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Introduction
What is the Stock Market?

Think big, think positive, never show any sign of weakness. Buy low, sell high.

Fear? That's the other guy's problem. Nothing you have ever experienced will prepare you for the unlimited carnage you are about to witness. Superbowl, World Series -- they don't know what pressure is. In this building, it's either kill or be killed. You make no friends in the pits and you take no prisoners. One moment you're up half a mil in soybeans and the next, BOOM!, your kids don't go to college, and they've repossessed your Bentley.

Are you with me?

Bruce Winthorpe III
Junior Executive
CHIA & CHIA

Contents:

The Basics:

Investment Strategies:

How do I find the the stock market?

The stock market is in the games room at the bottom of the page, just click on Nigel the little chia, and he will show you the way. Or just click here.

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How can I earn neopoints in the stock market?

To make neopoints, you need to buy stock at a low price and sell at a higher one.

For example, if you buy 1000 shares at 15np/share, then you spent 15k. If you hold that stock until it doubles to 30np/share, you have doubled your investment. This is great!! Right?
Perhaps, but what happens if you hold until it reaches 45np/share? Now you've tripled your investment to 45np/share, which is even better.

Simple. Well, not quite.

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How do I buy stock?

The rules of the game state that you may only purchase stock that is currently trading at 15np/share or more. The rules also state that you may only buy 1000 shares of any stock in one neopian day. You may buy as many shares as you like in any particular company but will have to wait for the next neopian day to increase your total shares to above 1000.

Here's a simple walkthrough, in order to get you going on buying your first shares:

  • Go to the main stock market page
  • Click on the link Find Stocks at the top of the page
  • Then, in order to show all the companies, click the linkOr click here for a full list."
  • After bringing up the full list, find a stock that, in the "Curr" column, says 15 (if nothing is at 15, look for 16)
  • Click the Ticker Symbol of that company
  • It brings up a little company abstract, which you may want to read. Though it really is not important
  • Click on the blue boldfaced name of the company
  • It brings up a box for you to input your number of shares
  • Type "100" into the box, then press the "Buy Shares" button
  • Congratulations! You've just bought 100 shares!

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Which stock should I buy?

It's entirely up to you and the needs of your portfolio.

The general consensus among experienced traders, though, is to buy only at 15-17np per share, and a bare minimum of 100 shares at a time. Preferably, buy the full daily allotment of 1000 shares. Anything less than 100 shares, though, and you risk not making much, if any, profit, and the whole process is not worthwhile.

If you are just starting, buy as many shares as you can afford of a stock at 15np per share. Here's a secret stocks page that you might want to bookmark: http://www.neopets.com/stockmarket.phtml?type=list&bargain=true.

While stocks all tend to be the same in the long run, there are four stocks I've noticed that move very slowly. Whether this is just a part of their price algorithm, or if it's due to the fact that they are most likely the four companies with the highest volume of outstanding shares in Neopia, is unknown. But this UnFab Four has been known to stay under 30np per share for the last year or more, and it would be wise for any beginning traders, or those looking for a faster profit, not to invest in them.

The Quadrangle of Evil is:

  • AAVL
  • BOOM
  • DROO
  • VPTS
While they aren't necessarily "bad" stocks, they are slow movers, and will most likely take quite a while to reach a decent sell point.

As you get more experienced in the stock market, you'll begin to find that your portfolio will dictate which stocks you should buy. In order to keep a well diversified portfolio, it will end up that you must buy a particular stock from the 15-17np choices. And thus it will make your buying much easier.

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What is a 'lot'?

A 'lot' is the amount of shares you purchase at one time. You can either buy one lot of 1000 shares, or split your lots into 500/500, 250/250/250/250 or smaller if you chose. If you can afford it, I recommend buying 1000 shares a day everyday, but it's important not to invest neopoints that you may want to use in the near future, as this is a long term investment.

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How do I sell my stocks?

In order to sell your stock, you must pay Nigel a 20np commission, and since he expects to be paid up front you need to have the 20np in hand when you press the sell button. He is a nice little chia however and will sell all of your lots at the same time for only 20np. (This comes in handy if you own any bankrupt stocks.)

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What do all these tables and numbers mean?

Indeed, for the beginner, all of this information can be quite confusing. And truly, it makes no sense when just referring to it through text. Therefore, I've taken the liberty of including some screenshots, so that I may better illustrate my examples.



Here we see the ticker entry for King Roo Uniform Distribution Ltd., ticker symbol KRUD.

  • LOGO
    This shows the type of company this is, and also who the competitors are. In this case, the company is a clothing manufacturer, and thus competes against other haberdashers, such as Faerie Clothing Ltd.

  • TICKER
    This is the ticker symbol for King Roo Uniform Distribution Ltd. This is what shows on the scrolling ticker bar at the top of the stock market pages, as well as the name by which companies are commonly known in the Stock Tips Chat.

  • COMPANY
    Company", interestingly enough, tells the full, legal name of the company. Because of the length of some corporate names, the company is often referred to by simply using the ticker symbol.

  • VOLUME
    This column shows the number of shares bought in that day, starting from midnight Neopian Standard Time until the current moment. Also see Stock prices and Volume.

  • OPEN
    Open is the price of one share of stock at midnight Neopian Standard Time.

  • CURR
    CURR is short for Current, which is the column for the current trading price. That means, the price at which it is trading right now.

  • CHANGE
    This shows the percentage of change that the stock has undergone since the start of that day's trading. It can be positive, negative, or 0.

Once we click on a company's ticker symbol, it brings up another page which tells us a bit more about the company.



Overall, the corporate abstract isn't very important, though it does provide a bit of background for the company.
But, from here, you can click on the company's name, and it will bring you automatically to the BUY screen.

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Are stock prices related to the shops in Neopia?

Unfortunately, no. The Neopets stock market is not yet sophisticated enough to have stock performance based on actual consumer demand.

For instance, if you have 1000 shares of HUW, it won't make the price go up if you and all of your Neofriends buy everything from Hubert's Hot Dog Stand everyday.

And it makes sense, too. Think of how inflated SWNC would be at all times. Everyone uses the Shop Wizard all the time. But then other stocks, like LUPE, would always be in the basement. Because it isn't related to anything in the Neopian economy outside of the stock market.

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Stock prices and Volume

If you generate enough hype behind a particular stock, and get a lot of Neopians to invest in it, it will inflate the price fairly quickly, right?

Wrong.
The Neopets stock market used to work like the real-life stock market, in that if a lot of shares of one company were bought in a day, then the price of that stock would increase accordingly. It was a fine idea, except that the Neopian economy is too small to follow the essential rule that a single person is economically powerless.

Due to that, a certain guild was able to rally its members together and have them all invest heavily in a single stock. Within a very short period of time, everyone made millions.
The entire guild was deleted, and everyone's accounts frozen.

Since that time, The Neopets Team has changed the way the stock market works, in that it is "a lot more random than that." You can read the official press release on the February 5, 2002, News Update.

Whether it is completely random, or follows some historical algorithm, or some formula which incorporates volume, but is not completely based on it, is still up for debate.

But needless to say, we simple Neopians can no longer affect the stock prices, nor know which will be the next to skyrocket.

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Is there any way to find the history of my stocks?

Yes. Neodaq.com is a wonderful site that has the past year's history on all of the stocks (look on the left under thumbnails). There is also a spreadsheet available for you to download to assist you in keeping track of all your stock purchases.

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Is there a way to organize my portfolio?

As of yet, there is no way on Neopets to organize your portfolio better. Therefore, the easiest thing is to download the neodaq spreadsheet from neodaq.com. It automatically updates stock prices, and shows you much more information that the NeoPets portfolio system does.

If you don't have Microsoft Excel 98 or better, or wish not to download from an unknown source, the next best thing is to create your own spreadsheet, and then either set up macros to update the stock prices, or update them manually every day.

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Portfolio Management

How do I read my portfolio?

Your portfolio will hold more information about the stocks than the simple ticker information, but much of it is still the same and can be understood pretty intuitively.



Here we see one lot of King Roo Uniform Distribution Ltd. stocks in our portfolio.

  • ICON
    This shows the type of company it is. In this case, it is a clothing manufacturer.

  • TICKER
    This is the ticker symbol for the company. Clicking on the name brings you to the BUY screen, and clicking on (profile) brings you to the company abstract.

  • OPEN
    This is the price per share that the company was at midnight NST of the current day.

  • CURRENT PRICE
    This is the price per share right now.

  • CHG
    This shows the change, in Neopoints per share, of the price from midnight NST to now. It can be positive, negative, or 0.

  • QTY
    This shows the number of shares you hold in the lot. In this case, the lot consists of 1000 shares, which is the maximum per lot.

  • PAID
    This is the amount per share that you paid for this particular lot. Here, the lot was bought at 16np per share, for a total investment price of 16,000np (1000 shares x 16np/share).

  • MARKET VALUE
    This is the value of the current lot, in Neopoints, right now. 17np per share x 1000 shares = 17,000np

  • % CHANGE
    This illustrates the percentage change of the current market value from the initial paid value. It can be positive, negative, or 0.
    The calculation is Current Price ÷ Paid Price x 100% - 100.
With all this information, we can see now that, if we sold this lot of stock, we would make 980np profit.

Mkt Value - (Qty x Paid) - 20np (Nigel's commission) = Profit
17,000np - (1000 x 16) - 20np = 17000 - 16000 - 20 = 980np

For the most part, though, a lot of the information can be skipped. If you buy all of your stocks while they trade at 15-17np per share, you can make a great profit by just looking at the % Change column, and selling when it says †100.00% or more.

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The Long-Term Approach

This is the easiest, and by far the safest, method of investing. Choose a stock that is currently selling at 15 - 20np/share -- the buy zone (I don't usually pay more than 17np/share). Simply hold those shares until you think the stock has risen as far as you can stand to wait. Ask yourself if you're happy with the profits you've made thus far. If you are, sell; if not, then wait a little longer. This is a game of patience.

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Day Trading

Instead of buying a cheap stock and just waiting, you prefer the more aggressive and risky approach. You've been playing the stocks for a while and think you have noticed a few trends among the stocks. Some of them go up and down rather quickly. I call these cyclic; some refer to them as Bread and Butter stocks. In order to be successful, you must be aware of current trends and be willing to take huge risks. In this case you buy a stock that is coming down from a 'high' in the hope that it will 'bounce' even higher.

Example:
You buy stock at 50np/share as it comes down from 70np/share. Two days later you sell at 85np/share (85-50=35np gain/share). That's a great profit!
But what if the stock continued its slide all the way back down to 6np/share (the lowest they can go without going bankrupt)? Then you are out all those neopoints!

Well, not exactly. You haven't really lost anything until you sell, for it is at that time that you have solidified the deal.

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How do I know when to sell?

This is by far the most common question and the most difficult to answer. It's really up to the individual, depending on your personal goals, and how many neopoints you have in the bank. Are you poor, secure, or rich and wanting to get richer?

When should you sell? When you are happy with the profits or simply can't stand to wait anymore. The waiting is the best and the worst part of the game.

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Oh No! My stock went bankrupt!

Unfortunately, this is a possibility. The key to investing wisely and decreasing your risk is diversification.
By purchasing 1000 shares of a different stock each day, you will soon own at least some of each. Don't spend more than you feel comfortable with, as all of the stocks will eventually reach the buy zone (15-20). While you may have many stocks that are losing neopoints you will surely have some that are gaining.

Diversification, then, not only acts to increase your chances of a winning stock, but it also decreases the liklihood of you losing a great deal of money from any one particular stock bankrupting.
In other words: Don't keep all your eggs in one basket.

For easy reference, I've included a list of all the bankrupted stocks to date:

  • BBBB
    Bobs Big Bonus Bingo -- Bob is a Blumaroo Bingo Owner. Jealous of the popularity of Dice-A-Roo on Roo Island, Bob migrated to the mainland and set up a range of bingo parlours across Neopia, and he isnt doing too badly as a result!

  • BODA
    Böda Furnishings Inc -- Specialising in economical self assembly furnishings. Böda was formed in early in the month of running, year 3 by an Eyrie called Sven. It is still very early stages for Böda but their future looks bright.

  • FUZZ
    Fuzz-I-Ow! Plasters and Bandages -- After winning an exclusive contract with the Neopian Hospital Fuzz-I-Ow stocks have begun to pick up. Building on this extra stability, Fuzz-I-Ow plan to launch a range of fun plasters designed specially for children. Slogan - We cannot kiss it to make it better, but we can do the next best thing.

  • HAKA
    Hakaheke Island Flights -- Hakaheke has had some serious competition from Peophin Cruises. Neopians have been opting for the cheaper, more traditional method of transport. If Hakaheke can continue to prove their impecable safety record and lower their prices they should be able to get their customers back, especially for longer journeys. Slogan - We will take you wherever you want to go.

  • KATE
    Kacheek Telecommunications -- Kacheek telecommunications are at present unrivalled in their field. Despite claims of poor customer service and technical support KATE looks set to dominate the market for a good few years to come. Slogan - We keep you in touch.

  • NEGG
    Neggwork Commerce -- You name it Neggwork Commerce have sold it at one time or another. Now aimed at top quality e-business solutions they intend to build up a strong presence on the internet community. Slogan - We are the Profit Producers.

  • NTV
    Neopian TV Channel One -- Channel One boast of being the largest TV station in Neopia. In truth they are the only channel but they may face some competition from telecommunications companies such as Kacheek Telecommunications. Slogan - We are #1 on Channel One for all forms of TV entertainment.

  • SILL
    Silly Squirrel Incorporated -- Silly Squirrel manufacture toys for baby pets, and generally anything that makes a rude noise. They also have a wide range of jokes and those small toys that you find within crackers!

  • SSGS
    Meri Acre Sausages -- The finest tasting sausages youll find ANYWHERE in Neopia.

  • TEFV
    Techrobatics Fitness Videos -- Year 2 has got off to a tremendous start following the release of their PetBo videos. Three times World Champion and president, Jayne Simmons claims to have a lot more revolutionary fitness routines in the pipelines so Techrobatics looks set to continue its current trend. Slogan - Eat, exercise and stay in shape with techrobatics.

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I think my stock has been stolen! What happened?

Unfortunately, this has been known to happen. If you have a mid-sized portfolio, you probably won't notice it. Only if you have a very small portfolio, or a very large portfolio and keep detailed records of all your stock purchases, will you notice any missing stocks.

It's an extremely rare occurrance, though. Much rarer than a stock bankrupting.

Most people attribute these missing stocks to a glitch in the Neopets stock market database. But the helpful people on the Stock Tips board know the truth -- these stocks have been embezzled by Nigel's evil twin, Snigel!

Nigel
Your friendly Chia stockbroker. You can trust him :)
Snigel
But watch out for this shady looking guy!

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Investment Strategies

The Poor Neopian

I've had the most absurd nightmare. I was poor and no one liked me.

You are short on neopoints, to say the least. You have less than 200k in the bank... perhaps far less. For you, I would recommend (buying at 15np/share) selling your stock when they reach 30-45† np/share (60† if you are in the higher range). Thus, at either 100% profit, or a 20np gain from what you paid. This gives you a quicker turn over and also allows you to reinvest your neopoints.

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The Secure Neopian

You are feeling pretty good about yourself. You have been playing for awhile and amassed quite a bit (4-600k). You have been looking around for things (battle items, paint brushes, petpets) and found that what you would really like is just out of reach. You can almost touch it, but not quite. Now you have stumbled upon the stock market.

For this scenario, my recommendations are slightly different. You can easily afford to buy tomorrow's 1000 shares, and so can wait a little longer. Therefore, instead of selling at a mere 30np/share you should wait for 45, or preferably 60np/share. Some strongly believe that you make good profits selling at an arbitrary price of 60np/share as they believe all stocks reach this point -- some doing so several times a year (this is sound advice.

However, I'm a bit greedy and want even more).

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Congratulations, You're Rich!

But not rich enough.
-invalid_words-
Mother always said you were greedy.
She meant that as a compliment.

For you it is easy to be more patient; you can easily buy whatever you want and don't even consider how you are going to pay for tomorrow's stocks.

You, my dear Neopian, should wait for the stock to reach 75np/share or more. In fact, you may now hold out for your first 3 digit sale.
How do you know if your stock will reach 100†?
Well you don't, but I have noticed that there are always 2 stocks above 100np/share. If there aren't then hold, hold, hold, and trust me -- one of them will be there soon.

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Playing the stock market is easy. Just remember to buy low, sell high, diversify, and never sell at a loss. Most importantly have fun.

And keep your eyes on Frozen Concentrated Orange Juice futures.

Images By crudmonger
Text by sniggy




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