Economics - That's not got anything to do with the Stock Market!

Hi there again,

Actually, Economics has a lot to do with the stock market, and from what little I've read about it so far, from knowing virtually nothing, I'm seeing more and more benefit in understanding economics in general, as well as the 
economics of the company.

It's interesting to read that rewards for directors often have the opposite effect to that intended one.  You give someone a directive to make the share price go up, that doesn't mean that the share price can't go down first, making life easier.  That short statement is quite powerful if you think about it - if you can see incentives offered by the company to its managers, and those managers then manipulate that situation to their own benefit, you're probably not going to want to invest in them, or certainly you'd look very carefully before doing so.

Then you have the phenomena when a product goes up in popularity, and price probably, you can also get associated products that also go up in price as a direct result.  That's interesting, because if you know what to look for, for those products, you can monitor those stocks too, and get a measure of whether they're going to go up, shortly before they do so.

Then there's the situation of when income goes up, the amount of a product purchased goes up too, that would generally mean that that is an inferior product, so you might not want to look at that product, as it's success is based on factors other than it's own good management.

I'm still reading but these small bits of information are very enlightening when look at the stock market, the fundamentals of a company and so on.  Very interesting indeed.  I will give feedback as I read more points of interest.

Getting signs from the market

Hi there again,

Having recently read information on a trader called Jesse Livermore, he explains about things such as the market giving you confirmation for what you think will happen in the market.

It's interesting to see that there's indicators in the market that may be present and can help you to time entry into and exit from the market.

Jesse Livermore studied the stock market all his life, and made and lost millions.  He said that he lost the money when he didn't follow his own advice, his own rules on when to get in, and when to get out.  That is, he listened to someone giving him a "hot tip" and got into the market, when it all turned out to be speculative gossip.

Since Jesse Livermore was a very successful stock market speculator of his time, and made a lot of money when the market was difficult, such as during a crash, I feel I must now do some research into what these indicators are, and then how likely they are to help me, and to what amount of accuracy they may do so.

Get rich quick offers

Hi,

As you can probably imagine, whilst searching for information on investments, there are a fair share of people out there offering incredible returns on the stock market, if you pay a large amount of money, they will tell you their secrets, and not many people know those secrets!

I have to say that I'm very sceptical of these offers at this stage.  I'm sure that there are techniques out there that will help you, but if you want to make money in the stock market, and it was that easy, to pay a few thousand dollars and receive in return information allowing you to potentially earn millions, surely everyone would be doing it, and there's be no need for fund managers and the like?

I'm more than happy to be proved wrong by people from these companies, but I can only see what they're offering as something that with a bit of effort researching, should mostly be available on the internet.  Obviously it's not going to be as glossy, and you'd have to read between the lines and work things out, but at the end of it, you'd definitely understand the situation.

There are situations where people offer training, which is likely to be a lot more useful than tips would be, but still I question how much can be gained from paying rather than researching and working it out for yourself.  I'd happily pay the money if I thought it was going to be worthwhile, by the way.

From what I can glean from these sites, they're often covered calls, option writing.  So my next thing to do was to read about that.  That's for the next article.