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Shares & Stocks

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    I'm 18 and currently reading "How to Make money in stocks" by William J O'Neil, and actually thinking of buying shares. Anyway my question is, is it worth it to invest in this sort of thing, will I actually profit of it and has anyone ever done it and been successful?
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    (Original post by ACER676)
    I'm 18 and currently reading "How to Make money in stocks" by William J O'Neil, and actually thinking of buying shares. Anyway my question is, is it worth it to invest in this sort of thing, will I actually profit of it and has anyone ever done it and been successful?
    I'm in the same boat too! It is worth investing in but it requires patience and lots of research as you need to know how to pick the most profitable and stable stocks. Personally I want to buy oil stocks as they are cheap at the moment.
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    Oh man, I will post something that DJKL wrote a while ago
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    BTW Oil stocks are not cheap right now, they were cheap in February-June time. I bought BP shares for 361 p, now they are trading at 434p.
    Oil stocks are pretty much fair value right now, they have scope to rise, but the boat has already left!
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    This post was written by DJKL and all credit goes to him....

    No it is not, sports gambling is a win/lose wager, and with horse racing you do not even get to keep some of the manure.

    The stockmarket (excepting punts in the short term ) is a long play.

    My criteria (except for the odd small punt)

    1. Buy stocks you will be happy to hold for a minimum five years, you may not intend a five year hold but buy those that if the price moves against you will not make you uncomfortable. The stock paying a dividend helps, but high yields are not the be all and end all, a very high yield can be telling you something. Do look at dividend cover and beware companies that every year have vast exceptionals that significantly impact difference between basic EPS and adjusted EPS, if every year they are miles apart do much more digging.

    2. Remember that the norm is you never lose all your money, unlike betting, usually you can exit with some of your stake returned. If you use stop losses you can mitigate the downside but you need a wide margin re volatile stocks to avoid being constantly auto sold.

    3.Moving your stop loss up if the price has increased is a good way to protect some of your gains.

    4. Never fall in love with a share, it is really easy to do, if you do fall in love not penny/aim stocks, they can break your heart. I have a running love affair with Shell but it is a big beast with a long dividend record, I probably always hold some as a core and buy extra if I think it is undervalued (the minus 2% this morning was such an event, it was in profit by close)

    5. Spread risk, very tricky if you have limited stake, you do not want all eggs in one basket. If very restricted re money/transaction costs will be an issue, consider Investment Trusts as slow burners. I do not like unit trusts but that is possibly in the main prejudice (except re property, they are dangerous with illiquid assets, as we are currently seeing) ITs also good way to get exposure into foreign markets etc, I use them for this purpose.

    6.Be careful in current market, it is very difficult to predict with the current macroeconomics/ political events (banks, property, exchange risk, contagion issues etc abound) There are very few 100% certs re economies but you do need to keep an eye on macroeconomic news and formulate what might happen if x happens-in my case, despite some study at university, I still misread market signals, so caveat emptor; remember markets can be irrational for quite a long time. (dotcom boom)

    7. Never believe that because a share was once priced at X it can retest that figure if it has fallen, a past price merely tells you that at some time some people valued it at X, nothing more.

    8. Understanding accounts is imho important, but I would say that, accountancy is how I earn a living. But it is helpful to be able to read published accounts (forget the five line summaries on your brokers site, delve deep)

    9. Always be prepared to cut your losses, see 4 above. Be careful of falling knives, if the market has priced downward it may have good reason, ensure you understand why it has taken the view it has.

    10. Despite fundamentals, P/E, Gordon Models, etc, always remember that the term profit is a vague concept, how/when an entity decides it has made a profit whilst subject to accounting regulation, is not exact. So when you look at the company with reported earnings and profits over 3-5 years dig into its cashflows, these are far more difficult to massage.

    There are a loads of other things to look for, study, read, delve into accounts, look at RNS stories, use bulletin boards but with great care, watch and observe to decide who seems to talk sense and who may have other motives, watching posters from a distance over time can educate your senses before spending any money.

    Also maybe concentrate on particular companies or sectors, get to understand particular markets; analysts cover a niche for good reason, it is hard to cover everything, so you ought to do likewise.

    Re my own credentials, I am old (a parent) have been investing for over 20 years, the last 8 with serious money (one of my pensions now a SIPP)

    You will make mistakes, you will maybe get a ten bagger (I have had one, 3.5p went to 75p, I started selling between about 35p to 45p, so far too early with hindsight, but felt better when it fell back to 3p later-Beowulf-do not touch it, not for widows and orphans)

    Anyway good luck.
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    I have £25K in the market, feel free to ask me anything you want

    I'm no pro, but I can do a pretty damn good job
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    This maybe a stupid question, but obviously atm I don't have much to invest with (£500 maybe?) can I do anything with that?/
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    (Original post by ACER676)
    This maybe a stupid question, but obviously atm I don't have much to invest with (£500 maybe?) can I do anything with that?/
    Yes! You can't buy shares, because the transaction fees will burn you. £12 to buy, £12 to sell, plus £3-£4 stamp duty on the buy.

    What you can do is open a stocks and shares ISA on this website...

    http://www.hl.co.uk/investment-services/isa

    And then put the money into a fund, I personally hold some money in Kotak India Mid Cap Fund (Income), but this may be a bit more high risk for you (as indian markets can be more volatile than western markets). There is a lot of growth in india, it's hard to resist.

    For you it may be best to invest in this fund....

    http://www.hl.co.uk/funds/fund-disco...e-accumulation

    Neil woodford is pretty respected as an investor, it is an accumulation fund, so dividends will be reinvested, which will dramatically help growth!

    Now don't expect amazing returns, for that you need to stock pick. But since you are passive investing and diversifying, you can't expect amazing returns.

    If you want, I can give you some good stock picks. But you need to put in more money £1000-£1500 per share.
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    Woodford's holdings are pretty solid, you can't go wrong with the pharmaceuticals and tobacco stocks in the long run. I try to find stocks which have corrected a lot, so I get more gain. It's called sometimes "catching a falling knife", it can be dangerous if done wrong.
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    (Original post by momoneyme89)
    BTW Oil stocks are not cheap right now, they were cheap in February-June time. I bought BP shares for 361 p, now they are trading at 434p.
    Oil stocks are pretty much fair value right now, they have scope to rise, but the boat has already left!
    True but I wouldn't ever invest in BP I'm interested in National Oilwell Varco and other stocks which are trading at below their intrinsic value.
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    It is worth reading 'The Intelligent Investor' by Graham as it has the fundamentals on how to pick the best stocks and even £500 is a decent amount to begin with but its best to buy in large numbers to reduce the impact of transaction costs
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    (Original post by 08hussainf)
    True but I wouldn't ever invest in BP I'm interested in National Oilwell Varco and other stocks which are trading at below their intrinsic value.
    Hmmm, interesting, let's do some analysis

    http://www.hl.co.uk/shares/shares-se...om-stk-usd0.01

    ^^ that is the security, correct.

    There is no P/E ratio for 2015, so I'm guessing the company operated at a loss that year. That worries me. I like the market cap, it's not a mid cap firm, so it has some resilience there.

    Dividend yield worries me, it's too low. We end up speculating rather than investing. I want to be 99% certain to break even in 5 years, when we are speculating it becomes a much more dangerous game.

    Share price has crashed a lot, it is indeed in "buy" territory. We are catching a falling knife here, we just don't know how far the knife will fall. I don't see the stock trending up yet, though it could near the end of 2016.

    Personally I would stay away from it, operated at a loss in 2015, low dividend, low dividend cover. Yes it is a good time to buy it, if you had to, but very risky speculative grade stock.
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    (Original post by momoneyme89)
    "catching a falling knife", it can be dangerous if done wrong.
    This must be your favourite thing to say
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    (Original post by BaronK)
    This must be your favourite thing to say
    That's literally how they say it in investing, you are catching a falling knife when you are trying to find the bottom for a security that has fallen a lot.

    It's best to wait for the bottom and catch the security on the uptrend.
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    http://www.hl.co.uk/shares/shares-se...c-ordinary-10p

    ^^ this is an example of a security you should be buying (though this is probably the riskiest security I own).
    I bought it at 316p, but there is still some room for uptrend.
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    http://www.hl.co.uk/shares/shares-se...ry-plc-ord-50p

    ^^ this is an another example of a security you should be buying.
    I bought it at 1010p, but there is still some room for uptrend.
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    (Original post by ACER676)
    I'm 18 and currently reading "How to Make money in stocks" by William J O'Neil, and actually thinking of buying shares. Anyway my question is, is it worth it to invest in this sort of thing, will I actually profit of it and has anyone ever done it and been successful?
    I'd say yes but I am far from an expert it's a long process to profit on dividends alone
    i have £9,000 in the market
    and just ask warren Buffett if it can be successful
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    (Original post by ACER676)
    I'm 18 and currently reading "How to Make money in stocks" by William J O'Neil, and actually thinking of buying shares. Anyway my question is, is it worth it to invest in this sort of thing, will I actually profit of it and has anyone ever done it and been successful?
    What are your life goals? You should be investing, saving and managing your finances entirely around what you want to do in life - so start there and work forwards.
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    Which is the best online brokerage to sign up with?
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    (Original post by Isobelcalisse)
    Which is the best online brokerage to sign up with?
    http://monevator.com/compare-uk-chea...nline-brokers/
 
 
 
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