Fake investing thread: make your predictions

[Giraffe]

As much as I hate to brag about how awesome I am, I am one of the world's best fake investors. I can't count the number of times I say to myself, "you know, that's a good deal right there -- I bet if I bought that stock, I'd make a lot of money," and then lo and behold, months later it's up 500%.

Unfortunately for my financial situation, I am a terrible real life investor. Once I actually put the money into a stock, aliens crash land their UFOs into the company headquarters and spread rumors that the company's products contain tainted beef. Also, I don't have any money, having spent it all on Southern hemisphere vacations and home repairs. So instead I'm going to keep track of my brilliant investing ideas in this thread, and I encourage others to do the same.

Fake trade #1: buy a bunch of BP at $342/share. I think it's going lower from this point on, so I'm holding back 50% of my fake Internet dollars to buy more when it hits $250, but I predict that in 1-5 years, it'll be back at or above $600/share. This one's a buy and hold stock.

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Edit: We're now running an investing game on Investopedia. See Wolf Larson's post on how to get started. (It's easy and fun.) Anyone can join at any time -- there's no end date, so jump in and see how you do.

[Stupid Sexy Flanders]

Buy Acciona (Europe; sustainability R&D).

Current: 66.71
12 mo high: 97.49
12 mo low: 60

And, I agree BP will probably bounce back, but I'd be scared as hell to buy some now.

[Giraffe]

Originally Posted by Stupid Sexy Flanders

And, I agree BP will probably bounce back, but I'd be scared as hell to buy some now.

This is why I'm a much better fake investor than real investor -- if I actually bought some, they'd have four more oil spills next week and it would end up going bankrupt. Instead, they'll dip a bit more but rally to $1200 before the end of the decade.

[Roo]

I just googled this and thought you might be interested.

Wall Street Survivor or Investopedia

I don't know anything about these sites except what it says on the page. But if it's real, it looks like a place to track your trades. And it says you can even make money in contests. But you'd probably want to opt out of the third party ads that they'd send or put in an e-mail you don't use.

[hajario]

It might be fun to use one of Roo's links for a competition. We each get 10k fake dollars and whomever has the most money at the end wins. Top three get custom titles. Bottom person gets a custom title chosen by the rest of the players.

[Wolf Larsen]

Sweet!

My current prediction. The market is going to bounce around with no real clear direction for a while.

[Zeener Diode]

Originally Posted by Wolf Larsen

Sweet!

My current prediction. The market is going to bounce around with no real clear direction for a while.

That's not a prediction. That's how it operates.

[Stupid Sexy Flanders]

Of interest:

Dilbert's Scott Adams says invest in the companies that you hate the most
http://online.wsj.com/article/SB1000...265955016.html

[Zeener Diode]

Originally Posted by Stupid Sexy Flanders

Of interest:

Dilbert's Scott Adams says invest in the companies that you hate the most
http://online.wsj.com/article/SB1000...265955016.html

But I can't wait for Creative Loafing to go public.

[Wolf Larsen]

Setting up a game on investopedia is pretty easy. I suggest you do one open ended, $10 commissions, $100,000 starting cash, 50% margin and no options.

[Jaglavak]

Chris Martenson is correct.

[Giraffe]

I think an ongoing investing game could be a lot of fun, although it would be nice if we could set it up to model successful real life investing (i.e. how we'd invest our own money, if we had any). My experience with some of these investing games is that they usually are set with a short enough time frame (e.g. 3-6 months) that it ends up like playing poker for fake money -- the winner will be the person who recklessly throws it all on some penny stock and gets lucky.

Maybe one way to combat that is to set a maximum for any given trade, e.g. 10% of your total -- if you can pick ten penny stocks that all hit, then you deserve to win.

[Roo]

Originally Posted by Jaglavak

Chris Martenson is correct.

That's quite a lot of information there. Could you summarize for us?

What is he correct about?

[Jaglavak]

Summary: The dirtbag politicians have created a system of fiat money that can and inevitably will be inflated to cover the emergency of the day. The government and most citizens are deep in debt, and the repayment plan assumes good times ahead to generate all the extra wealth for those payments. This is highly unlikely to happen. Also, there are about twice as many dollars floating around as there were two years ago. This will inevitably mean massive inflation soon, sure as gravity. Your best bet is to move your money into physical assets that cannot be devalued with the stroke of a pen. The worst is still to come.

[Wolf Larsen]

Jag that is the thesis to why I'm long gold, gold miners and silver miners in real money.

[Wolf Larsen]

Originally Posted by Giraffe

I think an ongoing investing game could be a lot of fun, although it would be nice if we could set it up to model successful real life investing (i.e. how we'd invest our own money, if we had any). My experience with some of these investing games is that they usually are set with a short enough time frame (e.g. 3-6 months) that it ends up like playing poker for fake money -- the winner will be the person who recklessly throws it all on some penny stock and gets lucky.

Maybe one way to combat that is to set a maximum for any given trade, e.g. 10% of your total -- if you can pick ten penny stocks that all hit, then you deserve to win.

We can set up trading rules that only let you put X% into a buy. The short term thing is why I no longer do the 3 month games on investopedia, too much luck. I think this should be a permanent game. I'll look at what it takes to set up a new game and we can agree on the rules before it gets started. Then it is on like Donkey Kong!

[Wolf Larsen]

Ok, I set up a new investopedia.com user to own the stock picking game. The user name there is wolflarsen5656 which is also the email address at yahoo.com that the account uses.

Here are the parameters that can be set in a game with my recommendations. I will wait until we have had discussion before I start the game. You will need to register at investopedia.com to enter, but it is free.

• Name: The name of the game. I vote for "Giraffe Board Stock Challenge".
• Game Type: public or invitation only. I vote for public. Who knows, we might get some cool new members.
• Starting cash: The amount of money every one gets. I vote for 100,000 USD
• Allow Trade With Margin: Can you borrow money from the broker. I vote yes, you need it to short.
• Allow Short Selling: Can you bet a stock goes down? I vote yes, gotta be able to play the dark side.
• Allow options trades. Can you buy/sell puts and calls. I vote no, a good options trader will smoke a good stock trader because of the leverage.
• Start date. When do we start? I vote for Monday June 20th.
• Does not end. Contest never ends. I vote for yes, it takes time for a good process to dominate luck.
• Allow late entry. Let new players in later. I vote yes.
• Allow portfolio history viewing. Can other players see what you did. I vote for yes.
• Allow portfolio viewing. Can other players see what you own now? I vote yes.
• Allow portfolio resetting. Can you start over? I vote no, you have to live with your mistakes.
• Market delay. Investopedia runs 20 minutes behind. We should keep the default.
• Daily volume. You can only trade this percent of total daily trading in this security. I vote we keep the default of 10%.
• Quick sell delay. How long to wait for the delayed stock quotes for a sell. I vote we keep the default of 15 minutes.
• Minimum stock price. I vote we keep the default of $1.
• Minimum price to short. I vote we keep the default of $5.
• Minimum stock price for margin. I vote we keep the default of $5.
• Commission market order. I vote we use $10 which is roughly typical.
• Commission limit order. I vote we use $10 which is typical.
• Diversification. What is the maximum amount of the original starting money that you can buy of one stock. I vote we go 25% which would be 25,000. If the stock does well, it can grow to way more than that, but you can only buy that much.
• Margin interest. How much interest do you pay on borrowed money. I vote we keep the default 8%.
• Cash interest. How much do they pay you on your cash balance. I vote we keep the default 1%.

Let me know what you think. I plan to put the Giraffe board URL in the welcome message so that other players can find us.

[Roo]

Originally Posted by Jaglavak

The worst is still to come.

Thanks for the summary.

[Jaglavak]

Originally Posted by Roo

Thanks for the summary.

Sorry, kid. Alright I confess, I engineered the whole stock market crash as part of my evil scheme to get back at you for that bug spray incident. That was harsh, man.

[Roo]

Originally Posted by Jaglavak

Sorry, kid. Alright I confess, I engineered the whole stock market crash as part of my evil scheme to get back at you for that bug spray incident. That was harsh, man.

I *KNEW* it. It was YOU the whole time that caused the stock market crash and the economy tanking. I should have known you were behind the whole thing.

Actually, I've heard those predictions before, pretty recently. The questions, as always, are how low and how long. Wanna share your answers to that?

[Giraffe]

Wolf Larsen, you are awesome. I'm totally in! Let me know when I can/should register and if there's anything one needs to know to join the game.

Also, I hope you bought that gold a couple of years ago. I think anyone buying gold right now is crazypants. Five years from now, you'll be down 30%, mark my words.

[Wolf Larsen]

Ok, if I don't hear any changes, I'll set up the game tomorrow (Sunday) to start Monday and I'll post how to get set up at investopedia.com so everyone can join.

On the gold. I agree it might well be down 30% five years from now. The interesting bit is what happens between now and then. Does the phrase "parabolic blow-off" mean anything to you?

[Roo]

Originally Posted by Wolf Larsen

I'll post how to get set up at investopedia.com so everyone can join.

Please make these instructions as super basic as possible.

I'll play too, if I can figure out how to set it up.

[Mako]

I'm based in the UK with a UK bank account, so am limited in who and what I can invest in. I made a few grand in NTOG and Barclays last year but have taken a bath in Sterling Energy.

Best advice I can give is choose an amount of money you could set fire to without hurting yourself. That's the amount you should invest. Forget oil and gas prospects - it seems that their prices actually drop when they score new resource. My tip would be raw metals such as copper and silver mines.

[Wolf Larsen]

Mako - Unilever at the right price would be a good investment. Also Glaxo Smith-Kline at the current price might work out pretty well. I'm not that familiar with the London exchange, is Novo Nordisk listed on it?

[Wolf Larsen]

Ok, I created the game with trading to start tomorrow. The only change from the proposal was the maximum you can buy into one investment with is 20%, not 25% and this was because they didn't have a 25% selection. This should not make much difference.

How to join the game:

1. Go to investopedia.com
2. If you get the teaser page for some ad, click the "go to investopedia.com" link.
3. In the top nav bar (in the same bar with the Investopedia.com logo) is a link to "Register Free". Click on it.
4. Fill in the form. You can use your Giraffe Board name if it is available or pick something that suits you.
5. Complete the registration.
6. It will ask you to pick a game. Scroll down until you see "Giraffe Board Stock Challenge" and select that.
7. Congratulations, you are now in the game.
8. To make trades, hover over the Simulator tab (about 2/3 of the way to the right) and select the "Portfolio" link.
9. You will now see a new toolbar that says "Stock Simulator" on it. The "Trade" tab will take you to the screen that will let you buy and sell stocks. This tab will not become active until tomorrow.
10. If you have any problems PM me.

The investopedia GUI is very rich and kinda complicated. If you can't figure out how to do something, ask here and I will explain it. The GUI is really a lot like my real broker at Fidelity and is easy to trade once you get used to it.

One custom I would like to start is that we always fill in the "why did I make this trade" box when we buy or sell. This is so that everyone can see how you think about a trade and we can learn from each other.

It Is On, Like Donkey Kong!

[Giraffe]

Awesome. I'm going to sticky this thread and then go sign up.

[Wolf Larsen]

One note on joining the game, if you put "Giraffe" in the search box, it is the only game that pops up. This is much easier than paging through the list of active games looking for it.

[Giraffe]

Second note: if you keep mashing the Trade button trying to figure out why it won't let you trade stocks while sobbing, it's helpful to realize that you can't make trades before the game actually starts (tomorrow).

[Dosipede]

I'm in. I slept through economics class in high school, so I think I'm more than prepared.

[Wolf Larsen]

Sweet Dosipede! So long as you are blissfully unaware of the Efficient Market Hypothesis, you will do well.

[Kat]

Damn, someone there already has my name.

[Dosipede]

Originally Posted by Wolf Larsen

Sweet Dosipede! So long as you are blissfully unaware of the Efficient Market Hypothesis, you will do well.

Yeah, I know all about Efficient Market HypzzzzzzzzzhchkhZZ*SNORT*wha?

[Roo]

Originally Posted by Kat

Damn, someone there already has my name.

Me too! I had to join as my other half, Heffalump.

Wolf, when the game starts, will we be able to see other people's portfolios? All I can see is that 3 people joined, but I don't know who they are, and I have a blank portfolio.

ETA: I forgot to add, thanks for setting this up! (and answering these really basic questions)

[hakuna matata]

okay I joined. tomorrow I will start losing my money. Excellent!

[Kat]

Is there any benefit to taking any of the tutorials, or should I just pick stocks randomly?

[Wolf Larsen]

Roo Once the game starts you will be able to see everybody's portfolio and the history of all the trades they have ever made. You won't be able to see any limit or stop loss orders they have out that haven't fired yet.

hakuna matata Excellent!

Kat The tutorials are quite good and I recommend reading them. One of the big points here is learning about investing. One of the critical things is finding an investing philosophy that matches your basic psychology so that it seems natural and you can keep to it even when the market is doing something screwy.

[hajario]

I'm going to play too. I might not make any trades right away though. I have been sick for a week with one of the worst colds of my life. I will barely have the energy and concentration to sign up.

[Wolf Larsen]

No problem Haj. I run a cash heavy opportunistic portfolio, so there might not be much trading until I see value.

[Dosipede]

I'm thinking about setting a minimum blood-alcohol level for my wheeling and dealing sessions.

[anyrose]

I'm in - I'll start investing this evening when I get home from work

[Wolf Larsen]

anyrose you can enter trades any time, but they only "take" during market hours (9am - 4:30pm EST) and get the price when the market opens and there is enough volume in the security to meet the volume rule. If the security is volatile, you might want to use a limit buy order so the price is your price or lower.

[Wolf Larsen]

Ok, made my first trade.

And in a piece of total retardation, the email address I mentioned is wrong, the email is wolflarsen8686 at the ISP I originally mentioned.

[Giraffe]

OK, I'm in. Bought some BP and a bit of Citibank and Goldman-Sachs. The latter two were somewhat impulsive, chosen simply so I had more than one stock in my portfolio.

[Roo]

So far, I bought Whole Foods because I'm a vegan, Google because who doesn't use google and an S&P 500 index.

Wolf, two questions, please

-I didn't see a place to write why we bought stuff. Is that on the stock buying page?

-Is there an index fund for the Dow? If there's such a thing, I couldn't find it. Could you point me in the right direction or maybe some words to look it up?

Thanks!

[Wolf Larsen]

Roo they changed the GUI, it used to ask you for the why you bought it before you placed the order. I will see if they just moved it or got rid of it altogether.

The ETF that tracks the DOW-30 is DIA, the inverse DOW-30 ETF is DOG. There are also 2X and 3X ETFs.

[Wolf Larsen]

Well, after the first day of trading, here are the standings:

1. Dosipede
2. Jelaza (who are you on the GB?)
3. hajario
4. anyrose
5. Heffalump
6. hakuna matata
7. wolflarsen5656
8. Giraffe_GB

Congrats to all who joined the game!
For the lurkers there is still time to join it is very early days yet.

[Dosipede]

I didn't get home from work until after the bell (damn restricted internet access), but I put in requests for a couple of trades.

Bought a bunch of Visa. Looks like some legislation coming down that will screw us all out of a little more money on debit/credit transactions, so I figured I'd get something out of the deal. And went for a little Chevron. Heard gas prices are going up.

I figure anything that screws us all out of extra money should be good for the stockholders. Am I going about this right?

[Wolf Larsen]

Dosipede looking for companies that do well in bad times and that you must deal with even if you dislike them is a pretty good investment strategy. This is why I own American Express and Conoco-Philips with real money.

[Giraffe]

Originally Posted by Wolf Larsen

Well, after the first day of trading, here are the standings:

1. Dosipede
2. Jelaza (who are you on the GB?)
3. hajario
4. anyrose
5. Heffalump
6. hakuna matata
7. wolflarsen5656
8. Giraffe_GB

Congrats to all who joined the game!
For the lurkers there is still time to join it is very early days yet.