Stupidity? Getting a loan, buying shares, selling when high

tillathenun

The topic title says it all... I'm thinking of doing something fairly reckless as a way of making money.

I've been dabbling with shares (well, three of them) and I've made £80 over the space of a few months. These shares are due to rocket thanks to the company's product launch soon so, my thought is to get a loan for £10k over a long term, buy shares, then sell when they go up (after three months or so) and obviously pay off the loan at that moment.

Clearly it's risky - I know how volatile the stockmarket is - but I'm 90% positive the shares I have will go through the roof and I should be able to make about £2,000 in three months if everything goes according to my (rough) plan.

Has anyone else done this?

I'm well aware of the risks but feel free to repeat them to me using bullet points where appropriate!

Andy

chickadee

How do you know the shares will go up when the new product is launched? Is this information about the new product launch in the public domain? If not, you could be guilty of insider dealing (i.e. taking advantage of knowledge known only to those within the company)

I wouldn't do it myself.

And if you do, it would be foolish to share that information on here. You don't know who else is reading your post.

Just my thoughts, of course, you can do what you think is best....

tillathenun

Haha, yes, I don't have any insider knowledge about it! It's just I know the product launch will do very well.

Well, I hope so anyway!...

Snooze

The facts are that no-one knows in advance whether it will be a good idea or not, especially as we don't know what the product is.

You're basically gambling a whole pile of cash with no guaranteed outcome.

If you are so sure that it will make you money why are asking for our advice?!

Rob

globalds

Can you handle the risk ?
If things don't go quite as planned ,could you manage to take ,say,a one thousand pound loss or meet the payments for a few more months than you thought .
Risk/opportunity ...Is it worth the gamble ?

Saviola

A friend of mine did this and it did not pan out to well for him. Shares went up but not as high as hoped. Early repayment fees made it a no winner also for him.

Is the risk worth the money gained? 2k in 3 months is not that hard to do, people earn that buy selling stufff on eBay they get from car boots and charity shops. Admittedly its a bit more hard work.

_Andy_

You admit it's risky but you feel you can make good money from it. Not sure what advice you're wanting specifically.

Incisor

tillathenun wrote: »

The topic title says it all... I'm thinking of doing something fairly reckless as a way of making money.

I've been dabbling with shares (well, three of them) and I've made £80 over the space of a few months. These shares are due to rocket thanks to the company's product launch soon so, my thought is to get a loan for £10k over a long term, buy shares, then sell when they go up (after three months or so) and obviously pay off the loan at that moment. ...

So, how do you know this will happen? If you know the company and its business from the inside, you may have to think about whether it is inside trading. If some broker is ringing you to sell these shares, watch out!!!

jonesMUFCforever

You say that you want to borrow £10k to make £2k-£3k profit in about 3 months.

What would happen if you lost the lot - would you be able to pay it back?

I'll guarantee you one thing if you put on your application what you want the money for you will be declined.

tillathenun

Thanks all for your comments!

I don't think I'll be doing it... I'm usually not the kind of person to gamble at all, let alone with such large amounts.

Still, it's always good to provoke some discussion!

Andy

Riq

If you have information about this product and it's not insider trading then the whole market will know.

Therefore the price would include this anticipation of this product launch.