Books, websites and other education resources

qaz · 3 December 2004

Hi,

I'm primarily interested in property as an investment however I relise that there isnt a great deal of growth in the current market and in most areas values are sliding slightly. Couple that with the good returns on offer in the share market and my relative lack of starting capital ($10,000) my question is........

What books, websites or other educational material would you suggest for a newish investor who understands the basics about investing in the stock market and wants to learn how to a) be an effective technical analyser of stock and various trading strategies and b) how to value stocks effectively so that I can see value?.

Thanx :jump:

crashy · 4 December 2004

you want the truth?

well first forget the idea of using technical analysis. It just doesnt work. I have backtested every indicator and returned slightly better than random results. Show me a rich chartist?

with only $10k capital you would make more money going to work than watching your screen. Dont waste your time unless you plan to INVEST that money in HIGH YIELD BLUE CHIP STOCKS, or borrow to invest (theres only ONE stock I would buy with the market up here).

Maybe read Buffetts book on value investing.

GreatPig · 4 December 2004

Qaz,

Good books on technical analysis and charting are the Edwards & Magee book "Technical Analysis of Stock Trends", Leon Wilson's "The Business of Share Trading", some of the Daryl Guppy books, and I believe some of Louise Bedford's, although I haven't read any of them yet myself.

Also, take a look at this link that got posted on Somersoft recently. It's well worth reading.

Crashy:

I have backtested every indicator and returned slightly better than random results.

Well perhaps you need to refine your strategy. I've been backtesting my method over the last 7 years of prices (all I have at the moment) and can get much better results than that. And that's using almost no indicators other than EMAs and stop-losses.

Cheers,
GP

qaz · 4 December 2004

The reason I wanna learn technical analysis is because im interested in the magic moo cow strategy (writing covered calls). Macquarie Geared Equities Investment plus loan will lend me $50k for a period of 1-5 years and basically guarantee the capital value in my shares. Any that are down on their orginal value at the end of the loan term are simply written off along with the principle payable on them. Where as those that go up (hopefully most), I get to keep the extra capital growth above what I bought them at. The interest rate is high (very high) but its a good way to get into a bull market with minimum risk (downside is limited to interest costs whereas upside is as good as the market and how well you can pick your stocks). I probably wont be looking into fundermental analysis as closely because I will just pick the stocks that Peter Spann recommends in his newsletter which are also in the Macquarie Geared Equities Investment plus allowed share list (they only provide this service for relatively blue chip stocks). Anyways, I thought it was a good way to get into a strong market without any of my own cash with limited downside.

Thanks for the tip Great Pig. I'll be sure to have a look for those books.

TonyM · 4 December 2004

Recently shares magazine have run four charting magazines that give a good intro to the basics of charting. Number three and four have been the most help for me. As for vaulations I'd try the buffet books. Following the posts on a good forum like this one or investorweb's premuim forum are also good ways to go. I've found it helpful to look at people's posts on stock values etc and then try to work out how they got there.

Try Investorweb for research and education. It's the best $400 a year I've ever spent.

A good charting programme is FC Charts Pro. It costs $140 and give you all the indicators you'll need. You can also run tests and scans. I get my data from cool trader. It costs about $100 a year for EOD data at 7.30pm.

As for the comment about technical analysis. It's been very good to me over the last 18 months but I often combine it with fundamental analysis. Recently I've acting on TA buy signals alone for DJS at 2.00 and LHG at 1.05 ish. I've also got in ZFX and 1.91, out at 2.10, in at 2.05 and out at 2.20. I'm not a big trader but I trade 10K lots and I'm happy a 10% gain over a few weeks, every few weeks. So that also means I happy with my profits from short term trading using TA!

Hope that helps.

Cheers

Tony

GreatPig · 4 December 2004

qaz said:
The interest rate is high (very high)

Umm... how high's "very high"? :evilburn:

Is the extra interest rate worth it for the capital guarantee if you think the market is strong at the moment?

Also, out of interest, is this a strategy Peter Spann suggests?

Cheers,
GP

qaz · 4 December 2004

GreatPig said:
Umm... how high's "very high"? :evilburn:

http://personal.macquarie.com.au/pe...nt_loans/protect_lend/protect_lend_detail.htm

if you click the "apply now" link it will bring up a screen where you can download the product disclosure statement and the share lists on offer and their respective interest rates. I tried to attach the PDF files to this message but they were too large.

GreatPig said:
Is the extra interest rate worth it for the capital guarantee if you think the market is strong at the moment?

I hope so.......

I think the extra bit of return covered calls will give me will help fund the interest bill.

GreatPig said:
Also, out of interest, is this a strategy Peter Spann suggests?

Yes, from what i've heard from attenders of his most recent seminar on Hamilton Island.
http://www.freemanfox.com.au/frame.asp?mainFrame=/seminars/page3c1.asp

Any other questions?

GreatPig · 4 December 2004

Qaz,

Wow... some of those rates I'd call extortion

. 34.51% on Peptech for one year!

Personally if I was doing that I'd be choosing my own shares and looking carefully for ones that have definite longer-term uptrends. I think it would be quite a gamble to hope that you can out-perform those interest rates with a simple buy and hope strategy.

For example, take Qantas. They have an interest rate of around 22% for that one yet the share price has fluctuated mostly between $3 and $3.70 for the last two years and Yahoo is showing a yield of 4.66%. I doubt you'd have much chance of coming out ahead with that one.

On the other hand, if you'd chosen Aristocrat about a year ago, for your 21% interest rate you'd be sitting on a capital gain now of about 420%

.

So choose carefully - and good luck!

And regarding Peter Spann, are you saying he suggests buying these capital guaranteed loans for shares, or are you just referring to his magic moo cow strategy?

Cheers,
GP

GreatPig · 4 December 2004

Qaz,

Hey... I found an even better deal with that Macquarie fund. Put it all on ERG!

They charge 44.44% for one year on that one, and just look at ERG's chart!

Of course it could turn around and go back up though.

Cheers,
GP

qaz · 4 December 2004

They charge higher rates of interest on stocks they think there is a risk of going down. Its just like buying a long put option, you pay more for stocks that have a good chance of loosing money.

Yes, Peter Spann from what ive heard recommended the loan by name and suggested using covered calls as a part of that strategy.

The Barbarian Investor · 5 December 2004

qaz-

I think Peter's MMC strategy is essentialy a Protected Buy/Write strategy isn't it? Not just covered calls..

As Great Pig say's you better protect yourself for the downside, those interest rates are Exorbitant, there’s ‘No Way” I would be paying that much on borrowed money !

Have you traded Options before?

I haven't , however i like the idea and agree a bird in the hand is worth two in the bush and along with some other shares (buy/hold, trade) i will persue the option strategy, but i will make haste slowly and begin at a lower level to get used to the game.

I'm sure Peter would not advocate jumping in head first?

Are you using Freeman Fox as your brokers..

The Barbarian Investor

Jett_Star · 17 January 2005

Absolutely hardcore!

Those interest rates are insane... be very careful.

:2twocents

Some great advice from the wiser among us:aus:

doctorj · 30 January 2005

This is a good read for those looking to learn from the experiences of others. In particular, I've learnt a lot from an old chap refered to as "Turkey".

Please note it is a full ebook and isn't suitable for a quick 5 minute read.

Books, websites and other education resources

qaz

crashy

GreatPig

Pigs In Space

qaz

TonyM

GreatPig

Pigs In Space

qaz

GreatPig

Pigs In Space

GreatPig

Pigs In Space

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