How to Double or Triple my money?

[db09striker]

Hello everyone. I'm from the UK....

Not sure how I ended up here, but I guess I started looking at commodities and it led me to Australia and Australian companies. I assume you guys are the mining gurus?

I am a complete newbie to stocks / commodities which may just be about to be proved to you.....

I ideally need to double or triple my money within one year.

I fear that may be an unrealistic possibility, but I'll go on anyway.....

I have £70,000 GBP or $113,000 AUD. Ideally I would not want to pump the whole of my £70,000 into this, maybe £50,000 max.

-What is your advice on the best way of achieving this? Feel free to tell me I'm a flaming galah for even hoping to double/triple my money within a year.

Are commodity related stocks a good route to take? I have been looking into Uranium, Lithium, and I'm soon to look into Gold.

Would it be best to place my £50,000 this way:
£10,000 on my most bullish stock or commodity.
£35,000 split into lots of £5000 and invested into 7 different stocks/commodities.
£5000 invested into speculative picks in amounts of £1000 or £2000.

I am prepared to go speculative and high risk with some stocks, but with low stakes of £1000-£2000. I am not too fussed about risking £5000 total on speculative investments.

I plan to do a lot of research before placing any money down.

It's not essential that I double or triple my money, but that would be the aim.

Or is it simply the wrong time to get into the stock market? Am I coming in at the wrong time. We are due a recession. The whole reason I want to double or triple my money is to buy a property. Maybe a recession will bring the ridiculous house prices in the UK down.

Any advice would be great. Thanks.

 

[CanOz]

You're a flaming galah! The name of the game is to manage risk, you're trying to manage the reward!

Little understood FACT : you can't manage reward, you can ONLY manage risk!

 

[db09striker]

You're a flaming galah! The name of the game is to manage risk, you're trying to manage the reward!

Little understood FACT : you can't manage reward, you can ONLY manage risk!

I see your point and will make sure I have risk in mind and look into risk management....

But don't investors have a goal in mind in terms of what reward they hope for?

I thought it best to have a goal in mind to then determine what types of stocks I invest in: high, medium, or low risk stocks.

I would not just lump in on one stock. I'd spread my money across a variety of stocks and have a diversified portfolio to help manage risk.

 

[tech/a]

I see your point and will make sure I have risk in mind and look into risk management....

But don't investors have a goal in mind in terms of what reward they hope for?

I thought it best to have a goal in mind to then determine what types of stocks I invest in: high, medium, or low risk stocks.

I would not just lump in on one stock. I'd spread my money across a variety of stocks and have a diversified portfolio to help manage risk.

I have a lot to say on this but I'm out of time right now
By diversifying you'll cut your risk and your potential profit.
Investing at best is likely to return 5-25% tops.
Any futures trader will tell you 100% is not impossible but they are trading.

More later

 

[OmegaTrader]

Hello everyone. I'm from the UK....

Not sure how I ended up here, but I guess I started looking at commodities and it led me to Australia and Australian companies. I assume you guys are the mining gurus?

I am a complete newbie to stocks / commodities which may just be about to be proved to you.....

I ideally need to double or triple my money within one year.

I fear that may be an unrealistic possibility, but I'll go on anyway.....

I have £70,000 GBP or $113,000 AUD. Ideally I would not want to pump the whole of my £70,000 into this, maybe £50,000 max.

-What is your advice on the best way of achieving this? Feel free to tell me I'm a flaming galah for even hoping to double/triple my money within a year.

Are commodity related stocks a good route to take? I have been looking into Uranium, Lithium, and I'm soon to look into Gold.


Would it be best to place my £50,000 this way:
£10,000 on my most bullish stock or commodity.
£35,000 split into lots of £5000 and invested into 7 different stocks/commodities.
£5000 invested into speculative picks in amounts of £1000 or £2000.

I am prepared to go speculative and high risk with some stocks, but with low stakes of £1000-£2000. I am not too fussed about risking £5000 total on speculative investments.

I plan to do a lot of research before placing any money down.

It's not essential that I double or triple my money, but that would be the aim.

Or is it simply the wrong time to get into the stock market? Am I coming in at the wrong time. We are due a recession. The whole reason I want to double or triple my money is to buy a property. Maybe a recession will bring the ridiculous house prices in the UK down.

Any advice would be great. Thanks.

It is very hard and not practical in the long term

1) Take extreme risks which most likely will lead to overbetting and bankruptcy

2)Trade a very very short term time frame, more trades = more profit or loss in the same time period

3)Be extremely specialised in area,
would have a massive opportunity cost in terms of time spent implementing and learning or would require additional resources depending on the strategy, eg fast computers, software, access to information. The big boys spend a fortune to get an advantage in this arms race to soak up the easy money.


Patience is the key, in reality one has to normally accept waiting like everybody else does

7.2% over 10 years is ~x2
7.2% over 20 years is ~x4
7.2% over 30 years is ~x8

 

[Habakkuk]

It is very hard and not practical in the long term

Who's talking about the long term? He wants to do it in one year.

All he has to do is pick the right stock now. How difficult can it be?

The right stocks 12 months ago, all in the ASX 100 were:

FMG returned 266%
BSL returned 132%
S32 returned 123%
DOW returned 117%

or a little more adventurous

WHC returned 559% and was in the ASX 200

Of course you could have picked a wrong one like:

SGH returned -72.22%
BAL returned -62.75%
SRX returned -57.36%
EHE returned -55.73%

 

[tech/a]

Hab

I agree
I think he would be better off learning how to manage short term trades.

Use say 75% of equity in no more than 2 trades risking no more than 5% on each trade (Position sizing only)
and ratchetting his initial stop loss as quick as he can and dumping a position if it moves from profit to B/E in two days. There are around 60 stocks whos price has trebled at sometime in the last 12 mths with liquidity over $500K.
Staying with those on the move and dumping VERY quickly those that don't stay in profit.

He has to learn
Entry
Exit
Position sizing
Initial stop loss (You'd want to cut that initial 5% risk really quickly)
Ratchetting Initial Stop
Pyramiding

OR learning to trade index futures where he could trade up to 5 lots easily.

You couldn't work and be successful at either option. Would need 100% attention during all trading hrs.
Mind you in Futures you could have a 2 hr trading day--but you wont know when that is before hand.

He would need to spend a great deal of time on sim in either equities or futures.
Do able but would need to be very very good.
If he ended up being that good why would he stop at 1 year---and there lies another story.

By the way I'm a duck not a financial guru.

 

[OmegaTrader]

Who's talking about the long term? He wants to do it in one year.

All he has to do is pick the right stock now. How difficult can it be?

The right stocks 12 months ago, all in the ASX 100 were:

FMG returned 266%
BSL returned 132%
S32 returned 123%
DOW returned 117%

or a little more adventurous

WHC returned 559% and was in the ASX 200

Of course you could have picked a wrong one like:

SGH returned -72.22%
BAL returned -62.75%
SRX returned -57.36%
EHE returned -55.73%

Maybe you can double it for the first time but what about the second time or the third time when luck runs out. This type of thinking sounds more like a casino gambler....
Putting all your money in one stock as a first time investor is madness.
False hope is being given at the detriment of who???

 

[Habakkuk]

Hab

I agree
I think he would be better off learning how to manage short term trades.

Use say 75% of equity in no more than 2 trades risking no more than 5% on each trade (Position sizing only)
and ratchetting his initial stop loss as quick as he can and dumping a position if it moves from profit to B/E in two days. There are around 60 stocks whos price has trebled at sometime in the last 12 mths with liquidity over $500K.
Staying with those on the move and dumping VERY quickly those that don't stay in profit.

He has to learn
Entry
Exit
Position sizing
Initial stop loss (You'd want to cut that initial 5% risk really quickly)
Ratchetting Initial Stop
Pyramiding

OR learning to trade index futures where he could trade up to 5 lots easily.

You couldn't work and be successful at either option. Would need 100% attention during all trading hrs.
Mind you in Futures you could have a 2 hr trading day--but you wont know when that is before hand.

He would need to spend a great deal of time on sim in either equities or futures.
Do able but would need to be very very good.
If he ended up being that good why would he stop at 1 year---and there lies another story.

By the way I'm a duck not a financial guru.

tech, you would agree that there is no possible way for a complete newbie to learn all this even if he took a whole year without trading, and that doesn't meet his objective.

I would go further and say that if a newbie was given a plan with absolutely clear rules and instructions for every action, be it end-of-day or whatever, they would still not be able to execute it reliably and consistently. I'm guilty of that myself.

And if someone was given an automatic trading system that runs all by itself on their own PC or even in 'the cloud', as soon they see a big drawdown they would pull the plug. One way is to prevent them from monitoring it, e.g. like a unit trust that sends you an annual statement.

Trembling Hand made a comment recently about 'The Janitors Dream', moving from the basement straight to the penthouse. That's the Newbies' dream as well.

Marcus Padley wrote a good article : Why Most Traders Lose

http://www.marcustoday.com.au/webpa...uid=5febee425ba37bbae6090475fd1baecf&id=30325

I hope the link works

 

[Habakkuk]

Maybe you can double it for the first time but what about the second time or the third time when luck runs out. This type of thinking sounds more like a casino gambler....
Putting all your money in one stock as a first time investor is madness.
False hope is being given at the detriment of who???

He doesn't want a second or third time. He wants to double or triple his money only once in one year, by then the house prices in the UK will have dropped and he can buy a property.

 

[tech/a]

tech, you would agree that there is no possible way for a complete newbie to learn all this even if he took a whole year without trading, and that doesn't meet his objective.

Id say its highly unlikely.
The problem is newbies don't know what it is they HAVE TO LEARN.

They think its all about when to enter and when to exit.
That's the start and the end of the journey.

The stuff in the middle is where the profit is.

EG

--Quitting when its clear your initial analysis was incorrect---embrace recognising and admitting to being wrong as quick as you can. (minimising loss from your initial stop positioning---most just watch it get hit living in hope).
--Not over leveraging. If your using leverage learn how to use it PROPERLY without increasing you risk.
--Not putting too much of your account at risk. And when to put more at risk than you would normally.
--Knowing when to hold a trade and when to fold it.
--When to add to a trade.
--When to stop trading.

Of course all of this is answered for you with a sound system.
But knowing the above sure will help you design a good one.

Spend a few hrs going over Pete 2s stuff.

 

[systematic]

More chance of achieving your goal by betting it all on red of black in one spin...or Baccarat will also do the trick. Or you could give yourself a high 64.8% chance of a 50% return by betting on 2 dozens or columns. Trouble is that the downside is a complete wipeout, so it depends on whether you're okay with that.

More seriously, you're a confessed newbie and you want world beating returns. You'd need to either be brilliant or a very lucky gambler. People do go on runs (markets and casinos) and it certainly has happened.

I'd encourage you to change your thinking on this whole endeavor and embrace a get rich slow mentality.

Either way, good luck.

 

[barney]

More chance of achieving your goal by betting it all on red of black in one spin
I'd encourage you to change your thinking on this whole endeavor and embrace a get rich slow mentality.

Totally understand what you are saying here 'Sys' and please don't take this as confrontational, but, picking red or black is a world away from choosing a couple of well selected Speculative stocks that have the potential to rise exponentially if the ducks align .....

Certainly not advising recklessness on the Op's part but there are often different ways to achieve a desired goal or result ... and being 'unconventional' can often be beneficial if you are aware of (and respect ... and accept if it goes wrong) ... the risk/reward. Cheers.

 

[pettlepop]

The best way to double or triple your money is to look at heavily oversold stocks with a relative strength (RSI) at or below the 20 mark. One stock in mind at the moment is MBE (MOBILE EMBRACE LIMITED). Its had 2 profit downgrades and 2 massive drops in share price. Its now so oversold its a joke. It has positive cash flow, money in the bank and is being treated like a debt stock. This is the perfect stock to double or triple your money, even from a traders perspective. It ticks all the boxes for a significant share price rise. Take a look and see if you agree, if not I am happy for you to discuss otherwise.

 

[barney]

Firstly "RSI" indicator means bugger all ..... Secondly, when a stock is being beaten down while it is theoretically increasing profits .....

That is one stock I would definitely not put a large amount of cash on, sorry!!

PS IF it goes ballistic form now on good luck .... still a no go zone for me personally

 

[OmegaTrader]

He doesn't want a second or third time. He wants to double or triple his money only once in one year, by then the house prices in the UK will have dropped and he can buy a property.

It's not gonna happen at this point in time or ever unless he is a genius or lucky gambler ,full stop, the end.

The rest is all hot air.

 

[db09striker]

Thanks everyone for all your input.

I am not going to rush into anything. I need to go into this sensibly and understand the best way to approach it.

I'm not saying I have to double or triple my money, that would be the aim. If I made some profit I'd be happy enough. That said - I need to come up with a strategy that could potentially get me those 100% - 200% returns I need to fully factor in the risks before doing anything.

I disagree with equating my goals to a red/black roulette spin. It's unlikely that if I invested £50,000+ in the stock market that I would lose the whole lot like you can with red or black. I also have the option to place a small amount on speculative picks and get massive returns, so small risk big reward. Red or black is just 50:50 and that's it.

Continuing with the gambling theme. I do like a gamble, though I don't gamble often. When I gamble I always select an outsider. I place a small amount on an outsider who by logic has a chance of winning.

These are wins that I've had (I only placed a few pounds on them and won about £3000 total):
Maldonado winning the Spanish Grand Prix. 250-1 (25,000% profit)
Leicester to win the Premier League. 100-1. (10,000% profit)
Ryan Giggs (footballer) to win Sportsman of the year. 66-1 (6,600% profit)

I don't really want to compare stocks to gambling on Sports, but from looking into stocks it's emphasising to me more than ever that these returns I got from those gambles were ridiculous. I knew they were good outside picks, but I am now realising what an absolutely massive return I got on them. These types of bets don't shout out to me all that often, maybe once every 2-3 years, next time I come across another one I am smashing £1000 on it. If it's a wild shot just to be able to double your money on stocks in 1 year, just get a 100% return, then gambling seems like a much better bet.

Anyway - as I like the idea of an outside gamble, I like the idea of a speculative gamble on penny stocks that could go ballistic. Risking relatively small amounts with a chance of big returns.

I am happy to risk £5000 on these speculative stock picks. I just need to find them and hope they work out. I could just focus on that strategy initially.

Any thoughts about Uranium stocks? - from research these stocks seem to being talked up a lot as something that has future demand and these stocks could take off soon.

 

[stevo2]

A very good aim for your first year would be to finish the year with as much money as you started with.

 

[So_Cynical]

I would not just lump in on one stock. I'd spread my money across a variety of stocks and have a diversified portfolio to help manage risk.

You are a Galah and spreading money wont help as it will lower returns in general..you're only hope is a single stock thus a hundred to one shot, something smallish and somewhat speculative, not necessarily a mining stock.

 

[systematic]

I disagree with equating my goals to a red/black roulette spin.

Read more carefully. I didn't equate your goals to a roulette spin. I'm not talking theory, I'm talking about you. (sidenote: this is the beginner's forum and I am trying to help. I have gone as far as to scold other well-known members for being unhelpful or sarcastic in the beginner's forum, as it is such an insult to the honest people who appropriately place their post in the correct forum!)

So, let me correct your thinking about what I said and hopefully I'll be more clear this time...
Forget theory, I'm talking about you.

I do not believe that you are better than 48.65% chance of trading your way to a 100% return over the next 12 months. Therefore, a bet on red or black would be better (the assumption being that you accept the downside). I get what you say about not expecting to lose all your money in one hit in the market, but that depends on how you are going to try and, 'reach for the stars'. In trying to shoot for ultra high returns like that, you're going to have to do something exceptional (one example would be, pick a mining stock about to double). You could lose a lot in that case. But also, even if you weren't quite that aggressive, I'd punt on you losing your capital slowly, over time (much like a slot machine player).

I'm just saying - on a purely 'best bet' basis...I think you'll more likely hit your goal of 100% in 12 months by betting on red/black as opposed to trying to trade stocks to get there.

The last part of your comment (asking for opinions on uranium stocks) shows that you are all over the place.

I wish better things for you; so I hope I get you thinking is all