Advice on buying stocks

[Weirdo]

Can someone recommend to me a book on investing for beginners.

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[Megalofyia]

Montly fool. http://www.fool.com/

 

[Shredder]

Learn to Earn, and the Wall Street Journal Guide to Investing I think it's called. Rich Dad Poor Dad is also good.

 

[masterMood]

rich dad poor dad is the stupidest book i ever purchased. I swear 95 percent of the posts on amazon.com reviews are fraud "this book changed my life blah blah blah"

it was mostly fluff imo. this is not only rich dad poor dad, but most of the business books out there on the market, because there are 1) too many reviews 2) most of the reviews are fraud [written by people who wrote the book or people usually college students being paid to click "5 stars"] 3) too many of them.

 

[Shredder]

rich dad poor dad is the stupidest book i ever purchased. I swear 95 percent of the posts on amazon.com reviews are fraud "this book changed my life blah blah blah"

it was mostly fluff imo. this is not only rich dad poor dad, but most of the business books out there on the market, because there are 1) too many reviews 2) most of the reviews are fraud [written by people who wrote the book or people usually college students being paid to click "5 stars"] 3) too many of them.

oh, what a similar thread to the other one i just posted in. i see what you mean about rich dad poor dad. however i think the greatest insight in that book is the distinction between the rat race and the fast track. building passive income vs living a paycheck to paycheck lifestyle. i think bearing in mind that alone could in fact change lives.

for building up investing fundamentals and learning about stocks and bonds, its not too good. its mostly about real estate and targeted at an older audience than the college crowd. i did like that wall street guide, it was pretty simple though. do be sure to flip through books or the table of contents before purchasing them, because there certainly are lots of books on this topic out there. but i think amazons rating system is good--its just biased toward a certain target audience, and if one doesnt fall into that market then the reviews may not apply very well.

 

[logos]

Jim Cramers "Real Money: Sane Investing in an Insane World" is probably a good choice. I havent had time to read it yet, but I like his articles (www.thestreet.com) and his TV show "Mad Money" on CNBC.

If you watch the show just remember that Cramer's recomendation can cause a stock to temporarily pop up to an artificially inflated price.

 

[Shredder]

wait for it to pop up, then sell it short?

 

[logos]

You could, but it wouldnt be easy. You can't be sure that it will go down again. In fact, from what i've seen it usually pops right away then drops a little, but to a level still higher than before he mentioned it. If he manages to point out a genuinely undervalued stock, it may stay up. If he recomends a stock that has a huge market cap and volume, it may not pop at all. When he really pushes a small tech company on some crazy idea, it tends to really pop. It also seems that the prevailing market conditions that day have some affect. It seems to pop more when there are a bunch of people just itching to get their money in the market.

What I did do once was buy a company in the afterhours market as soon as he mentioned it on TV then sold it the next day for about a 9% gain. (But, I payed about a 2.5% premium on what it had closed at that day...if it had opened at its previous close, I would have lost some.)

Shorting is risky business. You have to have a margin account and pay interest on the borrowed shares. The most fundamental difference to me though, is that when you buy a stock the potential downside is the cost of the stock; when you short a stock, the potential downside is unlimited. More risk, for no more portential reward than being long. It wouldnt be for a beginner like me, but some people do very well with it.

 

[etf]

Jim Cramers "Real Money: Sane Investing in an Insane World" is probably a good choice. I havent had time to read it yet, but I like his articles (www.thestreet.com) and his TV show "Mad Money" on CNBC.

If you watch the show just remember that Cramer's recomendation can cause a stock to temporarily pop up to an artificially inflated price.

yeah, you can actually see the shares of the companies he mentions being bid up in the after-hours the moment the ticker symbol leaves his lips - sometimes, he actually comments on the effect. Anyway, when I got bearish on something, I usually just buy puts - so the potential downside is limited (my initial investment), but the upside can be huge, especially in volitile issues...

 

[etf]

rich dad poor dad is the stupidest book i ever purchased. I swear 95 percent of the posts on amazon.com reviews are fraud "this book changed my life blah blah blah"

it was mostly fluff imo. this is not only rich dad poor dad, but most of the business books out there on the market, because there are 1) too many reviews 2) most of the reviews are fraud [written by people who wrote the book or people usually college students being paid to click "5 stars"] 3) too many of them.

kiyosaki is a ***** - there's this website that i ran into a while back that explains why: http://www.johntreed.com/Kiyosaki.html

 

[Shredder]

interesting link, but kiyosaki still presents himself as a more likeable and easily listened to guy. whatever hes doing, hes doing a decent job of it bc ppl are buying

plus kiyosaki and trump dont think education is meaningless, but even donald himself doesnt have an mba. education is meant to produce workers for the work force, not so much shrewd investors and innovators. education is designed to encourage conformity, not innovation and marching to ones own beat. there are proportionally few very wealthy ppl with doctorate degrees. stats do show that wealth rises with education but those stats pertain to the majority of the bell curve, not the outliers that kiyosakis audience is striving to become. never will one of these books advocate quitting high school or even college. but they also wont advocate heading for an advanced degree as a prerequisite to a fortune.

 

[aamartin81]

To the original poster: Some books which present sound strategies and advice include Beating the Street and One Up on Wall Street by Peter Lynch and The Essays of Warren Buffett by Warren Buffett (Maybe you've heard of him...)

The Rich Dad series, while informative, aims more at creating an active real estate investor, though it does not go into great detail discussing the details of such transactions. If you are interested in the capital markets, the books above may provide information you find more relevant.

 

[SlippingSloth]

For people just learning the market, One up on Wall Street and The Intelligent Investor (Ben Graham's Classic) I think are decent.

 

[Shredder]

graham, buffetts teacher right? must be good lessons in there. boring though im sure, and no internet back then. maybe no internet is a good thing...

 

[BiOGoly]

Ditto on Kiyosaki, trite advice and he seemed to be a rather arrogant guy. I'm sure the whole "Rich Dad" thing was contrived, the guy's from MLM for christsake.

A good general book for managing your finances and investing is "Start Late Finish Rich" by David Bach. It's not revolutionary thinking by any means. It's the same old spend less save more (Bach's double latte factor), "Pay yourself first" and the "Miracle of Compound Interest" repackaged with some good insight on retirement accounts and the importance of home ownership. But what do you expect? The simple rules for guaranteed wealth accumulation will never change: Live frugally, invest as much as you can as early as you can, and let the leverage of compound growth work it's magic.

 

[bugmenot]

bogelheads guide to investing

William Bernstein (he is a neurologist and finance guy):
The Intelligent Asset Allocator The Four Pillars of Investing