Let's Discuss Stocks

[Aucdoctobe]

I love this MBA section of student doctor. However, no one has brought up stocks. Stocks are the crown jewel of business (my opinion). It's the ultimate game. I've been trading since I was 21 years old and don't know what I would do without it.

I'm a technical analyst (use graphical patterns to determine supply and demand).

I'm also trained as a fundamental analyst (use ratios, data, business reports to make decision).

But I would love to hear what people think about this current market??

I think we are in a consolidation right now, and it is a great time to buy! There are some spectacular returns in the future!!!

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[sixteenstones]

What area of the market do you think will provide the spectacular returns.

What process do you use to buy/sell stocks... a broker, online?

 

[AznDoc]

Where could I go to learn more about the stock market and trading? This has been a recent interest of mine but I am not sure where to start. Is it a good thing to start with one of those virtual stock simulations, seeing that I do not have a lot of money? Or is there any recommended reading? Any ideas would be welcome. Thanks.

 

[Aucdoctobe]

What am I high on? Here we go:

1. YHOO -- it's in a consolidation. That means that it is in a period of slow activity where the price is actually declining (slightly). But watch out! YHOO is at a price of 30. It will go up far beyond that over time! I mean very far.

2. QCOM -- stock that just keeps on giving. Telecommunications leader with some punch. It has shown strength when the rest of the market was weak. At a price of 70, it is a bargain. It will go far beyond that price.

3. EBAY -- Strongest dot com of them all. It has major growth. Look for this one to be a fortune 500 company one day. At 85, it's a steal.

4. ORCL -- Major Sleeper. Crazy CEO and drama with PeopleSoft has helped depress its price. However, watch out! The only software company that beats this one is Microsoft. At $10, it is a huuuuuuuuge steal. Funny thing is that it has a little more decline left in it.

5. JDSU -- My number 1 major sleeper!!! It is at 3 something a share. This company will be as large as Cisco one day. There is so much growth left in this one. It's so cheap. If you are willing to wait on it, put down a small amount, you could be rich. I have this stock going into the 100's.

So, those are my top 5 picks. From a technical standpoint, they are all very strong. Don't look for them to go instantly up. They are in a consolidation. However, when they come out, get ready to make some money!

 

[Aucdoctobe]

Wow, Azndoc..

I remember asking myself the same question 6 years ago. The truth of the matter is that the information that you will learn about stocks in academics is useless. It's hard to learn how to be a good stock trader because people won't readily share their information with you.

Stocks are a competition, and people don't readily give away their "secrets." The best stock traders go through great lengths to keep what they know secret. After all, it gives them a competitive advantage.

What you see and hear on the news is the bullcrap that they consider invaluable.

I really like Technical analysis. It is invaluable to trading though not completely necessary. The advantage to technical analysis is that it teaches you how to read supply and demand. I should say that unlike economics it teaches you a way to read supply and demand in a way that makes you money! You can then apply those concepts to so many other markets.

Becoming a good technical analyst is not easy but doable. It requires hard work and practice. However, it is well worth it. You could easily surpass any income by a doctor within a few years.

 

[Aucdoctobe]

Okay, here is where to start:

1. Best Stock Newspaper -- Investors Business Daily.

2. Best stock website: For technical analyst, it's http://www.bigcharts.com. For financial analysis -- use yahoo financial or anything. They all work.

3. Best Book by Far: Technical Analysis of the Stock Market by Edwards and Mcgee. This is the "Bible" of technical analysis. It will deliver money over and over gain.

You can make money in stocks if you trade hard. The last few months I've made more in stocks than I do at my job (which I am leaving tomorrow). I will also make money while in medical school without having to take away from my studies.

 

[ortho-mdmba]

As one of those folks who was shorting stocks during the tech bubble in san francisco and almost went bankrupt until I got with the program and made a killing....

I'd recommend Yahoo Financial for analysis. I'd also recommend going in with real money... this gives you the needed incentive to learn. I highly recommend doing your own analysis if you can. Remember to look at industry characteristics and performance as a whole.

Most analysts believe in efficient markets (or at least to some degree) thus they do not share their secrets or stocks. I also subscribe to this philosophy thus won't be sharing any stocks.....

 

[Aucdoctobe]

What I gave were the bare basics. I don't even tell my wife about my secrets! I guard them with my life. But I do understand what it's like to be a new guy. I just told a lot of precious stuff. Anyone who reads the book will know what I am taking about as they develop into a good trader.

I trained for 2 years under an investment advisor who was very wealthy. I watched him make 5 and 6 million dollar trades out of his own money. Even with his help, I still went broke twice.

First you have learn how to trade.. Then, you have to know how to control yourself. If you do that, you will make plenty of money.

By the way, Ortho, have you traded any commodities or options. I play Options, and I'm transitioning to commodities right now.

 

[Aucdoctobe]

I agree with a lot of what Ortho said, but I got to disagree with the use your own money at the beginning part. It's okay if it is a small amount, but you must learn those concepts. Otherwise, when the market changes direction, you will go broke (unless you?re really lucky).

You can do simulated trading on many websites.

I also recommend using an online discount firm. I use http://www.tradingdirect.com. They don't require a minimum amount to start.

Many people who know nothing about stocks will make a lot of money in this current market. After all, it?s a bull market. Truth comes out when there is a change in the trend.

One last note, the stocks mentioned are hot now. But that routinely changes. In a month, it could be something else.

 

[AznDoc]

Thank you Aucdoctobe and ortho-mdmba. I really wasn't expecting this much advice but I thank you guys for helping me get started. My cousin (who is a Wharton grad) gave me a textbook on investment portfolio management and I will admit that I am at a loss with all of the terms and theory. But, I'll just continue to plod through it and do some more research and reading.

 

[flighterdoc]

I love this MBA section of student doctor. However, no one has brought up stocks. Stocks are the crown jewel of business (my opinion). It's the ultimate game. I've been trading since I was 21 years old and don't know what I would do without it.

I'm a technical analyst (use graphical patterns to determine supply and demand).

I'm also trained as a fundamental analyst (use ratios, data, business reports to make decision).

But I would love to hear what people think about this current market??

I think we are in a consolidation right now, and it is a great time to buy! There are some spectacular returns in the future!!!

No load mutuals, baby!

 

[mddre]

I was wondering if you use a special software for technical analysis? I think the book that you're talking about is actually called "technical analysis of stock trends." I also like the book "technical analysis of financial markets" by John Murphy. It's a great book, but just like the book that you suggested it is pretty expensive, about $70. I made some money last week by trading sandisk (sndk). Very volatile stock (high beta), a good trading stock, not so much as an investment. I think the current market has given us some good buying opportunities, but I think there is a little more room to the down side in this market, I wouldn't mind adding to some of my positions but I think I'm at least gonna try to wait out the earnings season. I'm begining to find some values in the semis (after all the bad news), so we'll see what happens next?

 

[Aucdoctobe]

mddre,

Those are very wise assumptions. I read the book by John Murphy a few years ago.

You know what's the deal with Sandisk? So many traders are talking about it! I have to admit its performance over the last year and a half is awesome. It definitely has a lot of strength. I want to see it go through more consolidation before buying some of it.

The entry points suck right now in the market. It's wise to hold off for short term buying.


I've been researching software programs that will work on my PDA because I will be trading commodities soon. I trade options a little bit, and I love it. The only problem with rapid fluctuation is it can be hard to get out when things don't go your way.

Do you have any recommendations for programs? I've been looking for a good program over a year.

By the way Murphy's book is good too!!!

 

[mddre]

Aucdoctobe,
I have also been looking for a decent software for a long time. I have gone to a couple of workshops for different programs but nothing has really caught my eye yet. I have checked out Wisetrade and OptionsXpress, the programs look a little Mickey Mousey to me. They use green lights and red lights to make trading decisions. I did a little research and figured out that the chart that the lights are based on are nothing more than exponential moving averages. I mean come on, there's a lot that goes into trading than just red ligts and green lights. The people who run these workshops are really smooth and they convince the public that this sofware is the software that's going to turn them into millionaires (I felt sort of sorry for some of the retired guys who fell for this and bought it, with the right marketing you can sell anything in this country). I even asked them several times to explain how the software works and they just replied that it's a bunch of complex algorithms that no one really understands so they won't get into it despite the fact that I assured them that I had a good knowledge of statistics and I would understand it. As I said before those guys are just sales people and their job is to charge you $2000-3000 for the software and another $30-50 per month for the live data feed that you need to run the porgram. Although, I was able to talk down one of their guys to about $500 for the software after I was contacted by them two weeks after. I know I could have talked him down even more but I had no real interest in purchasing the software, I just wanted to see how low he would go (My dad has been my bargaining mentor in my life). I mean I had some serious doubts about the software and also I wanted to get the best for my money.
Anyways, after all these negative comments, there's one software that I have sort of liked and will probably end up doing more research on, it is Metastock. However, I believe that it's only for stocks (no options) and I'm not quite sure if they have a version of their software for PDA's. It's basically a technical analysis software, but it doesn't have dingy green and red lights. It's a more serious software and I believe that it was developed by William J. O'neil founder of Investor Businness Daily. This one is about $700 plus the monthly data feed subscription. I'm really interested to find out what software do some of the institutional investors use? I'm pretty sure it's nothing with red and green ligths like a christmas tree...

P.S. The market is about to open in three and a half hours....let's hope for a good day...!!!

 

[Aucdoctobe]

Hey Mddre,

You are not kidding about that Wisetrade being a scam. They actually convinced my father to buy that junk for $3500. I was ticked off! This is why I have been so careful with software. I took one look at that program and just sighed.

There are a lot of parasites/users who have passed their Series 66 licensing exam and call themselves brokers. I don?t even pay attention to them. That?s what I like about the technical analysis. You really are an independent decision maker. You don?t have to depend on corporate lies to make your investment decisions.

I didn't know that Metastock was developed by William J. O'neil. I'm a big fan of his. He is one of those people who actually made their money investing and then went into teaching. As opposed to many others who teach how to invest without being able to generate 3 good trades in a row. I read his intro book a few years ago.

Oh, by the way, you mentioned Semiconductors and I never got a chance to comment on them. Semiconductors are powerful. You can't go wrong with them. I love their prices right now. But I need to readjust my timing.

I don't know if you have noticed or not but patterns have changed their timing. It's thrown off quite a few indicators.

I may have misread the strength of this latest bull rally. I'm going to have to readjust my support and resistance levels also.

Prediction: Look for an opportunity to buy Yahoo at 22-23.. I'm going to buy Calls equal to 1500 shares if it hits this price.

Take Care!