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How to invest money wisely

 
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from my experience...lot of people enter and exit...But it goes back to darwins principle of Survival of Fittest... ..Money is never a criteria for success here....

I have survived so far..but I dont know how far I will survive in future...In any case there is a job to bank on...

The only problem I face is I am finding it difficult to strike a balance between my work and my trading....Some times I have to stay late at night to finish the work which got disrupted due to trading...Any advice from people on how to balance both would be of great help...I dont want my professional reputation or career to get affected because of my trading activities...Some times I face a dilemma should I stop trading and concentrate on work alone...but it is hard to leave that.The money makes it more tempting.....Any suggestions in this regard would be of great help....I just finished my college a year back and would like to have a good growth path career wise too...



You are right Rambo Prasad. Its very tempting. I am relatively free this month and am able to concentrate more on Stock Markets. Next month i'll be finishing my college and join an MNC. So trading might take a backseat

However, my picks for the Month of April are:

1.)Shakthi Sugars, currently 220, will go to 250-270 by April end, considering they have a very good management,good profits and also the global shortage of sugar!!

2.)RCoVl, currently 316, expected to go to 350 by mid-April when the company announces profits!!

Long term stocks are:
1.)NTPC
2.)Hidalco
3.)Hindustan Zinc

This is just the tip of the iceberg!!!
 
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If you are a trader, and you dont trade your own money, that is, you dont invest in at least part of your trade activity, then you have a conflict of interest, with regards to giving advice on risks. You wont get whipped, the investor will. Try trade your own money, then tell us to take a bigger risk.
 
shan Iyer
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If you are a trader, and you dont trade your own money, that is, you dont invest in at least part of your trade activity, then you have a conflict of interest, with regards to giving advice on risks. You wont get whipped, the investor will. Try trade your own money, then tell us to take a bigger risk.



I trade my very own money . Why will I follow the stock markets so closely without trading my own money, since I am in a software profession and not any finance related profession?

[ April 05, 2006: Message edited by: Shankar Iyer ]
[ April 06, 2006: Message edited by: Shankar Iyer ]
 
shan Iyer
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There is going to be a Bull Run in Zee Telefilms for the next 2 days because:

1.) They have obtained rights to broadcast ODIs in neutral venues
2.) They have acquired 60% of Venus Recording studios
[ April 06, 2006: Message edited by: Shankar Iyer ]
 
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IS there any free tools something similar to Microsoft Money?
 
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Share market Gurus,
How is the market doing now? please continue your intersting dicsussions...
 
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try to schedule an appontment with Warren Bufett.
he will guide you better
 
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It's all about risk. Most people hear about all these stories, hear about people becoming wealthy off the stock market, listen to all these radio shows and tv shows and read tons of books.. The problem is many of these shows are all about making the people on those shows wealthier. Many of these books rarely tell you anything but general information.

So people read a book, listen to any of the television or radio show hosts on stocks and business and then think they are "experts".

While you might make money, it is always a risk. It becomes a larger risk when most people who work in another industry think they are experts after reading a few books and watching a few shows.

For somebody to make decent money in stocks, it becomes like another full time job. If you have another 8 hours a day to donate to learning, studying, and keeping up to date about business, finance, wall street, the world markets, and so on on top of the 8 hours + a day you already do in your normal job, then you will have a very good chance at making money by investing in wallstreet or real estate or whatever.

But if you just think you can read a book, look at the wall street journal in the morning, tune into Kramer, and then expect riches, I just hope you don't waste too much of your money.
[ April 19, 2007: Message edited by: william gates ]
 
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Here's a great book on history of investing and speculation called Devil Take the Hindmost: A History of Financial Speculation by Edward Chancellor. It'll put a little of "the fear of god" in anyone looking to invest. I am in the stock market, but am concerned that what mainly determines the value of any given stock is its perceived value, nothing more nothing less This is not the most stable structure if you ask me; any major turn of events could cause the whole house of cards to fall as has been seen time and again in history. This is quite sobering for me.
[ April 19, 2007: Message edited by: pete stein ]
 
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IMHO, the stock market is really no different than a Casino. The bets/investments that have the biggest potential return are also the ones that are least likely to pay off.

In other words, you can invest in something that might make you a LOT of money, but chances are very high that you will lose ALL your investment.

On the other hand, there are safer investments, where you are less likely to lose everything, but won't really make you a lot of money fast.

it's all risk vs. reward. high reward = high risk.

My investment strategy is to invest in mutual funds pegged to the S&P. I put in $X dollars every month - I have it automatically done, so I don't even think about it. I plan on leaving the money there for 20+ YEARS.
 
Jesus Angeles
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Cheap Options = low possibility to be realized
Expensive Options = expensive risk

Since there is no holy grail, then the most stable investment strategy will be based on those with history, good history, like some mutual funds.

But then again 10 years of 10% gain, wouldnt mean this year it cant go negative 10%.
 
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Rambo,

I happened to read your thread about investment.

Will it be possible to explain in more detail about Buy and Put option or any link where I can go, read and understand the terminology.
 
shan Iyer
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Hi Jignesh ,
There are two ways of playing the stock market : Long term and short term . Normally , people with less time to follow the markets very closely are advised to invest for the long term (> 2 yrs).

Will it be possible to explain in more detail about Buy and Put option



Buy option and Put option are part of the futures/derivative section of the market , where the future prices of stocks are speculated . THIS IS PURE SPECULATION AND VERY ILLOGICAL. People with a long term view normally dont play this. Buy(or call)option means you are predicting the price will rise in the very immediate future and Put option means
you are predicting the price will fall .

any link where I can go, read and understand the terminology.



Understanding these terminologies is not a big deal . But knowing whether to take Put option or call option on a specific stock is a big deal
 
fred rosenberger
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To elaborate on this a little more...

One way to play the market is to try and guess whether a specific stock will go up or down. Here's how it works...

Person A think the stock will go down. Say it is currently selling for $100/share. He will say "I agree to sell you 1000 shares of the stock for $95/share in 3 months." He believes the stock will actually go down in value, to $80/share by then. He can buy the stock an ANY TIME between now and 3 months from now. So if it goes down to $80, he makes a $15/share profit. However, if the stock goes up, to $120, he is still obligated to sell it at the agreed upon $95/share price. Hopefully he bought it before it got too high.

Person B thinks the opposite. He thinks the stock will only go up, so if in 3 months he can get it for $95, he gets a great deal. So he agrees to buy the stock in 3 months for $95 share. What was good for person A is bad for person B, and vice versa.

This kind of investing, or rather speculating, is VERY risky. It is not for amatures, or really for moderatly experienced people. You REALLY need to know what you are doing to consider doing this.
 
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Person A think the stock will go down. Say it is currently selling for $100/share. He will say "I agree to sell you 1000 shares of the stock for $95/share in 3 months." He believes the stock will actually go down in value, to $80/share by then. He can buy the stock an ANY TIME between now and 3 months from now. So if it goes down to $80, he makes a $15/share profit. However, if the stock goes up, to $120, he is still obligated to sell it at the agreed upon $95/share price. Hopefully he bought it before it got too high.



Actually, I don't think that this is exactly correct (but it has been a while). If I purchase a put option, it means that I agree to sell at certain price and at a certain date. If the stock goes down, I make a profit. However, if the stock goes up, I don't execute the contract, and not make a profit.

Unfortunately, it will cost me 2% of the price of the shares to get the contract -- meaning for a 1000 shares at $100 per share, it will cost me $2000 up front. (Assuming that the contract price is the current price)

I don't think buy and put contracts are matched with each other. And of course, you can also buy and sell (trade) these option contracts before they are due. This can get complicated, as you have to take into account the difference between the current price and the option price, the amount of time on the contract, etc.

Henry
[ April 20, 2007: Message edited by: Henry Wong ]
 
fred rosenberger
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i may be confused... am i thinking of selling short and long? or have i totally made this up in my head (a distinct possibility).

in any case, it always seems like a bad idea to me.
 
fred rosenberger
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I should have asked the wiki.
 
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Will it be possible to explain in more detail about Buy and Put option or any link where I can go, read and understand the terminology.



CBOE

I'm new to thw crazy world of derivatives - and its good to learn that there
is another industry with a vast amount of TLW's [three letter words].
 
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selling ones shorts can never be a good idea.
 
Peter Rooke
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selling ones shorts can never be a good idea - unless you have a long position!

On-Line Options Pricing & Probability Calculators. Black-Scholes and the "Greeks" trying to understand this stuff myself
 
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A wise advice: Don't spend more than you earn.
 
Peter Rooke
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Person A think the stock will go down. Say it is currently selling for $100/share. He will say "I agree to sell you 1000 shares of the stock for $95/share in 3 months." He believes the stock will actually go down in value, to $80/share by then. He can buy the stock an ANY TIME between now and 3 months from now. So if it goes down to $80, he makes a $15/share profit. However, if the stock goes up, to $120, he is still obligated to sell it at the agreed upon $95/share price. Hopefully he bought it before it got too high.



Yes - this is an uncovered call - you don't own the underling stock. If the stock climbs and you don't own it - and you will have buy the stock at a higher price than the strike - you could lose a lot of money. Traders use combinations of options to hedge (cover risk) their positions - condors, strangles, straddles - etc. Its all about volatility (the vega) - but then if I was any good with this stuff would I be a programmer?
 
Bill Mc Coy
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Investing money in stock markets is worst thing, you must be prepared to lose all the money you invested.
5 years ago, there were this 2 companies Enron and World Com , which prided themselves in being in top 10 , in the Fortune Global 500 list.
So many people invested in this cos, blindly on their reputation, and also based on their cooked -up accounts(which showed great profit).
But somewhere down the year, their shares fell from 40 $ to 21cents in 15 days flat(Enron especially).
One of my friends who invested 500$ in Enron back then, still rues about his decision.
There may not be a fraud by company in most of cases, but you never when your luck runs out, and you bump into these cos.So better be on side of caution and look for some other avenues .
 
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hi..
Which is better to go for IPO or MF..from risk perspective?
I am starter...
what are the sites to know about the how to do analysis of MF & IPO?(quick learner guide sort of thing where I dont need to go too deep..I dont have too much time.)
other guys you decide by urself to where to invest or do it through some agent etc?
 
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