

Offer HN: Stock Tips from Seasoned Novice - kyro

Hey all,<p>I just wanted to see if any of you wanted investment tips and general predictions as to which stocks will rise and fall. I'm an avid watcher of CNBC, have an account on Zecco and have the Bloomberg app on my iPhone; so I'm pretty well informed. Email is in my profile, so let me know.
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treeface
I'm not what you would call an "expert", but I've got a degree in economics,
having spent a lot of my college years studying accounting, finance, quant
analysis, and other fun things. I also passed CFA level I and studied for CFA
level II before getting bored and moving on to programming full time.

My questions are these (and I mean no disrespect, if it comes off like that):
what value do you think your tips add for the novice investor above random
stock selection? What is your track record? What valuation models do you use?
How much analysis do you put into a company prior to investing in them? Do you
read all of their SEC filings (including all the footnotes)? Do you use
external sources for general economic inputs (e.g. how are you calculating
your RFR over any given time period)? If so, what are these sources and what
is your reasoning for using them?

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riledhel
can I just reply with this??
[http://www.dilbert.com/blog/entry/invest_in_whatever_makes_y...](http://www.dilbert.com/blog/entry/invest_in_whatever_makes_you_angry/)

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logicwins
I have been lurking around hacker news for awhile now and felt this is my
chance to chime in with my experience with the market to help out. I have been
a successful proprietary trader for 7 years, since I got out of college and
now at 30 I am looking to indulge my entrepreneurial spirit full time (there
have been many failures!).

Anyway, here are some things I live by:

1) CNBC, blogs, everyone has a vested interest to make you think it is really
complicated. Its not - stocks go up or down. 2) CNBC is a joke. In 7 years,
they have broken only a handful of stories and if you weren't a full time
trader it meant nothing to you. 3) Barrons is the best layman's investment
journal there is, and it only comes once a week on the weekend. 4) Invest your
money only during bear markets or when others see gloom and doom. Stock pile
your investable money and buy only when CNBC predicts gloom and doom (probably
1-2 months out of the year. 5) If you actually want to trade, get to know
yourself by reading books that talk about mentality over ways to actually
trade. Trading is 95% mental.

If anyone has any specific questions or just wants to know more about me, feel
free to email me at logicwins@gmail.com

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beagle3
"avid watcher of CNBC" and "pretty well informed" are at odds. Start reading
Denninger, Mish and ZeroHedge and you'll see why.

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mistermann
An upvote isn't enough to express how true this comment is. If your only
exposure to the market information is the mainstream offerings, you are like a
sheep being led to the slaughter.

I've never gotten anything really tradeable from Mish, but if you want to know
what is going on, it is a daily must read.

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fleitz
No kidding, I read an article which compared following Cramer's advice to
doing the exact opposite, and the latter outperformed by a significant margin.

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rmah
Beautiful troll! I almost bust a gut laughing.

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cincinnatus
The credulous replies are disturbing aren't they.

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yellow
If I told you I have an account at Interactive Brokers, Zecco, Scottrade, and
Sharebuild, frequent EliteTrader forums, and watch CNBC would people be
interested in my tips?

I would be hesitant to act on financial tips without a well defined history.
This is one reason why I'm a fan of the Covestor model where you can follow a
well-documented history.

Having said that, if you can provide some journal of trades that beat SPY, I'd
love to get your tips.

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secretasiandan
If you told me that you watch bloomberg for ambient noise and use CNBC mostly
for comic relief or to get frustrated/angry before a hard workout I'd be more
interested.

If you told me that you peruse nuclearphynance but that (almost) all forums
are mostly crap, I'd be more interested.

I've only just perused it but I don't think a covestor model is that valuable
because things like survivor bias and small sample size even with a sizeable
history (unless they are very frequent traders, in which case I think there
are better places for them than covestor).

I also don't think I would (nor should anybody else) act on any "tips", since
to me at least the connotation of the word is that someone tells you a "fact"
without you understanding the mechanism. If you don't understand the
mechanism, you might as well just go full bore with the survivorship bias and
pick the best track record. Related to the requirement of understanding of the
mechanism is the idea that you should invest in what you believe to be
valuable investment philosophy, regardless of past performance.

Also, I find offers like this generally worrisome.

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dinedal
What amount of money and how much time per day would I need to start making a
10% +/-3% ROI per month in stocks?

Is this even possible?

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treeface
It depends on who you listen to. I spent a good 2 years post college building
upon the foundations of finance, accounting (of all its various stripes),
monetary theory, international factor movements, quantitative analysis (read:
fairly high-level stats), portfolio theory (risk management), etc. Then you
have to learn how to read SEC filings (and foreign versions of the SEC
filings), what all of them mean, all the nuanced rules that the FASB puts out
(in the form of GAAP) and how they differ from the international standards (in
the form of IFRS), entire histories of companies down to the intensely nitty-
gritty details...

The list is basically endless. The worst thing about it is that even after all
this, something like 90% of portfolio returns can be attributed to sector
allocation, meaning that even if you do think a company is great, they might
just be the best answering machine company in an age that is on the cusp of
seeing smartphones.

This is why you'll often find analysts focus specifically on sectors (or even
industries), and only a few companies in them. It takes a _lot_ of time to get
enough information about the past, present, and (potential) future of an
industry and a company in order to know all the factors to make an educated-
enough guess.

In short, you can pick 30 stocks at random and you will probably have returns
very close to market average returns. The amount of knowledge (and
intelligence) required to guess better than other people is so immense, that
unless you're going into financial analysis as a career, I'd stick to ETFs or
managed portfolios. With an ETF, you can make bets on sectors, countries, or
the entire market, all for minimal fees. People much more experienced than
yourself will figure out what the best allocation of companies inside that
particular ETF is.

Still, anything beyond a portfolio that is perfectly correlated with average
market returns brings with it increased risk. In other words, the more you
screw around on the edges without having the years of experience required to
know what you're doing, the greater the chance you'll make higher (or lower)
returns than the market.

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nathanwdavis
There is some evidence that you can beat the overall market by overweighting
ETFs that are trending higher or whose relative strength is higher.

I created a site ( <http://ETFtable.com> ) to make doing this pretty easy.
Sorry for the plug, but I think it's contextually relevant. Let me know what
you think.

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treeface
I put on my skeptical hat when I hear claims like that. I'd have to see
extremely solid evidence to believe it.

Nice site! Layout is cool. I haven't dabbled too much in ETFs or tools for
researching them, so I'll have to pass on any judgment due to a lack of
context. Still, I'm sure someone will find some use for it.

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nathanwdavis
Here are some backtested results of some RS ETF strategies. Specific industry,
asset class, and country ETFs just haven't been around long enough to really
backtest for long-term out-performance, but these seem to indicate you can
beat the overall market with lower drawdowns with an RS ETF strategy:
[http://etfprophet.com/two-simple-relative-strength-
rotation-...](http://etfprophet.com/two-simple-relative-strength-rotation-
models/) <http://www.bpas.com/media/HBT/dent_tactical_r3.pdf>

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treeface
Thanks, Nathan. I'll be giving these a look later today!

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hamilcarbarca
What amount of liquid capital would you deem appropriate to have before
beginning to "invest" and not play with stocks? I have heard that it is not
worth the risk for anything below $18,000.

Same question, only for options.

What percentages of capital should someone in their 20s split investment
between bonds/index funds/stocks?

What do you think about ishares vs. ETFs for 8 months to 2 year investments
into emerging markets?

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mrschwabe
Did you get in on any rare earths stocks before China's embargo?

What's your take on them, do you think they've peaked or still skyward from
here? A couple stocks I was looking at only a month ago have already doubled
(RES.V, HUD.V)

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cincinnatus
I was expecting "buy low, sell high"

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iworkforthem
I was expecting buy "citibank", hold for 3 years and sell. :]

