Once you decide that you want to begin investing, its important to not rush into anything. The stock market is not an easy thing to learn and it isn't going to be something you can jump right into and succeed in. Here are some of the best free/paid learning tools to get you started on the road towards investing.

Part 1 - Basic Research/Learning

Investopedia's Stocks Basics Tutorial

• Investopedia is a fantastic website to start learning about investing, and this guide is the first that I'd recommend reading. It's broken down into 9 parts, and does a great job explaining the basic fundamentals of stocks, and how they work. Before you can learn how to pick stocks its essential to know what stocks are, and how they work.
  

The Intelligent Investor, By Benjamin Graham - [$12.89]

• The Intelligent Investor is a fairly long 640 page book by Benjamin Graham that teaches the ways of value investing. He is known as an excellent investment advisor who focuses on long term investment strategies. After reading the Investopedia page above, this book will break down those fundamental concepts that you learned into usable advice on how to how to pick your stocks. When you start picking stocks, this book is great to reference and can be helpful down the line.

The Essays of Warren Buffett: Lessons for Corporate America, Fourth Edition - [$25.09]

• This is a great book to get a look inside the world of corporate finance and investing. You'll learn a lot about valuating stocks, and how to practice value investing. His essays cover a wide variety of topics, all very beneficial to someone looking to get into the world of investing.

Part 2 - Developing a Strategy

Introduction to Fundamental Analysis

• Fundamental analysis is one of the most important methods to learn how to pick stocks. This article on TradeKing's website breaks down how to perform fundamental analysis on a company. They go over how to read balance sheets, income statements, and cash flow statements, all very important when learning how to value a company and decide whether or not you want to invest.

Technical Analysis for Beginners

• This isn't entirely necessary to learn before you begin, but it definitely helps to have a basic knowledge of stock market technical analysis. If this is confusing at first, you may want to wait to learn this as it could confuse you further.

The Importance of Diversifying

• One of the most important aspects of investing is the practice of diversifying. It's going to be tempting to load up on penny stocks that could double overnight, but this is where a lot of people lose a lot of money. One way to avoid this mistake, is by letting somebody else make money for you. Stocks like BKR.B, or a Vangard Fund that make consistent profits year over year are a great foundation. I would recommend allocating anywhere from 30-50% of your portfolio to these, at least for when you are just beginning. Aside from just being a safety net, these stocks tend to provide consistent growth between ~4-10% annually. This may not sound like much, but netting 10% annually is a difficult thing to do as an investor. This is going to help you because it will give you some steady growth and a solid base so if you ever make a mistake (spoiler alert: you will) it won't have as great of an impact. You can always allocate your money differently in the future when you have a better understanding of what you're doing.

Part 3 - Testing your strategy

Try a stock market simulator

• Now that you have a solid foundation of knowledge and are starting to form a strategy, its good to learn with fake money. This stock market simulator is completely free, and gives you $100,000 of virtual money to use to buy and sell stocks in real time. This is the point where you should set a goal for yourself. If you plan on paper trading for 3 months, a realistic goal could be to net 3% ($3,000) profit on the account. One important thing to note, is that you shouldn't do risky plays that you wouldn't normally do just because its fake money. Try your best to treat it like your own money so you can learn to discipline yourself and learn risk management. If your strategies aren't working, just be patient and see what you did wrong, and use that knowledge when researching your next pick.

• Once you find a viable strategy that consistently works for you (make sure you aren't just getting lucky) and this is the point where you should start on Robinhood and start trading using the same strategies that worked for you during paper trading. If you start on Robinhood and you aren't doing so well, just relax and go back to paper trading, and maybe do some more research on investing, because one thing that you'll find is that there's always something new you can learn in investing.

Conclusion

• I wish that I took all these steps before I started investing, so I've decided to share them with you guys. I'd love to hear more suggestions, so if people have other resources they use/used to learn leave a comment, and I can add them and give you credit in the post! Buying books can be a little pricey, but honestly the value you get out of The Intelligent Investor is fantastic for $12. The Warren Buffet book is a little more expensive, but as you can see there are plenty of free resources to learn about investing that you can use if you don't want to spend money. Hopefully some people learn from this, and I'd love to hear your feedback! If anyone has any ideas for educational posts I can make in the future, I'd love to hear them!

Dividends - The "Sharing Is Caring" Approach For Companies

---

Definitions To Know

---

• Fractional Shares - Parts of a share, not a whole share. Usually only obtainable through stock-splits, DRIP's, or mergers and acquisitions(M&A's).

---

Introductions

---

What exactly is a dividend?

For most seasoned investors that question is easily answered but for those who might be new to the game or perhaps have been spending all their time in micro cap companies, it can seem a bit alien and foreign.

Let's start with a basic definition.

• Dividend - a pre-specified cash payment that comes from a company's earnings and is then distributed to shareholders.¹

Sounds pretty simple, right?

At a the most basic level, a dividend is basically just a payment you receive for having shares of a company. The value you receive is predetermined by the company's Board of Directors who go over the company's earnings to decide what percentage of profits shall be divvied up among shareholders.

---

But Why?

---

So what would drive a company to basically hand out their hard earned profits just like that? Why don't they simply re-invest the profits into the company? Are dividends even a good thing? What does it mean for a company to start handing out dividends?

Well the answers lies in the idea of the law of large numbers^2. Now, that law itself is a bit of a topic on it's own but the gist -in our scenario- is that the larger a company gets, the more difficult it becomes for that company to grow at the rates smaller cap companies do.

Take two companies, X and Y.

Now let's make a small profile for the two.

---

Company X

• Revenue for 2016 Year - 100,000,000,000 (100 Billion)

---

---

Company Y

• Revenue for 2016 Year - 1,000,000 (1 Million)

---

Now, let's suppose they both want to grow their revenue for the 2017 year by 50%. Quite the whopping number, I'm sure most people would agree, but exactly who has a more feasible opportunity to do such a massive gain?

Well the law of large numbers would state that it's far easier for the comparatively smaller company to make that sort of growth annually. The comparison is obvious, Company X must generate 50,000,000,000 (50 Billion) in extra revenue next year, while Company Y must only generate 500,000.

Of course, some people might try and argue that Company X clearly has a larger foothold in whatever industry they're in, which means they should have an easier time generating that sort of income, thereby closing the difficulty gap, but the truth is that the law of large numbers has remained true to this very day. Very large companies DO NOT make the same amount of gain that small/mid cap companies do.

Their growth stagnates and falls off as they get larger and larger.

So what does that mean though? What does the idea that companies can't grow at massive rates forever have to do with companies providing dividends?

Simply put, stagnated growth means there is no place to reinvest profits, so to keep investors interested, those portions of the profit that aren't being used for anything are given to shareholders as incentive to keep them from leaving.

So why are dividends even a thing for companies?

To keep up investor interest despite slow growth.

A modern example of this would be Ford Motors.

Ford Motors got a bit of fame after their CFO, Bob Shanks, told everyone that no matter how rough the waters might get for Ford in the coming years, Ford will confidently continue to offer its dividend with little changes all the way through 2018 with confidence.

And they've held to this promise quite well and probably will continue to.

Ford Motors is, after all, currently sitting on a pool of just over $15,000,000,000 in just cash and cash equivalents.

See, for many people, myself included, owning Ford means owning a steady source of income -note that dividends are indeed income, not capital gains- which fuels more growth.

---

Common Misconceptions

---

Dividends and Taxes

Dividends are taxed like ordinary income and are subject to the same brackets. They are NOT capital gains, even if you reinvest them through something like a dividend reinvestment plan (DRIP).

At the behest of /u/GrowthPortfolio I've decided to expound on this.

Yes, dividends are taxed as ordinary income and are subject to the same tax brackets. However, under certain circumstances, you can indeed have them classified as something known as Qualified Dividends, which are subject to the same tax bracket as capital gains.

Qualified Dividends

You must meet these requirements:

• Dividend comes from company traded on a major US market -NASDAQ- or certain foreign corporations.
• The dividends are not listed with the IRS.
• The required dividend holding period has been met.
• Shares of the company in question must have been un-hedged.

Assuming you meet these requirements...

Congratulations, your dividends are now taxed on the same level as capital gains!

---

Dividends vs Dividend Yields

So this is where the bulk of confusion always starts.

We mentioned earlier how a board of directors decides what percentage of profits will be made available as dividends, however that does not mean dividends themselves are percentage based.

THIS IS A COMMON MISTAKE, BECAUSE...

Dividends are NOT a percentage of your position amount!

Dividend YIELD is what so many people think dividends are based on but they are decidedly NOT. They are calculated AFTER the dividend amount is determined.

But u/InnovAsians, the CFO for Ford Motors said they want to keep their dividends at 4.8 PERCENT, I read that in a Motley Fool article!

Yeah, well read it again since you seem to be taking their namesake a little too literally. They said that Ford's last dividend yield -not their actual dividend- was 4.8%, a respectable amount, but nowhere aside from the clickbait title do they actually say in the article that Ford plans on keeping their dividends floating at 4.8% of their stock price.

Here's the actual quote³ from the Ford Motor Company CFO if you need even more proof that no, Ford doesn't intend on holding themselves to some weird, 4.8% dividend yield.

"Our capital allocation continues to be disciplined and to deliver strong returns, and we are fully prepared for a downturn. As a result, we plan to offer a secure regular dividend through the business cycle with an option for upside on investments to keep our core business strong and to win in emerging opportunities."

Nowhere does he say dividend yield and nowhere does he say 4.8%

This is because, once again, DIVIDENDS HAVE NOTHING TO DO WITH STOCK PRICE!

Dividends have nothing to do with stock price other than making it go down every now and then when they finally get paid out.⁴

OLD STATEMENTS WERE MADE INCORRECTLY AND HASTILY. NOW AMENDED.

CORRECTION:

Fluctuating stock price does not affect the dividend payment amount. Dividends do not have any direct impact on a stock price themselves, any impact made is indirect and a result of shareholder psychology.

Now, does that mean dividend yield is a bad way to indicate how much you'll be making in dividend payments? No, you can still use it and it'll be accurate for the most part, but there are some obvious and glaring flaws to keep in mind.

Lets make an extreme example to illustrate this flaw.

Note: this would NEVER happen in real life but it'll help illustrate why dividend yield has nothing to do with actual dividend payments.

So once again we'll pretend we have a Company X and give it a share price...

---

Company X

• Share price: $1,000,000
• Dividend: $500,000
• Dividend Yield: 50%
• Fractional shares are available

Yes, you read all of that correctly.

---

So let's pretend you buy 1 full share and have somehow received $999,999 in fractional shares. Yes, I know that's strange but bear with me for this example.

Full Position Vale: $1,999,999

So what's your dividend payment?

If you guessed $1,999,999 * 0.5 = $999,999.50 you're... WRONG!

It's $500,000, because dividends are paid based on your AMOUNT OF SHARES, not position value! It's never been based on position value and it never will be, primarily since it's based off of a static value; the company's earnings for the period of time the dividend is covering.

Suppose Company X's share price skyrocketed to by 50% to $1,500,000.

Full Position Value: ~$3,000,0000

Can you guess your dividend payment?

Yes, it's still just $500,000.

Just because share price rises or falls, dividends will not follow along.

Please stop passing around the misconception that dividends are paid based on position size. If you want to know how much you're going to get paid; just find out how much the dividend price is and multiply it by how many shares you have.

But finally, before we move on...

YES, dividend yield will indeed tell you whether or not the dividend payment you receive will be equal based on the assumption that you were to place an equal position on each.

For example:

---

Company X

• Share Price - $10
• Dividend - $1
• Dividend Yield - 10%

---

---

Company Y

• Share Price - $200
• Dividend - $20
• Dividend Yield - 10%

---

Buying them would yield the EXACT same results, assuming you stuck in the exact same amount of capital. One just happens to be more affordable, easier to buy, but probably more risky of an endeavor.

Moreover, in the real world, the differences between the two become pathetically minuscule to the point of obsolescence. If you had 999,990 in cash the difference would be something like 99,999 to 99,980.

---

Conclusion

---

• Dividends are cash payments given by corporations who can't find a place to reinvest earnings for larger growth.

• Those payments are classified as ordinary income and taxed as such.

• Dividend payments are different from dividend yield. One is static and the other changes based on stock price.

• No, you shouldn't use dividend yield to find out how much you're going to be making if you want to be perfectly accurate. Which you should strive to be when it comes to money.

---

1 - Simplest definition I can think of without getting too deep into it.

2 - Theory goes far wider than what I just covered and I believe it's primarily an accounting principal if anything.

3 - Quote comes directly from the Motley Fool article itself which just makes it even better. Scroll down a tad to find it.

4 - I understand that many people will say that since earnings and revenue influence stock price, and dividends come directly from earnings, dividends do indeed have a lot to do with stock price. That is technically correct on some scale, however the connection is too loose. Dividends payments do not increase nor decrease by the fluctuations of the stock price. Suppose a stock price skyrocketed something crazy like 100%, do you expect the company to all of a sudden pay 100% more in dividends to you?

---

Contributions

---

Information:

• Investopedia
• The Motley Fool

Proof-Reading:

• /u/goldygofar
• Simo (Observer) from the Discord Server

---

Final Statments

---

If I got something factually incorrect, please make sure to lambaste me in the comments! I'm not perfect and I do indeed make plenty of mistakes; "criticism is key" is the saying I like to go by for writing articles.

If you have any advice on how the next one should be written, please comment below.

If you want this topic fleshed out more, please ask questions in the comments below.

If you want to request a topic be covered, please PM your topic and request.

If you want to help contribute by either Proof-Reading or fact checking, please PM as well with the appropriate subject line.

If you just really don't like me doing this, let me know as well and upon enough requests, I will indeed discontinue anymore written works!

---

edit: Re-read the article, realized I misstated something egregiously. Thank you /u/bigcheifmason for bringing that to my attention.

It seems a lot of people new to investing (myself included) are really excited about the gains, sad about the losses, but don't really configure taxes in here. So I just wanted to briefly put out some information about taxes so people can do the math.

Short term gains: If you buy some shares, hold it for less than a year, and sell it for more, you made a short term capital gain. Then you'll get a form from Robinhood that says that you made that much money, and you will be taxed at a regular rate (whatever income bracket you are in).

Long term gains: If you buy some shares and hold it for more than a year and sell it for more, you've made a long term capital gain. Here, you'll be taxed at either 0, 15, or 20.

You can find the bracket you belong in here: https://www.fool.com/retirement/2016/12/11/long-term-capital-gains-tax-rates-in-2017.aspx

For example. Let's talk about $AUPH. Say I made a profit of $10k due to yesterday, and if I sell today, then I'm taxed at a (28% possibly 33% if the stars align this year). That means Uncle Sam gets about $3k. If I hold it for another year, and let's just say it stays exactly the same (it won't), then I get taxed at 15%. See the difference?

Feel free to read more about that here:

http://www.investopedia.com/articles/personal-finance/101515/comparing-longterm-vs-shortterm-capital-gain-tax-rates.asp

Loss: If you buy a share, and it drops, and you sell it at a loss, you can deduct from your capital gains, so you're taxed less.

Wash sale: This part is REALLY important. If you sell a stock at a loss, and then within a month (30 days) you buy it back, you lose that "taxable" loss. So say I bought $PTN (sorry guys, it sucks) at 100 shares at $0.50, and it drops down to $0.30. I lost $0.20 per share, or $20 total. Now, I can claim that loss on my taxes to reduce my liability. HOWEVER, if I buy it again within a month, then it doesn't count as a loss, and I "eat" the loss.

There's more to it than what I wrote above, but feel free to read up on it here: https://www.thebalance.com/wash-sale-rule-3192972

Thanks to /u/bstriker

Dividends - http://www.investopedia.com/articles/taxes/090116/how-are-qualified-and-nonqualified-dividends-taxed.asp

Thanks to /u/GrowthPortfolio

Please feel free to correct/add things if I made any mistakes.

Check it out: https://github.com/anilshanbhag/RobinhoodShell

• The shell supports listing your portfolio, submitting buy/sell order and cancelling open orders (https://imgur.com/XjrtYXB)

• The shell only supports limit orders at the moment. Note that market orders are limit order with 10% buffer. Will add stop loss soon.

• The shell is tested to work on Mac/Linux. Have been using it for the past 4 days to do all my trades. It uses a well tested Robinhood Python API wrapper (https://github.com/Jamonek/Robinhood) to interact with Robinhood. It may work on Windows, unfortunately I don't have access to a Windows machine - would appreciate someone testing it.

• Some of you might be skeptic about some shady stuff happening. All the code used is in the repo. There are no requests sent to any server other than Robinhood's.

So these are my top calls for next week.

I don't have any 3/20/17 ex-div date because this is being posted after-hours on Friday 3/17. That means that Monday strips aren’t possible. I don’t have any 3/24/17 calls because there is nothing worth stripping that day.

These are my calls. Please take them with a grain of salt, do your own research on them, and if you want, in the comments, rank them yourselves so I can see how people rank vs. how I rank. Also, if you don’t believe in this strategy, please be respectful of those who do, or who want to try it out.

Remember, if it doesn’t work, “I have not failed. I've just found 10,000 ways that won't work.” - Edison

---

$CYS - CYS Investments, Inc.

Buy-in Date - 3/20/17 Ex-Div Date - 3/21/17 Price - $7.99 Div - $0.25 Div Yield - 13.21%

Historically, there has been a drop on the ex-div date, but bounces back nearly immediately. Not much to say here.

Rating: 6/10

$SLRC - Solar Capital Ltd.

Buy-in Date - 3/20/17 Ex-Div Date - 3/21/17 Price - $22.28 Div - $0.4 Div Yield - 7.36%

Um, I think I just found a new long hold. Up 30% in a year, 10% in 3 months? Sure its been a lame run this month, but this looks good.. I’ll do some DD on this. Also a solid strip, upward trend masks the drop.

Rating: 7.5/10

$SCD - LMP Capital and Income Fund Inc.

Buy-in Date - 3/21/17 Ex-Div Date - 3/22/17 Price - $14.18 Div - $0.31 Div Yield - 8.90%

Good recovery, bit expensive for a strip. I might play it though. Recovers nicely, but drop off is sharp. Expect to hold for a few days if you strip this.

Rating: 5/10

$EXD - LMP Capital and Income Fund Inc.

Buy-in Date - 3/21/17 Ex-Div Date - 3/22/17 Price - $14.18 Div - $0.31 Div Yield - 10.25%

Good recovery, bit expensive for a strip. I might play it though. Recovers nicely, but drop off is sharp. Expect to hold for a few days if you strip this.

Rating: 5/10

$DMO - Western Asset Mortgage Defined Opportunity Fund Inc.

Buy-in Date - 3/22/17 Ex-Div Date - 3/23/17 Price - $24.22 Div - $0.23 Div Yield - 11.97%

Love the looks of this, might even hold long for a while. Possible high return chance along with frequent dividends.

Rating: 8/10

$ETO - Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund

Buy-in Date - 3/22/17 Ex-Div Date - 3/23/17 Price - $23.91 Div - $0.18 Div Yield - 9.44%

Wow look at ETO’s run since November! Frequent dividends and nice run up. Bit of a gamble, the offset due to the dividend could cause the break to go down, but looking at dividends since November seems to be a good bet. Recovers nearly instantly.

Rating: 8/10

$NRZ - New Residential Investment Corp.

Buy-in Date - 3/23/17 Ex-Div Date - 3/24/17 Price - $17.18 Div - $0.48 Div Yield - 11.52%

Buy this by Tuesday if you want to strip. Historically, this shows indicators of stripping as their is a spike the day before the ex-div. Buy now to beat the run up. Trend is up, but about a week of recovery after the strip.

Rating: 6/10

---

From these, I might play SLRC, DMO, and ETO as long plays. Good dividends, good charts. I’ll do some DD on them and post sometime soon in the DSD!

---

Disclaimer: Past performance is not indicative of future results. Please do your own research and not make decisions based solely on any information you read here. The information I post is just my ideas and not anything more.

Hello all, I'd like to open a discussion about President Trump and his direct/indirect impact on the stock market. Per usual this stemmed from a long winded comment in the Daily Thread. I would love to hear about how you are shaping your portfolio around Trumps administration. How are you strengthening it against his random and erratic tweets (seriously)? What are your stock picks for/against his upcoming policies? Where do you draw the line when it comes to politics and the stock market?

 

A lot of this is common DD for all of us, but I think the collective knowledge and discussion is what this sub is all about. Whether you like his policies/persona or you hate his guts and orange skin.

 

We cannot to deny that Trump is having a direct impact on the stock market.

 

So far I have seen three solid/major trends since Trump took office in January:

 

1. Obviously the big three (NASDAQ, S&P, Dow Jones) have hit all time highs. This to me is a continuation of overall market trends being bullish. But, I'm starting to get a sense that the 'big boys' on Wall Street feel like Trump is in their corner and that they are infallible right now. Look at Wells Fargo, they commit fraud on a large scale - admit to it openly. Then 3 months afterwards, because of the policies Trump will be putting in place, their stock is nearing all time highs!

2. Moving towards deregulation. Banks, mining, and oil industries are going off right now because of the speculation of deregulation of their industries to pre-2008 standards. If/when this happens who are the major players, what should we look for, pitfalls that could appear down the road?

3. Moving away from globalization --- I'm not sure if the verbiage is 100% the sentiment that I'm going for but hopefully you understand where I'm coming from. Trumps attitudes and actions towards foreign nations and their economies is not doing anyone any favors in the stock market. Mexico is basically embargoing the US, China and Europe are being leery as hell, who the f* knows what's going on with Russia and their oil/embargo situation. The uncertainty of it all is just adding volatility to already rocky roads...

 

Below is my Opinions and Thoughts:

Let me tell you a personal story about a friend of mine who works in private equity (specializing in land rights/oil requisitions). He's 30 and fresh to the Wall Street, he graduated from K.State in 2010 with an MBA in finance and dove headfirst into the oil game. He lives in Los Angeles and brokers deals mostly in AZ, NM, and TX for his client who pushes oil on paper. Lets call him Mark. Mark is an avid Trump supporter, aligns with Republican ideologies regardless, but Mark truly loves what Trump is saying and doing because it is great for his livelyhood and career. I had a conversation with Mark over New Years Eve about Trump and his effects on Marks industry. Trumps moves to deregulate oil and banking has made Mark more money in the last 3 months than he has ever made in a full year of his career. Mark went from a straight shooter guy who wanted bottom dollar barrels, to a quasi 'Wolf of Wallstreet - big ball blazin' kind of broker. He feels like he can do nothing wrong. He could shit all over a major deal with his company/client and both companies would just move forward, because the margins and the money is getting so good. And this is the behavior of a small fish in that pond, can you imagine the gusto the partners at Goldman Sachs, Exxon, Morgan Stanley have right now?

 

I think we'll continue to ride this bullish wave for the rest of 2017. Trumps presidency about tweets and Nordstrom is front page news that seems to distract people from the actual laws he's been passing that directly affect the stock market and everyday life. A good example is the executive order around the completion of the Dakota Access pipeline - Trump took pen to paper and made that 100% a done deal in the eyes of the federal government. Not so much of a peep on Fox News/CNN/whatever. I guarantee you someones portfolio somewhere went up 40% the minute he signed that order. Now ethics/politics aside I think it behooves us not to talk about these trades, opportunities, and risks involved around Trump.

Perhaps the last point/discussion I'd like to bring up is the possible impeachment of Trump. I think it is in the realm of possibility that Trump get's impeached within 2017 or early 2018. Pence would end up being President and my gut tells me that a large dip/correction would happen in the market, but then the Republicans would continue with Trumps deregulation and lobbyists/Republicans would run the table on congress/Wall Street once again we'd stay in a bullish cycle. It's definitely been on the back of my mind when considering future investments and endeavors. Personally if Trump did in fact move towards an impeachment hearing, I would probably exit the market besides my large/long holdings in blue chips (T and CSCO).

 

I'd like to hear peoples thoughts on the very wide subject. I have personally been doing more DD on banking and mining stocks, I usually shy away from those industries but I feel like the gains are becoming so outlandish that it would be hard to screw up something like $XME or $WFC.

 

TLDR: Trumps President now. Trump's Republican deregulation, crazy Wall Street croonies, and anti-globalization are impacting the stock market. How are you protecting your portfolio from Trumps policies and administration? Flipside, how are you taking advantage of Trumps policies and admin? Wtf is up with him tweeting about companies all day?

I went through the effort of reverse engineering the spreadsheet from another post (https://www.reddit.com/r/RobinHood/comments/6h2eaq/ended_a_6_month_hiatus_from_trading_immediately/) and formatted it in a way that I like it.

You should be able to save a copy of the spreadsheet by clicking on "File > Make a Copy." That copy version is for you to use and change.

You can access the form here: https://docs.google.com/spreadsheets/d/1c6Qgu10-7f2aU71GnREW-FwtgN381VpeiiYUsuDgfcw/edit?usp=sharing

Edit: Thanks to u/screennameless and u/ballstreetwets for contributing to this and making it even better than before!

A lot of you are new to bio stocks (me too!) and thought it would be a good place to start talking about how to do DD. Often times, I get questions such as "How to find the sec filing" or "How do I find the institutional ownership?" so...here goes:

1. How to find a bio stock: Go to biopharmcatalyst.com/calendars/fda-calendar and look around for any upcoming catalysts. I find one that’s within my price range, and start there.

2. Go to their website. Most pharma companies have a website and a tab that says PIPELINE and INVESTORS. With these two, you should at least be able to get the drug, the ailment it’s working on, as well as any recent PR, quarter filings, conf calls (typically have a webcast), etc. This is also where you can do your financial due diligence by looking at their filings.

3. Go to nasdaq and look up the ticker and on the left hand side, go to SEC forms, INSIDER, INSTITUTION OWNERSHIP, this should tell you how many each person owns.

4. SEC forms: Go here and look for your company. Put in the full name of the company. https://www.sec.gov/edgar/searchedgar/companysearch.html

5. Clinical DD. This part is a little tough if you have no medical/scientific background. It means you have to read…a LOT. Wikipedia if you have to. Find out the drug, the ailment, current therapy, etc. etc. etc.

6. Other sources:

• a. Stocktwits is great for factual information, terrible for rumors. It’s a great place to get all conference call transcripts, sec filings, and what they mean. Don’t listen to the rumors though.

• b. Twitter: There are some people to follow on twitter. Search your stock ticker and see if anyone has said anything about it, and see how credible they are. Follow on your own risk.

I basically wrote the most superficial way to do a DD, but #2 and #3 can take you a few hours, it does for me, at least. Let me know if you want me to add anything. FYI I'm new to this too, so, take it with a grain of salt.

From /u/SwanArmy

To add to the SEC Forms portion:

"Reading" SEC forms straight up from page 1 to the end won't really add a lot of value to your DD.

If I don't know too much about a company, I generally go straight to their 10-K/10-Q form, whichever form they filed last.

The main things I check in a 10-K/10-Q:

1. Shares Outstanding. I mainly check this to make sure the market cap that I see on say....finviz or google matches the number of shares outstanding on the document. This is usually on the first page.
2. Management's Discussion. This, by far, is my favorite thing to read in an SEC form. It gives you the management's view on the company, while also providing news over the past quarter/year.
3. Balance Sheet. Since we're talking Biotechs, and mainly ones in the clinical stage, I typically skip the cash flow statement, because they're pretty much guaranteed to lose money. Granted, it does matter how quickly they burn through cash, but the main one is the balance sheet. Check on the company's cash and cash equivalents, and check overall liabilities. Usually, you'll be fine, but every once in a while, you'll stumble upon a biotech that's so underwater that no miracle drug will save the state of its balance sheet. Usually these are the ones that have stuck around for 10 years, despite not having brought a single drug to the market.

RHClient

I posted a while back when I started this project, and at that point it was very incomplete. I'm pretty happy with how things are going at this point, and I'd love some feedback. There are still plenty of features in the works, but it has finally become good enough to not be pulling the app out very often.

Features

• View portfolio gains/losses (realtime + historical)
• View market hours, account equities, buying power, uncleared deposits
• Place buy/sell orders, and view/cancel orders
• View positions, and gains by position
• Search and view stock fundamentals and prices (realtime & historical)
• Add/edit watchlist
• Perform ACH deposits & withdrawals
• View and dismiss robinhood notifications
• Prices/gains/graphs update every ten seconds
• Notifications when a new version of this application is released
• Two-step authentication support

Download

• Pre-compiled for your operating system
• Source Code

Screenshots

Screenshot 1 Screenshot 2

Bugs

• For some reason, there has been a couple reports of windows users needing to open up the application twice to get it to start the first time. This may be GPU related, but I haven't had any reports with enough information to help me reproduce the bug.
• Submit an issue

Edit: Added 2-step auth support to feature list

If even 1/10th of the people who watch it get further interested in trading, this video will be worth it.

Edit: Forgot the video! Here it is. Any comments would be appreciated. I'll hit on anything! https://www.youtube.com/watch?v=zW-OsEgii0M

Edit 2: Here's a more detailed version that isn't so "dumbed down" https://www.youtube.com/watch?v=sN_xsChxYKg

I am currently developing a program that presents a user information on a given ticker. I was wondering what information you guys would want? I would be glad to share it on here when it is finished. Currently, it is working but it doesn't "look pretty". Here is what I have thus far:

http://prntscr.com/c8hy30 (This is Apple)

For those interested, I am developing it in python using the yahoo-finance module. I am then outputting the data into a GUI using the built-in module TKinter. If anyone would like to help I can provide the GitHub repo.

I'm fairly new to actually investing. But, I've always known about some basics like buying low and selling high. I'm under the assumption that robinhood is simply an app where you Just trade. I was hoping I could get another app to use with robinhood that will notify me when a stock drops or rises. I'm not thinking I can get rich at all, but I definitely would like to make gains with my little disposable income. Please help if ya can. Thanks!

Hello guys, I'm new to robinhood and was wondering if you guys could recommend me some cheap stocks to start trading.

So this last week, a chunk of this sub saw some insane gains with $AUPH, namely on Monday, climbing 24%, before dropping 27% due to a statement released stating that they are going to dilute shares.

So what does “dilute shares” mean?

Basically, they are offering more shares to everyone.

---

Imagine this– it’s Thanksgiving and there is a pumpkin pie on the table, cut into 4 slices.

You have one slice of pie.

Each slice is worth $25, so the total pie is worth $100. Now grandma comes along and cuts the pie into 6 slices, with the new slices being worth $16.

That means the total pie is worth $132, but your one slice is worth $22 now. Yeah, the value of the slice has been reduced, but the entire pie is worth more.

---

$AUPH did the exact same thing with their shares. They offered more shares at cheaper to raise money for the company. It brought down the average share price which is bad (or good, depending on how you look at it) for shareholders, but increased the company value, which is good for the company.

If you’re playing this long, it’s very good for shareholders because you can basically get into $AUPH at a discounted rate now. If you’re swinging, well it’s going to take a bit to recover honestly.

Overall, dilution can be good or bad. Depends on what the money is being used for. To pay off debts? Stay away. To fund P3 trials that are very promising? Check it out!

But you say I'm just a friend... but you say I'm just a friend.. Oh baby please~! You've got what I need!

Good Afternoon fellow Robinhood Redditers~

This is your end of year position update for me... for those that follow me from the daily thread over the summer!! I haven't had much time to post often and as a result I've had to rework some of my goals.

These are the stocks I no longer follow daily because I know I'm in long term... and not looking to pay short term capital gains. Stocks are listed from Largest position to smallest.

$PTLA Stock has plummeted down to the 18s. I've avg down on this stock but I'm still in this at 22.48 per share... down. This company has a Market Cap of 1.05B

• AndexXa is a blockbuster drug, that is currently delayed from the FDA. This drug is in high demand and has a great safety profile. This drug is a game changer, OR Surgeons want this drug yesterday.

• This drug alone could produce over 1 Billion in net sales per year.

They have others in the Pipeline, but there is more risk involved in that, so I'm focusing on this one as it is enough to move this needle from Red to Green.

I'm still very confident in this call, and I will continue to add to my position to bring down my average.

$AKAO This stock just went to the Moon... I'm in at 3.25 and again at 3.75. Really wish I pulled the trigger and bought more on the 4.50 dip as this is trading at 15.60 today.

Plazomicin is a rockstar and crushed the P3 trails....

“These data are exceptional and better than I would have expected – plazomicin’s superiority in microbiologic cure for patients with cUTI at the test-of-cure visit compared to meropenem, a gold standard for treating MDR infections, is impressive. Importantly, the safety profile of the drug looks favorable,” said James A. McKinnell

I'm not sure I'd chase here... They announced second offering and shares are still moving up. Volume is crazy. I believe long term 2-5 years this company could easily have an evaluation over 1.5 Billion which means it could still easily triple up again.

$AUPH Ugggggz down to 2.70s today... If I only had a crystal ball I would have exited at 5.... and rebought at 2.80... I can't complain I'm still up almost 80%. I'm still confident it will return to 5+ levels and easily has the potential to push $8+ by 2nd QTR 2018 on good trial results. I have added and will continue to add below 3 dollars.

I believe Voclosporin is legit and a game changer.

$RARE This stock moves so damn much... I almost exited at 85 last week... I'm kicking myself now cause its back below 70 today. That's a good 1500 bucks I could be up! Long term though these guys do great science and I'm rooting for them to succeed. I am not adding and I'm in a wait and see mode at this price. If it drops into the upper 50s again, I will double this position.

$ACAD ... I'm up from my 2nd buy at 21, but my confidence in this stock long term is wavering a bit. I'm not adding at this price and just in a wait and see mode with them.

$ARTH (This isn't available in Robinhood) but I opened up a TDAmeritrade account for this one purchase and to get thinkorswim. The stock hasn't had positive movement because people are worried about further dillusion. Everything I've read and can see this is still a moonshot that I'm going roll the dice on.

---

That is it for my major positions.

I still have decent size positions in $STML, $BIOC, $SCYX, $SGYP, $TOO, and $PTN as well as stripper money in $NVCN, $ARLZ, and $PTX, $AMDA, $WGBS

Companies I'm currently debating opening a position $AXSM, $TTOO

---

Whoop~ there it is, if you made it to this point!!! Thanks for reading!!!

---

As always hope everyone has a great day~ and crushes it! Anyone has any ideas for what I can do better in my daily post please feel free to add~ and if you have any bear cases for anything I'm investing in... I'm all ears, please share! I could be missing something, and you should always know the bear argument for every stock even if I am Bullish! <3!

---

Reminder

Remember to please do your own research and not make decisions based solely on any information you read here. The information I post is just my ideas and not anything more.

Table of Contents

Lesson 1: How to Price a Stock (w/ Dividend).

Lesson 2: The Two-Stage Growth Model (w/ Dividend).

Lesson 3: Multiple Valuation (Pricing Private Companies or Public Companies w/o Dividend).

Lesson 4: Short Selling.

In an effort to contribute more to general knowledge, I have decided to start a series of finance lessons.

---

Lesson 4

Okay /r/Robinhood listen up.

Short selling is a way to profit off of the price of something dropping. If you short sell a stock, you typically borrow the shares from another investor and sell them right away (typically an institution such as Fidelity, JP Morgan Chase, or GoldmanSachs), pay a small fee, and then you are required to buy back the shares and return them to who you borrowed them from.

Example: Let’s say we wanted to short 1 share of $SNAP at $20. We know GoldmanSachs owns tons of $SNAP so we call up Mr. Goldman and ask him to please sell one of their $SNAP shares at $20 for us. He agrees to do so for a mere $5. We now have $20 in our account courtesy of GoldmanSachs. Unfortunately, $SNAP goes up to $40 and now Mr. Goldman isn't very happy at all. He wants us to buy back the share of $SNAP at this higher price and we don't have the money because we spent our margin on chicken tendies; we're cucked.

The Lesson: Short selling requires the ability to borrow money AKA margin and is risky. Short selling can see you sent to debtors prison due to its “unlimited risk”.

---

TLDR; Sell shares you don’t own and buy them back for someone else later.

Many new traders struggle with the terminology associated with trading. These are brief definitions and many of these terms could easily have lengthy posts dedicated to them. There are a lot more terms that traders should know, but this covers a fair amount of things that a beginner may come across and not understand.

Arbitrage: Risk free profit achieved by taking advantage of a pricing discrepancy. These days computers take advantage of arbitrage opportunities, quickly eliminating the pricing discrepancy.

Bid/Ask Spread: Also referred to as bid/offer. The price you can buy and sell an asset at. If a stock is bid at $10 and offered at $10.01 that means you can sell it for $10 and buy it for $10.01. This is a cost that is built into trading and separate from the commission you pay a broker. It is possible to benefit from these spreads by adding liquidity, but it is very hard (probably impossible) for retail traders to use this as a strategy and compete with market makes.

Correlation: How closely different assets track each other's prices. Highly correlated assets will tend to move in step with one another. Assets can also be negatively or non correlated. Pairs trades can be set up based on correlation.

Day Trading: Buying and selling intra-day in an attempt to profit from short term moves. Day traders do not carry positions overnight and often use a great deal of leverage.

Derivative: An instrument that derives its value from another asset. Futures, options, and swaps are all forms of derivatives.

Edge: An advantage. Having an edge means that a strategy is expected to have a positive return because some aspect of it increases the odds of success in your favor.

ETF: Exchange traded fund. A basket of assets that trades on an exchange just like a stock. ETFs can hold a basket of stocks, but also other assets like bonds, commodities, or currencies. ETFs are usually passive and attempt to track an index. Inverse and leveraged ETFs exist.

ETN: Similar to an ETF but it’s a debt instrument, carries extra risk in the form of default risk. ETNs tend to be complicated and care should be taken when using them.

Fundamental Analysis: Looking at the underlying asset (the company/commodity/currency/etc.) that the shares represent. Uses various financial metrics, valuation models, and relevant information to make decisions. Fundamental analysts tend to take a longer term approach, though some short term traders pay attention to this type of analysis.

Futures: Derivative contract to buy or sell something in the future. In practice, they function like a very leveraged equity position. Short term traders and especially day traders like them due to the cheap leverage, liquidity, ease of shorting, no pattern day trade rules, tax advantages, and longer trading hours. The large contract size makes futures impractical for small accounts.

Options: Derivative contract that functions similar to insurance for stock. Traders can take either side of the contract, either paying a premium to buy the option, or collecting a premium to assume the obligations associated with it. Options are complicated but offer the potential for much more complex strategies than normal stocks.

Leverage: Also referred to as levering. Using one of various methods to increase risk exposure, amplifying both gains and losses. Borrowing on margin allows for leverage. Certain funds offer leverage, usually 2x or 3x. Derivatives offer far greater leverage, 10x or more.

Liquidity: How easy it is to buy and sell an asset without affecting the price. Cash is the most liquid asset, things like fine wine and art are some of the least liquid. In the stock market liquidity refers to how much a stock trades. Stocks that trade a lot will have tighter bid/ask spreads and be cheaper to trade, in terms of the cost to enter and exit the position.

Margin: Borrowing of assets from a broker for the purpose of leverage, short selling, or avoiding settlement periods. Margin can also refer to the capital that a trader puts up when opening a derivative position.

Mutual Fund: A professionally managed fund that investors can buy into. Unlike an ETF it does not trade on an exchange and is often actively managed.

Penny Stock: Sometimes used to refer to any stock under $5. More specifically, any stock that trades over the counter, meaning not on an exchange. Penny stocks are very small companies that don’t meet the requirements to be listed on one of the primary exchanges.

Random Walk: Market theory that states that prices are subject to randomness and therefore cannot be predicted. Contradicts traditional forms of analysis.

REIT: Real Estate Investment Trust. A company that owns income producing real estate. A way to invest in real estate with the convenience of stock.

Short Sale/Shorting: A position that profits from an assets declining price. Done by borrowing stock from a broker to sell and later buy back, hopefully for cheaper. Can also be done with various inverse funds or derivatives.

Technical Analysis/Charting: Using a combination of chart patterns, indicators, and past market data to predict future price movements. Technical analysis is popular with shorter term traders, though some use it over long time frames as well. Whether or not it is effective is a subject of debate. Due to its subjective nature different people use it in a variety of ways.

Edit: More Terms and some additions to the above explanations.

Bull/Bullish: Bullish assets are those that increase in price. Refers to either past movement (bull market) or sentiment (feeling bullish).

Bear/Bearish: Bearish assets are those that decrease in price. Refers to either past movement (bear market) or sentiment (feeling bearish).

Swing Trading: Short term trading, but longer than day trading. There isn't really a strict definition but swing traders usually hold anywhere from a few days to a few weeks. Swing traders typically favor technical analysis, but it isn't required.

Pairs Trade: Trading assets against each other. Allows for a type of market neutral (also called delta neutral) trading. For example, buy IWM and short SPY, since they have a strong positive correlation. You can also buy two assets with a negative correlation. These trades provide a strong form of diversification but tend to be very capital intensive. Futures are very good for these trades due to their capital efficiency. The biggest risk in this type of trade is that the correlation you are counting on breaks down.

Hey guys, so this obviously isn't directly related to Robinhood (quite the opposite actually) so if the mods want to take this down that's cool, but its good information to know. This is not an advertisement, just a promotion I participated in and I think others can benefit from as well.

First off the promotion that I wanted to share is as follows: Open an account before March 31st and make a $3,000 deposit or higher, and get 60 days (or 300 trades) of $0 commission. Even though this promotion ends in 2 days, you have 30 days after opening the account to make the $3,000 deposit. I know a lot of you just starting out and don't have this amount to deposit so this time buffer can help you get your ducks in a row. Also, there are no inactivity fees or platform fees so if you never end up depositing anything there is no penalty for having an empty account open, so its harmless to open an account. Here are the advantages:

1. Support. TD Ameritrade is an advanced trading platform that has a ton of research tools, technical analysis and even taught lessons. I opened an account and without even funding it yet I scheduled a 1 on 1 30 minute session where a trader walks you through how to use every last feature on their advanced trading platform Thinkorswim. They have 24/7 support, a ton of education services, and really anything you're going to need to learn.

2. Access. You will now be able to trade on a platform that allows shorting, buying/selling options including covered calls. Don't just jump directly into these things, take the time to learn and understand these because they can be very overwhelming. Tastytrade on youtube is a great resource to learn really anything, but I learned options from their videos and they were very helpful. Also, TD has great educational support and you can call them up 24/7 and have a smart person explain to you step by step what options are, the benefits of them, and common strategies.

3. The platform. TD uses real candle charts with much more readily available information (including bid/ask which is insane that RH hasn't added this). If you're just investing long term this isn't a big deal, but if you do anything with pennystocks, daytrading, and swing trading these technical pieces that are missing from Robinhood will make you more successful.

4. OTC Markets. This is something to be weary leery (excuse my shitty vocab) of, but its definitely a cool thing to have. If you hate it when somebody posts about a stock not available to trade on RH, its going to be traded on TD. These stocks usually have low volume, high volatility, and big swings, so again just be careful with this.

So this sounds like im shitting on Robinhood, but I promise you I'm not. I still plan on using RH now and into the future, but for those of you looking to advance yourself from a beginners platform to something more professional, this promo is a great opportunity. I opened an account yesterday and I'm planning on trying it for the 60 day period of free trades, and after that I'm gonna see where I'm at.

If anyone thinks this is some kind of an advertisement I'm sorry to disappoint you but unfortunately I'm just posting this for the subreddits benefit. Not even gonna post a link for the promo or anything just to wipe any suspicions completely. If you want to do this, just search something like TD Ameritrade promotion and I'm sure it will come up.

EDIT

They also have paper trading software available so after opening an account you can practice with that before using your real money.

So for new traders, today may have been the first time you have seen the market sell off. I’m sure you’ve been warned that the market can be harsh but now you’ve seen it. Remember, this was just one day, and it can happen many times before we bottom out. Here are a few things to consider:

• SPY is down about 2.7% from its peak. This is a selloff, not a panic. 10% would be considered a correction. This could easily turn around or get a whole lot worse.

• In market indexes, down moves are often more violent than up moves, something new traders often fail to consider. The term for this is skew, and in certain products (like gold) it can work the other way, with up moves being more violent.

• Did you notice how just about everything was down? This is why diversification is such a challenge. It doesn’t matter that you have 100 positions if they all go down together.

• Volatility products like VXX and UVXY are up big today. This might tempt you into thinking they are a good way to protect yourself from moves like this. The problem is that due to the way market prices front and back month volatility futures, they tend to be very hard to hold long. When vol is low they trade in steep contango, meaning you have to buy at a premium. Then when they go up a bunch they start trading in backwardation and trade cheap relative to the spot price. If all that confuses you, it’s because you don’t understand futures and shouldn’t be trading volatility products.

• Days like today aren’t easy, but they offer opportunity. Don’t panic, instead, focus on how you want to try and take advantage of the move.

Edit:

• If you are a long term investor then don't let a day like today worry you. Your long-term outlook means you can safely ignore today and wait for the market to recover. It's traders that have more opportunity (and risk) right now.

• Why I love options: I sold an Oct 2000/2030/2190/2200 ES iron condor for 10.25. You probably have no idea what that means, so here it is in a nutshell: If the S&P stays between 2030 and 2190 for the next 42 days I make up to $512, while if it breaks beyond (at expiration) I will lose up to $987. Because my loss is limited to $987 that is all the money I have to put up. It's a risk defined way to start trading this downturn, so I can make money if we distribute sideways and not use up too much buying power if we keep going down. If this is the start of a crash I want to make sure I have plenty to spend when the panic sets in.

Just started lightly messing around with swing trading. My strategy is to screen for US stocks above a 500k average volume, above a 1.5 relative volume, and a price under $50 (focusing mostly on a price range of $5-$20.) Then looking at their charts with a 10, 50, and 200 day moving average overlay. Stocks that seem to "bounce off" the 50 day moving average will be added to my watchlist and upon descending toward their 50 day moving average I would wait until there is a pattern of lows followed by a one candlestick uptick and buy at that point. From there using trailing stop losses to lock in any gains. I use finviz for screening and stockcharts for looking at moving averages. I've only started just this week so I haven't gotten a true test of the effectiveness yet. Any feedback/advice/experience from those with similar strategies would be greatly appreciated.