Stock Investments

[LostAllways]

Any daytraders in AP? I have a stock market project for my Econ class -- my teacher gave us $10,000 to invest on this stock trading simulation website and I'm really not sure where to start. Any suggestions on companies, industries, etc.? Personal experience?

[zachff]

If you're a day trader and you spend your time surfing AP either you're Bradley Cooper in Limitless or you suck at your job.

You probably can't go wrong starting with hot tech companies (Apple) or oil companies, since the project probably only runs for another 3 months

[evvandflow]

your project =/= day trading

[TheRealJohnOC]

Research companies that have new anticipated products coming out.

[LostAllways]

If you're a day trader and you spend your time surfing AP either you're Bradley Cooper in Limitless or you suck at your job.

You probably can't go wrong starting with hot tech companies (Apple) or oil companies, since the project probably only runs for another 3 months

your project =/= day trading

The duration of the project is 20 days, and fine, just normal trading then.

[presdaddy]

As general advice, if a popular website is recommending a stock - it's too late to purchase it. The price of the stock represents the value that the market places on it, and when a publication says something has growth potential it will typically show that in the price. Especially in a short term project, make money by choosing stocks you think will grow but you don't think the rest of the market realizes this.

For example, everyonew as saying Chipotle would grow like crazy four years ago. It did. But if you purchased Chipotle stock 3 years ago, that growth potential would already be represented in the price. So, even though Chiptole has gotten huge since 4 years ago, its stock price hasn't.

When I do these in-class competitions, I just go all or nothing. Invest in crazy chinese stocks you've never heard of. Some might double in price, others might go bankrupt. So, diversify your risk by choosing something stable like Walmart to invest most of your money in and take chances with the rest of the money.

[LostAllways]

As general advice, if a popular website is recommending a stock - it's too late to purchase it. The price of the stock represents the value that the market places on it, and when a publication says something has growth potential it will typically show that in the price. Especially in a short term project, make money by choosing stocks you think will grow but you don't think the rest of the market realizes this.

For example, everyonew as saying Chipotle would grow like crazy four years ago. It did. But if you purchased Chipotle stock 3 years ago, that growth potential would already be represented in the price. So, even though Chiptole has gotten huge since 4 years ago, its stock price hasn't.

When I do these in-class competitions, I just go all or nothing. Invest in crazy chinese stocks you've never heard of. Some might double in price, others might go bankrupt. So, diversify your risk by choosing something stable like Walmart to invest most of your money in and take chances with the rest of the money.

Exactly what I was thinking. Thanks for the tips!

[loveisdead]

Would your teacher let you short some stocks?

[Colinmac36]

daytrader.....good band, good band.

[LostAllways]

Would your teacher let you short some stocks?

I just read up a bit on short selling and I'm not sure I understand the concept. Can you elaborate a bit please?

[sdbrown]

I just read up a bit on short selling and I'm not sure I understand the concept. Can you elaborate a bit please?
It's a way to make money in the short term when you anticipate a stock is going to drop more than a few points in a short amount of time.

Basically, you borrow shares from a person or company at a percent interest (like you would borrow $$ from a bank, except you are borrowing stock). You sell those shares to someone else and you make whatever you sell them for. THEN, and this might be where you are confused, hopefully the stock drops in price and you buy the stock back at the LOWER price, which you then return to the company to make up for the stock you sold to the first guy.

edit: Let's say you think Apple is way overvalued and is going to dip sometime soon. You put in a short order for 100 shares while they're at $600 @ a 3% rate. You sell them to someone for $600/share, making yourself $60,000 (because you are selling it in lieu of the company, you receive the $$). The stock dips to $525 a share over the next few days, so you buy 100 shares @ 525 and give them back to the company. You just made ~$7500 ( a little less because you had to pay interest between the time you borrowed and gave them back)

[loveisdead]

I just read up a bit on short selling and I'm not sure I understand the concept. Can you elaborate a bit please?

Decent explanation is above me. It's your best chance to win the competition.

[Jake Gyllenhaal]

I should have invested in Apple (http://bits.blogs.nytimes.com/2011/03/10/if-you-bought-apple-stock-instead-of-products/)

[LostAllways]

It's a way to make money in the short term when you anticipate a stock is going to drop more than a few points in a short amount of time.

Basically, you borrow shares from a person or company at a percent interest (like you would borrow $$ from a bank, except you are borrowing stock). You sell those shares to someone else and you make whatever you sell them for. THEN, and this might be where you are confused, hopefully the stock drops in price and you buy the stock back at the LOWER price, which you then return to the company to make up for the stock you sold to the first guy.

edit: Let's say you think Apple is way overvalued and is going to dip sometime soon. You put in a short order for 100 shares while they're at $600 @ a 3% rate. You sell them to someone for $600/share, making yourself $60,000 (because you are selling it in lieu of the company, you receive the $$). The stock dips to $525 a share over the next few days, so you buy 100 shares @ 525 and give them back to the company. You just made ~$7500 ( a little less because you had to pay interest between the time you borrowed and gave them back)

Decent explanation is above me. It's your best chance to win the competition.

I probably should've mentioned that it's on a stock simulator online (http://vse.marketwatch.com/game). Sorry about wasting your time =/
But that is pretty fucking genius and I will definitely ask my teacher if this is allowed in the game in hopes of appearing overwhelmingly intelligent in front of the women in my class, so thank you.

[LostAllways]

daytrader.....good band, good band.

G9mYzdJLzmQ

Ohhhh yes

[kwsqd]

Don't listen to what anyone tells you--day trading works.

[mattyrocks]

Don't listen to what anyone tells you--day trading works.

how long have you been day trading for?

[kwsqd]

how long have you been day trading for?
I've never day traded in my life.

I was being sarcastic. (I should have made it more obvious.) Day trading is one of the worst ways to invest your money. It was extremely popular in the 1990's and it mostly died out... for good reason.

[mattyrocks]

I've never day traded in my life.

I was being sarcastic. (I should have made it more obvious.) Day trading is one of the worst ways to invest your money. It was extremely popular in the 1990's and it mostly died out... for good reason.


ha well thanks for not making me look like an idiot.

i am clueless when it comes to stocks.

[kwsqd]

ha well thanks for not making me look like an idiot.

i am clueless when it comes to stocks.
i'd suggest learning about benjamin graham and warren buffett if you're interested in learning some things about the stock market. the berkshire hathaway annual report is always very informative as well.

[mattyrocks]

i'd suggest learning about benjamin graham and warren buffett if you're interested in learning some things about the stock market. the berkshire hathaway annual report is always very informative as well.


thanks.

also, are there any websites you would recommend to trade from?

[kwsqd]

thanks.

also, are there any websites you would recommend to trade from?
I prefer Schwab, but there are lots of excellent options.

[loveisdead]

I've never day traded in my life.

I was being sarcastic. (I should have made it more obvious.) Day trading is one of the worst ways to invest your money. It was extremely popular in the 1990's and it mostly died out... for good reason.
The average stock is held for ~20 seconds. How has day trading faded? I gotta be misunderstanding something.

[kwsqd]

The average stock is held for ~20 seconds. How has day trading faded? I gotta be misunderstanding something.
Day trading was a trend that burst (or at least began to burst) with the .com bubble. It's mostly bad investors who are still interested in it. A lot of companies that had day trading desks, don't anymore. I think what drives the statistic that you have is high frequency trading which is handled entirely by computers (which is becoming more and more popular, although I think the average stock time jumped from 20 to 22 seconds in the past year.) There's potential for HFT to be more successful than value investing, but the results have not been there yet. To me.. day trading comes off as a get-rich-quick scheme that usually backfires. Even the SEC discourages day trading.

[Colinmac36]

G9mYzdJLzmQ

Ohhhh yes
fuck yea! everybody needs to hear these guys!

[captivewear]

Not to tut my own horn but my team actually won this for the state of CA in 05' . Thanks to Apple :)

[JamesBond]

in '07 i shorted Sprint and Washington Mutual with everything my family had...I pulled out when Sprint was at $2 and just prior to WAMU shutting its doors. I took a gamble on how long I waited but the shit paid off. At the time, the government was cracking down on shorting so I couldnt invest anymore even if I could. Anyway, I ended up paying everyone back and lived happily ever after, for 3 years. Funny how quickly people can spend easily earned money

[splitsecond]

Day trading was a trend that burst (or at least began to burst) with the .com bubble. It's mostly bad investors who are still interested in it. A lot of companies that had day trading desks, don't anymore. I think what drives the statistic that you have is high frequency trading which is handled entirely by computers (which is becoming more and more popular, although I think the average stock time jumped from 20 to 22 seconds in the past year.) There's potential for HFT to be more successful than value investing, but the results have not been there yet. To me.. day trading comes off as a get-rich-quick scheme that usually backfires. Even the SEC discourages day trading.

The SEC discourages all the fun stuff

[LostAllways]

http://i52.tinypic.com/503vc.jpg

I'm JalalMustafa. lol