Stock Market

[pianorama]

Has anyone here bought any stock in their life? Do you still have it?

Yesterday I took some money out of my bank account to buy some stock. My dad, my brother and I went downtown to see his stockbroker. The stockbroker thought I should spend the money on a diamond company.

And guess how much it costs to buy 1 share of the most expensive stock in the world?

$86,950!

(the company's name is Berkshire Hathaway I think)

[pianistimo]

even money market accounts can be scary with little increments over a large period of time.  my parents ended up losing a lot of money within a week about five years ago.  they thought that they would stick it out over the long haul and didn't withdraw when they saw the markets going down quickly.  they lost almost everything they put in. 

practically everything that you invest in is a risk.  don't know about diamonds, but when people can make fake ones so easily - you probably have to start knowing not only what you are buying but how much it is worth from day to day.  lots of headaches, but maybe not for business people. 

personally, i would be less inclined to take risk and just put my money in savings.  anything that gives you a bit of tax relief.  sometimes the best way to know how to save is to go through the recent tax book and see what isn't taxed.  like education bonds, etc.  (at least i think a few are not).   

[pianolearner]

Has anyone here bought any stock in their life? Do you still have it?

Yesterday I took some money out of my bank account to buy some stock. My dad, my brother and I went downtown to see his stockbroker. The stockbroker thought I should spend the money on a diamond company.

And guess how much it costs to buy 1 share of the most expensive stock in the world?

$86,950!

(the company's name is Berkshire Hathaway I think)

I have bought and sold stocks many times in my life and I am now Day Trading E-mini futures contracts. The reason Berkshire Hathaway is so expensive is because they have never split the stock. This basically means increasing the number of shares while decreasing their value without changing the net result. Eg/ If you had 10 shares and each one was worth $10, you would have $100 worth of stock. If the company decided to do a 2 for 1 split you would own 20 shares worth $5 and still hold $100 worth of stock. Companies will often split the stock to make them more liquid (easily tradable).

Microsoft stock is currently trading at around $28 (25/2/2006), but it has split a total of 9 times since being listed. If it had never split, each share would be worth $8,064. This is much less than Berkshire Hathaway, but at a guess I would say it’s because Microsoft has more shares issued. This means it actually has a bigger Market Capitalisation. Share price isn’t everything.

Stock market investing isn't risky if you do it right. Just make sure you buy shares that go up in value! 

[BoliverAllmon]

I have some mutual funds and a 403b that invests in stocks. I am making pretty good money off of it right now.

[jason2711]

I played a virtual stock exchange thing on the internet a while back... went alright, never made any losses or gains.  Then left it for about a year and half, came back to my account, and its value had soared haha.  Typical me.... i mess around too much

[pianorama]

I played a virtual stock exchange thing on the internet a while back... went alright, never made any losses or gains.  Then left it for about a year and half, came back to my account, and its value had soared haha.  Typical me.... i mess around too much

What website was that? That sounds cool.

[jason2711]

think it was www.virtualtrader.co.uk, but i'm not sure if its still around these days... they went throught quite a bit of reshuffling

[pianorama]

Why do they want so much info? And especially since house number, postal code, and phone # are required fields. I don't feel comfortable putting in that much info. Why do they need more than just email, username, and password. I tried lying about house # and postal code but then it said that the house # doesn't belong in the postal code.

After you signed up did anything weird happen?

No one in my family (including me) doesn't think I should sign up.

[pianorama]

even money market accounts can be scary with little increments over a large period of time.  my parents ended up losing a lot of money within a week about five years ago. 

Maybe if you put at least $500,000 . I was earning only 4-12 cents a month with my bank account, and yes, I had more than $10 in it.

[BoliverAllmon]

our church makes about 40 bucks a  month in our money market account. I don't see any real risk. Money Markets usually have fixed earnings.

boliver

[jason2711]

ah right, as I said, its been a long time since I signed up for it (or even visited) so things may have changed... I didn't get anything weird, but I don't recall putting my telephone number down (I never divulge my address or home telephone number online... it would be a bit weird)

try www.virtualstockexchange.com ... its american, so I didn't understand it so much, but it may be better

[pianolearner]

Why do they want so much info? And especially since house number, postal code, and phone # are required fields. I don't feel comfortable putting in that much info. Why do they need more than just email, username, and password. I tried lying about house # and postal code but then it said that the house # doesn't belong in the postal code.

After you signed up did anything weird happen?

No one in my family (including me) doesn't think I should sign up.

Pianorama,

There is no need to sign up with an online portfolio tracker because you can easily do this yourself with a simple spreadsheet.  You shouldn’t concern yourself about daily price movements of a stock (unless you are day trading it, which I don’t advise), you should be investing for the long term which means a minimum of 3-5 years at least.

I think the stock market is currently over priced, but if you really want to dabble with a virtual portfolio there are two EASY ways of choosing stocks and I will almost guarantee you will achieve the same performance as the average manager of the leading investment funds.

1) Buy and equal amount of the top 10 stocks (by Market Capitalisation) of ANY major index, ie/ FTSE100, Dow Jones, S&P500, NASDAQ etc. You will achieve +/- 2% p.a of the actual index.

2) Have a look at the average P.E ratio and Dividend yield for the entire major index. Only buy stocks in the index that have a lower PE ratio and Higher Dividend yield than the average. This may produce better results but you are unlikely to end up with many stocks. A good rule of thumb is only buy stocks that have a Dividend yield that is at least 2/3 x yield of a good quality corporate bond or government bond and  1/PE should be 2 x yield of a good quality corporate bond or government bond

For example, if the yield on a bond is 4% you should be looking for a PE ratio of 12.5 or less.

4 x 2=8%

8% = 0.08

PE= 1/0.08 = 12.5
 

[BoliverAllmon]

the reason why Berkshire Hathaway is so expensive is because it is Warren Buffet's company and they own tons of companies. here is a list of complete ownership.

Acme Brick Company
   

Johns Manville

Ben Bridge Jeweler
   

Jordan's Furniture

Benjamin Moore & Co.
   

Justin Brands

Berkshire Hathaway Group
   

Larson-Juhl

Berkshire Hathaway Homestates Companies
   

McLane Company

Borsheim's Fine Jewelry
   

Medical Protective

Buffalo NEWS, Buffalo NY
   

MidAmerican Energy Holdings Company

Business Wire
   

MiTek Inc.

Central States Indemnity Company
   

National Indemnity Company

Clayton Homes
   

Nebraska Furniture Mart

CORT Business Services
   

NetJets®

CTB Inc.
   

The Pampered Chef®

Fechheimer Brothers Company
   

Precision Steel Warehouse, Inc.

FlightSafety
   

RC Willey Home Furnishings

Forest River
   

Scott Fetzer Companies

Fruit of the Loom®
   

See's Candies

Garan Incorporated
   

Shaw Industries

GEICO Auto Insurance
   

Star Furniture

General Re
   

United States Liability Insurance Group

Helzberg Diamonds
   

Wesco Financial Corporation

H.H. Brown Shoe Group
   

XTRA Corporation

International Dairy Queen, Inc.
   

he also owns a huge section of coca cola, gillette, abc, disney, and other big companies. he is the world's greatest investor for a reason. oh and is worth approx. 30 billion dollars.

boliver