Everything I know about the stock market.
- The stock market is the result of potentially billions of calculations in which millions of variables are changing values and alternating their direction every second.Or you could take the easy way out and say, “the stock market is a bunch of random numbers with derived colorations to the real world.” Let me amend my easy definition so it is a little simpler, “the stock market is a bunch of changing price tags.”
- The stock market preys on the weak.Anyone who isn’t doing their homework is fair game to both the sharks and the system itself. While the system isn’t out to get you, it certainly has no qualms about taking you out.
- The thoughts expressed by Jim Cramer are those of his own.You are responsible for your own portfolio at all times. Any recommendations by anyone are simply that, recommendations. That’s why we’re not all go-zillionaires like Warren Buffet. That’s why there is a 10 page essay as a disclaimer at the beginning of every episode of “Mad Money.” That’s why this article should probably have been called, “Everything I *think* I know about the stock market.” And that’s why every time in the past 7 months that I have a conversation about stocks with my dad, he ended it with, “But what do I know? I bought stock in a company that makes robots that go around and vacuum”
- Market Cap is real and does matter.How much are you going to be personally be affected when a tidal wave hits your investment ship? If you’re in a hugonic cruise liner, you are simply going to continue playing shuffleboard right through it. But if you’re sitting with 2 other investors in a small cap dingy, you are going to be in for the ride of your life!
- It’s better to invest smaller amounts often than large amounts rarely.This might just be my own little philosophy, but I think it’s better to invest more often. That way you are constantly watching the market. You are watching for trends. You know what is going on in the sector and industry. If you don’t then you will become target to the second rule. But if you do follow these things, your gain will be substantial, if not initially in fiscal value, but in your trading and investing abilities. And with stock commissions at a super low price, you don’t have to save up for months to invest.
There it is, everything I know about the stock market. Of course I’d like to hear what you know about it, so please leave me a comment.
I really like the last point about keeping an eye on the market. Though I don’t recommend obsessing about it or taking everything going on in the market at face-value, I do wonder how many newspaper subscribers don’t read the business pages!
I was also wondering what you were “thinking” about the stock market, are you warning people about the risks? or telling people to manage it? The overall tone that I took from the article was that everybody stepping is a potential victim, whereas I believe you decide what role you will play.
August 13th, 2006 | #
Of course no one steps into the stock market hoping to be the victim eaten alive. Then again, we often aren’t doing the research. We throw in a few bucks and hope it turns into a few more bucks.
Warren Buffet doesn’t throw his money anywhere. He contemplates his decision–before, during, and constantly thereafter.
I think your chances of being a victim are less intense if you are proactive about your investments.
August 14th, 2006 | #
“The overall tone that I took from the article was that everybody stepping is a potential victim, whereas I believe you decide what role you will play.”
I certainly think that your stocks and portfolio are somewhat controllable, but you are still subject to the market as a whole. It may move for you, or it may move against you. But there are a lot of factors that are outside of your control.
August 15th, 2006 | #
[...] I just graduated from the university and began working in the real world. I realized that it is not easy to make money for anyone. The Japanese economy is getting better, and I’m earning some money to play with. Maybe, it’s time to consider playing the stock. [...]
August 19th, 2006 | #
The secret is that you cannot control the movements of the stock market but, like zen and tao, you need to get in the flow, and react to what the market does.
Constant Value Investing is one method that allows you to “hear” what the market is saying, and automatically buy low and sell high.
March 21st, 2007 | #
i work in a gym as a membership councultant,i earn ok but i always wanted to entre the stock market world,i liked what you said about investing a little often is better than investing a lot rarely,i want to get into it but i don’t know how or where to begain,any simple advice will be more apreciated…..
December 27th, 2008 | #