Welcome to StkyTreat

[JohnHenry]

Stock Split

Does it have any benefit(s) for the share holders? Yeah ok I was thinking if a company for example has 100 outstanding shares. I have one share and now the stock splits, there are 200 outstanding shares; I have two shares.

But if you think about it, it’s still one percent either way you look at it. Also I have notice once a split occurs the stock generally tends to go south. So my question, is a stock split just psychologically? One percent is one percent, it doesn’t matter how many times you slice it up its still one percent. NO?

[Rob]

Of course you are correct. 1% is 1%. What's the difference between 5/500 and 10/1000? Absolutely nothing.

[JohnHenry]

Of course you are correct. 1% is 1%. What's the difference between 5/500 and 10/1000? Absolutely nothing.

Then what is the purpose of the split? To lower the price and give others a chance to buy? I know all this is in the book I'm suppose to buy but until I have money to buy I'm still curious.

[IIC]

Then what is the purpose of the split? To lower the price and give others a chance to buy? I know all this is in the book I'm suppose to buy but until I have money to buy I'm still curious.

There are a number of reasons a stock might split...One might be that Institutions may not be interested in stocks with a low shs. out...Doug

[JohnHenry]

Mortgage rate question

I was visiting my aunt and I over heard my parents and cousin talking about how he got screwed with his mortgage. I think he purchased a house during or just before Christmas of last year.

I over heard something about his two loans, the interest rates are climbing through the roof. Something about his loan was base on a 12 month index average, but it’s on a pick a payment plan where he can pay on top of the interest toward the balance, it beats me! Someone said won’t worry the interest rate will go down and you can refinance (don’t know what refinance is but I will by the morning).

How will interest rate go down, it may not go up according to IBD in last week’s paper but any ideas for me to help my cousin? Is it a good time now or should he wait or stay out of it? Thanks

[jiesen]

mortgage rates

http://finance.yahoo.com/q/bc?s=%5ETNX&t=my

What do YOU think, Stky? Those are the long-term U.S. interest rates over the past 40 years or so. Do you really think the rates are high today? Going from 4% to 6% is nowhere near the roof. If your cousin thinks it hurts now, just wait until he sees the rates go from 6% to 16%. Yes it can, and has, happened. My parents told me about the business loan they took out around 1980, when they got an adjustable rate around 9% and saw it shoot up to 15% in less than a year. Nearly bankrupted them.

My advice to you, is never borrow money at an adjustable rate, unless it's for an amount you can easily cover with your cash if you need to (if rates go up). Your cousin IS screwed- he should never have gone for the adjustable rate. Nobody knows where rates will be in 5 years, and if they say they do, they're probably just trying to sell you something you don't need to buy. What he should have done in the first place was go for the higher fixed rate mortage and only borrowed what he could afford to borrow. But I wouldn't recommend telling him that, since he's just going to get pissed at you for being right.

(Also, what he should do now, is work really hard to pay down the debt faster and/or refinance immediately to a fixed rate. Waiting around in the hopes of lower rates is a fool's game.)

[JohnHenry]

1st trade = $25

HEY um…I made my first trade to day at my uncle’s work. I bought 25 shares of TIE and sold it after going up a buck, so $18 profit. I was so excited screaming, I got trouble so I wanted to share with you all. YEAH!!!

[Rob]

Hiya, Van McCoy.

If you bought 25 shares and then turned around and sold them at a buck higher, that's all well and good. However, I must ask, what are the broker fees? If the round trip cost you, say, $20, then that leaves you with five bucks. That's better than a jab with a sharp stick, and it sure beats the heck outta losing five bucks! But I'm curious as to how you came up with $18. Are you able to trade for $3.50 per trade?

Anyway, congrats on a profitable first trade! May you have many more. But be prepared to suffer some losses. There's no way to avoid them if you're in the market. The trick is keeping them to a minimum. Easier said than done!

[JohnHenry]

Hiya, Van McCoy.

If you bought 25 shares and then turned around and sold them at a buck higher, that's all well and good. However, I must ask, what are the broker fees? If the round trip cost you, say, $20, then that leaves you with five bucks. That's better than a jab with a sharp stick, and it sure beats the heck outta losing five bucks! But I'm curious as to how you came up with $18. Are you able to trade for $3.50 per trade?

Anyway, congrats on a profitable first trade! May you have many more. But be prepared to suffer some losses. There's no way to avoid them if you're in the market. The trick is keeping them to a minimum. Easier said than done!

Dude I forgot to add in the buy fee of $7! Crap! so a told of $14 with a profit of $11....wait one second....let me check on something...and I will get back to you....

Hey ok....I went into the scottrades account, on the profile list they had included the $7 fee with the price of the bought stock so I just looked at the green plus arrow and $25 gain...So I think I made 25 -7 for 18?

[jiesen]

Well congrats on the winning trade, Stky!

But let me make a suggestion to you for the next one. Factor commission into your trading plan, and plan for the commission to be no more than, say, 10% of your profit. If you pay a 2% commission for a 4% gross profit, you're losing half of it to your broker, and in the end (after enough trades that the law of averages sets in) you will be losing money, guaranteed. So, instead of looking for a stock to give you 4% in a week, try looking for one that will yield 20% in a month or two. Or, if you still want to do the shorter term trades, wait until your position size (meaning: save your money) increases to the point where the commission takes a smaller bite out of your trade.

Even better, though, would be to do some more paper trading before jumping in too fast with real money.

[mrmarket]

The reason IBD as a business is a total failure is because nobody...Well...Mostly nobody...Has any idea what they are trying to present...They have a really bad business model ...I have publically offered my assistance...But the phone ain't ringin'...Too bad for them...IIC

While I am generally a political conservative, I think I am open minded and look at each political issue as a stand alone case. Not so with IBD and their editorials and it's painful to read them, knowing what they are going to say before you even finish the first sentence.

[Lyehopper]

.... I have to get going my mom is yelling at me to go to bed or she will take my computer away. bye

Reading IBD and trying to understand it is good.... Listening to your mom and dad and making them happy is better....

..... I don’t like the mall much because when you go with a group of people the police harass you and no one wants to sell you anything because they think you will steal or don’t have any money. The same people and they police that treats us like crap sucks up to our parents when they take us shopping.

The police have a difficult job. Many teens hanging out in groups are up to "no good" and the cops have experienced this many times. The police and the shop owners have also experienced teens steal from the mall stores, and it's hard to tell which teens might steal and which ones won't. The police (and shop owners) are nice to your parents when they see them with you because they very much like to see kids who are supervised by parents. When you are older you'll understand this better I'm sure.

[JohnHenry]

Well congrats on the winning trade, Stky!

But let me make a suggestion to you for the next one. Factor commission into your trading plan, and plan for the commission to be no more than, say, 10% of your profit. If you pay a 2% commission for a 4% gross profit, you're losing half of it to your broker, and in the end (after enough trades that the law of averages sets in) you will be losing money, guaranteed. So, instead of looking for a stock to give you 4% in a week, try looking for one that will yield 20% in a month or two. Or, if you still want to do the shorter term trades, wait until your position size (meaning: save your money) increases to the point where the commission takes a smaller bite out of your trade.

Even better, though, would be to do some more paper trading before jumping in too fast with real money.

Hi Jiesen

Yeah I understand what you are saying. I was stupid and wasn’t thinking at that moment. I was bored at my uncle’s work and my parent also told me not to make a trade until I get permission from them. After I made the buy, the darn stock started to go down and I panic so when it went up a dollar I sold it quickly. Stupid of me that I forgot about the buy and sell fees. I thought in the gain/lost box I saw a green $25 with an up arrow was a $25 profit with the $7 fee taken out already but I was wrong.

Anyway I got into trouble for making the trade, my parents grounded for a week and no computer. Just an hour ago they gave my computer back but they changed my pass word to scottrade for now. My dad said I can have $500 to play with as long as I can show him I know what I’m doing. I think I better play POTW for a while before I play with real money.

[JohnHenry]

Reading IBD and trying to understand it is good.... Listening to your mom and dad and making them happy is better....


The police have a difficult job. Many teens hanging out in groups are up to "no good" and the cops have experienced this many times. The police and the shop owners have also experienced teens steal from the mall stores, and it's hard to tell which teens might steal and which ones won't. The police (and shop owners) are nice to your parents when they see them with you because they very much like to see kids who are supervised by parents. When you are older you'll understand this better I'm sure.

Hi Lye

I don’t think when us kids are hangout at the mall are up to no good, we’re just bored. It’ beats being in a gang and driving around town shooting things up. The bigger (older) kids maybe up to know no good but they are just as bored as we are.

We go to the mall because the shop owners advertises on TV commercials for us to go to the mall, a place to get out of the hot sun to buy cool hips clothes to show our friends the new upcoming styles so they can come to the mall to buy the products; basically to spent money on products at their stores but when we go there, they don’t want to help us. They filter us by the way we dress and what types of people we associate with. That I don’t understand?

I understand what you are saying about the police can’t tell which group of kids are good and which group steals. That is why the have cameras to see who is stealing and who is not. Everyone should be treated fair and equal until the act of stealing occurs, don’t you think?

Like it or not, stealing is a part of America!!!

Does anyone know of a good blog site that I can post my thought to share with millions of people?

[billyjoe]

Sticky,
When I mentioned that my son would be "set for life" if he kept contributing to his Roth IRA I meant that he would be very well off financially at a relatively early age ...... say 55.

---------I did some very conservative calculations based on you contributing 100 per month to a Roth IRA starting at age 18 with the money growing at 7% per year. Remember the government can't touch this money it will never be taxed once it's in the Roth IRA. Based on the 100 per month and the 7% compounded you'll have put in $9600 by age 25 , it will have grown to $12312, by age 35 , you'll have contributed $21600 , it will have grown to $40799 , by age 45 , $33600 = $96837 , age 55, $45600 = $207,073. Notice that the magic of compounding really kicks in . At a certain point the growth becomes massive. This is just an example. You can do much better than this. Some years will be bad , but most will be better than average. During the down markets of 2000- 2002 , I lost nearly 40% of my retirement funds but am now up over 350% from the low point. I never stopped contributing to the retirement funds.

Good luck, Sticky

-------billyjoe