T Nation

Learning About the Stock Market


I plan on investing a few hundred during the summer. If I can turn a profit, it will look great on my college applications. I want to major in econ. Any good websites, books, etc?


Sorry for 2 posts, but I was planning on putting ~500-700$ in:

some combination of

exxon mobile
Ford (might as well scarf these up while they are cheap)
Randgold recources limited

Most importantly, I want exxon mobile and RRL. Opinions?


You missed the bottom!!! That sucks. Anyway, read everything you can about everything. When playing the market there are many aspects that you must be educated in. Try watching Cramer to see what he seees, do your own research, and draw conclusions from there. You gotta stay diversified, bottom line.


Really, I cannot imagine an admissions officer being impressed in this manner.

The only thing you would be showing really is ignorance: a belief that a short term outcome on a few stocks proved something about your intelligence.

On average, half of monkeys throwing darts could do the same. A future economics major ought to understand that, and therefore should not think that making a short term profit is going to prove something with regards to being admitted to college.


Did you know that about 60% of Money Managers fail to even beat the index on a yearly basis?

It's hard/impossible to "learn" the stock market as a whole.

I would instead advise that you do a lot of heavy research into individual companies and if you are confident and feel they are undervalued, invest. This will take a lot of time per company to do a thorough analysis, but it will teach you a lot more and will make you feel like you "earned" the money when/if you profit.


Indeed. But this is a long term approach.

The idea of showing smarts by making a profit over a few months (or a couple of years or whatever the plan is) instead shows lack of understanding.


They will think you're rediculous and clueless if you put something like that on your ap.


All the above said:

While, very sadly, I cannot say it from the standpoint of "I did this," it is nonetheless an absolute fact that if you follow your basic idea, except for the college application part, and stick with it it will make an enormous difference in your life.

For sure except when very poor a person can get by very nearly as well and certainly satisfactorily on 95% the pay they actually receive. If it seems not, it is only because spending habits or desires have been ramped up to the 100% value -- had the employer or business only generated 95% the pay or income in the first place, the person would do fine on it.

And the outcome from investing 5% of your income from an early age -- that being the key -- is just outstanding. It far exceeds the benefit of spending those extra dollars on an ongoing basis.

While most, sadly including myself, have not done this, you would be hard pressed to find a single intelligent person who has not done this that later on considers it truly stupid of themselves not to have done so. And surely not a single person who did it who now thinks, "Ahhh, I oughta have just spend it as I went along."


It's very difficult even for professionals (with huge resources, 24 hour attention, and the ability to make lightening fast trades) to make money in a "bear market"; it simply cannot be done by "passive" investing.

There is no reason to believe we've hit bottom yet. We may be in a bear market (replete with bear rallies and a teeth chattering, roller coaster-like environment) for a long time to come.

When we enter a new bull market, you'll have plenty of time to get in relatively early - but you will not be able to time it perfectly; that's okay, though, because then you're in for the long term.

Anyway, I agree that no one in admissions will be impressed either way; save your money for books, tuition, living...etc.

Just curious...why do you want to be an econ major?


Bill I mostly agree. However, on your last paragraph there: in the current environment, people who have made investments their entire lives are feeling exactly as you say: "I should have just spent it all along..." - because now, at 65 or so, they've sacrificed for the future and now they may never recoup their losses. Meanwhile, I know a lot of people who never invested anything for the future - and now they're feeling vindicated in a strange way, almost elated: "see, I wasn't missing anything after all.." etc.


Yes. Google 'Market Oracle'. Free and its great.


Really, or are you just assuming that?

1) If they are not cashing out, but want to be able to live on investment income, dividends have not dropped vastly and are not expected to. It is only if they wish to cash out that they have "lost."

2) They still have vastly increased compared to the past. For example I recall that the Dow was around 700 say 30 years ago. So their principal has increased about 10 times AND they have earned dividends the whole time. The money has grown HUGELY.

If they are ACTUALLY thinking that instead of your assuming they are, then they are really dumb.


I've heard a number of people say this, but it was also in the context of their entire portfolio - including their house and so on; and were depending upon reallocating and drawing on the aggregated principle for their retirement, etc. It's probably mostly just their panic talking.


It's definitely reasonable to regret money put in recently. But regretting money put in much earlier in life just isn't remotely in accord with how things have turned out, even with the major losses recently in stock values.


best lesson in playing the stock market was when my parents took all the money i made one summer when i was 8,(100$)and made me choose a dollar a share company to put it all in and i couldn't touch it until i was 18.

the stock went up and down for a long time, then the company put out a prototype semiconductor for computers and it got bought up, the thing split 4 to 1 when i was 16 and was up to 62 a share. was back to a dollar a share when i was 18, i was so pissed, despite quadrupling my money.

first and last, but best day ever at a strip club that night. Blue balls are a terrible investment imo.

something like this should be taught in middle school. instead of some crap where they buy all the kids pizza one day, buy em some dirt stocks that they can watch for a real lesson.


Holy shit, was it up to nearly 25 grand when you were 16?


I appreciate the responces. THanks for the tip HH.


History, Politics, and econ are the only things that hold my intrest in the classroom. I figure the last one has potential to pay the best.


If you're looking for advice, I'd really caution you on this. If you're thinking about working as a trader or analyst or - hopefully someday - a fund manager, econ won't give you much of an edge when it really comes down to it. I know a lot of people at all levels of the field - some very successful - and very few of them majored in econ.

Study what interests you - I can't emphasize enough how important this is. I'm serious. If you study what interests you, you will discover so many other things that interest you, things you currently have no idea they even exist. And if you decide you want to work in the investment field, history - as you probably can tell from these threads - is invaluable to anything you think about or do.

Study history and you'll likely know more about both economics and history than an economics major. And what you don't know, you can learn in a single semester in business school, should you go on to B school. Or, you'll discover that you want to teach, or whatever.

my 2 cents.


Completely agree. My college roommate, the most monetarily successful of all my friends from high school and college, was a gov major after getting a D in econ 101 (through pure sloth, not lack of intelligence - but still tough to do). He's now trading distressed debt at a hedge fund and has put away enough money in the last couple years that he's the rare twentysomething who doesn't have to worry about getting canned in this economy.

Michael Lewis, famously, was an art history major when he made plenty at Salomon Brothers in the Eighties boom (highly recommend the book Liars Poker).

Keys are:
A. Get into a good college.
B. Major in something you actually enjoy, almost regardless of what it is. You'll actually care about what you're studying, which aside from being a good thing in general, will probably keep your grades higher than in a subject you were slogging through out of some desire for future earnings.

I'd bet good money you'd enjoy history a lot more than econ. Politics/gov too, if you have good professors who aren't hung up on models and that side of the field.