Get the climate forecast for Florida from an inside source before anyone else sees it. Then use that info to buy (or short) Orange Juice futures on margin.
Important: make sure that pranksters don’t switch forecasts on you! You’ll bet the wrong way and lose everything!
If you want a super-risky stock that could singlehandedly win the “game” for you, check out RMBS. I wouldn’t advise putting a large percentage of your portfolio in it in real life, but for game purposes, it is worth the risk.
They are involved in multiple lawsuits and an FTC investigation, but so far things seem to be going their way. If things continue to go their way, it should be worth $80 or so by December. (at $26 now) But like I said, you’re relying on judges and settlements and all kinds of legal wrangling, so its extremely risky.
Nasdaq Bargain bin stocks are faring okay as long as the whole Nasdaq is going up. They tank rather quickly when things go bad though.
Huerta88, you might check out this:
"The Securities and Exchange Commission on Wednesday charged Lebed, who is in 10th grade, with securities fraud and ordered him to pay back $285,000 in alleged illegal stock earnings and interest.
The SEC alleges that Lebed used Internet message boards to talk up, or manipulate, stock prices and then unloaded his positions in what agency administrator David Horowitz called a classic “pump-and-dump” operation."
http://www.thestreet.com/stocks/brokerages/1090004.html
There will be no factual answer until December. We can’t know for sure which stocks will rise the most between now and then. If we knew, we’d be too busy buying them to post about them here. But since you’re really looking for suggestions, I’ll move this thread to the IMHO forum.
bibliophage
moderator GQ
Yeah Bio Tech’s and Live stock! Thoroughbred Horses! Go down to your local track and wager on them. True investing cannot be measure in a quarter year. What you teacher is doing is trying to teach you how to gamble in the stock market. When it comes to this then there are several strategies to winning at the stock market gambling game. Here are a few.
Cycles—
Short Selling in the box—
Options-----
Buying big Selling bigger—
Thin margin trading—
Ok now to explain these cryptic phrases.
Cycles: A stock has a trading rythym which can be measured in hours, days, weeks, months and of course years. If you have the analysis tools and can plot the value changes so you can determine a trading rythym for a particular stock then you can utilize the other items I’ve listed.
Example XYZ Stock trades for prices between $5 and $10 a share on a monthly cycle with a 52-week high of $15 and a 52-week low of $4. If you plotted out the prices on a graph you would see peaks and valleys in the stock price. What you want to do is to buy the stock in a valley price with a lower per-share price. Once you own the stock then set a strike price at one of the peak price points you have graphed. If it is a standing order then when your stock hits that mark you will automatically sell your position and have cash ready for the next “Valley” investment. To put it simply BUY LOW and (und in German) SELL HIGH! or BLUSH!
Now once you have a stock with a pretty regular cycle pegged out then you start to trade in that stock at regular intervals. Buying low and selling high. If the interval is say less than a week then you can begin --Short Selling in the box—.
This first requires you to have a margin account. I’m not going to explain all the details of margin accounts here, just suffice it gives you the ability to borrow against your account and from your broker.
Ok, you have your cycle pegged at less than a week. This is called the BOX. So you make your first purchase of AT LEAST 1,000 shares (nothing less than this) When you own the shares you place a sell order at the peak price for twice the number of shares you bought. So you place a sell order for 2,000 shares of which you only “own” 1,000. When the stock value hits your strike price your broker will sell your 1,000 plus another 1,000 shares they have credited to your account. This is called selling short because while you sold 2,000 shares you only had 1,000 shares and were “short” on the other 1,000 which the broker sold for you.
Now you have let’s say 1,000 shares stock you bought for $4 a share and you sold 2,000 shares of stock at $6 per share. Your initial investment was $4,000 (not counting broker’s fees) and your ending cash balance was $12,000 or a 200% profit but you still owe your broker for 1,000 shares your account was “Short”.
You then buy 1,000 shares 7 days later hopefully at the lower valley price of $4. So you had $12,000 but paid your broker back by buying the 1,000 shares you didn’t have to make good on your “Short” and gave them back to your broker. This leaves you with $8,000 or 100% profit on a 30% variation in stock price. You could also double down on your stock and duplicate the whole process again each time increasing your amount purchased but I’ll stop at that for now.
You could buy options which work on this same priciple. Instead of owning a stock you own a future right to purchase or sell at a set price. Depending on the value of the stock on that date you can either sell at a profit or buy at a bargain. Read up on option trading though.
Buying big and Selling bigger---- First off never ever purchase odd lots of stock (amounts less than 100 shares). When I was actively trading back in the 1980’s I never ever purchased anything less than a thousand shares. I was using a discount broker who charged $40 per transaction whether it was for 1 share or 10,000 shares. So the larger the number of shares the less transaction cost per share. $40/1= $40 per share transaction cost while 40/1,000 = .04 per share transaction cost.
If you bought a stock at $4 per share and say you only bought 10 shares it would have cost you per share $8! If you had purchased 1,000 shares at $4 then the cost per share is only $4.04. So the bigger you buy the less it costs per share!
This leads to—Thin margin trading— where you are buying and selling on small changes in a stock’s value. If you have the capital you could purchase larger blocks of stock and then sell them at smaller profit margins while still making a hefty profit. You could also look for larger swings in a stock’s value based on its average net asset value. Take two stocks each go up $5 in value. One’s ANAV is $40 while the other is $8. A $5 increase in the $40 stock is a 13% increase in value while in the $8 stock its a 63% increase in value. You can make a profit with either stock but you will need to buy a bigger block of the $40 stock to equal the return on the $8 stock.
You would need to buy 5 times more of the $40 stock to get the equivalent percentage yeild that the $8 stock gave you. Or the $8 stock only needed to go up $1 to get the same return as the $5 increase in the $40 stock. This goes back to the concept of buying big and selling bigger.
Professional money managers take weeks and months to load up their portfolios with the stocks they want. If they picked up all the stock their portfolio requires in a day or a week the stock price would shoot up dramatically and they would not be able to buy all the stock they wanted because their demand pushed up the stock price.
So instead they buy chunks over time and then begin selling once they have their price point achieved. You see they can make the price by how they buy the stock. Likewise they can begin to sell their position in increments small enough not to affect the stock price significantly so that over time they can sell bigger values.
They can’t dump their holdings quickly because that would cause the price to fall. There simply would not be enough buyers for what they are selling so the price has to come down. Well enough for now but as for the lesson you are not really investing if you have a time horizon of less than five years. You are just stock speculating.
I’ll bet one whole dollar that you can’t pull it off.
In the interest of preventing the spread of misinformation I must clarify this. Handy you are incorrect. Your first statement has nothing to do with your second. You need not be licensed to suggest stocks, unless that is your business and you are doing so for compensation.
The operation of a ‘pump and dump’ scheme is quite a different thing. It is illegal for any person to artificially manipulate the market for a security. In the case referenced above by creating the appearance of widespread interest in a stock where there is none.
There is no legal problem with participants of a message board discussing stocks. There are hundreds of internet message boards devoted to that subject. A licensed securities dealer who posts on this board must be wary about recommending stocks, everyone else is in the clear. I am assuming the OP is not a licensed professional.
With that please carry on.
You should tell the instructor that economics ain’t finance and to teach some goddamn economics instead. You might also mention John Allen Paulos’s efficient market paradox.
Since the whole premise of a stock-picking contest is flawed, I suggest that you play to win, and not play as if you were really investing.
To play this type of game to win, you have to take risk. Slow and safe is no way to play a time-limited tournament. Read the papers, take a guess at something that might stand a chance of going up in value in the short term, and buy risky stocks in that industry. That means small-cap stocks, probably. Those are the stocks with the most variance. They’re thinly traded and financed, and single deals can move the stocks dramatically. So load up on them, and cross your fingers.
“Your first statement has nothing to do with your second.”
fruitbat, my first post was a question, not a statement as you’ll see quite clearly it has a question mark on it, therefore how is my question incorrect? Isn’t it quite correct to ask a question to get further information? Therefore, your assumption is incorrect, not mine. As for my first post not having anything to do with the second post, there is no law against that & again I was just asking someone for more information & opinon on a story.
I don’t like ‘handy cappers’.
I saw the question mark at the end of something that didn’t read much like a question. It was followed by a citation that seemed to be an atttempt to back up the idea that you must be licensed to recommend stocks. I’m sorry I misinterpreted what you were trying to say.
You gotta buy stocks that are real cheap so you can buy a lot of shares - try and buy the cheap ones that are going to go up.
But…you’ve also got to come up with a hooker with a heart of gold!
gee ur the nicest guy around here, u act like a cheapskate spaz. i was just asking a simple question… :wally
The both of you had better knock this antagonistic crap off now.