BS or not? become rich with the chinese stockmarket

[cout12]

I have a friend who told me that one of his friend (who doesnt have any education or stocks trading skills) made 100k from 10k in 3 months. What he does is he waits for companies to go public and then he buys them and sells them after 2 weeks. He told me that you can pay ppl to tell you what to buy and stuff so that you dont have to know anything.

I was kind of troubled by this because I have 10k (lol) and if this is true I cant beleive im passing up on this.

So some of you guys know about stocks trading, tell me if this is possible or not. And if it is tell me how do do it lol.

thanks.

[MDZ]

Well, I don't want to say that it is all BS, because who am I to know each and every situation. I would say that it's unlikely that your friends friend is going to be able to do this forever, if he has done it so far. The reason is that sooner or later, something will go the way that is not expected. My guess is that he keeps really leveraging his money by investing it all in one or two stocks, and watching them. This is great as long as the economy is in a bubble (like the Chinese) buy as soon as one of these doesn't jump up, well you get the point.

So my feeling is this, it very well could be true, but that would not be reason enough for me to jump in with my 10k, especially if I am new to trading. General rule of investing, if it sounds too good to be true, and beginners are making huge sums of money, it is usually going to crash pretty soon.

Hope this helps some, and welcome to the forums!

Mark

[Fredledingue]

Almost every IPO rise on the first trading days, often by 50%, 100% or even more.
The catch is that you need excellent relations in the world of finances because it's clear that if you enlist in an IPO like a nobody, you will pay the big price and won't make that much profit. Practicaly you have to be in the first to buy.

As MDZ said, he was probably extremely lucky (betting large sum on a stock which quadrupled and another which sextupled).

But it's always easier to make money when you have good friends who work for financial banks and who are specialized in IPO trading. That's where he gets his luck from.

Don't worry, if it was so easy, everybody would do that.

[StockJunkie]

I have a friend who told me that one of his friend (who doesnt have any education or stocks trading skills) made 100k from 10k in 3 months. What he does is he waits for companies to go public and then he buys them and sells them after 2 weeks.

Have your friend show you his broker account with all his gains drawn out with buys and sells. I am doubtful that he has hit every stock perfectly to yield such returns. On top of all of that, you can't even buy IPOs pre-public, so let's say a stock goes public at $16, well it may open at $40 which is where he would have to buy. The people making money off IPOs are the underwriters, even insiders have to wait 6 months to sell out.

Even if he has found success in this style of trading, it won't last. I'd be willing to bet against his future on IPOs. Just wait until he puts all of his money in a Vonage (VG) or Blackstone (BX) and see what he brags about then.

[EvaluatingStocks]

Whatever you do - don't do what your friend did. Put your money into a high yielding savings account that doesn't lock you into a CD (e.g., go with a well known bank like UBS, etc.). Then, learn more about investing - A good place to start is John Bogle's The Little Book of Common Sense Investing. I know, I know, sounds corny but he has some good points. Plus, he started a little company a while back you may have heard of called Vanguard Hope that helps - your friend's story sounds very reminiscent of bets folks were making right before the .com massacre of '00. Some of them will never regain the losses sustained in that market.