I had promised that I was going to start my own thread regarding stock investments and the markets. So many things have happened since last time I was here and I really do not feel like sharing my knowledge. But a promise is a promise and there have been few people that have emailed me and supported me.

This thread will deal with investing in the stock markets. I will not discuss individual stocks but discuss ETFs like SPY, DIA, IWM and QQQQ. The one good thing about trading ETFs compared to individual stocks is the the ETFs provide instant diversification among similar companies within the same sector.

I will post more as we go along, regarding entry-price, profit-target and stop-losses. I do not think that any ETF is good or bad. It is good only if I'm making money and bad if I'm losig money.

If you have not been in the market so far, please read this as an information piece only rather than my recommendations. There is risk involved and you should know how much risk to take on any position.

Any suggestations, comments and criticisms are welcome as long as it is market related. If this thread gets out of hand and we start discussing off-topics, I'll stop posting.

Have a happy new year!!!! May 2007 bring you and your family lots of joys and riches.

Bri: I do not think it will go below $2.00. Summer gas prices is one of the factors but not a major one. I'm mostly looking at the long-term supply and demand. Higher gas prices are here to stay because of the demand from India and China.

I don't know at what price a stock will bottom or top. I'm mostly playing probabilities. So as long as i'm getting a risk to reward ratio of 3, I'll buy. i'm not going to wait for it to come down to $1.90 or buy it above $2.90. If I pay more than $2.90, then my risk to reward ratio becomes less than 3. I do not want to take such risk because in the long run after factoring for commissions and taxes I won't have much left.

We do not know and cannot predict/control how high a stock will go. All that we can control is how much we are going to lose if things don't work out as planned. As long as the risk is within your comfort zone, take the bet.

hmmmm, I get that you would just want to have bench-mark of R to R ratio never below 3.

Also, I get that you would want to go defensive with monies with the hope that higher probability of making bigger profits are basically beyond your control. Or say, it is dictated by quirk of fate beyond what one can humanely calculate.

Neways, I am still learning.

Ani, if you don't mind, can i learn a little about taxes and commissons part. As far as I get it, it seems that 10 dollar for each transactions is what I pay at TDAmeritrade. Dunno about taxes part since I have not filed it for stocks since 2001. This input or say insight would be highly appreciated.

Best~!

-B

ps retiring now, gotta get some sleep after hectic week-end. DC weather was not that great either.

I pay less than 1c per share, but you have to do a certain volume and have a certain balance. I use interactive brokers a lot because they offer futures which is a whole beast in itself.

Short-term capital gain taxes are a bit higher than long-term gains where you hold for more than 1 year. I don't know exactly what it is on top of my head but I think it is around 30%. We have a tax expert that does it. I honestly don't know much.

Look at Scottrade or Ameritrade should be okay too.

Bri: I think you are getting it regarding the RR and probability. If you get that part down and can identify the long-term trend, you're 90% there.

Trader: If you are reading this. Would you like to share some of your rules? I am always looking for new ways/information/knowledge.

I always had problem with trailing stops. I'd like to know how you use it? I had more success with trailing stops in stocks than in futures, probably because stocks trend better than futures.

Eminitrader or anyone,
Could you recommend some books on options and futures, that covers little more than the basics?
Thanks.

Hi All,

This might be a novoice question, but how do you guys set a target price for a given pick?

Guest 4 and K bha ko yo- Go from the top to bottom of this thread and you will get all your answers.When this thread first started I didn't even know the difference between stock and bond. Now I got decent knowledge ofTrading. I'm following this thread since begining and I found it really worthy.

Just like Bricolage said" Making monies, I care less, learning the logic and potential to make some in the future, I care much."

xix

Before the Bell Rings:

we shall see a forward momentum today. I would be in the buy for the first segment of the market. Would sell if needed, otherwise hold it to see how the week fares.

Good news on the techie side of stuff.

For newbies, I would suggest One Up On Wall St by Peter Lynch. Although the book is rather old ( from 89'), it gives you an idea about how to look at the Market from what you already know. Then you can move on with other studies. Also, the book is simple and lucid. Esp if you do not come from financial background.

Good Luck to the traders!

Best~!

-B

E ji,
thanks for the FYI on commissons and taxes. I guess I want to see my this year tax papers to see how I fared. *smile*.

Best~!

-B

Dear xix-ixi,

Thanks Much. Good luck with the learning endevors. Wish me one too!

Best~!

-B

Eji and Bricolage ji- 'Sallie Mae to be bought for $25 billion'. Is this news going to bring any potiential fortune for Traders?

Bric ji- I am also getting ready to get into Market for today. Whats in your Radar for today??? SIGA is not doing that bad.

Good Luck


xix

xix ji,

yes it is going green on the first half hour.... SIGA is up, so is JDO, thanks E ji.

I still want some my IPO bets to go green... CLWR and ARUN... let us see how it goes..

Yes Sallie and Google news are good omens.

Best~!

-B

Like I had said yesterday. I got out of SIGA and bought JDO. JDO offers better RR than SIGA.

Check out NNI. Hope someone bought it on Friday.

guys like emitrader said before getting a 8-5 job will give you nothing but a peace of mind for a little while until you pay your bills and thats it. you work and you pay your bills... get into investments which is the path to financial freedom... social security is not gonna last when we retire so take the action now of changing your future...

talking about stocks--- i think what one has to really keep in mind is why would a stock fluctuate?? my answer to that is look out for earnings release, news, dividend it it pays any, merger can be good or bad( talking about merger look at sallie mae went up 33% in three days and above all dont let your emotions take control cause if it does than you are more likely to be losing a lot of money in the stock market, have a plan like knowing when to get in and when to get out and how much gain and loss are you ready to take, study the chart well to find good buy and sell points...look at the beta, realtive strength for the last three months and also return on equity.. always look for earnings per share that has been going up 20 % every quarter within the last 3 years, look for the least debt/equity ratio, watch out for RSI(relative strength Indicator), MACD and Stochastic, this will help you to find the best buying point for a stock.

start your knowledge yourself go to some these websites
www.cnbc.com
www.stockcharts.com
www.vectorvest.com

my favorite above all
www.investors.com

good luck and hope everyone makes a lot of money ....

I hope you will come back and post regularly after this summer.

E ji,
got into 300 of JDO... is swelling up as you said.... NNI I did not for some reason on Friday. May be the work load in between, I lapsed.

Got out of SIGA at 8 Percent Profit.

more later!

Best~!

-B

So far most of the picks are doing good. CVDT up about 35% today. NNI up 15% today. These stocks went up the next day after the recommendation. ESLR and ASTI are doing well too. ASTI was acually Timetraveller's pick so kudos to him.

I think it is time to get out of SIGA. The thing that worried me is that on Friday we had some good news and a nice rally. Usually when that happens there is more follow through the next day. In the morning it went up but saw some selling within the first half hour. Get out of this junk. Depending on where you got in, you might have some profit.

I had recommended APKT and HAYZ too. Those did not do as well so dump those too.

ESLR is coming out with earnings after tomorrow's close, now it is up to decide whether to book profits or take the chance. If you risked less than 5% of your capital, take the chance. If you risked say 50%, then take the profit.

For conservative investors I had recommended QQQQ, DIA, IWM and SPY. Those are all doing good here.

I bought JDO this morning. It is doing well. This is my only summer play.

Okay guys, looks like this is it till after the summer. I was going through this thread from the very begining to make sure that I gave the correct information. It was funny and sad at the same time when people would come and say (without any knowledge about what the other person is doing) that it can't be done. I have more respect for people that say show me the proof and I'll believe you than someone who says it is not possible.

If you guys are not comfortable doing it on your own, then look at the strategies and test it on paper this summer. Find the stocks ( I have posted the link), find Target Price, Stop price and Entry price. See if the stock comes to that point and record your profit and loss. You need to practice on your own. After the summer we'll re-start this thread and we can go through this together for few more months. Then you're on your own.

I won't be following the market as closely but I'll still be keeping an eye on it. If I see something crazy I'll let you know.

Many of you have emailed me and I replied to most of the people. I did not reply to some of you because I found some of your posts offensive in other threads. If you are one of the people arguing about which caste is superior or kill Madhesi or kill Pahadi then you fall in that catagory. I'm not going to waste my time with such people. The other ironic thing was when people say that communism is the solution to human problems and ask for a stock tip.

I'd rather be a chain smoker than a communist.

Here are some books to read:

How I tade for a Living----Gary Smith
How I made 2 million Dollars----Darvas
Secrets for Profiting in Bull and Bear Markets -----Stan W.
Reminiscences of a Stock Operator-----Best book ever.

Non trading related philosophical books.
Atlas Shrugged ---- Ayn Rand
Fountain Head ----- Ayn Rand

Good Luck to you all.

Hey emini, thanks a lot for your tips. I'll have to go back and review some of them, have finals right now.

But yeah, hope you have a great summer man! I know I'll keep myself busy trading this summer as I plan on refining my strategies and the ones you have mentioned work great too.

I think we all owe this guy somthing.

I hope to see you in NY one day. Coffee?:P

Peace bro!