I want to get into investing.
Hello all,
I currently work on Wall Street at a tech/financial firm. I work in network operations. I love it, I love the atmosphere of wall street. I'm making better money and want to invest it. My co-worker recommended this forum to me, and the book "A Random Walk Down Wall Street." I am half way through the book, and want to learn more. I'm not into a quick buck or gimmicks.
I'm looking to learn a ton, if you all have any tips it will be much appreciated.
You'll get the most out of this forum if you figure out what you are interested in first. Equity Research, Asset Management, Private Equity, Venture Capital, etc. Then have some specific questions to you that maybe haven't been answered before.
There are plenty of resources, guides and questions on this website. Just use the search function on the top right of the page.
I like the idea of Equity Research. information is valuable. I don't want to work at an investment bank, as I love my job as a network engineer. I just want to learn the skills of an investment banker.
You wanna learn how to bank investments bro? Just get on powerpoint and rearrange meaningless jargon and logos for 5 hours.
Seriously though get on SeekingAlpha and read up on stock analysis and find a particular industry you're interested in. Seems like you'd enjoy Tech Media and Telecom (TMT) which I am sure you are much more knowledgeable over than I am.
You don't necessarily need to learn financial modeling/valuation to put money in the stock market though. If that's what you mean by "skills of an investment banker". If you're really keen on doing so, there's plenty of free resources online like Breaking Into Wall Street or Wall Street Prep. They also have paid courses which I think WSO gives you a discount on. I've done Wall Street Prep and it's very helpful.
You need to figure out where your skills/industry expertise can best benefit any deal you do and evaluate your personal temperament for risk. It's kind of weird, but I found a lot of value in reading philosophical works to find a path I like for investing.
So many other factors too like how much free time you have, IRR goals, etc...
read the book "reminiscences of a stock operator"
Just read a ton: read some market letters/blogs, read the FT, read serious/casual books on economics, read 10Ks, use stock screeners, etc. Takes some time to get a general picture of the market.
If you want to learn quickly I suggest just jumping in and start investing in companies you believe in from the start - obviously, manage your risk if you're gonna do that.
There are so many forms of investing that maybe your first action should be to explore what is available.
First there is the passive v active investing.
There is a misconception that passive investing is purely dump cash and withdraw either a profit or a loss. Investing in index's is a good way for most people to invest especially if they have time constraints. But there are so many types of index's that on a more macro level you can do research and invest in this way. A major benefit is the diversification that comes with an index.
Active investing can encompass anything from buying stock to selling credit default swaps to buying volatility and everything else under the sun (you can buy and sell volatility on an index too).
My advice would be to try and understand what you are interested in below I have listed some books to help you get started. Do not think you need to read them all nor read them all cover to cover some are simply good for reference / helping you to consider how to formulate investment ideas / how to look at companies. Some of these books are also very academic and in practice most people do not use that level of analysis to value a security.
John Maynard Keynes — 'It is better to be roughly right than precisely wrong.'
Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics) Fisher, Philip A.
Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits (Bloomberg Financial) Passarelli, Dan
Dead Companies Walking: How a Hedge Fund Manager Finds Opportunity in Unexpected Places Fearon, Scott
Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations (Wiley Finance) Carlisle, Tobias E.
Financial Statement Analysis and Security Valuation (Int'l Ed) Penman, Stephen H
Investment Valuation: Tools and Techniques for Determining the Value of Any Asset (Wiley Finance) Damodaran, Aswath
The Dark Side of Valuation: Valuing Young, Distressed and Complex Businesses Damodaran, Aswath
Business Analysis and Valuation Using Financial Statements: Text and Cases Palepu, Krishna G.
Valuation, University Edition, Sixth Edition: Measuring and Managing the Value of Companies (Wiley Finance) McKinsey & Company Inc.
Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions (Wiley Finance) Rosenbaum, Joshua
I will probably be in the middle of passive and active. Thanks for the tips.
good thoughts, +1. I help clients' kids with this all the time. here's all you need to know:
as for more book recs, here you go
interpretation of financial statements, ben graham version & warren buffett version
security analysis, 6th edition
intelligent investor, ben graham, skip the jason zweig commentary
millionaire next door, thomas stanley
not suggesting any bond books, this is not important from an investing standpoint, but you do need to understand how the bond market works. start with frank fabozzi, but that's less important than those basic principles.
also agree with DickFuld on automating it. if I didn't have the interest or time, I'd just buy VTWSX (or the ETF VT) on a monthly basis, set it and forget it, thank me in 20 years.
I found the Zweig commentary kind of funny, and at times he does highlight the most important pieces of info in the chapters, which makes you remember them better. But I could see why you would skip them.
If you are young, your most important investment move is to buy equities early and often. Don’t spend a lot of time thinking about it, set up an automatic plan to buy equities every month (or week or quarter or whatever). It is imperative to automate this process so you can’t wimp out when news gets bad....it will get bad many times throughout your lifetime and that usually coincides with low prices and the best time to buy. If you are well diversified, this plan will work with an extraordinarily high probability. Max out your 401k before you do anything outside of it.
Im 29, I started my 401k 3 years ago. It’s a bit difficult to max my 401k at the moment due to saving for a bigger house. But eventually I will max it out.
word of advice, don't buy a bigger house. buy less than you can afford, and stack that paper homes.
By "get into investing" do you mean move to a role where you are involved in/contribute to investment decisions or do you mean you want to invest as a hobby? I highly recommend reading the intelligent investor by ben graham to first get a general understanding of the principles you should go into investing with, and it may help you figure out what style of investing you subscribe to.
Investing is...boring? Am I wasting my time? (Originally Posted: 04/02/2015)
So I've spent about a month trying to do stock investing and somehow I just don't "get it". What I mean by that is that no matter how much I learn and read and push....I just feel bored. Every time I open an annual report my attention span goes down to 15min. With reports about China's economy...it's 5 min.
I know the first thing you thought was "a month?" - this kid is a joke. That's definitely what one of the two voices in my head is telling me - "you only spent a month doing this, how on earth can you know if this is right for you?" The other though is saying - "well if you're feeling bored then what is going to change after another 5 months?"
This is where I need some input. Am I judging prematurely? Those of you that did get into investing (HFs, AMs, PEs) - did you find it boring in the beginning but different once you understand a lot more and real capital is at stake?
Any advice? Perhaps looking at different asset? Partnering with someone?
I want to invest as a hobby.
I suggest, you vest your money withsome trustworthy manager who has a decent track record. Because investment as a hobby might not fair well.
"You just gotta start somewhere - for me this is both interesting and makes sense. And also to make it clear I'm not asking "how do I not read 1500 pages and make loads of money" but rather how to BEST approach 1500 pages" (HedgeWhore). Maybe you should have taken my advice and NOT read a 1500 page report. I will reiterate what I said before and frame is for the question, "is investing boring". You are not going to understand a 1500 report are even most of an annual report when starting off. If I just gave you a rule book for Football would you find it exciting, no? My suggestion is start investing in some high quality stocks so you can get an idea how this works without risking alot of downside. From there your experience will allow you to understand more complex stocks/situations so that when you read a report you will find it more "interesting". That being said, I dont think anyone finds reading annual report thrilling, but finding investment opportunities in annual reports and making money off of them is definitely interesting. Good Luck, hopefully you next month goes better.
Reading reports is generally extremely boring/dry. What's interesting (and I think most will agree) is when you talk to management teams, try to pick their brains, going on site visits, etc and synthesizing all of this information to form an opinion.
sounds like you need direction. there's nothing worse than doing all the work then finding there isn't an interesting trade at the end of it. once you see a thesis and you're working to prove / disprove it then it gets interesting.
I view investing the same way I view golf. The first few months/years are absolutely miserable as you start developing your swing/style while mostly sucking and drunkenly hacking your way through rounds. At some point something clicks and you either get it or you don't. The danger in pursuing something for the wrong reasons is that you are destined to be mediocre at best given that you will be competing against people who actually enjoy doing the work. My old partner used to take stacks of filings home each night and enjoy voraciously reading through them. It's probably too early to tell which camp you fall into but know that you will be swimming upstream the whole way if you don't enjoy the work.
that's exactly how I see it. I guess it's just too early to judge like you said and so I'm probably going to give it at least a couple more months. It will either click or not I guess
Large majority of investors who spend tons of time researching and enjoy the investment process wont even beat the S&P over the course of their "investment careers". If you don't like it, find some lost cost ETFs/mutual funds and dollar cost average while you find a way to spend your time doing something you enjoy. You will likely outperform most investors anyways.
If we're being honest, at face value it seems like you're interested in getting into "investing" because of the prestigious career path. Some people are attracted to that; I get it. But at the end of the day, money doesn't buy happiness. I feel like I'm fortunate because "finance" happens to make good money and I genuinely enjoy it. I stay stick with it, if you want to stay on the finance path, I suggest find a finance job that more suitable for your personality. Do you want to be client facing (IB) ? Do you like research (AF, PE, HF)? Are you a quick decision maker and risk seeking (trading)? There are so many different paths within finance.
I have no idea what your situation is. I love learning about companies, first of all for many businesses it's simply interesting to know how they work - beyond becoming a better investor, learning the dynamics of many different industries and companies is really just learning about the world around you. So to appreciate that, you have to be the type of person who likes to really understand the world around them. If you're not a naturally inquisitive person and don't give a crap, that's perfectly fine but you won't enjoy the investment process. Secondly, there is an appeal to hunting for value that others might be missing, and then seeing how it plays out. To that end, if you appreciate that part, the whole process is kind of like a game that you are getting paid to play.
I suggest you go out and read about (annual reports, conference calls, other materials) a company that you already know about and where you find the product interesting. Focus at least first on understanding the business model in-depth and comparing it to competitors, rather than diving into the drudgery of modelling out the financials/etc. If you still drop reading after 15 minutes, then this industry isn't for you.
You might be on the wrong website
I don't think it is a bad idea or wasting time. In starting it is boring but after that you are habitual with this.
Hi Cli2trader, if you are looking for long term investments then please read Common stocks and uncommon profits followed by The Warren Buffet Way, Value Investing (Bruce Greenwald) and One upon wall street. Besides the books, common sense will help you a lot.
Best Investing Resources and Tips (Originally Posted: 10/20/2012)
So where can you go and who can you talk to without getting caught in a hidden agenda? Well here’s a list of a few resources I’ve uncovered through the years that have helped in my financial understanding.
General Information
For starters, if you’re looking for basic information on stocks and bonds, you’ll find it hard to get a better resource than Investopedia. This site has a wealth of information that’s all free and available to the public. Since the site is very robust, it’s likely it can answer almost any financial investing questions you might have.
Simulation Investing
Have you ever wanted to test your strategy before you actually try it out with your hard earned cash? Well, at the Motley Fool, you can do just that. By signing up for a free account, you can pick stocks that you feel will beat the SP 500 and test your strategy. Not only can you test your strategy, but you can also track the successes of other members and users. This approach will definitely provide a quick a free way to validate your investing approach.
Video Based Learning
Although investing is a hard subject to thoroughly understand, visiting the next resource may add a few steps of enthusiasm to your approach. By visiting a website called BuffettsBooks, you’ll be sure to watch over 10 hours of video content that teaches investors how to invest like Warren Buffett. The site also provides a money forum where members contribute to each other’s stock and bond picks. Although the site isn’t as large as other investment sites, its community of forum members are some of the most astute investment thinkers you’ll find.
With so much information available online, it’s easy to get tricked into thinking a site is an informational authority when in fact is a marketing scheme. When it comes to investing, these three sites are simply the best on the net. With a little determination and a lot of studying I’m sure these resources will provide you with the knowledge to talking your investing goals.
Obtaining a great start on your investment approach would start by reading a Warren Buffett Book. If you ever wondered who is Warren Buffett or how he pleased billions, start here.
Fisher's book is a great read. I second the recommendation.
shameless self-promotion
Is investing worth the headache? (Originally Posted: 06/01/2014)
I am an incoming investment banking analyst at a BB, and have also spoken to other classmates who are entering into some career in financial services (audit, consulting, trading, etc.) about this same concern. I have a decent sum of money just sitting in a checkings account, and feel like a complete hypocrite majoring in finance and then watching it return absolutely nothing. I know that these career paths often make it difficult to invest due to regulations, procedures, and documentation. Just wanted to see if others have dealt with this issue, and if all the paperwork and headaches associated with investing some money is worth the returns.
Not looking for advice on what to invest in, and I don’t plan on actively trading on a regular basis. More so worried about being that analyst that requires extra HR legwork and approval from group heads just to get a return of a couple hundred bucks.
generally not worth it wait until you hit 3mm, then play it safe and just go to PWM
It's worth investing your money. It's typically not as big of a headache as you might think. At the past two large financial institutions I've worked at, it's pretty much a matter of emailing your compliance team with which company, how many shares you want to buy. For things like ETFs you often don't even need approval (generally if there isn't any one holding that comprises more than 10% of the ETF). You might be subject to holding periods of like 30 days or so, but like you said, you won't be actively trading anyway.
So if time is your worry, it really isn't a big hassle. As far as returning "a couple hundred bucks", that's entirely based on how much money you put in and what you choose to invest in.
Not worth it. Buy the market and chill
I might not be able to speak through experience but I'm about to start my stint as an IB analyst and I plan on invrsting my money via the company's 401k/IRA and my online brokerage. I did the same in my previous internsip.and hope to keep doing so in the future. It's not too bad really. If you're short on time, you can always just buy an index fund and if you do it periodically, over time, you should be fine
I don't think he's referring to how much time investing would take up... I think he's more getting at having to deal with regulations and company policies about investing seeing as the company is a BB and may likely have some form of contact or relationship with potential investments (therefore not allowing investment in said companies). He's asking if investing is worth it and if taking all the time and effort to avoid being charged with insider trading will pay off in returns.
Wait for a downturn, buy the S&P, and then fuhgeddaboudit. You'll thank me in 20 years.
I've learned some valuable lessons losing my own money on the market.
this.
even though I advocate for self study, reading books, and learning accounting/portfolio mgmt/ouija board reading, the best way to learn is by actually investing your own money and inevitably making mistakes. try out different stuff with money you can afford to lose (don't invest your rainy day fund) and you'll eventually get better or you'll get frustrated, in which case you should use wealthfront/betterment until you get to a couple mil and then you should call me (or someone like me, our experience with finance people as clients has been mixed).
Investing - First Year Analyst (Originally Posted: 02/26/2012)
I'll be starting my post grad IB analyst position this summer with a strong MM firm. My group works in M&A in a niche market that isn't located in an area associated with extravagant costs of living. I have pro rated my 70k after taxes and have been working on a reasonable budget plan. The apartments I have been looking at are in the 600-700 range and I wont be spending much on going out since I don't drink (weird I know). My budget has been set up so that I can commit $1500-$2000 per month to investing.
I have never had the disposable income to do any investing for myself before outside of unrealistic trading sims. So, I'm looking for a place to start in order to start building wealth. To anyone who is/has making/made it, what would you recommend for a beginning investment strategy?
I'm looking for some introductory advice/strategy based on the constraints of capital listed above and average to slightly below average risk aversion. I'm not trying to fish out your stock picks or winning allocation mix, but any thoughts would be greatly appreciated!
Start by reading books. Lots of books. Then start looking at how stocks really trade (You'll see that theory and practice are seldom the same) In the markets, it's all about who you know, if you know a certain brokerage firm who's going to move the stock, etc.
1st book i ever read was Stan Weinstein's How to profit in bull and bear markets.
Financial stocks have starting to really take off. I am long WFC and JPM
Energy giants like Chevron, Conoco Phillips, and Exxon are undervalued.
I am also long CHK, it's a little speculative, but way undervalued.
If you're working in IBD, then likely you won't have time to actively manage a portfolio; it's very true that those in high finance are often (and ironically) the worst at managing their own personal finances, probably due to the time constraints.
The best idea is probably to do passive investing through ETF's, which has the added benefit of not having to go through compliance every time you want to make a trade.
If you do end up with some time, I second pitbul13's suggestion- read a lot of books. Start off with Ben Graham, but there are lots of different arguments out there as to how to invest. Personally, I found Greenblatt's book to be pretty engaging and also a quick read.
buy a company, dont buy a stock.
As timatom90 said, invest in some ETFs. There are plenty out there and they offer more than enough diversification. I would personally recommend Vanguard ETFs because they do not charge that much and you can trade them commission free (assuming you have xx amount of $ in your Vanguard account.)
Also, perhaps look into Mortgage REITs... I am long AGNC and NLY, both pay a 15%+ dividend and if Bernanke stays true to his word on keeping rates low through 2013 then you should be able to enjoy that yield for a bit.
I would concentrate on getting down maybe 5 ETFs, perhaps some mutual funds to make up ~60% of your portfolio, then focus on some high dividend paying stocks and some REITs and keep 10% in cash. Just my opinion.
i second waymon, look into vanguard funds.
also before you start investing I would save up atleast for the first 5-6 months if you don't have backup cash already.
I have no doubt that no one here will agree with me on this, but why waste your time and money investing right now?
Set aside a savings account for a rainy day and drop a % in your 401k for every paycheck.
70k while it may seem like a lot, really isn't. The money is going to go quick. If you're networking like you should during the week/weekends then most likely you're going to spend a decent amount of money going out and meeting others in a social setting.
The way I see it- Would you rather sit on your couch during the weekend and save 5-10k/year to invest or would you rather be spending this money on investing in your CAREER by making contacts and meeting others who can ultimately catapult you into better positions and opportunities?
Now, there is no doubt in my mind that it is possible to do BOTH (I'm sure IP has it down to a science). However if you're like me, managing your finances very tightly can also put a strain on your social & personal life.
The above poster was right when he said read lots of books. Some good introductory books are One Up on Wall Street by Peter Lynch and The Most Important Things by Howard Marks.
I don't buy the indexing idea. If you are a more passive investor than I would consider buying high quality dividend stocks on market dips (e.g. MCD, T, KO). With correlations extremely high right now, there will be plenty of good buys when the market corrects in the near future.
Stocks and bonds are toxic waste, get into real money and real assets and stay there.
With that small amount I'd say go for concentrated positions in a few highly-researched stocks. Go for value. I like the CHK recommendation, but don't suggested tossing capital into enormous companies that won't yield high returns any time soon. You're young and can afford the risk if you're looking to make a little money. Toss some cash into F, CHK, LULU, etc. with high ceilings and good (short-term) upside.
Thanks for all of the input guys! I greatly appreciate you taking the time to give your perspective on the matter :D
looking for some advice on investing (Originally Posted: 08/13/2015)
as my first post, I wanted to ask some questions that have been bothering me for some time and I hope that, although I checked, they have not yet been answered. still being at university but I am trying to manage some little money (my savings) with quasi-good results (performances are strong but so is my inexperience so a great part of them might very well be total luck). the portfolio is a concentrated portfolio - equities only. some long standing doubts:
1) I read that you have to be comfortable with what you do not know (quote taken from this very forum) and I absolutely agre but the question is: how do you practically do that? how do you cut through that uncertainty? some things are too big to ignore and my first instinct would be to simply stay away but even in the msot "secure" (relatively speaking) picks there are so many moving parts and things that dramatically impact is hard to make decision without totally losing sleep over it
2) I am not a divrsified investor - I have at best 5 picks at the same time in my portfolio and their weight is confidence based (I use some analysis to assess whether some shocks - mostly macro - would affect my portfolio and on this I may tweak things but nothing dramatic). How should I proceed to estimate my "reuired return" since CAPM assumptions do not hold? (there are many different problems with CAPM but this one is an issue also to me)
3) following up from 2), given, how do you say: "ok 20% looks like about right when I think of the risk of this stock with zero growth)". why? I mean, I have many inputs that influence my view on risk but how on earth do you translate into that number? I mean I think that, from my very green point of view, assessing required return is just as important as assessing future growth since 1% here or there makes the same difference if I take the fundamentally linked version of the multiple P/E. but then again I might be awfully wrong.
4) another important question that I came to face was how to put "somewhere" the input i get from the macro picture (as raw and wrong as my view may be it's still a view) in understanding the implications at micro level (my sub industry and my stock in particular)? is there an approximate way to do that?
I know much of this entails the "mindset" with one approaches what he does but, to me, it's still "advanced" stuff
2&3 I was trying to give you a good answer for these questions, I really was, but investopedia is prob your best asset for a beginner. They have a pretty good article on how to calculate RRR
http://www.investopedia.com/articles/fundamental-analysis/11/calculatin…
There are a number of excel templates you can download online that might get you started. You can assign weights to different macro conditions that could affect the momentum of your stock. For example, assign a particular weight for the strong US dollar and how it affects US companies who operate largely overseas, or primarily domestically (the former of course causing a headwind and the latter promoting a better share price)
But really, just do your research, You probably have more time to manage your portfolio then the rest of us working full time. Study your markets, study your company, and when significant macro-economic conditions come into play, study their effects before trying to understand how it will affect your bottom line.
I hope I have been of some help.
business A and B are in the same country, sector, sub industry, same size, workforce, capital structure, capex etc BUT business A employs a revenue model which consists of charging upfront for a service over time whereas the second one charges a one off (think MSFT business model switch in W10 compared to previous mdoels). now besides tax issues and more technical stuff, all thing equal the better customer retention (incredibly vague since a miriad of other factors come into play from a strategic perspective) should lower risk (Adobe discount with it services) and thus providing upside. but with the CAPM I have no way of including such assumption in my model. this is even more true when I run a contentrated portfolio. how do I tackle this issue as to include all this stuff?
or, also, if i am examining a biotech in early stage with stage II to be approved, I find very hard to believe CAPM estimates (low due to the high idysioncratic risk associated to the bet that lowers historical correlation) to be reliable: the risk is nonetheless immense. since I am not a fan of qualitative premia (not on principle but the problem is you cannot test the impled assumptions you make unless by comparison but then again you can only infer on a relative basis), I'd like something a little bit more "solid". since I am still in college I have no idea how professionals do it (and I am sure the considerations vary sector by sector) - and i don't think they just take CAPM at face value.
also, you were spot on in the understanding of my last question. if i may, where can i find those models ?
Investing advice - $200k (Originally Posted: 03/24/2016)
I'm a 40 year old freelancer in the film business. My gross annual income averages $150,000 (though since I'm self-employed, work can be sometimes volatile and inconsistent). My wife and I own a house (purchased for $800,000, 5 years ago. Now estimated worth over $1.3M). We have $590,000 left on the mortgage = 30yr fixed at 4.0%
I have $220,000 in cash savings and $34,000 in 401k. My wife has $19,000 in her 401k. She works for me (i.e. also self-employed).
Currently my cash is in an online savings account(!!), and is gaining a terrible 0.6% interest or thereabouts. Obviously I need to invest it more aggressively.
I was advised by my accountant that if I'm going to invest on the stock market, that I should consider paying off a chunk (say $50k) of our mortgage at the same time (as a way of 'diversifying' our investing by reducing our mortgage burden).
If I were to do that, and also keep about $50,000 in savings (rainy day), that leaves me with $120,000 to invest in the stock market.
I'm considering Robo-investors (Wealthfront, Betterment etc) vs a human financial manager. Can you advise on the pros/cons of robo-investors vs humans, and also the mortgage payoff etc. Thanks!
Don't invest it in financial instruments. Take that money and invest in yourself to develop skills for virtual reality (cinematic) and turn that into millions.
\ tongue in cheek comment, but for real consider it
Perhaps you can split 50/50 robo/human and after a few years see how well each of them performs (relative to the risk taken of course) and switch to the one you like best? Personally I feel better knowing my money is managed by people over robots, but that's just me.
Also, with a 4% 30yr fixed I wouldn't put 50K on the mortgage. Being self employed you never know when things might turn sour and your need for cash will suddenly become an issue. And I don't know how easy it will be to get equity out of the mortgage as a self-employed person.
Just my 0.02$
THank you both. Very smart advice!
Not learning anything about investing (Originally Posted: 04/05/2016)
I am 10 months into a sell side ER job and am not enjoying it one bit...a lot of the analysis we do is just meant to fit the beliefs of the senior analyst plus I don't see myself learning anything...
I like the consumer sector and wanted to switch over to that sector (versus my current sector which is semiconductors)...since I am so new to the markets I wanted to aim for training programs etc at large AMs. Was wondering if any one here have any advice?
Don't you think you'd be doing the same thing in the other space? Also, PMed you..
My thinking is that on the buy-side, watching PMs etc will teach me how to think like an investor?
I just like the consumer side more vs Semis..Problem with semi-conductors is that all the real analysis is done by Asian analyst (we just try to see how those numbers etc read through to our estimates). Very basic modelling, little to no research analysis
Depending upon your company's attitude towards change you might try either switching teams or asking to pick up coverage on a few names that are closer to the consumer space. If you volunteer to cover a name that your firm doesn't currently cover they probably wouldn't object. Could be a delicate situation though depending upon your boss' attitude and how you pitch it.
You need to be able to show that you can add value for investors in your research reports. Not just putting together some numbers. Then, you might get noticed by AMs or you could approach them with your great reports.
I would stick it out for a year and then start looking for another job if your responsibilities don't start to increase. FYI, it's very common for the new hires to do mundane crap for the first year or two. Even if what you're doing is mundane, you should have a thorough understanding of the industry you're covering which will help you in future interviews.
You think this doesn't happen with associates working on the buy side? LOL
models_and_bottles but the thing is I want to move to over to consumer side...so I am still trying to think how to position myself for that sector?
You keep saying you want to move to the 'consumer side'. Why? What will really be different?
Whether or not you feel like you are learning anything or not, you are certainly in a position to do so. If you aren't taking the steps to learn the true value drivers of those businesses and when good entry and exit points are, then shame on you.
You're not going to get spoon fed everything in your life. This isn't school. There's amibiguity with data that isn't as complete as you would like. That's where judgement comes in. I just feel disappointed that you're in that position and you feel that you're not learning anything about investing. I hope you understand that is mostly your fault. The senior analyst is using you to accomplish his or her goals. Use your time and his/her time to accomplish yours.
Investing on my own (Originally Posted: 05/20/2014)
This is probably an unpopular sentiment, but I'm not good with the nuisances of the working world. I've really given some thought to it, and if I can't break into Asset Management, i'm thinking of putting my money into the fray by investing on my own.
Any of the WSOer insights would be a lot of help. There are some things I don't quite know perfectly yet.
I'm currently studying for my CFA, plan to read books ranging from McKinsey's valuation to Aswath Damodaran and Pearl/Rosenbaum. This is to sharpen my theory and valuation techniques.
I'm currently in commercial banking learning about the concepts of fundamental and cash flow analysis. So I'm hoping that by the time I leave, I'll have some real world economic experience.
My approach will be value investing as well as ETF investing. The investment time focus will be long-term. If I had to identify a type of investment vehicle that I would want to model after, it would be the trust fund.
A few blank spots though.
1) Given my time horizon and investment strategy, I would think that having access to a bloomberg terminal wasn't all that important. But I have about 30 minutes of BB terminal exposure so I really can't make that call definitively. Would there be something that etrade or TD wouldn't offer to meet my needs?
2) I'm only in book 2 of the CFA level 1 curricula so I don't know the answer to this yet, but will I learn enough risk management from it to really understand the risk of my own portfolio?
3) Has anyone actually done this and been able to parlay it into a job in asset management? AM is the only place I think I would put up with all the regulation-induced headaches I deal with in my current gig.
Bloomberg is not needed for what you'll be doing. You can get company financials free from companies' investor relations websites and a lot of other data from yahoo or google finance. Your broker website might also have some useful stuff.
No, but finish it anyway. CFA provides a really good base level of knowledge. Over time, as you read more stuff and gain experience managing money, you'll develop your own portfolio and risk management philosophy.
This will be a necessary but not sufficient condition for getting an AM job down the road. Interviewers will want to know that you're investing on your own and will want to know what you own and how you chose those investments. However, they're probably not going to hire you based on your PA performance. Getting interviews is going to boil down to networking and having the work experience they're looking for.
Thanks for the input tctc.
One last question: where can an individual investor get affordable industry research?
dkim1984 - PM me if you'd like to have access to research. I can provide some reports on demand should you provide me with the company name.
You can get access to analyst/industry reports when you sign up for a brokerage account, like Schwab. You can also get financials from the company's website, Google Finance, Yahoo Finance. In fact, being diligent in the use of Google can get you access to a lot of information for free.
There is nothing magical about the CFA exams that makes the outcome for candidates binary. Across all the candidates, those that end up receiving the CFA Charter (and I have one) possess some solid basic foundation in finance, on average. You then build on that foundation to do what you need to do. The CFA Charter should not be a be-all and end-all. It is a starting point and you have to continuously develop your skills to stay updated with the latest investment strategies. There is no money machine, so being static and following the same strategy for years (even if it were profitable for a while) will not be sustainable in the long-term.
Agreed. The CFA is just to get me through the door a bit easier and as a foundation. Or if I can't ever land a gig, use it to help manage my own money and whomever I take along.
Also, have you ever used the Schwab research? If so, what do you think of it? It's a bit more expensive than the TD or etrade
I use it a fair bit. I don't know what level of service ETrade or TD Ameritrade provide, but Schwab offers a fair bit of tools for you to use. Schwab also offers research from Credit Suisse, Ned Davis, Argus, and Market Edge. In addition, it also provides you with news stories from Briefing.com, MarketWatch, Associated Press, and Reuters. It also gives you access to company press releases. I typically don't rely on one source and like to try and find different opinions. Schwab gives me access to a number of these things and I have access to additional sources through work to supplement.
out of curiosity, what do you think a minimum is needed to make a real dent out there? I could probably scrounge up about $25M of my own scratch.
Investing Advice (Originally Posted: 10/28/2014)
Hey everyone,
I recently graduated college and I have about $3,000 that I wanted to invest. I was thinking about investing in either a mutual fund or ETFs.
I was hoping some of you could give me some insight as to what you would do in my position. I plan on investing this money long-term and probably periodically investing more into these as I get more money.
I know ETFs are cheaper than mutual funds, but is there ever problems with selling ETFs when you need money, or is there usually always a high demand for them?
Any advice you could provide regarding what you would do in my position is appreciated.
ETFs offer adequate liquidity and I can't foresee a situation where you would have an issue selling. With $3,000 to invest and a long term outlook, your best bet may be to invest into an S&P500 index ETF or a Total Market Index ETF. This would provide you with broad equity exposure and long-term growth potential. As you add money and grow this account, you could look to add exposure to additional asset classes such as international and alternatives like REITs and commodities. The most important thing at this point is to have heavy equity exposure and hold for the long term. There is no need for you to over-complicate your portfolio.
As a college age person myself I recently had the same question. I would recommend reading a few books beforehand.
1) Intelligent Investor 2) A random walk down Wall St 3) Coffeehouse Investor
Those three give you a nice foundation of knowledge about investing. I went for the stock picking route, with 1/4 of my money in a total market etf and the rest in various F500 businesses, but from now on I'll just be putting my money in broad ETF products. Much less hassle, solid liquidity for most of them, and much less work breaking down businesses and analyzing them.
As was said before buy a total US market etf or an S&P 500 etf and sleep easy at night.
As a college age person myself I recently had the same question. I would recommend reading a few books beforehand.
1) Intelligent Investor 2) A random walk down Wall St 3) Coffeehouse Investor
Those three give you a nice foundation of knowledge about investing. I went for the stock picking route, with 1/4 of my money in a total market etf and the rest in various F500 businesses, but from now on I'll just be putting my money in broad ETF products. Much less hassle, solid liquidity for most of them, and much less work breaking down businesses and analyzing them.
As was said before buy a total US market etf or an S&P 500 etf and sleep easy at night.
Lol. that's pretty funny. Save yourself some trouble and just buy gold bullion. You can only get two coins with that kind of money so I'd probably use what's leftover on sports bets.
thanks everyone....so all of you would go with ETFs over mutual funds? I am still not really sure why someone would invest in a passively managed index mutual fund when they can invest in an ETF that is cheaper and has no real liquidity problems...
thanks everyone....so all of you would go with ETFs over mutual funds? I am still not really sure why someone would invest in a passively managed index mutual fund when they can invest in an ETF that is cheaper and has no real liquidity problems...
Just buy a vanguard mutual fund because you don't have to pay commissions and you can add small dollar amounts over time. This will be cheaper than buying an etf for this dollar amount.
I agree. OP, this is 100%, no way, absolutely not a scam. this person seems trustworthy. plus they used all caps so you know they're a serious investor.
/sarcasm
I wish these threads would actually be beneficial.
here, I'll sum it up for you. here's how you can get at least knowledgeable at investing/capital markets/economics/whatevs
/thread
Investing - How do you do it? (Originally Posted: 11/04/2007)
How do you guys invest your money?
An index fund or two is a good way to start (ie. the S&P 500). Search around for a high yield CD too. These are two low risk ways to start. Index funds generally outperform mutual funds, too.
How do I do this? Is there a site? Who do I give my money too?
you give your money to me
Check out www.fool.com for good introduction to investing articles.
www.investopedia.com is a nice resource as well.
ah yes, the Motley Fool. Remember, no loads and passive management
try vanguard value funds. good return for the past 5 years. and as mentioned above, you can't go wrong with an index fund.
read the intelligent investor, it will teach you alot. at the very least it will help you learn what not to do and that all bull markets end badly. it's eddie lampert and warren buffet's bible so i guess its ok.
Investing in 2008 (Originally Posted: 01/16/2008)
Hey monkeys,
I wanted to get everyone's thoughts on investing in 2008, some questions I have thought about:
Are there any sectors people think are going to perform better than others?
Do you think financial stocks are SO beat down that they may be a good buy soon?
Should we be long on the dollar with the potential of it strengthening? Or is it better to short Gold/Oil?
Does anyone have a play on any part of the interest rate curve that might be good for 2008?
Most importantly, has anyone come up with a way to hedge bonus risk? I have been trying to figure out a correlation between bonuses and some other market index with the idea of playing the index as a dirty hedge.
With that I will open it up, hopefully this will get some good conversation going.
"Most importantly, has anyone come up with a way to hedge bonus risk? I have been trying to figure out a correlation between bonuses and some other market index with the idea of playing the index as a dirty hedge."
Uhh...short financials? I wouldn't dream of going short financials at this point, though.
That is my predicament.
Not sure how good of a hedge going short on financials is right now. I don't think performance of the financials' stock prices will be a very good indicator of bonuses for 2008.
Investing Question (Originally Posted: 04/14/2010)
I have over 20k to invest in my brokerage account. How does this breakdown look? Any suggestions? I don't wanna actively manage, but do I need to breakdown into more sector specific ETFs or get some direct plays in currencies/commodities?
30% large cap us equity - VV (Vanguard ETF) 20% small-mid cap us equity - VXF (Vanguard ETF) 25% em equity - WVO (Vanguard ETF) 10% short term bonds - BSV (Vanguard ETF) 15% strong conviction individual stock picks
Thanks.
What is the point of this breakdown? Why would this be useful to anyone? Do you have some sort of investment thesis to back this up? Because you never know, my investment ideas might be the exact opposite of this and I'm thinking, "damn what a shitty portfolio." Or are you just trying to diversify? If so, then just get an SP500 index fund and be done with it. Unless you have a point to doing what you're doing (other than having fun and picking different funds for no particular reason) you should just keep it simple. Seems to me the only real thought process going on here would be the 15% that you want to put in stocks that you feel strongly about. That's the only thing that really makes any sense.
Why Investing (Originally Posted: 02/07/2011)
Why do you guys want to do investing?
Are you asking us just broadly or are you looking for help with an interview question?
Double-post.
Interview question
I'm still getting my answer together, but here's what I'm going with so far:
Why investing: -Always been interested (dad is a financial advisor, started investing in HS) -Performing a service (allocating capital efficiently) that benefits all parties involved if done well (investor, company, society, etc.) - still working on this point, but essentially I think investing creates much more value than banking/advisory services
Why PE -Unique asset class -Greater company access and information prior to investing than other asset classes -Control position allows you to help shape the future of the Company
That's what I have so far, I need to refine this into a better answer though
say you want to work in finance and you want to learn a lot. you learn a lot 2 years as an analyst. gain a good understanding of the capital markets, business strategy, business models, etc. get to look into the books of billion dollar companies- you cant get this in any other position (besides consulting, i guess). BE PASSIONATE. thats most important .
Investing - Key things to look for (Originally Posted: 12/18/2012)
I'm a high schooler very interested in finance. When reading Financials, that are key things to look for that an average person would look over
Well seeing as an average person probably doesn't even know how to look at a financial statement, look at net income, look at how much debt they have, look to see how much cash they have on their balance sheet and how much debt it could pay off, look at their income from operating activities as well.
sounds good. what about areas like P/E and EPS and PEG ratios....are high ones good or low ones?? also what are good analysis sites?
Rules of thumb for investing? (Originally Posted: 01/26/2013)
Have any of you come across a good resource to learn about general rules of thumb that can help guide thinking when analyzing stocks? e.g. large acquisitions into non-core industries are typically wealth destructive, share repurchases on average produce -X% annual returns, companies led by managers with above average compensation and below average holdings of company shares tend to underperform, etc.
Feels to me like the investment process would be significantly more efficient if we a) knew what these rules of thumb were, and b) the research or data behind them. Not sure if there's any sort of centralized resource for this, or if certain publications may discuss this more than others (I'm thinking potentially Harvard Business Review?).
Or perhaps this knowledge is only really accrued through a lifetime of investment experience.
There's no free lunch. You pick up all that stuff from reading voraciously and good old fashioned experience.
All those are definitely things to look out for, but everything is relative. Why exactly is a non-core acquisition wealth destructive? Is the management overreaching? Could there be some kind of scale benefit the market is missing? If there was always an x produces a return of y causal relationship, it would get priced in and disappear.
VIC, DDIC, SA. Print out a few every day and just read.
Read "How to be a stock market genius" and some behavioral investing books (Montier is good).
But there are no universal rules. Certain trends have been true in the past; for instance stocks with low P/E and low P/B tend to outperform in the long run.
Read securities analysis, profit from the core and Peter Lynch.
Investing Help (Originally Posted: 12/19/2014)
I am a freshman in college planning on majoring in finance and accounting hoping to pursue a management consulting career. I want to begin investing and learning about strategies how to invest. I currently have a mutual fund, but would rather have something on top of that, in which I can manage myself and be a part of. Any suggestions for a guide or quick start to investing?
Thanks!
Freshman year when I was starting to get interested in investing and starting to put my own money into the market, the best resource I had was "The Intelligent Investor" by Benjamin Graham. It is relatively long, but definitely well worth it. It is the basis for Warren Buffett's investing strategy. It is also written in a way that is easy to understand.
Beyond the reading, just learning how to research companies and understand how macro events can affect the markets is something that is much easier to learn first hand.
When I first started, I just looked at companies and looked at what analysts projected their stock prices to be in a year and picked stocks that way. I also threw in some of my own ideas. Thinking back it was completely ridiculous, but I also think that it was extremely valuable to see what can happen if you don't do your homework.
Now, I use the companies' SEC filings mostly (available to everyone) as well as ThomsonOne (a service that my school pays for).
As a freshman I would strongly suggest reading that book, and as you feel comfortable start digging into some 10-Ks of companies that you know stuff about (Apple, Target, etc.) to familiarize yourself with them.
Hope this is helpful.
Investing Questions (Originally Posted: 01/17/2016)
I am a relatively new investor (think undergrad). DCF or comparables is a great way to value a company but as I am new to investing I've spent a lot of my time figuring out the type of investor I am first(value, momentum, event-driven..etc) and also have trying to really define the goals/objectives/risks of my investments. I am now beginning to learn valuation and stuff.
In regards to DCF and other valuations a great resource is a NYU professor called Aswath Damodaran who has all his class materials online. A google search of that name should bring you to his website.
Reprehenderit fugiat sunt voluptatum. Dolorem qui omnis blanditiis similique veniam voluptate aut. Qui est officia nulla delectus. Molestiae ut et iure quos nihil iste.
Tenetur est fugit reprehenderit praesentium exercitationem similique qui. Et error similique eligendi amet sit doloremque inventore enim. Illo ut est laborum mollitia laborum molestiae esse ut. Saepe non officiis sit et.
Deleniti vel neque rerum vitae. Dolores et et exercitationem neque et. Non et ipsa neque pariatur animi dolores. Porro labore perspiciatis dolores aut culpa natus explicabo a. Nulla perspiciatis in doloremque sit nemo sint recusandae. Veritatis error vel numquam similique sit aperiam. Quo excepturi dolor est placeat omnis rerum cupiditate deserunt.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Accusamus animi aperiam architecto aliquam doloremque molestiae. Est officia excepturi ea.
Dolor debitis provident at molestiae aut ut. Eligendi repudiandae pariatur omnis ipsum tempora qui sapiente rerum. Exercitationem autem quis voluptas asperiores et. Laborum ipsum qui quam voluptas repudiandae occaecati.
Amet ea ex nihil eum sit reiciendis. Distinctio quod deserunt dolor harum quos itaque tenetur.
Vel omnis in et. Voluptates excepturi ut voluptas qui velit qui sit. Vero ea nesciunt iure unde facilis sint ea. Veritatis a tempora velit sed.
Sed aut sed praesentium est in laudantium sint. Vero nisi deserunt sunt maxime. Non nam nobis aut eius velit sed sed. Officia nihil magnam quia non id iure et. Laborum odio in odit doloribus itaque alias.
Rerum corporis adipisci quia sint fugiat sed qui. Ut et atque quo consequatur. Ut debitis in incidunt dignissimos. Aperiam autem voluptas assumenda aut deserunt a.
Quibusdam quod ut ducimus et aperiam veniam. Numquam placeat esse dolor distinctio possimus unde quasi. Et laboriosam et enim aliquam libero est voluptatem dicta.
Repellat ducimus sit explicabo dolores voluptas ea voluptate. Aperiam enim quam qui et veniam quia.
Fugit facere nobis debitis nostrum. Aut velit aut voluptas voluptas necessitatibus. Ut et cum reprehenderit repellendus consectetur in.
Veritatis esse consequatur inventore voluptates dolorem. Architecto quo sit nostrum et. Soluta sed harum est qui libero. Excepturi quod voluptatem voluptatem quia animi et natus.
A et tempore delectus veritatis. Commodi aperiam modi omnis velit cumque ab sit.
Rerum voluptates rerum pariatur illum dolores culpa. In fugit voluptatem soluta vero qui. Quod rerum nostrum vel facilis quis labore quis. Voluptatibus eligendi quos possimus dicta et aspernatur.
Excepturi occaecati magni labore deleniti occaecati rem. Nihil veritatis eveniet cupiditate corrupti. Repudiandae voluptatibus vel et impedit maiores in.
Eos ea expedita culpa quia sint vel mollitia. Fugit aliquam quia praesentium odio. Veniam nisi veniam repudiandae a. In aut dolore sed.
Nihil eos eos est odio. Quia dolores ut eveniet. Sint voluptatem laudantium omnis consequuntur. Perspiciatis fugiat blanditiis sed sunt numquam. Inventore aperiam nisi facilis facere. Voluptatibus rerum ut molestias.
Earum aut labore a qui consequatur. Est aspernatur ipsum ut et. Ut modi debitis quia in. Iste blanditiis amet ut dolores quasi sit rem.