1st post new fella interested in shares/stock market

[topdog]

Hi All,

1st post here, havnt had time to do much reading around so take it easy !!

I currently run my own building company and although successful ive always wondered about the stock market /share trading etc .

ive brought a few books, don't know how good good or not :

getting started in shares for dummies
stock market wizards - jack d schwager
learn more about shares - n.e. renton

starting to read the financials in paper, watch on foxtel the reports, get on to asx /commsec sites and do the courses and looking online to find share courses to gain a better understanding.

not really looking at this as a "new job" or to make a career in financial advising as such more a hobby and if I get good at it and it morphs into something bigger then one day maybe make a living for myself and my family from it maybe wishful thinking , im definitely very interested at the moment though.

id love to hear from anyone with any good advice as to what books to read , what courses to do , and any other useful information as to what I should be doing to maximise my learning

please save the negative comments and the non constructive feed back

cheers !!

 

[Gringotts Bank]

Decide if technical or fundamental or some other approach appeals to you. Go from there.

 

[tech/a]

Greetings
Civil Construction is my area with Property development.
So can associate.
Traded for 20 yrs and in comparison to business and Property only fiddle around.
It does supply a good return on $s invested for me.

My main aim was to have another income stream that I can tap into 24 hrs a day and where ever I am when I want---box ticked.
I also wanted to be able to quantify risk and be able to manage it quickly and efficiently.
hence I spent the 10000 hrs learning technical analysis as opposed to fundamental analysis---I just don't have the time. I'm visual and need clear cut instant ability to make decisions---right or wrong. Box Ticked again.

There a big benefits to investing in Shares and later futures.
(1) You can trade parcels with the value of a house and buy and sell in a single phone call.
(2) You can get out of a trade as soon as you equate that its not performing well enough in your direction.
(3) You can spread your investment or specialize it.
(4) You can hop on a trade for an hr--day- week--month--year.

And much more.

Best advice --take your time and trade on sim for at least a year.
Look through the archives here.

Enjoy the journey it is well worth it.

 

[topdog]

thx for replies

so I had a google of the differences in short I found this summary between fundamental and technical .....

•Fundamental analysis is a method of evaluating securities by attempting to measure the intrinsic value of a stock. Fundamental analysts study everything from the overall economy and industry conditions to the financial condition and management of companies.

•Technical analysis is the evaluation of securities by means of studying statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value but instead use stock charts to identify patterns and trends that may suggest what a stock will do in the future.

as to what which way Ill go that's to be decided, but me being me id say id be leaning towards fundamental, that's in my limited knowledge, at the moment.... in saying that id wager a guess youd need to know both to be at the top of your game

as tech/a said time restraints etc play a roll but not in its their entirety.

trade on sim you mean simulator as in one of the asx or the like games ??

cheers

 

[galumay]

If there is one thing this forum taught me, its to actually develop a system to support a strategy of investment in shares thats aligned with your personality. That sounds sort of self evident, but having the discipline to really follow a system for a strategy is harder than it sounds. I found for myself that writing down my thought processes on share selection helped.

ASF is a goldmine for help in learning how to invest in the share market, whatever style of investing you adopt, there are experienced investors that will support and challenge you on your journey.

If you are up for it, a bit of reading about the psychology of investing is something I would recommend. http://www.valueplays.net/2013/03/18/the-psychology-of-human-misjudgement-charlie-munger/

Good luck on your journey!

 

[Gringotts Bank]

thx for replies

...as to what which way Ill go that's to be decided, but me being me id say id be leaning towards fundamental, that's in my limited knowledge, at the moment.... in saying that id wager a guess youd need to know both to be at the top of your game

You don't need both. TA can certainly be used alone. FA would benefit from at least a basic TA knowledge, but some people seem to be ok without that.

For FA, type some of the following key words to search ASF threads: value, fundamental, financial, balance sheet, etc.

In terms of psychology, you won't know where you stand until you start trading. Some people have great mindsets before they even start (due to a range of of historical psych. factors) and so they don't need to tweak anything at all. Most others do need to do the work.

 

[topdog]

starting to read a lot about the psychology side of things in trading ....

any courses /books anyone can recommend ???

and not the courses that flog to buy there system bla bla bla bla

 

[burglar]

...
getting started in shares for dummies
stock market wizards - jack d schwager
learn more about shares - n.e. renton

starting to read the financials in paper, watch on foxtel the reports, get on to asx /commsec sites and do the courses and looking online to find share courses to gain a better understanding ...

I don't read much, but did skim read titles of the ASX Reports for a decade.
I opened many out of curiosity.

FWIW I think you are doin' Ok

 

[ROE]

If there is one thing this forum taught me, its to actually develop a system to support a strategy of investment in shares thats aligned with your personality. That sounds sort of self evident, but having the discipline to really follow a system for a strategy is harder than it sounds. I found for myself that writing down my thought processes on share selection helped.

+1 every man and his dog out there telling you how to make money on the market and they all preach the same stuff what you need to do is get the basic principles and come up with your own way of making money...

if you take TA, learn how TA works and work out TA signals that you will act on it and same with FA
sort out the information you want to take in and act on it and have conviction that what you done is to
your best ability and you can look at the market each day and smile even if it went against you.

One day you get more right than wrong.

Investing is like exercise, everyone will tell you how to diet and get fit but the one that really fit are the one
that work out a routine that their body can take and fit in with their daily life

every year some dude comes up with some diet or exercise system where it really works for someone
you read in the paper

I just run and walk three or four times a week, year in year out never change to any new super duper system
and hasn't has a sick day for a long long time and last time I check no Cholesterol, no High blood pressure, No diabetes and I eat anything in moderation, love a steak with a bit of fat, chips, KFC, Pizza, burgers and the professional tell me dont eat this stuff

and you should have been here when GFC hits, all the professional said buy and hold stocks doesn't work any more

 

[topdog]

thx again for all the extra input guys.....

still no replies about what books to read or about any courses ....

im after books that explain how the stock market works all the abreviations of terms etc

and courses for the same im trying to gain a better understanding of the basic fundamentals of different words there meanbings etc before I dive in whole heartedly coz when I do something I do it properly !!

so please any books or courses info is appreciated

im liking the gann book 45 years on wall st ??

 

[ROE]

How long is a piece of string?, you got to nail down what you want to do before you can go read books on the subject

this is a good place to start
http://www.investopedia.com/university/

 

[Julia]

im after books that explain how the stock market works all the abreviations of terms etc

and courses for the same im trying to gain a better understanding of the basic fundamentals of different words there meanbings etc before I dive in whole heartedly coz when I do something I do it properly !!

You'll probably find much of what you're looking for on the ASX website:
http://www.asx.com.au/

Go to the Education link which then has multiple sub-sections, including a glossary.

 

[Smurf1976]

First thing is to decide your basic approach.

Use Technical Analysis (looking at charts etc) with the intent of buying at a low price today and selling at a higher price in the future?

Use Fundamental Analysis to find stocks that are undervalued based on the fundamentals of the business?

Or just buy into a sound business for the dividends it pays and keep holding the stock regardless of short term price movements?

Personally, my approach is a combination. I aim to invest in sound businesses that are likely to stay around and keep making profits. Ideally I want to buy in at a low price, and use very basic TA to spot reasonable entry points. I continue holding the stock unless something changes with the business itself which gives me reason to sell, in which case I use very basic TA to make the exit. Amongst other things, I don't buy any stock which doesn't have a 10+ year history of rising profits and dividends.

That's just my approach, others will do things very differently. Someone who bases their trades solely on TA may not have a clue what the company does, or even what the proper name of the company is. They just know that the stock code is xyz and the chart looks attractive. They might happen to know those other things of course, but it's not a requirement of such a strategy. In contrast, I know exactly what the company does and that it is profitable etc - then I have to look up the stock code in order to make a trade. Very different approaches there and both can be profitable.

Then there's things like the broader economy. Not really much of an issue if you're basing everything on TA - just because the economy fell in a heap or boomed doesn't prevent an individual company's stock from doubling or halving in price.

But if the broader economy falls in a heap then that's bad news in some ways but it also presents opportunities. As a random example, consider the Commonwealth Bank. CBA shares traded as low as $24 in early 2009, down from about $62 a year earlier, amidst the financial crisis and concerns about banks going bust. But whilst many overseas banks may have struggled or even gone broke, CBA survived quite nicely and the shares are now trading at about $72. And on top of that, they've paid over $15 worth of fully franked (tax already paid) dividends per share over that time too. So bad economic circumstances certainly do present opportunities to buy into a sound business at a cheap price.

Fundamental approaches may well have lead you to CBA shares at the time, but then Technical Analysis could also have arrived at that point but for different reasons. One sees a sound business being sold cheaply. The other sees opportunity in the charts. Note that I am not recommending that you do (or don't) buy CBA shares - it's just a well known stock that I've used as an example.

Whatever you do, I strongly recommend that you trade "on paper" (that is, without real money involved) until you're comfortable with it. Don't use real money until you have a strategy (TA, Fundamentals, whatever) worked out and know how to implement and monitor it.

 

[topdog]

You'll probably find much of what you're looking for on the ASX website:
http://www.asx.com.au/

Go to the Education link which then has multiple sub-sections, including a glossary.

thx Julia , yes im going through them now have been for a while albeit slowly

First thing is to decide your basic approach.

Use Technical Analysis (looking at charts etc) with the intent of buying at a low price today and selling at a higher price in the future?

Use Fundamental Analysis to find stocks that are undervalued based on the fundamentals of the business?

Or just buy into a sound business for the dividends it pays and keep holding the stock regardless of short term price movements?

Personally, my approach is a combination. I aim to invest in sound businesses that are likely to stay around and keep making profits. Ideally I want to buy in at a low price, and use very basic TA to spot reasonable entry points. I continue holding the stock unless something changes with the business itself which gives me reason to sell, in which case I use very basic TA to make the exit. Amongst other things, I don't buy any stock which doesn't have a 10+ year history of rising profits and dividends.

That's just my approach, others will do things very differently. Someone who bases their trades solely on TA may not have a clue what the company does, or even what the proper name of the company is. They just know that the stock code is xyz and the chart looks attractive. They might happen to know those other things of course, but it's not a requirement of such a strategy. In contrast, I know exactly what the company does and that it is profitable etc - then I have to look up the stock code in order to make a trade. Very different approaches there and both can be profitable.

Then there's things like the broader economy. Not really much of an issue if you're basing everything on TA - just because the economy fell in a heap or boomed doesn't prevent an individual company's stock from doubling or halving in price.

But if the broader economy falls in a heap then that's bad news in some ways but it also presents opportunities. As a random example, consider the Commonwealth Bank. CBA shares traded as low as $24 in early 2009, down from about $62 a year earlier, amidst the financial crisis and concerns about banks going bust. But whilst many overseas banks may have struggled or even gone broke, CBA survived quite nicely and the shares are now trading at about $72. And on top of that, they've paid over $15 worth of fully franked (tax already paid) dividends per share over that time too. So bad economic circumstances certainly do present opportunities to buy into a sound business at a cheap price.

Fundamental approaches may well have lead you to CBA shares at the time, but then Technical Analysis could also have arrived at that point but for different reasons. One sees a sound business being sold cheaply. The other sees opportunity in the charts. Note that I am not recommending that you do (or don't) buy CBA shares - it's just a well known stock that I've used as an example.

Whatever you do, I strongly recommend that you trade "on paper" (that is, without real money involved) until you're comfortable with it. Don't use real money until you have a strategy (TA, Fundamentals, whatever) worked out and know how to implement and monitor it.

thx for taking the time to write that smurf

your approach appeals to me and something that im working towards

im going to try trading on the asx game or the lkes and see how I go for a while

got a few books to read and a new one on the way45 years on wall st by gann

cheers

 

[JLM Financial]

You should also consider whether you want to take a shorter or longer term approach to trading and figure out what type of trading suits you and your personality.

Fundamental analysis takes a relatively longer-term approach than technical analysis. Although, that's not saying people don't trade fundamentally short-term.

On the other hand, technical traders can be in and out of a trade within a few seconds, minutes, hours, days or weeks.

Whether you choose to be a fundamental or technical trader, you MUST learn how to position size and manage risk. Any good trading resource for beginners should have a section dedicated to this.