Help out a beginner

Friday 23 January 2009

jack108:

Let me recommend a book I think is mandatory for understanding the markets,
one I just recommended on another thread, and on previous occasions,
"How To Invest In Stocks," by William O'Neil. You have time on your side, and
this is not going to be an easy market ahead for some time to come, just my
opinion.

Were I you, I would keep my powder dry until you know exactly what you are
doing, and why. The trend is the most important element you can learn. Why?
When you are going with the trend, and you get in on poor timing, the market
momentum will help you out. If you go against the trend, and you enter poorly,
the trend will undress your capital rather quickly.

Just a few thoughts.

Cheers!

The Edge said:

...Let me recommend a book I think is mandatory for understanding the markets, one I just recommended on another thread, and on previous occasions, "How To Invest In Stocks," by William O'Neil. You have time on your side, and this is not going to be an easy market ahead for some time to come, just my opinion. ...

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Thanks for the recommendation, Edge.

O'Neil has a few books beside "How To Invest In Stocks" which include: "24 Essential Lessons for Investment Success" and the "The Successful Investor".

Has anyone read these other two books? Does any one of these books cover everything or is it necessary to purchase all three?

With the markets falling so far, I'm feeling it may be a good time to start learning a bit more about fundamentals with the idea of slowly building a portfolio. Fundamentals is not something I have bothered with so far as the option strategies I use are generally quite short term.

Any comments from anyone who has read the books would be much appreciated.

sails said:

Thanks for the recommendation, Edge.

O'Neil has a few books beside "How To Invest In Stocks" which include: "24 Essential Lessons for Investment Success" and the "The Successful Investor".

Has anyone read these other two books? Does any one of these books cover everything or is it necessary to purchase all three?

With the markets falling so far, I'm feeling it may be a good time to start learning a bit more about fundamentals with the idea of slowly building a portfolio. Fundamentals is not something I have bothered with so far as the option strategies I use are generally quite short term.

Any comments from anyone who has read the books would be much appreciated.

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I read all of his books. They are about the same thing "CANSLIM" but I recommend "the successful investor" because it comes with more details. His method is not about "buying the bottom" or "slowly building a portofolio". If you want to try the "slowly building" strategy, try "The Little Book that Beats the Market"

CANSLIM can help you find the right stock and get onboard at the right time (obiviously today is not the right time) so you can just read the book and practice your patience now.

If you are new, I think short term strategies may suit you well, because you don't have much experience to support your long term investment. If you try a scalping strategies, you can learn it within weeks. Because in 2 or 3 weeks you had probably made all the mistakes that you could make while scalping. And this is very important. If you want to try a long term investment now, I don't believe you really have the true confidence to hold your position for a real long term invesment.

Good Luck!

acetrader said:

I read all of his books. They are about the same thing "CANSLIM" but I recommend "the successful investor" because it comes with more details. His method is not about "buying the bottom" or "slowly building a portofolio". If you want to try the "slowly building" strategy, try "The Little Book that Beats the Market"

CANSLIM can help you find the right stock and get onboard at the right time (obiviously today is not the right time) so you can just read the book and practice your patience now.

If you are new, I think short term strategies may suit you well, because you don't have much experience to support your long term investment. If you try a scalping strategies, you can learn it within weeks. Because in 2 or 3 weeks you had probably made all the mistakes that you could make while scalping. And this is very important. If you want to try a long term investment now, I don't believe you really have the true confidence to hold your position for a real long term invesment.

Good Luck!

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Thanks for the comments, Acetrader and will check out your suggestion of "The Little Book that Beats the Market".

I'm not new to shorter term trading - started about 11 years ago with SPI futures, albeit without much success. Have since been in options for a few years with short term strategies and happy with the results at the moment.

Agree that this is not necessarily the time to start entering the market with a longer term positions, but it's probably a good time to start learning a bit more about it.

acetrader said:

(obviously today is not the right time)

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It almost certainly is for some stocks, just not the vast majority...im buying next week for the long term.

Sunday 25 January 2009

sails:

In the past 15 years, I have read few books on the market, having read every
one I cold get my hands on prior to then, so I am not the best source, but I
have confidence in recommending the O'Neil book mentioned because it
encapsulates a bit of fundamental considration in technical format.

Acetrader would be a better source, on that score, for current books.

For me, I have zero use for fundamentals. Understanding the premise behind
CANCLIM would be an easier explanation as to why. Fundamentals can change
according to perceptions and those perceptions can lead to a shift in the
underlying fundamentals, the last six months being an example.

From an editorial posture, the days of buy and hold are done, for now. If
anyone believes a 24 year (+/-) bull market will correct in a single year, simply
does not understand market history. Those who have been buying breaks or
seeming bargains are most likely unhappy with their purchases. This is not to
say some buys can show profit, rather, caveat emptor, and we are all free to
choose our pleasure/poison.

The battle of the mind for fundamental v technical will never go away, [much
like those of differing religions or political views], especially since there are so
many inept at technicals. They are fodder for fundamentalists, and rightly so.

I speak from a particular market slant, but one steeped in experience and previous
high tuition payments, in the process. It is possible to never have a losing
week, in trading. That discovery was a long road for me, perhaps because I
am a slow learner. I have seen it come much faster for others.

Let me give you a few other books you may find worthwhile, or at least not a
waste of time, and a decent variety:

"Hot Commodities" by Jim Rogers - very entertaining

"The Hedge Fund Edge" by Mark Boucher - more along the lines of O'Neil, to
satisfy your fundamental bent, and written by a highly successful investor.

"The Disciplined Trader" by Mark Douglas - I have read it no fewer than six times.
Personal choice.

"Out Of the Crises" by W Edwards Deming - This is a bit off the wall. It has
nothing to do with investing, but everything to do with quality, for me, as in
quality of decision-making. Deming is the only non-Japanese to ever receive
Japans highest honor to a businessman. His credited with turning the Japanese
economy around from the trashy "Made in Japan" on trinkets and cheap goods,
to the world-admired "Made in Japan" products when Japan was at its best.
This book first came out in 1982, when I read it.

There are a slew of others, the first half of "The Black Swan" by Nassim Teleb,
comes to mind. Much of my reading is from sources long out of print.


Cheers!

Just do a Google search free ebooks on share trading You will be surprised what is out there.

MS+Tradesim said:

Some of the comments here are bordering on advice, and unwise advice at that. I use "investment" here interchangeably for investing or trading.

Go to your local library and pick up a bunch of different books on different styles of investing. Read them all and find something that clicks with you. Find more books on that style by different authors.

Create a plan. You will need to cover many things including:

1) What do you want to achieve? Must be realistic - do not expect to make 100% return on the first $1000 you throw at the market.

2) What timeframe are you looking at? Years? Months?

3) How much money will you put in any given investment?

4) How will you know when to enter a market?

5) How will you exit the market? If you don't know this before entering then you are gambling.

6) What will you do if you suffer a losing streak? Say 5 or 6 bad investments in a row?

7) How will you handle winnings? Do you reinvest all your money? Will you divide winnings into 3rds - 3rd for you, 3rd to reinvest, 3rd for the taxman?

8) How will you know if your idea is no good?

And here's a free tip. The very worst thing that can happen to you is your first few investments in shares result in a profit. You won't start to ask the right questions until you've experienced losses big enough to hurt.

You might think, "C'mon. All I want to do is make some money in the share market." But if you don't think about these things, then any money you do make will just be good luck. And you'll lose it just as fast by going too big, too quick.

The fact that you are 18 and thinking about this is fantastic. Wish I'd started that young. When I did start, I wish I'd listened to the kind of advice I just gave you. But I didn't. And you won't. But be open to it after you realise that the markets are not a place to make a quick buck.

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Can you briefly mention some of the "styles"?

Can you tell me briefly why advice is not to be given? I'm guessing as the result of a court case. Being a part of the punting world for so long I'm wondering why "Apache Cat is a sure thing" can't be construed as similar if not the same.

It cant be against the law to give advice in purchasing shares, any more than giving advise in playing the pokies at crown, " Go ahead, press the button, bet the house, too bad, you lost". Let me know where thts wrong

waiter said:

It cant be against the law to give advice in purchasing shares, any more than giving advise in playing the pokies at crown, " Go ahead, press the button, bet the house, too bad, you lost". Let me know where thts wrong

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Waiter, just read the ASF posting rules.

My take is to go and read as much as you can from your local library until it stops telling you much new.

I went and did a TAFE Sharemarket course in Adelaide, great thing and I would recommend it to anyone. I went to Centrelink FIS seminars (for free), on personal finance, read magazines (Money, Smart Investor) and as many books as I could. Some brokers / wealth management houses will also offer seminars through their website.

A lot of great information is free and some authors like Paul Clitheroe, Ashley Ormond, Julia Lee, Ross Greenwood and Noel Whittaker will give you a lot of good pointers. Build your knowledge foundation first, the time that you take now will save you time and money later.

People are right, the market will be there forever and it's not going to go anywhere just yet....there is no rush to get in - that would be a great way to get burnt, lose money quickly, get really upset and vow never to go back to shares 'because they're stupid', which is sad. So many people have done this (especially recently) which I find sad - shares are fun and interesting.

Attend whatever seminars you can for free or little money - $5 will get you into an ASX Investor Hour Seminar and they do podcasts on the ASX site.

If you do jump in, I would say to do it very slowly. My first order was for $1K, which seemed like a lot then, but I quickly graduated to $2K as my confidence grew. I'm still learning, I haven't touched Forex, options, CFDs etc. and won't do for some time until I feel happy to do so. It's YOUR money, so take your time to learn, and most of all, ENJOY !

Thanks Guys,

This is some damn good advice and I know one newbie has definitely taken a lot of it on-board.