Starting to learn investing

Investopedia is a good resource.

As far as investing in needs, I think this is a misguided philosophy. Money is made in markets by identifying incorrectly priced securities, irrespective of the industry that the company is involved with. Your options will open up much wider if you take this view.

What triggered this honestly was I was at a mechnic today and just thought about what the world is. Like most people need a car, and everyone's car breaks down so owning a mechanic shop or investing in one could work. People need homes, and homes need repairs so look into companies like that. Im not aiming to be the next millionire but I want to at least see how far this will take me.

There's a lot of open sources on YouTube that I've utilized in the past. Yale has some good videos.

Ultimately, you need to go to school. If you're in America they pretty pay for it all, if you know how to work it.

You need capital. When you have capital, then you can start investing. For most people, coming up with enough capital takes years of hard work.

I had a markets professor who explained capitalism and markets to me this way, and it always stuck with me:

> "Prices are information. Information creates capital flows. Capital flows create productivity. Productivity creates wealth and the advancement of human kind."

So basically when you look at the stock market, it's just a place where everyone expresses what they think different companies are worth.

When people see enormous returns by a given company that aren't commensurate with it's current price, the price will be bid up. This shifts capital to places where it is needed the most (for example, read about the history of railroads in the US; investors saw that rail was a promising industry, so yields on rail bonds dropped, which allowed them to finance their expansion cheaply through borrowing). This concept has been the principle failing of communism and non market based economic systems. Inaccurate prices (information) distorts capital flows and destroys productivity.

So your goal is to find the future. Making money in the stock market is basically just a process of incorporating information into the market. Buying necessities doesn't mean much if those stocks are already fairly valued. I hope this all makes sense.

Like the previous guy said, this isn't a great mentality to have. the more you learn the more this will make sense to you too. You need to analyse stocks based on prices, highs & lows over specific time periods, trends, etc you will build a list of potential stocks then narrow that list down the more you learn what to look for and then invest in the few you think are solid, at least that's what I am doing.

You can you google finance to search your stock market and find stocks based on specific criteria. you want to be looking at volume too, the more volume the more liquid a stock, it makes it more likely that when you place a buy / sell order someone is at the other end to buy what you are selling or sell to you what you want to buy. but it also increases the risk as the price shifts quicker. if you look at Forex it is extremely high liquidity, shifts so much back and forth, where as if you look at maybe domino's or papa john stock, gentle long term gain. or look at something between that shifts weekly. you need to decide what kind of investments you want to make. Long term, mid term or short term. this will depend on many factors like your initial capital, willingness to take risk, confidence in understanding that specific stock

okay then how can I start building capital

This guy gets it.

I wouldn't worry too much about actual trade execution for now though. You probably won't be dealing in quantities large enough to actually move the market. For example, the last quote I can get for Apple says that I would have to buy 6500 shares in order to move the price 1¢.

Gotta get a job, preferably one that pays well.
Welcome to America.

if you have little capital then you need to look at cheaper stocks. lets say you have $500. buying 5 stocks for $100 that gain maybe 0.1 a week, you have a lower risk if you choose a company thats well established and you will slowly but steadily gain profit, but as you can see with such a small capital you can only buy a few stocks whereas if you have $5000 you could buy 50 and make more profit quicker.

lets say you have $500 and the stock is $0.01 each you now have 50,000 stocks, so you take the risk that the penny stock is going to rise alot due to its high volatility but due to this, it is high risk and a lot of companies are not well established if they are only penny stocks
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highly liquid high risk penny stocks - if you want short term. mining / oil / natural gas / gold / diamonds / exploration companies

these sectors have the benefit of high liquidity but with the underlying potential to find a new oil reservoir, or to find a suitable gold prospect and the stock will jump massively./ but you are taking very high risk trading like this but cant be very profitable if you do it right.

CAN be very profitable*

Now what if I actually want to own businesses and real estate instead of just playing the stock game.

For the love of all things holy, do not get into penny stocks. Read my previous post about how it takes thousands of purchased shares to move a large cap stock 1¢. Penny stocks are very thinly traded, and the price difference between what you can buy them for and what you can sell them for ("bid-ask spread") is enormous. It doesn't take a very large order to move the market very quickly there. Penny stocks are the investment equivalent of the casino.

I am new and still learning but I thought penny stocks are a viable option?

For example if I pick a stock with the price of 1¢ that is volatile but has a steady overall uptrend with steady peaks and troughs and I have $500 initial capital, I could invest even $250 for 25,000 stocks. If the stock price shifts even to 1.5¢ that means i have made $375. subtract the commission lets say $20 overall buy /sell. thats $105 profit. and it's not unreasonable for stocks to shift like this in repeating patterns, even if they are high risk and volatile.

like i say i am still new i don't know if this is correct way to think or what

>1732770
I feel as though you maybe think that investing is a way to get rich fast, so let me tell you this. It is extremely rare that someone who invests say $2,000 can become a millionare, now its happened before however it most likely wasnt due to skill but rather pure luck. If your serious about the stock market you need to become a good enough invester that other people will pay you for your advice about investements. In other words youll need to start off by investing other peoples money. Say your an analyist for a hedgefund and make $500,000 a year. One day you fuck up and loose your fund $50,000,000 and your fired. Well in this situation you have experience in the market and you can invest your much more of your own money in the market with much more confidence and make far more gains. Don't invest your money in stocks if you wouldn't be willing to pay yourself for your own advice.

i also use stock charts with simple averages, and rsi + macd + cci indicators to see when the best times have been to buy and sell in the past and to identify patterns in chart/s.

That would be true if not for bid-ask spreads. The price that you can sell a price for and the price that you can buy a stock for are not the same.

A bid price is what you can sell it for. It will be lower than the ask price, which is what you can buy for. The difference between the 2 ("bid-ask spread") is kept by your broker as a fee for executing your trade. Liquidity affects bid-ask spreads a lot, and penny stocks are usually very illiquid. You might buy a 30¢ stock and discover that the ask price is only like 25¢, which is an enormous portion of your investment. To use the Apple example from earlier, its bid-ask spread is 12¢, but the stock is also $119, so that spread is only like .1% of your investment.

Look at commercial real estate stalks. Perform well during good times and bad times.

What about very liquid penny stocks. Like my examples oil / natural gas / exploration companies.

Take LON: SRSP for example. If i bought stocks 2 weeks ago for 0.65, they would have peaked last week at 1.55. so wouldn't there have been profit to be made there? im not sure if I am understanding bid/ask correctly. i was under the impression I could buy for 0.65 when the stock is low, sell for 1.55. maybe do this over course of many weeks, make a bit of profit, then keep building capital a reinvesting until i get enough to invest in more stable lower risk stocks.

I think I am also underestimating the mammoth task of even trying to predict the trends accurately in such volatile stocks.

You would have made profits there, yes. Bid-ask refers to like one instant of time. Like Imagine you buy a stock, it fills at 65¢, and then you immediately try to sell it. If the bid-ask spread is 5¢, you will get 60¢ per share. That 5¢ went to the broker to compensate him for the trade, and you just lost money.

So basically when you buy wide bid-ask stocks, you are automatically starting off in the red on your investment (e.g., if you buy at 30¢ and bid-ask is 5¢, that's like having a 16% loss right off the bat).

I think I see what you are saying now. the market-maker will buy the stock on your behalf for a lower price and sell it to you for a higher price. so if you attempt to sell it back on the market immediately you have lost the difference between what the market-maker paid and what you paid to buy it off of them.

Do brokers take the bid/ask spread as well as a flat fee?

I was looking at brokers that charge a set fee of around £10 per trade.

why do you think buying a notebook is going to make you an investor

kill yourself OP

that's a great question.
However, real estate is still very much a numbers game; and you still need capital to buy real estate, unless you want to borrow money, which is ill-advised and difficult to borrow as banks are jews.
As for businesses, what do you have in mind?

>t. martin shkreli

Well my friends father owns some small businesses, he was an accountant and got alot of capital over time. I think right now he has like 2 mini marts, and 3 car washes and he is doing very well off it seems. The whole point of me asking all this was basically to see how to start it as like a side business. I don't expect to just invest in all these things own business's and just win life. I wanna see if it is a viable side profit business to invest and own businesses and real estate.

invest in death. crematoriums.

Yes.
I admire your fascination.
Many investors these days know nothing about investing.
Doctors, lawyers, etc. need some place to offset their income, and look to financial advisors and financial management companies to deal with their gross income.
Businesses are very difficult to manage, and have high probabilities for failure.
I wish I had more information.
Business owners have told me that operating their business is an absolute full-time job, so I'm not sure what you mean about "side business".
I cannot stress education enough. Read as much about macro-economics as you can, financial markets, investments, banking and money.

sorry OP i hijacked your thread

Real estate you have large upfront costs as well as fees for someone to sell your house unless you are going to do all of that work yourself.Yes, everyone needs a house, but it is an established market that is hard to break into if you have no idea what you are doing and very little capital.

you could make money buying houses cheap, fixing them and selling them for a profit, but again tonnes of work involved organising people and everything else that comes with that, paperwork etc. then you have the risk of not being able to sell or value dropping, so your money spent of fixing will be tied up until you can find a buyer, comes down to again, long term vs short term investment strategies, can you afford to have to wait a while for a buyer to be found.

not that there isn't work involved in the stock market but it's not the same kind of work.

as for owning your own business i have no idea. i imagine it would take a lot of time and effort to get it to a point where it's profitable enough to pay out more than you've paid into it and since you are only just beginning that is like jumping into the sea without being able to swim.

By side I mean have a manager there, someone I can trust to run it for me. My friends dad has a full time job and just shows up to his stores to check in a few times a a week

Water

How are you going to pay the manager?