Career advice for a 15yr old

[Dunecat]

Hey guys,

I'm interested in getting a career in the stock market. For the last 14 weeks I have been studying value investing techniques; making notes and implementing these techniques on companies. I have been doing accounting in highschool for the last 2 years, so I pretty well versed in reading financials of a company, which really helps me scout out a company using value investing techniques.

I do have a lot of opinions on where the American economy is going as well, which is making me very skeptical on investing in other things apart from gold. However, I am quite convinced of the effectiveness of value investing techniques purely from the irrationality of the markets.

I am rather interested in getting a job at a financial institution or somewhere else where I can discuss stock trading and economics, because my friends aren't very interested, and I'm left out in the cold while they're still talking to each other about the latest fps game . I just recently managed to convince my Dad to buy some BP shares; from what I saw, a lot of reports were simply fear mongering(I think I helped convince him, but I think he was fairly confident to start with; he'll be investing $33kUS in their shares, if he hasn't bought them already). Which is fine with me actually, the shares dropped 46% in a few weeks and there was an excellent buy opportunity. And I highly doubt the US would let BP go bankrupt over such a trivial matter; they sure as hell didn't let wall street feel the pain from their reckless bets! But I am just 15, so hey.

I'm currently in the process of opening up a stock trading account, but I think it'll just be BP shares(depending on whether they stay cheap) or gold. The reason why I think gold, is because I'm getting really nervous with the state of America. The colossal debt, 10 tril official and 50 trillion in debt obligations really scares me. Not to mention the rate at which dollars are being run out of the presses, and cease of treasury data on how much money is being injected every year. Which in effect means that the govt is lying that inflation is about 2-3% when it is more likely 9-10%. Which in turn means that the govt is devaluing the savings of savers, which the economy needs to dig itself out of this debt, and I don't think China is going to keep funding all this.
800billion US increases in the debt every year can't be healthy, and the quadruple of gold prices since 2006 just goes to further prove my point.

I kinda have this obsession with getting ahead, which differs from that of everybody else in my school. While they're either studying or playing games, I'm learning about the economy or reading about investing, but I'm fairly sure this is what I want to do as a career. If I get good at it now, at this age, I am convinced it will be a significant boon later on. I think that of all the things you can do in life, making copious amounts of money must be the hardest. Not to mention, I love money as well.

I don't want to come across as precocious, but I need a bit of advice on where I should be heading. I'm surprised at the denial and lack of logic that seems to be shown by a lot of economists though, so I think I can get in there somehow and take advantage of this.
What do you guys think I should do? My dad has promised a $12000 grant for me to invest with, so I suppose I can get started there. But I need to go somewhere or get a job somewhere so I can learn the finer aspects of business and get myself some work history, what with the stock market being more who you know than what you know.
I am situated in New Zealand too, so this might be a bit of a hinderence.

Any advice will be appreciated.
Cheers.

 

[MrGecko]

Smart cookie for 15, eh?

I would recommend two things:

i) Study hard at school, and get involved in extra-curricular activities such as playing competitive sport / volunteering regularly. Sounds boring but you seem smart enough to appreciate that this bit counts the most - in all liklihood you will want to go to uni, and you want the best chance of getting in to your first choice.

ii) As for getting a job/work history, how about doing a mailshot to all the financial institutions you can get to offering your services as an unpaid tea-boy during the summer months...?? You never know, do that for a few summers and it put's you in good stead for a place on one of the 1st year undergrad internships once you get to uni.


Good Luck!

EDIT: Oh... don;t forget to do all the stuff you should be doing at 15 too, like having to be collected by your folks for being too drunk at a party you have snuck in to, spend 50% of your time trying to get laid, you know, normal stuff.

 

[Mr. Charts]

Hey Dunecat,
So you've persuaded your dad to buy BP, huh?
You might be lucky, but that's all it will be if he makes a profit so don't let it go to your head.
Always be careful about catching a falling knife, they tend to hurt more often than they bounce....
Good luck for the future,
Richard

 

[arabianights]

Trade betfair on your dad's account. Can scalp for microstakes.

And yeah, stay well rounded(ish)

 

[tomorton]

Get all the quals you can at school - its the last free education you will ever see.

Get the best degree you can - it will rule you over-qualified for some jobs but will re-pay itself over and over.

Do something demanding apart from studying - volunteer for the most harrowing work you can find that helps others at their critical times or achieve something that demonstrates incredible determination and self-belief.

Never apply for a job you don't want to do.

Always apply for a job you want.

If offered two equally good jobs, always take the one that pays better.

Save 10% of all your income to pay for your mid-life crisis.

 

[shadowninja]

Wow. Can't advise but that's very well-written for a 15 year old. You sound like a smart cookie and I wish you well in your endeavours. (No sarcasm there, genuine praise and well wishes.)

 

[Dunecat]

hmm, so you guys think I should just phone them up and ask them that way? is it common for them to hire tea boys? It's just that where I am in NZ there aren't a vast number of financial institutions, so it might be a bit difficult.

I've been thinking about going to a business school but from what I've learnt the qualifications you gain there aren't the most useful. Is it more just a way to "introduce yourself into the system"?It's taken me about 12ish weeks, but I went from just wanting to be rather rich to knowing how I can achieve it, so I would suppose a few more weeks and I could be very well versed in what I'm doing

Are any of you guys familiar with value investing techniques? These are the main strategies I've been following, but I think there are going to be a few hitches when the USD starts to collapse. I was surprised when I learnt that if the US had stayed on the gold standard, instead of removing it in 71, a barrel of oil would cost about $3.60!
But when you think about it, it kinda makes sense. With the increase in US population since then, and the increase of paper money(inflation), oil prices really have gone through the roof. But everybody seems to think that oil is causing costs to rise, not inflation. Consumer prices are falling through the floor compared to gold. I think I'll just slap all my money into gold when I get it, because America can't keep up this much debt.

What do you guys think about it all?

 

[shadowninja]

I thought value investing is about buying undervalued stocks based on company accounts just like Warren Buffett? There is a book on his techniques: Pick Stocks Like Warren Buffett by J K Lasser.

 

[theSheik]

"I'm currently in the process of opening up a stock trading account..."

?

don't think so @ 15 - you'd have to be doing something illegal unless you live on the moon

 

[meanreversion]

( . I just recently managed to convince my Dad to buy some BP shares; from what I saw, a lot of reports were simply fear mongering(I think I helped convince him, but I think he was fairly confident to start with; he'll be investing $33kUS in their shares, if he hasn't bought them already). Which is fine with me actually, the shares dropped 46% in a few weeks and there was an excellent buy opportunity. And I highly doubt the US would let BP go bankrupt over such a trivial matter; they sure as hell didn't let wall street feel the pain from their reckless bets! But I am just 15, so hey.

Please tell me you have a stop loss to the downside in BP. If not, then this is not investing. Nor is it trading, it's simply gambling.

How do you know BP won't go bust? Many people made this same erroneous assumption about Lehman. How do you know when or if they will plug the leak? Unless you have special insight, buying the stock here is a pure flutter. The fact it is much cheaper than a month ago doesn't mean a thing - if anything, you should look to be SHORT it.

 

[arabianights]

If you believe BP are value, which I think is not an unreasonable view to hold, then you buy them, and continue to hold while you believe them to have value. You don't use a stop loss. You just invest a prudent amount.

 

[Dunecat]

Yeah, I'm going on analysing it with value techniques and then holding it.
I'm just curious, how many of you guys have ever used value trading techniques or know them comprehensively? I think a portfolio of 30+ undervalued stocks could be a winner, with diversification a decent safety net in case a few fail. A few value trading books have cited undervalued companies that had been invested in as part of value portfolio, and were boasting 24% returns against market averages of 10%. There is always the potential of a huge amount of foreign undervalued companies, China could be a good place to look(provided their accounts are in english )

I also had a long discussion with my Dad about those BP shares as well. We thought we'd reduce it down to a few thousand just in case we're waiting a few years to get a return, as I'm a bit iffy with the erratic trends of the US economy. Although value investing does involve waiting a year or two for returns, this is just a first try, so I'd best take it easy. Although I think it is highly unlikely BP will fail, you cannot be certain with markets.

Things aren't as clean cut as I was originally thinking, but I am still very skeptical about momentum trading/technical techniques. I just can't seem to justify anything that tries to use graphs to predict an unpredictable and irrational force like market trends. There seems to be this misconception that you can use past occurrences as a way to predict coming occurrences, which I suppose could be this desire to try and predict the future of a market using scientific method.

Officially, an authorized person is required to be part of my account, but they do not do much, if anything. They cannot change or make stock trading arrangements; they simply receive information about where my money is going. Because I will trade online, I will not need them to make a trade for me, and one of my parents suits this fine. But my credibility is as stake and a few thousand of my own saved money, so if money is lost I lose as well. Can't say the same about most wall street investment institutions, lol

Yeah, I think a lot of what you guys are talking about, these terms like stop losses don't really occur a huge amount in value investing(I have heard them referenced to very little in all the books I have read about value investing). Stop loss, from what I understand, is merely a safety net to catch you when you make educated guesses with momentum or technical trading that nosedive right? Don't want to be cocky, but I don't think a lot of people who have criticized me understand that value trading is always buying and holding.

 

[Dunecat]

Smart cookie for 15, eh?

I would recommend two things:

i) Study hard at school, and get involved in extra-curricular activities such as playing competitive sport / volunteering regularly. Sounds boring but you seem smart enough to appreciate that this bit counts the most - in all liklihood you will want to go to uni, and you want the best chance of getting in to your first choice.

ii) As for getting a job/work history, how about doing a mailshot to all the financial institutions you can get to offering your services as an unpaid tea-boy during the summer months...?? You never know, do that for a few summers and it put's you in good stead for a place on one of the 1st year undergrad internships once you get to uni.


Good Luck!

EDIT: Oh... don;t forget to do all the stuff you should be doing at 15 too, like having to be collected by your folks for being too drunk at a party you have snuck in to, spend 50% of your time trying to get laid, you know, normal stuff.

Hey gecko, just though I'd say that consumption of alcohol at my age is severely detrimental to brain development, not to mention intoxication increases chances of health problems later on in life. Serious inebriation can lead to coma and vomit can be aspirated into the lungs, which will cause permanent damage if it doesn't kill you.
High levels of sugar and carbohydrates also have that potential to make you quite chubby as well. Which is also bad for your health.

Why risk your health drinking something so readily available? Anybody can get ridiculously drunk. If it's going to hurt me, I want to look back when I'm older and remember the great fun I had. For example; waking up the neighborhood with your latest nitrated aromatic-ring compound.

If I did normal stuff, I would just be another normal guy.

 

[meanreversion]

Are you sufficiently capitalised to invest in 30+ stocks with no stop losses? Do you have the patience to wait years for a return?

Learn to walk before you can run..

The traders/asset managers you look up to and admire have millions/billions to look after, and have decades of experience.

If you think "stop loss" is a dirty expression, you'll bust your account fairly quickly.

Let's say you buy BP here at 330p. The two relief wells which have been dug (only two, why?) fail to sufficiently stem the flow of oil, the top hat fails again and markets worldwide decline by 10 pct.

BP is now trading at 200p, you've lost 40 pct of your money. Is there ANY point at which you would consider selling BP? This is a "stop loss". If the answer is no, have you considered they might go bankrupt?

I know, I know, BP can't go under.. Obama won't allow it (this is what you said before, kinda flies in the face of the facts as he has already extracted $20bio from them). Most people assumed Lehman couldn't go under, but whatever.

Irrespective of whether governments will step in to support a private oil company in trouble or what you might think, you will still be sitting on a hefty loss. Now what? Maybe wait ten years for the stock price to recover?

You have no plan. Value investing requires huge amounts of capital, fortitude and patience, not to mention industry insights of the highest order. Do you have these?

 

[gooseman]

i'm 30 and i still love getting drunk.

you trying to turn BP for a profit or are you wanting the divs? if they ever pay any

 

[Dunecat]

Are you sufficiently capitalised to invest in 30+ stocks with no stop losses? Do you have the patience to wait years for a return?

Learn to walk before you can run..

The traders/asset managers you look up to and admire have millions/billions to look after, and have decades of experience.

If you think "stop loss" is a dirty expression, you'll bust your account fairly quickly.

Let's say you buy BP here at 330p. The two relief wells which have been dug (only two, why?) fail to sufficiently stem the flow of oil, the top hat fails again and markets worldwide decline by 10 pct.

BP is now trading at 200p, you've lost 40 pct of your money. Is there ANY point at which you would consider selling BP? This is a "stop loss". If the answer is no, have you considered they might go bankrupt?

I know, I know, BP can't go under.. Obama won't allow it (this is what you said before, kinda flies in the face of the facts as he has already extracted $20bio from them). Most people assumed Lehman couldn't go under, but whatever.

Irrespective of whether governments will step in to support a private oil company in trouble or what you might think, you will still be sitting on a hefty loss. Now what? Maybe wait ten years for the stock price to recover?

You have no plan. Value investing requires huge amounts of capital, fortitude and patience, not to mention industry insights of the highest order. Do you have these?

There is a big difference between BP and lehman. One isn't riddled with cancerous sub prime toxic cellulose, and the other controls a significant amount of the world's oil reserves and is highly lucrative. If you're thinking that the market isn't irrational in it's slamming of BP I would have a whole other list of companies that had strong financials with bad PR that came through after a year or two.

I know value investing requires a huge amount of fortitude and patience. This is why I like the idea of it; less people have the determination to see it through. I didn't step into value investing thinking it was going to give me monthly returns. If you say a stop loss in terms of getting out when the BP behemoth begins to sink, I suppose you could be right. But it had been trading at a p/e of 4.6-5 for the last few months, and I doubt it will sink any lower without going bankrupt. A lot of the people on that coast also operate and work on the rigs. They've recently filed a lawsuit and it has successfully lifted part of the moratorium. People are getting pissed at Obama, and halting all that drilling is going to be bad for all the income is produces.

Those two relief wells are being dug through thousands of meters of solid rock. They have deemed it fit that two will be satisfactory. And we are in no place to criticize; I think they're finally taking it seriously.

Just remember the signature!

 

[gooseman]

are you really 15? bloody hell....

 

[Dunecat]

i'm 30 and i still love getting drunk.

you trying to turn BP for a profit or are you wanting the divs? if they ever pay any

Na, not the divs. I sincerely hope this PR stunt backfires on Obama; its certainly doing more harm than good.

 

[Dunecat]

are you really 15? bloody hell....

Yeah, I had a big spiel on another thread but that's dead and gone now, so you'll have to take my word for it.

 

[meanreversion]

A few value trading books have cited undervalued companies that had been invested in as part of value portfolio, and were boasting 24% returns against market averages of 10%.

Have you given any thought as to how much you would like to make on your capital in your first year?

24% for a fund is pretty good. You mentioned you had a few thousand (5?). If you make 24%, that eqautes to £1,000 or so profit over a year. Will you be happy with this? Or do you want to earn more?

I'm asking you these questions as I'm trying to get a sense of what it is you want from trading, or how you think you might go about trying to achieve it, and in what time frame.

Do you really want to wait years to make a decent return? Why is your mind so closed to exploring ANY type of trading other than "value investing"?