Talking Stocks
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Talking Stocks
1–10 of 28 posts
Re: Talking Stocks
#2I personally couldn't entrust my wealth to someone named "Raleigh Rails." But then I don't actually have any wealth.
Re: Talking Stocks
#3I had read A Random Walk Down Wall Street in college. I truly thought that the markets were efficient, that any available knowledge about a company was already reflected in its stock price. Yet I saw Raleigh using the information I gave him to make money for his clients.
Heh, that's exactly what I'm experiencing now. I've always bought the efficient markets hypothesis (i.e., that current prices already factor in all available information). But, I've been meeting analysts who are supposedly experts in their respective fields, and I've come to a simple conclusion: they can't interpret the information they're given.
They are the kind of people who consider valuation by a constant multiple of eyeballs to be legitimate. They are the pointy-haired-bosses of the world, who read a few trade rags and think they are experts.
In one light, it's all rather depressing. In another, it seems like a great opportunity ;-)
Re: Talking Stocks
#4I had read A Random Walk Down Wall Street in college. I truly thought that the markets were efficient, that any available knowledge about a company was already reflected in its stock price. Yet I saw Raleigh using the information I gave him to make money for his clients. Heh, that's exactly what I'm experiencing now. I've always bought the efficient markets hypothesis (i.e., that current prices already factor in all…
In order to exploit the "inefficient market hypothesis", you need to know what information is reflected in stock price and what is not. This means you need to know the market, not just the stock.
Re: Talking Stocks
#5I agree with most of what he writes, other than his dividends vs share buybacks commentary. I'm glad he published the descending comments though. A few quick thoughts:
1. Dividends are taxed, share buybacks are not. This is why in cases where a mature Company is sitting on a large pile of cash with little to no long term debt, share buybacks provide more value by avoiding the tax man.
2. If the management team truly believes the company is undervalued, buying shares back makes a lot of sense, especially for mature companies. However, if the buy back leads to incentive bonuses for the management team I'm 100% against it. Also, it's a lot more telling when a Company does this during a recession than a boom.
3. As alluded to in the comments, corporate earnings are relatively worthless without a cash flow statement for the same time period.
Re: Talking Stocks
#6I've been reading about stock trading over the last couple months, as time allows, thanks to Metlife managing my 403b to a phenomenal 1% growth over 5 years. Hands down the best book I've read so far is, Fire Your Stock Analyst: Analyzing Stocks On Your Own (Definitive Guides (Financial Times/Prentice Hall).*
All other books I've seen are "get rich quick." FYSA is the only one that has told me what the terms mean, how to calculate the "fundamentals", and where/how to research a company. It also gives examples of value and growth strategies. It doesn't, ever, tell you what you need to do to get rich, but rather, what you need to do to make informed decisions.
Mix in "common sense" and your own opinions and your off!
* Yes, I've read (most of) a Kramer book, too. Avoid at all costs. The only useful advice: buy and research (not buy and hold), it is possible to make money in down markets too, and sometimes its better to be in cash instead of stocks while you find your next position. The other 350 pages is about how EASY it is too make MAAAAD MOOOONNEY. Don't you want MAAAAD MOOOONNNNETY??!?11
Re: Talking Stocks
#7The secret to building a sustainable growing investment portfolio: DCF
Re: Talking Stocks
#8"What about fundamentals? Fundamentals is a word invented by sellers to find buyers."
Re: Talking Stocks
#9"What about fundamentals? Fundamentals is a word invented by sellers to find buyers."
I used to work in the finance & investing industry before doing a startup. The slimy, misleading marketing proliferating itself everywhere is absolutely ridiculous. They're even pretentious enough to call their fees and back loaded funds "products".
If you've ever seen the movie Boiler Room, my second finance job was similar. My third finance job had similarities to Barbarians at the Gate (on a much lower scale) and the classic tulip bulb story: http://en.wikipedia.org/wiki/Tulip_mania
Strange world is the finance.
Re: Talking Stocks
#10The secret to building a sustainable growing investment portfolio: DCF
Explain