Complete Noob Investing Questions

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Twisted Metal

Anfractuous Aluminum
Jul 28, 2001
7,122
3
38
39
Long Island, NY
Anyone good with investing here? I know absolutely nothing about it but I have about 40k sitting in my bank making 0 interest. I think it's time I start investing.

So riddle me this. You have a company like Take Two Interactive which happens to be releasing one of the most anticipated games ever (GTA V), guaranteed to sell millions.

Maybe this is a ridiculous thought, but can't I just drop like 20k on their stock and then sell when the share price spikes on release day? Or is it not that simple (I'm sure it's not, or everyone would do that...)?
 

TWD

Cute and Cuddly
Aug 2, 2000
7,445
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Salt Lake City UT
members.lycos.co.uk
You can buy or sell whenever you want assuming the market has enough supply/demand at that price. You could even use options to control your risk. But you should probably practice with fake money first using a demo account, and when you do start trading you should risk as little as possible at first.

I can't give any advise on any specific stock or strategy so I can't say if it would work. Just don't blow thousands on something unless you know what you are doing. Cramer's mad 4 life would be a good read here.
 
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Twrecks

Spectacularly Lucky
Mar 6, 2000
2,606
10
36
In Luxury
www.twrecks.info
Stock value has very little to do with product releases, Take2 maybe leveraged up the wazzzo to make GTAV, so creditors are already waiting for any anticipated income. Look at yearly reports for solvancy (income to debt ratios). Go to yahoo finance ( http://finance.yahoo.com ) and check on the history of what stocks you wish to purchase. I did a faux portfolio for my accounting class investing in game companies. What I saw was corporate entities like Activision and EA did very well, while Take2, Ubisoft and Atari tanked. Atari actually got delisted because their stock value dropped and couldn't even recover a 10 to 1 negative split (1 stock worth what was 10). I wish I had moved my 401K to Activision and EA, 5 years ago!!!

On the brighter side, game companies typically do better in a down economy, ppl looking for a $60 escape ticket I guess :p

Companies like Nintendo, Sony, Intel, AMD/ATI, Nvidia, Microsoft and Apple seemed all over the place... though I haven't looked at them lately, but are game related.
 

Twisted Metal

Anfractuous Aluminum
Jul 28, 2001
7,122
3
38
39
Long Island, NY
Looking at the history graphs though, the share prices are always up during the release of a major title. It really spiked during GTA IV. Why wouldn't that trend continue? At the very least, I don't think the prices would dip below what they are now, especially at the time of release. Right? Maybe? Perhaps?
 

Zxanphorian

( ͡° ͜ʖ ͡°)
Jul 1, 2002
4,480
0
36
34
PA USA
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While I may not be the best person to get advice from about investing, I would say allocating half of what you have in the bank on one single company is really foolish.
 

gopostal

Active Member
Jan 19, 2006
848
47
28
For 40k you ought to pay the price of admission and get a financial planner. In the long run you'll earn more than you ever could get near trying to do it yourself. It'll cost you a few hundred to ante into the game but those guys know what they are doing. While you are busy looking at Take Two they are busy buying stock in some factory you've never heard of because the next version of the Ipod needs a battery from them.
Government securities are a good bet too. You know what you are going to get and there is no fear of loss.
 

SleepyHe4d

fap fap fap
Jan 20, 2008
4,152
0
0
I'm sure people do this, but it's all about timing, so you probably shouldn't do it unless you're an experienced day trader I'd guess.

Look at EA and BF3's release. The stock fluctuated a few days before and then it spiked on the day BEFORE release, but after that it dropped straight down. Also even if you had bought and sold on that release perfectly you'd only have made like $1000 with the 20k investment. I wouldn't do it if I were you.

Of course, this is all an outsiders perspective on things, I don't trade... yet.
 
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TWD

Cute and Cuddly
Aug 2, 2000
7,445
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Salt Lake City UT
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It's all about expectations. Analysts set up expectations for how many copies a game will sell. They determine based on margins and so forth how much that game will contribute to the bottom line. So if the game sells more than expected then everyone adjusts their estimates, and the stock price goes up.

So yes if you think the estimates are low, then you might have a good trading opportunity. However, you also have to realize other things could be at play. For instance, stocks will follow the larger indexes almost 90% of the time. There's yearly and domestic trends, and one game only contributes so much to the overall profits of the company. You could be right and still lose 10% of your money. This is just to give you a general idea of how things work. Again I can't give any specific advice on any one stock or strategy.

Which is why I say that you should start smaller first. If you are willing to put the time and effort into it you can do really well. In fact, it's not all that hard to beat the professionals. The catch is that you have to put in the time. Read some books, do simulated trading for a while, start with small investments, etc.
 
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|*BILLY$CLINT*|

I make things happen!
Jan 25, 2008
532
0
0
The Moon
Anyone good with investing here? I know absolutely nothing about it but I have about 40k sitting in my bank making 0 interest. I think it's time I start investing.

So riddle me this. You have a company like Take Two Interactive which happens to be releasing one of the most anticipated games ever (GTA V), guaranteed to sell millions.

Maybe this is a ridiculous thought, but can't I just drop like 20k on their stock and then sell when the share price spikes on release day? Or is it not that simple (I'm sure it's not, or everyone would do that...)?

I would suggest that you get a financial planner to handle this for you.
 

Capt.Toilet

Good news everyone!
Feb 16, 2004
5,826
3
38
41
Ottawa, KS
Why the hell would you want to invest in something when all someone had to do was sneeze and you lose half its value? The stock market in general is a bad idea IMO.
 

TWD

Cute and Cuddly
Aug 2, 2000
7,445
15
38
38
Salt Lake City UT
members.lycos.co.uk
That so many on this forum are urging you to avoid the stock market is exactly why you should ignore them. See Peter Lynch's cocktail theory. People are scared of what they don't understand. There are real risks involved, but you can learn to manage them to be consistently profitable. You can even turn these risks to your advantage. Just realize that it's not for everyone, and that it requires real work.
 

dragonfliet

I write stuffs
Apr 24, 2006
3,754
31
48
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That so many on this forum are urging you to avoid the stock market is exactly why you should ignore them. See Peter Lynch's cocktail theory. People are scared of what they don't understand. There are real risks involved, but you can learn to manage them to be consistently profitable. You can even turn these risks to your advantage. Just realize that it's not for everyone, and that it requires real work.

That a majority is urging him not to do something is not a good reason to do it. There isn't a problem with investing in the stock market, but there IS a problem in doing it when you haven't got a clue about the forces at work that makes the numbers magically go up and down. The question isn't: should I invest? The question is: I have no idea how to invest, should I put 20 grand on a bet?

So sure, if TM spends time to give himself a background in investing and start following the market to understand what he's getting himself into, yeah, that's fine. But he should DEFINITELY not bet the farm on Take Two stock doing what he hopes it will do, and is in fact MUCH better off sticking his money in a mutual fund of some type.
 

Balton

The Beast of Worship
Mar 6, 2001
13,428
118
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Berlin
That a majority is urging him not to do something is not a good reason to do it. There isn't a problem with investing in the stock market, but there IS a problem in doing it when you haven't got a clue about the forces at work that makes the numbers magically go up and down. The question isn't: should I invest? The question is: I have no idea how to invest, should I put 20 grand on a bet?

So sure, if TM spends time to give himself a background in investing and start following the market to understand what he's getting himself into, yeah, that's fine. But he should DEFINITELY not bet the farm on Take Two stock doing what he hopes it will do, and is in fact MUCH better off sticking his money in a mutual fund of some type.

:stupid:

Btw. Twisted, didn't you want to blow your 40k on a car a couple of months ago and everyone told you to read up on investing?
Well, same advice applies again.