Would You Buy This Stock?

[ed8383]

a multimillionare stock investor gives you stock advice and you question whether to put some money into this or not? considering you are a pro gambler isn't this like an oxymoron?

[Gobgogbog]

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a multimillionare stock investor gives you stock advice and you question whether to put some money into this or not?

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Looks more like he questioned if *you* would buy the stock. And what you think the EV is.

[Artsemis]

Guys, if I'm not mistaken, he's "Getting into the stock market". Yes he's doing well but the OP said he was a multi-millionaire before he was aware he is now into stocks.

[Sniper]

Questions...

1. Did the stock in any way relate to anything discussed in the conversation?

2. Did he have any knowledge of this stock due to his business?

3. What was your first thought, after hearing his stock tip?

[Phil153]

EV is impossible to judge from this situation, but as someone said it's greater than most other investment options.

The more interesting question is: Assuming you're rational and only interested in maximizing dollar EV, what percentage of your disposable fortune would you gamble on this stock?

[TheGrifter1]

Dumb Question indeed !

[Traderx]

David,

Since you've helped me soooo much with my poker skills through your books. I really hope you listen to my advice on this because I have been a professional trader/ hedge fund manger for 20 years.

The stock markets have far more variables then poker and unlike poker someone just can't read 5 or so books and play for a year and call themselves a professional.

It takes at least 5 years of study and several market cycles before you even honestly have a clue about trading, that being said some people can have good runs when they first start because the market may be in a bull cycle (as we have been in recently).

Sooner or later this cycle will end (actual it ended Tuesday) and we will enter another cycle of either a Bear market or possibly a Consolidation phase (still to tip it's hand).

It takes years and years of experience and skill to learn how to navigate these various market conditions successfully.

If you want to have a little fun go ahead and buy the shares with money you can afford to loose and treat it like a lottery ticket if you win.

As long as he did not disclose any inside information to you it is NOT insider trading.

Good luck with your trade. :-)

[Cornell Fiji]

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...Sooner or later this cycle will end (actually it ended Tuesday) and we will enter another cycle of either a Bear market or possibly a Consolidation phase (still to tip it's hand).

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[jively]

Since I believe in efficient market theory, I would say the EV of the stock should be similar to the EV of the average stock. So, maybe EV = 10-12% per year, with SD of maybe 40-50%.

That means your actual investment performance over 2 years could be anything.

-Tom

[ALawPoker]

This question reminds me of certain poker strategy questions. Some of the answer depends on your ability to play a subsequent situation (i.e. you might be right to blind steal more or less depending how skillful you are in playing the flops vs. the BB in position). One inherent problem with just taking this guy's stock tip is that you don't (necessarily) really understand the company. You won't know when the ideal time to sell (or add more shares) is as often as you would for a position you discovered and were able to recognize value in on your own accord.

His advice might be good enough that your timing isn't very critical. But your ability and willingness to "play the various hands" has a large say in this stock's EV, particularly compared to what your money could do in a good ol' index fund or a stock for which you might have more natural timing insight.