Australian (ASX) Stock Market Forum

I've got $100k: Haven't traded before

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Joules MM1 said:
https://www.asx.com.au/education/sharemarket-game.htm
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I just found this in the ASX game thread, maybe give it a go first and see how you do.

Then

IF you aren't negative by the end game stick some real coin in an account and try and replicate what you did before.

IF you are negative at the end of the game review your trades, reform your plan, study up and create a new demo account and give it a go again....rinse and repeat until you see some gains and then think about putting your hard earned at risk.

Just my :2twocents
 
Just thinking about this a bit more religious investor, there are two parts to investing (rather than trading).
One is valuing and choosing the company - you need to lean about a lot of factors and you need to read a few books about it.
The second is the trading part. This can help you find companies that are rising long term and also help you sell.
So that is why I suggest you sign up to The Chartist for the Super option. I also would suggest you join Bell Direct to see how they value companies.
Buy the shares as they come up (in the Chartist) and then read about them. Get the annual reports and go through them. Read the newspaper articles and the threads on this website.
I would only put in say 20K for this and put the rest in investment funds by others while you are learning.

If you can master investing, it will serve you the rest of your life.
 
Also if you want to go down the investment route:
These books are a good start

Top Stocks 2020 by Martin Roth
The Barefoot Investor by Scott Pape.

Stay away from Benjamin Graham.
 
Value Collector said:
I think reading Ben Graham made me the successful investor I am today. I would definitely recommend his work to any student of finance.
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Theres a time and a place for value investing, right now it's tough but when we see the next major correction Ben Graham is a great play book to follow for the long term investor.
 
I just don't find him (Benjamin Graham) very relevant in the modern age and I think he leads new investors up a garden path where they buy crappy companies based on asset values that they struggle to recover from. I can't see him buying Apple, Microsoft, Amazon, Afterpay, CSL, Polynovo etc. etc.

Look up what Charlie Munger said of him.

I don’t love Ben Graham and his ideas the way Warren does. You have to understand, to Warren — who discovered him at such a young age and then went to work for him — Ben Graham’s insights changed his whole life, and he spent much of his early years worshiping the master at close range. But I have to say, Ben Graham had a lot to learn as an investor. His ideas of how to value companies were all shaped by how the Great Crash and the Depression almost destroyed him, and he was always a little afraid of what the market can do. It left him with an aftermath of fear for the rest of his life, and all his methods were designed to keep that at bay.
 
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Knobby22 said:
I just don't find him (Benjamin Graham) very relevant in the modern age and I think he leads new investors up a garden path where they buy crappy companies based on asset values that they struggle to recover from. I can't see him buying Apple, Microsoft, Amazon, Afterpay, CSL, Polynovo etc. etc.

Look up what Charlie Munger said of him.

I don’t love Ben Graham and his ideas the way Warren does. You have to understand, to Warren — who discovered him at such a young age and then went to work for him — Ben Graham’s insights changed his whole life, and he spent much of his early years worshiping the master at close range. But I have to say, Ben Graham had a lot to learn as an investor. His ideas of how to value companies were all shaped by how the Great Crash and the Depression almost destroyed him, and he was always a little afraid of what the market can do. It left him with an aftermath of fear for the rest of his life, and all his methods were designed to keep that at bay.
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Charlie and Ben have different ideas, But I believe warrens success is from combining the two.

I feel there is a lot to learn that is important from Ben.
 
Knobby22 your quote is largely correct but it misses the point. Ben Graham was the master of risk minimization, he wasn't the master of return maximization. The Graham approach was about making moderately above market returns with minimal risk. Yes if you are an investing genius a la Charlie Munger there are methods that will allow you to do somewhat better than Graham could have done. But for an average person Grahams methods are very sound and applicable.
 
Good points Value Collector and Value Hunter.
Rather than make some glib comment, I will go and do some thinking and research.
 
I found reading peter2's threads to be very helpful when I was researching. Skate's thread has already been mentioned.

What kind of reading to recommend will largely be based on what kind of trader you want to be. I thought I would want to be a partly discretionary trader but found myself gravitating towards system design and system trading.

Aaron Fifelds podcast 'Chat with Traders' is great. I put them on while driving.

The Market Wizard is an iconic book. Also, 'Trading in the Zone'.

I used a lot of free resources for my learning, but I found the kindle app to be great. I have bought a lot of books and spent a considerable amount on them. This was probably cheaper than blindly going into the market and paying my tuition that way ....

Biggest bit of advice I hear over and over, particularly on Aaron's podcasts with his big name guests is, 'find out what kind of trader you are'.

Oh, and understanding the market can't truely be predicted but rather is a collection of statistical probabilities where each outcome is independent of the other, is a good mindset to have. (I.e. you can flip a coin, each time you go to flip a coin you have a 50/50 chance of an outcome. But that doesn't mean you can't get 10 heads in a row. Each time you flip is a new statistically independent outcome to the last, but overall forms a probablistic set.)

Good luck
 
So a key message for the OP is that equity returns are volatile. Many trading systems can suffer drawdowns of 1-2 years. However most traders seem to take many years to develop consistent processes, and over that period almost always loose some proportion of their initial capital.
2-3 for most people is just about approaching the point of maximal losses for many that tackle the challenge.

Time to double your money in trading, allowing time to learn, time to incrementally increase capital with proper risk management? - For most people, say 3-5 years work learning and losing, 2-3 years starting to break even, 3-10 years after that to double your money.

ASF value investors may be a smarter lot and able to improve on these timeframes :)
Obviously the returns, losses and time periods described vary widely between individuals depending on drive, personality, intelligence, luck. Yet more "volatility" to consider.

P.S. Best way to start in shares for first few years regardless of investing or trading would probably be trade small fraction (10%?) of your initial capital. Losses during learning phase will be 90% less :)
Skills you learn could be invaluable later in life.
 
Hi Religiousinvestor - have you defined your strategy at this stage? Will you conducting fundamental or technical analysis or a combination of both? Reading a few books on the basics of share trading is a good start, and defining your strategy including setting some risk management criteria would also be essential in my mind. You can always take an extra step and subscribe to a range of podcasts so you can listen to thoughts of experienced investors. It's all about learning and educating yourself. $100k can go in an instant! Just read articles available on line, but I would avoid anything which starts with: "Do you want to make $5k a day trading - I did it you can too" or similar.

You can make some good money investing in equities, just don't think you can beat the market in your first year. If you come away with a nett profit, you've done well.
cheers.
 
Came across this:. Everything points towards participation being a long game.
Since 1900 on the ASX :
Positive years: 97
Negative years: 23
Click to expand...
Go the odds.
Manage risk and the returns will follow.
(IE, don't blow up your kitty, have a system and stick at it.)
 
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ReligiousInvestor said:
My objective is to create a cash driver enabling more significant real estate investment within 2-3 years.

If I could double my money within that, that would be great.

Considering building portfolio of TSLA, CSL, DTL, XRO, ALU, MSFT.

(Currency considerations for US stocks?)

Any ideas? Am I dreaming?
Any books I should read to become an educated investor?
Click to expand...

Definitely read, Motivated Money by Peter Thornhill and try to go to his seminars.


-Frank
 
ReligiousInvestor said:
My objective is to create a cash driver enabling more significant real estate investment within 2-3 years.

If I could double my money within that, that would be great.

Considering building portfolio of TSLA, CSL, DTL, XRO, ALU, MSFT.

(Currency considerations for US stocks?)

Any ideas? Am I dreaming?
Any books I should read to become an educated investor?
Click to expand...
Put it under ye' mattress.

gg
 
Hi another Newbie here with a $200k term deposit that is maturing..
Looking at buying bank shares and perhaps qantas and sydney airport.
Seeing the current share market similar to the boxing day sales
Any advice
 
Junior said:
Did you invest yet?
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No. Waiting on my cmc trading account to be setup and tossing up whether to go hard now, buy smaller amount over time to minimise any further drops or just forget about the whole thing and roll over the term deposit for another 6 months.
 
tonyparis said:
Hi another Newbie here with a $200k term deposit that is maturing..
Looking at buying bank shares and perhaps qantas and sydney airport.
Seeing the current share market similar to the boxing day sales
Any advice
Click to expand...
Lucky you, advise - pass on qantas and perhaps the financial ETF instead of all the banks, and consider some energy and infrastructure, ORG and APA.
 

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