How should I interpret this industry research?
As BobbyScon said in the comments, invest in a company that is developing in that field. Or invest in a company which supplies that field. The people who got rich in the California gold rush were those selling shovels and other miners' supplies. Or bet against whatever you think this will displace. If automobiles are the hot new thing, it might be a bad time to invest in harness leather. Or ... figure out how else it might impact the economy and invest appropriately. But you have to do that evaluation yourself. Or ignore it and stick with your existing strategy, which should have been diversified enough to deliver reasonable results whether this sector takes off or not. Remember that if someone gives you a free tip, they are probably just hoping to pump up the value of their own stock rather than help you.
I am a CFA Charterholder. Sitting for the exams was a great foot in the door for me to the world of investment research. Today, it is the lasting educational experience and development of mental frameworks on how to conduct financial analysis that help me in the field.  There are three exams in the CFA Program; moreover, to earn the CFA Charter, you need four years of financial industry work experience. I found Level II to be the hardest, and Level I the easiest.  Having the CFA Charter or simply stating you are a CFA Candidate sitting for a future exam goes a long way in your career early on. It is a great signaling mechanism for prospective employers as it shows you are committed and willing to put in hours to go above and beyond.  The body of knowledge you learn in the program will tremendously help you in your career as it will teach you the language of finance.  Overall, **it is a rigorous self-study program.** I can not stress the last sentence enough. You will need to be self-disciplined about doing the required reading, and preparing for the exam. [Exam pass rates are ~50%.](https://encrypted.google.com/search?{google:acceptedSuggestion}{google:originalQueryForSuggestions}sourceid=chrome&amp;ie=UTF-8&amp;q=cfa+exam+success+rates). Again, the exam is not hard per-se, you just have to sit down and study. [This man's blog was fun to read while I was studying.](http://luminouslogic.com/path-to-the-cfa)  Happy to answer anymore questions.  Edit: Most financial industry employers will pay for the cost of the exams and study materials. NOTE:  This is my opinion, so please have respect- I am not trying to insult or put down anyone.  I merely want to play the devils advocate and contribute to the dialogue in a constructive manner.  Thanks.   You're better trying to short magazines or the publishing industry.  The reason why the music industry fell was because they were disorganized even before iTunes came around.  The internet has a fantastic distribution system, I agree.  But many of these streaming websites are trying to eat TV and Cable's lunch.   Many of the people who under-estimate TV do not realize the amount of money, talent, research, staff and infrastructure needed to produce top-level high-quality shows and programming.  It is easy to stream a TV show or movie AFTER it's been already produced and broadcast, but do you really think the internet will give us a Mad Men, LOST, Walking Dead, Game of Thrones?  I highly doubt it, and that's a big reason why TV is here to stay.  Yes there is talk of Netflix trying to buy the rights to some shows, but it's only in the initial phase and you can be damn sure that TV/Cable is testing the waters on their part too.  If they decide that the relationship with Netflix isn't working then they are not obligated to work with Netflix.  In this case, Netflix needs TV more than TV needs the Netflix or Hulu.  What makes Netflix/Hulu any more right than a Viacom or Comcast?  You seem to think a future of Netflix and iTunes is utopia, when in reality it would be an oppressive dystopian closed system with NO competition.  At least with TV and Cable, you have networks actively competing with each other- they are literally tripping over themselves working as hard as they can to PLEASE you- the audience.  You talk about how a future without TV is a good thing, but you fail to realize that it would actually be a bad thing for American culture.    People seem to think that sitting in front of the 20inch computer monitors at a table for one is preferable to a 50 inch LCD screen with dolby surround in the den.  I am not surprised because the internet is comprised of people who mainly dwell on the internet, where people who watch TV are probably watching TV right now.    On top of that, many people would lose their jobs.  Just because Apple or Netflix can distribute shows and movies cheap does not mean that many thousands of people should lose their jobs (especially if the majority of America still prefers to watch programming on their TV's and not locked in their room on a small computer screen with the tinny-sounding computer speakers).  This is one of the reasons why we're having an unemployment problem, because these jobs are disappearing by the cold mechanical algorithms of a computer program.  Think of the many thousands of jobs that have been lost in the music industry, don't you think college kids would have loved to start their careers at a record label promoting music and encouraging growth?  Instead we have MP3's and instant gratification, music is arguably dead (read: 90's music).  And if we think a future without TV is utopia, then I have some bad news for you, it isn't.  TV is American, we do it best and we should NOT be turning our backs on it.  Once we do that, we lose our culture.   Who do you think will own the internet in 50 years?  I can tell you it won't be the US of A.  Think very carefully and be careful what you wish for... I can't believe no one has mentioned Detroit yet!   Amazon already pulls a huge percentage of their MBA hires from 40 miles away at the University of Michigan. The state is filled with good schools pumping out smart, qualified STEM, engineering, and computer science majors. We're also surrounded by great schools in Chicago and Pennsylvania.   Detroit has an exploding urban core but also lots of space for new development right downtown. It has a quickly diversifying economy, though the auto industry is still a significant player which is assisting with Detroit's thriving tech sector and driving autonomous vehicle research and development.  Detroit is 20 minutes away from Canada (across a bridge or through a tunnel - and a second bridge is in the process of being built). Depending on how the US emigration policy continues, having access to an international workforce via Canada at a US HQ could be a game changer.  There is a lot that Detroit can offer that is unique to this city. "Yes. There are several downsides to this strategy: You aren't taking into account commissions. If you pay $5 each time you buy or sell a stock, you may greatly reduce or even eliminate any possible gains you would make from trading such small amounts. This next point sounds obvious, but remember that you pay a commission on every trade regardless of profit, so every trade you make that you make at a loss also costs you commissions. Even if you make trades that are profitable more often than not, if you make quite a few trades with small amounts like this, your commissions may eat away all of your profits. Commissions represent a fixed cost, so their effect on your gains decreases proportionally with the amount of money you place at risk in each trade. Since you're in the US, you're required to follow the SEC rules on pattern day trading. From that link, ""FINRA rules define a “pattern day trader” as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six percent of the customer’s total trades in the margin account for that same five business day period."" If you trip this rule, you'll be required to maintain $25,000 in a margin brokerage account. If you can't maintain the balance, your account will be locked. Don't forget about capital gains taxes. Since you're holding these securities for less than a year, your gains will be taxed at your ordinary income tax rates. You can deduct your capital losses too (assuming you don't repurchase the same security within 30 days, because in that case, the wash sale rule prevents you from deducting the loss), but it's important to think about gains and losses in real terms, not nominal terms. The story is different if you make these trades in a tax-sheltered account like an IRA, but the other problems still apply. You're implicitly assuming that the stock's prices are skewed in the positive direction. Remember that you have limit orders placed at the upper and lower bounds of the range, so if the stock price decreases before it increases, your limit order at the lower bound will be triggered and you'll trade at a loss. If you're hoping to make a profit through buying low and selling high, you want a stock that hits its upper bound before hitting the lower bound the majority of the time. Unless you have data analysis (not just your intuition or a pattern you've talked yourself into from looking at a chart) to back this up, you're essentially gambling that more often than not, the stock price will increase before it decreases. It's dangerous to use any strategy that you haven't backtested extensively. Find several months or years of historical data, either intra-day or daily data, depending on the time frame you're using to trade, and simulate your strategy exactly. This helps you determine the potential profitability of your strategy, and it also forces you to decide on a plan for precisely when you want to invest. Do you invest as soon as the stock trades in a range (which algorithms can determine far better than intuition)? It also helps you figure out how to manage your risk and how much loss you're willing to accept. For risk management, using limit orders is a start, but see my point above about positively skewed prices. Limit orders aren't enough. In general, if an active investment strategy seems like a ""no-brainer"" or too good to be true, it's probably not viable. In general, as a retail investor, it's foolish to assume that no one else has thought of your simple active strategy to make easy money. I can promise you that someone has thought of it. Trading firms have quantitative researchers that are paid to think of and implement trading strategies all the time.  If it's viable at any scale, they'll probably already have utilized it and arbitraged away the potential for small traders to make significant gains. Trust me, you're not the first person who thought of using limit orders to make ""easy money"" off volatile stocks. The fact that you're asking here and doing research before implementing this strategy, however, means that you're on the right track. It's always wise to research a strategy extensively before deploying it in the wild. To answer the question in your title, since it could be interpreted a little differently than the body of the question: No, there's nothing wrong with investing in volatile stocks, indexes, etc. I certainly do, and I'm sure many others on this site do as well. It's not the investing that gets you into trouble and costs you a lot of money; it's the rapid buying and selling and attempting to time the market that proves costly, which is what you're doing when you implicitly bet that the distribution of the stock's prices is positively skewed. To address the commission fee problem, assuming a fee of $8 per trade ... and a minimum of $100 profit per sale Commissions aren't your only problem, and counting on $100 profit per sale is a significant assumption. Look at point #4 above. Through your use of limit orders, you're making the implicit assumption that, more often than not, the price will trigger your upper limit order before your lower limit order. Here's a simple example; let's assume you have limit orders placed at +2 and -2 of your purchase price, and that triggering the limit order at +2 earns you $100 profit, while triggering the limit order at -2 incurs a loss of $100. Assume your commission is $5 on each trade.  If your upper limit order is triggered, you earn a profit of 100 - 10 = 90, then set up the same set of limit orders again. If your lower limit order is triggered this time, you incur a loss of 100 + 10 = 110, so your net gain is 90 - 110 = -20. This is a perfect example of why, when taking into account transaction costs, even strategies that at first glance seem profitable mathematically can actually fail.  If you set up the same situation again and incur a loss again (100 + 10 = 110), you're now down -20 - 110 = -130. To make a profit, you need to make two profitable trades, without incurring further losses.  This is why point #4 is so important. Whenever you trade, it's critical to completely understand the risk you're taking and the bet you're actually making, not just the bet you think you're making. Also, according to my ""algorithm"" a sale only takes place once the stock rises by 1 or 2 points; otherwise the stock is held until it does. Does this mean you've removed the lower limit order? If yes, then you expose yourself to downside risk. What if the stock has traded within a range, then suddenly starts declining because of bad earnings reports or systemic risks (to name a few)? If you haven't removed the lower limit order, then point #4 still stands.  However, I never specified that the trades have to be done within the same day.  Let the investor open up 5 brokerage accounts at 5 different firms (for safeguarding against being labeled a ""Pattern Day Trader""). Each account may only hold 1 security at any time, for the span of 1 business week. How do you control how long the security is held? You're using limit orders, which will be triggered when the stock price hits a certain level, regardless of when that happens. Maybe that will happen within a week, or maybe it will happen within the same day. Once again, the bet you're actually making is different from the bet you think you're making. Can you provide some algorithms or methods that do work for generating some extra cash on the side, aside from purchasing S&P 500 type index funds and waiting? When I purchase index funds, it's not to generate extra liquid cash on the side. I don't invest nearly enough to be able to purchase an index fund and earn substantial dividends. I don't want to get into any specific strategies because I'm not in the business of making investment recommendations, and I don't want to start. Furthermore, I don't think explicit investment recommendations are welcome here (unless it's describing why something is a bad idea), and I agree with that policy. I will make a couple of points, however. Understand your goals. Are you investing for retirement or a shorter horizon, e.g. some side income? You seem to know this already, but I include it for future readers.  If a strategy seems too good to be true, it probably is. Educate yourself before designing a strategy. Research fundamental analysis, different types of orders (e.g., so you fully understand that you don't have control over when limit orders are executed), different sectors of the market if that's where your interests lie, etc. Personally, I find some sectors fascinating, so researching them thoroughly allows me to make informed investment decisions as well as learn about something that interests me. Understand your limits. How much money are you willing to risk and possibly lose? Do you have a risk management strategy in place to prevent unexpected losses? What are the costs of the risk management itself? Backtest, backtest, backtest. Ideally your backtesting and simulating should be identical to actual market conditions and incorporate all transaction costs and a wide range of historical data. Get other opinions. Evaluate those opinions with the same critical eye as I and others have evaluated your proposed strategy." I did a brief analysis during my undergrad on the sustainability of Subprime Auto-Loans ...there was definitely a lot more information that I could have included in my research. IMO it'd be a decent topic that would be perfect for a quantitative argument. What do you actually know about their methodology?  Do you have the raw data?  Do you know how they selected the sample?  Did they discover perfect random?  I would guess not. So that probably would mean 100 isnt correct in this context. Not that I doubt this study follows stats best practices perfectly or that the people running a study on employees about a company of a very wealthy individual would be objective/completely without ulterior motive and from some source I dont even actually know the full background of the people who made it but...  I'm non-partisan. I would also just ask, how did that election turn out again with the numerous polls and other research of 1000+, repeatedly at different times over a campaign that seemed to have been like 2+ years long?  Further I dont even know why we are talking about a study of 100 when theres glassdoor with more than 10,000 reviews though it isnt normalized or in an actual study format. The thing to note is that if you compare the types of employees to another tech company like lets say Google/Alphabet or Facebook you have a different distribution in the type of people recruited and that might effect their experience. Amazon does a lot of retail, support and call centers as compared to a lot of engineers with a more educated background. Both are people but theres definitely a difference in the type of person as well as their temperament you get if you go to lets say an urban wal-mart as compared to an Alphabet or Facebook engineer. Have to compare apples to apples and as far as this study goes I dont even know how they like them apples. Don’t you hate this shit? Whenever there’s a business-related or pharmaceutical company article posted on reddit, I try not to read the comments. It’s too frustrating to read all of the comments like the one you responded to. People with no business education or general knowledge of natural economic laws just spewing shit out of their mouths. People with no real understanding of what they’re actually talking about or the real implications of their proposals, but they have an opinion on something that’s been in the news somewhat recently so by god they’re gonna tell you how the fuck it should be! "Ah ok, I can appreciate that. I'm fluent in English and Mr. Graham's command of English can be intimidating (even for me). The edition I have has commentary by Mr. Jason Zweig who effectively rewrites the chapters into simpler English and updates the data (some of the firms listed by Mr. Graham don't exist either due to bankruptcy or due to consolidation). But I digress.  Let's start with the topics you took; they're all very relevant, you'd be surprised, the firm I work for require marketing for certain functions. But not being good at Marketing doesn't block you from a career in Finance. Let's look at the other subjects.  You took high level Maths, as such I think a read through Harry Markowitz's ""Portfolio Selection"" would be beneficial, here's a link to the paper:  https://www.math.ust.hk/~maykwok/courses/ma362/07F/markowitz_JF.pdf  Investopedia also has a good summary:  http://www.investopedia.com/walkthrough/fund-guide/introduction/1/modern-portfolio-theory-mpt.aspx  This is Mr. Markowitz's seminal work; while it's logical to diversify your portfolio (remember the saying ""don't put all your eggs in one basket""), Mr. Markwotiz presented the relationship of return, risk and the effects of diversification via mathematical representation. The concepts presented in this paper are taught at every introductory Finance course at University. Again a run through the actual paper might be intimidating (Lord knows I never read the paper from start to finish, but rather read text books which explained the concepts instead), so if you can find another source which explains the concepts in a way you understand, go for it. I consider this paper to be a foundation for other papers.  Business economics is very important and while it may seem like it has a weak link to Finance at this stage; you have to grasp the concepts. Mr. Michael Porter's ""Five Forces"" is an excellent link between industry structure (introduced in Microeconomics) and profit potential (I work in Private Equity, and you'd be surprised how much I use this framework):  https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy  There's another text I used in University which links the economic concept of utility and investment decision making; unfortunately I can't seem to remember the title. I'm asking my ex-classmates so if they respond I'll directly send you the author/title.  To finish I want to give you some advice; a lot of subjects are intimidating at first, and you might feel like you're not good enough but keep at it. You're not dumber than the next guy, but nothing will come for free. I wasn't good at accounting, I risked failing my first year of University because of it, I ended up passing that year with distinction because I focused (my second highest grade was Accounting). I wasn't good in economics in High School, but it was my best grades in University. I wasn't good in financial mathematics in University but I aced it in the CFA. English is your second language, but you have to remember a lot of your peers (regardless of their command of the language) are being introduced to the new concepts just as you are. Buckle down and you'll find that none of it is impossible."