Stuck in a rut

I'd say the most basic mistake of beginners (including myself sometimes) is that they go to the market with their 10k savings for example and expect to "make money." If you go into the share market with that mentality then you are most likely going to have a roller coaster ride, watching the share price and getting excited or depressed as it bounces around.

I've learnt to go into the stock market to invest in the business, I don't pay too much attention to the daily price bouncing around as it would do my head in. As long as the business itself is doing ok (eg. Woolworths keeps selling bread and milk and doesn't burn down and Coca Cola Amatil keeps pumping out the coke and powerade) then I'm not too fussed. I actually get excited both ways.

If the price goes down I get excited because I may buy more at a good price. If the price goes up I get excited because my investment decision was a good one.

Change up the way you think about investing and you will be much happier.

youngone said:

... what are we doing wrong as a beginner in the share market.

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a thread I like:

https://www.aussiestockforums.com/forums/showthread.php?t=22559&p=631747#post631747

A post by Logique is particularly relevant and I quote:
"... start small, remember there's no silver bullet, and mistakes are the price of an education."


I did not agree with all of this article, does that make me "Wrong"?:

www.decisionpoint.com/TAcourse/TradeMistakes.html


Video, if you prefer, but stop the advertisement, scroll down and on the right!

http://fundamentalwithtechnicalanalysis.blogspot.com/2011/04/top-10-trading-mistakes.html

Hi youngone,

You have seen Nioka's thread on investing $1500 and you commented on the trading plan. Did you note that the companies are in Oil Shale. The "fundamental" here is ENERGY and in particular liquid fuel.

My question to you is this. Do you have a trading plan? Do your companies share a fundamental idea? Are you passionate about a NUCLEAR future or are you keen on TRANSPORT?

I like the Chinese commodity boom with emphasis on anything associated with STAINLESS STEEL!
Iron Ore, Manganese and Nickel have my attention!
If the China story fades, India & Brazil will continue the story!

youngone said:

I am doing something wrong?

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Perhaps you are not relating what you are paying to what you are actually purchasing.

There are two parts, Quality and quantity.

Most people focus on quality first (and rightly so), But alot forget to check the quantity. meaning how much of the company are you buying when you buy a share, and is the price you are paying for that sized piece sensible given the likly future earning power.

Tysonboss1 said:

Perhaps you are not relating what you are paying to what you are actually purchasing.

There are two parts, Quality and quantity.

Most people focus on quality first (and rightly so), But alot forget to check the quantity. meaning how much of the company are you buying when you buy a share, and is the price you are paying for that sized piece sensible given the likly future earning power.

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Benjamin Graham wrote an article in a ladies magazine and suggested that you should buy stocks in the same way you buy your grocereries, not in the way you buy perfume.

What he was saying was that when people buy groceries, they look for quality but also compare value and make their purchased based on both, But when it comes to perfume often quality or brand is the only factor considered and purchases are made regardless of price, this may be ok for consumer items, But when it comes to investing it will almost always lead to disasterous results or medocre returns at best.

Tysonboss1 said:

Benjamin Graham wrote an article in a ladies magazine and suggested that you should buy stocks in the same way you buy your grocereries, not in the way you buy perfume.

What he was saying was that when people buy groceries, they look for quality but also compare value and make their purchased based on both, But when it comes to perfume often quality or brand is the only factor considered and purchases are made regardless of price, this may be ok for consumer items, But when it comes to investing it will almost always lead to disasterous results or medocre returns at best.

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Wouldnt work for me

Im an impulse buyer.