# I want to start an investment company



## kingcarmleo (3 August 2009)

So I have come to this conclusion that I want to own my own investment company after years of deciding what I want to do. I was always interested in shares since a young age and after saving for a couple of years I bought my first shares at the start of the year. Since then I have followed the stock market religiously, instead of doing assignments I would watch the dow, read company reports, bloomberg articles and the AFR. There is nothing more exciting to me than the world of finance, I still do all the normal things 18 year olds do and will be traveling to Europe next yr also. 

It's been a frustrating year for me,I watched my interest rate on my savings account diminish to 2.75% and earn me a measily $15 a month. I knew that there were many great opportunities to make money in the market but I simply let the downrampers get the better of me. I had watched stocks like ADX go from 3 cents to 14 cents, CFU from 6 cents 18 cents, RFE go from 17c to 1+ and then blue chips like MQG double, these were all stocks I had done some serious research on. Not only was it frustrating missing out on these opportunities but I had no one to talk to about my passion for the stock market, people my age (18) don't really care about money. I look to the long term and buy shares based on the future of industries. I currently hold ESG,MEL,ISF,POH and will not be selling for a long time. 

Currently I study marketing and advertising at uni and will pick up finance when i finish this double major, I have come to the decision uni is pretty much useless. Everything you learn is theory and has hardly any relevance to the real world on top of that you have international students that can't speak proper English, yet they will get the same mark for an oral presentation. The only thing that matters is that god dam degree yet it isn't an accurate measurement of the intelligence and business sense of a person in my opinion.

I have learned more about finance, accounting, economics and politics by having my money in the market and of course that counts for nothing towards a degree, a piece of paper that anyone can get for copying a book that is all theory. 

Anyway enough of that anti uni rant. I only earn $240 a week at my casual job but I save $100 a week for 5 weeks until I can buy a parcel of shares. My best friend and I have been talking about the possibility of opening our own finance/brokering company in a couple of years  now. He is a smart guy doing 6 majors and one of the best workers at anz. Next year we have decided to start a managed trust with our money by investing money in a few financial products after researching heavily including shares,term deposits and bonds without taking on too much risk. Hopefully from there we will be able to gain more capital and people wanting to join the trust and eventually start a company. This is very much a long term thing a 5+ years plus goal.

I know it's more than a long shot but I'm young and have many years to plan ahead. Any advice or comments I would greatly appreciate

I have a couple of questions

Is there any chance that the yuan will be floated in the future? Or what is a good way to get leverage into China and India's growth?

When I travel to Europe is there anything that I could take advantage of besides the beautiful women? For example I was thinking about opening up a savings account in Europe with a good interest rate and letting my money sit there.


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## Largesse (3 August 2009)




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## trainspotter (3 August 2009)

That's done it for me ... I can't stop laughing. Keyboard is all blurry from tears rolling down face . Bwahahahahhahahaha aa h ahaha hhahahah heh ehe.


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## Aussiest (3 August 2009)

kingcarmleo said:


> I have come to the decision uni is pretty much useless




Yep, pretty much. 

Not sure what to say in terms of the yuan, but i think you're making the right choice to invest $ now as people will want to see returns if/when you start your own business.


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## Krusty the Klown (3 August 2009)

I believe Bill Gates said a similar thing at your age kingcarmleo.


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## Krusty the Klown (3 August 2009)

P.S. Read through this thread as a starting point.

https://www.aussiestockforums.com/forums/showthread.php?t=16542


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## adobee (3 August 2009)

Find the richest people you can and become friends with them..  When you start you need capital.. You need lots of capital for every investment be it starting a hedge fund or developement site...   Get the capital... Other peoples capital is always the best capital.. there is less risk with other peoples capital ! (steer clear of mick gatto type characters though)..


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## doctorj (3 August 2009)

Don't let anyone discourage you.  
Don't let anyone discourage you. 
Don't let anyone discourage you.  

You're thinking outside the box.  At that age, this puts you ahead of the game.  

So you know where you want to be.  The question is how you get there.  D or HD average from a good school.  Some good internships.  Get in a grad programme.  Learn for a few years, then start thinking about how to apply your experience and drive on your own.

The idea about putting some of your savings aside to invest is a good one.  You may lose it, you may make a good return, but it will teach you a lot.
Go for it.  Good luck!  But don't be in too much of a hurry.

By the way, I'd be very surprised if EUR interest rates in banks of a decent credit quality are higher than Aussie banks over the cycle.  Spreads on currency exchange are likely to make it uneconomic for small volumes anyhow (assuming that $15/month @ 2.75% means you have about $6500).


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## Kryzz (3 August 2009)

kingcarmleo said:


> I have come to the decision uni is pretty much useless.




Most likely necessary though imo, if you wanna land a decent paying job and in turn establish/save for a decent capital base to trade with and generate sufficient returns


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## Naked shorts (3 August 2009)

You sound pretty much like me 1 year ago.

As for opening a bank account in Europe, there is no point. You can take advantage of interest rate differentials through whats called a carry trade. Depending on how much capital you have you can execute this in different ways. Spot forex is generally how most retail participants take advantage of it.

As for the Yuan, there is talk that they might adjust the peg in the near future, the whole world seems to be selling the USD right now (as a flight to riskier assets takes place) which is putting pressure on the Chinese to keep their currency weak. I think eventually the Yuan will be floated, but not too soon.


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## beamstas (3 August 2009)

Another Buffett
It's not as easy as it is in the books.

Don't let me discourage you, though


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## Julia (3 August 2009)

Better to have aspirations and be ridiculed than to stick with the masses and be ordinary.

Your suggested time frame of the next couple of years might be rather ambitious, but I wish you all the best for the future.

One 18 year old that is unlikely to ever whine about how life is unfair.
We make our own opportunities.


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## jono1887 (3 August 2009)

I feel exactly the same way and have very similar plans... although I've managed to save quite a bit more than you. But I do plan on opening an investment company with a close friend of mine thats also interested in investing.

What uni do you go to atm?


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## kingcarmleo (4 August 2009)

Johhno currently going to curtin. I'm interested in using shares as a starter than getting into other opportunities such as property but I want to be heavily diversified and not have to be trading everyday.


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## jono1887 (4 August 2009)

kingcarmleo said:


> Johhno currently going to curtin. I'm interested in using shares as a starter than getting into other opportunities such as property but I want to be heavily diversified and not have to be trading everyday.




What state is curtin uni in?? Hmm... well investing into property will need a lot more capital, and a f/t job to get a loan. I'd like to be trading everyday but just dont have the time with uni...


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## Ato (4 August 2009)

Uni isnt totally useless, but it often depends what you put in and how you go about making the Uni work for you. Of course, there are always those terrible lecturers too, though. Try to find yourself a couple of teachers you admire (I mean teachers you respect because they arent all just abstract garbage that comes from someone else's book they use to teach with), and use them. You can learn alot while at Uni; remember it isnt all just lecture time, use the Uni resources to their fullest extent. As DrJ points out above get good grades in the subjects you take, even if they are required ones that you hate. And I agree with the rest of what he writes, too. Dont let anyone discourage you. You sound like a smart young guy so I'm sure you will do well.


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## beamstas (4 August 2009)

What do you expect to learn from uni teachers, ato?

Generally they have a fairly specific area of expertise, and in my experience, don't know alot about trading, rather investing & portfolio construction.


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## Ato (4 August 2009)

Oh I'm just making a general comment. He says he studies marketing and advertising. I know nothing about such subjects, but I'd guess there might be a couple of lecturers, at least, at Curtin with real world experience. As far as uni teachers being traders, dunno tbh. Maybe there are one or two at Curtin who can be prepared to put their money where their mouths are. I know of one uni lecturer who traded back in the day when I was in uni. Pity I wasnt interested in finance back then.

I've found that seeking teachers who know their stuff are the best way to learn while at uni. There seem to be quite a few pretenders. I found that the ones who knew their stuff always made time for me. (I should say that my uni days were quite some time ago though.)


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## mazzatelli (4 August 2009)

Procuring knowledge is not enough. It then needs to be applied to the real world, so I would not dismiss uni as useless.

You would probably need some experience at trading firms/investment banks as Dr J mentioned. The goal is not solely to learn skills from the firm but also to meet other individuals who may have ideas to offer [e.g. your mate]
I was influenced by a mate I met at uni and we subsequently ended up at the same institution as each other. His enthusiasm for options influenced me to take the same path.

beamstas - it sounds like the OP wants to follow the path of portfolio construction, so ATO's suggestion may be valid.


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## beamstas (4 August 2009)

Yeah, occasionally you get a good teacher who you get along with well and is willing to help out.  They are real gems and normally you seem to fly through those subjects.

I didn't realise what he was doing, Even if the the lecturers are traders, it won't really work as the subjects for say, finance, are set and they can't be changed, so while the lecturer or even students may disagree with the subject matter, they still have to learn it!

Things like efficient market theory, share valuation and portfolio construction using standard deviations of CAR are things that are kind of the opposite to what you are trying to do as a trader, but that's what you have to learn. 

It's all good, i think if the OP is thinking of doing something like starting a fund, picking up a major in finance wouldn't hurt.


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## doctorj (4 August 2009)

Curtin's a good, relatively practical school.  I have to admit to taking the path of least resistance and really didn't have anything to do with my lecturers beyond what was absolutely necessary, so I can't recommend anyone.

I remember the Accounting 100 lecturer being very switched on, personable and helpful.  Not related to investment obviously, but I'm sure he'd find the time to at least point you in the right direction if he's still there.


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## doctorj (4 August 2009)

mazzatelli said:


> The goal is not solely to learn skills from the firm but also to meet other individuals who may have ideas to offer [e.g. your mate]
> I was influenced by a mate I met at uni and we subsequently ended up at the same institution as each other. His enthusiasm for options influenced me to take the same path.



It's not very clear what "investment company" the OP wants (perhaps I should reread the original post), but if you see yourself going beyond straight trading of listed equities and into the world of private equity, I can't stress enough the importance of mazzatelli's comments.

No matter how much money you have at your disposal, you won't be able to originate business without knowing other people in the industry.
Even if you just want to trade equities, I can't underestimate the value of being able to pick up the phone and ask someone (another fund, someone in the particular industry etc) what they think of company XYZ.

And if joining your local yacht club is out of the question, the next best way to meet these people is to work with them.


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## Gunlom (4 August 2009)

There is nothing like real experience to learn the great investing and money management lessons, you can read it, but to really understand you have to go through it.

I have been investing since I was 19,(now 32) starting in property, in Perth, and ridden the booms, and busts, over geared,  redraw equity for living expenses, lost money margin lending, lost nearing $100k in a few short months on the ASX, made thousands buy and selling land, renovating crappy houses, made so much easy money in booms, and thought I was was a genius!, forced to sell some assets because I over reached, not hedged for Interest rate rises, It's been a fantastic experience, I wouldn't swap it for anything....

but everything I do I get better and more focused on the goal, which I decided last year is to be a full time Investor. 

There is so much knowledge out there, the best advice to to find something you are passionate about and focus on the that till you can make money from it, then move on to the next thing....


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## kingcarmleo (5 August 2009)

I understand that Uni is important and that some concepts are essential to understand but I have come to realise you can't buy experience. You can always read books based on theory but how much of that theory actually evolves into practice? 

Getting back to my plan, I don't want trading to be the only way the company makes money. I want to diversify heavily into many different areas but to start it will mostly have to be done through buying and holding shares. I want to start out with low risk with most of the money invested in bonds, term deposits and sound companies then look to expand into other areas. Basically like bell financial group they are slowly diversifying their products.


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## beamstas (5 August 2009)

kingcarmleo said:


> I understand that Uni is important and that some concepts are essential to understand but I have come to realise you can't buy experience. You can always read books based on theory but how much of that theory actually evolves into practice?
> 
> Getting back to my plan, I don't want trading to be the only way the company makes money. I want to diversify heavily into many different areas but to start it will mostly have to be done through buying and holding shares. I want to start out with low risk with most of the money invested in bonds, term deposits and sound companies then look to expand into other areas. Basically like bell financial group they are slowly diversifying their products.




Is there any proof that this actually makes money? Or have bell got to where they are now and then you looked at what they have done and backfit an idea that you can actually make money like this.

I don't know the answer but it might be something that is worthwhile to think about.


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## kingcarmleo (5 August 2009)

Sorry I'm not quiet sure what you mean beamstas? but I do know that brand extensions and diversification are a key to growth in any business.


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## prawn_86 (5 August 2009)

beamstas said:


> Is there any proof that this actually makes money? Or have bell got to where they are now and then you looked at what they have done and backfit an idea that you can actually make money like this.
> 
> I don't know the answer but it might be something that is worthwhile to think about.




And just on this point, why would people invest with you as opposed to someone that has been around for ages like Bell?

Its great your thinking about things, but remember there are 100s of fund/investment co's out there, so how are you going to stand out?


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## beamstas (5 August 2009)

kingcarmleo said:


> Sorry I'm not quiet sure what you mean beamstas? but I do know that brand extensions and diversification are a key to growth in any business.




What i mean is you are acting like you can go out, raise funds, diversify and become the next big thing, with no proof of your methods, all you have is a backfit idea that is not proven to work. 

Look at all the funds around the place, hedge funds unwinding & deleveraging, super going out the window, managed funds having record losses and every second day another company is raising capital. Obviously what they are doing only works during a bull market, and the next black swan event will clean the next lot of garbage out that comes around during the coming next bull market.

Just becuase funds in the past have done things a certain way, does it mean it works, or did random luck produce the result?

Not many people on this board buy into funds, with good reason, they tend to lose alot of money in bear markets. People like to be able to control things, giving capital to a grad uni student to sling around wouldn't fit too well with investors risk profiles.

By all means prove me wrong, but diversification, your only plan of attack, is NOT guaranteed to make money.

Brad


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## kingcarmleo (5 August 2009)

prawn_86 said:


> And just on this point, why would people invest with you as opposed to someone that has been around for ages like Bell?
> 
> Its great your thinking about things, but remember there are 100s of fund/investment co's out there, so how are you going to stand out?




Yes it is a good point you make Prawn, a point that I think about regularly. I will aim my services at a specific target. I haven't decided yet however I am looking at the younger crowd and more specifically university students. I can possibly offer them a way to pay their HECS or a majority of it as soon as they finish uni by investing in the company. This is just one of a few ideas I have constantly going through my mind.

Marketing does teach you the importance on differentiating yourself from the competition and having a product or service that is aimed at a certain target market, so I will try to stick to this philosophy.


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## kingcarmleo (5 August 2009)

beamstas said:


> What i mean is you are acting like you can go out, raise funds, diversify and become the next big thing, with no proof of your methods, all you have is a backfit idea that is not proven to work.
> 
> Look at all the funds around the place, hedge funds unwinding & deleveraging, super going out the window, managed funds having record losses and every second day another company is raising capital. Obviously what they are doing only works during a bull market, and the next black swan event will clean the next lot of garbage out that comes around during the coming next bull market.
> 
> ...





Ok, I understand what your saying now. All valid points and by no means do I think that everything just falls into place and makes money. I have many years to develop a business plan and strategies to test , my main idea is to be low risk and diversified whether that works I will only know in time but what I do know is a lot of these funds could have reduced their losses if they had not got so greedy, risky, leveraged.


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## Mr J (5 August 2009)

> I can possibly offer them a way to pay their HECS or a majority of it as soon as they finish uni by investing in the company.




Sounds like busking .


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## Trembling Hand (5 August 2009)

kingcarmleo said:


> I do know is a lot of these funds could have reduced their losses if they had not got so greedy, risky, leveraged.




Mate that is their job.


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## Mr J (5 August 2009)

Also works both ways. They amplified their gains as well as their losses.


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