Help Mao Become an Intelligent Investor

[Drake Tungsten]

It makes work more interesting.

That's what porn is for.

[MRT144]

It makes work more interesting.

That's what porn is for.

I could do that but I have enough porn at home and it's bad when the gatekeeper of content is viewing forbidden content.

(p.s. I look at 4chan at work)

[Seeker]

What investments you consider 'low-risk' in this current age very much depend on how you relate to and define a few key concepts:

-Value (re: exchanges)

-Money, and the theory of money

-Economic cycles, where they come from

-The role of governments in the economy

How you answer and define those questions should then lead you to a simple investment strategy. For example, if you hold with mainsteam ideology (ie, KrazyHorse-ism), you should buy index funds in countries with records of strong growth and moderate inflation.

However, there are alternative viewpoints which have been validated by the events of the last few years...

Example:
If you had acknowledged that retail investors 'can't beat the market' and bought the broad US stock market in the 1950s you'd have bought and held yourself into financial oblivion. So 'buy and hold' "conservative" portfolios are NOT always the low-risk option.

However, if you gone on the basis of pre-20th century investment guidelines, and invested at least 10% of your income in gold, you'd be set by now.

It's not about 'trading'. You can't beat professional traders. But it's also not about sitting like a lump and buying and holding any asset class, including equities. What you have to do is research and identify a long-term bull market and stay in it until it is showing an obvious 'parabola' on its monthly chart.

You also have to consider what do you 'cash-out' into when the time comes to sell. The old answer would've been dollars or bonds. The new answer is foreign currency (aussie, canadian). Precious metals are currently behaving as speculative assets rather than currencies, so I would avoid having too much in them.

My current:
10 Oz. Palladium (2008)
5 kg silver (currently losing money but I suspect that will turn around with new commodities rules) (2010)
2 kg gold (most bought while gold was under $1000) (2007)

$2000 shares in Rio Tinto (initial investment) mining company (2008)
$1000 shares in BHP Billiton (initial investment) mining company (2007)

3 000 000 Korean Won cash, but if I had more money I would hold most of my cash in Aussie dollars or RMB.

So a pyramid structure of metals/cash/equities is best IMO.

FORGET about trading day to day or even month to month. I only make trades on a yearly or longer basis, unless my long-term stops get taken out ($900 for gold as an example).

[MRT144]

Buy and hold is market timing. Which is the hilarious thing about it as a strategy.

[Mao]

Buy and hold is market timing. Which is the hilarious thing about it as a strategy.

I tend to disagree, which may be because our definitions of "market timing" differ. The times I plan to sell largely revolve around the times when the reasons I bought a stock in the first place are no longer valid. This largely has to do with the fundamental characteristics of a stock. To me, market timing usually revolved around trying to predict when stock/market would take a downturn and to sell beforehand. I don't really care when the stock will take a downturn, I care if a company has fundamentally changed from the time I bought it, no longer making it the same investment (ie: took on a crapload of debt, bought a lot of companies it knows nothing about, etc.).

Seeker, I think I can beat most professional traders. Most people can. It's called an index fund.

[MRT144]

I tend to disagree, which may be because our definitions of "market timing" differ. The times I plan to sell largely revolve around the times when the reasons I bought a stock in the first place are no longer valid. This largely has to do with the fundamental characteristics of a stock. To me, market timing usually revolved around trying to predict when stock/market would take a downturn and to sell beforehand. I don't really care when the stock will take a downturn, I care if a company has fundamentally changed from the time I bought it, no longer making it the same investment (ie: took on a crapload of debt, bought a lot of companies it knows nothing about, etc.).

Seeker, I think I can beat most professional traders. Most people can. It's called an index fund.

It is a semantic issue.

[Japher]

Invest in what you know. By that, I mean understand what effects the stock price and how it effects it. Tracking a stock or industry is a good way to figure this out. Trending doesn't work for more than day trading. By tracking that means read the news, follow the option market, and check out message board chatter on the individual stock and then see how the price fluctuates in regards to this. What you should learn is how to avoid panic selling or buying because people decide to hedge their bets with options, how to understand earnings (or lack there of) and how it influences the investors, what insiders are doing and what that means, what boosts a stock or industry other than earnings, and when are good buying times (what a dip is).

[Mao]

Invest in what you know. By that, I mean understand what effects the stock price and how it effects it. Tracking a stock or industry is a good way to figure this out. Trending doesn't work for more than day trading. By tracking that means read the news, follow the option market, and check out message board chatter on the individual stock and then see how the price fluctuates in regards to this. What you should learn is how to avoid panic selling or buying because people decide to hedge their bets with options, how to understand earnings (or lack there of) and how it influences the investors, what insiders are doing and what that means, what boosts a stock or industry other than earnings, and when are good buying times (what a dip is).

That's basically what I want to do. Unfortunately, law and international relations aren't really an industry where there are many public companies to invest in. And if there are companies you learn from in the former, it's called insider trading. Bah. I need to actually learn something useful I guess.

Have you done this, Japher?