You are either not logged in or not registered with our community. Click here to register.
 
December 02, 2016, 02:20:23 PM

Welcome, Guest. Please login or register.
Did you miss your activation email?

Login with username, password and session length

Click here if you are having problems.
Default Wide Screen Beige Lilac Rainbow Black & Blue October Send us your theme!

Hark!  The Herald!
Holiday Issue 2016

Wiki Blogs Dicebot

Author Topic: Anyone Participate In The Stock Market?  (Read 883 times)

0 Members and 1 Guest are viewing this topic.

Offline DimirTopic starter

Anyone Participate In The Stock Market?
« on: January 21, 2015, 02:20:33 PM »
Does anyone here participate in the stock market, either for money management or retirement planning? One of my major interests is business/economics so I started investing in the summer of 2013. As I searched around and determined as to what kind of investor I would be, I look for fundamentally strong companies with good growth prospects and trading at reasonable valuations. Even though I live in Canada, I also own stocks out of the US, Europe and Southeastern Asia. I also own some Canadian bond ETF's to reduce volatility as well as diversifying my portfolio. Luckily I am up to date. :)

Offline Valthazar

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Anyone Participate In The Stock Market?
« Reply #1 on: April 02, 2015, 07:35:19 PM »
Dimir, thanks for pointing me to this thread in PM.  I must have missed it.

I use ETFs (a primary target date fund for the long-term, and a couple of other industry ones, like healthcare which are mainly for the next 5-10 years).  The great thing about target date funds is that they balance the stock/bond ratio based on your age, so it controls for volatility. 

I also do some day-trading every now and then with penny stocks, but I'm usually smart about it - and I only use a fixed amount.

Offline Asphodel Terrarium

Re: Anyone Participate In The Stock Market?
« Reply #2 on: May 07, 2015, 08:51:38 PM »
I started investing around November 2014. I do not yet have a diversed portfolio though. I need to study the market more. Currently own 4 corporation stocks. It is said that diversification rule is best with 5-30 corporations.

I need to be wary because I do not really use technical analysis with all those trends and so, even if a corp. is nice fundamentally, it still might go down due to other investor's emotions. *shrugs*

Offline Mikem

  • *Cancer Survivor*
  • Permabanned
  • Seducer
  • *
  • Join Date: Nov 2012
  • Location: In the damp and dreary Pacific Northwest
  • Gender: Male
  • No labels. I'm a Man and that's all that I am.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Anyone Participate In The Stock Market?
« Reply #3 on: May 07, 2015, 11:27:02 PM »
Too complicated and too risky. I've heard plenty of things about people losing all their money because of shaky economies.

It's always been an intriguing thought though. A possibly easy way to suddenly make money. The most I know about it is if you buy a stock now, have it for a while and then sell it when it becomes more valuable, you make money off it. But can you just easily sell stocks whenever you want? Or does there have to be a buyer for them.

Offline Asphodel Terrarium

Re: Anyone Participate In The Stock Market?
« Reply #4 on: May 08, 2015, 12:01:01 AM »
@Mikem: Stocks are generally liquid. You can buy and sell anytime. But you should check the volume traded for liquidity.

In the US, stocks are more liquid because the beoker sometimes buy and sell stocks anytime. They even can lend individuals stocks to sell- this is known as short selling.

For us in the Philippines, well, we can't do that. Our stocks are less liquid. I think that goes for most countries too that don't have the option to sell short and having low credit.

I think what got me discouraged multiple times across the five months is that the price is based on the perceived value of the people. And it's not all in the intrinsic value. There are cases when the market value differs greatly from the intrinsic value. Sure, you can take advantage of it by buying undervalued stocks but then, for how long until it meets the FV? Or will it continue to go down?

Then again, what is intrinsic value?

FV = intrinsic or fair value
« Last Edit: May 08, 2015, 01:19:08 AM by Asphodel Terrarium »

Offline DimirTopic starter

Re: Anyone Participate In The Stock Market?
« Reply #5 on: May 08, 2015, 09:09:48 AM »
Too complicated and too risky. I've heard plenty of things about people losing all their money because of shaky economies.

It's always been an intriguing thought though. A possibly easy way to suddenly make money. The most I know about it is if you buy a stock now, have it for a while and then sell it when it becomes more valuable, you make money off it. But can you just easily sell stocks whenever you want? Or does there have to be a buyer for them.

Hello there Mikem and welcome to this thread. ^^

When I make a serious investment with any stock, I want to have the greatest certainty with the fundamentals of the company that I am putting money in. This is why with every news headline and earnings season report I reevaluate my holdings to see if I am still fundamentaly in the right spot. My goal is to hold quality companies with growing earnings and revenue and trading at decent valuations for the long term, however, if the fundamental story of the company or economy it serves changes, then exiting the position is always an option.

And yes, the liquidity of a stock effects how easy it is to sell and buy shares. Most large companies on major exchanges are very easy to buy and sell.

Also replying to something Asphodel Terrarium said, there are plenty of ways to value stocks and perhaps there are more effective ways then what I use. What I do use is a combination of yearly earnings and revenue growth compared to the price/earnings ratio, price to book value (especially for financials) and price to cash flow (mainly used for oil/gas companies).

Offline consortium11

Re: Anyone Participate In The Stock Market?
« Reply #6 on: May 08, 2015, 09:39:21 AM »
Too complicated and too risky. I've heard plenty of things about people losing all their money because of shaky economies.

It's always been an intriguing thought though. A possibly easy way to suddenly make money. The most I know about it is if you buy a stock now, have it for a while and then sell it when it becomes more valuable, you make money off it. But can you just easily sell stocks whenever you want? Or does there have to be a buyer for them.

That's pretty much the Hollywood idea of investing; either you pick up a stock incredibly cheap and then sell it for a fortune or you start playing around with derivatives (put really simply, you gamble with stocks/financial instruments that something will happen to it), notably going short of long (expecting the price to rise or fall) and making a killing if it does.

In reality most trading is done with a much longer and more modest return in mind. In general people go for a portfolio of stocks and normally diversify across different markets (i.e. some stock in tech companies, some in retial, some in industry, some in finance etc etc) and risk patterns; you'll have a core of "safe" stocks which are highly unlikely to significantly  change price compared to the market as a whole, some slightly more risky stocks and then a very high risk stocks that may well get you a big return but may also crash and burn. The people who lose all their money on the stock market tend to be those who use it as a wealth generation tool; their express purpose is to make lots of money and because of that they have to take more risks. Most individuals instead use it a wealth preservation technique; the idea is that you invest it in the market and look to get a return slightly higher than the rate of inflation (and thus almost certainly more than you'd get from a savings account at a bank). Profit is certainly nice but one is only looking for a small return.

The other aspect to consider is dividend. A dividend is basically the company paying it's stockholders X amount per share they own. There's no obligation on a company to pay a dividend (Microsoft only paid it's first in 2006) but doing so makes a stock more attractive and raises the price of it (generally making the company seem stronger). A company with a history of paying dividends gives an investor some return even if the stock price stays stagnant. For example, BP has paid a dividend multiple times a year for a long, long time. If someone held BP stock then even if they didn't sell or suffered a loss as the price fell they'd still be getting some return each year as dividends were paid out.

Offline DimirTopic starter

Re: Anyone Participate In The Stock Market?
« Reply #7 on: May 08, 2015, 09:51:21 AM »
The other aspect to consider is dividend. A dividend is basically the company paying it's stockholders X amount per share they own. There's no obligation on a company to pay a dividend (Microsoft only paid it's first in 2006) but doing so makes a stock more attractive and raises the price of it (generally making the company seem stronger). A company with a history of paying dividends gives an investor some return even if the stock price stays stagnant. For example, BP has paid a dividend multiple times a year for a long, long time. If someone held BP stock then even if they didn't sell or suffered a loss as the price fell they'd still be getting some return each year as dividends were paid out.

Dividend payments are certainly useful for all investors who hold stocks with a long-time horizon in mind. What you have to keep in mind is that not all dividends are sustainable under certain conditions, especially for smaller companies. Example is here in Canada. A lot of older investors here invested in very small oil stocks that paid a dividend from 6-13%. Due to the price of oil being cut in half, these small oil stocks almost collapsed and many dividends got significantly cut or deleted all together. They would have been far better off if they invested instead in say Royal Dutch Shell or Chevron.

Something else that annoys me is when stocks go up from dividend percentage increases rather than the organic growth of the company. If a company can't grow it's revenue but it's price and valuation goes up from dividend increases, then that increases the price volitility risks of a therefore overvalued company. Many of the global consumer staple stocks known for longtime dividend increases (Procter & Gamble, Coca-Cola, Unilever, etc) are trading at around 20x forward earnings when the growth of those companies are nowhere near that. There is a phrase known as "don't pay too much for growth" which I completely agree with, but the same has to be said for income oriented stocks, since those companies still go up and down with the votility of the stock market.

What do you guys think?
« Last Edit: May 08, 2015, 09:52:23 AM by Dimir »

Offline Asphodel Terrarium

Re: Anyone Participate In The Stock Market?
« Reply #8 on: May 09, 2015, 01:07:56 AM »
Well, actually a most common stock valuation is through dividends. There is the Discount Dividend Model, which simply states that the value of the stocks relies on its dividends.

Well, that's for corporations that has them. For some that don't, then another method is used. There are actually a lot of them and that makes the market a diversed... market! If people all use the same valuation method, then there's no one who will win or lose.  :P LOL. They'll be doing the same thing and everybody would all buy and nobody would sell. In that case, no transaction, and you know what happens. There's also the Bigger Fool Theory that makes me a bit discouraged. It means you are here to fool somebody else to buy your stock at a higher price than you bought it.  :'( Kind of harsh...

Offline DimirTopic starter

Re: Anyone Participate In The Stock Market?
« Reply #9 on: May 10, 2015, 12:54:27 PM »
Well, actually a most common stock valuation is through dividends. There is the Discount Dividend Model, which simply states that the value of the stocks relies on its dividends.

Well, that's for corporations that has them. For some that don't, then another method is used. There are actually a lot of them and that makes the market a diversed... market! If people all use the same valuation method, then there's no one who will win or lose.  :P LOL. They'll be doing the same thing and everybody would all buy and nobody would sell. In that case, no transaction, and you know what happens. There's also the Bigger Fool Theory that makes me a bit discouraged. It means you are here to fool somebody else to buy your stock at a higher price than you bought it.  :'( Kind of harsh...

If you look at most of the Forbes 2000 Largest Public Global Companies list, the large majority of those stocks pay at least a small dividend, but one can argue based on earnings and revenue metrics that there are those that can still have consecutive periods of growth and therefore be GARP stocks (Growth At A Reasonable Price).

The reason I pay attention to growth rates first is because stocks respond to earnings season and misses on estimates can cause even defensive stocks to go down. There isn't anything wrong with paying a sustainable dividend to shareholders, but reasonable valuations and growth metrics aren't a bad thing either. Good examples of these types of stocks that I own are Apple and engine manufacturer Cummins, as well as advertising giant WPP Plc which I would like to own but don't yet.

Interesting valuation metrics you've brought up, thanks for sharing them. ^^

Offline Asphodel Terrarium

Re: Anyone Participate In The Stock Market?
« Reply #10 on: May 11, 2015, 03:34:58 AM »
Alright, my good man. Here it is.


This is the chart for CPG (Century Properties). Sure, it might have a good fundamental which is Php 1.77/s, but if you look at the trend analysis (known as technical analysis commonly), it has a down trend and that last Friday date marks a sell signal. Investors who would see this would be afraid and would now sell and that would just make the price go down even further. *shakes head* That's why it still is based on the perceived value of other investors.

Sure, there may be brave people out there who would buy but their numbers would soon be insufficient to drive the price up.

Note: The body of the candlestick just touched the rock bottom while the shadow is piercing last Thursday May 7 but May 8 saw a shattering of the glass.

Offline DimirTopic starter

Re: Anyone Participate In The Stock Market?
« Reply #11 on: May 14, 2015, 12:08:55 PM »
I own shares of Canadian engineering company Stantec, it is up four percent after beating revenue forecasts. ^^

Offline Asphodel Terrarium

Re: Anyone Participate In The Stock Market?
« Reply #12 on: July 16, 2015, 07:19:16 PM »
I want to ask if for example I own shares of stock of Jollibee (JFC), a fastfood restaurant like McDonald's and KFC, here in the Philippines, does that also mean I am part owner of Jollibee establishments outside the country, say, China?

Offline alextaylor

Re: Anyone Participate In The Stock Market?
« Reply #13 on: August 20, 2015, 01:00:56 PM »
Idk if this counts as a necro but it's still on the first page of the forum!

Yeah, I've been doing it for a while. My ground rule is that stocks are 90% psychology. The market cap of a stock is a little less than what most people expect it to be in the future. So the actual fundamentals matter little. It's the perceived value that really counts!

I did look a lot into technical analysis but found most of it BS. TA is great for warning flags, but if you invest in smaller tech companies like I do, it messes up a lot.

My best tip is to look for the secret sauce. Some checklists I do:
1. Is the solution tackling a big pain point? My best investment was a private hospital and an insurance company simply because the gov hospitals were doing a horrible job. Second best investment was a transportation company. You don't need to read finance magazines and all, just think about what would make the world a better place, and invest in companies that are doing that.

2. Is the team good? I don't look for smartness, I look for toughness. Think Tony Stark. Most people on a BOD are smart enough. But few can make right decisions under pressure. And the truly brave people are the ones who push forward an innovation and tackle important problems. They're more likely to not get disrupted and they'll solve big problems fast. Any rags to riches guy is gold. I'm biased but I don't like MBAs as CEOs, yellow flag. Directors who don't put their picture up, red flag.

3. Is the market niche enough? A lot of people invest on market size. This kinda overinflates the price. What people don't invest is niche market. A pharma that focuses on one cure than all. A tech company that specializes in search. A company that does electric cars only. Companies often reach good growth here, and may break out into bigger markets.

4. Scaleable model. This seems obvious, but I usually avoid companies reliant on projects. Mainly construction companies and some B2B ones. So far all my major losses were on these.

Offline Knightshadow

Re: Anyone Participate In The Stock Market?
« Reply #14 on: August 22, 2015, 06:37:52 PM »
I want to ask if for example I own shares of stock of Jollibee (JFC), a fastfood restaurant like McDonald's and KFC, here in the Philippines, does that also mean I am part owner of Jollibee establishments outside the country, say, China?

If Jollibee owns those establishments in China, then technically yes, you are a part owner. However, some international laws may apply where foreign companies' stocks cannot actually be established/traded directly. And in some cases (not sure about China), the foreign government may actually own/control these shares.  All that being said, you MIGHT have a percentage ownership in those establishments if the corporation owns them.

Not sure if that helped at all.