Have you ever bought a top-performing stock?

Ok, totally ignorant about stocks here...but just curious. From time to time i browse the business section of the paper and find that some stocks (if you put $1000 in them for a week) would have nearly doubled your money. I know that you cannot predict the market, but has anyone bought such a stock after hearing it's so hot and held it for a short length of time. If so, what happened. What are your thoughts on such a gamble?

I have traded all of the "hot stocks" at one time or another. I have been earning a living off the markets for about 19 years (see bio). I spent about 8 years studying the markets on a daily basis before I put someone elseâ€™s money in the market.

I think you may be looking at penny stocks (under $5.00) and they trade Over The Counter (OTC), "Pink Sheets".

"Real stocks" (that trade on major exchanges and NASDAQ primary market) just don't double in a week - unless youâ€™re referring to 1998-1999.

I don't invest in penny stocks. Have I ever? 3 or 4 times. 3x were IPO's (I knew the underwriter, and had an account with them) and one was pure momentum. I have done much better on big name stocks (S&P 500 Listed).

I've written a lot about penny stocks and their risk. Add me to read my posts if you'd like.

There is a lot of hype and speculation. I think you hit the nail on the head when you said "Gamble."

If you are looking to make money on a short term basis (under 1 year, I call that speculating).

The key to speculation is:

1. Experience.

2. Intuition.

3. Luck.

4. Trading ahead of the news - being able to read the market better that the majority and having the gull to buy or short against the majority. This is not easy even after 19 years. That is where intuition comes in.

Example: Last Fri (05-02-08), a ton (the majority) of people bid up YHOO speculating that MSFT would just up the offer a bit to make a friendly deal. Watch Monday (05-05-08), YHOO should dive and MSFT should be going up. I think we will find that the correct trade was to short YHOO and go long MSFT. You would prob make a lot of money doing this, but you went against the market. Of course if MSFT ended up bidding YHOO higher (I doubted it from day 1) then the majority would have been right.

There is prob another 20 or more things I can list, but even if I did, it's a lot of absorb, and type right now.

So you have to ask yourself:

Do I want to speculate or invest?

There is nothing wrong with speculation. Just be careful not to put in anything you can afford to lose.

Gambling in the market is different from speculation. By definition, a Gambler just wants the thrill, where the speculator really wants to make money.

Also, gambling to me in the market is guessing. If you are driving a car and using the review mirror as your map, youâ€™ll likely crash soon.

Same with the market. If you use yesterdays or last weekâ€™s news to forecast next week, and you donâ€™t know what is fundamentally driving the stock, and looking at technicalâ€™s (charts, volume, etc), then it is more likely that one will prob be taking losses soon.

There is a lot of free info to read and learn from. Education is the best way to start. Some links below.

Careful of the get rich quick stock hype websites.

Actually, the first stock I ever bought was WMB in Jan of 2003. I bought it at 2.92 I think. And I sold it in April for 8.83, I think. I bought a lot too! I made 16,000 dollars on it and have been trading stocks ever since. I have never done that well, unless you count the times I have made 10% in one day or so. But I can't count that because that same stock that goes up 10% in one day might not hold up for 3 or 4 months.

I didn't think I was gambling with WMB, and I didn't expect it to go up that quickly. I was just glad it did. I expected it to go up to around 15 dollars in a couple of years or more. But I had no idea. I just felt strongly that it would go up rather than down.

You'll do better betting on baseball. Have I been lucky? Yes. But, luck is the intersection of Preparation & Opportunity. I shorted Starbucks at $30 (still have it), Countrywide at $28 (covered)... bought Panera Bread the day before the announced earnings and made 40% on the call.
More unlucky than lucky though. But the key is I cut my loses early and let the good ones run. I lose more often but they are small loses. When I profit it's a nice size profit. That's my strategy, I take calculated risk. No different than me walking outside. I could get hit by a bus...

I like to buy up trending stocks that are doing very well. You can ride a trending stock until it starts to turn against you.

But you still have to develop your own rules,

1 how much are you willing to risk on this trade (where are you going to set your stop)

2 When you have a profit how much are you willing to let it come back before you sell, (stocks always pull back but if they pull back too far it could be a sign that they will crash)

Just buying it and hoping to sell after a week is a bad idea, but their is plenty of money to be made with them.

If your interested in it, I would suggest learning technical analysis and paper trading first.

Ive made my entire living from stocks for the past 3 years (and I sell domains now too and thats actually even better) but Ive only lost money a few times. Ive had stocks quadruple on me before.I usually day trade but I hold some too. The biggest mistake I see people make is buying companies they know of, buying companies that are "hot" at the moment. When you hear about a stock being hot, that means stay away. That means its too late. It might go up a little, but there is a greater chance that it will take a big drop as its reaching its peak. Buying companies you know of is a bad thing...I had a friend who owns a donut shop so he has a thing for donuts, everybody knows krispy kreme, so what did he do? He bought krispy kreme stock and lost alot of money. The stocks that nobody is talking about that most people have never heard of are the ones that you should be looking at. You want to get stocks before they are hot and sell them the minute people start saying they are hot. I've made alot from bio stocks and agriculture stocks (Ethanol and what not). I usually dont buy any stocks that are over $20.00 a share or lower then $8 and I always look for a LOW p/e ratio. I've gotten into domains recently because stocks arent looking too good this year (at least not USA) and there are so many other emerging markets out there so China shouldnt be considered an option either (most people automatically jump ship to go over to China stocks, but thats not a very good idea).

Experienced traders & investors recognize that trading certain stocks with momentum can be among the fastest and most lucrative ways to approach the stock market.

It doesn't matter if the market is up or down. There are always going to be momentum stocks getting ready for a solid breakout, either in pre-market hours, regular market hours or in the after hours session.

Profitable trades can take anywhere between 2 or 10 minutes. And in some occasions You will be able to ride a very good stock for a full day or more.

The problem is that if you don't know how to pick those stocks and manage the trade while limiting your risk, you won't even get close to making a few dollars.

You don't necessarily have to trade hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities.

Improve your trading results and discover how to pick among the hottest stocks in 2008 at http://www.MomentumStockPick.com

coin is gonna more than double soon because their opening up a plant sometime this month or next..

this company is a great investment..look into it yourself!!!!

full form converted organics!!

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.044
Copyright (c) 2011 Financial Crisis Monday, May 28, 2012 - Terms of use - Privacy Policy