Investing 102

[Woody]

Hi Woody. I never meant this to be Bitcoin vs Stocks or anything. Like Greg said, Bitcoin is a digital currency. Just like the dollar, its backed by nothing more the the people who use its. The main difference is that Bitcoin can not be artificially distorted by central banking manipulation. It's a peer to peer, open source user driven system. I knew about them and was very skeptical when they were $1 each. When I brought them up here, they were $70. Today they are busting out at $104. This is a direct result of the outright theft that has occurred to the people of Cyprus having their money outright stolen from the Banks they kept their money in. All of EU is debt to the same bankers. Bitcoin at $103 today is still a GREAT deal, I believe, as this mess is only going to get worse in the EU, and people are looking for other options.

As far as Bitcoin being something for "fun" I would agree! But its very real. It valued at more that alot of sovereign currencies are! It's total value topped $1 billion and soon could rival the dollar and euro. And you can always exchange back into dollars at any time just like any other currency. Of course to dive in you need to be tech savy and that right there turns a lot away, or scares them. But we all know the role technology is playing in this future.

As for stocks, the people I listened to seen it coming. I sold my home right before the bust. Because I listened to all the people the "stock" shows were calling "Crazy"... I listen to the guys who proved themselves right by calling out where these bubbles are. They are saying the same thing about the stock market.. it's very much an illusion that's being propped up. We are simply on bought time at this point.

Greg you should just go for some Bitcoin... Get in and out, now is the time... then kick yourself later for now staying in!

Tony,

I am showing my ignorance about bitcoin because I never did any research before posting. You were discussing in an earlier post how bitcoin moved up from a few cents to $70+ so I was just assuming it was a stock. Just for my knowledge how is bitcoin traded? I know it is not a currency future. Does it trade on an exchange?

I have nothing against speculation as I have done my fair share of speculating in the futures and options markets, but when you were discussing the stock market being risky, it appeared to me that you were comparing bitcoin to be on the same risk scale as the stocks we have been discussing in this thread.

I don't disagree that the stock market is a little scary to invest in after it has run up so much. However, I do not believe in the doom and gloom predictions some are making now. I have seen too many of these guys make claims that they called the top before. In reality, they called the top 2000 points ago and have been wrong for a long time. When the market finally does correct, and it will, they will say that they were right and called the top, but they won't tell you that they have been calling for a top for the last year all the while the market kept going higher. It like the saying "a broken clock is right twice a day".

The other thing I have learned is that sometimes, some of these so-called gurus actually make a pretty good prediction and hit the timing right. Then everyone thinks that this guru knows everything and follows every word they say. The problem is, they are usually never right again.

Just my opinions, not trying to start an argument. I have been pretty silent for a while and thought I might like to be a bit more involved in the discussions for the time being.

[GregWeld]

I was fooling around in my Schwab account this morning - just kind of reviewing the quarter that just finished (January / February / March) and compared some of the names I own in this account vs the Benchmark S&P 500

We always are talking about "investing" vs trading vs gambling etc -- so I find real actual numbers to do the talking vs the "I think" kind of statements...


Large Company - Benchmark S&P 500 46.21%



AT&T (T) has a 3 year cumulative return of 71.75%


Altria (MO) " " " " 98.93%


American International Group (AIG) " 84.76%


Consolidated Edison (ED) " " 57.79%


Kinder Morgan Partners (KMP) " 62.77%



Small Company uses the Russell 2000 Benchmark -- 50.94%



National Retail Partners (NNN) " 92.61%


StoneMor Partners LP (STON) " 69.36%


There's a few more in my personal account - but you get the drift.... it's too much typing to do them all... and by the way NONE of these are recommendations for anyone to own - they're just examples from my own account. If you have a Schwab account you can find this info for your own stocks and might find it interesting to see how you're doing versus a benchmark.

This is THREE STINKING YEARS.... and while none have actually doubled a couple are close. So beating a dead horse.... do you really need to gamble to make a few bucks? Will these numbers "hold" going forward? Who knows....
Have we had an extraordinary run since 2008.... Yeah... but we also went down "too much" so we have to average back up. Over the longer terms - we want good steady averages - and we shouldn't get caught up in the bumps and lumps along the way.

[Tony_SS]

Tony --- I've been IN the stock market and other investments for some 30 odd years now. I've been up and I've been down... but mostly I've been retired since I was 41 (I'll be 60 this summer) and I live a pretty nice lifestyle. I think I'll just keep doing what I'm doing. :thumbsup:

Brawk, brawk. :lol: :poke:

$108 today! :rules: (we will see $110 here soon)

Tony,

I am showing my ignorance about bitcoin because I never did any research before posting. You were discussing in an earlier post how bitcoin moved up from a few cents to $70+ so I was just assuming it was a stock. Just for my knowledge how is bitcoin traded? I know it is not a currency future. Does it trade on an exchange?

It trades between individuals. There are miners (using software to "create" bitcoins, and there are buyers and traders. So someone like you or me are better off just buying them. Later you can sell them off, cash them out, or just keep them. They are literally a virtual currency. It's value comes from miners and people buying them (available). The interesting thing is, they can not be inflated. There is only a fix amount 21 million. So once they're gone, that would be it. Scarcity is built in, unlike the dollar/euro, where that is created by central banking and diluted.

I have nothing against speculation as I have done my fair share of speculating in the futures and options markets, but when you were discussing the stock market being risky, it appeared to me that you were comparing bitcoin to be on the same risk scale as the stocks we have been discussing in this thread.

I didn't really want to compare one between the other.. they are different, both hold pros and cons, both hold risks.

I don't disagree that the stock market is a little scary to invest in after it has run up so much. However, I do not believe in the doom and gloom predictions some are making now. I have seen too many of these guys make claims that they called the top before. In reality, they called the top 2000 points ago and have been wrong for a long time. When the market finally does correct, and it will, they will say that they were right and called the top, but they won't tell you that they have been calling for a top for the last year all the while the market kept going higher. It like the saying "a broken clock is right twice a day".

The other thing I have learned is that sometimes, some of these so-called gurus actually make a pretty good prediction and hit the timing right. Then everyone thinks that this guru knows everything and follows every word they say. The problem is, they are usually never right again.

Just my opinions, not trying to start an argument. I have been pretty silent for a while and thought I might like to be a bit more involved in the discussions for the time being.

I've been listening to guys like Tom Woods, Peter Schiff, Ron Paul. These guys arent "stock" market guys really. Peter Schiff owns Euro Pacific Capital, but they are more Austrian economists who study monetary policy, and how markets react to that. All of them predicted the housing bubble and are giving us warnings about the dollar/euro. Their view is that you can't have this artifiical growth, create this massive bubble and have that correct the economy. Sort of like spending money to get out of debt, it doesn't work. So they think the dollar is being diluted, the market is being pumped up once again, the growth is an unsustainable, unnatural bubble that will pop once again. I happen to agree with that. There are a lot of countries getting out of the dollar. Because of all that, I think its wise to diversify in other things like Bitcoin, holding precious metals, property, etc. Just my .0002 bitcoins.

[Tony_SS]

Here's an article today from Peter Schiff about the market situation

Flying High on Borrowed Wings
http://lewrockwell.com/schiff/schiff214.html

And for anyone who's never heard of him, here's a classic video mash up of him telling the future, not many were listening.

2I0QN-FYkpw

[CarlC]

I should of, would of, could have taken better care of myself....Spilled Milk.:snapout:

So you younger Guys follow the Health thread and take good care of yourself...Otherwise the money you Save and Invest will get eaten up later by Hospitals and Doctors...

MIke

Words beyond wisdom. Money won't buy you health. Steve Jobs can attest to that.

Part of financial planning should be the "what if's" of future health costs. My father's passing was a real eye-opener for me in that his sudden departure was in many ways a blessing. He left life on his own terms and it did not have to destroy his estate to pay for in-home or nursing care (I didn't care if he died broke, but HE did.)

There are no easy or inexpensive options here. In the long run, if one wants to protect their assests and pass them on to their children the the best thing to do is talk to a tax and financial professional/lawyer and start planning now. There are timeline rules for what can, and cannot, be done for asset protection.

[Bucketlist2012]

Words beyond wisdom. Money won't buy you health. Steve Jobs can attest to that.

Part of financial planning should be the "what if's" of future health costs. My father's passing was a real eye-opener for me in that his sudden departure was in many ways a blessing. He left life on his own terms and it did not have to destroy his estate to pay for in-home or nursing care (I didn't care if he died broke, but HE did.)

There are no easy or inexpensive options here. In the long run, if one wants to protect their assests and pass them on to their children the the best thing to do is talk to a tax and financial professional/lawyer and start planning now. There are timeline rules for what can, and cannot, be done for asset protection.

Carl...

I was 50 years old 3 years ago when suddenly I was on my Death bed and NO Will or Trust.:sieg: :lostmarbles:

My Wife called a Trust attorney and his Notary and he drove through heavy traffic at 400.00 an Hour plus the Notary wages, to rush to my Deathbed to notarize a Will and Trust at the last moment..

I did pull through and I am fighting hard, But I almost left my family at the hands of our thieving Government...:disgusted:

PLEASE, EVERYONE...No matter what your age, prepare and set up a Trust and Will and Advanced Health Directive for you and your Loved ones...

When something goes wrong, it happens fast and unexpectedly...

Investing does no good if the Government is just going to take it and leave your Family without your hard earned money..:G-Dub:

[realcoray]

Here's an alternative I've started to do lately in addition to my retirement stocks.

Peer to peer lending via Prosper.com or LendingClub.com. Essentially you are buying notes for unsecured loans, in tiny slices.

I used prosper in the past and was less than pleased but with lending club it's been great minus one thing, how long it takes from the point where I put up money, until the note is issued. It is decidedly not an invest and forget endeavor.

Anyways, the idea is that people want to borrow money, to do things like consolidate other loans like high interest credit card debt, home improvement, small business loans etc. These are the types of loans you could get at a bank, but eliminating the bank means that people can borrow at a lower interest rate.

Other people, have money and want to earn a return. You can invest as little as 25$ per loan and the company in between services the loan and you collect the interest (minus fees).

In the case of lending club, the interest rates are between 6 and 25% based of course on the risk that the person who receives the loan will default. They have plenty of information to convey the risk, including their own scoring system, the persons FICO, various credit history details (how many late payments etc), their debt to income ratio, and so forth. They also have an area where the person can describe what they are using it for, but it's generally not ideal to let emotion control who gets your money.

The key thing here is that you need to diversify here just the same as anything else, by both investing in enough notes and spreading out your risk profile. The more notes you have, the less impact an individual note defaulting has on the overall portfolio.

The other big thing is that it is a loan, so the payments you receive each month, are principal + interest. Similar to dividend re-investing, but more importantly you have to re-invest these, since you get principal back.

The pros here are:

High interest rates - my blended rate is 10%, but you can go riskier and get 12-15%
Easy to use and manage
Lending club seems on top of rejecting shady applications, they say they accept only 10% of applications, and then they do more checking once a loan is funded.

The cons are:

Long delays to fund loans - Two weeks for me to fund 80% of the loans I have tried.

Lots of maintenance. If you had the suggested 20k+ invested, you'd have to re-invest in 20+ new notes every month, which generally involves checking every few days to see what has funded or not.

The tax issues are more complicated than most although they have streamlined the reporting they give you in terms of the interest you received, defaults etc.

Not very liquid. You can sell your notes, but it takes time to do so.

[WSSix]

If I had more money, I'd do this I think. I believe in helping people and if one of the ways I could do that was to lend someone money, I'd consider it. However, I'd only be willing to put up money I could lose and not see again without hurting myself. While I'm not really a fan of big banks, they have their lending criteria for a reason.

[GregWeld]

Remember that INTEREST is taxed as INCOME.... and you're adding to your income -- so let's say that you make a $1500 a week... at your regular job...and have withholding at the appropriate tax rate. Now a year goes by and you've added 20 grand in INTEREST INCOME. So be careful of 'bracket jumping' your income!

That's why dividends are so popular - they're not added to your income... and are taxed at a fixed rate of 20%...


72,500 is the top at 15%... make 72,501 and you're now paying 25% on that last dollar earned.

In most states there is also a STATE income tax.... so you've got to factor that in as well.

I'm not arguing against doing this kind of diversification etc... What I'm pointing out to ALL that read - is that don't forget that income taxes play a HUGE roll in your overall investing strategy! Don't overlook them! They will and do, affect your net return.

[realcoray]

Remember that INTEREST is taxed as INCOME.... and you're adding to your income -- so let's say that you make a $1500 a week... at your regular job...and have withholding at the appropriate tax rate. Now a year goes by and you've added 20 grand in INTEREST INCOME. So be careful of 'bracket jumping' your income!

That's why dividends are so popular - they're not added to your income... and are taxed at a fixed rate of 20%...


72,500 is the top at 15%... make 72,501 and you're now paying 25% on that last dollar earned.

In most states there is also a STATE income tax.... so you've got to factor that in as well.

I'm not arguing against doing this kind of diversification etc... What I'm pointing out to ALL that read - is that don't forget that income taxes play a HUGE roll in your overall investing strategy! Don't overlook them! They will and do, affect your net return.

Indeed, the tax side of things is complex but they do have IRA accounts which avoid that.

They also say you shouldn't have more than 10% of your money in this sort of thing because I imagine if there was another recession the defaults probably go up.

[toy71camaro]

I thought this was a good read today...

what do to about the doom and gloom of the impending "correction"... basically? not a whole lot for us long term dividend investors. :) LINK (http://seekingalpha.com/article/1316751-what-do-you-need-to-do-before-the-next-market-meltdown)

[Tony_SS]

I thought this was a good read today...

what do to about the doom and gloom of the impending "correction"... basically? not a whole lot for us long term dividend investors. :) LINK (http://seekingalpha.com/article/1316751-what-do-you-need-to-do-before-the-next-market-meltdown)

I want to read that 2nd page w/o signing up on that site. :)

[Rybar]

Greg, what is your opinion on this article saying TNH is entering oversold territory.

http://www.forbes.com/sites/dividendchannel/2013/04/02/top-ranked-dividend-stock-tnh-enters-oversold-territory/

I have been looking to buy more of this stock and see this as an opportunity for a "sale price" but this article makes me weary as this sort of thing happened with BPT and that one dropped quite quickly after that.

[toy71camaro]

I want to read that 2nd page w/o signing up on that site. :)

Just sign up. its free. you can opt in/out of any email (I have it send me my daily portfolio updates). It has a lot of good info on there.

[WSSix]

anyone catch the Tommy Boy reference on that seeking alpha link? :lol:

[toy71camaro]

anyone catch the Tommy Boy reference on that seeking alpha link? :lol:

His callahan auto parts image? LOL yeah, i noticed that.

[GregWeld]

Greg, what is your opinion on this article saying TNH is entering oversold territory.

http://www.forbes.com/sites/dividendchannel/2013/04/02/top-ranked-dividend-stock-tnh-enters-oversold-territory/

I have been looking to buy more of this stock and see this as an opportunity for a "sale price" but this article makes me weary as this sort of thing happened with BPT and that one dropped quite quickly after that.




Sent you a PM --- I'm not sure I'd add to a current position.... unless you really need to average down. We're headed into summer -- and everyone knows summer is the time to buy -- but not sell stocks. With the run up we've had this year - this summer could take a pretty good dip and then it would be really "on sale". If not - no biggie.

With the economy seeming to be on the mend -- you need to be very careful with chasing "yield".... as interest rates rise -- stock prices will take a dip... Of course when, how much.... blah blah blah... We're in one of those periods where we're not sure what is coming -- better economy which will help stocks -- but if the economy is too good - we get a rising rate environment....

[Tony_SS]

A few pages back I was crowing about Bitcoin at $70 each. Many friends of mine screamed "bubble!!!" at that price and ran away... not me. :) Right now the price is $190.00 / bitcoin. :confused59:

The question remains, is it an exploding market searching for its true value? Or is it a gigantic bubble?

Personally, I still think this is a good price. Markets are emerging, companies are creating ATMs for Bitcoin and we will see its use streamlined and mainstreamed. I think the opening door to get in is closing fast though. But I could be wrong, millions of users could decide to sell at once or have security breach at an exchange to drop the value. If that happens, I'm buying!

[GregWeld]

This morning I was reminded of something that is somewhat important... especially in this thread.


AT&T (T) will trade today "EX" dividend -- meaning - that if you owned the stock PRIOR to today - you'll get this quarters dividend payment. That isn't very important actually except that you might see T trade down the equivalent .45 cents per share - on what otherwise might me an up day for the market. This is perfectly normal - do not adjust your television set... LOL


What I picked up on though -- which I know and understand -- is that as the stock price has RISEN -- that wonderful dividend % payout has decreased on a percentage basis. I pulled up my spreadsheet to see that T is paying me 6.22% on my cost basis... but if you bought Friday -- you'd only (only?) be getting 4.75% -------- this is the same .45 per share but your cost basis would be higher.

WHY IS THIS IMPORTANT YOU ASK.... <like the old Romper Room -- I can hear you through my computer>

Well it's important IF --- big IF --- and WHEN --- big WHEN --- interest rates start to rise. As an investor -- and we're really talking big sum investors here -- but they're the ones that move the markets.... you're always doing the math on where you can earn money NET NET. So when and if treasuries etc start to rise --- and a guy could earn 4% tax free vs T's 4.75% taxable well... share prices will FALL because money will move out of T and into the other comparable investment.

WHAT I'M SAYING here is not that this is going to happen this week - or this year or even this decade..... what I'm saying here is to learn and pay attention to these market relationships! EVERYTHING is based on interest rates... WE have zero control of this but we can, do, and should, pay attention to them!

While we want our share price growth AND we want our dividend.... the share price only grows when someone is willing to pay more per share than we did/were. But the dividend percentage falls as the price grows.... at some point this math catches up to OTHER interest bearing investments... and the price will have to be adjusted to make it all "work".

What I look at is % return on my money. I live off my investments and their cash flow. I try to be somewhat tax adverse... so I trade VERY little.... I call up the old spreadsheet and think 6.22% (with 20% tax rate) is pretty decent and the company is solid as hell -- and well run. So I'm a happy camper.

Interest rates - in the environment the world is in right now - move pretty slowly. Don't fight the FED is an old saying that usually holds true... so as long as the FED is working hard to keep interest rates LOW.... the stock market is pretty good! But if the FED starts to allow those rates to rise... then just beware - and learn from - what happens to housing - the stock market - auto sales etc.

PLEASE do not read anything into this post other than exactly what I'm saying -- it's just a reminder for Investing 102 -- so that you don't forget about all the little things that affect the stock market. EARNINGS are the most important -- if they're good or growing -- we're golden.... and INTEREST RATES being low are good! There will be a point going forward that earnings are good and interest rates are low because the economy is good... once it gets TOO GOOD... then rates will creep up. We have no clue when that's going to be. We don't have to take any action... just understand the relationship.

[Sieg]

Thank you :thumbsup:

[Woody]

A few pages back I was crowing about Bitcoin at $70 each. Many friends of mine screamed "bubble!!!" at that price and ran away... not me. :) Right now the price is $190.00 / bitcoin. :confused59:

The question remains, is it an exploding market searching for its true value? Or is it a gigantic bubble?

Personally, I still think this is a good price. Markets are emerging, companies are creating ATMs for Bitcoin and we will see its use streamlined and mainstreamed. I think the opening door to get in is closing fast though. But I could be wrong, millions of users could decide to sell at once or have security breach at an exchange to drop the value. If that happens, I'm buying!

Tony, speaking security breaches, did you see this.

http://rt.com/news/bitcoin-currency-cyber-attack-394/

[GregWeld]

All people really need to understand about stuff like this is that it's the difference between INVESTING -- and GAMBLING.... Some people gamble and hit HUGE winnings... others just drip their money away every week buying "stuff" hoping they're going to be winners.

I'd prefer to actually invest.... and I'm the kind of guy that could actually afford to gamble. I just can't be bothered. I don't even buy lottery tickets or Mega power whatever they ares... Bitcoins fit this category... it's just gambling. You're just gambling that someone is going to pay more than you paid... because you're not buying anything more than that. You're just buying something and hoping like hell that someone else will pay more than you did... thus making you have a "gain". As long as someone else is around - great... things go fine. But what you're really buying is nothing more than a fart in a windstorm.

My wife and and argue all the time about spending money... we don't actually argue about spending money -- we just see value in different kinds of spending money. She would spend - and does in fact spend - huge sums traveling... and on clothing... To which my way of thinking is that you might as well walk outside and toss the money in the street... I prefer to buy STUFF... real stuff... that if I want to I can sell at some point and get "some" of my money back. We discuss it this way.... Even if I ONLY get 50% of my cost back -- I have something -- where as there is ZERO return EVER on a trip... other than the memory. I get the memory part out of owning my stuff AND I get something back...

We just agree to see things differently... she goes places... I buy stuff....

I feel this way about INVESTING in stocks... sometimes I sell for lower than I paid.... I accept this fact. I can not pick 10 stocks and have all 10 go up and stay there. But I try my best to understand enough about what I'm buying to try to minimize my losses. I can not understand ANYTHING about Bitcoin except that it appears to be a frenzy and that there's enough people out there that are willing to play. It reminds me of the Dot Bomb era... or the house flipping era... Some people made millions... most of the people lost their shirts. I like walking around with my shirt on. :D

[Tony_SS]

Tony, speaking security breaches, did you see this.

http://rt.com/news/bitcoin-currency-cyber-attack-394/

Yes I did, but those don't concern me. Targeting one exchange has pushed the price down for a minute then it pops right back up. They are trying to shake user confidence since they can't "steal" anything or disable any system.

And instawallet isn't very secure, so I wouldnt use it in the first place, but your wallet is backed up on your computer or usb flash drive (or so it should be) so if where you park your wallet gets breached, then it is still safe, as far as I know.

I use blockchain.info. That's said to be one of the best, encryption there is said to be excellent, you can control the amount of security on your wallet too. It has some nice features.

[Woody]

All people really need to understand about stuff like this is that it's the difference between INVESTING -- and GAMBLING.... Some people gamble and hit HUGE winnings... others just drip their money away every week buying "stuff" hoping they're going to be winners.

I'd prefer to actually invest.... and I'm the kind of guy that could actually afford to gamble. I just can't be bothered. I don't even buy lottery tickets or Mega power whatever they ares... Bitcoins fit this category... it's just gambling. You're just gambling that someone is going to pay more than you paid... because you're not buying anything more than that. You're just buying something and hoping like hell that someone else will pay more than you did... thus making you have a "gain". As long as someone else is around - great... things go fine. But what you're really buying is nothing more than a fart in a windstorm.

My wife and and argue all the time about spending money... we don't actually argue about spending money -- we just see value in different kinds of spending money. She would spend - and does in fact spend - huge sums traveling... and on clothing... To which my way of thinking is that you might as well walk outside and toss the money in the street... I prefer to buy STUFF... real stuff... that if I want to I can sell at some point and get "some" of my money back. We discuss it this way.... Even if I ONLY get 50% of my cost back -- I have something -- where as there is ZERO return EVER on a trip... other than the memory. I get the memory part out of owning my stuff AND I get something back...

We just agree to see things differently... she goes places... I buy stuff....

I feel this way about INVESTING in stocks... sometimes I sell for lower than I paid.... I accept this fact. I can not pick 10 stocks and have all 10 go up and stay there. But I try my best to understand enough about what I'm buying to try to minimize my losses. I can not understand ANYTHING about Bitcoin except that it appears to be a frenzy and that there's enough people out there that are willing to play. It reminds me of the Dot Bomb era... or the house flipping era... Some people made millions... most of the people lost their shirts. I like walking around with my shirt on. :D

Greg I could not agree more. I am with you on every point you made.

By the way thanks for keeping us up to date on the interest rate issues. I watch the 10-year note rate every day. As we moved above 2.0% I was beginning to think we were at the point where rates were going higher. They sure retreated quickly though in the last week.

[Tony_SS]

All people really need to understand...[snip]

It's investing in an alternate currency, one that is user controlled and freely exchanged without "interest, fee's, taxes" etc that banks and govts make money off of. So people are investing or buying into using that currency. Yes some are speculating making money, but that's all part of it. Judging by the price we have more people buying into this than cashing out.

I'm not naive though, bitcoin is in direct competition with the dollar. I know how central banking works, and I can bet you that they are buying in as well. They can do that since they print up the electronic dollars willy nilly. They will sell all at once, the price will crash and they will try to set off a panic. That's all they can do against bitcoin.

I agree with you on spending. But do you think your "dollars" in the bank are really there? Ask the people of Cyprus what happened to their Euros. And stocks are just paper that can become 'farts in the wind' as well. Some things have more risk than others. Bitcoin has a ton of it, there's no denying that. But understand that there are a LOT of people who despise having their dollars slowly devalued through inflation, robed of the purchasing power and savings, having their Euro's stolen and so on. So Bitcoin is a direct free market response to that.

I think you should always invest in what you are knowledgeable about and what you believe in. Succeed or fail, I think a free market should be in control of their currency and completely own it free of any other intervention. That's why I'm supporting it. Heck yeah it's high risk, and there's a good chance it's a bubble and will pop for now... but I'll risk what I can loose. :) Whatever happens remains to be seen, but it sure is fun watching so far. :popcorn2:

Should I have diverse investments based on advice given here? Absolutely. I not knocking any other investments, just bringing this one up for discussion.

[GregWeld]

Heck yeah it's high risk, and there's a good chance it's a bubble and will pop for now... but I'll risk what I can loose. :) Whatever happens remains to be seen, but it sure is fun watching so far.




Ya know -- the people around me that thought flipping houses was fun too.... right up until they lost their ass and moved into an apartment. Then their refrain is --- "I should have seen it coming".


Personally - I don't care what anyone invests in -- or does with their money... but this is INVESTING 102 and people need to understand there is investing and there is gambling. I think Bitcoin is gambling. Since your currency really can't be used to buy very much... you can't take them or transfer them to a real bank account and go buy a car... or food... (you'll no doubt argue that you can, in fact, buy these things -- but I'll argue that even if you could - it would be difficult at best)... so the real intrigue with this "currency" is trading it and watching (hopefully) it go up. Whether it's a bubble or not won't be known - so I wouldn't speculate on whether it is or not. What I'm saying is that things that have no intrinsic value other than someone pays more for it - tend to have very bad outcomes.

It may be that Bitcoin becomes so wildly owned that everyone will take them as payment for anything --- in other words -- just like a US dollar.... It really doesn't matter to me whether the dollar is in fact nothing more than a printed piece of paper... what matters is that if I have enough of them I can buy goods and services and that ANYONE will take my money. That's all that really needs to happen. End of story. Perhaps Bitcoin makes it to that point.

My Grandfather - who lived in Carson City, Nevada for 50 years - used to point out that "most people" are, at some point, perhaps 10% ahead at some point in their gambling while in a casino... and that most people would be happy with a 10% return on their money ANNUALLY... yet these people are up 10% in an hour or two, or day or two.... yet most gamble until they've spent whatever it was they brought to gamble with. He also pointed out that they didn't build those big casinos with the money they earned from the winners.... but I'm sure the losers had a great time. They're still losers.

[GregWeld]

See -- Tony -- I don't know that you actually get what I'm trying to say about Bitcoin.

Here it is in a nutshell...


Bitcoin (whomever or whatever that is) didn't come out a month ago and make an announcement that their currency is now accepted at Bank of America... or at Wal Mart... Nor did they come out and say they've just backed the currency by purchasing half a gazilion dollars of Titanium (or gold or silver)... YET! The price has quadrupled. For no apparent reason than what? Because there are more and more people such as yourself buying into it? Or was there some government that said Hey! We're dropping out of the Eurozone and we're now using Bitcoin as our domestic currency.

None of that happened.

The only "news" is that the meteoric price of a new digital currency had gone bananas.... drawing in more people to play... thus pushing the price up. That's it. Nothing more.

A guy buys 1,000 dollars worth --- next thing you know it's "worth" 3,000 dollars so he buy another 2,000 worth... and that doubles -- so now he's got 10,000 dollars worth.... and he's telling everyone he knows about all the money he's made.

You know when I quit day trading Intel - Microsoft and Dell? When I'd go to the grocery store and the clerks were telling me how much they made day trading "dot whatever". You know why I didn't flip houses with a couple buddies of mine? Because my SON was convinced that he could do it and make zillions in just a matter of weeks.

You know why I just spent a tidy sum rebuilding my Sister and brother in laws Camaro? Because they bet the farm - including money they didn't have by signing as guarantors on notes for my nephew to buy and flip houses. The first couple times went pretty good.... and now they rent a house.

[sik68]

Anyone remember Itex? My parents exchanged on it for a while, then the bottom fell out on that. They were saving their Itex dollars to buy a swimming pool for us kids. 6 months go by and they call the pool company to place the order, and the pool company quoted them 3x the price in Itex as before. I don't remember the exact devaluation; I just remember being sad I didn't get a swimming pool. Another summer on crabgrass running through the sprinklers, thinking "I'm getting too old for sprinklers."

:(

For the kids Tony, be safe and limit your potential downside!

[GregWeld]

Anyone remember Itex? My parents exchanged on it for a while, then the bottom fell out on that. They were saving their Itex dollars to buy a swimming pool for us kids. 6 months go by and they call the pool company to place the order, and the pool company quoted them 3x the price in Itex as before. I don't remember the exact devaluation; I just remember being sad I didn't get a swimming pool. Another summer on crabgrass running through the sprinklers, thinking "I'm getting too old for sprinklers."

:(

For the kids Tony, be safe and limit your potential downside!




Here Steven --- You can come up and paddle around in mine.... :action-smiley-027:










http://i919.photobucket.com/albums/ad33/gregweld/Pool%20pics/DSC_7858.jpg

[Tony_SS]

Hate ya for that pool!!!

The price has quadrupled. For no apparent reason than what? Because there are more and more people such as yourself buying into it?

Greg I hear what you're saying but let me explain why the price has gone up. After the Cyprus banks were on lock down just long enough for the govt and banks to physically steal the savings right out of the accounts, this set of a panic. Bitcoin started to climb. Spain, Italy, Slovenia, many countries in the EU are in bad shape and folks started to buy into the currency. They way it is set up, is that the price only goes up is when people buy more coins, making them more scarce. The program only produces 21 million 'coins'. Nothing else is manipulating the price. That to me is what is amazing about it. Also, you can exchange back into dollars at any time and buy that car, house, etc, just like any other currency.

Now, having said that, I'm not here to entirely toot its horn. I read this great article (http://www.naturalnews.com/039830_bitcoin_bubble_crash.html) and I agree with it. Asian markets are buying into it now, not with the intentions of supporting a new currency, but with to flip based on speculation. I would say 90% chance we are seeing central banks/asian markets run this price up. For that reason I'm cautious. So far is has proven to be legitimate tool for peer to peer trade, its just super volatile right now. Time will reveal its value. Right now it's $207. Mathematically one Bitcoin could be worth $1 million. Will governments shut it down somehow? (although that's virtually impossible, they have to turn off the internet) What makes it interesting is that this is all based on human psychology as nothing else whatsoever is manipulating the price. So, how long is a rope?

http://www.naturalnews.com/039830_bitcoin_bubble_crash.html

[GregWeld]

A decent article this morning on Seeking Alpha --



http://seekingalpha.com/article/1330911-top-notch-long-term-dividend-growers?source=email_investing_income&ifp=0




which brings up a couple things for me...


#1 -- I read stuff like this just to learn something/anything.... WE don't operate in a vacuum.. and I'm constantly trying to learn and listen to someone else's perspective on the world.

#2 -- Usually the writer has an agenda.... which I try to ignore - opting instead to search for the little nugget I might glean from the "larger picture" in the piece.


This article attracted me because it's discussing TOTAL RETURN --- a couple words you've heard here more than once. :rolleyes: :hello:

Early and throughout this thread we've discussed the trade offs of high dividend vs share price - and that we should try to blend (diversify) using some higher yields but to be more mindful of that longer term Total Return. That's how you grow rich.

In real estate -- you might trade off a monthly negative cash flow -- for the longer term price appreciation of the property - coupled with the current tax benefits (write offs etc) that you get.

In stocks -- we want to get paid while we wait -- using the dividend to constantly and automatically "average in" -- but also getting the price appreciation. For me --- most people lack another important factor in the selection process... which is -- feeling confident in owning the stock through good markets and bad. Most people SELL in a down market -- and thus loose money -- because they lack the confidence to hold --- or better yet -- to buy more! So to me that's a really really critical component to ownership!

+++++++++


Which brings me to this post and it's beginning ----- I went through the list this writer uses -- and to me -- the problem with it is --- I don't recognize most of the names! And while it might prove to be (in hindsight) a really good list of stock performance based on his criteria.... I'd dare to say that in a down market -- any of us would have the confidence to hold these let alone add to our positions. To me this is the big mistake "newbs" make. They just can't hold when they should.


++++++++++


So the article is good because it discusses "total return".... I just discount the details of the actual picks. I know this was a long winded way to say that - but it's just how my mind works. I just write what I'm thinking. Thank god I type as fast as I think!


:RunninDog:

[toy71camaro]

where's the link!? lol

[GregWeld]

where's the link!? lol




PICKY PICKY PICKY!!!





http://seekingalpha.com/article/1330911-top-notch-long-term-dividend-growers?source=email_investing_income&ifp=0

[toy71camaro]

HAHA...

That was a good read. If anything, it also gave me some suggestions on what to help use to "screen" for possible purchases in the future.

I "clipped" it to Evernote for future reference. :)

[96z28ss]

Well I entered the market. I took some money I had in a 401k and rolled it over to a self directed IRA. Just incase you were wondering thats why the market is down today! LOL

04-09-2012, 09:36 AM
I entered the Market and posted here on that date and time. On page 129.
Taking what Greg has preached on this thread. INVESTING and not gambling.
I have made a gain of 15.5% in one year.
I'd like to thank Greg and Everyone that has filled this thread with great valuable information.
By the time I'm 70 years I can retire and travel around with Greg in our Hot Rods, I'll be pushing him around in his wheel chair when that happens though.

[dhutton]

04-09-2012, 09:36 AM
I entered the Market and posted here on that date and time. On page 129.
Taking what Greg has preached on this thread. INVESTING and not gambling.
I have made a gain of 15.5% in one year.
I'd like to thank Greg and Everyone that has filled this thread with great valuable information.
By the time I'm 70 years I can retire and travel around with Greg in our Hot Rods, I'll be pushing him around in his wheel chair when that happens though.

Although I am older than the guys targeted in this thread I have also learned some valuable lessons here that will not only enable my wife and I to retire with a larger nest egg but also make that nest egg go a lot further when we do retire. Sincere thanks to Greg and the other contributors. You got me off my complacent butt and really thinking about investing and generating a decent return. Of course the market over the past year and a half has made this easy but I am determined to stay the course.

Thanks again,
Don

[Bucketlist2012]

Did I just read that Bitcoin went from 266 to 150 in one day ???

I don't follow or own it, but man that is a crash for sure..

[GregWeld]

Did I just read that Bitcoin went from 266 to 150 in one day ???

I don't follow or own it, but man that is a crash for sure..




No --- It was actually WORSE than that... it hit a high of $266 -- crashed to $105 before bouncing back to $145.


Now - let's put it into perspective..... the 30 day range on Bitcoin is a low of $36.65 ---- with todays high of $266.00

It's currently trading at $170ish

[GregWeld]

Don and Bob....


Don't thank ME --- thank yourselves for being interested enough to read and take action.

As Don said.... you could have thrown darts at a Wall Street Journal and made a gain in this market.... BUT that is the way the market works! You have to learn to take easy with the hard. BUT if you're not in at all -- you don't get doodle. Up 15% for a couple years in a row -- then you might go sideways for awhile - then you might go down for awhile - and then bang you're up 20% again.... ALL THE WHILE GETTING PAID.

Work is like that -- super busy - then fearing a layoff.... if you stick to it work hard - next thing you know - all is okay again. But even when you're fearing getting laid off -- you're getting paid. If you hate your job you might be inclined to look for other opportunities.

The stock market is like that! I do my best research and shopping etc when the market SUCKS! It forces me to get my act together and really be wise in my choices - really think about what I'm buying... So sometimes it's actually kind of a good thing.

Right now it's all fun and games. I can go play in the shop - come back and see I've made "X" while goofing off. It won't always be like that.... But let's say the market sells off 10% (a real correction) --- do I care.... sure... but then the dividend comes in - and one company is paying me 6% -- and another is paying 5% -- and another is paying me something else.... And if I've been in the market long enough -- I might have a 15% gain -- so the sell off only reduced my "gain" temporarily. And now the dividends are buying shares at that reduced entry point... and therefore buying me MORE shares than if the market was full tilt boogie... so there's some offset for the pain I'm suffering.

BY THE WAY -- you don't loose anything if you don't sell. Just as could be said that you don't have a gain until you sell and take it... but long term -- eventually you'll sell -- or sell part -- or use the collateral to have cheap borrowing (cash on cash borrowing is always cheap!).

[toy71camaro]

It sure has been an "easy" market... Glad you other guys got in on it too!

i re-calculated my Investing 102 stocks. My "total return" since starting this is at 21.8% :trophy-1302: :trophy-1302: Learned quite a bit here, and in the process of teaching the same general concepts to a few others in my life. One being my parents. Who basically threw darts to pick their 401k (followed what i picked, which, i generally just guessed by looking at the overall return numbers of the 1,3,5,10 year values. knowing nothing of the underlying stocks, dividends, etc, etc.).

On a side note, the guys at work have been talking about Bitcoin the past couple days too. watching it sway up and down wildly. One buddy had like 100 "coins" from over the last couple years mining, he sold some, took the $5k he made from them, and build a kick ass "mining" computer to mine more coins. Not bad, but I dont have the $ to "gamble" that.

I'll leave that one to the gamblers. Right now all my spare $ goes to rebuilding my emergency fund an my ROTH IRA. :)

[Tony_SS]

Did I just read that Bitcoin went from 266 to 150 in one day ???

I don't follow or own it, but man that is a crash for sure..

Yes it did, big time! Amazingly Mike Adams, predicted (http://www.naturalnews.com/039865_bitcoin_crash_prediction_Mike_Adams.html) it the day before it happened. And oddly someone called "Bitcoinbillionare" on Reddit was giving away over $13k in Bitcoins over the day. Mike is calling this a central bank stress test to determine how much it would take to crash the bitcoin market. And thus did just that and they achieved their goal: extreme price volatility has hurt bitcoin credibility. One does not just attempt to compete with the dollar and euro, and get away with it.

[GregWeld]

Yes it did, big time! Amazingly Mike Adams, predicted (http://www.naturalnews.com/039865_bitcoin_crash_prediction_Mike_Adams.html) it the day before it happened. And oddly someone called "Bitcoinbillionare" on Reddit was giving away over $13k in Bitcoins over the day. Mike is calling this a central bank stress test to determine how much it would take to crash the bitcoin market. And thus did just that and they achieved their goal: extreme price volatility has hurt bitcoin credibility. One does not just attempt to compete with the dollar and euro, and get away with it.




Well the REAL difference in actual currencies is that they're backed by countries that make things - or produce things - and have tax payers (so actual revenue) etc. Of course we all know that the "full faith and credit" of some of these countries is complete BS.... and that only works IF they have enough cash flow to pay their gianormous debt load... But what I'm saying is there is a monumental difference between a national currency and a digital "game"/"trading scheme" for lack of a better definition which solely relies on the greater fool theory (i.e., someone else will pay more than you did).

I'm not saying that Bitcoin can't or won't catch on and become an actual currency that can be used for everyday functions... I'm not a guy that believes in ANYONES predictions. That's just guessing or wishful thinking. But you never know!

Personally - I think Bitcoin would catch on and would more likely become a currency if there were more of them and they were worth LESS.... and were used to buy things and pay bills --- rather than just (for the most part) being traded amongst the "faithful few".

[GregWeld]

BY THE WAY ----- Bitcoin is trading at $120 this morning....


Last night when I check the "Bitcoin charts" --- which might as well be peering into the sky and counting stars (hahahahahahaha) it was trading at $170.


I don't care one iota about this thing... it's just interesting to watch and perhaps LEARN from it. I hate to see anyone loose out on a great investment - but I really hate to see people just flat ass be stupid.

The whole thing reminds me of guys that go out and buy a clapped out Fred Flintstone car because they can't afford to buy a version of it that actually runs and drives etc..... yet their dream is to build a Ridler car. Dude! Really! If you can't afford to buy a $25K car --- how are you going to turn that $5K car that needs floors - quarters - roof - cowl - chassis... into ANYTHING.


So it's like investing.... we all want to be "rich" (hell - we all want to drive Ridler winners).... but if you're trying to build your nest egg --- is it smarter to gamble it --- or invest in real stuff?

[Tony_SS]

Well the REAL difference in actual currencies is that they're backed by countries that make things - or produce things - and have tax payers (so actual revenue) etc. Of course we all know that the "full faith and credit" of some of these countries is complete BS.... and that only works IF they have enough cash flow to pay their gianormous debt load... But what I'm saying is there is a monumental difference between a national currency and a digital "game"/"trading scheme" for lack of a better definition which solely relies on the greater fool theory (i.e., someone else will pay more than you did).

I'm not saying that Bitcoin can't or won't catch on and become an actual currency that can be used for everyday functions... I'm not a guy that believes in ANYONES predictions. That's just guessing or wishful thinking. But you never know!

Personally - I think Bitcoin would catch on and would more likely become a currency if there were more of them and they were worth LESS.... and were used to buy things and pay bills --- rather than just (for the most part) being traded amongst the "faithful few".

Yes, obvious differences. But I like the principle of the bitcoin decentralized peer to peer, free market system. That's where the real value has always been. It's too bad that it seems like the popularity was exploited. It remained very stable for almost 2 years until this bubble. Bitcoin reminds me of the Gold market since 1971 on a nano scale. lol! It's not going anywhere, there's still a use for it. It will level off and slowly climb as options for usage expand.

Full disclosure, For what little that I have I'm staying in as its still trading for more than I paid. :) I am very happy for my buddy (who unlike me!) bought in at $8. He sold almost all of his on Monday for $188. He made out very well.. so I'm very happy for him recognizing the bubble and jumping ship at a good time!

[GregWeld]

Well === it didn't take long for the bubble to burst did it....



I'm always happy for anyone that scores - regardless of how they did it... My problem is with folks not having a clue about values of "things"... We all know housing can't double and triple every other year... we all know a 1969 Camaro CLONE (now called a tribute car) has no value at $200K.... yet somehow people get sucked in and sucked up.

Tony - I agree there is some value in the Bitcoin system... but the value has to be in trading the "coins" for goods and services... Not just trading the coins themselves. So I agree with you... it's too bad that there was a pile on affect that made this go crazy and if it falls back to "norm" ($30ish) then it will hurt the legitimacy of the entire system.

It's funny - people LOVE stuff when it's going up -- and when it comes back to "normal" they don't want to have anything to do with it (whatever it is).

[John510]

Whats a good thing to invest a large chunk of money into? Looking for at least a 10% return if thats even possible.....


Also would like to have access to the money.

Commercial real estate a good idea?

[sik68]

These recent posts on bitcoin have really guided me to learn more about currencies and so here's a summary based on how I understand it.

A currency falls into 2 categories: an instrument of equity, or an instrument of debt.

A currency that is backed by a tangible asset (like gold) is an instrument of equity. At any time, your notes can be traded in for a ratio quantity of the asset. Of course, it can be argued that the value of gold is arbitrary, but there are a lot of valid reasons why it works. Not rocket science, but I'm stating the obvious to draw the distinction with non-backed currencies.

A currency that is not backed by a tangible asset is only an instrument of debt; an IOU traded among people who agree on its value. It is only backed on faith by those using it.

Again, not rocket science...the concepts are basic but thinking about the difference between an asset based monetary system vs a debt based monetary system and you start to see the world through a different lens.

I know this is not directly Investing 102 material, but I think it applies, because it is important for us as investors to recognize the distinctions between not only speculation vs investing, but also the distinction between real assets and IOUs, aka liabilities.

[GregWeld]

Whats a good thing to invest a large chunk of money into? Looking for at least a 10% return if thats even possible.....


Also would like to have access to the money.

Commercial real estate a good idea?



John -


That is not an easy one two answer... because you failed to provide adequate info such as: Term? i.e., retirement - one week - 5 years etc

Also - can you stand (suffer) a decrease in capital during the holding period...

Commercial real estate is ILLIQUID.... it provides the cash flow you're looking for - although not 10% - more like 7% -- you would NOT have access to the capital.

So when you say you want to have access to the money -- do you want access to the cash flow the capital produces? Or do you need to have access to the capital as well?


Personally - I use three different stocks to hold cash while providing me with a return.

Go to Google Finance and just "search" these three stock symbols:

JNK

JNK is a a Junk Bond ETF (meaning a basket of high yielding low grade bonds) that pays a monthly dividend of 7.12% (annual) ---- or in other words 21 CENTS per share per month.

HYG


HYG is a high yield bond fund consisting of high yielding CORPORATE bonds. It pays 6.41% - or 49 cents per share per month.


I use these because in the CURRENT fairly stable interest rate market -- these have a fairly stable per share price... and I like the monthly income while waiting for less risky investments. Since they pay monthly -- I don't have to pay as much attention to the timing of the buy or sell - since I'll only miss out on ONE months dividend rather than an entire quarters worth (3 months) if I miss time the event.

NLY


NLY - Annaly Capital Management is a mortgage based or mortgage RATE spread based company that pays a HUGE dividend quarterly... of 11.36% or 45 cents per share per QUARTER.


THESE THREE ARE HIGHLY RISKY BASED ON INTEREST RATES.... but as I said above -- right now -- interest rates seem to be fairly stable. That can change and when it changes (we don't know how long or when) the capital basis will change - perhaps just a little - or perhaps a lot. That depends on how much the FED decides to jump the rate.

[GregWeld]

I love stuff like this! It really tells me "you guys" are starting to see this INVESTING --- can be extremely interesting --- and it can be like a hobby like our cars are.... where you might not buy that part -- or that car - but you're interested enough to talk about it and LEARN something from it. I love it!




BY THE WAY --- BITCOIN is now DOWN to $71

That is DOWN 33% in ONE DAY.

That my friends is a gut wrenching decrease in your "money"





These recent posts on bitcoin have really guided me to learn more about currencies and so here's a summary based on how I understand it.

A currency falls into 2 categories: an instrument of equity, or an instrument of debt.

A currency that is backed by a tangible asset (like gold) is an instrument of equity. At any time, your notes can be traded in for a ratio quantity of the asset. Of course, it can be argued that the value of gold is arbitrary, but there are a lot of valid reasons why it works. Not rocket science, but I'm stating the obvious to draw the distinction with non-backed currencies.

A currency that is not backed by a tangible asset is only an instrument of debt; an IOU traded among people who agree on its value. It is only backed on faith by those using it.

Again, not rocket science...the concepts are basic but thinking about the difference between an asset based monetary system vs a debt based monetary system and you start to see the world through a different lens.

I know this is not directly Investing 102 material, but I think it applies, because it is important for us as investors to recognize the distinctions between not only speculation vs investing, but also the distinction between real assets and IOUs, aka liabilities.

[GregWeld]

I looked at CON ED (ED) today -- just because it was one of the couple GREEN (up) shares so I wondered if there was some news... even though a utility company doesn't really produce much "interesting" news.... :>)


I see this STEADY EDDIE was UP over 11% already this year (since January 1st)...


There's that trade off between steadying your investments (more important in a DOWN market) and the lower dividend rate.... but a nice total return non-the-less! Gotta love it!

[96z28ss]

MCD Mcdonalds is really up today. I wonder if that stock will split soon?

[toy71camaro]

I've been happy with ED. I doubled down on them after the hurricane brought them down some. Im up 15% overall from them. Not bad!

[GregWeld]

MCD Mcdonalds is really up today. I wonder if that stock will split soon?



Never buy a stock based on a split or speculation of a split.... It's FUN when they do... but it's been proven that a split is nothing more than just that - a split. Having said that - that covers the Investing 102 portion - Mikey D's hasn't split since 1999... and they have a history of splitting - but not a particular "rhythm" i.e., every time they hit $100.... At $100ish it's a pretty "affordable" stock.. it's not like Google or Apple where you don't get many shares for your $5K. So you can't really make an argument that way.

In other words --- we'd just be guessing. Although wouldn't that be nice!





I've been happy with ED. I doubled down on them after the hurricane brought them down some. Im up 15% overall from them. Not bad!




That's a smart man right there! To recognize a temporary dip in the price and seize the opportunity! Brilliant move!

The difference is you saw a valid reason for the stock to dip -- but knew that it's a good company and they would recover from it.

That's a very different scenario than a J C Penny's (JCP) where they're down because they shot themselves in the foot. Now a "dip" in the share price might be an entry point - but you'd just be gambling because there's nothing you can point to that would tell you they'll recover from that injury.

One is smart and educated - one is gambling. Big difference.

[96z28ss]

Never buy a stock based on a split or speculation of a split.... It's FUN when they do... but it's been proven that a split is nothing more than just that - a split. Having said that - that covers the Investing 102 portion - Mikey D's hasn't split since 1999... and they have a history of splitting - but not a particular "rhythm" i.e., every time they hit $100.... At $100ish it's a pretty "affordable" stock.. it's not like Google or Apple where you don't get many shares for your $5K. So you can't really make an argument that way.

In other words --- we'd just be guessing. Although wouldn't that be nice!


That's a smart man right there! To recognize a temporary dip in the price and seize the opportunity! Brilliant move!

The difference is you saw a valid reason for the stock to dip -- but knew that it's a good company and they would recover from it.

That's a very different scenario than a J C Penny's (JCP) where they're down because they shot themselves in the foot. No a "dip" in the share price might be an entry point - but you'd just be gambling because there's nothing you can point to that would tell you they'll recover from that injury.

One is smart and educated - one is gambling. Big difference.



No, I never bought based on a split. MCD is a good dividend stock.
However it would be nice if they split. This is the longest they have ever gone with out a split.

[toy71camaro]

No, I never bought based on a split. MCD is a good dividend stock.
However it would be nice if they split. This is the longest they have ever gone with out a split.


Yeah, it might be nice if they did. But who knows. as long as the company continues to do well and increase the divvy each year, I'm happy. Currently sitting on 3.46% yield on cost for MCD. I dont mind the wait. Its not "Great" but its not bad either, and hopefully it continues on up!

[Tony_SS]

Well === it didn't take long for the bubble to burst did it....

I'm always happy for anyone that scores - regardless of how they did it... My problem is with folks not having a clue about values of "things"... We all know housing can't double and triple every other year... we all know a 1969 Camaro CLONE (now called a tribute car) has no value at $200K.... yet somehow people get sucked in and sucked up.

Tony - I agree there is some value in the Bitcoin system... but the value has to be in trading the "coins" for goods and services... Not just trading the coins themselves. So I agree with you... it's too bad that there was a pile on affect that made this go crazy and if it falls back to "norm" ($30ish) then it will hurt the legitimacy of the entire system.

It's funny - people LOVE stuff when it's going up -- and when it comes back to "normal" they don't want to have anything to do with it (whatever it is).

I still love the principle of bitcoin. Yes, it has some serious weakness, one being that the main exchange was under constant dos hack attacks and at the same time flooded with new accounts. They were shut down all day yesterday. So its clear they need to shore that exchange, and more people need to use the dozens of other exchanges out there too. But CNBC has just officially added bitcoin to their ticker.. so that is pretty cool I think. We are seeing steady pricing today around $75 after all the weaklings sold out. :) I will remain in the system.. I see it only getting stronger and growing. And you can exchange for goods and services. There are websites where you can buy precious metals, electronics etc using it.

These recent posts on bitcoin have really guided me to learn more about currencies and so here's a summary based on how I understand it.

A currency falls into 2 categories: an instrument of equity, or an instrument of debt.

A currency that is backed by a tangible asset (like gold) is an instrument of equity. At any time, your notes can be traded in for a ratio quantity of the asset. Of course, it can be argued that the value of gold is arbitrary, but there are a lot of valid reasons why it works. Not rocket science, but I'm stating the obvious to draw the distinction with non-backed currencies.

A currency that is not backed by a tangible asset is only an instrument of debt; an IOU traded among people who agree on its value. It is only backed on faith by those using it.

Again, not rocket science...the concepts are basic but thinking about the difference between an asset based monetary system vs a debt based monetary system and you start to see the world through a different lens.

I know this is not directly Investing 102 material, but I think it applies, because it is important for us as investors to recognize the distinctions between not only speculation vs investing, but also the distinction between real assets and IOUs, aka liabilities.

That's great. I think currency is interesting too. It important to remember that our dollar is not back by gold/silver anymore, it's an instrument of debt as is the euro and most other currencies from central banks. I don't want to derail the investing thread here, but it's good information to know. I still like the traditional topics here, but I also like precious metals and other investments for diversity.

[GregWeld]

Yeah, it might be nice if they did. But who knows. as long as the company continues to do well and increase the divvy each year, I'm happy. Currently sitting on 3.46% yield on cost for MCD. I dont mind the wait. Its not "Great" but its not bad either, and hopefully it continues on up!



On a percentage basis --- McDonalds (MCD) is a low paying dividend... BUT!! Check the dividend out... because a scant 4 years ago -- they paid a whopping 38 CENTS per share per quarter (2008) and now they're paying 77 cents per share per quarter!

So they LIKE to increase the dividend! Think about it - has YOUR income DOUBLED since 2008??? Does your employer like you that much? :>) MCD likes you so much they've doubled your pay!


Don't ya just love to think about all these little nuances?


By the way -- I point these things out -- not to belittle your statement or to argue etc --- but rather -- because it's good info for INVESTING 102.

[toy71camaro]

On a percentage basis --- McDonalds (MCD) is a low paying dividend... BUT!! Check the dividend out... because a scant 4 years ago -- they paid a whopping 38 CENTS per share per quarter (2008) and now they're paying 77 cents per share per quarter!

So they LIKE to increase the dividend! Think about it - has YOUR income DOUBLED since 2008??? Does your employer like you that much? :>) MCD likes you so much they've doubled your pay!


Don't ya just love to think about all these little nuances?


By the way -- I point these things out -- not to belittle your statement or to argue etc --- but rather -- because it's good info for INVESTING 102.

No worries! I meant the same thing when i said "its not great..." as in, 3.5 isnt a "great" dividend amount. its simply average, at best. BUT, if they continue to move forward like they have, that 3.5 could be quite a bit higher for me in a few years.

And yeah.. my employer hasn't changed my income in YEARS. lol.

Use me for an example all we want. its all about learning, whether it be good or bad, its better for the entire group. :)

[GregWeld]

Well..... I hope not many of you are speculating in Gold....


I felt the metals market was a bubble for quite awhile now... too many people that know nothing - have never invested etc - all telling me about "gold". Big red flag to me... I've written about it here before - when the grocery store clerk is telling me about the money they're making doing "X"... I'm running away from "X" with my hair on fire.

I like diversification..... but I like my diversification to PAY ME -- up market or down market. I'm sure there are some gold ETF's or some gold investments out there that maybe pay a dividend (I've never bothered to look for them) but the trade has mostly been about a rising price. I just can't play that game. You can never bail out at the top and people don't sell until they've finally lost their ass. I like making money and keeping it... and getting the cash flow to spend... :snapout: :lol: :lol:

[GregWeld]

You don't see many outright SELL recommendations.... and I can't remember when the advice has actually been to SHORT something! Usually the PC version is "neutral"....


GUYS!! Please do not short anything - ever.... that advice takes some explanation but just don't do it!



The market has been increasingly negative on gold, with Goldman Sachs making a high-profile call to short it this week. "You've had lesser open interest. In the last few months, we lost about 20 percent of our open interest and on top of that every other asset manager has moved away from gold into strong stocks. Right now the path for least resistance for gold is lower," said RBC analyst George Gero.

[GregWeld]

I would certainly agree with this executive.... While I rarely - and I mean - RARELY - eat at McDonalds... their service, and in fact, I think the cleanliness of their stores has suffered a lot in the last few years.

Most of the time I can't understand a word their staff says... I usually have to do a "HUH?" I think standards of service and cleanliness - dare I say it - foreigners - aren't the same as ours.

Having said that -- the very fact that they RECOGNIZE this as an issue - is fantastic IMHO because you can't fix something you don't see or understand.




http://www.nbcnews.com/business/mcdonalds-executive-says-service-broken-1C9327907



BTW -- I don't eat at MCD not because I don't like their food or think they put out a bad product -- I just don't eat that way -- I don't drink or smoke either but I'm certainly happy spending the dividends from Altria (MO) etc.

[WSSix]

As far as I'm concerned, Chicfila has set the fast food service standard and I've not found another company that can touch them so far. You can walk into a Chicfila that is slammed and get your food faster than you can at most other places that have only a few customers in line. They have a whole group of people working at one time not just a few. They'll bring you your food to your table a lot of the times. They speak up and are beyond courteous. When they have some special that they know will bring people in, they have even more people on staff working at that time. Simply put, they rock at service. I just wish they weren't private because I'd like to invest in them. Same thing with Subway.

[WSSix]

So I'm looking at my savings account and how much I have in it. This is money I am saving to buy a house with eventually among other things. It is not money I need right now or use regularly. I figure it will be easily more than one year and a day before I would buy a house or really do anything with a substantial portion of the funds. I'm only earning 1% on the money right now but it's guaranteed unless the US decides to pull a Cyprus. At the very least, I won't lose any money though. What can I do though to earn more than 1% though? Considering I am risk adverse I'd be happy with 3%. What I don't want, is to lose money obviously.

What I'm considering is to take a large chunk of the money and put it into another brokerage account with Fidelity. My current brokerage account is with Vanguard under my Roth IRA. I mention this because I'm going to have to pay capital gains taxes on the earnings throughout the year with the money at Fidelity but I'm going to be doing that anyway with the money left in the savings account. I figure if I stick with dividend paying stocks, diversify, and stay with solid companies, I should be ok even though this is short term at this point instead of long term like my other stuff. Really, I just want to safely earn more than 1%. Besides, by the time I actually buy a house, I may have replenished my savings and not have to even touch this money I'm considering moving around now.

So how does that sound? Think it's fairly safe? Obviously, we can't know the future but I'm just trying to earn a little bit more than I am now with the money. Are there other options I should consider? From what I've seen, CD rates are crap but I don't know what else is out there. Greg and others, I know you guys have you cash with JNK and other type stocks. Considering this is short term, should I consider those options or is the risk and the vigilance on checking the stock too high? I wouldn't be interested in anything that requires me to watch it by the hour daily.

Thanks everyone

[96z28ss]

I would certainly agree with this executive.... While I rarely - and I mean - RARELY - eat at McDonalds... their service, and in fact, I think the cleanliness of their stores has suffered a lot in the last few years.

Most of the time I can't understand a word their staff says... I usually have to do a "HUH?" I think standards of service and cleanliness - dare I say it - foreigners - aren't the same as ours.

Having said that -- the very fact that they RECOGNIZE this as an issue - is fantastic IMHO because you can't fix something you don't see or understand.




http://www.nbcnews.com/business/mcdonalds-executive-says-service-broken-1C9327907



BTW -- I don't eat at MCD not because I don't like their food or think they put out a bad product -- I just don't eat that way -- I don't drink or smoke either but I'm certainly happy spending the dividends from Altria (MO) etc.

I have no issues with McDonalds its fine when on the road driving a quick stop to grab breakfast. Too many better places to grab lunch and dinner to east there.

[GregWeld]

So I'm looking at my savings account and how much I have in it. This is money I am saving to buy a house with eventually among other things. It is not money I need right now or use regularly. I figure it will be easily more than one year and a day before I would buy a house or really do anything with a substantial portion of the funds. I'm only earning 1% on the money right now but it's guaranteed unless the US decides to pull a Cyprus. At the very least, I won't lose any money though. What can I do though to earn more than 1% though? Considering I am risk adverse I'd be happy with 3%. What I don't want, is to lose money obviously.

What I'm considering is to take a large chunk of the money and put it into another brokerage account with Fidelity. My current brokerage account is with Vanguard under my Roth IRA. I mention this because I'm going to have to pay capital gains taxes on the earnings throughout the year with the money at Fidelity but I'm going to be doing that anyway with the money left in the savings account. I figure if I stick with dividend paying stocks, diversify, and stay with solid companies, I should be ok even though this is short term at this point instead of long term like my other stuff. Really, I just want to safely earn more than 1%. Besides, by the time I actually buy a house, I may have replenished my savings and not have to even touch this money I'm considering moving around now.

So how does that sound? Think it's fairly safe? Obviously, we can't know the future but I'm just trying to earn a little bit more than I am now with the money. Are there other options I should consider? From what I've seen, CD rates are crap but I don't know what else is out there. Greg and others, I know you guys have you cash with JNK and other type stocks. Considering this is short term, should I consider those options or is the risk and the vigilance on checking the stock too high? I wouldn't be interested in anything that requires me to watch it by the hour daily.

Thanks everyone



You can't have your cake and eat it too..... so you can't say "you don't want to loose a dime" ----- and make money on your money. You're either going to be super safe and not risk capital --- or you're going to risk capital and make some income. SHORT TERM -- no way to do both.

Like the old saying goes -- don't invest money you're going to need. The risk of LOSING 10% in order to make 2% more isn't worth it.

If you had a 5 year horizon it would be different - but you don't. So stay put.

[GregWeld]

In the interest of full disclosure ---- I have decided to sell my positions in Annaly Capital Management (NLY) and Junk Bond ETF (JNK).

I use these to "park" cash --- and as such have very substantial positions. They both have very nice short term (fully taxed) gains. And while they provide substantial positive cash flow they also come with a high degree of risk.

It "appears" that the FED is readying the market for their inevitable exit from QE (easing) of interest rates... and I want to be AHEAD of that game. When you couple the usual "sell in May and go away" --- and the possible -- note possible -- reduced FED QE this summer.... I want to trade when I want to and lock in a nice gain.

If it doesn't work out --- I'll re-buy these at some point down the road. I've used them for a long time and they've been very good places to park and make a return.

[GregWeld]

Too many posts.... I know... but I like to share with you all when I "think" about something that has bearing on this thread.


The old saying "pigs get fat - hogs get slaughtered" must be thought about as we watch Gold and Silver get absolutely pounded here!


When it (gold) was at $1800 --- all the talk was about it going to $2000! When people start talking about stuff like that --- and predicting it --- that should signal a "top" in the price. That my friends is a sure fired signal to SELL.

Once again it's the old (my truism) --- when the grocery store clerk is telling you about their investment in Gold/Silver..... SELLLLLLLLLLLLLLL

Apple (AAPL) is another one that comes to mind -- at $600 -- all the talking heads came on TV and pronounced $1000 was the next stop... it promptly (relatively speaking) dropped to $400...


Once EVERYONE is convinced that something is going to go bananas.... Pay attention to that and RUN AWAY with your hair on fire. These types of predictions rarely come true - and more often they signal a top is near. Yeah - something might go up for awhile after everyone is convinced -- but I'd rather get out with a "nice" profit (a pig) -- than I would gamble on getting the "maximum" (a hog) profit.

[Tony_SS]

Still if you look at the 10year chart on Gold its pretty impressive.

I think this is a good buying opportunity for gold and silver. I say that with a bit of hesitation because they are still sold on paper so can still be manipulated. But long term they are solid. And when I say 'buy' I mean take physical delivery.

[Tony_SS]

A sudden drop like this in gold is not normal....


What Happened The Last Time We Saw Gold Drop Like This?
http://www.zerohedge.com/news/2013-04-15/what-happened-last-time-we-saw-gold-drop

[glassman]

Greg, i dont think you need to "full disclosure" us on here do you? I really apprieciate that you do, I really apprieciate your 35 years +/- of investment teaching. I like what you tell us what your gonna do in terms of "macro" investing, i believe everything can trickle down, exponentially of course. But the same applies, does it not?

I know history often repeats itself, "I think it will reach $_____," run baby run....

I finally opened my Schawb acct and funded it. I cant get all the basics down though. How to buy. I am going to attend one of the seminars on the basics, heck, i dont even know how to do paypal. I understand alot of whats said here, but buying things electronically i am still a newb. So hopefully this basic classes will help. I wish it was that easy, maybe it is, and i may be over thinking this. Its probably the "101" i need help with....haha.

thanx all, Mike

[GregWeld]

Greg, i dont think you need to "full disclosure" us on here do you? I really apprieciate that you do, I really apprieciate your 35 years +/- of investment teaching. I like what you tell us what your gonna do in terms of "macro" investing, i believe everything can trickle down, exponentially of course. But the same applies, does it not?

I know history often repeats itself, "I think it will reach $_____," run baby run....

I finally opened my Schawb acct and funded it. I cant get all the basics down though. How to buy. I am going to attend one of the seminars on the basics, heck, i dont even know how to do paypal. I understand alot of whats said here, but buying things electronically i am still a newb. So hopefully this basic classes will help. I wish it was that easy, maybe it is, and i may be over thinking this. Its probably the "101" i need help with....haha.

thanx all, Mike




#1 -- Glad to hear you've opened up an account... AWESOME... that's a big step forward.



#2 -- Taking a class is a brilliant idea! You don't want to be playing around and push the wrong buttons and accidentally sell or buy something!



#3 -- I'm kinda kidding when I do the "in full discloser" -- and I certainly don't want people to invest in what we use as examples etc -- but I know dang well that they do - because it's easy. I just want people to learn the basics on their own - but I also feel some responsibility. We've talked about several names in here on a repeated basis... I want people to also understand HOW to think about their investments. That's more important than anything else to me. That they start to THINK about cause and affects - relationships etc.



#4 -- If I have 10 or 15 or 20 years before I retire -- I do and think DIFFERENTLY than those guys that are like me - living off their investments. There are all types reading these threads (cars - health - wealth) and I usually try to post accordingly. Cover all the bases so to speak. If you toss enough info out there -- someone will pick the nugget THEY need from it.

[toy71camaro]

Greg, i dont think you need to "full disclosure" us on here do you? I really apprieciate that you do, I really apprieciate your 35 years +/- of investment teaching. I like what you tell us what your gonna do in terms of "macro" investing, i believe everything can trickle down, exponentially of course. But the same applies, does it not?

I know history often repeats itself, "I think it will reach $_____," run baby run....

I finally opened my Schawb acct and funded it. I cant get all the basics down though. How to buy. I am going to attend one of the seminars on the basics, heck, i dont even know how to do paypal. I understand alot of whats said here, but buying things electronically i am still a newb. So hopefully this basic classes will help. I wish it was that easy, maybe it is, and i may be over thinking this. Its probably the "101" i need help with....haha.

thanx all, Mike

Mike,

Congrats!!

If you'd like some guidance, before the classes (I'm not sure how soon they are for you). I'd be happy to help over the phone one of these afternoons/evenings.

Albert

[GregWeld]

I like what Crammer said about Gold today.... "it's owned by people that like to buy high".

In other words -- it only works when it's going up... and then you get the pile on affect.



BTW -- Just because it's fun to live and learn -- from the sidelines.... Thanks to TonySS we're getting to watch the implosion of BITCOIN.... it's DOWN 41% today - and is now trading @ $59..... That's a pretty steep decline from $170 a whopping 5 days ago.

Who cares to buy "on the dips"?? Anyone? Oh come on.... :snapout: :bang:

[Tony_SS]

That 10yr Gold chart looks pretty good to me. :)

Regarding bitcoin, it seems obvious that some deep pockets have manipulated that smaller market. From that perspective, it's mission accomplished.

[GregWeld]

I'll repeat just for good measure.... for Investing 102.... Buy what you know and understand... buy "best of breed"... Don't gamble, invest. It's not always about making money, it's about keeping the money you make.


Here's my personal take on buyers of precious metals and stuff like Bitcoin - and this is not a personal slam - it's just a fact..... if you're checking the price of the stuff you've bought hourly.... you shouldn't be in it. Housing got that way... dot bombs got that way... Gold got that way... Bitcoin was a 3 month story that got that way.


TonySS -- To answer your 10 year chart on gold. Yes the chart is lower on the left and higher on the right. So there's no doubt that lots of people made lots of money on gold. What I don't like about that kind of "investment" is that I don't think people own it for the right reasons. They're SPECULATING... rather than INVESTING. By the way -- the inflation adjusted HIGH for GOLD was set back in 1980 at $2300. So if you'd bought and held for the last 33 years -- you've LOST A HUGE AMOUNT OF MONEY.


http://inflationdata.com/Inflation/images/charts/Gold/Gold_inflation_chart.htm

Compare that to having just bought a Dow 30 component as shown on these charts. If you scroll down - you will see a chart that goes back to before 1980 and there is also a list of DOW stocks that you can click on and see their inflation adjusted value. I just clicked on McDonalds -- so that's the first charts to come up.



http://www.aboutinflation.com/Dow-Jones-vs-Inflation/mcdonald-s-inflation-adjusted-chart-mcd

[toy71camaro]

after yesterdays sell off, i figured today would be a bit more of the same.

Surprised to see most of everything "in the green" and shocked to see Coca-Cola up 5%! Wowzers!

[Tony_SS]

I'll repeat just for good measure.... for Investing 102.... Buy what you know and understand... buy "best of breed"... Don't gamble, invest. It's not always about making money, it's about keeping the money you make.


Here's my personal take on buyers of precious metals and stuff like Bitcoin - and this is not a personal slam - it's just a fact..... if you're checking the price of the stuff you've bought hourly.... you shouldn't be in it. Housing got that way... dot bombs got that way... Gold got that way... Bitcoin was a 3 month story that got that way.


TonySS -- To answer your 10 year chart on gold. Yes the chart is lower on the left and higher on the right. So there's no doubt that lots of people made lots of money on gold. What I don't like about that kind of "investment" is that I don't think people own it for the right reasons. They're SPECULATING... rather than INVESTING. By the way -- the inflation adjusted HIGH for GOLD was set back in 1980 at $2300. So if you'd bought and held for the last 33 years -- you've LOST A HUGE AMOUNT OF MONEY.


http://inflationdata.com/Inflation/images/charts/Gold/Gold_inflation_chart.htm

Compare that to having just bought a Dow 30 component as shown on these charts. If you scroll down - you will see a chart that goes back to before 1980 and there is also a list of DOW stocks that you can click on and see their inflation adjusted value. I just clicked on McDonalds -- so that's the first charts to come up.



http://www.aboutinflation.com/Dow-Jones-vs-Inflation/mcdonald-s-inflation-adjusted-chart-mcd

Agree with you Greg. As far as pricing things in 'inflated dollars' it gets a little tricky. All of the guys I was listening to were saying to buy gold (this is when it was $600). They stop saying that around $1000 as a bubble started to appear. Sure enough it became a fad, you heard about on your 'talk radio' and it started to bubble. And now the correction (manipulation?) I do think it's still a decent hedge against inflation, but like you say, not as any majority.

[Bucketlist2012]

Tony SS. There is no questionmark about the manipulation of the PM market...

The Big banks and the FEDS are for sure manipulating the price. I did not sell at the peak but I did put in a large sell order on Thursday..Pretty much listening to Goldman Sachs. They told us they were about to lower the price...And boy did they..

That is why PM's are not an Investment...I do hold them but it is not really a wealth builder.. Real Estate and Stocks are..

[Tyler E]

Question from the peanut gallery:

With the summer doldrums on the horizon along with the rumors of the fed exiting QE, which stocks or sectors are going to get hit the most by these two events?

I haven't been in this long enough to have seen either play out in the past, but if Greg is getting his ducks in a row, I'm paying attention.


P.S. I'm still reading and learning. Thanks to everyone for keeping this thread going.

[toy71camaro]

Welcome Tyler!

I unfortunately don't have the answers to your questions.

But, I dont base my actions based on what Greg does. He is in a different situation than most of us. I am investing for long term retirement. So short term ups/downs dont matter a whole lot to me. He is investing for short term gain (his income) and sustained investing for his future income.

You'll learn as you read through these pages that "Timing" the market isn't very successful. Just look at today for example. The market dropped ~2% yesterday. My investments took a good hit (worse one i've seen since i started this). However, today, its back up. and one of them (KO) is up 5+% today. I would of likely "missed" that if i would have been trying to time the "low point" of the market, rather than just getting in whenever i could.

Good luck!

[GregWeld]

Welcome Tyler!

I unfortunately don't have the answers to your questions.

But, I dont base my actions based on what Greg does. He is in a different situation than most of us. I am investing for long term retirement. So short term ups/downs dont matter a whole lot to me. He is investing for short term gain (his income) and sustained investing for his future income.

You'll learn as you read through these pages that "Timing" the market isn't very successful. Just look at today for example. The market dropped ~2% yesterday. My investments took a good hit (worse one i've seen since i started this). However, today, its back up. and one of them (KO) is up 5+% today. I would of likely "missed" that if i would have been trying to time the "low point" of the market, rather than just getting in whenever i could.

Good luck!



SUPER SUPER GOOD POINTS!!!!

[GregWeld]

Question from the peanut gallery:

With the summer doldrums on the horizon along with the rumors of the fed exiting QE, which stocks or sectors are going to get hit the most by these two events?

I haven't been in this long enough to have seen either play out in the past, but if Greg is getting his ducks in a row, I'm paying attention.


P.S. I'm still reading and learning. Thanks to everyone for keeping this thread going.



Tyler --- #1 I didn't sell any long term positions -- I sold two stocks where I park cash....


#2 --- We'd need to know your time horizons and what kinds of account(s) you're talking about.... because if they're long term retirement accounts then as Albert stated... there's no need to be worried about "this summer" etc.


So without talking dollars --- just give us a clue about your investing goals - and time frames etc.


I'm leaving for a week plus on a nice car road trip so may not be on much.

[Tyler E]

Greg, I'm 35 and investing for retirement. I don't yet know what age that will be. I hope before 65. I'm working hard to make that happen.

As a budding long term investor, "this summer" isn't going to mean much for me, and I realize that. My question was more for learning. Maybe I asked incorrectly.

You wrote a few days ago:

It "appears" that the FED is readying the market for their inevitable exit from QE (easing) of interest rates... and I want to be AHEAD of that game. When you couple the usual "sell in May and go away" --- and the possible -- note possible -- reduced FED QE this summer.... I want to trade when I want to and lock in a nice gain.


I read into your statement that you see a good time for buying. In your opinion, what do you see happening? Anything the long term investor needs to be concerned or excited about?

[Tony_SS]

Tony SS. There is no questionmark about the manipulation of the PM market...

The Big banks and the FEDS are for sure manipulating the price. I did not sell at the peak but I did put in a large sell order on Thursday..Pretty much listening to Goldman Sachs. They told us they were about to lower the price...And boy did they..

That is why PM's are not an Investment...I do hold them but it is not really a wealth builder.. Real Estate and Stocks are..

You sold your 'paper holdings' ? I still think holding physical is valuable... at least the Queen agrees. :lol:

http://s1.ibtimes.com/sites/www.ibtimes.com/files/styles/picture_this/public/2012/12/14/queen-elizabeth-ii-visited-gold-vault-inside-bank-england-thursday.jpg

[Bucketlist2012]

You sold your 'paper holdings' ? I still think holding physical is valuable... at least the Queen agrees. :lol:

http://s1.ibtimes.com/sites/www.ibtimes.com/files/styles/picture_this/public/2012/12/14/queen-elizabeth-ii-visited-gold-vault-inside-bank-england-thursday.jpg

Tony....Yes some ETF's....I just lightened up my positions in PM's. I will still continue to hold some paper ETF's in Canada and also keep all physical Metals...

[GregWeld]

Greg, I'm 35 and investing for retirement. I don't yet know what age that will be. I hope before 65. I'm working hard to make that happen.

As a budding long term investor, "this summer" isn't going to mean much for me, and I realize that. My question was more for learning. Maybe I asked incorrectly.

You wrote a few days ago:

It "appears" that the FED is readying the market for their inevitable exit from QE (easing) of interest rates... and I want to be AHEAD of that game. When you couple the usual "sell in May and go away" --- and the possible -- note possible -- reduced FED QE this summer.... I want to trade when I want to and lock in a nice gain.


I read into your statement that you see a good time for buying. In your opinion, what do you see happening? Anything the long term investor needs to be concerned or excited about?





I realize that with 300 pages -- it's going to take some time to slog thru all that is in this thread... but welcome and take the time to start on page one... :>)




The "market" has a history of being lower throughout the summer months... for no particular reason really - except that people take time off - they go on vacation - the traders and "market makers" are out in their swanky dumps at the Hamptons etc...

So with that said -- the old saying "sell in May... and go away" -- is an old saying for a very good reason. Generally the market is higher going into May and then seems to just ebb down -- and comes back for the 4th quarter (September thru December). The "odds" are that happens more often than not.

We have another large market factor hanging over our heads -- that is -- the ECONOMY.... and if it really is making a comeback or not -- which means whether or not the FEDERAL RESERVE starts to let interest rates climb... We have no crystal ball... but IF -- always a big IF -- the economy is good and rates rise a little -- that will affect INTEREST RATE SENSITIVE stocks -- such as the two I just sold (JNK and NLY).

Okay -- so if you couple those facts with the "sell in May and go away" odds... and the "usual" market swoon in the summer.... It's a pretty good chance that the market will be buyable at lower prices than today. Maybe. Maybe not. We might just rally all summer... NOBODY -- and I mean NOBODY can tell you what it will do. It's GUESSING. It's PROBABILITY. It's ODDS.

So ----- now that you've read all of that.... I personally would WAIT -- if you're not already in the market --- for the summer swoon and plan exactly what you're going to buy -- and how much -- and I'd be picking away at that list sometime in July and August. Maybe we rally and you just pay higher prices -- and maybe we get the usual swoon and you save a buck a share.


Here's the fudge factor. If you're buying DIVIDEND paying stocks... You want to time your buy on the EX DATE.... and then you'll pick up the dividend for the following quarter. So if you have a list -- you'll want to note the EX DATES for each stock - and set a reminder on your phone or whatever - and be ready to put in a purchase for those shares.

But the real fudge factor is -- how much are you investing. In other words -- how much money in each stock --- if you plan to buy 100 shares of each company -- and they're trading at $45 a share.... in the long run - does it really matter if you paid $44 or 45.75? Not really. Not really at all. It's a nice ego stroke to have bought in on the dip but for your retirement it won't count one iota. ZIP. NADA. And you may have only paid $44 but you missed the .35 dividend payment by a week -- and now must wait 3 more months to get another dividend payment.... so now we're talking even less of a great buy.

That's why market timing doesn't work. You'll not get in at the bottom -- and you'll never sell at the top. And if you read this thread -- you're going to finally understand that you have 30 years to retire -- and just because you retire in 30 years doesn't mean you're dead! Ya got another 30 years to live! So now your real "horizon" is more like 55 or 60 years!! My advice is to just get going. If you want to -- wait for the "maybe" summer swoon.... it'll make ya feel better if it happens.

Does that make sense?

[Bucketlist2012]

Again Greg..Thanks for taking the Time to give your input on things...

[GregWeld]

Again Greg..Thanks for taking the Time to give your input on things...



My input isn't worth the paper it's written on.... it's just the ramblings of a worn out old guy with nothing better to do. Hey! That sounds like a description of CONGRESS!!



NOTE TO TONY.... how many people do you know that have the ability to safely store precious metals? If you pay for offsite storage you've lost your ability to access in an emergency... so it needs to be at home. I don't know about you -- but I'm not storing 50/100 grand or more in "cash"/"metals" in my house. And I have some pretty bitchin' safes (at least TWO of them and they're far larger than the average guys!) It's hard to keep a secret -- and these days -- with kids posting crap on the internet -- who knows what they tell their friends and then their friends tell someone else - and the next thing you know you're duct taped to a chair with a gun to your head or worse. No thanks.

I think that's why they invented BANKS in the first place. I don't keep stock certificates either. They're all electronic -- somewhere...

I guess that after 200+ years -- I have to place some faith in my government even as F'd up as they seem to be... ya gotta trust someone... and if our government goes to hell... I don't think we'll be worrying about a few lousy bucks stored out back in our buried coffee cans.

Take the money - put it in a brokerage - invest it wisely - let it grow... let it EARN money... next thing you know - you'll only be worried about which car you're going to have to wash tomorrow before you head off to a show somewhere. :snapout: :lol: :lol:

[toy71camaro]

crazy week this week in the market (from my portfolio's perspective). Big Gain followed by big loss, followed by KO shooting up 5+% in one day, and now my KMB is hitting 4+% today. crazy.

[GregWeld]

Albert,


#1 -- I hope your Dad is doing fine!



#2 -- The "market" is always a hoot when things are going well.... Nothing better than "money for nothing" <stolen from the old Dire Straits song>

[GregWeld]

Bob...... Your Sturm Ruger stock reports earnings after the bell today... will be very interesting to see their sales numbers! My guess is they've sold every thing they had made at full price!

[96z28ss]

Bob...... Your Strum Ruger stock reports earnings after the bell today... will be very interesting to see their sales numbers! My guess is they've sold every thing they had made at full price!

Well It had a pretty big sell off, but I held on to it. I don't think it will be a question of "are they going to beat the estimates" rather than " how much did they beat them by" Its up over 3% today I'm guessing they excpect things to be good.
I also bought OLN cause of the ammo. DHS buying ammo at an alarming rate, and consumers seeing a serious ammo shortage right now, this stock should do good also.

[Bucketlist2012]

Albert,


#1 -- I hope your Dad is doing fine!



#2 -- The "market" is always a hoot when things are going well.... Nothing better than "money for nothing" <stolen from the old Dire Straits song>

Same Song...."And your Chicks for Free"....Boy we all know they are not free..

Oh I am in Contract on three rental properties......I decided to Diversify even more ....I will know more this next week...Not expensive homes at all, Actually cheap ones, but Positive Cash flow if I get them....

[96z28ss]

Bob...... Your Strum Ruger stock reports earnings after the bell today... will be very interesting to see their sales numbers! My guess is they've sold every thing they had made at full price!

yep they had a 53% jump!!

[GregWeld]

So.... with all the traveling lately --- and the "bringing home" the rig... I've been distracted to say the least. The beauty of income investing is that you can be distracted and the cash keeps flowing IN. The $18K from Annaly (NLY) I picked up on the 29th and the $9K from AT&T (T) posted yesterday - just about paid for the fuel burned last week. :D


With the distraction --- I'd completely forgotten about Bitcoin.... apparently the IRS HASN'T!


While the accounts are "digital" like a Swiss bank... in an audit... you'd have to disclose the transactions. You'd also likely be asked about the unexplained deposits in your checking account. Audits - if they smell fishy - can be especially nasty. Remember too... that trying to hide "income" is the crime. Filing false income taxes is not something that should be taken lightly. I'm not saying anyone is doing this - I'm saying it might be tempting given that Bitcoin is not going to 1099 you like your Schwab account is going to... so it might be "tempting" to just forget about this little extra dough.


http://www.forbes.com/sites/robertwood/2013/05/02/irs-takes-a-bite-out-of-bitcoin/




This reminds me of a guy that used to work for me. He owned lots of rental property - and had his hand in a restaurant/night club... etc. So he gets an audit - and he proudly takes all his receipts down etc showing that while he made great money - he also expensed nearly every dime. Weeks went by and he finally hears from Uncle Sam... he owed $18K!! Of course he immediately proclaimed that was impossible..... but -- said the IRS officer -- his check book showed NO checks written for cash -- or to a grocery store -- or to the dry cleaners etc.... so asks the agent "what did you live on"?? Thus Robert wrote them a check right then and there rather than risk an even more onerous audit!! He's still laughing about this little "exchange". He also learned a good lesson. Mind you --- this was around 1974 or so -- and 18K was a chunk of change!

[GregWeld]

Same Song...."And your Chicks for Free"....Boy we all know they are not free..

Oh I am in Contract on three rental properties......I decided to Diversify even more ....I will know more this next week...Not expensive homes at all, Actually cheap ones, but Positive Cash flow if I get them....



Smart Mike! We all know that housing went UP too much and came DOWN too much. While you might have missed the very bottom - they are still relatively "cheap". Interest rates are cheap and won't stay that way forever. The key is positive cash flow!

I personally like to invest in LLC's that are professionally managed and own class A apartments. They typically pay a 7+% rate (taxable - but offset with depreciation). And in fact I'm now looking at a mixed use building with 48 units and a 30,000 square foot retail rental (long term leased)...


Rentals like houses and apartments are LONG TERM guys --- they tie up your cash -- and have relatively large buy and sell commissions --- so aren't something you can just flip out of. However, they have nice long term capital appreciation - come with some nice taxable incentives - and can spin off great cash flow that generally increases over time. Be prepared for a 7 plus year holding period.

[GregWeld]

Here's an excellent article that is the kind of stuff I read -- even though I know the rules of engagement etc -- stuff like this is a good reminder and can help keep you on track!



http://seekingalpha.com/article/1392801-5-rules-to-become-a-better-investor?source=email_investing_income&ifp=0

[68ZClone]

Thanks for jumping back on, Greg. I don't post much, but really appreciate and enjoy reading your posts. Thanks for taking the time with us here.

I was happy to see Costco raise their dividend ($0.275 to $0.31 = 12.7% raise) even though the yield is only 1% annually. However, from this thread, I know why I own it - for growth and yield combination. I bought at $101 and its trading north of $108 now. Purchased it completely with the dividends from my other holdings!

[Bucketlist2012]

Smart Mike! We all know that housing went UP too much and came DOWN too much. While you might have missed the very bottom - they are still relatively "cheap". Interest rates are cheap and won't stay that way forever. The key is positive cash flow!

I personally like to invest in LLC's that are professionally managed and own class A apartments. They typically pay a 7+% rate (taxable - but offset with depreciation). And in fact I'm now looking at a mixed use building with 48 units and a 30,000 square foot retail rental (long term leased)...


Rentals like houses and apartments are LONG TERM guys --- they tie up your cash -- and have relatively large buy and sell commissions --- so aren't something you can just flip out of. However, they have nice long term capital appreciation - come with some nice taxable incentives - and can spin off great cash flow that generally increases over time. Be prepared for a 7 plus year holding period.

Thanks Greg.

Yes I am prepared to hold Long Term and these places are really Cheap...

But at those prices and the price I can rent them for, it is a no brainer...They are "cozy" a.k.a. small homes...

I am a small Fish so I need to stay with small rentals...But positive cash flow is the name of the game..

[GregWeld]

Thanks for jumping back on, Greg. I don't post much, but really appreciate and enjoy reading your posts. Thanks for taking the time with us here.

I was happy to see Costco raise their dividend ($0.275 to $0.31 = 12.7% raise) even though the yield is only 1% annually. However, from this thread, I know why I own it - for growth and yield combination. I bought at $101 and its trading north of $108 now. Purchased it completely with the dividends from my other holdings!



#1 -- Thanks for posting! I often wonder if I'm just talking to myself!



#2 -- Using your dividends from other stocks to diversify into another name is BRILLIANT and exactly how this can be done!

[WSSix]

Thanks for jumping back on, Greg. I don't post much, but really appreciate and enjoy reading your posts. Thanks for taking the time with us here.

I was happy to see Costco raise their dividend ($0.275 to $0.31 = 12.7% raise) even though the yield is only 1% annually. However, from this thread, I know why I own it - for growth and yield combination. I bought at $101 and its trading north of $108 now. Purchased it completely with the dividends from my other holdings!

Sweet! I've been gone for a few days and didn't know this. I won a few shares as well and have been pleased so far.

[ErikLS2]

Rentals like houses and apartments are LONG TERM guys --- they tie up your cash -- and have relatively large buy and sell commissions --- so aren't something you can just flip out of. However, they have nice long term capital appreciation - come with some nice taxable incentives - and can spin off great cash flow that generally increases over time. Be prepared for a 7 plus year holding period.

Umm, got 46 units in San Antonio that I'm thinking of getting out of. Anyone?? Anyone??? :D

[GregWeld]

And here's another Bitcoin disaster......




http://www.nbcnews.com/technology/technolog/bitcoin-scam-turns-online-gamers-unwitting-accomplices-6C9743685

[GregWeld]

Umm, got 46 units in San Antonio that I'm thinking of getting out of. Anyone?? Anyone??? :D




Get an agent and list it.

[GregWeld]

I'm posting this because some of you may find this info "handy" either now or in the future.



So I'll spare you the details except to say that I recently moved some of the bonds I have with another brokerage into one of my Schwab accounts. I set up a PAL (Pledged Asset Line) with them (Schwab) so that I can fund the purchase of the land and build a new house in Sun Valley.... without borrowing or getting a construction loan etc. It's an open line of credit with a check book but I'm using securities (stocks and bonds) for the line to borrow against. This is REALLY REALLY cheap money and I don't have to pay it back for like 5 years - and can pay interest only against the money drawn against the line. It's 2.28% money.... and I can borrow 70% of the asset base. It allows me to trade - or change positions - still withdraw the dividends etc. It's basically an invisible line drawn around a portion of this account which must maintain a certain value.

For guys like me -- this was super simple to set up -- one phone call... discuss the options... BAM! Done.

Normally I'm debt adverse... but for this instance - this is going to work out really well. I only need to draw against it as needed and this little house project will play out over a 2+ year timeframe. I don't have to deal with any bankers (I hate them)... I don't have to sell any houses or assets - so there's no pressure to raise cash at a certain time etc. I'm really just borrowing my own money -- all the while it's still earning money.

Ordinarily these "PAL" accounts carry a 3 month LIBOR (London Inner Bank Overnight Rate) PLUS 3%..... With my asset base which is FAR higher than the assets put into the PAL -- I squawked like a hungry crow and they finally agreed to 2% over LIBOR. The 3 month LIBOR is about .28 right now.

When the construction is nearly completed -- we'll put the Bellevue place up for sale and move to our condo in SV -- then we can be there for the finish work on the house and all the little details that go into that.... once we move -- we already have a buyer for the condo (friends that want it). Then we'll get permanent financing on the new dump.

[GregWeld]

So I forgot the reason for mentioning the movement of the bonds....


Now that the bonds are in my Schwab account --- I can see their performance and sort them etc. There's some 85 different names!

What I wanted to say in the above post --- and got off subject --- was what horrible investments these have been!! OMG!! The best performing bond is up 7% (face value) and most are up a whopping 2 or 3%!! Versus an AVERAGE of about 11% on the stocks.

Mind you - they are purchased for a completely different reasoning. They provide steady TAX FREE income of around 4% --- doesn't sound like much until you do the math --- and compare that against the dividend you must earn on a stock and pay tax on it. Dividends are now taxed at 20% so you have to take that into consideration if you're using the money now vs holding them in a ROTH or IRA/401K account.

[glassman]

#1 -- Thanks for posting! I often wonder if I'm just talking to myself!

Nope, not at all. is your middle name "ef hutton" ? lol

The funny thing is about most forums is everybody has a comment or wants to play armchair quarterback, not this one.

Lateral-g, imo, has class and intelligence. Look, learn & listen. Funny too, cause i talk way too much....

Mike

[camcojb]

Greg,

I can't wait to see the shop plans for the new digs. :trophy-1302: Congrats!

[GregWeld]

Greg,

I can't wait to see the shop plans for the new digs. :trophy-1302: Congrats!



Jody -- I don't want to side track this thread... but the plans for the new "shed" will have 5,000 plus square foot shop in the "basement" -- which will also suck up the 65' long toter and trailer. It's very cold in SV -- I want this stored inside -- and washed inside etc. The house sits on the hillside rising up to a ridge... and the cul d sac is 110' diameter... The lot is 1.6 acres at the top of that cul d sac.. and will allow us to split the driveway leading to the shop and then continuing on up to the house...Truck parking with a view! LOL

[camcojb]

Awesome!!!

[toy71camaro]

Seeing some hits in Divvy stocks today.. down near 1% (averaged) for all mine.

[GregWeld]

Seeing some hits in Divvy stocks today.. down near 1% (averaged) for all mine.




Think of buying stocks as a set of stairs.... sometimes up -- sometimes flat... and they go up and down. :lol: :lol:

[GregWeld]

Well..... so much for sell in May and go away! <a very old truism/saying>


SO you newbs ---- this is something that I've talked about before, i.e., just when you THINK you know what's going to happen in the market.... it will do something else. Generally - against whatever you thought was going to happen.

The lesson from this is (should be).... quit trying to figure it out --- and just trust that you're going to have a lot more money down the road than you have right now. PERIOD. Stop stressing over all the news - the day to day - the world problems <of which few have any control>.... and just buy that good old company that you know and trust to do a good job... and PAYS YOU... for being an investor in them.

[toy71camaro]

Well..... so much for sell in May and go away! <a very old truism/saying>


SO you newbs ---- this is something that I've talked about before, i.e., just when you THINK you know what's going to happen in the market.... it will do something else. Generally - against whatever you thought was going to happen.

The lesson from this is (should be).... quit trying to figure it out --- and just trust that you're going to have a lot more money down the road than you have right now. PERIOD. Stop stressing over all the news - the day to day - the world problems <of which few have any control>.... and just buy that good old company that you know and trust to do a good job... and PAYS YOU... for being an investor in them.

Yup.. I try not and worry about it. Not trying to time anything anyway.

I am workin with Dad to try and get his 401k moved over to a Trad IRA so we can get some more control over it. Just trying to make sure it doesnt have any negative impact on his disability/insurance, etc.

[GregWeld]

Yup.. I try not and worry about it. Not trying to time anything anyway.

I am workin with Dad to try and get his 401k moved over to a Trad IRA so we can get some more control over it. Just trying to make sure it doesnt have any negative impact on his disability/insurance, etc.



You might want to include a TAX professional in this discussion BEFORE actually taking any action. One slip up and you get killed. The IRS is not very forgiving.

I once had a check sent to me --- and deposited it into my account --- to transfer into the IRA..... BIG MISTAKE -- paid taxes and a PENALTY for that little slip. Even though it was an honest mistake --- they could care less.

[Tony_SS]

This is why I love Peter Schiff! It's one of the more entertaining video's I've seen in a long time. Plus, I think Maria is drunk. Haha.

RwjrF96BO6c

[GregWeld]

Tony -- Another old truism in the stock market --- DON'T FIGHT THE FED.


What does that mean? Well --- it means that the FED is in control... and as long as you can make money on it -- who cares what the reason is. Right or wrong really doesn't count. Making money counts. When the FED changes course -- then you don't fight the FED then either -- then you move to what's going to work in a rising interest rate market.


People get all caught up in trying to "pick sides" and decide who's right and who's wrong. What you'll learn is that it doesn't matter who's right and who's wrong -- just concern yourself with making money -- then that will make you right. It makes everything all right!

Those that have been saying the market is too high (for like the last 2 or 3 years) --- and that what the FED is doing is all wrong -- and on and on.... they've been losing money while grousing about their "ideas". To me.... they're wrong -- because they don't get how to make money... they only get how to grouse about what they think is wrong. Eventually if they grouse long enough - they'll be right... but in the meantime -- they've lost their ass. The market is UP 100%..... I don't care if that's right or wrong.... as long as I've been able to profit from it.


Put another way --- people can talk all they want about the "poor people" that have lost their houses due to this entire real estate mess..... and how they shouldn't loose their house - and it's all the banks fault (BS!) etc. ME? I just see an opportunity to buy low -- and sell higher... I might feel sorry for the people having to move etc -- but that won't stop me from striking a deal for the property (I bought a 600K building for 335K from the bank holding the construction loan). Not my fault someone borrowed and the value went down and they couldn't make their payments. I had nothing to do with that. Not my problem. Not my worry. My only concern is to see if the deal can make money for me... cause if I don't buy it - someone else will. Thus my point about - I can grouse about the lousy bank kicking out the owner and taking the building - and NOT buy it.... or I can make an offer and hopefully turn a profit. My job isn't to fight over what's right.... my job is to make money and take care of my family.

[Vegas69]

There's plenty of room at the top, it's the bottom that's crowded.

You can try all you like to try to change the way things are out there, good luck. Take the circumstances and play the game to the best of your ability. Listen, read, learn from your mistakes and take advantage if you have the means. If you don't, get yourself in position to take advantage next time around as it will come. It always does...

Success is the refined study of the obvious. It's not rocket science becoming wealthy in this country. There is plenty of opportunity if you have the desire and self discipline. Set some goals that make you stretch and grow as a person, work hard at it, manage your personal finances, manage your business finances, stay accountable, take advantage of the handful of Springs in your life, invest your money wisely, and don't fall for the get rich quick schemes. All good things come from labor. Most of all, take 100% responsibility for your own life. Nobody else gives a **** if you die sick and broke.

Just my opinion... :lol:

[ErikLS2]

You might want to include a TAX professional in this discussion BEFORE actually taking any action. One slip up and you get killed. The IRS is not very forgiving.

I once had a check sent to me --- and deposited it into my account --- to transfer into the IRA..... BIG MISTAKE -- paid takes and a PENALTY for that little slip. Even though it was an honest mistake --- they could care less.

I'm not an expert on this but I do know this much. You can only convert a 401k to a traditional IRA if you no longer work at the company that you had the 401k with. In my case I didn't change jobs but I changed employers when we were bought out. This made me eligible to make the transfer. As long as you still work for the company that you have the 401k with you're stuck there.

The other key factor is to do a trustee to trustee exchange, i.e. from your 401k administrator directly to say Schwab or other brokerage. LIke The Master said, the money must not touch your hands or any of your personal accounts in any way. Schwab is REALLY good, if you call them they can explain to you just how to do it without any penalty

[GregWeld]

Nobody else gives a **** if you die sick and broke.

Just my opinion... :lol:





EXACTLY!

[GregWeld]

This news article was posted on NBC news.com today....

The real points of posting this kind of stuff is more just to say -- the minute you think you know what's going to happen... it won't happen that way. Thus -- market timing does not work. It's only useful information in a hindsight kind of way.

The part I like about everyone hollering about a "new record high" --- is that -- when you think about it -- there's zillions of new market record highs - otherwise we couldn't have gotten to this latest one! So really - a new record high is nothing more than just another day. I pay NO ATTENTION to the talking heads that pronounce that because we're in record territory -- that something must happen to knock us out of it. Maybe... maybe not... when? Who knows.... but if you go back and do a chart of the DOW --- it's not a straight line higher -- but it is (obviously) higher over a long period of time. Are there periods when it SUCKED --- oh yeah... but the chart is far higher on the right than it is on the left -- including the Great Depression which is a horrible dip down.


http://stockcharts.com/freecharts/historical/djia1900.html






Stocks: 'Sell in May and go away?' Not this year


REUTERS


A street sign for Wall Street hangs in front of the New York Stock Exchange.
NEW YORK -- With the Dow and the S&P 500 setting another string of record closing highs this week, the old Wall Street adage "Sell in May and Go Away" is starting to look weak.

Closing out the second week of May, the Standard & Poor's 500 index is up 2.3 percent for the month.

For the year, the benchmark S&P 500 is up a stunning 14.6 percent.

Some analysts say that when the market starts off this strong, it tends to keep the upward momentum going until the end of the year.

"Instead of 'Sell in May and Go Away,' we may be setting up for a surprise May rally," said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

"What's encouraging is that small-cap stocks have been outperforming the market recently. It's a sign that the market is going for even the riskiest sectors."

Both the Dow industrials and the S&P 500 topped major milestones for the first time in early May, with the Dow Jones industrial average surpassing 15,000 and the S&P 500 breaking through the 1,600 mark. Since then, the indexes have been steadily holding above the landmark levels. The Nasdaq Composite Index has climbed to the highest closing levels in 12-1/2 years.

In a sign of the rally's breadth, the Russell 2000 index of mid- and small-cap stocks also hit all-time highs recently.

Technical analysts say the next level to watch would be 1,660 on the S&P 500.

"The main question is whether the bulls can maintain the 1,600 level on the S&P 500 for another week," said Ari Wald, technical analyst at PrinceRidge Group, a New York-based investment bank.

"If it does, the next level is 1,660. But with markets already this high, it won't be easy."

Despite lingering concerns about a technical pullback, the market's strong performance so far this year has also increased the chances of equities rallying throughout the year, according to some analysts.

"With the market up so much, can it continue to make gains over the next seven months through year end? At least based on history, it has a better chance of continuing higher during strong years than when it is not up significantly," Bespoke Investment Group analysts wrote in a note to clients.

Bespoke noted that this year is only the 11th-best start to a year since 1991, when the index gained another 9.7 percent for the rest of the year.

If 2013 plays out like that -- with another 9.7 percent gain in store for the S&P 500 -- the broad index would finish the year up a whopping 24.3 percent.

Laggards play catch-up
Among recent gainers, sectors closely tied to economic growth such as technology and financial stocks have been catching up after lagging for most of the year.

"We are seeing the once beaten-down stocks making a comeback," Wald said. "It's been sort of a rotation of leadership that has been taking place for a month or so. It will be interesting to see if this can last" into next week.

The S&P financial sector index is up about 2 percent for the month, while the S&P information technology sector is up about 3 percent.

For some perspective, the tech sector has a way to go, when compared with defensive sectors like utilities. The S&P utility sector index is up more than 13 percent for the year, while the S&P info tech sector index is up less than 8 percent.

Consumer in the driver's seat
The American consumer will get Wall Street's attention next week when a raft of economic data and retailers' earnings could shed some light on whether they shopped for more than just the bare necessities.

Retail sales for April will be released on Monday by the U.S. Commerce Department.

"It (retail sales) will be a chance to look at the real picture after weak numbers last month on sequestration and other (external) factors," said Karyn Cavanaugh, market strategist at ING U.S. Investment Management in New York.

"The market is driven by good fundamentals from corporate earnings, but it's really the consumers that take up 70 percent of our economy. They are a real game changer."

Other economic data on tap includes April import and export prices on Tuesday, followed on Wednesday by the U.S. Producer Price Index for April, the Empire State Index for May, industrial production and capacity utilization for April, and the National Association of Home Builders Index for May.

On Thursday, the economic agenda includes the U.S. Consumer Price index for April, housing starts for April, weekly jobless claims and the Philadelphia Fed's survey for May.

Wall Street will get a look at consumer sentiment on Friday, when the Thomson Reuters/University of Michigan Surveys of Consumers will release its preliminary reading for May.

On the earnings front, a number of retailers are scheduled to report results, including Macy's on Wednesday. Results from J.C. Penney, Nordstrom, Kohl's and Wal-Mart are expected on Thursday.

With 89 percent of the S&P 500 companies having reported earnings so far, 66.7 percent have topped profit expectations, above the average of 63 percent since 1994. However, only 46.4 percent have beaten revenue expectations, well under the average of 62 percent since 2002.

[WSSix]

My OXY stock is at a record high too! It's only down $400 now. It was much lower. :trophy-1302:

I do wonder though, how much all this talk about what's supposedly going to happen, even though no one really knows, affects the market. While I'm in this for the long run and don't care about record highs either, I can't help but think if people would just chill and let it ride, the ups and downs might not be so bad. Maybe I'm too much of a cynic or just don't bother to count my chickens until they hatch though.

Regardless, my choices aren't doing bad and I'm happy to see the NYSE up. I'll update soon as it's been a year since I started all this and I'd like to see how I'm doing compared to my other accounts that are controlled by the pros.

[GregWeld]

Trey ---


If you own 10 stocks -- 5 can be doing well -- 2 are doing fantastic -- 2 are break even -- and ONE can ruin your performance!


About the time you sell the loser.... it takes off straight for the moon and runs 10 points. Then something else sucks -- and something else goes even. It's just that way. We can never have 10 out of 10 going gangbusters.

I hope that at the end of the year period - you're up 11% or so in capital -- and have gotten a pretty good 4 or 5% cash return in dividends.


That doesn't seem like much -- but the 10 year treasury is still at 1.66% !

[RECOVERY ROOM]

Greg's last post just exploded my head...LOL

[GregWeld]

Greg's last post just exploded my head...LOL



That was pretty easily done..... :catfight:

[RECOVERY ROOM]

:yes: :yes: :yes:

[GregWeld]

This market has just been fantastic ---- and every time I look at some name to check relative performance -- I'm blown away.


Coke (KO) a certain "steady eddy" -- is UP 17% Year to date...


Altria -- (MO) -- is up 18%


Con Ed -- (ED) -- is up 11%


I'm just tossing these out there because they're the "BORING" low paying dividend names we've talked about many times. Folks! Hello! That is some amazing capital growth given we're only 5 months into the year!


Something else I've tried to get folks to understand - or at least be aware of -- is that let's say we have a "healthy" pullback... 10% or so.... if we do? We're still going to be UP. Gotta love that kind of market.

[toy71camaro]

This market has just been fantastic ---- and every time I look at some name to check relative performance -- I'm blown away.


Coke (KO) a certain "steady eddy" -- is UP 17% Year to date...


Altria -- (MO) -- is up 18%


Con Ed -- (ED) -- is up 11%


I'm just tossing these out there because they're the "BORING" low paying dividend names we've talked about many times. Folks! Hello! That is some amazing capital growth given we're only 5 months into the year!


Something else I've tried to get folks to understand - or at least be aware of -- is that let's say we have a "healthy" pullback... 10% or so.... if we do? We're still going to be UP. Gotta love that kind of market.

Are you spying on my portfolio?? lol. I have all 3 of those.. I'm not complainin one bit. :)

:popcorn2:

[GregWeld]

You're the main event Albert!!!





How about Kinder Morgan Parners (KMP) ---- PAYS $1.30 dividend today --- and on top of that is UP a buck today as well!!!


Amazing market folks! Just amazing! Enjoy it while it lasts.... 'cause this is one of the best I've seen and I've been doing this (investing) for 30 years.

[toy71camaro]

The "big one" for me has been KMB... up 23.96 YTD. Plus their 3.08% Divvy (which is actually 4.09% YOC for me)...

Although, its all paper gains right now. its neat. I am waiting for a pullback, so my divvy payments can buy more shares on sale. LOL. But, pushing ahead like this isnt bad either. :)

I've got 30+ years before i need to (or can) touch it. :)

[96z28ss]

You're the main event Albert!!!





How about Kinder Morgan Parners (KMP) ---- PAYS $1.30 dividend today --- and on top of that is UP a buck today as well!!!


Amazing market folks! Just amazing! Enjoy it while it lasts.... 'cause this is one of the best I've seen and I've been doing this (investing) for 30 years.

KMP and NNN pay day today.

[hifi875]

My little homemade 401k is up 40% in one year. My Bank of America has almost doubled since I bought it. Wish i'd bought more but hindsight is always 20/20!

[GregWeld]

KMP and NNN pay day today.




Your money for nothin' and your chick for free.....


Don't ya just love getting paid?!?!?!

[GregWeld]

My little homemade 401k is up 40% in one year. My Bank of America has almost doubled since I bought it. Wish i'd bought more but hindsight is always 20/20!




I'm going to start listening to YOUR advice!!!



I'd be up more --- but I SPEND my dividends and bond income..... so they don't get rolled back into more shares. :RunninDog:

[GregWeld]

Don't ya just love getting a RAISE!!!







HOUSTON--(BUSINESS WIRE)--May. 13, 2013-- Kinder Morgan today announced an increase in its 2013 projections for Kinder Morgan, Inc. (NYSE: KMI) and Kinder Morgan Energy Partners, L.P. (NYSE: KMP) primarily based on projected contributions from the Copano Energy acquisition, which closed on May 1, 2013. KMI now expects to declare dividends of $1.60 per share for 2013, up from its published annual budget of $1.57 per share, which represents an increase of approximately 14 percent over its 2012 declared distribution of $1.40 per share. KMP now expects to declare cash distributions of $5.33 per unit, up from its 2013 published annual budget of $5.28 per unit, which represents a 7 percent increase over its 2012 declared distribution of $4.98 per unit.

[toy71camaro]

Nice!

[CRCRFT78]

I need to post an update on my account soon. Its been a nice run and I'd like to start adding to it. This weekend the wife and I will begin researching some stocks for her so I can get her moving along.

[Bucketlist2012]

I need to post an update on my account soon. Its been a nice run and I'd like to start adding to it. This weekend the wife and I will begin researching some stocks for her so I can get her moving along.

Excellent....The number one problem in marraiges is MONEY....So talking with your Wife about your plans for the future is critical..

Laying out 1 year, 5 year, and 10 year goals really keeps the bond tight between a Man and his Wife...

I have friends who won't talk about their financial futures with their spouses and they are always fighting...

Good Job Jose...

[sik68]

It's really fun watching the recent stratospheric rise of the market from the perspective of a 102 reader. Most of my previous "shoulda/coulda/woulda" day-trading anxiety is gone, and I feel much more secure knowing that the path I am choosing is the right way to proceed for long-term gains.

Actually, while most of the country is rooting for the market to keep rising, I'm ready for a correction because it's hurting my dollar-cost-averaging. :idea:

[toy71camaro]

A good read this morning... shows some "numbers" on the whole timing the market question..

Obviously, buying during a crash is GREAT. but just getting in whenever you can for us long term holders, will still be great. Looks like about a 1% difference in "timing it" which isnt that big in the long run. and you may have never bought until weeks/months later when you finally gave in, and lost even more money..

http://seekingalpha.com/article/1441391-what-if-long-term-dividend-investors-buy-before-a-crash

[WSSix]

Ok, here's my yearly update. I only included the stocks I bought last year. The ones I purchased at the beginning of this year are doing fine but nothing worth mentioning since it's only been a couple months.

I did my calculations by hand because either Vanguard doesn't offer me that ability or I'm just not utilizing the website fully. All the same, in order to separate everything out to see how my money is being earned I did the following math.

For dividend gains, I simply divided the difference between my initial investment and total cost by the initial investment. Total cost being the sum of my initial investment plus any dividends earned since I reinvest them.

For capital gains, I divided the difference between current value and total cost by total cost.

For overall gains, I divided the difference between current value and initial investment by the initial investment.

Without further ado, here are the results from my first year.

KO Div 3.79% Cap 23.15% Total 27.8%
KMP Div 6.49% Cap 9.94% Total 17.1%
OXY Div 2.25% Cap -7.73% Total -5.65%
SO Div 4.44% Cap 3.85% Total 8.4%
WFM Div 3.38% Cap 23.3% Total 27.5%

Averages Div 4.07% Cap 10.5% Total 15.03%

I'm happy :D I'm also pleased to see my OXY starting to climb back towards the surface. My Fidelity managed 401k has an 11% IRR and that doesn't include the company match which is fantastically free money. My Vanguard managed mutual fund I'm honestly not sure on but it's going up. So yeah, I'm happy and dividend investing is clearly working for me. MY ESPP is flat out amazing right now too.

[GregWeld]

Aren't you glad you started this thread!!! LOL

[WSSix]

Yes! :D Thanks again, Greg.

[GregWeld]

I've kept about 3MM in cash WAITING for "the pullback" to jump in and do some selective buying... Obviously that hasn't happened YET.... and may not. That's the stock market. It never does what you think or want it to do. We're actually just spectators along for the ride. Sometimes you're just sitting on your hands. So 3MM employees are currently on vacation.

I write this -- because a car dealer will tell you that the money is "made on the buy - not on the sale" side. Meaning that if he buys a car right --- that's probably where the best profit is. I'm sitting with the employees on vacation hoping that when they come back to work -- I will have a chance to make a little gain buying "right".

I DO NOT RECOMMEND this kind of practice for normal investors... and or EVER for 401's and IRA's etc. I'm basically a professional money manager (for my own funds) and have been doing this for some 30 years. I eat and sleep this on a daily basis. The reason for writing this post is to show just how wrong (so far) I've been. Remember too, that this is a very small portion of what I'm investing. It was cash that was parked in a couple cash cows but at least it WAS earning money even though it wasn't really "invested".

[hifi875]

Still the best thread on Lat-g!!

[GregWeld]

Did anyone see that the US government seized assets of bitcoin??

I checked the price and it was trading at $125 and since I'm traveling back from
The V8 Supercar races in Austin I can't cut and paste the article
Using my phone.



http://www.cnbc.com/id/100750803

[XLexusTech]

This was recommended to me.. I am reading it now so I thought i would pass it on... Not positive its 100% relevant as its over 50... :twak:

http://www.wiso.uni-hamburg.de/fileadmin/sozialoekonomie/bwl/bassen/Lehre/International_Finance_I/Assignments/1959_Gordon.pdf

[Tony_SS]

Did anyone see that the US government seized assets of bitcoin??

I checked the price and it was trading at $125 and since I'm traveling back from
The V8 Supercar races in Austin I can't cut and paste the article
Using my phone.



http://www.cnbc.com/id/100750803

DHS didn't seize any bitcoins, the just closed an exchange here in the US. This is like killing one ant and hoping the whole colony dies. As long as there is a need, it will be near impossible to stop it.

The price has stabilized with a slow steady increase... but still, they know what it takes to destabilize it. When central banks can create dollars out of thin air, a relatively small bitcoin market can easily be manipulated.

Since that bubble and crash didn't scare everyone off, they are using force to trying to close things down now, at least here in the states where they can.

[GregWeld]

DHS didn't seize any bitcoins, the just closed an exchange here in the US. This is like killing one ant and hoping the whole colony dies. As long as there is a need, it will be near impossible to stop it.

The price has stabilized with a slow steady increase... but still, they know what it takes to destabilize it. When central banks can create dollars out of thin air, a relatively small bitcoin market can easily be manipulated.

Since that bubble and crash didn't scare everyone off, they are using force to trying to close things down now, at least here in the states where they can.




Well personally I'd be worried about a couple of things.


#1 --- I never want to be in a pissing match with any government.


#2 --- They seized the assets of the exchange... to me that says they
may also have access to accounts - transactions - etc... which I'd be worried about if I wasn't paying income taxes on my gains. That's what they're really after.

[GregWeld]

You guys that looked around your neighborhoods and decided that Home Depot (HD) was someone you'd like to invest with.... certainly got it right. It's up what ?? Like $4 in the last two days?


I've missed two things that if I'd have followed my gut hunch --- I "wanted to" short the housing stocks just prior to the crash --- and I wanted to buy housing stocks last year (I have three buddies in the biz and they all saw good things coming). I did neither.

Home Depot and Lowes are both "housing proxies".... * Newbs * a "proxy" is a way of buying a company (stock) that is a direct beneficiary of an industry etc without actually picking a name (stock) in the industry. Think of it like buying Goodyear if you thought "car sales" were going up. You wouldn't have to pick Ford or Chevy.

[dhutton]

You guys that looked around your neighborhoods and decided that Home Depot (HD) was someone you'd like to invest with.... certainly got it right. It's up what ?? Like $4 in the last two days?


I've missed two things that if I'd have followed my gut hunch --- I "wanted to" short the housing stocks just prior to the crash --- and I wanted to buy housing stocks last year (I have three buddies in the biz and they all saw good things coming). I did neither.

Home Depot and Lowes are both "housing proxies".... * Newbs * a "proxy" is a way of buying a company (stock) that is a direct beneficiary of an industry etc without actually picking a name (stock) in the industry. Think of it like buying Goodyear if you thought "car sales" were going up. You wouldn't have to pick Ford or Chevy.

HD is one of the stocks I purchased way back in Jan/12 when this thread inspired me to get off my butt. I purchased it in my Schwab account (that I opened because of this thread) and also in my 401k Brokerage Link account (that I also opened because of this thread). It is up 85% since my purchase. This thread is pure win. :thumbsup: Thanks Greg. Your advice to buy what you know and like was right on the mark.

Don

[GregWeld]

^^^^^^^^^ AWESOME!!!



Investing CORRECTLY -- really is pretty damn simple.


It's when someone tries to get fancy that it fails.

[96z28ss]

my ford "F" is up 49% since I bought a year ago this May.

This is the best thread on the internet.

[GregWeld]

HD is one of the stocks I purchased way back in Jan/12 when this thread inspired me to get off my butt. I purchased it in my Schwab account (that I opened because of this thread) and also in my 401k Brokerage Link account (that I also opened because of this thread). It is up 85% since my purchase. This thread is pure win. :thumbsup: Thanks Greg. Your advice to buy what you know and like was right on the mark.

Don





Because this thread is read by many -- I MUST comment that this is not a good habit to get into. Remember to look at your "investments" as a whole... it is, after all, ALL your money in the end. Therefore.... a well diversified portfolio would/should be a sum of all those investments. It's better to buy DIFFERENT names for each account -- and then still use the "5% rule"... to make sure you're not loaded up on any one investment.

I know this is hard to do ---- and it's far too easy to ignore these simple rules when things are humming along nicely (as they have been) ---- but these rules are more to protect you when the shizzle isn't running in your favor. Trust me when I tell you -- THEN you will be a believer in diversity --- and in not loading up the truck with "what was" working.

When I'm buying shares -- I use a DOLLAR amount -- and then round off... but I take into account my total dollar amount invested...... Where I diverge from that is actual real estate. I treat real estate as separate investments and just put in what I'm comfortable with --- and in my case --- usually enough so that I have a controlling interest as an investor (the management group actually has 49% usually -- but I want to be the largest investor on the other side).

I lump BONDS and STOCKS as a total..... so I have "X" amount invested... and use that to control the diversity as well as the 5% rule.

[dhutton]

Because this thread is read by many -- I MUST comment that this is not a good habit to get into. Remember to look at your "investments" as a whole... it is, after all, ALL your money in the end. Therefore.... a well diversified portfolio would/should be a sum of all those investments. It's better to buy DIFFERENT names for each account -- and then still use the "5% rule"... to make sure you're not loaded up on any one investment.

I know this is hard to do ---- and it's far too easy to ignore these simple rules when things are humming along nicely (as they have been) ---- but these rules are more to protect you when the shizzle isn't running in your favor. Trust me when I tell you -- THEN you will be a believer in diversity --- and in not loading up the truck with "what was" working.

When I'm buying shares -- I use a DOLLAR amount -- and then round off... but I take into account my total dollar amount invested...... Where I diverge from that is actual real estate. I treat real estate as separate investments and just put in what I'm comfortable with --- and in my case --- usually enough so that I have a controlling interest as an investor (the management group actually has 49% usually -- but I want to be the largest investor on the other side).

I lump BONDS and STOCKS as a total..... so I have "X" amount invested... and use that to control the diversity as well as the 5% rule.

HD is not a major portion of either of my accounts. I think it represents roughly 10% of each account since I also took your advice regarding diversification. However, even then it is nice to see these kinds of returns on one or two holdings. It has helped cover a couple of my purchases that have not done as well.

Don

[GregWeld]

As long as we're on this subject --- I'd add that what you buy in which type of account is really pretty important.

Some things to think about when selecting.


IRA/ROTH etc --- what you put in here DEPENDS on your timeframe til retirement. Obviously if you have a long time -- say more than 15 years til retirement... then I'd personally select things that are more GROWTH oriented.


If it's money in a regular account --- and it's money that may or may not be tapped in to from time to time..... THEN I'd buy more steady eddies for that account.... because I might need the money when things are down. So the Cokes --- and that sort of name would be in my normal accounts.


A couple reasons here.... again --- just some food for thought. DIVIDENDS are taxable.... and GAINS aren't UNTIL YOU TAKE THEM. So in a normal account -- your money might DOUBLE over 10 years -- but you haven't been paying tax on that and won't until you sell. YOU WILL pay tax on the dividends even if you're having them re-invested.... at 20%. So you get 2K in dividends in that normal account and you're out of pocket $400 come tax day.


Now -- all of this DEPENDS --- like most things -- because nobody is doing or should be doing - what someone else is. It all has to be tailored to what your needs and goals are and your tax and cash flow situation is. I have NOTHING in IRA/401's -- I sold them out years ago because I had no need for them. I do still own an apartment house inside of an IRA -- and it's nothing but a PITA and is taxed as well! But that's a mistake on my part and I now can't seem to get out of it so it is what it is.

[GregWeld]

I just have to do one more post today....



I was just poking around and noticed something that, personally, I think is incredibly important to "investing".


Check out WALMARTS (WMT) 5 year chart on Google Finance.....


Now -- What I want people to really pay attention to is at the end of 2008 -- 5 years ago -- WMT paid a .24 cent per quarter dividend.... Yeah - WMT sucked wind for 3 or 4 years (as share price goes).... but -- the BIG BUTT -- they now have almost doubled the dividend to .47 cents per share per quarter.

Think about that for just a minute --- have ANY OF YOU gotten a 100% increase in your pay in the last 5 years???

This is what I'm talking about when I say -- you get paid to wait.... and that you don't have to be some miracle stock picker to make money in the market LONG TERM.

Forget the share price growth --- you've doubled your cash flow even if the share price just stayed flat!!! What's wrong with that scenario??

[GregWeld]

Today is what I was waiting for. Not a big sell off but buying down a dollar here and there.... Adding to positions already established. Gotta love it!

[Steve_O]

Greg,

Re: Diversification, a google search reveals 10 'sectors' (investment sectors...).

Are there some sectors you might favor? Sectors to avoid? I'm about 15 years away from retirement if that factors in.

Is there a rule of thumb about spreading risk? One stock of each sector before 2 of any one sector?

Sorry if this has been covered, I'm up to about page 75 in the thread and
had not seen this question.

Battling 'analysis paralysis' but I just opened a Schwab account, so I'm close to making some moves,

Thanks for the info and the motivation!

Steve O

[GregWeld]

Greg,

Re: Diversification, a google search reveals 10 'sectors' (investment sectors...).

Are there some sectors you might favor? Sectors to avoid? I'm about 15 years away from retirement if that factors in.

Is there a rule of thumb about spreading risk? One stock of each sector before 2 of any one sector?

Sorry if this has been covered, I'm up to about page 75 in the thread and
had not seen this question.

Battling 'analysis paralysis' but I just opened a Schwab account, so I'm close to making some moves,

Thanks for the info and the motivation!

Steve O



Excellent questions!!!



Okay -- I'll try to keep this simple (the market is anything but!)....

Diversification is based on how much you really have to invest -- time horizon -- adversity to loss of capital etc. It's pretty dang hard for a guy with 5 grand to invest - to get much diversification.... at 10 grand a guy could buy 10 stocks - 1 grand each. I personally don't see any need for more than 20 stocks - regardless of how much money you have... 20 stocks will keep you in the 5% rule. More than that is just kind of a waste of effort and you loose track of what you own.

SECTORS are a different story. Sectors tend to go in ROTATION.... one sector can be a looser in an up market -- as investors roll out of that sector and invest in another sector. So just to have every sector covered.... is probably not a good strategy.

If you read this thread --- I'm personally more about owning the best of the breed in the field that you're going buy in -- and even more about owning names that you know and understand... by understand - what I'm saying is places you shop - places you eat - places that you buy from - in other words - something that you personally can look around and say -- I like this dump - and the parking lot is full - and the merchandise is good and these places seem to be well run. Whatever "these places" are...


The reason for that is because I believe that it's important to hold and invest more when things are crappy. If you can look around and trust the business you've invested in - then you'll tend not to panic and sell just because the share price isn't so hot for a year or two. And if you like the company - then you might feel comfortable adding to your position when things aren't so hot - and that's where real investors make their money.


SO -- make a list of places you'd like to own.... Just for fun - let's say
Home Depot
Ford
McDonalds
WalMart


Okay -- then we look and say -- you have THREE retailers --- but break it down more and you have FOOD -- General merchandise -- Home building supplies... and a manufacturer (Ford). I don't really see a problem in owning those stocks even though they're not diversified by "sector".

Now --- I like to own some OIL.... whether or not that's pipelines -- retailers - drillers - refiners.... there's so many kinds and types -- but again -- never buy something you know nothing about. I happen to always buy Chevron... I like their product - I see their stations -- I can sleep at night owning it. Maybe you're a Conoco guy... but you see where I'm going.

I don't own sectors I own COMPANIES that I like and can live with and understand -- and that pay me to own them (dividends) -- In other words -- they like to share their profits with me.


So the short answer is --- you don't want to be in all retail -- or all banking -- or all housing.... BUT -- you do want to be in great companies that pay you to own them and that you love.

Do that --- and you'll be happy and successful over time. Why own something in a "sector" you don't know a damn thing about -- just for the sake of being diversified.

So here's something else ------- I don't smoke or drink ------ But I love cigarette and booze stocks... because people buy them in an up economy or a down economy... even if a guy is laid off - he's still puffing away... While I might hate that and wish he'd quit.... he's not going to -- and I'm going to make money off that. Can't help him - might as well help myself. They're called SIN STOCKS.... don't overlook them.

I used to own AT&T and VERIZON -- then I said --- why bother -- AT&T is who I use - so that's the one I own. Nothing wrong with either one of them -- but I'm a customer of AT&T so they might as well pay me back once a quarter with a nice dividend.


Hope that helps.


Take you a few nights -- but go back and read from the beginning.....

[GregWeld]

Yesterday I said I was picking away at adding to some positions because I wanted to be buying down a buck or so if I could. That doesn't sound like much does it.... I mean really? Down a buck? Whoo hoo....

Here's the PROPER way to look at this though.


When you're buying 4 or 5 or 10 THOUSAND shares at a time like I do... Down a buck is 4 or 5 or 10 Thousand DOLLARS.

I also always look at PERCENTAGES... so if something is off 2 or 3 PERCENT... and I'm only trying to make 5 percent for the year - well (hopefully) I have a good leg up on that 5% when the market snaps back!


Here's a snap shot of one of the orders I placed yesterday. I placed two separate orders as the day went on -- one for 2000 shares and another one for another 2000 shares as the price fell a little more. I always do LIMIT orders -- so I pick a price I want to pay and when shares are for sale at that price - then the computers buy them. Thus the multiple fill of the orders.



300 $39.679 $11,903.70
Commission: $1.34
$11,905.04
1,700 $39.678 $67,452.60
Commission: $7.61
$67,460.21
159 $39.60 $6,296.40
Commission: $0.71
$6,297.11
1,241 $39.60 $49,143.60
Commission: $5.55
$49,149.15
100 $39.5994 $3,959.94
Commission: $0.45
$3,960.39
100 $39.5994 $3,959.94
Commission: $0.45
$3,960.39
400 $39.599 $15,839.60
Commission: $1.79
$15,841.39



Now --- here's why I'm writing about this today. BUYING ON THE DIPS --- makes you FEEL BETTER. When you buy a little here and there -- and the price a few days or weeks later is MORE than you paid -- YOU FEEL BETTER. Does it make a huge difference 10 years down the road? Probably not really... but for those 10 years... I'll think I was pretty dang smart.

Does this kind of investing make a difference in a portfolio where someone is buying 50 or 100 shares... Not really... BUT YOU'LL FEEL BETTER!!!

Note that I was ADDING to an already established position. I've been asked a zillion times about "should I wait to get in"? The usual answer is no. While you're waiting -- you're losing time -- and will probably wait until just after the "X" date of a dividend payment -- and then will have to go for 3 more months before you get paid a dividend etc. And maybe you missed the 3 day selloff -- and now the shares have not only rebounded but they've jumped 4%. In the long run -- 3 - 5 - 10 - 15 years -- just buy when you have the money ready and are ready to make a pick. TIME is your friend.... not the .50 per share dip you waited for.

If you're pretty sophisticated and are aware of all the little nuances of the market - you know the X date - and on and on - and you're placing orders for 500 shares at a time etc -- okay -- then maybe you can wait a couple weeks or a month or two for a dip like I do.

[GregWeld]

Looks like I should have waited another day or two!!! LOL


You can never pick the bottom -- or sell at the top... Just get over it. :smiley_smack:

[GregWeld]

This is a good article and everyone should read it -- it's short - but long on ideas and values to be remembered. The values are that it really doesn't take that much per year or that long - to accumulate some meaningful funds.

The strategy is that investing is not about getting rich quick - but rather - time is the wealth creator... the sooner someone gets started the better. The author uses 12 years to show money growth. If money doubles every 10 years - then the 167K is going to be 330K and the author is assuming that you quit saving after just 12 years. Of course he's not writing about that - but I'm taking his example just a bit further.

Now imagine - that if a person really said to themselves... RETIREMENT should be fun - and fun costs money. And then saved accordingly. To me - I think if someone is making 100K a year... they should easily be putting away 1K PER MONTH... which would double all the authors results.

http://seekingalpha.com/article/1460381-is-blue-chip-dividend-investing-only-for-rich-people?source=email_investing_income&ifp=0

[glassman]

I thought you smoke'd tires and drank gas? goodyear and chevron lol

But seriously, Greg you've said so much just right there. That is why i keep refering friends and family to this thread, the old sales motto, kiss=keep it simple stupid!!

Steve, i'm kinda in the same boat as you, mid 40's, and about 15 years left.

Think about that, its halftime in our careers, 3rd quarter, hows your game doin?

Have a great Memorial Day everybody!!! AND REMEMBER TO THANK OR HUG A VET!!!! (not a corvette, you can hug that some other time,,,)

[glassman]

sorry, i missed this last page, was referring to right after Steve's post....

[Bucketlist2012]

Hey Guys..

My thought for the day is just remember that health is a HUGE factor in your Numbers..

You can plan and then wham....You are not working anymore due to Health..

My numbers had me working 10 more years, but due to major health issues I can no longer work..

So overestimate what you will need and shoot for that.. Also have the Will/Trust in place...I don't think you want your Family in probate after you are gone...Keep the Government out of your pockets...

Life Insurance ? It depends...

Long Term Care....Another question...

Not things we like to talk about, but all your planning can go out the window in a flash

[glassman]

The old saying goes "if you've got your health, you've got your wealth"

I have many disabled clients, some from sickness, some from age, none of them can "spend"....

[GregWeld]

Any of you newbs to investing making any money??:poke:

[toy71camaro]

No complaints here!!

ED Dropped back some over the past week. Seems the news article about them charging the highest rate for Electricity in the US didnt help me any. lol.



Here's a question however...

back long before my Investing 102 days I made a decent purchase ($ wise, not "smart" wise. lol)... (compared to what i have in my ROTH Investing 102 account that went belly up. Now its a "fraction of a penny" stock. lol. What's your thoughts on this one? My thought, is that its so low, it will cost me more to sell it than what its worth (ouch). So holding it is costing me nothing, other than seeing the lower overal % growth being true for my account. I figured since it doesnt cost me, perhaps i should just hold onto it, and maybe one day in the far far future they come back.. lol. The stock was Storm Cat Energy, who went bankrupt not to long after my purchase (relatively speaking. It now goes by the ticket SCUEF, and is no longer listed on the normal stock exchange (which not sure if i could even sell it if i wanted). The original $ amount makes up about 4% of my total "ROTH" account. So that obviously takes a hit on my Gains/Losses column.

This is in a ROTH Account. So no tax benefits either way...

[glassman]

Well with the Roth you dont get taxed as earned income when you take it out, course there has to be something there to take out lol, dont get me started on the entitlements.....

[GregWeld]

This is a big heads up.... and while the MARKET could be wrong --- it seems that the YIELD CURVE is headed UP. Which means that mortgage borrowing is strong because housing sales are strong.... and the FED seems to be signaling that they're going to or are about ready to taper their bond buying (QE - Quantitative Easing).

With the HUGE run up in CAPITAL (Share prices) we've had -- my guess is the big money is going to scoop theirs off the table... and start to buy other stuff --- which you'll start hearing the word "ROTATION".

When you do the math -- the market has run about 17% this year (that's just giant given it's not even a half a year yet!).... So it doesn't surprise me that the fast money would be selling and taking their profits.

If you've made 15% capital appreciation -- and you're trading millions / billions of dollars -- you start to sell the dividend shares (you get 4% - but you've made 15%) and ROTATE into shares that would deliver GROWTH in a better economy.

But then what you have is share prices dropping --- but the YIELD goes up as the share price drops... and then you have all that cash that was "made" now has to go somewhere --- we can't have employees on vacation for very long - and that money lands somewhere.

Think about a tree full of doves -- you shake the tree -- all the doves fly up -- and then they land back on the tree - but on a different branch.

++++++++++++++++++++++


Does this mean you should log in and sell everything and sit waiting for better prices?

No probably not. Your dividend stream will continue -- it will buy shares at lower prices -- building your share count faster -- paying more dividend -- buying more shares. IF the market - thus prices - are high - your dividend doesn't buy as many shares - and you build shares slower. So in actual fact - you want share prices down... Remember that the dividend is paid in DOLLARS not percentages.... so provided the dividend isn't cut -- then the PERCENTAGE you're earning on those new share purchases is higher... the lower the share price goes -- the higher the percentage you're earning on your money.

+++++++++++++++++++++++++++


I've been warning for awhile now -- to remember what it feels like to be in a market like this -- where every day you're up. That isn't normal - not normal at all..... But remember your goals! Your goals are 10 - 20 years away.

[Sieg]

Thanks GW, very interesting. I was reviewing our fund managers actions and it appears they sold off 30-45% of positions on an average last week.

05/28/2013 as of 05/23/2013 Sell
25,000
US TREAS NOTE 1.75%03/14UST NOTE DUE 03/31/14 $101.379 $25,394.30
05/28/2013 as of 05/23/2013 Sell
25,000
WACHOVIA CORP 5.25%14NOTES DUE 08/01/14 $105.258 $26,729.71
05/24/2013 as of 05/23/2013 Sell
25,000
GEN ELEC CAP CP 5.625%18MED TRM NT DUE 05/01/18 $118.104 $29,620.38
05/24/2013 as of 05/23/2013 Sell
25,000
BP CAP MKTS PLC 5.25%13FNOTES DUE 11/07/13 $102.103 $25,590.96
05/23/2013 Sell
50,000
US TREAS NOTE 2.625%14UST NOTE DUE 07/31/14 $102.9102 $51,849.80
05/23/2013 Sell
30,000
US TREAS NT 4.125% 05/15U S T NOTE DUE 05/15/15 $107.5977 $32,294.57
05/23/2013 Sell
25,000
TARGET CORP 5.375%17NOTES DUE 05/01/17 $116.249 $29,151.76
05/23/2013 Sell
25,000
A T & T INC 5.5%18NOTE DUE 02/01/18 $117.828 $29,892.69
05/23/2013 as of 05/21/2013 Buy
25,000
A T & T INC 5.5%18NOTE DUE 02/01/18 $118.337 -$30,030.85
05/23/2013 Sell
60
ZMH ZIMMER HOLDINGS INC $79.801 $4,779.03 $9.03
05/23/2013 Sell
150
XEL XCEL ENERGY INC $29.463 $4,410.42 $9.03
05/23/2013 Sell
80
WAG WALGREEN COMPANY $50.28 $4,013.38 $9.02
05/23/2013 Sell
95
WMT WAL-MART STORES INC $76.541 $7,262.32 $9.08
05/23/2013 Sell
250
TCK TECK RESOURCES LTD CL BF $27.112 $6,768.93 $9.07
05/23/2013 Sell
380
VOD VODAFONE GROUP NEW ADR FSPONSORED ADR $29.213 $11,091.80 $9.14
05/23/2013 Sell
60
TEL TE CONNECTIVITY LTD F $45.53 $2,722.80 $9.00
05/23/2013 Sell
140
STT STATE STREET CORP $64.633 $9,039.51 $9.11
05/23/2013 Sell
700
SPLS STAPLES INC $15.013 $10,499.97 $9.13
05/23/2013 Sell
750
LUV SOUTHWEST AIRLINES CO $14.103 $10,568.12 $9.13
05/23/2013 Sell
85
RDSA ROYAL DUTCH SHELL A ADRFSPONSORED ADR $67.521 $5,730.24 $9.05
05/23/2013 Sell
20
SLB SCHLUMBERGER LTD F $74.76 $1,486.22 $8.98
05/23/2013 Sell
100
PNC PNC FINL SERVICES GP INC $70.636 $7,054.53 $9.07
05/23/2013 Sell
250
RTN RAYTHEON COMPANY NEW $66.72 $16,670.76 $9.24
05/23/2013 Sell
115
PSX PHILLIPS 66 $65.21 $7,490.07 $9.08
05/23/2013 Sell
70
NSRGY NESTLE S A REG B ADR F1 ADR REPS 1 ORD $67.94 $4,746.77 $9.03
05/23/2013 Sell
125
NEE NEXTERA ENERGY INC $77.689 $9,702.01 $9.12
05/23/2013 Sell
475
NCR N C R CORP NEW $31.3738 $14,893.35 $9.21
05/23/2013 Sell
90
MUR MURPHY OIL CORP HLDG $61.78 $5,551.15 $9.05
05/23/2013 Sell
265
MS MORGAN STANLEY $24.323 $6,436.54 $9.06
05/23/2013 Sell
135
TAP MOLSON COORS BREWING CLB $51.316 $6,918.59 $9.07
05/23/2013 Sell
250
MSFT MICROSOFT CORP $34.293 $8,564.15 $9.10
05/23/2013 Sell
325
MRK MERCK & CO INC NEW $46.643 $15,149.77 $9.21
05/23/2013 Sell
90
LLL L-3 COMMUNICATIONS HLDGS $85.606 $7,695.46 $9.08
05/23/2013 Sell
135
MCK MCKESSON CORPORATION $117.093 $15,798.33 $9.23
05/23/2013 Sell
35
KSS KOHLS CORP $51.961 $1,809.66 $8.98
05/23/2013 Sell
230
JPM JPMORGAN CHASE & CO $53.261 $12,240.87 $9.16
05/23/2013 Sell
410
JCI JOHNSON CONTROLS INC $37.083 $15,194.82 $9.21
05/23/2013 Sell
65
HHC HOWARD HUGHES CORP $100.00 $6,490.94 $9.06
05/23/2013 Sell
300
INTC INTEL CORP $23.973 $7,182.82 $9.08
05/23/2013 Sell
40
HSP HOSPIRA $35.15 $1,397.03 $8.97
05/23/2013 Sell
150
HMC HONDA MOTOR CO LTD ADR FSPONSORED ADR $39.514 $5,918.05 $9.05
05/23/2013 Sell
80
HP HELMERICH & PAYNE INC $61.791 $4,934.24 $9.04
05/23/2013 Sell
230
HRS HARRIS CORPORATION $49.789 $11,442.32 $9.15
05/23/2013 Sell
450
GE GENERAL ELECTRIC COMPANY $23.563 $10,594.22 $9.13
05/23/2013 Sell
20
FDX FEDEX CORPORATION $99.171 $1,974.44 $8.98
05/23/2013 Sell
170
DVN DEVON ENERGY CP NEW $57.846 $9,824.70 $9.12
05/23/2013 Sell
70
COV COVIDIEN PLC NEW F $65.201 $4,555.04 $9.03
05/23/2013 Sell
420
GLW CORNING INC $15.582 $6,535.38 $9.06
05/23/2013 Sell
110
COP CONOCOPHILLIPS $62.6101 $6,878.04 $9.07
05/23/2013 Sell
320
COH COACH INC $58.323 $18,654.09 $9.27
05/23/2013 Sell
75
CB CHUBB CORPORATION $87.761 $6,573.02 $9.06
05/23/2013 Sell
25
CVX CHEVRON CORPORATION $125.221 $3,121.53 $9.00
05/23/2013 Sell
70
BG BUNGE LIMITED F $70.881 $4,952.63 $9.04
05/23/2013 Sell
60
BDX BECTON DICKINSON & CO $100.14 $5,999.35 $9.05
05/23/2013 Sell
75
BLK BLACKROCK INC $282.174 $21,153.73 $9.32
05/23/2013 Sell
245
BWC BABCOCK & WILCOX CO $29.6614 $7,257.96 $9.08
05/23/2013 Sell
355
T A T & T INC NEW $36.583 $12,977.79 $9.18
05/23/2013 Sell
200
ADM ARCHER-DANIELS-MIDLND CO $33.953 $6,781.53 $9.07
05/23/2013 Sell
125
AMGN AMGEN INCORPORATED $105.4212 $13,168.47 $9.18
05/23/2013 Sell
200
AET AETNA INC NEW $59.651 $11,921.04 $9.16
05/23/2013 Sell
85
ALL ALLSTATE CORPORATION $48.66 $4,127.08 $9.02
05/23/2013 Sell
125
MMM 3M COMPANY $110.006 $13,741.56 $9.19

[GregWeld]

Old saying in the market ---- "when interest rates rise -- the stock market dies".



Is it a zero sum game -- NO!


Does it happen over night -- NO!


When rates rise -- some money flows out of the stock market and into the new higher rate "whatevers" that compete for the world's money this week. It's been happening since the first market opened a gazillion years ago.

[toy71camaro]

yup.. quite the pull back for my divvy stocks today.. roughly 2%.

but, that also means that possibly my next CVX and ED divvy payments will be buying just a tad more of a share this time around thanks to the pullback since they both pay in a couple weeks.

We'll see. a 2% pullback (just today) isnt going to change a whole lot on my paper gains. lol

[GregWeld]

yup.. quite the pull back for my divvy stocks today.. roughly 2%.

but, that also means that possibly my next CVX and ED divvy payments will be buying just a tad more of a share this time around thanks to the pullback since they both pay in a couple weeks.

We'll see. a 2% pullback (just today) isnt going to change a whole lot on my paper gains. lol



I'd be prepared for about a 10% plus pullback --- because the market ALWAYS over corrects --- just as it shoots the moon on the up side... then people who sold start looking around and saying -- Hey! Now I can get 3% on JNJ (made up that example) and start buying again. In order to make money -- your money HAS to be working... it can't be sitting in cash.

[GregWeld]

One of the guys asks me ---- So what do I do if I'm 40 and have 25 years to retire? What do I do if I'm 50 and have 15 years to retire? What do I do if I'm 60 and have 5 years til retirement?


To me -- this is the best question ever....


My response:


What happens when you retire? Do you die?

Oh wait.... maybe you'll live another 25 years! So your REAL TIME HORIZON is 50 years if you're 40.... 40 years if you're 50.... and 30 years if you're 60!


That's the real way to think about it.... 'cause ya just don't up and die because you retired. Ask me how much more money I spend being retired than I ever did working. And ask me (retired some 22 years now) what things cost me 22 years ago versus now! Retirement isn't the end of spending and it isn't the end of you! Just keep doing. Keep doing what got you to retirement.

In the old days -- they advised people to switch from stocks to bonds and blah blah blah... to which I've seen more than my fair share of people "out live" their useful cash flow. Had they stuck with stocks and real estate -- they'd have lived a whole lot better.

That being said --- I don't invest in Faceybook -- or Netflix -- or any of the other "sure fired winners" either anymore. I stick to good old fashioned basics --- just like we've discussed here. You don't start (or continue) to gamble at 60 (which I'll be in August). But you don't up and die either!


:relax:

[Steve_O]

SO, I made my first purchase in my Schwab account this morning, and...

True to predictions, the stock immediately lost value! Good thing I'm in it
for the long haul.

Next challenge, locate enough Best of Breed companies for my IRA account
funds.

Steve O:G-Dub:

[GregWeld]

SO, I made my first purchase in my Schwab account this morning, and...

True to predictions, the stock immediately lost value! Good thing I'm in it
for the long haul.

Next challenge, locate enough Best of Breed companies for my IRA account
funds.

Steve O:G-Dub:



When that happens --- pull up the 5 year chart --- or longer if you can find one... and look at it. How far down is it on the left vs the right side.... and think about that TREND.... Now if you zoom in -- you'll see all the zigs and zags... Don't worry about the zigs and zags --- zoom back out and stare at the trend line.... TIME is your friend. Keep at it!

[GregWeld]

The author of this article must be reading this thread....



He does do one interesting calculation which I've never even thought of - and that is what happens to the % if a company grows the dividend over time...
Interestingly -- I've stated here many times -- that money doubles about every 10 years (based on a 7% interest rate/dividend rate etc). Well guess what? So does the dividend % if a company increases it at about that same rate! DOH!

Read the article and it will make sense.

Also note the small number of shares this "portfolio" is working with.... yet the important part to me is -- that the author has a plan -- is working that plan -- and he understands the market and what his goal is.


http://seekingalpha.com/article/1474731-footsteps-of-buffett-retirement-portfolio-time-for-a-correction?source=email_investing_income&ifp=0

[Steve_O]

I've spent some time looking for places to put my 'employees',
and find that my list is heavy on consumer staples. Can anyone suggest
a few things that they have, or are considering, so that I can
broaden my search?

The list I have is:

Philip Morris
Coca Cola
Costco
Altria
Kimberly Clark
Nike
McDonalds
Consolidated Edison
Southern Cos
AT & T
Johnson & Johnson
Eli Lilly
Merck
Caterpillar
Chevron
Kinder Morgan
National Retail

Also, I would probably consider these steady-eddy type picks.
I would also like to consider one or two that might be more 'exciting',
so if you like a company that has some growth potential, I may
have some room for a small share in something slightly riskier.

Thanks for all the good info shared on this thread, and for the good
things ahead!

Steve O :popcorn2:

[WSSix]

Given that most of us are invested in dividend stocks, here's a website I found to be useful. Maybe you will too.

http://dripinvesting.org/tools/tools.asp

[GregWeld]

I've spent some time looking for places to put my 'employees',
and find that my list is heavy on consumer staples. Can anyone suggest
a few things that they have, or are considering, so that I can
broaden my search?

The list I have is:

Philip Morris
Coca Cola
Costco
Altria
Kimberly Clark
Nike
McDonalds
Consolidated Edison
Southern Cos
AT & T
Johnson & Johnson
Eli Lilly
Merck
Caterpillar
Chevron
Kinder Morgan
National Retail

Also, I would probably consider these steady-eddy type picks.
I would also like to consider one or two that might be more 'exciting',
so if you like a company that has some growth potential, I may
have some room for a small share in something slightly riskier.

Thanks for all the good info shared on this thread, and for the good
things ahead!

Steve O :popcorn2:





That's more than enough names to build a portfolio on.... All good solid companies. Don't spread yourself too thin.

Summer is usually pretty "volatile" -- look for big down days and be ready to nibble away at the shares on those days.

By September or October we'll know what the economy and the FED is probably going to do... so I wouldn't go all in... sneak up on the purchases.

My guess is -- we get a FED that changes course on their bond buying (QE) we'll get a big leg down and that's a nice opportunity to be buying.

[Steve_O]

Thanks for the replies. As a result of this thread I have decided to move
money from a rollover IRA account that is all in funds, (FUNDS, the new F-Bomb!). So I have just enough, (~$185K), to make it probably a good
idea to have 12-14 different holdings. I guess that is a good 'problem' to have.

I will also scale-in as I go, trying to apply the things discussed here.
It's a challenge to be methodical, when I feel like I wasted the time the
money has been under-performing.

I just bought KO this morning, (ex-date June 12), so if it dips, you'll know why!

Thanks!

Steve O

[Payton King]

Woman:
Do you drink beer?
Man: Yes

Woman:
How many beers a day?

Man:
Usually about 3

Woman:
How much do you pay per beer?

Man: $5.00 which includes a tip

(This is where it gets scary !)

Woman:
And how long have you been drinking?

Man:
About 20 years, I suppose

Woman:
So a beer costs $5 and you have 3 beers a day which puts your spending each month at $450. In one year, it would be approximately $5400 …correct?

Man:
Correct

Woman:
If in 1 year you spend $5400, not accounting for inflation, the past
20 years puts your spending at $108,000, correct?

Man:
Correct

Woman:
Do you know that if you didn’t drink so much beer, that money could have been put in a step-up interest savings account and after accounting for compound interest for the past 20 years, you could have now bought a Ferrari?

Man:
Do you drink beer?

Woman:
No

Man:
Where’s your Ferrari?


Now we know why Greg has that large pile of cash. LOL

[GregWeld]

Okay! That's funny as hell right there! Love the logic!



Large pile of cash??? Because I don't drink!!!! Don't smoke either.... so I put all my loose change in a jar at the end of every day...

:G-Dub:

[toy71camaro]

LOL. I used that same principal the other day on another forum when they were talking about playing the lottery. :)

[Sieg]

OK G-Dub, educational opportunity?

I just received this offer:

Pfizer Inc. is offering to exchange up to 400,985,000 shares of Zoetis Class A common stock (which Pfizer currently owns) for outstanding shares of Pfizer common stock.

For each $100 of your Pfizer common stock accepted, shareholders will receive approximately $107.52 of Zoetis common stock, subject to the upper limit of 0.9898 of a share of Zoetis stock per share of Pfizer stock. The value of the shares will be based on the volume weighted average price (VWAP) for the stock on the NYSE during the three days up to and including the expiration date. Cash will be paid in lieu of fractional shares.

If the offer is oversubscribed, shares tendered will be accepted on a pro rata basis. However, the Company will accept all shares tendered by holders who hold an aggregate of 99 shares or less and tender all of their shares. For purposes of this offer, aggregate is defined as the combined total number of shares held by a beneficial owner; this includes shares held in separate accounts registered to the same beneficial owner. Submitted instructions for holders that beneficially own an aggregate of 100 shares or more will be subject to proration.

The offer is conditioned upon, among other things, the Minimum Amount Condition, opinions of counsel regarding non-recognition of gain and loss for tax purposes, the continued validity and effectiveness of the private letter ruling from the IRS and other customary conditions. The Company reserves the right to amend, extend or terminate the offer.

If you wish to participate in the offer, you must deliver your response to Schwab. If you have any questions regarding the offer or for a copy of the prospectus, please contact Georgeson Inc. (the Information Agent) directly at (866) 628-6024.

Your Choices:

Exchange: Exchange all or a portion of your Pfizer shares, subject to proration.

Decline/Take No Action: If you do not wish to participate in this offer, no further action is required and you will continue to hold your Pfizer shares.
-------------------------------

PFE - .24 dividend - Human pharmaceuticals
ZTS - .064 dividend - Animal pharmaceuticals

PFE division spin-off.

I'm holding 208 shares of PFE..........

[GregWeld]

Well.....


Here's what I'd have to go on.


PFE (Pfizer) is up almost 28% for 1 year -- and over 10% for YTD... and they pay a 3.46% dividend (based on todays price)


ZTS (really ZITS??!?!?!) Zoetis is up 4.48% for YTD and they have no history longer than that. They pay way less dividend so IMHO you're not getting paid to wait - and you're (so far) not getting the offsetting growth which would make up for the lack of the dividend.

So if it was my account -- I'd stick with PFE.

[Sieg]

Here's a little history on the IPO and the architecture:
http://seekingalpha.com/article/1147801-ipo-preview-zoetis

It's certainly not going to set the world on fire but could end up being a moderately priced Steady Eddy so to speak. The way I see it the world will always need healthy animals for food and companionship and this company appears to own the market share globally.

Pfizer is a good stock though I'm a little concerned about the number of expiring patents and competition from the generic sector, especially with the healthcare train wreck that's coming in January 2014.

:headscratch:

[GregWeld]

Here's a little history on the IPO and the architecture:
http://seekingalpha.com/article/1147801-ipo-preview-zoetis

It's certainly not going to set the world on fire but could end up being a moderately priced Steady Eddy so to speak. The way I see it the world will always need healthy animals for food and companionship and this company appears to own the market share globally.

Pfizer is a good stock though I'm a little concerned about the number of expiring patents and competition from the generic sector, especially with the healthcare train wreck that's coming in January 2014.

:headscratch:



This is EGG SACK LEE why I tell everyone -- PICK YOUR OWN STOCKS -- because if you listen to someone else... then the reasons YOU own them won't wash -- and if they go down - you're quick to sell rather than hold and add more. INVESTING IS A LOT MORE MENTAL than most people understand.

[GregWeld]

There's not too much to write home about with this choppy market. Trust me - this is typical summer action. We didn't get the usual "sell in May and go away" - but we are getting the typical summer "death of a 1000 cuts"...

I ALWAYS ALWAYS ALWAYS build a cash position coming into summer. Remember that I use JNK - HYG - NLY as cash parking spots. Years ago it was MSFT - GE - DELL.... but you must change with the market... but I digress...


We're at kind of a weird place in the market these days. People KNOW - without a doubt - that INTEREST RATES ARE GOING TO RISE.... when and how much and more importantly HOW FAST.... that's the unknown.


My typical action is to pick away on the stocks I like -- when they dip a bit. I use LIMIT orders for these buys - setting a price below where the market is at the time I place the order. I don't get stupid -- I just go a penny or two below the current BID not the ASK.... and if it dips to there at some point during the day I get the order filled - if not - it expires (I use day only limit orders).

So if I want to build a position to 10,000 shares... I'll buy 2,000 at a time. But during the summer - I only buy more if it goes below my last buy. So if I paid 20.50.... I'll add more if it goes to 20.35 etc. All I'm trying to do is not go all in at 20.50. Why?? Because it feels better to do it this way -- and I've been doing this for some 30 years... and I fully understand the MENTAL part of the game. I EXPECT --- expectations are meant to get crushed --- the market to be better in the fall -- so by September or October I expect the market to be higher or more steady.

This strategy is for large buys not 50 or 100 share positions... a few dimes on 50 or 100 shares isn't going to affect your return. But this is a strategy to remember and use if you're buying 500 or 1000 share position. It's just a game -- it makes you pay attention -- it makes you understand where your heart and mind are and it teaches you to really get in touch with your investor side. Can you stand to buy when the market sucks.... it's very important to know whether or not you can. Some can't -- it's okay.... but you need to know that. It's like a good poker player -- if you start a bluff -- can you see it through til the other player folds or are you going to toss money in the pot a couple times = and then fold -- thereby just increasing your loss. You should have just folded after the first cards came around... If you're not a good bluffer -- it's okay -- just know it and fold early. It'll save you money. Same thing in the market -- if the market is going south and you start buying and it's just killing you mentally... so you buy more and then at the bottom you fold and sell... THAT'S DUMB! That is what MOST "retail" investors do. They sell at the bottom and buy at the top. DUMB - DUMB - DUMB.... Let's not be "that guy".

[Sieg]

Good points.

I just need to learn to sell when the market starts to turn..........as is, if I was a gunfighter, I just stand there and watch in slow-motion as the guy shoots me. :guns:

If I would just act on instinct and sell a portion of the holding verses my mindset of all or nothing I'd still be alive and engaged playing the game and learning. :D

[GregWeld]

Knowing when to SELL is far harder than when to buy.... I use the same resistance in selling as I do buying --- I sell slowly... because it never fails that the day after you sell -- the market goes up.

The hardest part to selling is to question why you bought in the first place.

Here's the deal... if you look at the chart of the stock -- and you check it's total return over a long period of time.... Are you selling because it's down this quarter? Are you selling because you have too large of a gain? Or is it just portfolio rebalancing?

Today --- I asked my broker to sell ALL my BONDS.... Why? Because I have nice gains in them --- I just got the June interest payment... and I'm relatively certain that going forward my gain is going to turn into a loss as interest rates rise. I'll probably be wrong - but nobody ever went broke taking a gain (profit). I've owned them all longer than one year and a day -- so will be taxed at long term capital gains... So this is purely a "plan" -- and the trade off is I will loose the TAX FREE income.... but most of this laddered bond portfolio is out 2 - 3 and 4 years from now... I'd rather NOT loose the capital appreciation and have to hold the lower interest rate return for that time period.

IF -- big IF -- The economy is doing as I feel it is -- which is MUCH better than the unemployment numbers tell -- then we'll have a good XMAS selling period for retailers -- housing is making huge gains -- cars are selling like hot cakes etc.... so I'd rather chase that than hold tax free munis at 4 and 5%. I've started to build a position in FORD (F) etc.... I'm late to that party but I think they're just getting started on the road to recovery. So I'll position accordingly.

[sik68]

Good info on selling, Greg, Thanks! I believe in the dollar cost averaging approach, so I will stay the course this summer & fall. I expect I will :bang: a few times that's for sure.


I've been doing more reading on gov't sponsored retirement plans like 401k's. The author makes a pretty compelling argument AGAINST shuffling money into these types of retirement plans, namely because of of the lack of investment control, and that income from the plans is taxed at normal income rates.

Unless you plan to be "poor" when you retire, you plan to be wealthy when you retire and your normal tax rate at retirement will likely be HIGHER than the capital gains rate. For example, if you are retired in a 35% income tax bracket, your 401k income is taxed at 35%. Whereas your income from dividends and sale of stock in your brokerage portfolio is only taxed at 18%. Something to consider when deciding whether or not to max out 401k's...is your expectation REALLY to have a low income when retired?

[JKnight]

Something to consider when deciding whether or not to max out 401k's...is your expectation REALLY to have a low income when retired?

This is very true. I think it's very important to have diversification amongst your pre-tax and post-tax retirement savings. 401k's are great because you can get yourself a raise by maximizing the employer match, but we need to have savings where the taxes have already been paid at (hopefully) a lower rate! This is something I've been working towards myself during the past year.

[GregWeld]

These are good discussions --- and they really need to be evaluated on a case by case basis.... there is no one size fits all!


Most people will have Social Security --- and maybe a pension --- and then will have some dividend and interest income (hopefully!).... But for the most part your income should be lower when in retirement mode. Think about it just for a minute.... if you're 40 now --- you're going to work 25 more years -- SURELY your income will be higher 25 years from now...

So when they say -- withdrawals from a 401K should be taxed at a lower rate -- for the most part that is true. Remember that it takes a MILLION DOLLARS today to generate about a 5% taxable return. So that's only earning 50 grand a year taxable income. Dividends are only taxed at 20% maximum today..

How many folks out there retire with a million bucks? I don't know.

How many retire with 2 million?

My guess is most will be lucky to retire and have 750K in savings --- so maybe it's making 35K a year... that's not much "taxes" being generated... and considering some of it will be max tax rate of 20% -- Dividend income -- or Long Term Capital Gains @ 20%.... there's not much EARNED INCOME.

[WSSix]

When I was still in Georgia and had time, I listened to Clark Howard. He is a consumer advocate and in general tries to get people to be better with their money. He often addresses the pre- versus post-tax savings debate because people are always asking. His response is simple and maybe even too simple for this thread but it is no one knows what tax rates will be in the year whatever. Any savings you do now is going to help when retirement comes around. So stop putting a unnecessary factor in play and just start saving anyway you can.

Of course, then he will sometimes branch off into what Greg and Jeff mentioned and that is the other factors such as a 401k match coming into play etc.

You really do have to take into consideration your personal situation and available options. For me, I actually backed off my 401k percentage and put the difference into other accounts. I still get my full company match but I wanted more control over the dollars. I'm still saving the same total as before but I'm controlling it more. I'm also not worried about the tax implications for when I retire. It's a long way away and no one knows what taxes will be like then. For all we know, we'll go the way of Chile and everyone's retirement will be seized and divvied out by the government to be more fair :confused18:

[GregWeld]

When I was still in Georgia and had time, I listened to Clark Howard. He is a consumer advocate and in general tries to get people to be better with their money. He often addresses the pre- versus post-tax savings debate because people are always asking. His response is simple and maybe even too simple for this thread but it is no one knows what tax rates will be in the year whatever. Any savings you do now is going to help when retirement comes around. So stop putting a unnecessary factor in play and just start saving anyway you can.

Of course, then he will sometimes branch off into what Greg and Jeff mentioned and that is the other factors such as a 401k match coming into play etc.

You really do have to take into consideration your personal situation and available options. For me, I actually backed off my 401k percentage and put the difference into other accounts. I still get my full company match but I wanted more control over the dollars. I'm still saving the same total as before but I'm controlling it more. I'm also not worried about the tax implications for when I retire. It's a long way away and no one knows what taxes will be like then. For all we know, we'll go the way of Chile and everyone's retirement will be seized and divvied out by the government to be more fair :confused18:



Taxes are really an over rated item.... People with money really don't pay much attention to them. Here's how they think... if they make a big azz bunch of money and have to pay a big azz bunch of taxes --- then that's a good thing because it means they made a bunch of money!


Obviously -- you do what you can to minimize any taxes -- but you never make the choice to not make a profit or take a gain - or try to make money just because of the taxes.

I hope everyone here is in the maximum tax bracket when they retire!

So here's really what I'm saying.... I sold tax free munis today which give me a pretty nice tax free income ------ but my real concern is not the tax free part ---- my real concern is whether or not those investments are going to go UP from here --- or whether they're going DOWN from here.... Screw the taxes... If I'm making money -- I'm happy to pay them.

Totally serious here.

[GregWeld]

So here's why I like to use LIMIT orders.... and this is really probably only really useful for those buying larger amounts of shares -- but it is also something that all of you should know and understand.


This morning I put in some buy orders -- a couple for "DAY ONLY" -- in other words if the price I chose doesn't fill the order - then the order expires today...

Another one -- for Chevron (CVX) -- I chose "Good til expired" -- that is good for 60 days. The reason I chose that type of limit order is because I put a bid in way under where the shares are currently trading. CVX pays a dividend ($1.00) on MONDAY -- I hope the shares dip at least that $1.00 on Monday and therefore my order might get filled. If that works - then I effectively picked up the dividend even though I didn't own the shares on the EX date. Obviously I only pick up the dividend IF -- BIG IF -- the shares recover sometime within the next day or two.

I also like to scale into shares. I buy very large lots... and scaling in is important to my overall mental health -- as well as I can am "closer" to the market for the stock. Putting in a limit order helps me scale in --- and even though the shares might go below my purchase price -- I'm still closer in cost basis to where the shares are currently trading. Today I put in a limit order for Terra Nitrogen (TNH) -- I put that limit order in "day only" at $204.00 per share... for 1000 shares. So far I've bought a whopping 75 shares. But my point is -- once I put in that order - whenever their is a seller willing to match my price - I'm automatically buying. If it doesn't get filled completely -- who cares. Tomorrow is another day... and if the shares are going up -- then I've made some money on what I did buy... and if they're going down or staying steady -- then I'm at least closer (with my lower buy per share) that I would be if I just built a "market" order.


If I'm not in a hurry (rarely) to build the positions --- then I put in limit orders that are .50 or 1.00 LOWER than the "low" for the day. If it's a stock I just want to buy -- then I might be only .10 or .20 under the "market" price. That way when it dips just a bit during the day -- I'll most likely get a fill.

[GregWeld]

By the way -- please remember that just because I use examples naming names in here - doesn't mean that these names are appropriate investments for YOU. Please don't just copy what I'm doing. I do this EVERY DAY -- for YEARS... my holdings are bought and sold for completely different reasons than what you guys should be investing for.


So for example -- the limit order for Terra Nitrogen (TNH) was put in for $204.00 for 1000 shares ---- What I wanted to explain is that the high for the day so far is $205.21.... and the LOW for the day (most likely set by my whopping 75 share fill) is $204.00


When you're buying a 1000 shares ---- that $1.21 difference between the high and the low -- is a GRAND. How many of you make a grand that easy?? So to me -- that difference is important. Would I bother doing that for 100 shares?? No -- but I might just to use it as a way to learn --- and frankly -- that would be a hundred bucks if it gets filled....so maybe that's a good way for you guys to at least feel good about "gaming" the market just a bit.

[GregWeld]

So just a follow up to these "limited" thoughts.... LOL



My Chevron order for 2000 shares at $120 was filled today... and while it's currently quoted at $119.94.... My buy at $120 is a far cry from the days high which I would have bought at had I just placed a market order.... that would have been about $1.60 plus difference! On 2000 shares -- that's a lot! Thus my statement that even if the shares go lower than where I bought -- I'm a lot closer to the market than had I paid the market high for the day.

So since I was trying to capture the $1.00 dividend being paid Monday -- I put in another 1000 share limit order (good 'til canceled) at $119.00

[chr2002ca]

Please don't just copy what I'm doing.

Oh, darn, I guess I should go cancel that buy order I just placed for 2000 @ $120 on Chevron stock. :lol:

Yah, I know what you meant, copy on a different 'scale'. Just messin' with you Greg. I see the numbers you post and I'm like, "Holy sh_tballs....that must be nice." Thanks for all the continued great advice and helping us try to 'get there'. :thumbsup:

[GregWeld]

So here's how my buys went down today.... all set with LIMIT ORDERS

and the price where the shares closed today in red.



06/06/2013 Buy 1,000 CVX CHEVRON CORPORATION Details $119.00
-$119,008.95 * 119.59


06/06/2013 Buy 100 NNN NATIONAL RETAIL PPTYS REIT
Details $35.18 -$3,518.30 * 36.36


The NNN was an order for 3000 shares -- I got a whopping 100 at my price. I'm okay with that... that's the way it works!


06/06/2013 Buy 2,000 CVX CHEVRON CORPORATION
Details $120.00 -$240,008.95 * 119.59


This order was filled --- and now you see what I'm saying about my cost being closer to the market price... had I put in a market order my cost would have been possibly at the market HIGH for the day of 121.49 !! I didn't hit the low either which was 118.66..... But I did buy an additional 1000 shares at 119.00 - so that brings my AVERAGE cost down closer to market!


06/06/2013 Buy 1,429 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$117,613.10 * 84.03


06/06/2013 Buy 100 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$8,230.45 * 84.03


06/06/2013 Buy 75 TNH TERRA NITROGEN CO LP COM UNIT
Details $204.00 -$15,300.67 * 205.25


The TNH order was for 1000 shares at 204.00 --- I got a whopping 75 at my price and the order expired at day end... Again -- that's how it works. Rome wasn't built in a day!


06/06/2013 Buy 50 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$4,115.22 * 84.03


06/06/2013 Buy 421 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$34,650.18 * 84.03


06/06/2013 Buy 5,700 MO ALTRIA GROUP INC
Details $35.40 -$201,785.10 * 35.81


06/06/2013 Buy 4,300 MO ALTRIA GROUP INC
Details $35.399 -$152,219.55 * 35.81

[GregWeld]

Oh, darn, I guess I should go cancel that buy order I just placed for 2000 @ $120 on Chevron stock. :lol:

Yah, I know what you meant, copy on a different 'scale'. Just messin' with you Greg. I see the numbers you post and I'm like, "Holy sh_tballs....that must be nice." Thanks for all the continued great advice and helping us try to 'get there'. :thumbsup:




Sorry Chris.... I was so busy typing I missed this! Good comment BTW I got a good laugh out of it. So thanks!


Yes --- scale is "variable" with the readers here... and sometimes I'm actually kind of embarrassed to post my numbers -- but I feel they're useful to show how the market works etc... and I think it's more meaningful when you can really see what a difference it makes etc. I'm still trying to keep this as "102" (not that it's MY thread)...

I think that the basics of "best of breed" etc have been well covered. Now some of the details or nuances of investing can be introduced.

[96z28ss]

and sometimes I'm actually kind of embarrassed to post my numbers --

Yeah really make us feel poor!

[GregWeld]

Yeah really make us feel poor!



Think of it more as the carrot on a stick....




:wacko: :wacko: :action-smiley-027:

[WSSix]

I like the Limit Order idea. Considering how I like to by stuff at a discount, I see it as a good way to simply name your price. I can see myself eventually using this method.

[GregWeld]

I like the Limit Order idea. Considering how I like to by stuff at a discount, I see it as a good way to simply name your price. I can see myself eventually using this method.



You can outsmart yourself using limit orders as well -- by missing a lower price by a penny or two and then seeing the market jump a buck... So they're a mixed blessing. You can stand there and watch the train pull out of the station so to speak.

So I'm watching the market -- gauging a feel for where it's headed -- and staying on top of the order fill (or not) and I'm willing to go in and change the order if needed. I've also been known to cancel an order mid-stream as well.

[carbuff]

I'm of the opinion that you should always use a limit order, but you don't always have to do it the way Greg originally suggested. If you have decided to make a purchase, make it with a limit order, NOT a market order. You can put the limit order price in a the current market price, or a few pennies above or below. But if you use a market order, you could get hit with a 'spike' in the price, paying more than you planned to.

I never use a market order.

[WSSix]

That's not a bad idea, Bryan. I might try that next time just to see if it works out. Sure, in the long run it won't matter but it would be nice to one, ensure you don't buy at a spike like you mentioned, and two, basically bargain on the price of your purchase. :G-Dub:

[GregWeld]

That's not a bad idea, Bryan. I might try that next time just to see if it works out. Sure, in the long run it won't matter but it would be nice to one, ensure you don't buy at a spike like you mentioned, and two, basically bargain on the price of your purchase. :G-Dub:



The "bargaining" you mention is exactly what this is -- in a round about way. You say what you're willing to pay --- and if someone is willing to sell at that price -- then GREAT. If not - you can then choose to set a different price.

I would NEVER set a limit order above the current market price.... I always go below... if you get filled great -- if not -- you have time -- wait for another day.

I always buy on DOWN days... thus the lower limit price. At some point during the day -- someone comes in and hits my target. Of course it can always continue to fall... but that's a different issue.

[GregWeld]

So here's another strategy that I employ from time to time. Today I used it.


LuLuLemon (LULU) sold off big time today due to the CEO announcing she was stepping down. There was no reason given for her departure -- but the company just came out with blow out --- as in great --- numbers for the quarter. Sales were up huge - profits were good etc.

But the shares were at $81 -- and this morning are under $70....


I'm taking a giant leap of faith here and thinking that numbers (business) is good... and maybe the CEO is just simply leaving. Sometimes people actually make or have so much money - they just don't need or want to work anymore. :>)


So I owned 1000 shares @ 80ish. This stock pays NO DIVIDEND -- so I never invest much in just plain "growth" stocks. That's because of my own personal situation. I just don't really need the gamble of pure growth.... I like the income and some growth that dividend stocks give me. But I'm certainly not against growth stocks. I just own them in very small numbers rather than my usual 10 and 20 thousand shares per name -- I'll buy 500 or 1000 or maybe 2000 shares.

So with the shares almost $12 below my cost level -- I BOUGHT 3000 more shares. With this purchase -- I now own 4000 shares @ $72.75 -- and IF -- BIG IF -- the shares manage to get back to say $75ish -- I'll sell off half... get some cash back -- and end up (hopefully) with a lower cost basis going forward.


My "theory" in doing this is that while I might not have a gain -- I should be closer to where the market is currently. I would only do this in a name that I truly believe is a good well run company regardless of the "market" conditions.



++++++++++++++++++++++++



A CAVEAT here...... I once owned 8000 shares of a company that started to go down because interest rates were rising.... as it went down - I doubled up - to 16,000 - then again to 32,000 shares and so on. I finally threw in the towel when I owned 93,000 shares and it was "only" down a buck a share. So this theory doesn't always work. But 9 times out of 10 it has for me.

[sik68]

Hey Greg, search "lululemon bend over test" :action-smiley-027:

They had a rash of problems lately, and are the butt of a lot of jokes. A load of their pants slipped through the cracks in quality control, and the shear number appears to be larger than they once admitted to. I think the CEO was squeezed out.

[GregWeld]

Yes Steven I knew about the see thru pants.... And that may very well have cost the CEO her job.... Unless they announce that - I guess we'll never really know why she's "leaving".

I'm really more about the numbers -- and the numbers are/were great. My wife and Daughter shop there -- and the retail stores are always busy... and their quality is top notch (except the see thru pants -- and then I wish they'd have just kept selling them!! LOL).

This is another one of those backyard buys I do from time to time... I bought Apple at $85 after coming home from the mall... having seen a line of people trying to buy their stuff... That worked out pretty well.


We'll give it some time -- a quarter or two -- and see where the chips fall.

[ErikLS2]

Oh Greg almighty! Have you taken a look at TSLA Tesla? I know it's had a huge run-up lately but it recently was rated the best car Consumer Reports has EVER tested. They are putting up their Supercharger centers quickly among other things. I'm fully hybrid trained and certified and all that, and thinking of trying to go to work for them, they don't even have service centers set-up in Phoenix yet.

I know it's speculative but thinking about putting a little play money (that I can afford to lose) in it and see what happens. Just wondering what the Investing 102 guru thinks? If their is going to be a big time electric car player it looks they they'll be in the running for sure.

[GregWeld]

Oh Greg almighty! Have you taken a look at TSLA Tesla? I know it's had a huge run-up lately but it recently was rated the best car Consumer Reports has EVER tested. They are putting up their Supercharger centers quickly among other things. I'm fully hybrid trained and certified and all that, and thinking of trying to go to work for them, they don't even have service centers set-up in Phoenix yet.

I know it's speculative but thinking about putting a little play money (that I can afford to lose) in it and see what happens. Just wondering what the Investing 102 guru thinks? If their is going to be a big time electric car player it looks they they'll be in the running for sure.



A buddy just took delivery of his and absolutely LOVES it... last night a lawyer buddy was here for dinner and he's thinking he might buy one... dumping his MBZ S55...


So here's my take on it as an investment. If I was a young guy and had some play money - I'd be buying it. I'd also EXPECT it to be a bit of a wild ride... this is a new manufacturer - building a new technology - THERE WILL BE BUMPS IN THE ROAD. A battery recall - a new model that doesn't sell - etc... but I agree with you - they seem to have a good grip on what they're doing.

As a car guy -- we've all been talking about this company. The downside of this rather expensive car is either the lack of charging stations - the time it takes to re-charge - or the batteries capable of getting some range out of it.

Tony would like to drive it over to Sun Valley from Seattle - as we'll be over there... but can't figure out how it would work - because he'd need to make a two day trip out of what should be a one day drive. The reason - charging... but WHERE is he going to be able to charge....

He and my lawyer buddy just commute to downtown and home again for work -- and this car works flawlessly for that... the problem is doing almost anything else. And it's a chicken and an egg issue -- not enough cars to justify charging stations - not enough charging stations to justify buying a car... And NO STANDARD set for the type of plug in etc.

I think all this will be over come eventually.... and more people will want this technology. :welcome3:

[WSSix]

In my opinion, another thing to think about possibly is what is your particular take on their direction, goals, product etc. Sure, we are here to make money with our investments but another aspect is what/who are you willing to support. There are companies I flat out will not support so I will not invest my money in them regardless of how good of an investment it is. Maybe that's naive or flat out dumb but I don't care. Meanwhile, there are others I invest in simply because I believe in what they are doing. Now that Tesla has paid back their loan and to me is showing they are serious about making a car versus get government loans, receive fat paychecks, and then declare bunkruptcy I may start looking into them, too. Could it pay off in the long run? I don't know. I do however believe in supporting real alternatives to energy and transportation. So, I think I'll put my money behind my beliefs to an extent of course. I'm certainly not going to bet the farm on this type of investment. Your opinion may vary.

[GregWeld]

Trey -- That's good thinking -- and there's nothing wrong with investing what you believe in and leaving other stuff alone. I'm more of a whore when it comes to that stuff -- thus my investments in Altria (MO) even though it's tobacco and booze... and I do neither of those! I just like it that others are willing to pay me to go have fun while they kill themselves! :lol: :lol: :lol:


That's been the drum beat of this entire thread -- just look around -- invest in what you see and know and understand --- it's not rocket science -- and in fact, people make mistakes and loose money when they stray from that line of investing.

[GregWeld]

Well the last couple days were a little wild... hope some of you were able to get in on the two day sale!


Bought more LULU down at $66.... but regardless of where it goes from here I've hit my share limit (5000) so we'll kick back now and see where that goes. You guys can watch me get sliced and diced or (hopefully) see this play out favorably. It will take MONTHS.... because nothing is going to happen until the search for a new CEO is finalized. Depending on who they hire -- (MY GUESS) -- will make or break this investment. I really invested in the company (my initial 1000 share purchase) because I like the company --- then the big event (CEO "quits").... and the shares tank. Stuff like this happens in investing. You have to learn to deal with it. It's why you NEVER put money into ANYTHING that you may need down the road. Remember the little guy on Wall Street knows everything -- and he knows you're gambling -- and he'll know you need the money -- and he's there to kill you!!:D :D

Anyone in the gold or silver market??? You're getting absolutely killed --- and gold and silver don't pay you to wait. That market is like playing oil futures - better left for the big boys.

[GregWeld]

How many of you are learning to only buy on down days.....???

[toy71camaro]

How many of you are learning to only buy on down days.....???

If i had new money to put to work.. i would. LOL. But then again, it all depends on where the market is "headed" which, of course, is some what of a crap shoot.

For me, its more important with my smaller budget, and longer long term horizon to just "get it in" the market, than trying to time a good/bad day. As a "bad day" might be a while down the road and i'd miss the good days between now and then...

[GregWeld]

If i had new money to put to work.. i would. LOL. But then again, it all depends on where the market is "headed" which, of course, is some what of a crap shoot.

For me, its more important with my smaller budget, and longer long term horizon to just "get it in" the market, than trying to time a good/bad day. As a "bad day" might be a while down the road and i'd miss the good days between now and then...





DING DING DING DING ---- right answer!! Good for you!

[nicks67ca]

I love this thread. I am maxing out my company match program and there is nothing better than a rate of return of 16% right now and 3% of 9% of salary contributions in the account was free!

[toy71camaro]

I love this thread. I am maxing out my company match program and there is nothing better than a rate of return of 16% right now and 3% of 9% of salary contributions in the account was free!

sure wish mine would re-instate our company match policy.... :( we lost it when the economy went sour and its yet to return.

[GregWeld]

So here's my "thinking" given new information today on Lululemon (LULU) ---- and as you all know -- I don't recommend stocks by name -- I use them for examples -- and for you all to kind of gain a small insight of how "I" think when I'm investing. The actual purchases etc are just used for thought process rather than "you need to own or sell this". Forget that! YOU buy or sell what you think fits YOUR criteria and needs!


Today - LuLu announced they plan to open MEN'S stores.... They already successfully sell men's and woman's in the same stores. I buy stuff there.

Now -- UnderArmor and NIKE already have the lions share of MEN'S workout business.... LuLu is considered a WOMAN'S like of workout clothes... I go there because my wife goes there and if I'm with her - I'll shop the 10 men's items and pick up a pair or two of shorts.... but I'm the lone man in the store! Not that I mind checking out the hardbodies inside! LOL


So my guess is that the CEO was against the BOARD on this decision to expand into MEN'S.... and quit over it. She's not going to say that - because you can bet she has a bunch of options on the shares - and has large personal hoard of shares as part of her pay package etc. She's still working there until they find a replacement.

BUT --- Here's the big butt --- and the reason for this post. This is a FUNDAMENTAL change in the company --- and perhaps it's a FUNDAMENTAL change in the reason you'd either buy more --- or sell. This of it as you own Home Depot (HD) and they announced they were going to expand into FOOD.... would that make you happy or would you think they're nuts.

Personally --- I think I'm about as average a guy as there is.... and therefore -- my thoughts are probably similar to others. I'm not smart. I'm not dumb. I'm average. I do average stuff. I wear blue jeans and t-shirts and tennis shoes. Usually with some kind of stain on them. In short - I don't give a sh!t about how I look as long as it's functional.

Would I go into a LuLu to buy without my wife dragging me along? Probably not.

Will I hold the stock and watch how it plays out. Yes. Their sales are stellar... their profits are stellar. I EXPECT that to grow... and that's why I bought in the first place. I don't agree with this decision -- and it's my guess they run some test stores and find out one way or the other before they just blindly open 1000 retail shops (think Microsoft - in their "ME TOO" stores to compete with Apple..... BALMER is an idiot and continues to prove it --- I've thought that since he was a nobody and we used to worked out together. He was dumb then and hasn't changed. The last 11 or 12 years of stock price proves this.)

[GregWeld]

I had written about the fact that I bailed (sold) on about 4MM in tax free muni's I had laddered out... and I brought that all over as cash to invest in stocks. Remember that I think (as do many) that interest rates are going to creep up... when that happens -- fixed income (i.e., bonds) would take a nice capital hit. I had nice long term capital gains in my bonds -- so thought I should capture that as well as the June payments...

I've been buying on these down days. I hope this is the "sell in May and go away" down that normally would have occurred earlier... and that we are in the typical summer swoon. I hope so because I don't have much dry powder going forward.

That might sound scary to you.... but to me -- I look at the balance sheet and see my income being built in stocks rather than bonds... and while I'll have a higher income tax bill... I'm fine with that part... What I'm investing in is that quarterly dividend ---- and then hoping I have capital gains as icing on the cake.

I know that I'll never buy at the lowest prices of the year - day - week - whatever. I'm okay with that knowledge. I'm buying good stuff... and I KNOW the market will/can/surely will - go lower AFTER I buy. So be it. Right now -- I have a lot of red... minor -- but red non-the-less.

Next Wednesday is a FED announcement... and maybe I could have waited on some of the buys until there was a little more "clarity" on which way they're headed on the QE (the big FED buying of bonds)... as this could be another big leg down... but if they say they're going to continue to be big bond buyers - then the market moves HIGHER and I miss my chance for some slightly lower prices.

I've added Caterpillar (CAT).... a low paying div stock for sure -- but if housing and the economy are getting better -- then I want to be in front of that as they will benefit from that... and if Europe and China get better - then again CAT will benefit. In the meantime I get paid to sit on my hands.

I added Wells Fargo (WFC)... because if interest rates rise -- their mortgage business will benefit with better loans and maybe a better spread. They also pay a minuscule dividend but I think they'll raise it as they can.

I added Ford (F).... again -- a better economy - more sales - more income... and a tiny dividend might gain some traction going forward.

I then put some money to work in Northern Tier Energy (NTI) a small refiner with direct retail stations in Minnesota (mini soda)... a HUGE dividend and the way I do things -- Ford - WFC - CAT dividends suck - so I'll offset that with an outsized dividend payer to bring up my "average".

I added Terra Nitrogen (TNH) because their price seems to have calmed down to around the $200 level... and they pay a sweet dividend. This is a fertilizer business but their really a natural gas play. It takes Nat Gas to make fertilizer -- if that price stays low -- then they make better spreads (is that a pun?)

I built Chevron (CVX) to 3000 shares.... buying on dips... it's a steady eddy and I have to own these for my own mental stability. They offset the NTI's and the TNH's in my portfolio. LOL

I'm now up to 40,000 shares of Annaly Capital (NLY)... which I've written about a zillion times -- I use it to park cash and make a nice dividend... so to me -- this is still a cash position rather than a long term investment... and I'm still in iShares High Yield (HYG) and Junk Bonds (JNK) ---- again these are cash positions in my mind. They pay really well.... I'm comfortable holding positions in these names because I'm on top of my game. I'm not a buy and forget and these aren't names you'd do that in.

I added much more to my Prudhoe Bay Trust (BPT) which is a royalty oil trust... it's also more of a cash parker --- and pays a really nice dividend. I hope they don't run out of oil while I'm sleeping one night. :>)


Again -- I'll caveat with Please don't take these as some recommendation to buy or sell. THEY ARE NOT. This is just a way of blogging/posting... what I'm doing and why and what I'm thinking. Remember that my goals are completely different than yours (whoever and IF anyone is reading this drivel)... as my goal is monthly income -- and I pay attention the market everyday all day. That in no way means I know more than someone else - or have some f'n crystal ball. :hitaxeonthehead:

[WSSix]

So I found out something that's a little odd, to me anyway, but might be something the rest of you may come across as well. A little while ago I decided to gamble with a purchase into Mid Con Energy Partners, MCEP, which is a Master Limited Partnership. They are a dividend paying stock and a fairly new company. Apparently, I'm not allowed to reinvest my dividend immediately. I'm with Vanguard and that's what the brokerage service person just told me. He indicated it's up to a manager to decide this but that it's most likely because trading volume on the stock is low. I'm thinking it's because it's a small and fairly new company since after all, I have KMP as well which is also a MLP but I roll my dividend over immediately ever quarter.

It kind of sucks because it takes away that second compounding effect that we get investing in dividends but I'm still getting paid cash and pretty good cash at that, 0.51 a share. I wish I would have known this before I bought the stock but then again, it is nothing more than a gamble for me. I also imagine that if it's because the company is small and new that I shouldn't really have this issue occur with future acquisitions that will be into larger established companies, ie less of a gamble on my part.

Just thought I'd pass along what I learned.


As for Lululemons, unless they come up with a different more "manly" logo for their men's line, their name alone screams feminine. I think that would be a hindrance but that's just my opinion. Best of luck to them but honestly, until your first mention of them I had never heard of them at all.

[MattA]

We are reading and learning from your "drivel". I personally want to thank you, Greg and everyone else that has contributed to this thread. I have changed my way of thinking due to this information.

I have recently purchased a home and am working hard to get the rest of my outstanding debts paid so I can begin to work on some investing. I recently established a mock portfolio on Seeking Alpha with 1k each of about 15 companies that I am interested in. I have been following my pretend purchases and watching the news stories just as a way of becoming familliar with everything.

I know I have a long way to go but now I feel I am headed in the right direction, only wish I would have started sooner.

Thanks again

[GregWeld]

We are reading and learning from your "drivel". I personally want to thank you, Greg and everyone else that has contributed to this thread. I have changed my way of thinking due to this information.

I have recently purchased a home and am working hard to get the rest of my outstanding debts paid so I can begin to work on some investing. I recently established a mock portfolio on Seeking Alpha with 1k each of about 15 companies that I am interested in. I have been following my pretend purchases and watching the news stories just as a way of becoming familliar with everything.

I know I have a long way to go but now I feel I am headed in the right direction, only wish I would have started sooner.

Thanks again



Awesome!!



Funny about wishing you'd have started "earlier". I only wish they'd begin this education in High School.... so that people would start to budget and save as soon as they start to earn. If they would -- people could retire earlier - with more - and generally have a better life. NOTHING -- and I mean NOTHING -- beats having some extra dough. Not to spend... but to save and invest... because the sense of SECURITY is unbeatable... and the sense of SATISFACTION only leads to better decisions and even more investing.

Congratulations on buying a house! Smart move. NOW --- Don't use it as your ATM like so many millions of Americans have done. The goal here is home OWNERSHIP ---- not making the bank your master! Ownership means YOU have the title. A very nice feeling after years of hard work -- not having to make a payment! The guy across the street might LOOK like he's living better -- but you can bend over and pick up your newspaper, smile a bit -- and know that you OWN your house.


Put extra money on that mortgage beginning the first time you have some extra.... and cut that 30 years of payments down to 20.... that $500 you toss at it now -- will save you THOUSANDS in interest later. The sooner you whittle away at that principal due - the better off you'll be when you're too old to earn.

CHEERS!!!

[GregWeld]

A good article -- in which I agree with 100% (sold my bond holdings "early" - while I still had a gain!).


Here's the takeaway for me ----- IF you have an adjustable rate mortgage -- GET OFF YOUR ASS AND REFI into a fixed rate NOW!


Rates are not going lower....


http://www.latimes.com/business/la-fi-economy-rates-20130619,0,7850511.story

[GregWeld]

So if you pay attention to the market -- and you've been watching this last couple days of 200 point selloffs... you might be saying OMG!! The sky is falling the sky is falling....

But - always a big butt - the DOW is still UP for the first six months of the year -- by about 13%. A GREAT YEAR would be if you managed to be up 10% for the entire YEAR... We're only halfway into the year.

Someone called me last night and was just about in a panic... as he said breathlessly - You (meaning me) must be just losing your ass!!

Uh - yeah - sure.... I said -- I was down around 100K today in the Schwab account (I only use one account to monitor how I'm doing) and I said - I'll probably be down another 100K plus tomorrow... BUT -- That account produces 58K PER MONTH in dividends. So big whoop. By the way - the caller had also completely forgotten how much capital gains have taken the account up... so if you're UP 15% and you go down 5%... SO WHAT! You're still up!

I'm just trying to put this day to day swing into some kind of perspective. That's the important thing in investing - you have to keep your perspective.

If a guy had a large apartment building and it's well financed and producing a positive cash flow... and suddenly the real estate market goes to hell.... SO WHAT -- he's collecting cash flow every month... what difference does it make if the building is worth slightly less -- or even slightly more from time to time. It's value is only important at the point he decides to sell. If he's not selling - it's not important.

The FED deciding to taper their bond buying -- is telling me that perhaps the economy IS finally getting better.... and when the economy does better - businesses do better... and that's a positive for me. Now -- down the road -- if interest rates climb WAY HIGHER than where they are right now -- that can have a drag on peoples balance sheets. But we're nowhere near that level.

That's my story and I'm stickin' to it!


:D

[GregWeld]

BTW -- I love to just check various things -- regardless of whether or not I'm invested in them. Oil prices are important - Gold prices are important - the price of BitCoin - not so much.


If you were a gold bug.... you've watched the price per ounce go from $1700 to under $1300. That my friends is a HUGE loss...

I never was interested in it -- and always questioned why anyone would be. To me - it was always just gambling - hoping that someone would pay you more than what you paid. No thanks. It generates ZERO income. Check! No thanks.

Ditto that whole Bitcoin "investment" -- the only game in town is hoping like hell that someone is willing to pay more. No thanks.

I got a check from Con Ed (ED) last week.... $4,950.00 THANK YOU...

[sik68]

:thumbsup:

Thanks for the insight as always, Greg. As your typical Investing 102 student, I often fall back into the trap of "what's my investment worth." It's good to be :smiley_smack: right now as a reminder that whether the market is up or down, the 102 strategy wins.


Also, I want to practice rental real estate and am looking for a good book that includes theory and worksheets that demonstrate how to get cash flow positive (and/or show a taxable loss). Any leads?

[Flash68]

Also, I want to practice rental real estate and am looking for a good book that includes theory and worksheets that demonstrate how to get cash flow positive (and/or show a taxable loss). Any leads?

I have a bunch of these books Steven and you are welcome to borrow any or several of them next time you come by. Their principles never change either so they do not really become dated.

[ErikLS2]

If a guy had a large apartment building and it's well financed and producing a positive cash flow... and suddenly the real estate market goes to hell.... SO WHAT -- he's collecting cash flow every month... what difference does it make if the building is worth slightly less -- or even slightly more from time to time. It's value is only important at the point he decides to sell. If he's not selling - it's not important.:D

Great point Greg, except if you're like me and all that applies except you need a new loan by March and they are basically NOT lending, unless you can prove you don't need the money!! 2-3 times the borrowed amount in net worth is what I'm hearing.

On another note, you still high on NLY? I haven't checked but I heard on the radio yesterday that their yield has gone down around 12 or so?

[GregWeld]

Great point Greg, except if you're like me and all that applies except you need a new loan by March and they are basically NOT lending, unless you can prove you don't need the money!! 2-3 times the borrowed amount in net worth is what I'm hearing.

On another note, you still high on NLY? I haven't checked but I heard on the radio yesterday that their yield has gone down around 12 or so?



Banks have come BACK TO -- everything is about the numbers... THAT was the way banks were all during my professional life. If your numbers don't make sense from a risk standpoint -- then they don't loan. That was the way it always was. Apartments? You need 40% EQUITY...


I like Annaly (NLY) only from a cash flow perspective... it is not a place for capital growth. And is very interest rate sensitive. THEY borrow to invest. If their costs of borrowing go up -- then the spread starts to go away. I own about 40,000 shares -- so not huge position (relative to my investments) but I like the dividend and it's been a good place to park cash. I have warned many many times -- that this is not a buy and forget stock... and I have warned many many times -- that we are in or approaching rapidly - a rising interest rate market. These kinds of stocks WILL suffer capital losses UNTIL the dividend rate is so compelling that it finds a base.

Year to date -- it's DOWN almost 11%.... so that's a result of rising interest rates. But as the share price goes down -- the dividend yield rises. At any point for any stock - that creates a floor for the price.

BTW -- The "EX date" for NLY is June 27th... and it pays .40 per quarter or 1.60 a year. I have about a 60K capital loss in the shares I own -- but -- Big Butt -- I pick up 16K PER QUARTER in dividend -- and the loss varies day to day... and I'm not selling so it's just paper at this point. I took a long term capital gain of around 40K earlier this year on the name... so between that and the dividend -- even with the current sucky position - I'm a winner (as of now). If it holds here -- I'm "even" by the end of the year on the current position. That's kind of the way I view this one.

[GregWeld]

As usual -- I start every day with coffee -- and CNBC....


The talking head is telling everyone that GOLD is at a 4 year low... and on pace for it's worst week and blah blah blah.


Here's my point... and I've said this about half a zillion times in past posts.

When everyone is talking about something - whatever that is - RUN AWAY.... For the last 3 or 4 years all I heard about was GOLD going up - and GOLD is going to 2000 and GOLD is this and GOLD is that.... WHICH IS WHY THE ONLY GOLD I OWN IS IN WATCHES TO WEAR... cause that's all it's good for in a retail investors mind. It's jewelry... buy a bauble for your wife.

NOW --- in a DOWN MARKET all you're going to hear from the talking heads is how bad it is -- and how low it's going to go.

They did the same thing during DOT BOMB days -- and the same thing during the housing boom and bust....

Don't get caught up in those traps. When the guy at work - that you know has nothing and knows nothing - is telling you about the latest "can't loose" investment --- RUN AWAY WITH YOUR HAIR ON FIRE.... cause you might make some on the way up -- but you'll never know when it's about to break - and they break faster on the way down than they do on the way up. When everyone is talking about "it" -- IT is just about done.

[GregWeld]

Okay -- So I'm a post whore this morning...


Here's your homework for Investing 102 for the day. We just had a couple of "not so nice" days... really == the first kind of not so nice days since this thread began.... so here's what I want you to do.

Go to Google Finance.

Pull up a chart on

KMB -- Kimberly Clark -- Don't wipe your butt.... just pull up the chart...

Now -- click on ALL.....

Now -- Look at the gain percentage....

Now -- Pull up a chart on JNJ - Johnson and Johnson and repeat the steps for ALL on the chart.


What I want you to SEE ---- Not the gains.... LOOK AT THE DIPS.... There are MANY!! Some of them quite dramatic. Scary even. OMG....

Now -- notice that in every case -- they are just that -- mere dips. Get over it. If you'd held JNJ for 20 years you're UP 16,000% -- and you're ONLY up 3700% on KMB....

I own neither of these -- I'm just using them here to show you a "proxy" for "the market".

[XLexusTech]

Okay -- So I'm a post whore this morning...


Here's your homework for Investing 102 for the day. We just had a couple of "not so nice" days... really == the first kind of not so nice days since this thread began.... so here's what I want you to do.

Go to Google Finance.

Pull up a chart on

KMB -- Kimberly Clark -- Don't wipe your butt.... just pull up the chart...

Now -- click on ALL.....

Now -- Look at the gain percentage....

Now -- Pull up a chart on JNJ - Johnson and Johnson and repeat the steps for ALL on the chart.


What I want you to SEE ---- Not the gains.... LOOK AT THE DIPS.... There are MANY!! Some of them quite dramatic. Scary even. OMG....

Now -- notice that in every case -- they are just that -- mere dips. Get over it. If you'd held JNJ for 20 years you're UP 16,000% -- and you're ONLY up 3700% on KMB....

I own neither of these -- I'm just using them here to show you a "proxy" for "the market".

my strategy is to do just that... and snipe them when the overall market is down... JNJ i was in @ ~60 for example

[GregWeld]

I was reading an article on MLPs - Master Limited Partnerships... Kinder Morgan (KMP) is one of these... which we've written about in the past. What was funny about the article was what the author tossed in near the end.


It has been my experience that it is not what you buy that matters - it is what you hold on to. When one has confidence that they know the key metrics, one tends to hold on to investments with superior performance metrics. When one buys based on borrowed opinions, both the confidence to pull the trigger on the right investments and the comfort to hold those right investments is lacking.



You've heard me say this a few zillion times now. INVESTING is about confidence. YOU ALL must invest in companies (stocks) that YOU have confidence owning - thru good times and BAD. In the long run that's how you make money. Not by trying to buy low and sell high week to week or this six months vs next year.

[glassman]

I was reading an article on MLPs - Master Limited Partnerships... Kinder Morgan (KMP) is one of these... which we've written about in the past. What was funny about the article was what the author tossed in near the end.


It has been my experience that it is not what you buy that matters - it is what you hold on to. When one has confidence that they know the key metrics, one tends to hold on to investments with superior performance metrics. When one buys based on borrowed opinions, both the confidence to pull the trigger on the right investments and the comfort to hold those right investments is lacking.



You've heard me say this a few zillion times now. INVESTING is about confidence. YOU ALL must invest in companies (stocks) that YOU have confidence owning - thru good times and BAD. In the long run that's how you make money. Not by trying to buy low and sell high week to week or this six months vs next year.

Very well put, both by the author and the way you explain it.

My brothers a very sucessful man, CFO of a large firm and great dad and husband, his quote that he uses to tell me and others is, "Its not timing the market, its time in the market"....

Had lunch with my dad last week, hes been trading his whole life, hes 66. Tells me last week he's "poor" (by his standards). I said what happened, he said i wasn't patient enough with my investments. He traded too much IMO, sad, same thing happened to his dad (although not with the stock market). But, and this is a big butt, he's still on this side of the soil, if ya know what i mean, In other words, its never too late....

[GregWeld]

Of course - nobody really fully grasps the reasons why markets do what they do... and there is endless blabber about what they're going to do. One guy is buying - one guy is selling.... THAT is what a market is all about at the end of the day.

So here's my take on the latest dips and hiccups.

Unless you've just bought shares recently -- you've enjoyed outsized gains. People are always looking to capture gains - and when you've made 10% in 6 months --- that's very tempting. So the big market players are no different than you and I. They just have more zeros behind their trades... and they move the market. Trust me - WE do not move anything.

Now -- hair trigger -- looking for any excuse to capture those nice juicy gains... the market sells...

Now -- What the hell do you do with the cash?? Cash is all about making money... not sitting on it. So where you going to put that cash?? Europe? China? Russia? Iran? <buzzer sounding> You going to buy 10 year treasuries that yield a whopping 2.5% PER YEAR after you just killed it with a 10% 6 month gain??

Nah.... it comes back into the stock market.


Think of a tree full of Doves.... Somebody shakes the tree -- all the doves fly up into the air -- circle a bit -- and land on the same tree on a different branch.

[Payton King]

That was a brilliant last post. Spot on in my opinion...which is not worth much.

[toy71camaro]

Think of a tree full of Doves.... Somebody shakes the tree -- all the doves fly up into the air -- circle a bit -- and land on the same tree on a different branch.

I love that analogy. lol

[GregWeld]

That was a brilliant last post. Spot on in my opinion...which is not worth much.




Trust me -- neither is mine. I just spend more time posting mine than most. My wife calls it "in the brain - out the mouth". Pretty much sums it up.

[WSSix]

That may be true but you're correct about this. People don't suddenly stop investing. The doves analogy was a good way to explain the situation.

[GregWeld]

That may be true but you're correct about this. People don't suddenly stop investing. The doves analogy was a good way to explain the situation.




Actually --- the "RETAIL INVESTOR" which is what we are called in the industry - DO STOP investing in down markets.... Seems as a collective group we love to buy high and sell low.

This is what I've been trying to change in this thread. People need to see value in buying low if at all possible and NOT selling at every little hiccup.

I hope that most of you were able to do a little "gut check" when you saw the market down for a couple days here. You need to be able to handle -- and learn from -- your feelings when things aren't so rosy. That is what will save your bacon in the long run. Kind of a Fight or Fright training.

[XLexusTech]

Buy and short on the down... .

all my long term investments are purchased on the down... take Apple.. it hit 398... it may go down further.. but with the buy back plan even with the forecasts hitting 460 its still a buy.. my cost average goes down every time I buy more... so investing.. in down times... its when i look for deals to buy..

Are they taking about institutional investors holding?

[GregWeld]

Buy and short on the down... .

all my long term investments are purchased on the down... take Apple.. it hit 398... it may go down further.. but with the buy back plan even with the forecasts hitting 460 its still a buy.. my cost average goes down every time I buy more... so investing.. in down times... its when i look for deals to buy..

Are they taking about institutional investors holding?




Institutional investors are the market movers... because they trade in extremely large blocks of shares so they set the prices. Mutual funds etc are the big holders.

I don't think anyone is talking about institutions.... they're professionals and know what they're doing (supposedly). It's the "little guy" --- that sells his/her 401K out because the market is soft or is in a down period. Of course that's just exactly the opposite of what they should do. They should have upped their participation buying more shares in the soft patch....

Retail investors are reactionary.... and they just don't understand the market or even how to pull up a google chart and look at stuff. Just look at how they reacted in the soft housing market -- buying and pushing up prices at the top --- only to bail the minute the market went soft..... and the smart money came in and buys up the inventory at rock bottom prices... holds it for a year or two and sells for a nice gain or holds on and watches their rental income increase AND the value rise.

[XLexusTech]

Institutional investors are the market movers... because they trade in extremely large blocks of shares so they set the prices. Mutual funds etc are the big holders.

I don't think anyone is talking about institutions.... they're professionals and know what they're doing (supposedly). It's the "little guy" --- that sells his/her 401K out because the market is soft or is in a down period. Of course that's just exactly the opposite of what they should do. They should have upped their participation buying more shares in the soft patch....

Retail investors are reactionary.... and they just don't understand the market or even how to pull up a google chart and look at stuff. Just look at how they reacted in the soft housing market -- buying and pushing up prices at the top --- only to bail the minute the market went soft..... and the smart money came in and buys up the inventory at rock bottom prices... holds it for a year or two and sells for a nice gain or holds on and watches their rental income increase AND the value rise.

OK so the "stop investing" is referring to the gamblers not the investors I guess...