Need a Devils advocate

Ans Blix

I'm a long time lurker on boards and reddit. I am a physics student with some petty cash and want to try out a few long buys (9months)

I don't want to needlessly risk my money but I also lack the experience to make an informed decision, so I would like to get a 2nd(and an n+1) opinion.

The Plan
I want to put about €500 down on Dell and Intel and hold until after Xmas

The Reasoning
Dell's stock fell recently after poor performance reports ($15.30 down to $11.20) as a result of a shift to mobile platforms for computing. With Windows 8 being released sometime before Xmas and optimised for touch screens I reckon that people will have to go out and buy new computers to utilise that functionality. Dell manufactures these computers with Intel products. Both will gain profits over the Xmas period anyway.

??????
Profit


Am I missing something glaringly obvious that would bite me in the anus?

Also, I hate apple!

freeze4real

Hiya,

€500 is not enough to invest in one of those companies.
Ok share price of dell is 12.20. €500 I'll get you about 40 shares maximum.

The There's comision when you buy and sell the share plus brokerage fees.


What I'd advice you to do is trade CFD's with leverage. It's like holding/buying a stock but not owning them.

That's what I trade with €300 good thing is with lever has of 100:1 you can spend up to €30,000 but I would advise not to and the risks are also great as well.

I might actually trade dell tomorrow. Lol

freeze4real

For profit sake you'll be hoping that dell/intel moves up at least 40% to get your expenses covered.

Assuming it moves up 40% that's €4.88 x 40 shares = €195.2

Then commission some brokers charge € 9 -15 to buy and sell but it'll fall under €50. Anyway you'll have a decent profit of at least €140.

Ans Blix

Cool thanks for the info F4R

tbh i would expect Dell to regain $15.5 easily (everyone is saying to avoid though :S They've taken a beating but there not out...?) but that would net me $120 profit before expenses. I would be happy with that.

I think i'll avoid CFT's until i understand them better. Did you see anything wrong with my idea though?

HowFinancial

Agree with above, €500 not enough to invest in terms of investment portfolio, due to trading costs, risk etc.
However, this type of investment can be worth doing - as alternative to betting on horses or sport - in which case it is different.
If technology shares are your thing, then you might consider spreading your investment between a few companies. e.g. Samsung, Amazon, Google e.t.c. as well as your preferred stock.
If you can't afford to loose on your investment you're better off staying away.
Best of luck!

bee_keeper

Ans Blix wrote: »

I'm a long time lurker on boards and reddit. I am a physics student with some petty cash and want to try out a few long buys (9months)

I don't want to needlessly risk my money but I also lack the experience to make an informed decision, so I would like to get a 2nd(and an n+1) opinion.

The Plan
I want to put about €500 down on Dell and Intel and hold until after Xmas

The Reasoning
Dell's stock fell recently after poor performance reports ($15.30 down to $11.20) as a result of a shift to mobile platforms for computing. With Windows 8 being released sometime before Xmas and optimised for touch screens I reckon that people will have to go out and buy new computers to utilise that functionality. Dell manufactures these computers with Intel products. Both will gain profits over the Xmas period anyway.

??????
Profit


Am I missing something glaringly obvious that would bite me in the anus?

Also, I hate apple!

dell is not a good buy at anytime theese days , the company has a lot of problems , as does hewlard packard btw , i would go with microsoft if i was buying tech right now , truckloads of cash to see it through the rescession and a decent enough dividend , its also launching a tablet in a few months

intel is a great company but your time frame is far too short , the outlook for stocks is negative in the short to medium term , if your still determined to put money in stocks , i would recomend vodafone , they pay a dividend of over 5% and the price is pretty low , telecoms tend to do well in times of rescession

Sonnenblumen

Vodafone have been static (several years now) and usually flat between £ 1.70 - £ 1.85. They do pay a good divi but unless your risk adverse, I'd be looking elsewhere within FTSE 100 for a better performing and divi paying stock.

bee_keeper

Sonnenblumen wrote: »

Vodafone have been static (several years now) and usually flat between £ 1.70 - £ 1.85. They do pay a good divi but unless your risk adverse, I'd be looking elsewhere within FTSE 100 for a better performing and divi paying stock.

so has microsoft but those are the kind of companies that remain in good shape during large downturns and we are approaching one of those

if the op wants to make some quick handy money , buy the etf CORN , corn futures are up 5% today due to bad weather in several of the major corn growing regions of the world

Marcus Halberstam

You're assuming that no one else realises that Dell will shift a few Windows 8 PCs over Christmas and/or this is not priced in already

The margins have always been really thin in this industry and shifting a few extra units will not turn things around for Dell IMHO.

Sonnenblumen

bee_keeper wrote: »

so has microsoft but those are the kind of companies that remain in good shape during large downturns and we are approaching one of those

if the op wants to make some quick handy money , buy the etf CORN , corn futures are up 5% today due to bad weather in several of the major corn growing regions of the world

Steady as she goes might be safer in turbulent waters, but ARPU (average revenue per user) is falling for all major telcos, so this will impact on sales, margins will be squeezed, and ultimately SP and divis etc will also be impacted. On the otherhand a Tesco might be a better option especially in a downward market.