Investing Thread

[bigruss]

For traders, share price is considered a part of risk. There is more risk in a share of google versus a share of BAC because of the sheer dollar amounts at play. Otherwise 0-1 type Delta options trades would be considered the riskiest of all, even though you are only better a dollar or so in all likelihood.

Yea there's definitely more risk for an investor like myself, where I don't play with tens or hundreds of thousands of dollars, I have like 12k invested now (which I think is pretty damn good for a 21 yr old, thank you internships!) but I tend to invest a few k each time, and when a share price is even $100 a pop then it gets much riskier for me.

 

I have pretty much been going for decent growth companies that pay good dividends, with a few riskier companies mixed in. I would like to see some return in the short term to help build the portfolio while also having some high reward candidates too.

[StrangeSox]

For traders, share price is considered a part of risk. There is more risk in a share of google versus a share of BAC because of the sheer dollar amounts at play. Otherwise 0-1 type Delta options trades would be considered the riskiest of all, even though you are only better a dollar or so in all likelihood.

 

You're still only risking a set dollar amount, not "100 shares of BoA or 100 shares of Google." I don't stand to lose any more money just because Google shares are more expensive if I'm investing $x dollars, not buying x shares. But I'd imagine that price inherently reflects risk, at least in part, which is why I picked Google ($$$$) and BoA ($).

[Balta1701]

(Sees someone challenging 2k5 on technical definitions of risk in markets...runs).

[StrangeSox]

the term's being used colloquially, since we're talking about personal investors with maybe four or five figures, not institutional investors or analytic traders.

Edited September 7, 2011 by StrangeSox

[NorthSideSox72]

You're still only risking a set dollar amount, not "100 shares of BoA or 100 shares of Google." I don't stand to lose any more money just because Google shares are more expensive if I'm investing $x dollars, not buying x shares. But I'd imagine that price inherently reflects risk, at least in part, which is why I picked Google ($$$$) and BoA ($).

You are looking at this purely from a natural price perspective. If you look at the greeks, you will see why share price and risk do indeed have a relationship. It is not nearly as simple as you are making it.

 

Now, for a very small time investor, these sorts of analyses may be over the top and not worth the time. Actually, for truly small investors, the problem of share price is mostly about brokerage cost recovery than anything else.

 

[southsider2k5]

You're still only risking a set dollar amount, not "100 shares of BoA or 100 shares of Google." I don't stand to lose any more money just because Google shares are more expensive if I'm investing $x dollars, not buying x shares. But I'd imagine that price inherently reflects risk, at least in part, which is why I picked Google ($$$$) and BoA ($).

 

Price really doesn't reflect risk that much in a stock price in the sense that you are using risk. Price is just a function of relative value in that case. It is just total perceived valuations of future earnings divided by float.

 

Risk is really reflected in price when you get into options trading and you have things like volatility and time factored into the pricing model, instead of just expected future earnings.

[bigruss]

You are looking at this purely from a natural price perspective. If you look at the greeks, you will see why share price and risk do indeed have a relationship. It is not nearly as simple as you are making it.

 

Now, for a very small time investor, these sorts of analyses may be over the top and not worth the time. Actually, for truly small investors, the problem of share price is mostly about brokerage cost recovery than anything else.

Which Optionshouse.com helps out with quite a bit

[Swingandalongonetoleft]

Wondering if anyone can help me decipher this. Time is limited.

 

CNW Group

Compton Petroleum Corporation (TSX - CMT) ("Compton" or the "Corporation") reminds the holders of its rights ("Rights") that all holders of Rights wishing to exercise their Rights must forward the completed Rights Certificate along with the applicable funds to Computershare Investor Services Inc. (the subscription agent) no later than 5:00 p.m. (Calgary time) on September 20, 2011.

 

Packages containing the Short Form Prospectus qualifying the distribution of the Rights, Cashless Warrants and Common Shares of Compton along with the Rights Certificate were mailed to shareholders and former noteholders on August 26, 2011. The Prospectus and further information about the Rights are available on the Corporation's website at www.comptonpetroleum.com, under "Investor Relations/Recapitalization".

 

The Rights are listed on the Toronto Stock Exchange (the "TSX") under the symbol "CMT.RT". Trading of the Rights is expected to continue until noon (Toronto time) on September 20, 2011, at which time the Rights will be halted and Rights which are not exercised by 5:00 p.m. (Calgary time) on September 20, 2011 will be void and have no value.

 

The ticker was CMZPF, it was doing horribly, and looks to be in the midst of some restructuring. On my positions screen it has been broken up into three symbols: CMT/W/WI, CMTr, and CMZPF. I'm not horribly worried, because this was something that was purchased on the cheap, but would still like to know my options here.

[bigruss]

So as I started fulltime a bit over a month ago, I'm trying to save $1k a month for bigger expenses such as getting an MBA in the near future (probably 2 years from now).

 

After looking at what CD's are offering, I decided I'd rather invest that money in high-dividend stocks, but I don't want to dump it all into 1 or 2 stocks since that adds a lot of risk still.

 

So far, I have positions in:

 

Vanguard Total Stock Market Mutual Fund

Vanguard Total International Stock Mutual Fund

 

KO

VZ

GWW

BP

BAC

GE

DE

MM

F

MON

KFT

SNY

HINKY

AGNC

AEP

 

 

 

So what do you guys recommend in terms of relatively low risk stocks with good dividends? Should I continue investing in the stocks I have or look elsewhere?

 

FYi, a few of those stocks are viewed more as long term positions.

[StrangeSox]

I have the Vanguard Stock Market fund. It seems to pay decent dividends but I don't really know what's considered "good."

[southsider2k5]

So as I started fulltime a bit over a month ago, I'm trying to save $1k a month for bigger expenses such as getting an MBA in the near future (probably 2 years from now).

 

After looking at what CD's are offering, I decided I'd rather invest that money in high-dividend stocks, but I don't want to dump it all into 1 or 2 stocks since that adds a lot of risk still.

 

So far, I have positions in:

 

Vanguard Total Stock Market Mutual Fund

Vanguard Total International Stock Mutual Fund

 

KO

VZ

GWW

BP

BAC

GE

DE

MM

F

MON

KFT

SNY

HINKY

AGNC

AEP

 

 

 

So what do you guys recommend in terms of relatively low risk stocks with good dividends? Should I continue investing in the stocks I have or look elsewhere?

 

FYi, a few of those stocks are viewed more as long term positions.

 

Until you save enough to be able to afford the risk of individual stocks, a full market index mutual fund is a perfect diversification tool. I don't know if I would be in the international fund, but you are fine where you are at for the coming years. I am in an SP 500 fund right now.

[ChiSox_Sonix]

So what's the best trading site to use for someone who is just going to be a casual investor?

[Y2HH]

So what's the best trading site to use for someone who is just going to be a casual investor?

 

Probably etrade or ameritrade...

[southsider2k5]

Probably etrade or ameritrade...

 

yeah, find the lowest commission and that is about it. Most sites today have ridiculous technology at their disposal today, so that isn't really an issue anymore.

[ChiSox_Sonix]

Facebook stock climbed over $30 for the first time since June. I made a modest investment when it dipped down to $20 and am glad I did.

[southsider2k5]

Facebook stock climbed over $30 for the first time since June. I made a modest investment when it dipped down to $20 and am glad I did.

 

Ever since the lock up sell off happened, it has been on a quiet steady rise.

[bmags]

So what's the best trading site to use for someone who is just going to be a casual investor?

 

I am starting to look into ING's stuff. Nervous because I hate capitalone and am nervous they will try and stick me with something awful. I will report back!

[Jenksismyhero]

So when does the bottom drop?

[Y2HH]

So when does the bottom drop?

 

When bad things start happening in succession, like always.

[Balta1701]

So when does the bottom drop?

I'll say several years. No sign yet that we're moving past the current stasis, nothing nearly so obvious as the last couple bubbles.

 

The caveat to that could be a gigantic fraud in the banking system, which is not out of the realm of possibilities.

[Buehrle>Wood]

So when does the bottom drop?

 

Never. Even bad news isn't stopping the market these days.

 

 

On another note, how about bitcoin? I wish I was trading this instead of the boring stock market the last month. From $20 to $266 yesterday and back down to $70 today. Incredible. Here's the crash yesterday.

 

 

Edited April 11, 2013 by Buehrle>Wood

[Balta1701]

Never. Even bad news isn't stopping the market these days.

Oh god, someone said that the market will never drop! Good god Sell now!

[Y2HH]

Never. Even bad news isn't stopping the market these days.

 

 

On another note, how about bitcoin? I wish I was trading this instead of the boring stock market the last month. From $20 to $266 yesterday and back down to $70 today. Incredible. Here's the crash yesterday.

 

 

 

Bitcoin is an unstable virtual currency ripe for hack. It's backed by nothing, not even a governments word. It'll be a short term fad, such as is being displayed in it's value fluctuation.

 

Currencies should never rapidly fluctuate in value to such a degree, it shows instability, and when it comes to currency, the last thing you want is instability.

 

A loaf of bread costs 2$ today, you expect it to cost 2$ tomorrow, and 2$ in a few months, etc. You don't expect it to cost 2$ one day and 240$ the next. Bitcoins are a currency being traded as a commodity. And the reason they're able to swing them so much is because there aren't enough of them out there.

 

I think the total value of all current Bitcoins combined are like 2 billion dollars? Essentially, that means any fortune 1000 business, or practically any government in the world can buy the entire market. Bad.

Edited April 12, 2013 by Y2HH

[Buehrle>Wood]

Bitcoin is an unstable virtual currency ripe for hack. It's backed by nothing, not even a governments word. It'll be a short term fad, such as is being displayed in it's value fluctuation.

 

Currencies should never rapidly fluctuate in value to such a degree, it shows instability, and when it comes to currency, the last thing you want is instability.

 

A loaf of bread costs 2$ today, you expect it to cost 2$ tomorrow, and 2$ in a few months, etc. You don't expect it to cost 2$ one day and 240$ the next. Bitcoins are a currency being traded as a commodity. And the reason they're able to swing them so much is because there aren't enough of them out there.

 

I think the total value of all current Bitcoins combined are like 2 billion dollars? Essentially, that means any fortune 1000 business, or practically any government in the world can buy the entire market. Bad.

Yep. It is certainly more like commodity. It was down to 50 today and I fully expect it to go closer to 0 or at least to where it was trading at before this month.

 

I'm not sure if bitcoins cap is that big. I talked to a guy from a trading firm and he said they were a big part of the move. Wouldn't surprise me.

[lostfan]

It was crashing today, looks like the bubble has burst or is about to.