Calling all speculators: your formula

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As per my other thread. . .and how the topic evolved. . .I am wondering who out there speculates in their investing and what your formula is and what markets/products you speculate in.

For instance, some of you might do 5% of your portfolio on 1-3 stocks. Commodity futures. Options. Etc.

Hopefully there are a few gamblers among the conservative forum out there.

[Slug]

Just as I have a Prosper play account, I also have a 'play' brokerage account. I use it to speculate. I gave it 2k a few years ago, and that's all it gets. There I dabble in options and highly speculative stocks.

Since this is a speculative topic and I know you like alt. energy, my spec pick in this category is ENOC. Not because the company is speculative but b/c the whole alt. energy area feels a little speculative.

Oh, and just like my Prosper account (when I was investing stoopid), I have several big losers that I'm holding.

[sweeps]

I dream about speculating, but never pull the trigger. For example, I wish I would've put some money into my FXP prediction back on 12/11.

Edit: I guess I do some speculation by market timing. When times are bad, I increase my stock contributions. When times are good, I back off and sit on the sidelines for a while. But I don't have a formula for it.

[Broken Arrow]

Well, I kind of answered in the other thread that I mostly don't speculate. However, that doesn't mean I won't do so...

As I have also answered in the other thread, I think it would be OK with speculating if I am extremely confident about certain upcoming trends. It's pretty much what Warren Buffet, Peter Lynch, and what any other good fund managers do anyway... minus their level of prowess. But it's OK, I'm still learning and the risk is mitigated by limiting the amount of money I am willing to expose for active investing....

Personally, I'd rather attack other avenues-- such as diversification-- to realize better gains.

[jIM_Ohio]

As per my other thread. . .and how the topic involved. . .I am wondering who out there speculates in their investing and what your formula is and what markets/products you speculate in.

For instance, some of you might do 5% of your portfolio on 1-3 stocks. Commodity futures. Options. Etc.

Hopefully there are a few gamblers among the conservative forum out there.

I think the reward needs to be considered before taking the risk.

If you put $30k into alternative energy, how much money would you want to make in that investment this year? $3k? That is a 10% return. $6k? That is a 20% return.

Can you make the same 3k by investing in something else, like silver? Which do you think has more risk to it?

I would make an investment in something speculative when comparing it to the risks taken in other positions of overall financial plan.

I do not think a percentage can be attached to it. I do not think putting 5% into a stock makes sense. Could a person then put 5% into 20 different stocks and not be taking as much risk as investing in just one stock with 5%?

The whole needs to evaluated before analyzing the parts. I might suggest that 5% be allocated to stocks, with 20 stocks in that 5% position, for example. You could buy just one stock, but would it really change your performance much?

Thatb being said, my 401k has 5% in my employers stock and my wife's has 5% in her company stock. So I don't always take my own advice either.

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JimOhio,

Good point. . .as per the answer on my other thread, that's why I think options and futures are appropriate for speculation - you get the power of leverage. The downside risk is total loss is very real.