Need Investment Advice

Hi...I'm thinking of jumping into the stock market. I've heard the phrase "buy low, sell high" given frequently as advice. I was doing some light reading and I found this:

news site wrote:

As if all these legal problems weren't bad enough, on Dec. 1, SCO's stock plummeted 38 percent on very heavy trading, hitting a new low of $1.22 per share. Leading up to Friday's plunge, the company's stock had been gradually declining since June, when it was around $5.

I'm thinking of picking up this stock in the hopes that it will rise from here on out...what do you all think?

Bad idea.

From my 4 years experience in stock market, I would say that if you buy stock of good company which grows steadily, you would earn more.

If you dream to invest in a dollar stock and dream that one day my money would double or triple, then this would be betting and not investing. Moreover if you plan to get in and get out of a stock just in days, its not investing but trading.

So, buy a company which had good fundamentals and forget about the stock for another 3-5 years. You will get good returns. Believe me!

Shreyas Zare

fdisk wrote:

I'm thinking of picking up this stock in the hopes that it will rise from here on out...what do you all think?

I wouldn't touch it.  This stock has NO strength.  The sellers are dominating.  Anyone who thought they were getting a deal by buying Friday's weakness is down 11.5%... IN ONE DAY!

If you do have the courage to buy this thing, make sure you put in a hard stop... a set point where you will throw in the towel if it continues lower.

“It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.” - William O’Neil

shreyasonline wrote:

So, buy a company which had good fundamentals and forget about the stock for another 3-5 years. You will get good returns. Believe me!

Not as generally true as we woud like.  There are countless counter examples.

You can even invest in companies which are investing in emerging markets around the world like in Asia. Or simply get into mutual funds.

Shreyas Zare

Larsenal wrote:



shreyasonline wrote:So, buy a company which had good fundamentals and forget about the stock for another 3-5 years. You will get good returns. Believe me!

Not as generally true as we woud like.  There are countless counter examples.

Absolutely true though ... nobody can predict what happens in markets anyways. But this strategy has paid me at least when I invested in some good Indian companies.

When I was new in markets, I was just dreaming to do day trading and make huge profits. I would buy 1000 stocks at a time and sell it just in minutes. This was fun initially until I suffered huge losses when markets started correcting. So I am into long term investing since then.

Shreyas Zare

Buy Microsoft stock.

At some point, I plan to do more trading.  At this point, I'm only doing paper trades since I'm undercapitalized for real trading.  I made 101 trades in Oct. and Nov. with an overall return of 10.2%.  I'm taking December off since it's too busy to keep up with.  My plan requires approximately 1 hr. per day of preparation.

Even making fake money is tough work!

Cybermagellan wrote:

Buy Microsoft stock.

It's right near a level of resistance at $30.  I would either a) wait for it to pull back or b) wait to buy on strength above $30.  If you were to buy right now, there's a strong chance it could bounce back down to $24 like it has been doing for several years.

Larsenal wrote:



Cybermagellan wrote: Buy Microsoft stock.

It's right near a level of resistance at $30.  I would either a) wait for it to pull back or b) wait to buy on strength above $30.  If you were to buy right now, there's a strong chance it could bounce back down to $24 like it has been doing for several years.

What do you call a stock trading at $1.08?

Right now, SCO is trading at $1.08. Down 11.48 percent today alone. I don't want to wait much longer guys. I think I should scoop up a thousand shares pronto.

Larsenal wrote:



fdisk wrote:  Larsenal wrote:  Cybermagellan wrote: Buy Microsoft stock. It's right near a level of resistance at $30.  I would either a) wait for it to pull back or b) wait to buy on strength above $30.  If you were to buy right now, there's a strong chance it could bounce back down to $24 like it has been doing for several years. What do you call a stock trading at $1.08?

I'll be frank.  I call it junk.  Same as Microsoft, don't buy unless you see strength.  You won't make money unless a lot of buyers show up to the game.  Right now, all the buyers are leaving.

Go ahead and scoop up a few thousand shares if you like.  Best of luck.

But I like tech stocks. I think its fun to invest in the future.

I get the sense that people are going to give me errant advice no matter what because they are jealous. It's not my fault that I may have discovered a natural gift at picking winners in the markets.

fdisk wrote:



Larsenal wrote: Cybermagellan wrote: Buy Microsoft stock. It's right near a level of resistance at $30.  I would either a) wait for it to pull back or b) wait to buy on strength above $30.  If you were to buy right now, there's a strong chance it could bounce back down to $24 like it has been doing for several years.

What do you call a stock trading at $1.08?

I'll be frank.  I call it junk.  Same as Microsoft, don't buy unless you see strength.  You won't make money unless a lot of buyers show up to the game.  Right now, all the buyers are leaving.

As much as you think the market should come back and buy this, that may never happen.  Or it may happen after you leave.

Go ahead and scoop up a few thousand shares if you like.  Best of luck.  Hopefully you're not trying to catch a falling knife.

Maybe read this to temper your excitement.  Maybe only buy half of the shares now.  Perhaps you can buy more in a few days at a better price.

Several edits made

Be sure to let us know how it goes.

fdisk wrote:

But I like tech stocks. I think its fun to invest in the future.

I get the sense that people are going to give me errant advice no matter what because they are jealous. It's not my fault that I may have discovered a natural gift at picking winners in the markets.

I wouldn't brag yet.  As far as anyone can tell, SCO might go bust tomorrow.

IMO, as an ameteur investor, you should be sure you know something about a company, including its products and its market before you consider investing in it.

I'm not talking about insider info or anything like that, but you should have some reason to believe that a stock is going up.  I'll give you two examples.

UPS - I've liked them for quite a while (http://appdev.info/index.php?name=News&file=article&sid=26).  I like the company, and there's no denying that all the ebay trash being bought and sold has got to get shipped around the country somehow.  Same goes for amazon, newegg, etc.  So I watched them for a while, and at one point earlier this year, they had a bad week.  High gas prices, some bad news, etc.  Anyway - stock went down.  I bought at $70 in early Sept, and it's now at $78, up 14%.

BA - In this case, I jumped on weakness in Boeing's competitor, Airbus.  I'd been hearing all sorts of news about Airbus not being able to get their act together on their new A380, and again, BA had an off day.  I scooped some up at $79, and it's $89 now, up 12.5% since late October.

Despite these successes (both of the yeilds above are for just a couple months), I've got 85% of my $$$ in mutual funds, and 15% in stocks I've picked.  There's a reason why the professional fund managers are professional fund managers and I'm in software....

fdisk wrote:

But I like tech stocks. I think its fun to invest in the future.

Then do not invest in SCO. It's not a tech stock, more of a capital/financial one (and a crappy one at that too).

fdisk wrote:

I get the sense that people are going to give me errant advice no matter what because they are jealous. 

Jealous of what?

fdisk wrote:

It's not my fault that I may have discovered a natural gift at picking winners in the markets.

Heh. I need some picks for next year

PaoloM wrote:



fdisk wrote: But I like tech stocks. I think its fun to invest in the future.

Then do not invest in SCO. It's not a tech stock, more of a capital/financial one (and a crappy one at that too).

So because it's a crappy capital/financial company I should avoid it? I thought they were involved in tech. I figured at the least, you'd recommend them. But now you want nothing to do with them?

PaoloM wrote:

fdisk wrote: I get the sense that people are going to give me errant advice no matter what because they are jealous.

Jealous of what?

Of my financial talents. I see a winner here. But I want to do a little more homework instead of going on instinct alone. Is there anyplace I can find out more out about this company?

fdisk wrote:



PaoloM wrote:  fdisk wrote: But I like tech stocks. I think its fun to invest in the future. Then do not invest in SCO. It's not a tech stock, more of a capital/financial one (and a crappy one at that too).

So because it's a crappy capital/financial company I should avoid it?

Yes, exactly because they are a crappy capital/financial company.

fdisk wrote:

I thought they were involved in tech.

They once were. Today their offering is outdated and pretty much irrelevant.

fdisk wrote:

I figured at the least, you'd recommend them.

Why?! I mean, if you want to throw money down the toilet, I guess they're fine, but for actually wanting a ROI? Buy anything else but.

fdisk wrote:

But now you want nothing to do with them?

I don't understand what you mean..

fdisk wrote:

Of my financial talents. I see a winner here. But I want to do a little more homework instead of going on instinct alone. Is there anyplace I can find out more out about this company?

If you want to do something else other than trolling, there's plenty of information about SCO available at your local fund manager.