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  1. #1
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    investment for someone starting help please

    Hi,

    I am a 27 yr old guy in Australia learning how to invest.

    I have read books for the last 5 yrs. My strategy will be most similar to Warren Buffet ( in principle not execution especially his areas of expertise).

    However, I do not know how to simply get started.

    Eg. I spoke to my bank to set up a domestic share trading account but I am more interested in international shares (despite currency risk).

    My bank can only allow international trading in the US market.

    Are there any other options. Can I just buy in other areas (eg. links to websites?)

    To research
    -------------

    Also. one
    area I would love to research more is Internet television. Is there a way to invest in internet television? If so how and who?

    Do you recommend it?

    thanks

  2. #2
    riding once again jschen's Avatar
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    This may be a good place to start.
    Or maybe this.
    Or this or this.

    See a theme?

    Your biggest problem appears to be analysis paralysis. Ultimately, you can never get comfortable handling your money by simply studying about handling money. That would be like trying to learn to practice martial arts by reading books but never actually practicing martial arts. You have to handle money to become comfortable at doing so. Learn to be comfortable making decisions. Make mistakes while the amounts you're handling are small. Hammer out a long-term plan that you're happy with and that allows you to sleep soundly at night.

    As for your question about investment methods, unfortunately, most of us aren't in your country. But surely there are some mutual fund companies in Australia. As for specific investment ideas, I still am of the belief that you should first figure out how to handle your portfolio as a whole in a broadly diversified manner. I'll stop now since my advice to you is the exact same it has been in all the other threads.

    Edited to add the following quote...

    Quote Originally Posted by jschen View Post
    Of course, the standard caveats still apply. I have interacted with you, but I don't really know you. I don't know your country. And you're reading something a chemist typed up late at night. Hardly the description of trustworthy advice.
    Last edited by jschen; 01-09-08 at 11:12 PM.
    If you notice this notice then you will notice that this notice is not worth noticing.

  3. #3
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    Nice, JSCHEN great to hear from you!!! Wow, re-reading those threads now with the experience of a year has helped IMMENSELY!!! Goodness, you guys gave BRILLIANT information that would have taken me LIFETIMES to learn otherwise.


    note: I mean no disrespect if I seem to have disregarded anyones as even if I did not take it, I DEFINITELY learnt from it!!!

    I read as much as I could. I paid a lot of money to advisers and professionals plus spent a lot of time with them to learn strategies.


    I should elaborate:

    since my threads, I have followed the advice and incorporated into my strategy as best I could tell:


    1) 6 months living expenses;

    then

    2) Bought a unit to live in, in very nice area (1 br so great for me but would need bigger for family one day). Unit went up over 20% in first year

    then

    3) I bought an investement unit which has gone up steadily in nice solid area.

    then

    4) ???

    Could buy another property but this would make my borrowings much higher (decrease my overall equity substantially) being very risky considering the property market has plateaued plus it is tied to the boom/bust resources economy. I would like to buy another property later (the strength seems the appreciation on the borrowed funds minus the costs is a lot higher than share portfolios (I would not dare to leverage a share portfolio nearly as much NOR would lenders provide me.

    Combined with the fact that I am already heavily loaded in property and in my one area to boot, it may be time to start in shares with a small portfolio whilst trying to save up as much money as possible on the side and put it in my mortgage offset account.

    I want to do shares myself (no managed funds). Reason. Would be a nice hobby to learn about companies. Plus managed fund fees. Plus I would have low capital to start (say $10,000)

    I would see it more as paying for my education so even if I lose it all then at least I learnt a lot!
    (University cost me a lot more!)

    advisers: recommend managed funds with margin loans. I prefer my plan above



    * sidenotes: superannuation (401k) has been taken care of (9% contributions) but I do not want to make further payments as I am only 27 and would prefer to control my money.
    - i bought a reliable car for $12,000 in cash
    - I use my extra savings to pay my home and investment mortgage then use the remainder in my offset account





    Would love to know your thoughts and the 'now what' information

    thanks!!!

  4. #4
    Senior Member DannoXYZ's Avatar
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    yeah, analysis paralysis will keep you sitting on the sidelines and trying to "learn" the "perfect" strategy rather than just "doing it" and actually getting results.

    Let's relate it to cycling. Imagine being a kid and asking your older brother on how to ride a bike. Imagine asking to explain the physics of balance. Then reading endless books on metallurgy and determining how the bike is constructed and built. Imagine figuring out the "best" gear to buy and the "best" clothes to wear. Imaging writing notes on the "perfect rhythm" of timing a push down on the left pedal, then a slight counter-steer on the bars. Then 0.5s later, push down on the right pedal, with a slight counter-steer from the other hand. In the end, what good does all that academic learning have to do with learning how to ride a bike?

    No, you can't "get balance" from learning books. You can only learn how to ride a bike by getting on and DOING IT. You'll fall, get back up and try, try again. So for investing, get your feet wet with some papertrading if you must rehearse. However, most people (like 99%) approach investing backwards. They learn basic strategies then try to milk them inappropriately, leading to frustration and poor results. My first recommendation is to DEFINE YOUR GOALS FIRST then learn the specific strategies that will get you those results. For example:

    10% a year is done with a certain type of investment
    50% return requires a different type of strategy
    100% requires yet a different set of tools
    500% needs completely different tactics
    1000% takes specialized niche skillz
    2000% is yet again another completely different game

    I recommend learning a vast variety of strategies and tactics. This is so you can be flexible and adapt yourself to current market conditions. It's like the Jeet Kune Do strategy of the intercepting-fist and not getting locked up in rigid forms. Buffet's but just one guy in the markets. There are a tonne of others that are way more successful and are playing with their Ferraris and Gulfstreams at an early enough age where they can actually enjoy them. But they're not making money writing books and giving seminars because you know the saying about those who can versus those who teach...

    Here's my recommended reading list:

    BACKGROUND ATTITUDES
    "Rich Dad, Poor Dad" by Robert Kiyosaki
    "The Battle for Investment Survival" - Gerald M.Loeb 1935 ! (not really necessary, but gives insight into how the stock-market and prevailing investor attitudes were developed)
    "The House of Rothschild" - Niall Ferguson
    "The House of Rothschild II" - Niall Ferguson
    "The Creature from Jekyll Island" -


    EMOTIONAL CONTROL & PITFALLS
    "Shootout on Wall Street" - Gerald A. Cannon
    "Rogue Trader" - Nick Leeson
    "Pit Bull - Schwartz
    "The Day Trader - Borsellino
    "Beating the Street" - Peter Lynch
    "The Millionaire Next Door" - Thomas J. Stanley
    "God in the Pits: Confessions of a Commodities Trader" - Mark A. Ritchie
    "Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing" - Hersh Shefrin
    "The Psychology of Risk: Mastering Market Uncertainty" - Ari Kiev
    "Think and Grow Rich" - Napoleon Hill

    TECHNICAL KNOWLEDGE & TACTICS
    "How I made $2,000,000 in the Stock market" - Nicolas Darvas
    "How to Make Money in Stocks" - William O'Neil
    "Secrets for Profiting in Bull&Bear markets" - Stan Weinstein
    "How to Make Money Selling Stocks Short" - William O'Neil
    "Techniques of Tape Reading" - Chris Schumacher & Vadym Graifer
    "The Candlestick Course" - Steve Nison
    "Getting Started in Options - Thomsett
    "Trading for a Living - Dr. Alexander Elder (get workbook too)
    "The Winning Trader - Developing a Mental Edge for Market Success" - Dr. Michael Shopshir
    "The Art of War" - Sun Tzu
    "SOROS: The Unauthorized Biography" - Robert Slater
    "Art of Contrary Thinking" - Humphrey Bancroft Neill
    "A Demon of Our Own Design" - Richard Bookstaber (VERY GOOD)
    "Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas for Millions" - Ben Mezrich
    "The New Market Wizards: Conversations with America's Top Traders" - Jack D. Schwager
    "All About Commodities - Wasendorf & McCafferty
    "Trading Options on Futures - Labuszewski & Nyhoff (a little too much math, but if you're the technical type...)
    "Trader Vic – Methods of a Wall Street Master" - by Victor Sperandeo
    "Trader Vic II : Principles of Professional Speculation" by Victor Sperandeo

    MAGAZINES - definitely required as they have the most current ideas
    SFO - Stocks, Futures, Options
    Technical Analysis of Stocks & Commodities
    FUTURES

    I've read easily 50x more than this list, but these are the useful ones. And like the bicycling analogy, cross-training really helps. Going back to stocks after a couple years of commodities-trading gave me immense improvements. Also check out this forum: http://www.elitetrader.com
    Last edited by DannoXYZ; 01-10-08 at 12:20 AM.

  5. #5
    Senior Member randya's Avatar
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    pick a sector of the market you think you want to invest in and track/watch/research it for a while before you make your move. Energy, water, health care, whatever. decide how much risk you want to take. look for value in something that has future potential.

  6. #6
    Senior Member DannoXYZ's Avatar
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    Sorry for the ramble, there's three ideas you should keep in mind:

    1. define your goals first, as in a specific rate of return, then learn the strategies that will get you those results. What you're doing is saying, "let's go on vacation", then setting out of your front door walking with $10k in your pocket without having any idea where to go. So you just start walking.. walking... walking..

    2. get your feet wet and DO, not think, think, think endlessly. It's like a journey of 1000-miles. Or it's like my friend who tried to start an import business. He wanted to be guaranteed a certain profit his 1st year before he'd even think of designing a business plan or working pro-formas. The results you want are in doing steps 1, 2, 3...1000+. There's no way you can predict what the 997th step will be or what results will await you at step-1000 unless you've already taken at least steps 1-950. You're trying to mentally predict that journey, can't be done. So DO, DO, DO... take lots of notes and learn from your mistakes.

    3. be careful of where you get your information. Keep in mind the implicit test that whoever you talk you can ONLY advise you on how to get the returns that they themselves have personally achieved. It's like going to a doctor for brain-surgery in removing an aneurysm and finding out the most he's ever operated on was a hang-nail. Would you trust that guy?

  7. #7
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    Quote Originally Posted by DannoXYZ View Post
    yeah, analysis paralysis will keep you sitting on the sidelines and trying to "learn" the "perfect" strategy rather than just "doing it" and actually getting results.

    Let's relate it to cycling. Imagine being a kid and asking your older brother on how to ride a bike. Imagine asking to explain the physics of balance. Then reading endless books on metallurgy and determining how the bike is constructed and built. Imagine figuring out the "best" gear to buy and the "best" clothes to wear. Imaging writing notes on the "perfect rhythm" of timing a push down on the left pedal, then a slight counter-steer on the bars. Then 0.5s later, push down on the right pedal, with a slight counter-steer from the other hand. In the end, what good does all that academic learning have to do with learning how to ride a bike?

    So for investing, get your feet wet with some papertrading if you must rehearse. However, most people (like 99%) approach investing backwards. They learn basic strategies then try to milk them inappropriately, leading to frustration and poor results. My first recommendation is to DEFINE YOUR GOALS FIRST then learn the specific strategies that will get you those results. For example:

    10% a year is done with a certain type of investment
    50% return requires a different type of strategy
    100% requires yet a different set of tools
    500% needs completely different tactics
    1000% takes specialized niche skillz
    2000% is yet again another completely different game

    I recommend learning a vast variety of strategies and tactics. This is so you can be flexible and adapt yourself to current market conditions. It's like the Jeet Kune Do strategy of the intercepting-fist and not getting locked up in rigid forms. Buffet's but just one guy in the markets. There are a tonne of others that are way more successful and are playing their Ferraris and Gulfstreams at an early enough age where they can actually enjoy them. But they're not making money writing books and giving seminars because you know the saying about those who can versus those who teach...

    Here's my recommended reading list:

    BACKGROUND ATTITUDES
    "Rich Dad, Poor Dad" by Robert Kiyosaki
    "The Battle for Investment Survival" - Gerald M.Loeb 1935 ! (not really necessary, but gives insight into how the stock-market and prevailing investor attitudes were developed)
    "The House of Rothschild" - Niall Ferguson
    "The House of Rothschild II" - Niall Ferguson
    "The Creature from Jekyll Island" -


    EMOTIONAL CONTROL & PITFALLS
    "Shootout on Wall Street" - Gerald A. Cannon
    "Rogue Trader" - Nick Leeson
    "Pit Bull - Schwartz
    "The Day Trader - Borsellino
    "Beating the Street" - Peter Lynch
    "The Millionaire Next Door" - Thomas J. Stanley
    "God in the Pits: Confessions of a Commodities Trader" - Mark A. Ritchie
    "Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing" - Hersh Shefrin
    "The Psychology of Risk: Mastering Market Uncertainty" - Ari Kiev
    "Think and Grow Rich" - Napoleon Hill

    TECHNICAL KNOWLEDGE & TACTICS
    "How I made $2,000,000 in the Stock market" - Nicolas Darvas
    "How to Make Money in Stocks" - William O'Neil
    "Secrets for Profiting in Bull&Bear markets" - Stan Weinstein
    "How to Make Money Selling Stocks Short" - William O'Neil
    "Techniques of Tape Reading" - Chris Schumacher & Vadym Graifer
    "The Candlestick Course" - Steve Nison
    "Getting Started in Options - Thomsett
    "Trading for a Living - Dr. Alexander Elder (get workbook too)
    "The Winning Trader - Developing a Mental Edge for Market Success" - Dr. Michael Shopshir
    "The Art of War" - Sun Tzu
    "SOROS: The Unauthorized Biography" - Robert Slater
    "Art of Contrary Thinking" - Humphrey Bancroft Neill
    "A Demon of Our Own Design" - Richard Bookstaber (VERY GOOD)
    "Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas for Millions" - Ben Mezrich
    "The New Market Wizards: Conversations with America's Top Traders" - Jack D. Schwager
    "All About Commodities - Wasendorf & McCafferty
    "Trading Options on Futures - Labuszewski & Nyhoff (a little too much math, but if you're the technical type...)
    "Trader Vic Methods of a Wall Street Master" - by Victor Sperandeo
    "Trader Vic II : Principles of Professional Speculation" by Victor Sperandeo

    MAGAZINES - definitely required as they have the most current ideas
    SFO - Stocks, Futures, Options
    Technical Analysis of Stocks & Commodities
    FUTURES

    I've read easily 50x more than this list, but these are the useful ones. And like the bicycling analogy, cross-training really helps. Going back to stocks after a couple years of commodities-trading gave me immense improvements. Also check out this forum: http://www.elitetrader.com


    BRILLIANT!!!

    Thanks so much!!!

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