Stocks

[glockgirlie]

For those of you that have them, how do you go about choosing which stocks to buy? I know a lot of people just check growth charts and buy what's cheap at the time, but I'm curious if you have a particular method.

[Easterbrook]

I recognize that picking stocks is a bit of a random walk. The market is incredibly efficient, and it's a bit foolish of me to think I can somehow discover some unknown undervalued company that is about to make it big. A company's growth potential, risk and return is all already accounted for in the stock price, imo.

That said, I diversify and try to buy companies I feel are run well, undervalued (ha ha, the irony), and that have growth potential. I also only buy companies when I understand what the heck they do (saved me from buying Lucent Technologies).

I also read the company's SEC filings and think about the world and whether this company will be more profitable or less profitable in the future.

All that said, I doubt I can beat the market.

Some good books:

Malkiel's - A Random Walk Down Walstreet (http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338/ref=pd_bbs_1?ie=UTF8&s=books&qid=1219767745&sr=8-1)

Bernstien's - The Four Pillars of Investing (http://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071385290/ref=pd_sim_b_1)

Or if you're feeling more aggressive and optimistic about your stock-picking abilities, try Lynch's - Beating the Street (http://www.amazon.com/Beating-Street-Peter-Lynch/dp/B00150GHGA/ref=pd_sim_b_2)

[major]

I like traditional wood stocks. The synthetics are ok, but there's just something about wood.:cool:

[VaderGlock]

<<<<------ Long Time Banker and Financial Advisor


Big time loaded question. If you're new to investing, don't even go there. You are taking on more risk than makes sense, and you're very likely to get slaughtered. Think long term, max your qualified accounts (401k, IRA, etc.), stay diversified, and rebalance at least once a year. And by diversified, I don't mean Jim Cramer's version, I mean Asset Allocation diversified. Google the concept and put in into action, or if you really want to do it right, get this book and do it- http://www.amazon.com/Intelligent-Asset-Allocator-Portfolio-Maximize/dp/0071362363/ref=pd_bbs_sr_4?ie=UTF8&s=books&qid=1219768020&sr=8-4
This may be the best twenty bucks you've ever spent.

Good Luck. :cool:

[Easterbrook]

<<<<------ Long Time Banker and Financial Advisor


Big time loaded question. If you're new to investing, don't even go there. You are taking on more risk than makes sense, and you're very likely to get slaughtered. Think long term, max your qualified accounts (401k, IRA, etc.), stay diversified, and rebalance at least once a year. And by diversified, I don't mean Jim Cramer's version, I mean Asset Allocation diversified. Google the concept and put in into action, or if you really want to do it right, get this book and do it- http://www.amazon.com/Intelligent-Asset-Allocator-Portfolio-Maximize/dp/0071362363/ref=pd_bbs_sr_4?ie=UTF8&s=books&qid=1219768020&sr=8-4
This may be the best twenty bucks you've ever spent.

Good Luck. :cool:

VaderGlock, how does that book compare with Bernstein's Four Pillars of Investing (which I've read)?

[Jim B in CO]

Buy a good mutual fund. You can get (depending on which one you buy) great diversification at a low price. You could do a lot worse the the Vanguard S&P 500 Index fund.

[Unlocked]

Google 'Cup and Handle'. Friend of mine swore by this method.

[glockgirlie]

The question mostly stems from something my financial advisor said to me. I was looking for stocks that were fairly low right now, but had a decent 1 year growth estimate. Now, granted, I know that's not the only thing I need to look at, and by no means am I even looking to double right now or use that as my sole criteria for trading, but he said that the best way to find inexpensive stock was to find a company that had just filed a contingent bankruptcy. That just didn't make any sense to me, though it would make sense that they're stocks are now dirt cheap.

Opinions?

[elo]

I go to yahoo.com and pull up the company's profile.. then I make a bee-line for what their executives make.

What a company's executives pay themselves is a good metric for how they run the company.

[VaderGlock]

VaderGlock, how does that book compare with Bernstein's Four Pillars of Investing (which I've read)?

Haha, I've never read Four Pillars. It looks like an updated version, so I'll pick it up. Just by browsing the info on Amazon, it looks a little more user-friendly than The Intelligent Asset Allocator.

Funny how Amazon offers them both in a package. She should be served well by either (or better yet-both!). :cool:

[straightblast]

Beware any advice you get on the internet. Beware any advice you get from a person making a commission.

With that said, do yourself a favor and go subscribe to Richard Russell's website for 6 months. I think it will cost you $150. Read everything on it, even in the archives. No, it will not tell you to invest in X, sell Y, and trade Z...it will give you some good history, and sound LONG-TERM viewpoints.

Read everything he has on his site, including his daily writings. Then, go to Berkshire Hathaway's website and print the annual reports (or save paper and read them online). Tons of sage advice in there from the master, Warren Buffet.

Remember, always: UNLESS YOU MAKE A LIVING AS A TRADER, NEVER TRY TO BE ONE.

Also, remember always: Compounding is one of the most powerful tools known to man.

Good luck and go very, very slowly.