Any website/forum that is good to start learning about trading? One that is to trading/investing as 2p2 is to poker?

www.berkshirehathaway.com

read the chairman letters, there are over 30 on the site.

My experience with TDA was pretty poor on pinksheets/OTC. Their price quotes are worse than IB, much more often at TDA I'd get no bid/ask while I could still get one at IB.

At TDA you have to bug them to get their lowest commissions (I got $7) and you have to have enough assets to get them. But it's a fixed commission, so if someone hits your limit order for $30 of stock you pay $7, at IB you pay 0.5%, so it only costs you 15 cents. This means IB enables you to put more limit orders out hoping to catch some volume in illiquid stocks, without caring if market makers hit you with tiny orders to jack your commissions to try to get you to pull your orders.

And TDA frequently would put OTC stocks on a special list that required me to place phone orders. They changed something in the last year to get stricter about this, it became so burdensome I complained to my Private Client rep, which I think is the highest level of support you only get with large accounts. He and I had to jump through a bunch of hoops for a week before I was able to get those stocks cleared for my accounts so I could trade them electronically. And this is for a guy who is a large account for them, and who has been trading these stocks for over 7 years exclusively with them.

And still my client accounts weren't cleared so more hassle when I bought for them.

The algos at IB are useful time savers so you don't have to continually adjust orders in response to moving bid/ask lines. You don't have to know any programming, you can figure them out fairly quickly, they are just dialog boxes that you fill out with the order characteristics you want. Programming the API is useful if you need it, but it can obviously be a big time sink. But I enjoy programming, at least when it's not a deliverable on a deadline to some commercial client

My only complaint about IB is once you setup your account with margin you can't have it removed and have to monitor it yourself if you don't want to use it. And if you don't use margin they restrict your account in certain ways, though I'm forgetting specifically what it was.

A second issue with IB that I don't complain about is that it's commissions can be higher than TDAs depending upon how your orders are filled. The 0.5% commission is higher for orders over $1,400. But I don't complain about it because the lower costs on small orders gives me a great deal more flexibility in trying to pick up illiquid stocks without worrying about commission costs. And they do nickle and dime you for data feeds a little. But if I end up paying more total commissions at IB I won't mind, because I'm getting so much more value from the trading flexibility, algorithms, and API. Essentially I feel like TDA wouldn't give me what I needed but was cheap, and IB is still pretty cheap but gives me everything I need.

But all in all I'm still extremely happy about my move to IB. It's client management tools are tremendous starters for anyone who wants to manage client accounts which is the easiest and safest way to get started for both you and the client.

I very much agree with your last statement. Even if lump sum was a lot better I still only get paid once a month so there's not much I can do about it. That and I'm looking to end up with the most money when I retire rather than just get the highest return on my money so my desired outcome isn't even the same outcome we're looking at. I was mainly confused by the calculation of DCA's annualized return, but I like using the unit weighting.

What is the smallest company (market cap) that you have invested in? You don't have to name it just curious to the size.

I think I've gotten below $1M, but I get very squeamish in that territory. It's too easy to buy 5% without realizing it and trigger reporting requirements or some other head-ache, and when the company is that small I don't trust the usual incentives for management to do the right thing as much.

What website or websites do you use for your research? I've been using yahoo finance in my very little time so far but the income account and balance sheets I think only go back 3 years.

Seems like edgar online is probably the best, but then I have to learn what forms I'm looking for. What forms are you most commonly analyzing?

He got long financials big time in 08.

Lynch continued to do really well even as assets went over $10b.

I do wonder if he could replicate that performance today given how the market has changed re info dissemination, algos, etc. I'm pretty sure he couldn't.

I don't follow BRK too closely but the chart suggests he has underperformed since 07 though I wouldn't have thought that to be the case. Any idea why its still below the 07 high?

Buffett's returns have been degraded for a couple decades now. I don't pay much attention to the chart, but long term growth in book value is definitely slowing, and he himself has attributed it to the limits he has because of portfolio size and constantly works to lower his investor's future expectations.

8ks, 10Qs, 10ks. It depends upon what you are looking for. Usually when I find something I just read every new SEC filing as they come out regardless of type.

You are referring to these (http://www.berkshirehathaway.com/letters/letters.html) right? Just making sure, there's a few other resources on there too but those are probably not what I'm looking for.

In Graham's formula what maturity are the AAA corporate bonds?

I think 10 years.

Do you prefer debt heavy or cash rich companies?

I'm looking at a lot of cash rich microcaps and the cash is a real drag on our potential return. How do you think about a company with half it's market cap in cash?

Why is having cash a drag on returns?

Because cash earns very little. If Coca-Cola has $5,000,000 in cash and $5,000,000 in coke syrup making machines, the cash is gonna earn just about nothing, whereas the machine is spitting out liquid gold.

Right but a company who's stock is trading close to cash has very small down side risk and decent upside potential (assuming their running the business well), the same thing cant be said about leveraged companies. I guess it all comes down to how much gamble you have?

Yea if you have as much cash as your market capitalization you don't have much downside risk, but that's not what was getting talked about. It (cash) is still a drag on returns.

I only get interested when the company (or a large shareholder prompts them to) announces plans for putting the cash in shareholders pockets, or a canny investment. Otherwise a large portion of the companies value isn't compounding or growing, though obviously it reduces risk, I'm looking for ++market returns.

Here is an article about unhappy Apple shareholders.

http://online.wsj.com/article/SB1000...06-search.html

Of course they bought it knowing the company policies. I disagree with Job's cash hoarding, but he's earned the right to decide how to use it, and he's always used it as a safety net to give Apple long lead times to build markets. Ignoring the iPod/iPhone/iPad, look at how he totallly tore down and rebuilt the Macintosh business, I think sales dropped by over 50% his first four or five years back in charge, and now it might have a bigger share of the PC market than ever, and is the fastest growing segment. If Jobs dies, or the products fade, that cash will cushion some of the market loss.

I avoid debt heavy businesses in general just because of balance sheet risk. NICK is the only exception to that rule, and to be honest I just wasn't cognizant of balance sheet risk when I first started buying and then when I started to really think about it I was able to come to the conclusion it's risk was mitigated because of the low leverage and large amount of outstanding loans that could still be serviced in a melt-down.

Sorry to return to this topic, but I've still been thinking about it. Feel free to say that you just don't care and I'll stop bringing it up.

In the simulation I started out with having everything increase 5% each year. Doesn't it make sense for DCA and Lump to return the same annualized return under those circumstances? Isn't that exactly what the annualized return is (the rate at which if it great that amount every year you would end up with the same return that you have)?

DCA shouldn't generate the same return as lump sum in a real world scenario, but yes, if yearly returns are fixed, it makes sense that returns from both would be the same.

In the real world wouldn't DCA almost always give you a different position size by year end compared to lump sum? So obviously the underlying security would have the same annual return, but the two portfolios wouldn't have the same returns because DCA wouldn't have the same number of shares as lump sum. So you in your model the underlying just increased (1.05)^1/12 every month then DCA would return less than 5% because you'd have purchased fewer shares and most of them at a higher price. To make it fair you need some sort of volatility.

Jumped in late to this argument so I might not be hitting the point your getting at.

I was actually using yearly numbers so it turned out the same. This was just to check that my simulation was correct before I went back and add variability. I think DesertCat and I had a misunderstanding which lead to him thinking that my simulation was wrong which lead to me doubting my simulation and us finding another way to do it.

However the more I think about that way (averaging time by how many units of stock you have) the more I think it is incorrect and I need to go back to the way I was doing it before.

So in short, yes I need to add in variability now to determine the effect of DCA because my current simulation, while probably correct mathematically, doesn't model what actually happens with DCA.

What do you think will happen to Apple and the stocks if Jobs dies?

I have no idea what the market will do. but the products and revenues shoulld be strong for a long time.