Happy Trading!

In an accessible place (handy dandy paper notebook, digital file or a whiteboard*) list the name of the stock, stock symbol, buy price range and the reason why. Why list the reason why? You’ll want to recheck your reasoning in case it changed. If you are buying on a trend, list that. You’ll want to check on the trend before buying. News is another good reason, make sure the news you were looking for happened.

The best way to create a list

Buy it. Seriously, buy it. I used to waste so much of my free time combing through the news and web sites trying to find the next big stock to buy. Why waste your time? Buy a list, there are plenty of services that can offer good selections. You can even buy a list on what type of investing you want like small cap, large cap, value investing and swing trading.

Here are a few services that sell lists:

Investor Business Daily:
Top rated stocks under $10
IBD 100
IBD 20

The 100 and 20 lists are published in the ever awesome Investor Business Daily. I’ll admit I’m a fan boy for this newspaper. I subscribe to it and the “Top rated stocks under $10”. I’ve made money from both.

Fools:
Hidden Gems – Small Caps
Global Gains – International Stocks
Inside Value – Value Stocks
Rule Breakers – High Growth Stocks
Income Investor – High Yield & Growth Stocks

I have not personally used these lists, but I’m a huge fan of their books and web site.

The Street:
Cramer’s Action Alert Plus – Jim Cramer sends out his buy and sell decisions.
Breakout Stocks
Market Movers
And many more….

The Street offers a wide variety of lists including Jim Cramer’s personal portfolio. Love him or hate him, he’s entertaining. I don’t personally use The Street’s services or web site. I was a fan of Jim Cramer’s show before I decided to cancel my evil satellite service.

Good luck and happy trading!

* I remember blackboards, but my kids have informed me that they are whiteboards now. It’s unfortunate that they will miss the fun of cleaning the chalk from the erasers (yuck).

Let’s say you don’t want to invest in HP or Apple. What about the companies that make the components of their products?

Typical Components Inside a Computer:

CPU – Intel (INTC) or AMD (AMD)
Video card – Nvidia (NVDA), ATI (part of AMD)
Monitor – HP (HPQ), LG (KRX)

There are plenty of excellent companies that you can find that make the bits and pieces of your favorite products. Do a search on google or wikipedia to find who makes what.

Happy trading!

Here are my 5:

1.  Tide

2.  Starbucks coffee (it helps me write)

3.  Coke Zero

4.  Doritos

5.  Cheez-its

What companies make these products?*  A quick search on Wikipedia shows:

1.  Tide – Proctor & Gamble Co. (PG)

2.  Starbucks – Starbucks Corp. (SBUX)

3.  Coke Zero – Coca-Cola Company (KO)

4.  Doritos – PepsiCo, Inc. (PEP)

5.  Cheez-its – Kellogg Company (K)

That was easy!  I now have 5 companies to do my investing homework.  On your next visit to the grocery store, check out a few of your favorite products.  Who makes them?  Leave a comment below and have fun trading!

* These stocks are listed for example purposes only and I do not endorse these companies.  Remember to always investigate and consider the risk before investing.

My goal is to pay off my family’s van with my short term stock portfolio.

* I have met a rich person and I have met a filthy person, but I have yet to meet a filthy rich person.

Yes Virginia, its ok to sell your stocks.

Sell for only two reasons:
1. Take a profit
2. Limit a loss

Unless you have invested in a stock that pays a dividend, the only way to make money from your portfolio is to sell. It took me almost a year to figure that one out (duh!). If the stock is at a point where you are happy with the profit, don’t worry about the “what if”. Buy it again later and make more money. There is no reason you can’t re-buy a stock.

What about the commission?

There is no such thing as a free lunch. You have to pay a commission to both buy and sell. I’ve always made the commission part of my bought price. If the stock was $15 and I bought 100 shares, it cost me:

$1,500 + $14 ($7 buy + $7 sell) = $1,514

Divide that back to the individual stock price ($1,514/100) and I paid $15.14 (that’s my break even number, more about that later) for the stock. Now if the stock goes to $16.15 and I sell, that’s 10% profit ($100). It’s ok to laugh at my small numbers, I’m just a part-part time trader.

What about taxes?

Depending on how long you keep your stock determines how much taxes you pay. When I started out I was worried about paying the taxes. I read in the vast investing books that I collect, you were supposed to keep the stock for a year + 1 day. Bull crap! Really! If I can take a profit ($100, $1,000, $10,000), I’m taking a profit! Dear Uncle Sam is going to always get a cut, why jeopardize MY profit worrying about his cut.

Limit your loss

The stock market can go down, down ,down! And sometimes it can go down, down, down really fast. Limit your loss. Don’t let the sinking ship drown your hard earned money. Just like taking a profit, you can always re-buy later. Keep in mind there is a catch to re-buying on a loss. The IRS will not allow you to offset your gains with your losses if you re-buy a stock in a certain period of time (confusing, yes, more on it later as I figure it out!).

Good luck and happy trading!

Here is my strategy so far:

1. Small amounts

No more than 25% of my cash in one stock. This will limit my risk.

2. Diversify

No two stocks in the same sector. Diversification is always a good option. This will hopefully keep me from being killed by any bad news for one sector.

3. High Relative Strength (RS)
4. Positive EPS

For annual and next /last quarters. I’m picky about investing in profitable companies.

5. Volume %

I want to see activity on the stock. That may be a good sign of a break out and PROFIT!

6. Simple Moving Average going up

Never invest in a sinking ship.

As I try out this new strategy, I’ll make changes as needed. My goal is to have a strong under $10 strategy that I can use to help increase my portfolio.

As always, comments are welcome!

This service offers:
• News
• Stock quotes (opening and closing amounts, 52-week range and day’s range, last trade amount)
• Charts
• Company fundamentals (dividend, EPS, P/E, etc.)
• Investing information (stocks, bonds, ETF’s, etc.)
• Personal finance
• Personal portfolio tracking

Stock research

This is a good resource to research new stocks. Yahoo finance gives current news about the company from respectable sources like the Wall Street Journal, Fools, and Investment Business Daily (among others). The charts have a variety of settings including daily, three-month, six-month, year-to-date and max date ranges. You can compare stocks, show events (stock splits, dividend, etc.), and use a variety of technical indicators (simple moving average, volume, etc.).

Portfolio

The service allows you to create different stock portfolios. You can create one for your holdings and one for your watch list. The portfolio page gives a nice grid layout of your stocks with a variety of information like last trade amount, percent change, volume and details about your shares (number of shares, priced paid, gain/loss, etc.). The downside of this service is that the stock price has a 20 minute delay.

This is an excellent resource to use when you’re getting started investing. I have personally used the service for several years and would recommend it to anyone just starting out.

Subscribe to the RSS feed or check back to my website for reviews on all of these options.

What to expect from this website:

1. Articles written for the beginning investor
2. Book reviews
3. Terminology clarification
4. Product reviews: websites, applications, iPhone applications and other blogs
5. Helpful quick tips
6. Examples of my successes and my failures.  I hope this will help everyone to profit and avoid my previous mistakes.

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Disclaimer:

Periodically I will use stocks to emphasize a certain key point in a post.  This is not an endorsement of that stock. Any stocks owned by me that are mentioned or products that I am affiliated with or use will be noted within the post. I am not a professional investor or financial advisor. This website’s intention is for educational purposes only and does not take the place of professional advice. Keep in mind any investments come with risks, please research your investments to better understand your risks.