Do you trade shares?

[Monstar]

Quick question; I was speaking to a relatively senior commodities analyst at a research house and he seemed to bad mouth fortescue the quality of the iron ore they produce however they have about a return on equity of about 50% but this is blindsided by the sheer leverage of the company.

I tend to steer clear of resources stocks purely because there is so much dangling on the quality of the ore.. but if the analyst says that the iron ore is shit but at the same time they are able to generate huge returns and huge cashflow.. does it matter?

[seremify007]

^ Depends if you are buying for short term speculation or if you genuinely are doing your research and buying long. I don't really research or follow any particular data but I rely on my fundamental gut instincts and technical analysis to trade quickly and that's it.

Truth be told unless you're inside and know everything there is to know, you're playing with second hand smoke.

[Studentleader]

I have an irrational fear of technical analysts

:S

as do i - fundamentals ftw

[pete shearman]

does anyone follow roger montgomery's blog at rogermontgomery.com?

if not, you should.

i picked up his tips on MCE, FGE and MLD last year and did very well. he follows the buffett approach of buying a slice of a solid company at a discount to its intrinsic value.

i also bought $1500 of EXS shares which are more speculative in nature. cost 0.515c each but will spike once mining deal is done with another company.

[Monstar]

I used to be a big fan of the roger but then I started to realise people like you just make the valuation a self fufilling prophecy..

[Arceupins]

Looking to get into ASX trading simulations later this year. I've just been introducing myself to the utmost basics whilst reading a few motivational biographies (Warren Buffett 'sup) here and there.

I figure the things I learn whilst completing my Economics degree will help me in my quest to become a 'solid-returns, low-risk' investor.

[Monstar]

lol at you thinking uni will help you.

[Deathless]

Does anyone want to form an Investment Club? We could go into comps or something if no wants to have a real mutual investment.

[Deathless]

Bell is cheapest but I hate their interface. Feels so difficult to trade and you have to pay a subscription fee to access "live" prices. C'mon what the heck?

Commsec offers T+3 settlement which was a great way to make money without any outlay... only thing was their brokerage was very high (I was paying around $80-120 each way for trades).

If you're only about 5k then try e-trade?

[Earl Luper]

burlap sack

[Garygaz]

i'm not 100% sure about your theory on outlay seremify, i work at a discount broker and all transactions (regardless of whether you buy and then sell before settlement, or on the same day) get credited and debited as separate transactions, hence you will get fail fee + have to find some way to have funds to match the cost of your buy.

&yeah uni pretty useless when it comes to making money on market

[sjp112]

whats wrong with technical analysis? I always thought the technicals helped a fundamentals investor get in at the right prices?

[Garygaz]

see there's your problem with uni education. this is how the market works:

first of all you have day traders: from my personal experience these guys get themselves a margin lending account which pretty much multiplies the amount of money they would otherwise be outlaying by about 10x. So random, uneducated dude/lady puts through an order to buy $50,000 of RIO at market in the morning and sells them some time during the day. These people have no view on the market longer than a day and legit, I have had people ring me from the pokies at the rsl to put orders on. These people (the vast majority) are gamblers with a gamblers mentality.

secondly you have pensioners/self managed super funds who pretty much just try and pick a low and buy. rarely sell, buy the same stuff; banks, resources, retail in the 200.

then you have fund managers who are a mixed bag, mostly buying and selling at highs/lows (according to them) of the market. can't see any real pattern in what they do as of yet.

then you have professional (i use this word carefully) traders who have multiple positions open including covered calls, speculative puts etcetc based on some charting/tech analysis. stuff like butterfly spreads don't really get used in a real market.

[Mature Lamb]

Anyone know any good sites like www.investopedia.com so I can learn how to trade?

[Garygaz]

learn to trade as in what? how and where to buy/sell shares or learning about options and other financial instruments?

[seremify007]

i'm not 100% sure about your theory on outlay seremify, i work at a discount broker and all transactions (regardless of whether you buy and then sell before settlement, or on the same day) get credited and debited as separate transactions, hence you will get fail fee + have to find some way to have funds to match the cost of your buy.

&yeah uni pretty useless when it comes to making money on market

Sorry missed this post before but I assure you that Commsec allows T+3 settlement and net settlement if the trades occur within 1 day. This means if you close the position within a day you're sweet, but any more than that and you better ensure you have sufficient liquidity either through online savings accounts or a LOC to cover yourself before the T+3 kicks in.

Anyway I've since moved on from Commsec but am now looking to move to HSBC Premier E-trade since the Bell interface is not confidence inspiring, and I miss Commsec's speed and general usability. Pity the trading costs were so damn high.

If you're only about 5k then try e-trade?

I'm significantly more than $5k per trade

[seremify007]

I should clarify Bell Direct requires you to deposit funds into their trust account and hence the net settlement thing doesn't really work here since they debit your account immediately, and don't pay much interest either.

[Garygaz]

I should clarify Bell Direct requires you to deposit funds into their trust account and hence the net settlement thing doesn't really work here since they debit your account immediately, and don't pay much interest either.

ahk, yeh at our broker you can have the funds in any australian bank account, hence the seperate debits/credits.

though we have had a few problems in the past, with people taking positions and not having the cash to cover them, yet we had no idea (because we couldn't see their balance). if i was running a broker i'd prefer for all my clients to have cash in cleared accounts.

[seremify007]

I guess that's just a business risk. Luckily it's essentially a secured loan whilst waiting for securities to be delivered and cash to be received so its less risky.

[SylviaB]

Anyone know any good sites like www.investopedia.com so I can learn how to trade?

http://www.new2shares.com.au/

also intelligentinvestor.com.au

its super expensive, but theres a lot of free stuff available, and you can sign up for a trial and get heaps of free information

[seremify007]

Hmm I still haven't closed my Bell account yet. Really should as I don't like trading on their horrible interface/platform. I'll look around but more likely than not will end up with HSBC e-trade.

[Omnipotence]

Yep, on the ASX game. =)