So we steadily buy a little here and there. Found out a long time ago buying low and selling high isn't really the best way to invest. We also invest in stuff that is forward thinking, like a couple companies developing technologies for energies (sold our oil shares), BC companies into deep sea technologies, recycling companies, etc.

Do you think there is oil off the coast of BC?

Other than oil, what resources (energies and technology) do forward thinking people want to invest in?

You're not thinking about dumpingrecycling off the coast of BC, I hope.

 

[Ariadne]

Johnnny, there is no way you can time the market perfectly; it is very difficult to accurately judge the bottom. The most one can hope for is to buy somewhere near the bottom. And you succeeded in doing that.

I have been investing in the market since 1994 (to give you some idea of how far the market has come since then, TSE was around 3500 at that time, I remember buying Royal Bank for 7½ dollars). When the market was riding high, I sold considerable amount of equities. For the past year I have been slowly putting the money back into the market.

While the market has recovered considerably (TSE has gone from 7500 to more than 10,000), it is still much lower than the all time high (15,000 for TSE). There are still plenty of good bargains to be had in the stock market.

Wasn't the all time high a bit of an anomaly? Isn't the market usually around 10,000? Did the market go from 7500 to 10,000?

Are pork bellies a good investment right now? Seems to me the investment is depressed because some people think they can catch swine flu from eating pigs for dinner. Do I misunderstand, or do you prefer depressed markets?

 

[Ariadne]

Is that when you wager a stock will decrease in value? You basically borrow the stock today without putting up the dough, sell it, and then pay for it later when the price has dropped. Or do I have it confused with something else?

Selling short ...

 

[Ariadne]

Stretch, I have a friend who plays options with 10% of his assets. He tells me that he earns more with that 10% than he earns with the remaining 90%.

Beware of those that think the stock market is a gambling field where people play.

 

[Ariadne]

These days I am concentrating on dividend paying stocks. I am heavily invested in Canadian banks; all of them pay hefty dividends (BMO pays almost 10% dividend). Last month I bought Bell Alliant, it pays 12% dividend.

I am also heavily invested in the index in different forms. That is a reliable, long term investment.

Sounds like you are heavily invested.

Banks? As an American maybe I'd consider investing in the failing economy if I was prone to the underdog, but Canadian banks are not in trouble with insurance pyramid schemes, so ... not sure if I'd be investing in the bank. Maybe oil in Saskatchewan.

 

[SirJosephPorter]

Is that when you wager a stock will decrease in value? You basically borrow the stock today without putting up the dough, sell it, and then pay for it later when the price has dropped. Or do I have it confused with something else?

Sorry Johnny, I missed this post. Options and futures are where you promise to buy a stock at a future date for a certain value. Let us say that you promise to buy Royal bank at 50 $ in three months time. You hope that it will have gone up (say, to 55$) in three months time. Then you buy it for 50, sell for 55, and you have made a profit of 5 dollars.

The flip side is that if the stock goes down to 45 $, you have lost 5 $. It is easy to make or lose a lot of money in options and futures. The reason for that is that you may be able to buy 100 $ worth of options for as little as say 20$. So if the stock goes up by 5 % you have made 5 $ on 20$, giving you 25% (or losing you 25%).

The difference between options and futures is that in options, you have the option to walk away from your promise (hence the name options). So if you have promised to buy Royal Bank for 50$, and in three months’ time it has plunged to 20$, you have the option not to buy it.

With futures you have no such option, you are locked in. But the fee for option contract is higher than that for future contracts. If you walk away from an option, of course you lose the fee you paid when you bought the contract.

Both options and futures are risky investments (futures more so than options). You have to know what you are doing. I myself don’t dabble in either of them.

 

[SirJosephPorter]

Wasn't the all time high a bit of an anomaly? Isn't the market usually around 10,000? Did the market go from 7500 to 10,000?

Are pork bellies a good investment right now? Seems to me the investment is depressed because some people think they can catch swine flu from eating pigs for dinner. Do I misunderstand, or do you prefer depressed markets?

Aridane, I couldn’t tell you about pork bellies, I don’t know anything about them. And yes, I do prefer depressed markets; they do present good buying opportunities, good bargains.

The best time to buy is when markets have plunged, when there is a general panic, when everybody is selling, when experts are telling you why it is different this time, why the markets aren’t coming back this time around.

Experts tell you that during every plunge of the markets. They said the same thing during dot com meltdown, how it was different, how the market was not going to recover. They said the same thing during the current meltdown. When it comes to investing, experts don’t know any more than us amateurs. However, they scare away a lot of investors with their talk of Armageddon and that presents good buying opportunities.

 

[SirJosephPorter]

Wasn't the all time high a bit of an anomaly? Isn't the market usually around 10,000? Did the market go from 7500 to 10,000?

You say you are from USA, you may be thinking of Dow. I was talking of TSE (Toronto Stock Exchange).

TSE did hit 15,000 at its speak (I remember I posted a thread about it on canada.com forum). Since I started investing in 1994, TSE has gone through several peaks. It rose from 3500 (in 1994) to 7500, down to 5100, up to 11,000 (largely on the back of Nortel), down to 7000 (when Nortel imploded), up to 15,000, down to 7500 and now it is inching upwards again, currently it is around 10.500.

But TSE has gone up from 3500 to 10,500 between 1994 and now.

TSE has outperformed DOW for the past several years.