that figure, includes reinvestment of all dividends and (I believe) ignores that pesky income tax on those dividends

that's a good question. the whole point of it is to say that stocks are better than banks for long term savings considering you don't buy stupid companies.

and when you invest - sometimes it's for your children's future or families wealth. So while you as an individual may not live to be 108 - your family may.

No one is on the other side of that. Obviously having any substantial amount of money in a savings account is a waste of opportunity.

Since everything in bold is a big overestimation and you think plates cost thousands of dollars for some reason, when you say you have "plenty of cash" I imagine it's < $500 and you're overestimating like normal.

Like Henry said, not nearly enough.

Nice to see you come all this way to troll diesel, keep it classy bro

I have no perspective on health insurance but ignoring that with the exception of cell phone all those numbers are extreme underestimates. Cell phone would have been accurate a few years ago but now is about half that. I also don't understand how any of that post is relevant to the topic being discussed.

It's really the only thing relevant. See, OP doesn't really want anyone's advice. How many television channels cover stuff like this? How many websites, books, classes, etc. The only reason OP is asking this on 2p2 is so that people who don't usually read his posts/threads in other subforums will know that he has...



There's no need to say that. If OP actually wanted advice, he could've just asked for advice. He added that line as a brag. Nothing more.

OP isn't complaining about a lack of money. He is just gun-shy on committing enough of his funds to make individual stock picking something that is worth doing. Being afraid to commit enough money to something is different than not having enough money. As such a discussion of his expenses is irrelevant. This tangent is even more ridiculous when you consider you that the expenses listed are more than reasonable and actually very much on the low side.

You are getting a lot of pushback on the idea of starting with a small amount of seed money and I think those who oppose starting small are taking an indefensible position. Sure you could get better value per hour of time spent if you had more money and you could obviously diversify more if you had more to invest, but you'd also stand to lose a lot more in the process of getting smart. I've more or less gone in the opposite direction as you -- I started almost exclusively buying individual equities and I now am almost completely an index investor (I still hold four individual positions, primarily because I don't want to pay the tax). Part of this is that I've mostly met my investment goals and part of this is that I've come to believe that I was pretty lucky and that I would be unable to replicate my results without spending way more time researching companies than I want to spend.

It would be helpful to understand your background and level of sophistication. Personally, I don't think anyone should be doing stock picking that can't really understand balance sheets and cash flow and all of my biggest winners were investments in the tech business, which is the business I know. I've been long on most of the tech giants for 10 years or more and it made me look like a genius, but mostly I was just lucky to know things about a field that a lot of people misunderstand. Even when you are right, you can screw up. I bought EMC at $10 a share in 1998 when they made a pitch to me about buying their storage solutions and I realized that they had a really great product. Within a couple of years, it was worth $100 and I looked like a genius. Of course, I held them through the tech crash in 2000 and ended up selling them for $0.13 a share profit in 2001 after I decided their time was past.

If I were in your shoes, I'd focus on one particular industry (ideally one that you are especially knowledgeable about already) and dive deep into the numbers of firms in that business and try to figure out who looks most likely to be in position to generate significant growth (or, in some sectors who is most likely to be bought).

If you could just identify a simple screen that says look for cash flow of X and P/E of Y and so on, you'd be a zillionaire. My best picks were finding growth opportunities when I recognized that someone had more upside that the market in general did. Some people do well with value-side where a stock has been discounted by some bad news below its intrinsic book value, but I find that much more difficult because often there is more to the story of the downward slide than you may not be able to perceive.

I'd suggest you check out "Common Stocks and Uncommon Profits" by Fisher. It was my original bible of stock picking and even though it is old as dirt, it still basically gets it right.

However, if you subtract three huge hits (buying APPL, AMZN and shorting SKYM), I'd have been better off just indexing and could have spent more time doing something else so maybe you shouldn't listen to me.

not in Nebraska, they're not.

Yes, so why not buy a load of shares from young companies in emerging markets. These shares are very cheap like $1 and then hope one will blow up. Look at the AMAYA gaming group shares 320% return in one year, probably round 1500% in last 5 years, i guess because they took over Pokerstars.
Key thing id think for investors is to be able to sense which markets will grow, then navigate and find the good new companies to invest in. You need a sense for it do some research and follow your instincts. And when shares start going up slowly but steady buy a lot more.

It is unrealistic to think of this as a viable strategy. You might as well just bet 10 game parleys

I know you are right, aaargh

how about sir John Templeton, this is from his wiki. ¨Templeton became a billionaire by pioneering the use of globally diversified mutual funds. His Templeton Growth Fund, Ltd. (investment fund), established in 1954, was among the first who invested in Japan in the middle of the 1960s. He is noted for, during the Depression of the 1930s, buying 100 shares of each NYSE listed company which was then selling for less than $1 a share ($17 today) (104 companies, in 1939), later making many times the money back when USA industry picked up as a result of World War II.¨

It may turn out not to be viable but it is a strategy. (low risk potential huge rewards) And the time is good for this i guess, was probably even better 3-4 years ago.

It's really easy. You read primary sources (10-Qs, etc) and other people's theses (seekingalpha, forums) until something sticks out at you. You're looking for something where the market's view of the company's prospects is at odds with a rational view of the company. MSFT in early 2013 was a perfect example - the market, including very intelligent people, retail investors and funds, viewed it as "dead money" because it hadn't moved in a decade. There was also fear about mobile eating into PCs. But when you actually looked at their business, rather than people's opinions of their business, they had an incredibly solid, heavily diversified business that was growing steadily with multiple reliable growing revenue and profit streams that had zero chance of failure or stagnation. That's an example of the market being bat**** insane and suffering from groupthink and hypephilia and nonhypephobia.

The other kind of situation is where something changes that the market hasn't spotted. Ahnuld's PRSC thread is a classic example of spotting a high probability turnaround opportunity that the market completely overlooked.

Two things you shouldn't do. Don't read investing books. In my opinion - lots of people will disagree - they are worthless. If you want to be a sheep and think like everyone else, just buy the index and save yourself some hassle. You're not going to beat the index using other people's widely disseminated strategies or insights. The same thing goes for stuff like the MisesLetter.com the poster above me posted. Most moderately intelligent people stay away from such stuff anyway, but I thought I'd add it.

I've come to learn that reading investing books won't get you anywhere. It's mostly just entertainment. The only way to find a real investment is by focusing in on reading about actual companies, whether it be by reading annual reports or by reading company news. After all, what you're trying to do is invest in real businesses, not theories on investing.

A few sources that talk about the subject state that you have to just read about a ton of companies, and when you find one that is really good or interesting you will know that there is something special about it. You have to build a bank of knowledge to find great companies and then wait for those great companies to be attractively price.

Ok so im a dumb f...
But whats this misesletter.com you mentioned?

Just skimmed but this is likely the best advice posted. Having a basic understanding of financial metrics and an in depth understanding of a field is superior to being a financial data mining wizard of broader market trends.

This is all still talking about your "playing around" fund. Your main focus should be indexing.

Came across this article through AOL and wondered what people thought of the advice contained within. Couldn't really find a general questions thread so thought I would drop it into this thread.

http://fortune.com/2014/09/30/invest...rket-equities/