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Mo-

The Investments Thread

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Salams folks.

Over the past year and a half i've been studying business, and in particular i've been aiming towards finance. For about a year or so I have been using an online stock simulator, talking to investors (huge Arab ones and small uni graduate ones) and learning the basics of investments.

I thought i'd make a thread where I could share my stock picks I choose on simulators, my notions towards risk and my attitude towards investments as a whole. To start out with I'll begin with some principles that I have learnt from my experiences through simulation, the classroom, talks with investors and common sense:

1. Have faith in Allah! And that whether you win, lose, or go bankrupt, it is all apart of his plan!

2. There is always risk. No matter what you do, how you do it, when you do it, every action you perform entails with it a risk, and the greater the risk the greater the reward. Just because a company is too big to fail, just because a country has the strongest economy in the world, it doesn't mean the risk does not exist.

3. Think how well an investment will serve in 10 years (courtesy of Mr. Warren Buffett), as opposed to the immediate future. It is no great secret that time pays off, and that the faster money comes the quicker it will go!

4. Don't become too greedy. This is the fastest way to lose money.

5. Optimise investments by hedging risk. For those of you who do not know what hedging is, it is the reduction of risk by giving up a portion of profit.

6. Have an exit plan! It is just as important to be able to leave the investment and cash in as it is to enter it.

7. Invest locally as well as internationally. It is a great feeling to see the fruits of your investments in the community around you.

8. Diversify your portfolio by having many small investments as opposed to few large ones.

9. Be cautious and learn how to leverage off incurred debt through smart post-investments.

10. Gather as much information as you can, about everything you can, so you have at least the slightest idea of the smallest of things, so your decision in what to invest in is more efficient.


Investing is a learning process, and some learn faster than others, but if you stick to your principles and add in a little experimentation here and there, you are almost sure to succeed.

At the moment I am running two portfolios (one is in recovery, haha), so I'll share with you the one that is doing good (it has a projected annual return of 31% and is pretty low risk), which the layout is the following:

 

Company name (Stock symbol)
% of total portfolio: x%

 

This portfolio I have is predominantly based in the consumer food market and features room for liquid cash so the stocks can be sold. All of the stocks in this portfolio are longed stocks, which means, as opposed to shorted stocks, I believe they will increase in price and thus I am taking what is known as a bullish attitude, as opposed to a bearish one. This portfolio has performed well both under poor and fair market conditions (the presidential elections, recent problems in Cyprus, Greece, etc.)

 

Here is the portfolio:

 

 

 

Coca-Cola (KO)

% of total portfolio: 7%

 

 

Doctor Pepper Snapple Group (DPS)

% of total portfolio: 9%

 

Kellogg (K)

% of total portfolio: 10%

 

Pepsi Co (PEP)
% of total portfolio: 14%

 

Tyson Foods (TSN)

% of total portfolio: 19%

 

Wal-Mart (WMT)

% of total portfolio: 30%

 

% of portfolio in cash for liquidity: 7%

 

 

 

 

These numbers are rounded so please excuse the 4% irregularity. I made this portfolio using $1000 dollars in the simulator, otherwise I would have diversified it even more. I chose to stick primarily in food due to the fact that people always have, always will need food. And I chose these companies based on their size and returns in previous years, their value chain and the worth of their supply chain. I left the seven percent liquidity so that if any investment went bad I could afford to buy out of it. The reason I did not short anything on this stock portfolio is because I could not afford it on a $1000 dollar budget to stocks relevant to these ones whilst still investing enough to warrant shorting other stocks to hedge risk.

 

Now, although these investments are in public equity (i.e. they are in publicly owned companies), the same principles for investment apply to them as to private investments.

 

Here are some links to sites you may find useful:

 

 


Stock simulator:
www.investopedia.com/simulator

 

Investopedia:

www.investopedia.com

 

The Wall Street Journal:

www.wsj.com

Forbes:

www.forbes.com

 

Bloomberg:

www.bloomberg.com

 

Yahoo! Finance:

finance.yahoo.com

 

 

 

I will be posting more here later, and if anybody has any questions please let me know. It would be great if any of you decided to start up your own portfolios on Yahoo or investopedia and post your success stories here! Perhaps we could even have a little competition huh? :P

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Hey Mo link your sims please, I wanna have a go

 

They are in the spoiler at the end, but here you go:

 

investopedia.com/simulator

 

This is the best free one out there imho. Yahoo has a simulator too but I like this one more. You could also feasibly make your own on excel but you'd have to write a macro or manually update the prices each day.

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ill stick in 1000

 

You can create your own investment environment with your own rules. They give you $100,000 dollars as default, I created another one with $1000.

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do i just check these free add ons and click yes? what does it all mean

 

There are guides on the website, but its simple really:

 

1. Register

2. Read the basics on longing and shorting stocks

3. Go read up on companies you have heard of and check rates of return charts (available on Yahoo Finance)

4. Choose the investments you'd like to make!

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public or investo game aghrkrkakrka

 

It's irrelevant unless you plan on being in the Investopedia competition.

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I did Investopedia in my Accounting class. Wal-Mart did well for me. Slow and steady increase. So did Target, although I think one day I had a bit of a shocker when it fell.

 

There was a really cool site we went on that said different types of industries, all the companies within it, and their size and stuff. Super cool :yes:

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This is awesome. I anticipate good things from this thread brother. Don't let it die an undignified death of those other threads that haven't been updated within 30 days.

 

Plus I seriouly need to learn more about this stuff.

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soo i have 100k

 

 

i bought 100 wmts cuz everyone needs food

 

but i typed in tesco (see a pattern) and 3 diff things came up. where is the tesco i want.

 

i realize tesco is doing badly atm, im hoping if i buy them now theyre low value and they cna go up

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