Investing 101

[Woodson]

Hey gang,
I'm in need of some stock advice and why not try here first at MJ's investing forum. I have a couple grand that I want to play the market with. I dont wont it to go into an IRA and and the 401k is maxed so, I basically want to play a little.

Question:

What stocks would you buy with the 2 grand?

 

[Red & Black]

Two that I've been buying recently are Nortel (NT) & General Electric (GE).

NT is an investment play, with the price below $5. I don't believe that the deep discount in price justifies the upcoming accounting restatement. This is a strong stock that should hopefully be around $30 in about a year, sooner once the accounting restatement is finalized.

GE is a good investment play and a good dividend play. It is currently under $30 and its dividend yield is above 3% (haven't checked lately so this number could be wrong). I've always believed that anytime GE is under $30 it's a buy and its dividend yield is a very nice bonus.

Both of these are very good blue-chip stocks that are down in price. Both are stable companies that have good fundamentals and solid balance sheets. Now that I've recommended these stocks, expect both to have hugh price falls. :142lmao: Good luck in what ever stocks you end up picking.

 

[selkirk]

Nortel was cdn. largest cap before it blew up, the stock trades in the US, cdn. over $5 cdn.

it will not hit $30 in a year, the reason for this is that they have issued hundreds of millions of shares to stay in business. this has diluted shareholders.

it may be a good pick, it is a pure gamble. for instance the last three years they have no financials, they hope to restate them this year.

they have stated recently it is harder to cut costs and to make a profit. however if management could cut costs and make a profit the stock could go higher.

high risk trading over $5 cdn. could go to $8-$10 cdn. within a year or $2-3cdn. outlook is very cloudy.

if you do buy the stock write some covered calls on the position. premiums are very high since the uncertain future. and its volatile past. almost might want to look at buying a put. covered call and a put. or just trade nortel and pray.....that might work to..

agree with Red black on GE it is a blue chip stock and is well run, have options on it since I think the upside is limited to 15%. however a blue chip that often reflects the blue chips and the health of the US ecoonomy.

would probably find a good fund to buy or an index product. with 2,000.

thanks
selkirk

 

[selkirk]

one note on Nortel believe the past management should have been brought up on charges, and also the directors. What they did to this company is far worse than what Martha did, hopefully for the remianing investors and workers the company can be turned around.

do not own Nortel, own some Nortel bonds, so hope they stay in business for a few more years. believe they are a good buy, time will tell.

bonds should be safe since they do have cash on hand.

thanks
selkirk

 

[Doughboy]

Was getting ready to say the same thing about the price target on Nortel. There are much better speculative plays out there than Nortel. I think SIRI wight be a good longer term play, but there again, it has much risk.

 

[Woodson]

Thanks

Thanks

Thanks for your replies guys.

R&G The GE purchase has been advised previously by friends of mine so that only helps, for that thanks

Selkirk, could you elaborate on what you would do with it? You say mutuals or bonds but that leaves it wide open.

Doughboy: War Eagle, graduated in 99 from Auburn, and can't wait to get back on the Plains Sept 4 for tail gating...

 

[Doughboy]

Woodson
War Eagle back at ya. I graduated in 2000. I live in Austin, so can't tailgate much anymore, but we ar egoing to rent an RV and make the trip for the Georgia game this year. Do you make it to all of the games?

 

[Woodson]

Yea, I'm an hour and a half in Atlanta... Try to make it to all the games... One day, I'm going to retire in Auburn... Love it... Surprised we didn't run into each other in the Laowder building. I grad. in MIS and Telecom. Work for a big Telecom corp here in the Southeast now.

 

[Doughboy]

When I was in the business building I should say, which wasn't as often as it should have been. I graduated in finance. Yeah, I definately miss Auburn. Life was so stressless when I was there. No bills or worries. I sure miss Mellow Mushroom also. Where did you live there?

 

[Woodson]

About a half a mile from Mellow Mushroom in Brookhaven. A mile or so from Buckhead and Lennox Park.

So what do you think about this CNDD stock?

 

[Doughboy]

Will look into it and let you know if I find anything.

 

[selkirk]

woodson it is a hard to answer the question. I mean there have been a few people lately who have asked the question. They have so much money, and how should it be invested.

I mean do you have any debt, I met a friend who had $10,000 and wanted to invest it in stocks, but had loans outstanding which he was paying 9.5%. I told him to pay off the debt because 9.5% guaranteed return is a good return.

as for which mutual funds, do you have a good small cap fund, or any international investments.

you will have to look at your portfolio and see what you would like to add. for example if you have small cap stocks or small cap mutual funds do not need to add more.

one point people in general buy tooooo many funds. i know people that have 35-,62-75 funds. if you cannot tell yourself the funds you own or why you own them then it is too many.

if you were in Canada i would list some funds however I do not own any US mutual funds, just some stocks and bonds. however $2000 is good start with a good fund. just figure out what you want and then research the product. there are plenty of sites that allow you compare the best mutual fund in different categories.

also you might want to invest the $2000 on a flyer, in that case good luck.

here are a few things you can ask yourself (belong to a share club one of the main reason we are winning is the small cap we picked.)

1. can they raise money. if not pass
2. manangement have they done this before
3. does anyone follow them.....
4. where is the market.....for instance in the mid 90s in Cdn. the place to be was jr. gold stocks. Diamond fields and bre-x. when bre-x blew there was jr. companies with gold and good potential and no one cared....DEAD money.

those are just a few things to look at

thanks
selkirk