What is your buying process? From research to actual purchase

Out Too Soon said:

Sorry to have mis-led you oowl, we should know by now that the only true religion is Fundamentalism, bible= The Intelligent Investor & Messiah Warren Buffet. Now that has been cleared up go make some solid investments in some solid co's & wait 50 years. You'll be superior to everyone else because you'll be safe in the knowledge that you'll be one of the richest men in the world (in 50 years time) & you can spend all your spare time (over the next 50 years) pestering Traders about how they're all totally wrong & you're Investment strategy is sooo brilliant. You'll especially have fun starting pointless arguments on newbie threads because we know the more newbies you convert to your religion the more likely you are to go to Billionaire heaven & sit on Warrens lap. :

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Tysonboss1 said:

there we go

and the kid takes the path the promises returns without the work.

He wants to have businessman profits with out becoming a business man, Good luck kid

See you in 10 years after all else has failed and you relise that,

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What a magnificently uninformed post. Ironic from someone who is advocating research.

:bad:

Out Too Soon said:

Sorry to have mis-led you oowl, we should know by now that the only true religion is Fundamentalism, bible= The Intelligent Investor & Messiah Warren Buffet. Now that has been cleared up go make some solid investments in some solid co's & wait 50 years. You'll be superior to everyone else because you'll be safe in the knowledge that you'll be one of the richest men in the world (in 50 years time) & you can spend all your spare time (over the next 50 years) pestering Traders about how they're all totally wrong & you're Investment strategy is sooo brilliant. You'll especially have fun starting pointless arguments on newbie threads because we know the more newbies you convert to your religion the more likely you are to go to Billionaire heaven & sit on Warrens lap. :

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Spot on Out Too Soon.

Unless you are Buffet or Munger or you are going to buy a company and restructure it with your own management or you are going to buy enough of a company that you are going to get a place on the board then all of the material relating to them is just nice touchy feely bedtime reading.
Here is a Buffet business quote from 1987 "I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty."

The reality of making money consistently in a calculated and controlled manner is a whole different situation for any individual such as you or me.
You need to be able to think for yourself and not be dependant on company reports (based on what happened in the previous 6 or 12 months) and be able to see through all of that for yourself.

A chart of any market, index or stock is the reality at any point in time, it is either going up, down or sideways.
It is a constant barometer of any company and their performance.

I am not saying that a fundamental approach does not work, it is just a very long winded and dependant on others way of doing things.
Look at the TGA thread, Pioupiou has done a great job there based on fundamentals but any average technical trader can be just as successful without ever having to get bogged down in all the reports and figures but more importantly is the technical advantage of recognising at a much earlier stage when it is time to get out and stand aside.

The real advantage of the technical approach is that it tells you when things are not well, way ahead of the company report dependant being told that there is an issue pending.
If I had time I could probably list a dozen stocks where the charts were issuing a warning way before the reality statements hit the great unwashed. Yes, I have been there and been a victim (believer) on more than one occasion over the last 17 years of being in the markets.

TRADE WITH YOUR EYES - NOT WITH YOUR HEART !

I am not going to enter into further discussion on this subject as the arguments just go round in circles, I have been where you are now oowl, I have been dependant on others at my expense and I work harder at making money now that I did years ago but the harder I work the luckier I get.

If you are not willing to work hard initially at learning a technique that works for you then just hand your money over to some financial institution and let them read the reports and quote the figures for you.

An example of this fundamental approach is in the table below that relates to BBG, have a quick look at the chart of BBG !
There has not been less than six fundamental based "HOLD" recommendations on this stock during its continued decline over the last 12 months, great approach to "investing", different story if you want to actually make money.

Trembling Hand said:

What a magnificently uninformed post. Ironic from someone who is advocating research.

:bad:

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To be fair, that post was completely out of character for Tysonboss.

Boggo said:

Spot on Out Too Soon.

Unless you are Buffet or Munger . .

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29.9.2012 article from The Economist: "The secrets of Buffett’s success"

http://www.economist.com/node/21563735?fsrc=scn/tw/te/pe/secretofbuffettssuccess

"These two factors”” . . . ””pretty much explain all of Mr Buffett’s superior returns, the authors find. Of course, that is quite a different thing from saying that such a long-term performance could be easily replicated."

There's nothing wrong with Fundamentals except the blinkered Fundamentalists.:
I just got ticked off when Guppys Trading Tactics was called rubbish ---"Are there any other books besides < Deleted because it's rubbish> that you'd recommend?"---
We're trying to help with a broad view here & I have found Trading Tactics in particular to be a little gem.
There are 100 different approaches to the sharemarket if we find the perfect one we'll probably be too busy spending all the cash to mention it here

Thank you to those who have already contributed. I've learned a lot, so far

So perhaps another direction for this thread to go in, in the hopes of it remaining an education resource for other people like myself... this is the beginner's lounge, after all.


Is there any 'percentage' of a stock increasing in value that is your measure of when to 'sell', or when you would deem it as a 'successful' buy? Or do you judge it on a case by case basis? What percentage of return do you hope for, that makes you choose shares as your investment platform?

C'mon, I know I have been guilty of being sucked into this argument in the past but do we really have to go into this again. No matter what camp you are in why don't you concentrate on your own process and just maybe take some superior returns for yourself.

Just because I enquire how to do something, that doesn't mean I'm going for it. I'm all about getting the most information I can, about everything, and forming my own opinion/direction from there.

I'm also female. Just to clear that up.

Tysonboss1 said:

there we go

and the kid takes the path the promises returns without the work.

He wants to have businessman profits with out becoming a business man, Good luck kid

See you in 10 years after all else has failed and you relise that,

Investing is most intelligent when it is most business like.

Cheers
TB

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oowl said:

Is there any 'percentage' of a stock increasing in value that is your measure of when to 'sell', or when you would deem it as a 'successful' buy? Or do you judge it on a case by case basis? What percentage of return do you hope for, that makes you choose shares as your investment platform?

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Thats a guess along the lines of how long is a piece of string. We all have vastly different methods. No one size fits all or is the "right way". There is no one theory or method that "works" all the time. I'm afraid the best way is just more education.

That way as you gain a broad based knowledge you will be drawn to what method suits you and be able to come back here and rubbish all the other methods because you cannot see how they work or why anyone would waste their time on them.

oowl said:

...
Is there any 'percentage' of a stock increasing in value that is your measure of when to 'sell', or when you would deem it as a 'successful' buy? Or do you judge it on a case by case basis? What percentage of return do you hope for, that makes you choose shares as your investment platform?

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There is so much info already here.
Because there are two diametrically opposed camps
(carnivores and herbivores)
much is lost in contradictory views.

But I'll have a go!
I wrote this 12 years ago.
Ten most important things about owning shares!
Then I placed it where I could revisit it.
You can do this too!

1. Never borrow money to trade.
Did it once.
The broker made money.
The taxman made money.
The banker made money.
2. Buy Low – Sell High
… Sounds simple.
Based on research, you decide a price is low.
If you buy the price goes down.
If you wait the price goes up.
(Murphy’s Law of Buying)
Later, you decide a price is high.
If you sell all the price skyrockets. (That’s why you keep some!)
If you wait the price plummets.
(Murphy’s Law of Selling)
3. Do your homework
Remembering the diversity in companies, the homework need not be boring!
Once, I bought 10 parcels with insufficient homework.
I was hoping that the best one would pay for the worst 8
and the second best one would pay for a holiday.
I did not holiday that year.
4. Diversity is essential
Currently I hold equities (ordinary shares) in Nickel, Magnesium, Gold and Silver.
Later I intend to cover Platinum, Palladium, Diamonds
and Mineral Sands, as they have become fashionable.
Note. They’re all in the Resources sector, so I would still need to be careful.
5. Look from a distance
Remember the goal is to make money.
Step back and look with emotional detachment.
6. Stay solidly liquid
I laughed when I first read this.
It means keep most of your money in secure investments (e.g. cash).
You can’t lose your shirt unless you bet the whole of your shirt.
7. Expect the unexpected
I once held shares in an oil company.
They announced a discovery of the world’s biggest gas field.
The price went down!
Why?
The announcement coincided with bad economic news in America.
8. Never drop your guard
“Bargain hunters” (heavy buying) can drive your holding
beyond your selling price and within hours,
“Profit takers” (heavy selling) can reverse your fortune.
9. Check your holdings
Volatile (explosive) shares need to be checked daily
or sometimes hourly, while blue chip shares do not need such close monitoring.
10. If it’s no fun, don’t do it
Some find it stressful while others find it boring.
I find it engrossing and requiring special talents.
It’s not for everyone. Remember!
There’s always Falconry or Camel Racing.

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Julia said:

Or, oowl, you could save yourself all that tedious reading and crunching of figures and learn something about trend following.

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Completely agree.

oowl said:

How would you suggest I get started?

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To learn the basics, I'd suggest reading "Trade Your Way To Financial Freedom" or "Trading For A Living", then read everything you can by Nick Radge and Michael Covel (his website has HEAPS of stuff).

There are many different approaches to trading/investing (as you can see by opinions in this thread), you just have to find a method that suits you. For me, that's trend following.

Best of luck.

After having examined a broad (though not exhaustive) cross section of existing trading/investment philosophies and analytical techniques, I was able to identify the areas that I believed to be best suited to my objectives. Coupling this knowledge base with my own creativity I have tailored a number of personal trading systems/techniques that enable me to navigate most market conditions within my comfort zone. Having said all that , I must confess that the proliferation of black swans during the past five years still gives rise to headaches.

In my earlier trading days I did experience modest successes trading a simple strategy where I entered and exited trades based upon technical analysis. The stocks included in my target list were chosen on the basis of their perception as being fundamentally sound. I've long since moved on from these early days and only mention them to highlight that fundamental and technical analysis needn't necessarily be treated as mutually exclusive approaches to trading.

Just remember, there's a right way and a wrong way to do everything and the wrong way is to keep trying to make everybody else do it the right way. ~M*A*S*H, Colonel Potter

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One thing that threads on this forum often highlight is the propensity for humans to:

(i) subscribe to a particular belief system (i.e. a religion),
(ii) attempt to indoctrinate others into said religion (investment/trading philosophy)
(iii) dismiss all other religions as false (eg. rubbish their books/sacred doctrine).

Those whom are most passionate about professing their "religion" as being the one true faith (i.e. "though shalt worship no other god but <insert your personal investment guru/deity here>") are usually saying more about themselves and their personal insecurities (i.e. the more people whom embrace their religion the more confident they will feel about having chosen the right faith, but any proferred alternative is a threat to their convictions and must be condemned in order for the acolyte to maintain their personal illusion of security and self worth).

One need only look to the most recent event approximating current market conditions (approximately 8 decades ago) to recognise the current risk level in trading fundamentals. Certain wizards/gurus did enjoy some success during the 7 decades between the end of the great depression and the onset of the GFC. The reason for this seems obvious - these years were amenable to the funda-"mental"-ist approach, however, I personally believe that the associated risks with this style of investing greatly outweigh the potential rewards given the current economic climate.

When considering the merits of any trading/investment style I prefer to have an understanding of how and why it works! The fiscal support that markets have been receiving via regular Government/central bank interventions may enable the funda-"mental"-ists to "get away with" their approach to trading for a time. Whilst these successes might be a comfort to the bank balance, they could hardly be considered to constitute validation for this trading style (eg. would the price of the stock have risen sans stimuls?).

cynic said:

...
One thing that threads on this forum often highlight is the propensity for humans to:

(i) subscribe to a particular belief system (i.e. a religion),
(ii) attempt to indoctrinate others into said religion (investment/trading philosophy)
(iii) dismiss all other religions as false (eg. rubbish their books/sacred doctrine).
...

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Hi cynic,

I loved your post.
So true!

I found mostly it not really about the methods it about consistency.

Find your area of expertise, stick to it and broaden it...every method has its way of making money.

ROE said:

I found mostly it not really about the methods it about consistency.

Find your area of expertise, stick to it and broaden it...every method has its way of making money.

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+1

Interesting post there cynic. Especially those last two paragraphs in light of the other points made





[for some reason I can't reply with quote to that post]

Just remember, there's a right way and a wrong way to do everything and the wrong way is to keep trying to make everybody else do it the right way. ~M*A*S*H, Colonel Potter

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Just love Col. Potter's witticisms!

Something else I consider & give a lot of weight to before buying or selling - Buying & Selling depth, both no. of buyers vs sellers & no. of units on either side

Yes love Cynics post, you asked for individuals processes not proof or arguments. We are all different using different techniques angles beliefs emotions etc.
I'd love to see some more people open up more about their processes, it's all interesting & can be useful.

PS: when to take a profit- hahahahaha, just before the price goes down... lol :
PPS: both charting & buy sell depth can help with when to sell

craft said:

Interesting post there cynic. Especially those last two paragraphs in light of the other points made





[for some reason I can't reply with quote to that post]

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Craft,

Yes! There is a glaring hypocrisy in my previous post!

I simply couldn't resist the urge to give the pendulum a decent swing in the opposite direction after an earlier poster got up my nostrils by condemning the works of a popular author.

I grant that I may have undermined my main point in doing so, but felt that it would be remiss for me not to highlight to newcomers that many of the successes claimed by the fundamental investors of yesteryear probably won't be replicable given the current economic climate. Having said that, I must also concede that many from the technical analysis camp are similarly challenged.

I'll probably make myself unpopular by saying this, but, I believe that technical analysis is, in truth, just another style of fundamental analysis! Like fundamental analysis, technical analysis also seeks to gauge the strength of a trading prospect via examination of data. The datasets employed may be different but the goal is still very much the same (i.e. to invest in more winners and weed out more of the losers.)