Your Questions About Money Making Stocks For 2010

Paul asks…

15 Year Old Looking to Invest With Small Capital. Looking for the best (ROI). Can I make any money?

I’m a 15 year old that currently holds a blogging position that pays around $9-10 an hour. Over the last year the stock market has interested me greatly and I would like to join it. I had wanted to do something similar back in September of 2008. I got cold feet however and didn’t do anything. My dad is willing to help support my ambition with more capital. I have around $100 myself with the possibility of making $50 or so a week and my dad would contribute $100-200.

In short I’d most likely have around $250 to start.

Goals:

1 Year Goal- $1,200 Net Worth by June of 2010.
4 Year Goal- $5,000 Net Worth by Graduation in 2013.
8 Year Goal-$15,000 Net Worth by Graduation of College.

These figures are just goals that I hope to make. I would love much more to make hundreds of thousands, but I know that isn’t possible without luck and a lot of work.

I’ve studied the market, read books, gotten reviews on online brokers, and learned what I could about the market. I think I still have more learning to do, but I understand the basics of rolling stocks, stocks, and call/put options.

I want to know if options are even a plausible investment for me or if I should invest in a Mutual Fund or Stocks?

(I have studied options quite a bit and I understand they are very very risky. Probably not for a beginning investor? I know a good chunk on calls/puts and covered calls. Should I even consider this?)

(Rolling Stocks or the old “Buy Low, Sell High” Is it still working these days and possible for a new investor?)

Can I make a profit at all with a $250-500 Capital Base?

What Online Broker is the best for cheap commissions, but can execute quickly and has Customer Service and a nice interface?

If anyone can help me out it’d be greatly appreciated!

I know so many questions, but I really need some final guidance.

John answers:

You sound very ambitious. Good for you.
Feel free to open up a brokerage account, but keep in mind that no stock, mutual fund, or stock market has a guaranteed or even predictable ROI. The only exception would be very conservative, very low return things like money-market funds.
It sounds to me like you’ve learned enough to do better than average with stock investing.
Given your ambition, however, I would suggest that private investment may be the thing you’re looking for.
Start your own private investment using your money and perhaps also that of investors. This could be a real estate venture, a small retail service, a wholesale business, or whatever you think would be profitable for you and your investors.
Don’t forget us little guys once you’re at the top!

Steven asks…

good virtual stocks to invest in the next 6-9 months, $100K starting budget?

this is a virtual stock game competition at my school and the time duration to sell would be in the next 6-9 months, the problem for me is that i cannot change what i buy!, so i can’t just do short-term investment and then sell it when it drops, which is what i want to do…i have to do investments that i keep for at least 6 months, i dont know for sure since i dont know when they actually determine and tell me who’s the winner. So the sell date is in 6 months, or half of a year, in 2010 of course. My idea is of course to diversify as much as possible but also keep penny stocks.

my first would be a major food production company, 2-3 energy companies, including alternative energy. A specific one for oil would be Exxon Mobil. Miscellaneous could be either gold or silver, a “drug” medicine stock, and foreign stocks. I will also take a few percent of the 100,000 and put into penny stock.

Since i get to start with such a high amount i have alot of freedom in what i invest, but i want to be careful though, because even though its not real its for a competition…(nation wide, but the winner is determined by the best performing at a school only)
anyone have any suggestions either specific ones or just general catagories all of them are appreciated!
no you dont have to make me money but if you have any good ideas or suggestions just let me know.

Thanks.

John answers:

A good “story stock” is one whose fortunes will rest on whether their products become popular or not.

I am currently watching a biotech stock called MNKD. It is coming out with a revolutionary way of administering insulin into the body – for diabetes. Instead of the usual ( painful ) injections, they administer it through an inhaler. Cleaner, quicker, no pain, and no needle marks.

If this product is approved by the FDA, it could work out very well for the stock; they have applied for approval, but a decision is not expected to happen before January 2010.

So, you could put some of your virtual funds into this stock, and hope that the product gets approved. The stock is currently at about $9.70 right now. Potentially could go into the 20s or 30s if things go well for them.

But, as I said at the beginning, it is a story stock. If this thing does not pan out, the stock could go back to $5 or worse.

Hope this helps you. Good Luck.

Ruth asks…

Should I cash out my stock for tax in 2009?

HI

Please some one tells me. ,I transferred some cash out stocks and 1000 shares of GM stocks from 2008 to 2009 and declared them as a lost.And in 2009 I deposited more money into stock market, and so far, I’m very behind my investment from beginning of the 2009. Almost I lost 80% of total investment in 2009. So! do I have to cash out my stocks this year again to declare a lost? or
it is not necessary to cash out my stocks to show lost and i can transfer into 2010 if I want to keep them for long term minimum 1 year? I bought and sold altos of them and always lost more money. Now! if i have plan to keep them for long term can I transfer all of them which bought today again 11/133/09 and transfer into 2010 without pay tax next year on my own money if make that lost back and wants to sell it. Also, is that corect of you want to trasfer your stock into next year you can have the same stock you sold in 30 days?

Edi_kh2000@yahoo.com

Thanks!
A looser (:(

John answers:

You had 1000 shares of GM? Sorry about that.

Anyhow, yeah, if you want to be able to write the loss off on your return then you have to actually sell the stock and not buy it again for a month. If you lost 80% of your investment that you’ve only held this year, then I’d probably sell it to get a short term loss. Short term losses can offset short term gains which are subject to the ordinary income tax rate (read:higher rate) or long term gains which are subject to the lower capital gains rate. Long terms losses can only offset other long term gains or 3000 worth of other income. No clue what you’re getting at with transfering stocks into a next year. Many people hold the same shares for decades. There’s no reason to do anything special at the end of the year unless you need a loss deduction.

William asks…

Am I making a good return on investment?

Hi, I am trying to find out if I am making a good return for an investor my size. I started out with 1600 in May of 2008. Got shorting privilages in August of 2008. Also for the figures given, ALL profits are being reinvested so it is compounded monthly.

I trade stocks and options (no penny stocks. Option privelages granted in December of 2010), often using straddles that I later change to a slit or slant after earnings. A crash has no effect on me as I use options to profit from them or simply short.

Trading alone since May of 2008 (after I graduated high school, used to trade with friends together when we were too “small” to trade on our own. Also didn’t turn 18 till around then.)

For the last two months I have posted a return of 29.4% and I have a target of 10% per month return compounded. (I have exceeded this in reality and have averaged overall about 11.2% return per month compounded after you take out taxes and money spent on trips/leisure)

Now I’m glad about this and all, but a couple of things I want to make sure of.

Is this a good return for an investor my size?

How long can I keep this up? In other words, how long until I get too “big” to make these kind of returns?

Any answers would be greatly appreciated.
The 11.2% return per month rate was based off of having a bit under 60,000 now. In reality the return was higher because I spent several thousand in 2009 and 2010 on trips. Probably 13% a month had I never spent any of it.

Effectively my ROI is 357% or basically for every 1k I have at the end of the year I have 3570 by the end of the year.

Really hope I can keep this up until I get “big” enough

John answers:

If you can keep that up in the long run, I make you my compliments in advance.
You can get an idea of the highest returns that can be achieved in the mid and long-term from this list of top-performing managed funds in 2010:

http://www.businessinsider.com/michael-hintze-performance-hedge-fund-cqs-2010-12#1-gavin-wilson-and-mark-redway–4079-112510-21

I’ve seen also other managed funds reports but no one exceeded 72% ROE per year.
Consider that these fund managers are top-skilled professionals operating in a highly competitive environment.

Betty asks…

Will Liberal TEAchers compromise?

Will TEAchers give up 50% of their Pension WELFARE, or will they yell for tax increases for both the State and Counties?
A) Retired teachers benefit from tax increaes, while young teachers get the pink sheet to support their immortal pension welfare fund.

2. Will Lib teachers get rid of NY Rubber rooms for bad teachers?
B) This is another way Lib teachers are making money for doing nothing.(criminal)

3. Will Libs be opt out of their pension fund, so it would be shifted into a 401-k like the rest of the Americans?
A) Libs need people like me to invest their money, both in stocks/bonds/insurance/etc…

4) Why is it ok for Liberal teachers to bankrupt our U.S states with their (pension black hole)?

5) Why do overpaid teachers cry about making $35k as a first year teacher, when in fact they work 180 days out of the year, while majority of Americans work 48 plus weeks out of the year to make the same amount?
A) Teachers want to make as much as Hedge fund managers, yet teachers are inefficient/unproductive public sector thugs.

6. What should happen to these overpaid teachers?
A) Replace them with foreign teachers, which they will work for much less, plus they have the same educational background.

If we cut pension WELFARE funds, cut wages, then that means the state deficit would decline and we would not be faced with higher taxes!

I love exposing you frauds!

I have a bachelor degree!!

Teachers pension fund is $43 billion short The California State Teachers’ Retirement System says that as of June 30, 2009, it could meet only an estimated 77% of its future pension obligations –far less than the 100% recommended by actuaries January 29, 2010 |

http://articles.latimes.com/2010/jan/29/business/la-fi-calstrs29-2010jan29
Do not try to play the card that teachers are middle class trying to raise their families. Everybody plays that card.

Read an article about “pension black hole”

John answers:

No

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