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.

Well, I was obviously wrong. Taking a small loss here.

JavaBeans: Thanks for your concern. If you read this thread from the begining, you should get most of the answers.

Well I was a day early on my call about the market starting its decline. It looks like it has topped here. I am expecting about 15% decline from here.

It has been a while that this thread has been on silence.

Thanks Emini and jbeans for reviving it.

Corrections is about what the whole pundits are talking about. WHEN is the question.

I am just about ready to be in cash. The run last month was preety good for me.

La ta!

-B

Riten,

I really don't have a clue about this sector- any reason why you are following it? Do you work in this industry? Please share with us if you do, including your investing strategies inclusive of it. In return, I'm happy to share some of my experience in the Technology sector- Internet, Telecommunications, Software, etc. This is the sector I work in, and have an understanding of their business.

Eminitrader,

If these moves are NOT purely speculative I'd be happy to hear the reasons behind them. As you've just demonstrated, a lot traders get burned when speculating- you sold a day early for a loss, whereas one more day of hold could've meant profit. What were your indicators? What kind of experience do you have? So now, you're suggesting 15% decline- please state the reason why you think the market will decline. Is it b/c the Feds raised the rates on 10 yr maturity bonds? Or is it b/c you think the market is overvalued (if so, what valuation technique do you use?)? Or do you just follow what ppl say on CNBC??

Allan Greenspan gave a speech at my alma matter several years ago (during the pre-bubble period)- and this word has never escaped my mind ever since: 'irrational exhuburence'. The word refers to investors buying and selling equities in the market without a REASON, another words- speculation! Well, if you were old enough to remember you know exactly what happened in 2000...

Bricolage,

Which sector do you follow? What do you think about the concept of derivatives? Do you invest in/utilise options?

-JB

Java: I have already posted my experience in the markets and proof too. It is somewhere in this thread. I am usually a medium to long-term trader but since I'm not actively following the market during the summer, I closed the position. I don't remember the Fed raising rates for the past few months, although the yield has been going up. I don't follow CNBC, they are mostly bullish cheerleaders. Yes, I do have Bloomberg and few other tools.

The way I see it everything in life is speculation. The major you choose, the company you work for and even the person you marry. I am more concerned about handling risks.

I would suggest you look through the previous posts and we can discuss. I do not want to explain my experience anymore. We have been discussing markets for more than 6 months and for some reason it is one of the most viewed thread. I must be doing something right.

We did see some sell-offs the past 3 days. It seems as if the uptrend has ended here. There is a FOMC meeting on Wednesday which could lead to some volatility. There is a huge support around 1450-1460 in SP. If we cannot hold that, the next stop is 1380.

So far so good. By the end of this week we'll be able to tell if this is just a pullback or a change in trend.

Thanks Emini ji.

I also have been seeing going-nowhere market moves. It is very new to me in terms of learnings.

I am thinking of just being in cash from today or tomorrow, depending on how market moves.

JBeans...
No I am not into derivatives.. do not get time to keep tab on those for now. I only do stocks, mostly Tech side. Telcomm is my niche.

Best~!
-B

ps emini ji- what do you think about BX... the infamous Blackstone and sub-prime fiasco.. do you think that this stock is worth having a peek at?

Bri: I would not touch Blackstone here. It is trading below it's IPO price now, so is Fortress that went public recently. In some weird way it might have signaled a top.

We are still in a major bull market so this market will go higher, but it pays to be patience and buy on a pullbacks rather than chase everything that is moving.

Another thing that I noticed is that the Commercials are net long, so if the market goes down here it will go down more than the previous reactions. In previous reactions, the market has been down mostly 6-8%, so my guess is about 13-15% from the high, we are already down about 3% from the time I suggested the market was going down.

If the market rebounds here and keeps on going up, we might see a crash like in 87. Before the crash in 87, the bonds were sinking, commercials were net long and investor sentiment was very high. I'd rather see a nice pullback now than a crash later.

Did you get a chance to read the Dhandoo Investor? It is a good read.

Emini ji,

nice uptake on the market. I guess places where I read some on the volatility of current market pretty much is in consensus to your line of thought.

I sold of major portion of CDE (silver). Now I hold OPXT ( telecom) and STEC ( IT)...

aa Kitab from Prabrai, I ordered and is accumulating dust in my study room. I am reading the following, presently:

Good to Great by Jim Collins ( time to setup something of my own I believe)

The starfish and the spider by Ori Brafman and Rod A Beckstorm ( No leaders wanted)

The fortune at the bottom of the pyramid by Prahalad ( looking at oursourcing side of stuff)

la ta Good Luck to the traders!

Best~!
-B

Small caps and Techs are very strong today, I guess the bulls still have some ammo left.

Buy some QQQQ or IWM here and see if we see more follow through in the next 2 days.

A close below yesterday's low confirms the start of a correction. I will get out if we close below 1484 in S&P. Till then holding QQQQ.

Still holding QQQQ and IWM long here. This market is in a range, either the cyclicals move up with Tech or the techs give in for a larger correction. I'll get out on the first sign of weakness.

Hey Bri: Did you hear the news about Monish Pabrai. He won the auction to have lunch with Buffet. He paid more than $600,000 and outbid others. That guy has piled some serious retuns the last 8 years. He has mentioned several links for further reserch. Check it out.

There have been a number of people that have emailed me or sent messages asking how they can get started. Here is what I think.

If you are completly new to the market, contribute as much as you can to your 401K and put the money in value-funds. Start early and you'll have a decent portfolio by the time you retire.

For many of you, the methods that I have suggested will not work. It could be because you do not have time to follow the market regularly or you cannot follow all the rules at all times. I thinkk I might have something for you. I had a chance to read a lot during the last few months and I noticed that there are some value-fund managers that have had outstanding returns without taking huge risks. Two of the people are Joel Greenblatt and Monish Pabrai.(Monish just paid more than $600,000 to have lunch with Warren Buffett). Monish started in 1999 and has more than 30% return in the last 7 years. This is amazing because we were in a bear market from 2001-2003. He is a value fund manager. I was able to find Monish's buys and sells and might have figured out the way he picks stocks.

I think I'll use another thread to discuss value picks and keep this for the general/current scenarios. More later.

bump!

Ok, feels good to be back. I've been preparing for my final school year/ interview bimbardments and so have been off of the market. I tok some heavy losses (laughs) but what the hell...if you'e young like me, I say keep going back to the markets with real money till you learn it. Everyone says "I learnt the hard way but learn from me and you'll learn the ropes"

BULLSHIT!!

If you don't take the hits, how can you be a boxer?

Anyways, it was good seeing this post still alive. Maybe 10 years down the road, if sajha is still alive and we all are, i'd be glad to see this thread still active.



o.k...maybe 10 years is a long time...3 more?

HAVE A GREAT WEEKEND FELLERS!!!

Dear Emini,

I miss this thread all the time.... hmmmm http://www.sajha.com/sajha/chat/smileys/m-cry.gif

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http://www.sajha.com/sajha/chat/smileys/m-cry.gif

I am still playing... CDE, STEC and OPXT.... CDE is interesting... I see the shortings every day... I still don't understand how it works - to be honest... we have 5 mil of stocks being traded, and then I see a value dip of 20 cents at most... it is marked towards the end of trading hours...

Please tell me how this works... I would like to learn ... http://www.sajha.com/sajha/chat/smileys/m-cool.gif

Ani, target=_blank>http://www.sajha.com/sajha/chat/smileys/m-cool.gif
http://www.sajha.com/sajha/chat/smileys/m-cool.gif

Ani, thanks for the input on Monish... if you have gotten the logic or the gist, then it is great.. how about starting a Nepali Fund... you think we could do that???

and yes you are very right... time constraints does not allow me to step into futures, et all...

heard about ANA stuff... daru and ego when mixed in plentiful, we Nepalese become a bakamfuseee heros.. ani pheri, we have to impress those gals who have just learned new ways of dressing up ( which is okay) but guys don't understand it all in the first place, hai na ra?

la ta!

Cheers!
-B

Sounds like you guys trade often. What you all use (e.g. scottrader, ameritrader...) to trade to minimize transaction costs? If you kind of do day trading, transaction cost is a very big deal, I think.

Kina kina,
I use ameritrade... ani, yes the 20 bucks involved in buy and sell amounts to bigger number as you start trading more...

first 50 trades were free for me, and I realized that you could make monies with free trade... but then once that free 50 expired, I felt, I needed to be more careful..

I still have not figured out how the end of the year tax numbers boil down to... anyone savvy on that subject, please share?

Best~!
-B

I use Interactive Brokers, if you have certain amount in the account you can negotiate a very low rate. Daytrading is very hard and I do not day-trade but there are many times when it ends up being a day-trade.

I you hold a stock for less than 1 year, the taxes are higher on your realised gains, so it is better to be a long-term investor.

I will be starting a "value oriented strategy" thread soon. It will be ideal for most of the people. It is buy and hold for 5 years. I'm back-testing the results to make sure that it has worked over a long period.

Bri, I'm not sure about the Nepali fund but I am going to be talking to some banks in Nepal and see if they would be interested, but before that the tax structure between the two countries need to be defined. If you end up paying taxes in both countries, you'll come out a loser eve after making money.

Emini,
I copy you on trans-Nepal investment fund. But why not have a fund here in USA with monies invested by Neprikans which otherwise go wasted in daru and fashion and others.

I for one think, that we have quite a few Neprikans in 30-something and 40-something range who are wise and savvy.

I also feel your route of approaching Banks in Nepal would be a tough cookie. You would need to wine and dine and then dance to their beats. You would have lots of red tapes to cut and whole lot of cultural barriers to overcome that will make you older by another 50 years in next 2 years only. Correct me please! But yes, if you have power house connections, it will work out well.

Best~!
-B