The official lounge stock market & investment advice thread

[Sugar Adam Ali]

Bumped for fallenego

[Eff Pandas]

Few questions as a curious mind who's been interested in investing for a long time & dabbled in mutual funds for a long time before recently playing around with stocks within the last 6 months.

How much short term investing do you do (year or less investing not necessarily day trading) percentage-wise to all your investing? Whats your current longest held stock?

What top 5ish or so company details/stats do you find most valuable in determining that a company is capable of growth &/or has value to you as an investor?

What do you think of the recent IPO Snapchat stock (current value $27ish) & its future potential over the next several years?

Top 4 or 5 (or more) investment books you'd recommend for anyone to read who's interested in investing in stocks?

What sort of bankroll rules do you follow with your "investment bankroll"? For example if you had $50k to invest in stocks how much is your average investment in a particular stock & how much do you try not to exceed to try to neutralize your loses if things were to go south?

[Willy Wanker]

I've been lazy studying the stock market, etc... The only investment I have is 401k. All my money is in my savings account and time deposit lol. I'm definitely losing money coz it's just in the bank and making almost zero interest. I feel like an idiot for just keeping all my money in the bank.

I will look into this index fund.

B.UTLER, was this your old account?

[Sugar Adam Ali]

Few questions as a curious mind who's been interested in investing for a long time & dabbled in mutual funds for a long time before recently playing around with stocks within the last 6 months.

How much short term investing do you do (year or less investing not necessarily day trading) percentage-wise to all your investing? Whats your current longest held stock?

What top 5ish or so company details/stats do you find most valuable in determining that a company is capable of growth &/or has value to you as an investor?

What do you think of the recent IPO Snapchat stock (current value $27ish) & its future potential over the next several years?

Top 4 or 5 (or more) investment books you'd recommend for anyone to read who's interested in investing in stocks?

What sort of bankroll rules do you follow with your "investment bankroll"? For example if you had $50k to invest in stocks how much is your average investment in a particular stock & how much do you try not to exceed to try to neutralize your loses if things were to go south?

1. short term investing i do none.. Short term really isn't investing, thats more like flipping a house. I usually buy and hold forever or at least til I'm elderly.
My trading habits is every month i sock away at least 50% in index funds (S&p, healthcare, S&P ETF), using schwab and their funds, it literally costs me nothing in terms of fees
The other 50% or so i will invest in a particular stock if i feel its undervalued i.e. JP morgan when they were at 40s. Usually i look for strong companies with a nice yield of 1% or higher (dividend) and a P/E in low teens or under 10. Recently i was buying up HP before they spun into 2 en******, the printer side pays a huge yield and p/e was at 4-5... My plan worked because now they have spun off and and HPQ (printer side) has been driven up the P/E to the low teens, and i got gains and fat yield the entire way.. Same principles warren buffett uses

2. current longest held stock... Index funds.. I stuck my first 10k towards those when i was younger.. I have held for years Disney, JPM, BAC, apple, etc.. I did hold ebay for years, but once they spun off paypal (which was their growth driver) i sold them and kept the paypal.. If ebay had some sort of yield i probably would have kept them, but no yield, with a non growth stock, i aint got time for that

3. stats i look for... Each company different.. Amazon has amazing growth but very small margins, no yield and astronomical P/e, so i tend to only buy on huge dips and is very little of my overall portfolio..

Stats and things i look for- solid company i understand like nike, microsoft, mcdonalds, waste management,
yield- unless they a growing company like amazon or Facebook and don't have a yield yet.. Took apple forever to finally pay a dividend
p/e ratio in the low teens or lower.. Though i will buy a higher p/e if circumstances are right, like i believe in 3d printing so slowly been acquiring shares at huge p/e rates
managable debt.. current and quick ratios can't be horrible
Where i think the stock is headed.. Radio shack and best buy fit my criteria but they are dying and i wouldn't touch them.. HP was in same position, but i knew they could rebound and change and eventually be a juggernaut again

basically p/e, PEG (p/e plus growth) debt levels, yield, do i understand the business, will they be around in 20 years?

4. snapchat--- I stay away from.. they aren't profitable, have no free cash flow, i don't understand how they make money long term, i highly doubt they will be around in 20 years.. Tech is very brutal.. 20 years ago we had prodigy and aol, compuserve, etc.. remember when myspace was all the rage... I will stay away from snapchat until they show they can monetize and actually make money, have free cash flow and i can understand their business.. In tech my rule is i wanna own the companies that acquire, not the companies that get bought.. snapchat will one day get bought by google, mircosoft, apple, Facebook etc....

4. books-- read warren buffets annual letters to shareholders, anything by benjamin graham, peter lynch is another investor to emulate and read up on.. Really the best reading material is actually investopedia and understanding differences and uses of stuff like p/e, peg, current and quick ratios, debt levels, etc.. Being able to comprehend financial statements and figures is the most important... everything else is just opinion and philosophy

5. my "bankroll" rules,,, I dollar cost average into index funds, don't care what the market is doing. Individual stocks i track and pounce when they dip.. I waited for disney to get below 100.. bought some at 95, it slipped further and bought some more at 91.. it fell alitlle further, i bought none, but now its back up over a hundred and i got paid a small 1.5 yield while i waited..
Usually i carry about 12-20 individual stocks... Usually try and buy at least 100 shares at a time.. I don't mind if a stock eats up a bunch of my portfolio if its on a rampage.. JPmorgan has doubled for me but i don't mind because it pays a nice yield, still has a reasonable p/e level, and will be around 20 years from now, so why sell it?

[Sugar Adam Ali]

rule of thumb when looking at p/e and peg ratios.

first determine if the company is a growth stock or a mature stock..

Mature stocks are the big boys that make tons of money but can't really grow any larger at a very fast rate. Think microsoft, mcdonalds, waste management, GE, ford, etc.. These stocks usually are done growing so instead of reinvesting profit to grow, they will pay a fat dividend. Those stocks should be p/e of 22 or under,,, maybe as high as 28 if the market is on a tear.... I have made a killing bouncing on bluechip stocks when p/e goes into single digits.. JPM, BAC, C, apple, HP.... Best method i have used by far

Growth stocks are the uprising growing stocks,, think snapchat, amazon, DDD, these are the trendier stocks because they can have huge huge upswings, but also brutal down swings.. They also aren't profitable for the most part yet, and reinvest all earnings back into growing, so they don't pay a dividend... These P/e can be astronomical because the belief is that the company will "grow" into that valuation worth.. If one of these companies that i like, like amazon, DDD, etc has a p/e that dips to around 50 then i could be tempted, but i will very rarely every but anything with a p/e ratio above that unless I'm 100% certain of the company like i am with amazon,,, even then i buy very small portions.. My hope is by the time I'm 60 they will have split a few times and started paying a dividend

[Sugar Adam Ali]

Serious question because I am interested in these things if it can pay off. When if ever would it be a good time to invest in WWE's stock because they are doing bad now but have no comp so its not like they are going out of business anytime soon.......wouldn't now while it is at a low price be the best time to buy stock in the company and get a return much later?

did you buy WWE in 2014.. you would have made some nice money. the network has been a modest success

[Sugar Adam Ali]

May 17th

Market really took a beating today... Dow down 1.7% and Nasdaq down 2.5%

And tons of blue chips like apple, BAC, jpm all took 2-5% losses..


Is the market getting scared of the uncertainty of trump, or is it because of the Fed increasing overnight interest rates.. I honestly think it's a combination of both, plus "sell in may, go away"

For those that don't fully understand how fed interest rates affect market,, just know that evaluations of companies are evaluated from future discounted cash flows, which are greatly affects by interest rates.. rule of thumb, rates low, stocks are cheap, and interest rates rise, evaluations become more expensive..


Anyone else have any feedback as to why market just got bludgeoned today

[AddiX]

Its pretty simple, wall street doesn't think they will get their tax cuts for the rich anymore. And they have lost faith in trump.

May 17th

Market really took a beating today... Dow down 1.7% and Nasdaq down 2.5%

And tons of blue chips like apple, BAC, jpm all took 2-5% losses..


Is the market getting scared of the uncertainty of trump, or is it because of the Fed increasing overnight interest rates.. I honestly think it's a combination of both, plus "sell in may, go away"

For those that don't fully understand how fed interest rates affect market,, just know that evaluations of companies are evaluated from future discounted cash flows, which are greatly affects by interest rates.. rule of thumb, rates low, stocks are cheap, and interest rates rise, evaluations become more expensive..


Anyone else have any feedback as to why market just got bludgeoned today

[BM dnobagaV]

did you buy WWE in 2014.. you would have made some nice money. the network has been a modest success

Funny enough I was expecting the Network to do lame right out of the gate and their stock to drop rather considerably. Inevitable that it would rise in the long run, meaning it would've been a nice buy.

Shame I just don't have a great interest in finance. My dad/sister have always had the minds for business, money flow, uncertainty etc in the family. I'm in the same boat as my mother where I'd rather be somewhere stable by comparison and not dealing with headache.

[Sugar Adam Ali]

Its pretty simple, wall street doesn't think they will get their tax cuts for the rich anymore. And they have lost faith in trump.

A liberal from 9 months ago