Chapter 12

Being Savvy When Shopping for Stock

In This Chapter

arrow Understanding various types of orders

arrow Looking at long and short stocks, chips, caps, and sectors

arrow Determining whether you’re dealing with a bull or a bear (market, that is)

arrow Seeing how stock indices work

arrow Figuring out what a stock is worth

Shopping for stocks is a lot like going to a Black Friday sale every day of the year: A lot of otherwise rational people go completely out of their minds, pretend they know what the value of anything in the store actually is, and start fighting with each other like lunatics over the right to either buy or sell something that they don’t understand and quite potentially don’t have any use for. For some reason, though, people keep coming back to smoke from the pipe of equities that promises an easy fix in the form of quick payouts but that far too often leaves them exposed and wondering where all the money went.

It doesn’t have to be this way, though. Stock prices aren’t random, and you don’t ...

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