Hey There! This is the place where I have written some articles about the stock market that I hope you will find very informative. They contain anything and everything about the ins and outs of the stock market! These articles are also Neopian Times Recognized, so be assured, it's good advice!!
Any Questions, feel free to ask or neomail!!
Click to Be Transported to the Article You Would Like to Read.
-The Stock Market Beginner's Guide
-The Guide to Stock Market Jargon and Terms Part I
The Guide to Stock Market Jargon and Terms Part II
Diversifying or Stocking up, that IS the question…
-What IS the Stock Market?
Why the Stock Market?
-The Savvy Investor
Types of Selling Strategies; The Science of Pressing 'Sell'
www.NEODAQ.com. -The Ultimate Stock Site, compiled by w3neo. Useful for anything and everything Stocks
Gerkel's Battledome Guide-A USEFUL AND HIGHLY INFORMATIVE BD Guide, compiled by abreev8
Stock Market Main PageThe Stock Market Front Page.
Your Current Portfolio-Your Current Portfolio
UPDATES: PLEASE Check here to see what's new!
3/5/05. UPDATED WITH A NEW BEGINNER's GUIDE!! CHECK IT OUT!!
8/27/05. Updated with "The Stock Market Guide to Jargon and Terms Part II.
8/28/05. Updated with "Types of Selling Strategies; The Science of Pressing 'Sell'"
8/29/05. Updated Page Navigation with Clickable links to help you easily find the article you want. No scrolling now, just click and read!
This is where I will write down my sells to show you the profit that can be made from the market. I also want to show you when is a wise point to sell. I hope you find it informative!
NOTE: DUE TO an UNFORTUNATE hacking, I lost nearly 2.5 million in stocks, and was forced to start over. therefore, this sells page can't be going until i get more stocks. But no worrys, shes getting quite healthy!!
By now you're probably heard the incredible, but seemingly plausible stories of thousands, no, millions of pure profit from the stock market. You want to get in on this, who wouldn't? Well, if you know me, then you know that I have written and am an expert on the stock market, having crafted several articles about strategies when fluent in the market. However, one thing I've been lacking, is what to do when you've clicked on Nigel for the first time, and how to make a profit in this game which can soon become you're best friend. So, come along, with several easy steps to improve you're portfolio size, and in turn, bank balance!
1. Start Small, and Start Prepared.
The Stock Market is not a game in which you profit 1st day, 1st week, or even 1st month, and it does take time to accumulate. For starters, I recommend having a reserve of at least 50-100 thousand neopoints, as I buy 1,000 shares everyday, at 15-16 np a share. Even with 100 grand, this only lasts about 6 days or so. So, you do want to have a bit saved up before you begin to invest. However, if you would like, as I did, start in smaller amounts, buying maybe 500 shares of stock a day. Soon however, you will be wishing you could buy 3,000 a day or more.
Also, in starting small, like a said, it takes time for profits to occur. For selling points in any strong portfolio, I recommend around 60 or so, utilizing a 300% profit. However, in a newer portfolio, you need sells and you need money. Therefore, before you're portfolio hits the quarter-half million mark, I suggest selling at a smaller point, 100% seems nice. This allows for sells, and also allows for a small, but steady profit. Stocks regularly bounce to 30, so you shouldn't have a problem.
2. Advanced Selling, a Ladder Approach. (In the Larger Portfolio's)
Once your port has reached a suitable size and in which you are no longer scrambling for money to buy you're 1,000 shares a day, you can learn to maximize you're profits. We all know that when you sell a lot of KSON at 30, you've gained a modest 15,000np. However, we also know that when KSON hits 60, you've missed out. Therefore, if you want to maximize profits, here's a simple way how. Firstly, before I begin, I'll remind you that this is only for latter-steps, when you have say, more than 2-3 thousand shares of a stock. Let's say this stock, T.SRC, hits 60, giving a 300% profit. Here, I would suggest selling 50% of your total shares, (So let's say you have 6,000 Shares, we have 3,000 left). This allows for a sure sell, but what if it climbs higher??? T.SRC hits 75, and 400%, here, sell another 20% or so. (Roughly another 1,000 Sold). The last 2,000 I would recommend for maybe 85, and then a lot to watch for a triple-digit sell, as many stocks have peaked that high. With this system, you have still been able to sell at low amounts like 60, but still aren't burned when the stock continues to climb beyond 60. Here, you have reserve shares if it climbs higher. Now, a burning last question, what if T.SRC gets to 60, you sell, gets to 65, and then heads back down, leaving shares still in you're portfolio?? Well, these are shares for next time, as inevitably, stocks cycle, and sooner or later, a stock will rebound (Unless it bankrupts) back to a buy point
3. Avoid At All Costs: Selling at a Loss, and Buying above 17.
Yes, these too mistakes are the MOST deadly you can make to a portfolio. First, never sell for a loss, as ALL stocks cycle. It can take a day, a week, a year. My point is that sooner or later a stock will rebound and you can profit. (AAVL took over 2 years for me to walk away smiling with a near 6-digit profit. The final line on this, is you sell at a loss, you lose money, end of story.
Next, for buying, the lowest the Neopian Market allows for is at 15np/share. This means if you buy 1,000 shares at 15, you pay 15,000, 16 costs 16,000, 17 is 17,000 and so on. However, though 16, 17, 18, 19 and 20 are a mere few points away from 15, let's look at the costs of buying stocks at those amounts for a month. 4 weeks @ 15 equals 420,000np
4 weeks @ 16 equals 448,000 np
4 weeks @ 17 equals 476,000 np
4 weeks @ 18 equals 504,000 np
4 weeks @ 19 equals 532,000 np
4 weeks @ 20 equals 560,000 np
As you can see, a difference of 84,000 np is achieved when you buy at 15 as opposed to 18. Those 3 points add up, in this case, to over 5 days of stock when you look at it. Final word: Buy low.
4. Have Patience.
Yes again, this concept is imperative in winning in this game. The Stock Market is no lottery. You rarely strike it rich overnight, and stocks, all stocks need time to mature. It may take months before the first sale is achieved, but I know many, once they get rolling, it is not uncommon for a million a month in pure profit. However, for starter's expectations, don't be surprised if you don't see sells for some months.
5. It Takes Money to Make Money
This concept may seem complicated, but once I break it down, you will be sure to see the unmistakable logic presented in it. This concept was first coined by a famous Neo-Stock legend, w3neo, and has been interpreted ever since. Basically, this is saying that in order to make those massive sums (Like my 2 million profit in the market) you have to be willing to first spend mass amounts of neopoints. For example, if you buy 200 shares of KSON at 15, your total input is 3000 neopoints. Let's just say KSON soars to 60, a strong selling point in my eyes. You sell the 200 shares for 12,000 np, or a profit or 9,000np. Not too shabby, but consider this, most have their shares tied up for months at a time, some even years, before their stocks see the 60 mark. For all that wait, wouldn't you want a little more bang for your buck? I could go on the shop wizard, and in less than an hour, find 4 cheap codestones whose profit I could sell for over 9,000np..9,000 isn't much in the long run…. Now, consider this, let's say you bought 5,000 shares of KSON at 15, an input of 75,000 np. Then KSON soars to 60, so you sell for 300,000 np, or a 225,000np profit. Just look at the difference. You may say, isn't 75,000np a little steep? Yes, in an aspect you're right. However, 75,000 in the bank just get's you some pocket change each day, and adds up to a couple thousand np a year. Personally, I'd much rather have the 225,000np. See what I mean now? This is what it means to "Taking money to making money"
Also another key to a goldchest in the Stock Market Game. This is the act of when buying shares, equally spreading the amounts of the companies you buy. For example, to diversify, you wouldn't have 15,000 of FAER, and 1,000 JCK, as they are two qualified stocks. You would have something like this, 2,500 JCK, 3,000 FAER, 4,000 BOOM…etc. This doesn't mean however, that you have 4,000 shares of one company to 7,000 or another, as these amounts are generally considered somewhat close. But, when pouring money into the market, you are equally buying the different qualified stocks, and 'spreading the wealth' so to speak. This is a perfect defense for a bankrupt stock, (as they do bankrupt). This allows for you not to get too dependent on stocks, and also to maximize profit, as with a selection of more stocks equals More chance of you profiting from 1 moving to a sell point
7-blocked- an Active, Informative Group to Discuss Stocks and Tips With.
Like the topic says, in order to succeed, you should join a guild or group that will help you along the way, and also will discuss strategies with you. Experienced veterans will be sure to tell you more do's and don'ts, and also can give different viewpoints for the game. If you need this "Group", check out my Guild, the Neo Stock Benefit Guild, which has daily advice, and knowledgeable people to steer you out of trouble in the stock market.
Also, utilize other tools to thrive in the Neopian Stock Market, such as Neodaq.com, compiled by a Neopian, w3neo, who can be considered nothing short of a stock authority, a true master and pioneer in the Neo-Stocks. If you consider the Stock Market a new confusing appliance, Neodaq.com is the priceless user's guide. Neodaq.com had articles, advice, tools, past records and peaks, and more. Also check out other tools, such as my Pet's Page which is full of advice and tips to keep you going.
No, I'm not talking about that legendary monster living in your sewer system, I'm talking about fatal errors of judgment that can be almost as fatal to your folio, and respect. However, these are common newbie errors, so don't be ashamed in you make them, but, better yet, read this part so you don't.
- Nigel's Suggestions.
No, when you see that random event that Nigel has told you to buy So and So, this doesn't mean that it is even a good buy (Though it may be). This also doesn't mean this stock is destined to climb, and I believe his advice picks are purely random. Remember, he sells you're stocks, he doesn't choose them, and thank heavens for that. Also, along these lines, the "Stock of the Day", other than a nice feature on a stock, does not prove to help it to rise
- Volume Doesn't Affect Price.
Again, unlike in the real market, everyone telling each other to buy AAVL, or NTV, or VPTS doesn't mean that if you do, it will go up. Price is NOT driven by volume, and this final passage will convince any skeptics. If a stock ever plunged below 15, making it unbuyable, if you couldn't buy it, how could it ever rise again? Done.
- Message Board Blues
When you see one of those o-too-common threads saying "Buy LDSC", and when you open it, all it says is, "I'm sure it'll go up". Do me a favor, don't trust it. This stock may or may not rise, we don't know. However, this poster has provided no evidence, no back-up to support his claim, and it likely just posting to post-blocked- a group of smart, knowledgeable people, and THERE you can talk about stocks.
That's just about it! With all this absorbed information, even one who has not so much as clicked Nigel's photo into Market can be on track for success. Some final tips, persistence, patience, and overall, have fun! Any questions? Feel free to neomail, : nyyankeesfan72
Bread and butter, day-trader, total net profit, selling range…. Eh, someone tell me in real English already!! In the worlds and wonders of the stock market, may a term have been given to describe certain stocks, patterns, and almost anything in-between. However, if you're rather new to the game, these terms don't mean squat to you. But luckily, I'm here for a go to try to explain some of this lingo in more simplified terms. Here goes nothing.
Bankrupt-This is when a stock hits rock bottom, zero, nadda, and sadly never returns. There is no known reason why this happens in the Neo Stock Market. However, don't stack up too much in one stock, because if this happens, your whole portfolio can be down to one big number. 0….
Bread and Butter Stock or "B and B Stock"-A certain stock with a previous high over at least 40. Normally, when these stocks are in the 15-20 np/per share range, or moreover in the 15-18 np/share these are considered good strong buys. These stocks can be considered safe options, and are expected to do somewhat well over a period of time. For the direct opposite of stocks, see Sleepers.
Buying Range-the 15-20 np/share range for stocks. Normally, this is the range when most tend to buy their stocks, in hope of maximizing return profit. Some even tend to go further and buy only in the 15-18 range, while some never leave the 15 mark when they buy.
Day-Trader- A person normally considered to buy higher, more unstable stocks in large amounts in a single day. Normally, this person seeks for a daily profit, and therefore buys stocks in the 100's/per share, given that they normally can fluctuate 10, 20, or even 30 points in one single day. Many traders can be fit into this, but I am not one of them. This is a highly unpredictable method, and often causes more harm than help.
Diversification-This is the act of when buying shares, equally spreading the amounts of the companies you buy. For example, to diversify, you wouldn't have 15,000 of FAER, and 1,000 JCK, as they are two qualified stocks. You would have something like this, 2,500 JCK, 3,000 FAER, 4,000 BOOM…etc. This doesn't mean however, that you have 4,000 shares of one company to 7,000 or another, as these amounts are generally considered somewhat close. But, when pouring money into the market, you are equally buying the different qualified stocks, and 'spreading the wealth' so to speak.
Long-Term Seller-This is a person who normally buys stock for the hope of seeing long-term profits. This person mostly buys in the 15-20 range. This person can be categorized as more patient, and less susceptible to sell more minor profits. Normally, these people don't sell their stock until they reach prices in the 50's or beyond. They mainly like to wait out the storm, and see their stocks reach the maximum potential. I am one of these, as these people aren't afraid to sit a stock in their portfolio and wait for a year until it blasts up. See Short-Term Seller for the opposing type of seller.
Net Profit- The amount of clear neopoints you make per sell. For example, if you buy 1,000 shares of a stock at 15, you pay 15,000nps. Later it jumps to 60 when you sell; you get 60,000nps in your pocket. However, 60,000 isn't your profit because you paid 15,000 to buy it. So your net profit is 45,000np. Formula- (Selling Price-Purchase Price) equals Net Profit
Patience- Pretty simple, in order to play the market, you gotta have it..This game will certainly test your 'endurance of the mind'..If you don't have it, consider not investing…
Selling Range-The normal range certain sellers tag on a stock. Some stocks vary with this. For example, FAER has a high of 89, so when I sell I want to see it in the 50-60's before I do. However, with a stock like SWNC, with a high of 220, my standards are a bit higher, and I expect it to be in the 80's or over when I sell. This varies from seller to seller, and stock to stock.
Short-Term Seller- This is the seller who often goes for the quick, sure and smaller profits. This seller still tends to buy in the Buying Range, but tends to sell earlier more often. Expected sells for them can be in the 30's. These people like to see their sure profits, and are often hesitant about leaving a stock in their portfolio for months at a time. See Long-Term Seller for the opposite type of seller.
Sleepers- These are mainly the underperformer stocks, with no real breakout highs above 40. Stocks of this nature aren't often bought as much as B and B', but still do have their time in the sun. KSON, PEOP, and FAER are all examples of sleepers that turned B and B's. These stocks are slightly more risky, but some investors prefer their unexpectable and erratic jumps and declines. See Bread and Butter stock for the other kind of stocks.
Takes Money to Make Money-This concept may seem complicated, but once I break it down, you will be sure to see the unmistakable logic presented in it. This concept was first coined by a famous Neo-Stock legend, w3neo, and has been interpreted ever since. Basically, this is saying that in order to make those massive sums (Like my 1.4 million profit in the market) you have to be willing to first spend mass amounts of neopoints. For example, if you buy 200 shares of KSON at 15, your total imput is 3000 neopoints. Let's just say KSON soars to 60, a strong selling point in my eyes. You sell the 200 shares for 12,000 np, or a profit or 9,000np. Not too shabby, but consider this, most have their shares tied up for months at a time, some even years, before their stocks see the 60 mark. For all that wait, wouldn't you want a little more bang for your buck? I could go on the shop wizard, and in less than an hour, find 4 cheap codestones whose profit I could sell for over 9,000np..9,000 isn't much in the long run…. Now, consider this, lets say you bought 5,000 shares of KSON at 15, an imput of 75,000 np. Then KSON soars to 60, so you sell for 300,000 np, or a 225,000np profit. Just look at the difference. You may say, isn't 75,000np a little steep? Yes, in an aspect you're right. However, 75,000 in the bank just get's you some pocket change each day, and adds up to a couple thousand np a year. Personally, I'd much rather have the 225,000np. See what I mean now? This is what it means to "Taking money to making money"
Wow! Hopefully you dialect has increased to the point where instead of asking 'What the hay does this mean in English??' you can zing with the best of 'em when presented with these terms. Hope to see you on the message board and Forums chatting away now that you've got your voice, so to speak! Any questions? Feel free to neomail me!!
Self Sufficient Portfolio, index, and volume, eh when will it ever stop! So you've read my first article in the Neopian Times from week 122 and you think you know all the lingo there is to offer in the stockmarket. Now, is it time to hit the message boards and boast of your extremely vast dialect? No, for I've realized I've made a terrible mistake and left out many terms that are imperative to stocks in general. Time to fix that! For the second time, I'm about to tell you more of the terms, phrases and words to help you boost your Stockin' speech and make you the Savvy Investor we all want to be. In Part II, like Part I, here goes nothing.
Average-This can be used in several ways, but for this example, I'll use Buying Average. Let's say you own 5,000 shares of HELT and you spent 78,000 on them. That means collectively you've spent an average of 15.6 NP per share. Averages can be done for anything; buying, selling, portfolio stocks, and so on. (120,000 shares in 31 companies give you an average of 3871 shares per company). This is useful for selling and buying, among other things.
Cash Flow-A Concept enlightened to me by another Neo-Stock Junkie, Richie02474. As Richie has used this term, it is an excellent way to express how your stocks are faring. This isn't used for a short period of time, but again, for months at a time. Cash Flow is negative as you start in stocks, as you don't usually have many sells. However, as with the Self-Sufficient portfolio, you begin to see a point in which the cash flow is positive (Sales pay for the buys). Richie provided me with an excellent explanation and example that I'll tell you here: In a given month it costs 450K to invest - 30,000 shares at 15NP a share. If you sell maybe 20,000 shares at 30, the profit is 300,000NP. (600,000 sold minus the 300,000 buying fee) If you sell only sell 5,000 shares at 75, the profit is still 300,000, but you've sold only 375,000NP (5,000 times 75) worth of stock. 600,000NP will pay for your next month of buys, 375,000 NP won't. It's not all about profit sometimes, and this explains why. The profit is the same, but the money returned to you isn't. Thanks Richie!
Current Investment-The Current Investment Figure represents how much NP to this point you've put INTO the stockmarket. This is totally different from Current (Market) Value.
Current (Market) Value-The Current Market Value amount shows how much your stocks are worth at this moment. This isn't how much you paid for them; it's how much they are worth NOW.
Doing Your Homework-Another one of my terms that's more of a concept. This entails how to smartly invest, and that's an article in itself. Overall, use assets as some top guilds (Like the Neo Stock Benefit Guild), my Pet's Page and other tools to help you succeed. Overall, this encompasses being a savvy investor, and learning the ins and outs. You're doing it by reading this article and you didn't even know it!
High/Low-Using any chart, you may see a stock's high (peak) or low. This figure shows how high the stock has ever climbed in its time and can be useful sell information. A stock with a high of 272 may very well be a better stock than one with a high of 30.
Index-Often this is the first thing a stock junkie like me looks at in the start of a day. The index is the overall number of the Neodaq, showing respectably how all the stocks are faring. The index opens at Midnight NST, and closes at that same time. The index updates (As do all stocks, at half hour intervals of :00 and :30)
Lot-This is a Stockie's term for signaling a group of stocks bought together. As you know, you can buy up to 1,000 shares daily, and I do. If I have 6,000 shares of DROO, it's interchangeable to say, "I have 6 lots of DROO". It's just a shorter version of saying 1,000 shares, 500 shares, etc. Overall though, a "Lot" is almost exclusively used for 1,000 share groups.
Open-Let's say you're looking at your portfolio and you see DROO is listed under "Open" at 16. What does this mean? Well, this means that at midnight NST (when the index opens/closes), DROO was at 16. This means, for the Stock Day, DROO started at 16. It may or may not be at 16 now because stocks change.
Percentage (% Change)-Often seen in your portfolio, Percentage Change shows out of what fraction the stock has moved. For example, if you buy 1,000 shares of AAVL at 15 and it moves to 30, The Percent Change is 100%, for AAVL has doubled in price. Portfolio-This is the grouping of where you can easily see the stocks you have purchased and are holding. There are many other terms in your portfolio that I will define. You can also do your buying and selling from your portfolio.
Profit Realized (To Date, This Month, This Year, etc) - This is a collective number showing all the profit you have made in a certain timeframe. As you can see it's often used with different time sets. However, this only refers to the profit realized when you sell, not just when you're holding onto a stock with a higher value than when you purchased it.
Profit/Loss-These two words are used together to show someone's gain or deficit in the market. If you buy 1,000 shares of AAVL at 15 and you sell at 60, the profit is 45,000NP. If you buy 1,000 shares of LUPE at 100 and LUPE falls to 75 and you sell, you've lost 25,000NP. We don't want losses. Never sell at a loss. I've been loss free (Not including bankrupts) for almost 3 years.
Self Sufficient Portfolio-A fairly easy concept that requires a fairly long explanation. This is when your portfolio reaches a stage in that it can feed itself and overall not be a cost on your other money. How so? Well, let's break it down. For the sake of numbers let's say that all months have 30 days, a nice round number. Now if you want to buy 1,000 shares a day (The Maximum) at 15NP a share (The Minimum) it is going to cost you 15,000NP a day to invest. Simple enough. Given the 30 day month, we are looking at a cool 450,000NP a month for investing. Stocks aren't cheap. However, as you begin to sell your stocks, you realize a profit. Where can that profit go? Back to stocks of course. As the profit grows, the amount of money you need to earn by playing games, restocking, etc decreases. Once you've reached a point in which, on average, you make over 450 grand a month, you've reached this term. Now, you now longer need to fork over bank money or any other source of money, as the profit from stocks has done that for you.
Unique Stocks-Now I know all stocks are special, but this has another meaning. This goes hand in hand with diversification. "Unique Stocks" mean how many different companies you have invested in. Let's say you have 100,000 shares in 20 companies. You have 100,000 shares, but have 20 unique Stocks.
Volume-Often seen on any stock page. "Volume" shows the amount of stock that everyone has bought in one day. Looking at AAVL's profile's I see Volume is 1713754. This number means that 1712753 shares have been bought. Personally, in YOUR Portfolio, Volume is entitled QTY. (Quantity), and it shows how many shares TOTAL of a single stock you are holding.
Well another wild ride through the slang and terminology we stockers have all come to call a second language! Hopefully this article has informed you of more of the terms useful in the game! Also, I hope this will help you become a better investor and smarter Stock Junkie!
For more terms not listed here, check out Part I of this article, titled The Guide to Stockmarket Jargon and Terms, featured in week 122 of the Neopian Times. If you have any extra questions, feel free to neomail me!
And one more thing, thanks to all the folks out there who helped me brainstorm up with all these terms to define, your part in this article was insurmountable to calculate. Thank you.
All right, as my portfolio passes the 1.4 million mark, I can safely tell you many different strategies in playing the stock market. But this one, as I am about to discuss now, is in picking to 'stock' the stock rather. These two types are drastically different, but both posing both positive and negatives in their own respectable case.
First, the key issue of diversifying, diversifying is the operation of choosing different stocks almost each day you buy, and almost never overlapping buys until you have equal quantities of that stock. For example, when starting your portfolio, you would buy 1,000 of stock A, then on day 2, 1,000 of B. This operation would continue as so until you have all 26 'stocks' (I am using 26 because there are 26 letters to the alphabet) Anyways, once you get 1,000 of each, then you move on to getting 2,000 of each. This doesn't necessarily mean that you NEVER have 3,000 to 1,000 of a stock, but you shouldn't have something like 10,000 to 500 of 2 perfectly good stocks, if you are a small time stock junkie like me. When you have 5 million in stocks, you don't have to care what you do…POSITIVES- You always get your profit. For example, only certain stocks soar at certain times, in other words, not everything soars at once. So, you always are involved in the selling, and profit-making, instead of when using the "stocking up", you might hit, or miss with that stock. NEGITIVES-If you are a primarily small investor, you never really get over 5000 of a certain stock, so you never get a HUGE profit, like those who sell 10,000 of a stock at once. Instead you may only sell 1000 or so of a stock at once, but still making a profit. But, this is the "slow and steady" approach and that is the only major setback
Next, stocking up, this is the act of choosing a stock, and buying almost nothing but it. For example, with the 'A' examples, you might buy 10,000 of A and then 10,000 of B and so on, not buying as many stocks, but buying much more. POSITIVES-Your stock might not hit as quickly, but when it does, look out. Now, you can sell you 10,000 shares a see a HUGE return. (10,000 shares sold at 50np/shares gives a 500K return) NEGITIVES- You might not see your stock rise as fast. With stocking up, you choose only a certain few, and never really get 20 different stocks, when you don't have 8 million np. Instead you must wait until your stock, the one you chose, fires up for a profit.
There you have it, two ways of investing, giving the †'s and –'s. Hopefully; this will help to decide which one suits you!
Sure, I've told you why I like it, what a savvy investor does in it, what types of investors play it, and more. But really, have I ever actually told you what it is? And more so, how can you make money on it? I think not. I am sorry for my faux pas. However, in the following article I hope to make you as knowledgeable as the Neopian Neodaq elite.
First, lets start with the basics. Here is an often-asked question I get bombarded with neomails (in one form or another). What is a stock? A stock is when a company chooses to sell a portion of itself on the market. The portion, (or portions rather) are called stocks. So, you take stock in something literary speaking. This doesn't mean you own the company, as if you buy 10 shares of TNAH, it doesn't mean you can say, "Hey, I own the Auction House," it just means you have a portion of it.
Now, what to do with your "stock"… In order to sell, all you need to do is press the "Sell" button, but making a GOOD sell is a totally different order. To make a profit, large or small, you must sell you stocks at a higher point then when you bought them. (I am not using the 20np deduction for this as to generalize the statement). For example, if you buy 1000 of KSON at 17, and now it is at 27, you can sell for a 10,000np profit, (9980 actually after Nigel takes his dues). But, others (and I) demand more…. I normally look for a 100% return at the least. But I often have some 200%† return profits. That is another question I get asked, but my response is that there are two types of investors, short-term, and long-term, (I being long-term), but I won't get into that as it is another article in itself. In general, I look for 100%†, but if you are pleased and can live with your profit, sell. BUT, don't blame if it soars higher when you sell at 32, and now it's at 65, given the reason I look for more than 100% on most occasions.
But, perhaps another question is, do stocks differ? Sure, each stock has its own characteristics (besides its name). The stock market junkies at my guild have come up with a generalized category, where every stock fits.
Bread n' Butter Stock: Noun; A stock that has a history of going to 40 or above therefore giving you at least a 100% profit if you buy between the suggested buying range. (15-20 np per share) Such examples of these include LUPE, EEEEE, and BOOM. In general, these are the safe picks, which because of their history give them a preference to the buyers, because they are (supposedly) expected to rise again, which in most part, remains true with continued success from these stocks. I personally, only buy bread and butter stocks.
Now, we get to the risky stocks, or "Sleepers". A sleeper stock is basically an under performer, or a stock that has never really done anything in the past, or have never actually been buyable. Examples of these include TAG, and STFP. However, many people buy these stocks in hope of them coming Bread and Butter like (which some have). For example, KSON, and PEOP were once sleepers, but now there are considered high Bread and Butter's. I don't buy these, but I am not saying you should not, as many have made fortunes on these "sleepers".
Now, another question I get bombarded with, "How many should I buy??" Now, I will quote a famous neopian, w3neo "It takes money to make money." To make more sense out of this, I will give an example. Say someone buys 10 shares of KSON at 15. Not a bad buy for a beginner, but I know an experienced stock junkie would never buy less than 1000. You have given a total of 150np to these shares. Now, lets say KSON soars to 50, a good selling point in my eyes. Now, you investment is worth 500 np. Not bad… You sell for a 350np profit.. BUT, (lets say) you spent 2 months holding these shares. I could play Meerca Chase for 5 minutes and get 350np in one game. So, the 350np wasn't really worth it in that long haul. However, if you buy 1,000 of KSON, that 350np profit turns into a 35,000np profit. Now THAT'S worth spending 2 months on. Even if you can't buy those 1,000 shares everyday, buy when you can. It will make it so much easier when selling, as you can see results when you buy 1,000 KSON to 10 KSON, 10 LUPE, 10 PDSS, etc. and so on.
Finally, another question I get, (but in different wordings) is "What do I do to become more educated about the Neopian Stock Market?" Simple—DO your homework. Well, for starters, I think it best to read articles (like these) that involve insights and hints in playing the market. Look at help websites such as neodaq.com or mine to get the most out of your stocks. Next, join a group of users who are educated about the stocks and are willing to help and point you in the right direction. I think it is vital for you in order to succeed, be in a group of people so that you may learn. There are quite a few stock market guilds in Neopia, but none such a quality as the one I am in. People know what they are talking about, and always have advice. Even if you are not the guild type, there are also several forums on different sites dealing with the help. I AM NOT going against the 'Stock Chat' message board but many times, even when the topic is relevant; moreover the message is not helpful. Many times they just give a message of "Buy TPP, I know it will rise." You have no proof, and perhaps are just posting to post.
Now with all this sucked into your head, you should be a pro in the stocks, even if you are just emerging. And remember, I started there too. Remember, as long and boring it may seem, it is ALWAYS worth the wait and fuss.
It is an often-asked question. Why would some fools want to lock up thousands, hundreds of thousands, or even over a million neopoints, in something as slow and un-exciting as the stock market? Wouldn't you want to buy a nice new Hypno Helmut to give a solid whooping to your opponent? Or would you want to make you pet as tough enough to be considered a legend? Sure I would like that, but I prefer the market for several key reasons.
1. You don't need a fast connection. Wow! Magic Goop 1 in stock, price 1155np. You think, boy, I could sure make a nice profit form this, to dine royally on sweet wines and primes cuts of filet. As you click it seems an eternity is passing and you get the new screen with those to-famous words. Magic Goop is sold out! Hmm. It has happened to me enough to say if I even got a fourth of the items I went after, the hidden tower could be halfway out of stock. However, with my 56K and I, it is a famished dream. However, fortunes could be made in the in the stocks in the speeds that could make a snail proud. I can safely say I have over one-quarter of a million locked up in various shares of stocks. But, with a mere 15K input, a nice 50K profit could be in order as was my last sell of 1000 shares. In fact, I consider it a slow game, and tell people who want to win the lottery to keep on looking when they spot the stocks. For example, over 2 months ago I bought 1000 shares of BOOM one day. It then cycled from 6-50. 3 weeks ago, it was finally making significant movement. It was at 67 when I sold for a nice 52K profit. The only catch, I had from 15-67K tied up for 2 months. This just kills some people. However, I could sit at the pharmacy for just as long and see a fraction of that profit. I don't need as fast connection to buy or sell shares, even though the market changes every 30 minutes, it is never immense enough to discourage of a selling of stock if it was 11:28 and now is 11:32.
2. You don't need fast fingers. Holy Smokes! You get to the haggling window for the Magic Goop. Your adrenaline is pumping as you imagine the profit to be made. Now what was the price? Yes! 1155np! You go to type it in. No! Wait that's an 8! NOOOO! Your hands are shaking as you finally get the right numbers. Sorry, Sold out! Hmm. Well that has happened to me numerous times before. But, in the stock market, that problem never occurs. The stocks you want to buy are always 'in stock'. And literally, whenever you want to buy a stock over 15np, it is always available, and unless you want to buy a Slippery Floor Potion for 33 thousand neopoints, I can't say that for any of the other shops.
3.You must Research and Make the Right Decisions. Pretty self-explanatory, the stock market is not a fool's game. You have to know what you are doing and everything revolving around it. Or else, you will make serious mistakes as I did. My first buys weren't bad, two shares of HUW @ 4 and one of COFL @ 6. Though I sold for a slight loss after the 20-np deductions, I learned the basics. Next came my downfall. I bought 100 shares of UNIB at 190np/share. This totaled up to 19,000. First, I shouldn't have bought that high. That was just asking for trouble. Oh, it came. I saw UNIB drop like a lead balloon. I finally sold UNIB at 45np/share, or 4500 np OR, a 14,500np LOSS. That's almost enough to buy 1,000 shares. Yes, the market is NOT an easy, quick, and painless game. I do love it and think you must always be cunning and quick on your feet. With the invention of neodaq.com, researching has become sooo much easier. I highly recommend it for articles, tips, hints, advice and everything in between. With this invention and other advice sites, (like my pets web page) there is almost no reason to make any serious mistakes if you simply do your homework.
4. Your Stocks are always worth their Volume in Neopoints. Yes, when it says 1,000 shares are valued at 46,000, they are just that, and always will be unless the drop or gain. A perfect counter-example of an item that is not this promising is a fire faerie. In November, a fire faerie was bringing about 3200 neopoints each. Now one day I went to the Advent Calendar and the prize was a bandy-new fire faerie. Wonderful! A quick 3,000np I thought. That is enough to play (and lose) on my daily turdles. Well, we I went to the shop wiz, I found they were down to less than 2,000! See, 1,000np is not too much to be lost, especially, since it was a gift but think of people who bought 50-100† faeries to stock up on for the War and perhaps make a nice profit. Perhaps. Yes if you had 50-100 fire faeries, you lost 50K-100K. Now we are talking serious money. However, unless a stock suddenly falls bankrupt, if you chose the right stock, the roller coaster will come around again and you will get you investment back and more even if it drops a few points from your purchase.
Those are just a few select reasons why I prefer the challenging, cunning, sometimes annoying, but never dull, and all-around interesting and fun game of the stock market. I hope this inspires you to play the game if you do not, and play it and take it seriously if you don't. It is worth the wait and fuss because in the end, all you need to play the stocks is a computer and a brain.
Good-by filet mignon, hello chicken McNuggets, all because you stocked up on a stock and watch two weeks of saving up go down the drain. Was it a doomed stock, destined to fall, was it just an unpredictable fall, yes that's what everyone who made a wrong move wants to think. Or was it a bad move from the second you clicked buy?
I know you have heard those people who say, "I've made 250K of the stock market and you can too." These people are telling the truth in that they have made a quarter of a million np, but they are just scratching the surface, there are some other faces of the stock market.
If you can remember way back when the Neopets had a 'Bargains' sections. They also had a maybe misleading section. I was new to the market. I had just bought some shares of certain stocks, 2 shares of HUW at 4 and one shares of COFL at 6. Yes I wasn't going to make money but I later called them my guinea pig shares. Also, I didn't want to pour too much money into something I didn't have substantial and adequate knowledge about. If you are new I suggest you go that same route. But back to the 'Help' section. It gave several tips on buying stocks. It said:
So far, so good, I agree with this part, except, some stocks never make huge gains that really add up. There are instances however that are forever burned into my mind as a stock advisor. I remember when KSON was at 16 and I was telling everyone to not go for it. I remember although I would like to forget putting KSON under the 'Never Go Far' section in my advice. Then over the next week, KSON was up to 50. An unpredictable gain, that is all I can say. There are occasions like this when a sleeper stock flies high, but it is NEVER predictable. I am done with this point. Next it said:
There are few blunders I have made in playing the market but I clearly remember one. I had just started to find my way in the market and learned the general principals. I read that last bullet and saw that UNIB was at 190 and though, "Well they saw high stocks stay strong, so what the hay." I bought 100 shares of UNIB for 19,000np. Over the next 3 weeks, UNIB slid down an invisible mudslide to sit at 45 when I put a towel over the wound. A net loss of 14,500np. If I only would of looked at a certain line in the first bullet I might have been able to salvage a porterhouse steak. "Only one way to go." This shows that a stock too high is plain old too risky of an investment. However, you are bound to make a mistake in the stock market, some people make more than others. Although, I did one thing you must do when you make a mistake. Learn from them. Yes I learned from my mistake and have had a very profitable time with the market since.
Another thing the savvy buyer does is never, never, NEVER listen to Nigel. I am certain at one time or another you click to go somewhere and a window pops up with that gelled-back hair suit-wearing chia. He is supposed to be you stock broker. However, the only thing he is good for is selling your stocks. I believe (and not just me) that his advice is completely random, and there is no rhyme or reason for whatever stock he picks.
In order for me, and the people I give advice to, to buy a stock we all (as a savvy investor) must have something to back why a certain stock(s) should be bought. You can't build a house without a foundation. The foundation supports the house. The foundation as I refer to it is the information and the statistics to back and therefore suggest a stock.
Also, the savvy buyer never trusts and even bothers to read the 'Buy TCAG! I know it is going to go up!' on the message boards. I can guarantee you, that if you go to the stock advice message boards you will see one of these in one shape or another. Then 9 times out of 10 if you open it, it will just say 'Buy it, I know it will go up.' They give no advice, no support, and no proof to support their theory. Now with the invention of neodaq.com all done by a great neopian, you can see the history of any given stock. The history is a crucial fact in proving why you should get a certain stock. Why is this so critical? Because it shows how high the stock has been and how high the stock can get. This is the foundation, the supports. This shows you how much money you can make off this stock. Let's say there are two stocks you are looking at. Stock A has a high of 21, while stock B has a high of 59. This shows that stock B greatly outnumbers stock A in the chances it will shoot up and therefore give you a greater profit.
As you have read in this article the savvy investor does and does not do many things. In order to be one you must too! And in the end, it is the savvy buyer sitting down to filet minion with wine as you munch on you Mcnuggets and coke.
Have you ever heard a phrase of something to the sort saying "There's more than one way to do things?" I'm sure you have. And selling in the stock market is no different. Now I'm hear to tell you about all the known tactics by any means possible for conquering the Stock Market by achieving that magic word, profit.
1. Day Trader.
This type of investing is not my favorite by a long shot, but many people use this method and are quite pleased with it. Futhermore, many people have made quick money with this approach, so I tell you what it encompasses in case it's your flavor of Slushy. What Day Traders usually do is:
1- Have a LOT of neopoints on hand.
2- Buy stocks at a high price.
3- Sell when stocks move 10-20 points in one day.
The reason they need a large amount of np is basically to fund their efforts. They want QUICK np NOW. And to do it, they need to buy stocks that are higher in price, as they tend to fluctuate more. Normally, they buy 1,000 shares of a stock, and sell if it moves 10-20† points, pocketing a cool 10 grand or so. It can be very quick, and very profitable, but a certain amount of luck is involved. Stocks that are high never stay high, so you could be in for trouble if it plummets. Look at BOOM. At one point BOOM was at 256. I bet many traders bought BOOM for 200np† and look what happened. However, look at YIPP today. It's up from 102 to 118. Some trader's might have pocketed 16,000np in under 24 hours. Not bad Not bad. Overall, this is for the risky investors, the ones who 'don't mind to live dangerously' and want money QUICK. However, keep in mind, the possibility of getting burnt is always there.
2. Short Term Investor
The Next Step on our scale is the Short Term Investor. These investors also tend to want profits quickly, and aren't as patience as their Long-Term Counterparts. However, with these investors, they also aren't nearly as risky as the Day Trader. These investors tend to buy close, if not at the 15 np per share mark. Once the stock jumps a few points, these investors tend to sell. Therefore it's possible to have a sell on the same stock you bought earlier in the week. These investors also seek maybe 10,000-15,000 np in profit, and rarely hold onto a stock once its gain is 100%. (Though I have seen variations when investors sell at 45 or so for a 200% profit.) Most beginner investors start out on this path, and for a good reason. Since playing the stock market is expensive, newer members don't have time to hold stocks for months until they reach 60. With this approach, one can still gain profit from selling, and also sell sooner. Therefore, they can continuously pump money into their stocks, and also quickly realize profit, (though small) from it. Overall, this is a sound process for beginner investors, or investors who want to play it conservative, and still achieve a modest, but steady profit.
3. Long Term Investor
Ah, finally, the top of the top, in my opinion. This is, by FAR, the method of most sellers', and also, the most rewarding and satisfying. This method, though, be warned, takes money, time, and patience. It involves a substantial amount of cash input, and the results may not be seen for months or years but when you get to that point, it's smooth sailing from there. Overall this investor shares the bond with the Short-Term counterpart in still buying near or at the 15 range. However, this investor isn't pleased with a 100% gain. 200%?? No. Normally most Long Term investors wait for the 60 mark or over, realizing at least a 45,000 np profit on stocks. This investor, from waiting so long, has often many shares of stock in his or her portfolio, and often sells in increments. Myself, I normally sell 50% at 60-65, 15% at 75, 15% at 90, and the last 30% I wait for a triple digit sell. Yes, a triple digit sell. For example, I sold Yipp earlier this week at 101, realizing an 86,000 np profit on a mere 1,000 shares! Now I must also tell I bought those shares in April and May, so it took over 4 months for me to see return on that stock. It takes time to say the least, and as I said, patience is imperative. However, because of that, I achieved 86,000 np, not 15,000 np. Also, I minimized my risk by buying those shares at 15 np a share. Sometimes however, it isn't just 4 months. I held AAVL one time for nearly 18 months until it sold, but when it did, I achieved maximum profit. This course is only for the fairly rich, as it takes a constant input of neopoints for some time. However, once the sells begin to amass, one doesn't even need to drop another penny out of the bank or wallet to buy stocks. Alone in July of 2005 I realized 705,000 neopoints PURE profit. That will pay for ALL of August's stocks without withdrawing a thing. (Provided 31 days x 15,000 np a share for 465,000np) It's well worth the wait. August has been a slower month, but I've still achieved 354,000 np pure profit, and that's NOTHING compared to some who average well over a million np a month pure profit. Overall though, if you want that 3 million np weapon, or what, the size 200 shop, or need the pet with 200 HP, the stock market is a very real option. However, diving into it unprepared can lead to disaster. I hope this article has enlightened you to all the methods possible to make money in the market. All 3 strategies make money, and all 3 have pros and cons. See which one fits you to maximize the profit, and overall, have fun! For more information check my other articles in the Neopian Times or feel free to Neomail me! Thanks!
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