Is This Stock A Good One To Invest in?

Question

I'm 15 and i have a plan on buying shares...my budget is only about 250 since i have no job...i plan to buy shares and selling them about 2-3 years from now for school or a car or any needs that i will have as i will graduate out of high school.

looking into Sirius XM Radio i think its something worth investing in as it doesnt have competition as xm and Sirius have came together..for my budget i would be able to get about 150-180 shares for this stock?

Im more than open to your advice and thought..and recommendations to what stocks are worth looking at based on my budget. thanks for your time and happy holidays!

This Is the SIRI Stock (=
http://finance.yahoo.com/echarts?s=SIRI+Interactive#chart2:symbol=siri;range=19940913,20101217;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on

Answer 1

Look for a stock with a little more movement? SIRI is not a risky enough stock for someone with $250 to his name? Huh?



Siriusly though, I agree with the other poster who said that you should not just go buy a stock because it is low-priced. SIRI is a bad auto industry play. SIRI cannot recover without the automobile industry recovering, but it's not at all clear that it can recover with the automobile industry recovering. The problem is that they are selling an old technology (radio) with a new spin (you can't drive out of range). Is that really so important that people want to pay for subscriptions? I'm down on cable TV because I think that it is being replaced by Internet TV and I think that radio is being replaced by flash memory and iTunes.



Edit: I don't know about two people recommending RAS to a 15 year old. Reading their 10-K is a serious piece of work and it's not at all clear to me what risk this company is taking. There is lots of "fair value" accounting being done on subordinated positions in various CDO's. If you buy this stock, you own a residual interest on a portfolio of subordinated interests in a bunch of esoteric securities that are held using someone's model of interest rates and defaults to account for it at "fair value". This "usually trades near 25" is irrelevant to now and the "1/4 of tangible book value" is almost certainly false (the "tangible" book value would be what they could sell their positions for and there is almost surely no market for them).

Answer 2

If you are going to need the money back in such a short period (2-3 year is not a lot of time in the stock market), you might be better off not investing and keep it in a saving account or a CD. I would say if you can wait at least 5 years to sell, you will be better off investing though.



I've been keeping my eye on SIRI for about a year, but personally I do not think it is a very good buy right now. I wish I had bought a year ago when it was lower, but I am quite sure it is starting to level off in price now. I could be wrong, of course, but this is just what I think. You need to study the fundamentals of any company before you make an investing decision, take anyone's opinion on here with a grain of salt. In the end, don't worry about what people say will happen to SIRI, study and fundamentals and make a projection if you think the company will do well.



Understanding that you have a limited budget I suggest you take a look at RAS. It is a real-estate investment fund. As the title implies, they invest in real-estate. The housing market is very low right now, and this ETF (if you don't know what this means, just replace this word with stock) is at a very cheap valuation. You would be able to buy a few hundred shares at the current price. As always, study the company and its balance sheet before you make any final decision. Do not trust my opinion until you have looked at the company yourself! As I originally stated, you will be better off if you can keep it in for longer. I cannot guarantee that the housing market will have improved significantly in the next 2 years, but I would wager that it will be a lot healthier in at least 5 years.

Answer 3

I'd suggest buying a stock with a positive track record that is depressed due to recession but likely to recover as opposed to hoping this one will go into territory it's never been to before. This way you are betting only on the economic recovery instead of both the recovery and the individual stock. I have many that are in that category now. Suggest looking at RAS, a real estate trust (REIT stock with a $25 normal value selling at $2 and small change today, which is 1/4 of it's tangible book value. Last two quarters are green, so it's beginning to show profits again.

Answer 4

I didn't think that you may get the good return if you are only going to invest $250 in the stock market. You have to invest heavily in order to gain higher profits if yours stock does well and/or if you sold at the higher price than you brought it. Stock market don't promise you to give the higher return even in the long term. You have to do yours homework before getting into these things. In other words you have to learn it before doing it. And yes, CD's are a good investment as well while it's depends on the at what rate shall yours bank give you depending on the CD's time period. Some Banks promise you give you at the fixed CD rate no matter what happened. You can even buy the preferred stock but it doesn't give you any guaranty for that but yes it's pays you good interest rate depending on the stock. I hope this would help you.

Answer 5

I suspect your other reason for being attracted is it is such a low price stock. Based on your age and lack of experience, this could be fun, but it entails a lot of risk. It sells at 46+ times earnings, making the share price very high relative to that. It is in a newer industry... and that means if some new technology comes out, it could be worthless over night.

I applaud you're interest and I encourage it, strongly. But I really think this is the wrong one to begin with. If you bot and tripled your money, chances are you would look for a similar kind, and then watch your investment go to zilch. And that could end your interest right there, for a lifetime.

I encourage your interest and suggest to you that you invest in more conservatively. But even before that, I would go to the library and start reading books on investing. They will expand your knowledge base and provide you far more tools for making wise choices.

Answer 6

first you need a adult to buy them for you as you are too young to open a trading account its not a bad stock but do some shopping around and look for something with a little more movement there are a lot of stocks out there in the same price range with a lot more movement look at the ten year chart and look at its movement it really has not done a lot in 10 years do some more research if it has not moved in ten years i don't think i would invest long term with it if i were you look at stocks lets say between 1.50 and 2.00 dollars a share if that's what you want to trade or look for a little more pricey stock with some movement

Answer 7

There was a study done with monkeys, kindergardners and stock brokers. kindergardners picked the stocks they knew: Disney, toys'r'us, etc. Stock brokers did it their way. Ststistics, etc. And the monkeys picked stocks by throwing darts at a wall.. long story short.... stock brokers came in last. monkeys second, and kindergardners came in first... Pick stocks you know of and buy products from.

Answer 8

If your holding period is 2-3 years then you should consider a nice CD or money market account.