Investing 102

[GregWeld]

It appears that trying to "game" oil -- by buying the "dips" -- is the best showing of what trying to catch a falling knife looks like. The oil patch is just awash in losses and hemorrhaging. Yesterday Conoco Phillips (COP) cut it's dividend - the first time in 25 YEARS.... which, of course, will cut it's share price. OUCH. This is similar to Kinder Morgan (KMI) which cut it's dividend...

It's just way too early in this MESS to try to figure it all out. Best to just hold if you already have the losses... and WAIT until the oil price gets back to whatever "normal" is. As long as the Saudi's want to continue to kill the market - you don't want to stand in the way of that.

[glassman]

Originally Posted by GregWeld

To use your analogy.... it would be like selling a house you borrowed from your neighbor, for $500,000 and hoping the buyer defaults and you could buy the house back for $400,000 and return it to the neighbor you borrowed it from.

If, in the meantime, the real estate market gets 'hot' - and the house value shoots up to $650,000 and the neighbor is demanding the return of his house - and you have no other option but to go to the buyer and lay $100 bills on the table until the buyer decides to sell back to you.

Sometimes - when a "short" is "obvious" to many... that trade gets "crowded" (using terms in quotes that you'll hear on TV etc) and everyone decides to cover... the stock can shoot up just because everyone has to buy the shares to cover their short positions.

Basically - it's a very risky trade.

Thanx Greg. It makes it more clear (for a cloudy brain)... Between Bryan's and yours i've got a basic understanding of something thats not basic. Cheers.

U going to t-hill in Feb or May? Hows the house coming along?

[GregWeld]

Originally Posted by glassman

Thanx Greg. It makes it more clear (for a cloudy brain)... Between Bryan's and yours i've got a basic understanding of something thats not basic. Cheers.

U going to t-hill in Feb or May? Hows the house coming along?

I'll be there running with NorCal Shelby end of April.

[GEN_X]

Greg, if it wasn't for you saying "the stock will drop after buying" I would be crying right now.

[slow4dr]

Originally Posted by GEN_X

Greg, if it wasn't for you saying "the stock will drop after buying" I would be crying right now.

All I keep thinking is "It can't always be like this". Being a NOOB I am just going back and forth between anxiety and complacency. I am certainly getting a crash course in just about every aspect of the market with the volatility so far this year.


I noticed that The existing CFO of ETE had resigned. The CFO of ETP got moved to CFO of ETE and both of their (and related partners) stocks just tanked. I hadn't bought any yet but I had been watching it.

http://247wallst.com/energy-business...tock-plummets/

I know many of you are also AT&T holders. I found this article a little unsettling. I'll be watching this one closely.

http://www.fool.com/investing/genera...mpaign=article

-J

[GregWeld]

Originally Posted by GEN_X

Greg, if it wasn't for you saying "the stock will drop after buying" I would be crying right now.

Absolutely guaranteed!!!!


And worse.... it will go up 5 minutes after you sell.

Originally Posted by slow4dr

All I keep thinking is "It can't always be like this". Being a NOOB I am just going back and forth between anxiety and complacency. I am certainly getting a crash course in just about every aspect of the market with the volatility so far this year.


I noticed that The existing CFO of ETE had resigned. The CFO of ETP got moved to CFO of ETE and both of their (and related partners) stocks just tanked. I hadn't bought any yet but I had been watching it.

http://247wallst.com/energy-business...tock-plummets/

I know many of you are also AT&T holders. I found this article a little unsettling. I'll be watching this one closely.

http://www.fool.com/investing/genera...mpaign=article

-J

This is a market that is looking for ANY reason to hit the sell button. These happen all the time - usually with ferocity... and they can be vicious. I don't care how long you're in the market - you'll never get used to them. The only thing that will ever help you make sense of it all - is when you don't sell (thereby NOT locking in losses) and the stocks rebound, and you're not only made "whole" you get a gain too.

I had a post earlier that stated that I didn't think sinking oil prices were good for everyone = as the talking heads were all saying the consumer was going to really benefit and spend the excess cash etc. I knew that was BS - because I will guarantee you that I spend more every two months than most people make a year - and the price of gasoline is hardly a big deal. What is a big deal is the billions of losses that INVESTORS have seen - and the companies and towns etc that all depend on this industry.

Here's the thing that I've seen many many times over the years - just as you didn't see any of this coming - you won't be ready for the snap back either... because everyone gets so certain that the market rising is just a sucker hole - so you wait and wait and wait for certainty - and by then - the market has run 20%.... LOL

[ErikLS2]

So I went to Chipotle tonight to get a burrito, same one I almost always go to on Monday night, same time, and there's a line and several people inside eating. There hasn't been either of those in there for weeks, and then they gave me my food for free. The CEO had a tele-conference with ALL the employees today, all the stores were closed until around 3 PM. Hmm, coincidence? I doubt it, I"m betting they're going to bring this company back.

[GregWeld]

Just a reminder for all you investors out there..... As the share price falls - the dividend percentage paid rises.

Don't overlook the opportunity to get higher returns when this stuff all goes on sale.

This is a market that is throwing everything to the wolves. But never forget what a market is. For every seller running with their tail between their legs - there's someone on the other side of that trade putting up real cash to buy. Those 'sold' shares are not just sitting on a shelf somewhere waiting for someone to walk by. They only change hands when someone buys.

Stocks like Exxon Mobile (XOM) are now paying 3.69%... and there's many out there paying 10% just due to the share price decline. Stocks like Facebook (FB) are on sale... Apple (AAPL) is off 21%... their sales are tremendous and that price has them paying a 2.2% dividend yield.

I'm not saying you rush in and spend every nickel you have.... I'm saying you should have your radar up and you should be picking away - either averaging down a little here and there - or picking up solid top notch companies at "reasonable" prices. In other words - if you where buying Apple at $130... why would you be afraid to buy some more at $94? I'll tell you why - because like everyone else - you only want to buy HIGH. Get your heads on right and start to look at the market as being opportunistic. Take your best shots when they're dealt. You'd love it if FAST put their EFI unit on sale 30 or 40% off... You wouldn't be afraid to buy then would you. 'Nuff said.

[Vegas69]

I heard a great quote last week. "I make all my money when the market and people are most pessimistic."

[GregWeld]

Originally Posted by Vegas69

I heard a great quote last week. "I make all my money when the market and people are most pessimistic."

People "HEAR" buy low, sell high... but they really don't understand it.