Please help a newbie learn to buy stocks

[Guest Close Quarterbore]

OK, call me insane but I am getting anxious to start cherry picking a few stocks as while we may not have hit bottom there are some stocks out there that have been dragged down to levels that I want to be in a position to buy a little.

I did a little, and very little at that, research and I looked at sites like e-trade, scotttrade, and sharebuilder and I realize I will need about $1000 to start the account. I also think I undertstand the fees around buying and I assume the same fees apply to selling.

I also have a basic understanding of short-term vs long-term gains and the relative differences in the tax impacts of selling in less then a year. I have $1,000 to start with and I can afford to lose that money without too many tears in the process of learning.

So, can I ask for some recommendations given how little I know from there? Do you use any of these or are the pros on here all hi-rollers that can't relate to a poor fella like me I am not planning to get into international stocks although the Chinese auto stocks might do well if they buy up GM.

[bigfrank Administrator Find all posts View Profile Close bigfrank]

buy stocks that you know will come back and that are paying a ice Dive, GM may not go under but if they file Chap 11 there goes the stock. I own a few Reits that got hammered but they are paying high Divs, HRP and FCH are selling for pocket change but it is taking a chance. Company's like MO or GE or HP or MSFT will come back. Ford if you want to play the car market have more money that GM and they just sold Mazda so they should be able to ride the storm.

[vintner Super Moderator Find all posts View Profile Close vintner]

I will need about $1000 to start the account.
.

Heck, I loose 2-3 times that in a day, then gain that the next day. I have a bottle of acid reducer at my desk.

[mas Senior Member Find all posts View Profile Close mas]

Buying dividend stocks makes sense to me. But then what do I know? This market is crazy. F and GM use to be dividend stocks with 5% to 10% dividend yields. Now their dividends are non existent and they are practically penny stocks. A guy on CNBC suggested buying F because he believes you could easily quadruple your money. I'd say you have a better chance of turning any size purchase of this stock into zero dollars with the odds being very good that a chapter 11 bankruptcy is in their near term future.

I just picked up 200 shares of C for $3.75. Do I know what I'm doing? Hell no, I figure the odds are 50/50 that it's a good way of turning $750 into $400, but OTOH, C could be selling for $20 or a lot more in a couple of years. With BAC at $10/shr, I'm giving up on trying to predict the future!!

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

Personally, I would not buy F or GM. They could easily go Chapter 11 or 7and then you are screwed. That is also why I am staying away from most of the financials as well as Citi. If I wanted a bank I would get Wells Fargo which will come out a winner.

The shoes that are dropping now are commercial real estate following residential real estate and all the retail store closings and the oncoming credit card toxic debt crisis. Another reason to avoid Citi and JPM Chase.

Many of you talk about dividends too.....that is fine but many companies have drastically reduced or suspended dividends at this time. GE has suspended dividends for now but I like the stock at these prices. They have some financial exposure but not enough to take down the company IMHO.

GE
KO
CSCO
INTC
MSFT

Just my opinion....worth what you paid for it.

$1000 wont buy you much stock. Scottrade should be fine. I use Etrade and Interactive Brokers IB.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

$ 1000 isn't much to start with and I'm not even sure what the minimum is to start an account. Buying stocks in less than 100 share blocks is rather inefficient and a dividend stock with a great balance sheet will be hard to find. Best bet is a gamble on a stock that might go up in multiples. Best bet in the autos is Ford IMHO. Other than that, I would suggest SLT(around $ 4) for under $ 5 a share or TMR (now in the .60 range)for under a buck per.
Another gamble might be Citigroup or Frank's HRP.

[vintner Super Moderator Find all posts View Profile Close vintner]

McDonalds MCD and Walmart WMT are decent quarter over quarter reporting stocks. When others are hurting, they go up or at least they hold up.

MCD has a dividend payout of .375 per share. WMT is .2375 / share.

Of course, you need to start out with more than a grand.

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

I like both of those too. I also like COSTco.

I was liking Alcoa AA but the cost of aluminum is below the cost of production so I think I will sit that one out for a bit.

McDonalds MCD and Walmart WMT are decent quarter over quarter reporting stocks. When others are hurting, they go up or at least they hold up.

MCD has a dividend payout of .375 per share. WMT is .2375 / share.

Of course, you need to start out with more than a grand.

[vintner Super Moderator Find all posts View Profile Close vintner]

Dryships DRYS was a $100 stock 6 months ago, today it is under $4.00. Will it get back there? Don't know, but pretty sure it will go well above the $4.00.

You don't need a lot of money to get into that one.

BTW-I had scottrade. Not bad, but I think etrade maybe better. I use thinkorswim but that is a higher level than you need or want.

[3kids4me Super Moderator and Super Mom Find all posts View Profile Close 3kids4me]

If I were going to buy a stock today with money that I didn't care about at all, I would buy stock in the company that makes the lasik machines (EYE). It's the poor man's plastic surgery...lol....

[vintner Super Moderator Find all posts View Profile Close vintner]

The other one that I can think of that makes the equipment no longer is listed. Bausch & Lomb Inc had problems a year ago and is now gone.

[Elan Senior Member Find all posts View Profile Close Elan]

Here's one worth considering, IMHO: NWL (Newell Rubbermaid). A profitable established company that is currently paying over 7.5% yield. They're hurting right now due to decreased consumer demand (who isn't), but I figure they'll bounce back eventually. In the meantime, you get paid to wait.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

NWL - I already lost money on those bums. However they are tied somewhat to the cost of oil for their expenses, so this could be a good quarter in process - if they are selling anything.

[Guest Close Quarterbore]

Thanks for the advise. I realize that 1k is not a lot but I am also not going to empty the bank and buy lots of stock at this time either.

I can do 1k now to start the account and add to it but what I really wanted to know is who do I start with and what type of account do I need.

The stocks to buy will likely change before I can get the account started. I appreciate the tips and honestly ford has my attention but so do a number of companies.
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[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

Yes, things will change before you can make a move. But, there will be some opportunities coming up and you can come back again then and see what's being touted.