What's holding me back?
- Thread starter NeoGenesis
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Hi Neo Genesis,
Good conversation to start. From my experience there is much extremely worthwhile analysis done in this forum (thank you again Joe for hosting ASF). I believe we can all do very well recognising new investments that are simply not taken seriously by larger funds until they are already so established the best value may have gone.
I have noticed that one of our forum members seem like a contempory of yours. Very young and trying to build some funds. He is running his own blog site on his investments and for what it's worth I think he does some good work. His name is Parlevous and you can find some of his ideas in the HOG forum (amongst others)
Cheers
Good conversation to start. From my experience there is much extremely worthwhile analysis done in this forum (thank you again Joe for hosting ASF). I believe we can all do very well recognising new investments that are simply not taken seriously by larger funds until they are already so established the best value may have gone.
I have noticed that one of our forum members seem like a contempory of yours. Very young and trying to build some funds. He is running his own blog site on his investments and for what it's worth I think he does some good work. His name is Parlevous and you can find some of his ideas in the HOG forum (amongst others)
Cheers
Wysiwyg
Everyone wants money
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Oh I made up for it.
By the time I was 30 I owned 5 houses and had a share portfolio valuation over 2 million dollars. Anyone who thinks it can't be done are kiddin' themselves. There are plenty of people out there doing it.Well if you buy a share pack you are just relying on comsecs choice of shares. You won't actually gain experience in share investing this way. You may as well simply put the money in a index fund (like via anz investment account).
Regarding BHP and the single company, my point was that BHP is huge. It has market capitalization bigger than a large number of smaller companies put together. In the situation in which it's share price dropped to zero, we are probably in a nuclear war or asteroid collision or something of that nature. My point is, loosing more than 50% of your money on a company like BHP would be very low odds, perhaps similar odds to loosing your money in a bank. Just my opinion though, DYOR of course.
Oh I made up for it.
wow, reading that is motivating. if i can own 5 houses & a portfolio of 2m by 30 that would be a dream.
how long have you been investing and when did you start?
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Compounding interest and Exponetial growth does wonders. If you start early enough and deploy decent amounts of capital efficently the results seem to be defy logic.
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RE OP: Well firstly you've got to decide if fundamental or technical investing appeals to you more, then learn more about whichever system you chose.
I don't know all that much about technical investing but I'm big on fundamentals, so if this route appeals to you, firstly read "The Intelligent Investor" by Benjamin Graham, and "Security Analysis" by Benjamin Graham (a bit longer and more boring but worth it). Then you should find a financial newsletter called "The Intelligent Investor" which is run by a bunch of people who invest fundamentally, sign up for the two week free trial and read as much of the past reports and discussion as you can in the two weeks to get even more of a feel for the markets and fundamentals. Then finally go to Roger Montgomery's blog and read through it all, absorb the things he tends to focus on, such as return on equity etc.
By the time you've done all this you should be confident enough to have a go with that 20 grand, I'd suggest 3 or 4 positions in the big blue chips (just to get an idea of shares, and if this is going to work for you, perfectionists always get emotionally destroyed by the market). Imo the idea is to keep learning, there is no one book or article or essay that will "make" you an investor, it's a long process and you should never stop reading or learning.
One thing I've begun to learn just recently is the idea that it's not what you buy that gives you the returns, it's what you don't buy. Imagine if you could buy the index, but only the shares that will end up higher in a years time, the out performance would be incredible just based off of not holding losers. Anyway I've digressed and you've still got a long way to go (just like me) before becoming anywhere near an old hand at investing.
PVF.
I don't know all that much about technical investing but I'm big on fundamentals, so if this route appeals to you, firstly read "The Intelligent Investor" by Benjamin Graham, and "Security Analysis" by Benjamin Graham (a bit longer and more boring but worth it). Then you should find a financial newsletter called "The Intelligent Investor" which is run by a bunch of people who invest fundamentally, sign up for the two week free trial and read as much of the past reports and discussion as you can in the two weeks to get even more of a feel for the markets and fundamentals. Then finally go to Roger Montgomery's blog and read through it all, absorb the things he tends to focus on, such as return on equity etc.
By the time you've done all this you should be confident enough to have a go with that 20 grand, I'd suggest 3 or 4 positions in the big blue chips (just to get an idea of shares, and if this is going to work for you, perfectionists always get emotionally destroyed by the market). Imo the idea is to keep learning, there is no one book or article or essay that will "make" you an investor, it's a long process and you should never stop reading or learning.
One thing I've begun to learn just recently is the idea that it's not what you buy that gives you the returns, it's what you don't buy. Imagine if you could buy the index, but only the shares that will end up higher in a years time, the out performance would be incredible just based off of not holding losers. Anyway I've digressed and you've still got a long way to go (just like me) before becoming anywhere near an old hand at investing.
PVF.
Julia
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Agree absolutely.
I actually subscribed to this many years ago, in my ignorance, and - at least at that stage - they got about 80% wrong. Could never recommend them. Perhaps they have improved a bit since then.
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I'd have to agree on the wrong bit Julia, but I never said invest in their picks blindly (I did this a few times, always burnt), just read it to see what parts of the company you should be looking at also, they have pretty solid results with the big blue chips, just when you get down to the medium caps they get rolled quite often imo. So read it for the two weeks as a more finding out how to research the fundamentals, as opposed to using their picks.
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Thank you everyone for your comments and advice.
Many people are recommending Benjamin Graham, I will pick up that book and read it
I'm not much of a reader though
I registered for the ASX share market game. I will treat the $50k like my own money and try to manage risk. The game starts on the 17th Feb (next week). Let's see how I go.
The game allows you to trade with 100 Australian companies, I downloaded the list and will go do some research. I haven't even heard of some of the companies!
Has anyone else here participated in the game? How did you go? Was it beneficial?
Many people are recommending Benjamin Graham, I will pick up that book and read it
I'm not much of a reader though
I registered for the ASX share market game. I will treat the $50k like my own money and try to manage risk. The game starts on the 17th Feb (next week). Let's see how I go.
The game allows you to trade with 100 Australian companies, I downloaded the list and will go do some research. I haven't even heard of some of the companies!
Has anyone else here participated in the game? How did you go? Was it beneficial?
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I'm taking the plunge. It looks like a good time to get into the market. I'm going to buy AVK and ADO shares tomorrow. $10k each. I'm prepared to lose 50% of my initial capital. I'm not investing all my savings, the majority will still be safe in a high interest savings account.
I have been playing the ASX game and got the hang of it... lost a lot of fake money in the process, but now I know what not to do
I've also been an avid reader of http://parlevoufrancoistrades.blogspot.com and I admire his insight. As he stated in one of his posts: I'm still young; if I lose it all, I can work for another 40 odd years. I like that thinking.
I have been playing the ASX game and got the hang of it... lost a lot of fake money in the process, but now I know what not to do
I've also been an avid reader of http://parlevoufrancoistrades.blogspot.com and I admire his insight. As he stated in one of his posts: I'm still young; if I lose it all, I can work for another 40 odd years. I like that thinking.
Tanaka
Always Learning
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I have been playing the ASX game and got the hang of it... lost a lot of fake money in the process, but now I know what not to do
Firstly, congratulations! The journey begins, which is exciting.
But the question I have is did you make money in the ASX game at all? Live trading is lot more difficult than simulated trading. It would be preferable to make money in a game before going live. Having said that, if it is money you can burn why not learn with real money. <- this is not financial advice, just a generalised remark.
skc
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That thinking is wrong.
You should be thinking..."I am still young, if I only make 5% a year and compound for 40 years".
If you have heaps of time, you should risk less.
If you have not much time, then you probably should look for higher return.
Julia
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I'm 100% with skc. You are prepared to lose 50% of your capital?I'm taking the plunge. It looks like a good time to get into the market. I'm going to buy AVK and ADO shares tomorrow. $10k each. I'm prepared to lose 50% of my initial capital. I'm not investing all my savings, the majority will still be safe in a high interest savings account.
I have been playing the ASX game and got the hang of it... lost a lot of fake money in the process, but now I know what not to do
I've also been an avid reader of http://parlevoufrancoistrades.blogspot.com and I admire his insight. As he stated in one of his posts: I'm still young; if I lose it all, I can work for another 40 odd years. I like that thinking.
Why, for god's sake?
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Well lately I lost a lot of money because of the events in Japan. I'm down about 10% It will bounce back eventually when the media stops reporting on the devastation and goes back to the usual garbage about charlie sheen and lindsay lohan.
I will be old and wrinkly then. No point buying a Ferrari when you're 60 years old! I realise I'm taking a risk, but its an educated risk. I won't be losing all my savings if things go south. I don't want to lock away my money in shares for 40 years so I can retire rich. About having "heaps of time" you never know in life... I'd rather enjoy myself now rather than waiting for riches tomorrow.
I don't want to lose money. If the company doesn't look profitable at any stage I will pull out. I can't predict the market and the human/environment factors. In small cap markets the price can fluctuate rapidly (look at NMS), so I am prepared for the worst. I won't go throwing myself off a bridge if I loose it all.
Apologies for the rant.
The points you guys bring up are excellent and make me think about what I'm doing. Your points of view are most appreciated and that is why I'm in this forum
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Hi Neo,
You might benefit from reading the newbies thread in the beginners section. A couple of pieces of advice I wish had been given to me when I was your age....
1) Your first property investment should not be your Principle Place of Residence. Doing so chains you to a large asset with inefficient taxation advantages. It is "bad debt" because it is not tax deductible. If you are looking at buying and living in the house, you might want to look at ways of purchasing the house through a corporate structure and renting from yourself. <- not advice DYOR about the pro's and con's of such an action.
2) You don't know what you don't know. Investing in any asset class, what you don't know can HURT you. Go look at the Brisconnections thread for how devastating a lack of knowledge about the market can be. You owe it to yourself to become educated before you risk real dollars.
Well lately I lost a lot of money because of the events in Japan. I'm down about 10% It will bounce back eventually when the media stops reporting on the devastation and goes back to the usual garbage about charlie sheen and lindsay lohan.
3) You've just fallen into a trap. The trap is that you are displaying emotion towards an object that your personal emotion does not effect. There is an old saying in the market.... the market can stay irrational longer than you can stay solvent. You are also about to experience Opportunity cost. Whilst you wait for this stock to eventually recover, other stocks, other asset classes, other commodities which have different drivers behind capital appreciation will perform better. IE That 6% saving account is looking pretty good right now I imagine. You should be maintaining a stop loss trigger mechanism with your trading. A stop loss is specifically designed to PROTECT your gains and LIMIT your losses. It is impartial and unemotional. This is part of what Tech/A was talking about with your trade management - how do you sustain profits and limit losses.
Good Luck
Sir O
You might benefit from reading the newbies thread in the beginners section. A couple of pieces of advice I wish had been given to me when I was your age....
1) Your first property investment should not be your Principle Place of Residence. Doing so chains you to a large asset with inefficient taxation advantages. It is "bad debt" because it is not tax deductible. If you are looking at buying and living in the house, you might want to look at ways of purchasing the house through a corporate structure and renting from yourself. <- not advice DYOR about the pro's and con's of such an action.
2) You don't know what you don't know. Investing in any asset class, what you don't know can HURT you. Go look at the Brisconnections thread for how devastating a lack of knowledge about the market can be. You owe it to yourself to become educated before you risk real dollars.
Well lately I lost a lot of money because of the events in Japan. I'm down about 10% It will bounce back eventually when the media stops reporting on the devastation and goes back to the usual garbage about charlie sheen and lindsay lohan.
3) You've just fallen into a trap. The trap is that you are displaying emotion towards an object that your personal emotion does not effect. There is an old saying in the market.... the market can stay irrational longer than you can stay solvent. You are also about to experience Opportunity cost. Whilst you wait for this stock to eventually recover, other stocks, other asset classes, other commodities which have different drivers behind capital appreciation will perform better. IE That 6% saving account is looking pretty good right now I imagine. You should be maintaining a stop loss trigger mechanism with your trading. A stop loss is specifically designed to PROTECT your gains and LIMIT your losses. It is impartial and unemotional. This is part of what Tech/A was talking about with your trade management - how do you sustain profits and limit losses.
Good Luck
Sir O
