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View Diary: Chain Restaurants, exploitation of employees, arrogance, greed, and crappy food. (175 comments)

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  •  um, can I offer some free advice? (3+ / 0-)
    Recommended by:
    sfsteach, BlackSheep1, llywrch

    One should only buy into individual stocks what one can afford to lose. As in, evaporate, with no recourse of reclaiming it. "Sorry pal, you lost, game over. NEXT!"
    Gone. Skint. Bupkis. (you get the idea)

    Be extremely careful entering the market. There are experts with algorithms that manage stock supply and demand as best they can, and they lose their shirts sometimes. The ones that keep playing are those that can survive the loss.
    If the loss of a hundred bucks will hit too hard, you might want to look at other options for your investing.

    Speaking of options, those come into play with shorting - basically, you're buying the option (the right, but not obligation) to unload stock at a price higher than it might be on the given day you opt to sell it, through a contract with another party.

    The experts have gamed this and prices are usually fixed so that unless you're buying/selling in large quantities, it's tough to make serious bank.

    Right now... hmm... (see above) Papa John stock is trading at about $47 per share. So with your $100, you could theoretically buy 2 shares. Buying and hoping it will increase in value, for you to clear $300, the stock would have to triple in value - skyrocket to $150 per share. Not gonna happen... Buying put options (that it will drop in value), to clear $300, would be a longshot gamble. Selling short, one's losses can theoretically be infinite if the stock price increases. Just think about that for a moment or two.

    With a hundred dollars, you might be tempted to invest in "penny stocks" - those with share prices on the order of a few cents per share or most any under a buck per share. You'll see lots of pop-up ads showing young guys in expensive jackets that read "I MADE MILLIONS IN PENNY STOCKS! LET ME SHOW YOU HOW!"

    It's all a scam. Don't fall for it. It is strictly a game for those that know exactly what they're doing and how to read a company's financials. You could easily - in the blink of an eye   - lose your entire investment. Someone smarter than I said, "start investing heavily in penny stocks and you'll soon be scrambling in the gutter looking for loose change."

    If you want to try it yourself, going through an online brokerage can be the way to go. Tradeking works extremely well - there's no minimum to deposit with them, and each stock trade has a fee of about $5 (options and penny stocks trade at a higher rate though - read the fine print). They have a good raft of educational reading too. One could take a hundred bucks, buy 2 shares of Microsoft, and still have enough left over for some beer and pizza - from your local indy pizzaria, of course.

    Caveat emptor.

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