Stock Market Game...?

Question

So, my high school does this activity called the SMG (Stock Market Game)
What happens is you get 100,000 in virtual money and you buy and sell stocks.
My partner and I are in need of help on some of our stocks.

Which of these should we sell:
BEBE
COST
SOHU
BIOF
EBAY
FSLR
MCD

The last four seem to be draggin' us down. Even though the last 3 have just recently been invested. BIOF has been with us for about three weeks now and has increasingly gone down, however the rest are doing quite well. Do I need to sell any?

P.S - Our balance is $40,741.37. How much more money could we use to invest before we get screwed?

Answer 1

Go to Yahoo finance and find each chart by putting in the symbol.
Then click on technical data and click on bollinger bands.
Then click on the 20 day moving average.
The bands are going to show the average volitility. Now when the stocks are close to the top of the top bollinger ban then sell the stock and after they cross the 20 day moving average and get close to the bottom bollinger band then buy it back.
Lots of succesful traders use this data and for many of them they do quite well and it is better than any so called hot stock tip.

Answer 2

You have chosen exceedingly expensive stocks. The price to earnings ratio of your portfolio is through the roof. It would be hard to find more expensive choices. You have paid Lamborghini prices for Fords and Chryslers. That is why you are losing money.

You need to read "The Intelligent Investor," by Benjamin Graham. You are sitting on a lot of risk for the reward you are looking to receive. For example, at the price for FSLR, if all existing shareholders got together and took that amount of money and lumped it together, you could build 27 companies identical to FSLR or one giant company. It isn't reasonable to believe that FSLR is worth that. It is simply too easy to raise money to compete against them, doing the same thing. If that happens, since competition drives out profits, FSLR won't be worth a thing.

BIOF isn't unreasonable, if you believe it is going to survive as a business, that of course is the question.

You should be 100% invested, in something else.

Look at good financial firms and other beaten up firms. Look at what no one wants, low PE, low PB AND low debt.