»

[GermanStudent]

Hi im an exchange stundent from germany and 15 years old.

In school i have the subject business education and i have no idea of business.

Now we play a game in class. We have 100000 Dollars and we have to invest in companies. Well do this project untill february and who has the most money than wins the game.
We are only allowed to invest in companies that are in the Toronto Stock Exchange, Cdn. Venture Exchange, New York Stock Exchange or Nasdaq.

So my question to you is.
Could you please tell me in which 10 companies you would invest in.
But just in the exchanges i told you at the top !!
And in which how much from the 100000 dollars ?

Thaaank you so much for your help greetings Christian.

[Miles]

I would definitely start here: http://www.google.ca/finance - Find some tickers for Canadian companies that interest you and add them to Google Finance. Watch them daily.

Or even better if you have charting software like Think or Swim provides, use that.

I can't advise you on what to buy but here's 5 small cap TSX stocks I watch:

AC-A.TO (Air Canada)

HW.TO (Harry Winston Diamond Corp)

ELR.TO (Eastern Platinum)

WPX.V - (Western Potash)

MB.TO (MegaBrands) *Speculative risk!

Good luck

[Strohem]

Christian,

Many of us were given the same task - with little preparation, understanding or instruction. If this is for real, I have to say that you are being given an awful assignment.


1) You only have a few months to perform (that's terribly unfair, in my opinion).

2) You're grade is based ON your profit/performance (I assume).

3) You acknowledge you don't understand "business" (although I contend that "business" understanding is not needed at all).

4) The rules are very vague. (Do you have to invest the money? How many trades are you allowed to make? Can you sell short? Etc.)

5) Has your instructor given you any instruction on how the market operates? (The "market" and "business" are two distinctly separate things, especially in short time-frames.)

5) Is your instructor ALSO going to participate? (She/he should...)

6) Are there any provisions for risk management (selling, setting stop-losses, options, etc.)?


Granted, I know that this is a game, and if there is no weighting to negatively impact your grade, then it IS only a game - entertainment. Still, that is a poor lesson to be taught.

For what it's worth, when I was given the same task in class 35+ years ago for a similar assignment, I had no idea what was going on. Throwing darts was no more or no less of an advantage, and the kid who won the deal picked some penny stock that went through the roof (by pure luck). Any one of your other competitors could get just as lucky and have a beginning balance that goes to the moon. What is the lesson in that? That it is a game of chance? That it is nothing more than a gamble??

In that vein, that you even have restrictions on which markets you can select from is a positive.

Also for what it's worth, my initial inclination was to urge you to do NOTHING (to NOT invest) at all until you had a clearer, better idea of what you can and can't do. I certainly wouldn't be rushing to invest everything right now anyway, especially until some of the questions are answered.

Take those questions - as many as you can think of - to your teacher (that alone may get you a good mark). Try to understand the process better, then return here to get a better idea of what the process of investing in securities is REALLY like. To my way of thinking, Christian, if you have achieved a better return that the overall market and have done so by taking LESS risk than being fully invested in that same market, you have aced the assignment... but four months is not a good parameter for that.

In the meantime, read and re-read this section of the forum (Traders Lounge).

There are a handful of pretty reasonable posts by a couple other members here - along with a few others - who tend, in my estimation, to offer meaningful information. Take or leave mine - that's not the point. I go there to check up on the helpful insights they make, and it benefits me.

First, get more rules and THEN set out to understand the craft and process of risking money for gain. Asking for "tips" doesn't teach you much or help your cause.


Best efforts.


S

[GermanStudent]

Hello and thank you very much.

Google Finance is a good idea but i have to pick out 10 companies i want to invest for tomorrow we just had 2 days time for that.
He didnt say anything if we can trade and yes we have to spend the whole money we can for example put all our 100000 dollars on one company or we can put a little on every 10 companies.

I thought that I should invest in Apple Google Amazon (because of christmas ?) sth with oil or gold and alcohol. But actually i have no idea. Is that good ?

Okay thanks for those 5 tips does anyone has some more tips.

Thank you for your help.
Christian.

[Strohem]

Originally Posted by GermanStudent Hello and thank you very much. Google Finance is a good idea but i have to pick out 10 companies i want to invest for tomorrow we just had 2 days time for that. He didnt say anything if we can trade and yes we have to spend the whole money we can for example put all our 100000 dollars on one company or we can put a little on every 10 companies. I thought that I should invest in Apple Google Amazon (because of christmas ?) sth with oil or gold and alcohol. But actually i have no idea. Is that good ? Okay thanks for those 5 tips does anyone has some more tips. Thank you for your help. Christian.

No - not good... sit tight for a minute. Clarify these things for me.

So, the entire 100,000 needs to be invested tomorrow? And you CAN put it in UP TO ten names??

I'll be waiting for your reply. I have an idea.


S

[GermanStudent]

Hey thanks man youre very friendly.

Yes tommorrow i have to invets the money.
Yes we can invest our money (100000dollars) in max. 10 companies.
But we could also invest for example just in 5 but we have to spend all our virtual money.

Ok thanks tell me your idea

Greets
Chris

[Strohem]

Originally Posted by GermanStudent Hey thanks man youre very friendly. Yes tommorrow i have to invets the money. Yes we can invest our money (100000dollars) in max. 10 companies. But we could also invest for example just in 5 but we have to spend all our virtual money. Ok thanks tell me your idea Greets Chris

Sorry for the delay (dog walking).

I'll have some thoughts in just a moment...

[Miles]

We are only allowed to invest in companies that are in the Toronto Stock Exchange, Cdn. Venture Exchange, New York Stock Exchange or Nasdaq.

Hmm sorry misread the post...for some reason thought you said only TSX.

[Strohem]

It may be the contrarian rebel in me, but I think you should NOT invest right now. Since you must, I think you can do well to be as market neutral as possible. (That's a way to be invested with out risk, but you will also not have any gain.)

Earnings season is beginning and there is likely to be a bit of volatility - perhaps down.

I'd rather you enter limit orders that will only fill/execute when a lower price is reached, but you can't do that ( I suppose).


So-

Buy $46,000 of the SPY (396 shares @ previous close of $116)

Buy $46,000 of SH (958 shares @ previous close of $48)

This pair will be "neutral" and will generally offset one another. (There is a reason for this - trust me.)


Take the remaining 8,000 and buy your 3 (AMZN, AAPL GOOG) and Miles' 5 picks with equal dollar amounts. (I personally wouldn't put money in tech at this exact time, but I have my reasons. My guess is that Mile's picks will outperform.)

Look at price charts of all of these names ^^^ above to confirm that they are going in a direction that will make you money. Trust the charts - they are your road map.


You WILL not set any records - the first two picks will offset each other until you can see your way more clearly and sell one side of that pair (if you can). The last 8 will do whatever they will do. I doubt you will loose much, if at all unless the last 8 absolutely crater. Even then, you would lose no more than 8% of the beginning value.


Good luck, and post up more rules, questions or comments as the come up. Don't be afraid to challenge your instructor with any question you may think of, either.






S

[Miles]

Hah good advice Strohem...

Does this mean you get an A on this assignment?