12/24/16

I typically find people on here talking about having a passion for the markets and generating investment ideas. Perhaps being a student has held me back or maybe it's just not "in me", but I've found cultivating this passion pretty difficult, and i think it's just that I don't know where to start really. I have a baseline knowledge of finance, accounting, and economics. I've dealt with 10-k's, and I've read investment ideas, but this hasn't given me the tools to come up with ideas of my own, at least not so far. I can check the VIX indicator and read about market flux all day, but if I don't have a reason or a proper context to use that knowledge then it's pointless.

So, where do I start? What do you use to pull ideas together and where do you really learn how to invest? Are there any specific sites/books/compilations of info any of you rely on? Lastly, how did you get passionate about the markets?

Comments (18)

12/22/16

Put some real money in the markets and start following a few companies, market trends, investment ideas, etc... If you don't find it interesting then, maybe look into being a teacher.

Try out the app Robinhood, it's pretty nifty to use if your investing small amounts.

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12/23/16

I second this, you can't learn without doing.

I recently moved all of my funds to Robinhood from Scottrade, I can't imagine how much money I gave up in fees, I must have conducted several hundred trades at $14 a pop to get in and out of a position which really eats into your margin if you're trading just a few thousand.

12/23/16

I actually use Robinhood (well, use is a strong word. right now the money just sits). But, yeah, it's a cool app for sure. Im going to give following the markets/companies a second try and see what I can do. Thanks.

Best Response
12/23/16

This won't work for trading but if you're a long term guy, make a list of really smart investors with an awesome track record. Track their 13-F's like a hawk and try to reverse engineer the thought process. Look at some of their homeruns over the years and the date it showed up in the 13-F and then track what went down and why that caused the stock the sky rocket. Once you think you have a feel for it, take a stab at the new 13-F's and try to think what they are thinking. If they're an activist investor, they will probably tell you sooner rather than later. I remember trying to reverse engineer a new holding in a 13-F by an activist and a few days later a 13-d came out saying all the "strengths" I saw in the business needed to go, so there's a good possibility you will be wrong the first few times. But keep going and try again. I think trying to reverse engineer shit is a better method than original content for noobs.

12/23/16

This looks like great advice. I'll try it. I've tried the traditional method of combing through Seeking Alpha and checking Market Watch and what have you, but I've found that to be information overload and not necessarily good for establishing a baseline knowledge/skillset for investing. This looks to be a more focused approach, which I think could work. Much appreciated.

12/23/16

You can't really force passions, if you do you end up hating markets and investing, like anything really. Plus if you talk to most of the PMs of HFs and most of the time they will say they love markets and it gives them a serious kick when they make good calls

12/23/16

Yeah, i get what you are saying. The hope is that once i'm immersed in it to some degree i'll find it rewarding. It's easier to find something interesting when you have some personal investment/viewpoints/opinions-- just like the PMs you mentioned.

12/23/16

Yea you should put a bit of money in. Maybe a few hundred if your low on cash. I am sure you know this, but the market isn't some kind of game to just throw money in. Choose stocks carefully, and ask yourself "why am I choosing this specific stock?" Otherwise, you should just head to the casino and throw a few bucks on red, probably more fun at that point.

12/24/16

Read the Financial Times. Cover to cover. Every day.

I don't think that it is necessarily "market news" that will get you interested and cause your brain to start churning with ideas. You need to have a grasp of everything that is going on in the world, short-term issues, long-term trends, anything of consequence.

Guarantee after reading the paper for a few weeks, you will start to spontaneously generate some ideas. Then, as others have said, you need to invest with real money. While the stock trading/investing simulations appear useful, it is completely different when you have actual capital at stake.

"The problem with Socialism is that eventually you run out of other peoples money"

  • Margaret Thatcher
12/25/16

Thanks, I will try this. I just signed up to the free four week trial of FT and I'll see what i can glean from it all. I definitely think you are right. Market news functions more as an indicator of the current state of the market in a given moment and less as a comprehensive resource on what's going on in the world. That's really been my problem. I'd like to start getting a full view on everything just for the sake of being well informed and if I can get investment ideas from it, so much the better.

12/24/16

"Markets" is much too big of an idea to just go in an try to learn broadly, or all at once. I would advise learning piecemeal. Personally, "Markets" don't really interest me much by themselves. I thought they would, but once I learned what they are and how the benefit society, the only other thing left learn is how to use them to make money - which is nice to know, but not an end-all be-all motivation for me.

I'd rather blow my life savings on fireworks before I ever tried to trade tech stocks (netflix, apple, etc.) This is because I know basically nothing about these companies and industries, other than the fact that I like their products. I do not care to learn about the true drivers in their business such as, forecasting consumer demand, industry competitiveness, or the efficiency of their supply chain, etc. At least the fireworks would be a fun and pretty waste of my money

My suggestion to you or anyone starting out is to start off with one industry or company structure you really think is cool, and then drill down into a couple companies you think are awesome within each industry or structure.

For me it was Oil & Gas, and MREITS.

I am from Texas, and love anything energy. In specific, North American Upstream, Midstream, and Oil Field Services, as well as Global Integrated companies. I think Apache / Anadarko, Buckeye Partners, Baker Hughes, and Shell are among the most innovative / smartest companies in each space, so I follow them pretty closely. As I stay plugged into broader Macroeconmic news, I have a decent idea of how these companies will be effected.

The libertarian in me is interested in not paying taxes to the gummit, so when I learned about MLP structure in the midstream space, i also found out about REITs and mREITS in the Real Estate Space. Also, I wanted to learn more about what the FED is, does, and its influence on markets. mREITS and REITS are also extremely sensitive to interest rate changes, so a good place to help me learn this. I follow NLY capital and this wacky-ass company with Ticker NYMT.

So I know these industries fairly well, and I know about 10 companies within these two areas extremely well. I have been able to trade oil / interest rate volatility, election-related news, and M&A news and rumors in these spaces, and have done pretty well. More to the point, My focus on two sectors of the economy has allowed me to learn what I am interested in to a much greater degree, and simultaneously taught me more about markets.

12/24/16

Lmk if you come through with the firework idea. Would forsure chip in..

12/25/16

Thanks for the long post. Do you know of any good resources, or, more pointedly, what resources do you use to learn about/follow specific companies, industries, and also broader macroecon news? I go to college in Texas so I have a somewhat strong, if nascent, interest in energy so that might be an industry I also would like to learn about (also real estate too, not that that has anything to do with texas, lol).

12/25/16

pmed

12/24/16

I have had a passion in the markets since high school and it is entirely due to the fact that I have had money in the markets since then. The first time you make money off your own idea I would not be surprised if you got hooked. I was reading all of the EIA, IEA & OPEC reports before I even considered a career in finance solely because I enjoyed trading companies in the oil sector.

I personally find that the oil sector is useful in being passionate about the entirety of the market because a lot of different parts come together in strange ways. For instance a strong U.S. report on Employment could cause investors to anticipate a more hawkish future rate hike strategy by the federal reserve which would cause the dollar to rise. Because commodities like oil are dollar denominated and can be viewed as another store of value, when this rise of the dollar happens it can cause oil prices to decrease, etc.

I am sure there are much better qualified people on here to give you advice on investing, but I personally found the strategy highlighted by Investors Business Daily to be useful. They have a book about their strategy that you might find useful.

12/24/16

I had read the news online originally, but it never caught. I started reading the paper edition and it put news in a completely different light. Also, listening to YouTube videos of well known investors/businessmen is interesting. Both sparked my interest in markets and I've started to develop a few ideas.

12/24/16

For me it's definitely about the industry. I like tech, so following tech companies is more interesting to me. There's so much movement in that space that there's always something interesting going on.

I think it also helps to keep watching. It's hard to know everything that's going on in an industry right away, and as a student you likely don't have easy access to the kind of industry reports that could easily explain industry trends (sometimes company 10ks do that but not always).

"There's nothing you can do if you're too scared to try." - Nickel Creek

12/26/16
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