Investing 102

[GregWeld]

Greg, have you ever had any dealings with Thomas Partners?

I have not.

Here's why I don't use a big brokerage for dividend investing.... their percentage takes too big of a bite (percentage wise) out of the equation. When you're trying to be somewhat conservative and make a careful 5% average --- 1% is 20% of that. So the dividend earning money is held at Schwab and Fidelity. I break up my portfolio in the event something happens --- you know --- like "to big to fail"?

Just an Investing 102 statement here about a brokerage failing. YOU own your stocks -- they do not. So even if the brokerage went bust -- the stock is in your name.... BUT -- CASH is only FDIC insured (if your brokerage is actually FDIC insured!) for $250,000 per account. I have way more than that in cash any given day... so split my accounts up.

Lots of folks like their money "professionally managed"... nothing wrong with that if that works for them. Just NEVER use a private individual and never ever ever let them have access to your account. EVER.

[GregWeld]

Stuart ---

Taken straight off Thomas Partners website....


"We are distinguished by our disciplined commitment to the value-driving characteristics of dividends; a commitment to the goal of delivering rising portfolio income streams, without sacrifice of capital gain potential."



Here's my issue.... not with them in particular... just with "needing" someone that does what they do.


The above statement has been repeated by me a million times. In other words TOTAL RETURN -- that is Growth WITH a Dividend stream. Dividends protect on the downside -- create income and compounding - and "the market" will provide - over time - capital appreciation. I just don't need help finding 20 names that will do that for me. It just isn't rocket science... and these kinds of "pros" typically put people in lower dividend investments -- known as Little old blue haired lady" stocks.... Kimberly Clarke -- Johnson and Johnson - 3M - IBM. Now if I'm collecting 3% and they're taking .75% off the top... that REALLY REALLY affects your compounding -- and does someone really need to pay a third of what they're making (on the dividend) to pick these names?? I don't think so.

[Stuart Adams]

Thanks. Just browsing the schwab site. I'm happy managing my own dividend stocks, it's fun also. It looks like Thomas Partners specialize in that arena only and do pretty well.

[GregWeld]

Thanks. Just browsing the schwab site. I'm happy managing my own dividend stocks, it's fun also. It looks like Thomas Partners specialize in that arena only and do pretty well.



They'd have to beat the averages by at least the percentage they charge for running the show... in order for you to just be "average". Average is the best anyone can expect... But the way I figure it --- and what I've been preaching here is -- as long as you just stay best of breed - don't go searching for abnormal stuff.... just stick with the tried and true... You're going to do just about as good as anyone else.

When people get into trouble is when they let greed and fear creep in. Many times it's the fear that the phone call to "the broker" will help with - 'cause they'll talk you back off the ledge. And many times they'll keep you from reaching - and becoming greedy. So if a guy lacks some basic common sense -- has no understanding of the market - has no desire to learn even rudimentary terms and functions. Then a broker is probably a good thing for that person and there's lots of people like that.

If, however, a person has good common sense -- takes just a little bit of time to understand "the market" (nobody will really ever figure it out!) -- and knows himself and can control the greed and fear... Then I say -- do it yourself. It's not hard. People make it hard... and they loose themselves money because they freak out and sell the first time the market takes a dip... Or they only put money to work when everything is at record highs ---- rather than just wade in and put money to work on a regular basis... reinvest the dividends and have some patience.

[GregWeld]

Stuart ---


I've read everything they posted to their website... here's the gist. Invest in select dividend paying stocks that pay above average dividends and have shown to increase their dividends over time.


I'll "select" one... or two.


AT&T..... In 1988 they paid .15 per quarter - 10 years ago they paid .31 per quarter - Now they pay .46 per quarter. So 10 years ago they paid $1.24 per year... and the share price was $24.... Today they pay $1.84 per year. Using the $24 starting price -- and collecting just a $1.24 per year... you've gotten half your money back already. Imagine if that dividend was buying extra shares each year for 10 years...


LO....Lorillard -- using this instead of MO because MO split off some companies along the way and makes it a tougher example..... LO was $8 - 10 years ago and didn't pay a dividend... today it closed at $49.78 and pays a .55 per quarter dividend... and had a 3 for 1 split along the way --- meaning that those $8 shares you bought 100 of --- you now have 300 of. (split adjusted cost basis would have been $24 initial per share) But here's the deal --- the 300 shares -- are paying .55 per share per quarter --- $2.20 per year on a cost basis of $8.00 (split adjusted).



JNJ... 10 years ago the share price was $50 and they paid .24 per quarter... today they closed at $90.10 and they pay .66 per quarter. Let's do some simple interest calculations. $2.93 (annual dividend) divided by $50 (what you paid) equals 5.86% dividend on your cost basis. So you've doubled your money in 10 years and you're getting 5.86% spending money.



How complicated is all that?? LOL

There's not a single name there that you'd lose sleep owning...

[GregWeld]

If today's action makes you nervous --- or has you questioning why you're invested. Go to a chart of STARBUCKS (SBUX) and look at it's 5 year chart... UP 700% --- when I just checked it's price it was Down .69%....


Really? Down half or 1% or even 10% is going to bother you on it's way to a 700% return? If that's the case --- put your money under a mattress and go join a bowling league. You're heart can't take the stress of watching football.


HAHAHAHAHAAHAHAHAHAHA

[Solid LT1]

Me....I'm into paid off real estate...income producing...and...heavy metals....AU, AG, Lead/Brass the sure stuff:mock:

[Stuart Adams]

Stuart ---


I've read everything they posted to their website... here's the gist. Invest in select dividend paying stocks that pay above average dividends and have shown to increase their dividends over time.


I'll "select" one... or two.


AT&T..... In 1988 they paid .15 per quarter - 10 years ago they paid .31 per quarter - Now they pay .46 per quarter. So 10 years ago they paid $1.24 per year... and the share price was $24.... Today they pay $1.84 per year. Using the $24 starting price -- and collecting just a $1.24 per year... you've gotten half your money back already. Imagine if that dividend was buying extra shares each year for 10 years...


LO....Lorillard -- using this instead of MO because MO split off some companies along the way and makes it a tougher example..... LO was $8 - 10 years ago and didn't pay a dividend... today it closed at $49.78 and pays a .55 per quarter dividend... and had a 3 for 1 split along the way --- meaning that those $8 shares you bought 100 of --- you now have 300 of. (split adjusted cost basis would have been $24 initial per share) But here's the deal --- the 300 shares -- are paying .55 per share per quarter --- $2.20 per year on a cost basis of $8.00 (split adjusted).



JNJ... 10 years ago the share price was $50 and they paid .24 per quarter... today they closed at $90.10 and they pay .66 per quarter. Let's do some simple interest calculations. $2.93 (annual dividend) divided by $50 (what you paid) equals 5.86% dividend on your cost basis. So you've doubled your money in 10 years and you're getting 5.86% spending money.



How complicated is all that?? LOL

There's not a single name there that you'd lose sleep owning...

I have two of those no brainers. Your advise is always great. Slow and steady is a good motto I go by..

How much time a day on average do you spend on investments?

[GregWeld]

Me....I'm into paid off real estate...income producing...and...heavy metals....AU, AG, Lead/Brass the sure stuff:mock:



I wouldn't place metals in the "sure stuff" category... Gold is down 25% from it's recent highs. And Silver is down 36% in the same period ---- so I'm not so sure where you think this is a sure bet.

Real estate is a great investment -- as long as it's INCOME PRODUCING. Paid off real estate is a feel good statement... as leverage in real estate will produce better returns over time. I'm not going into the math -- but because other people read these posts... and this is a learning thread... The basics are if you put 100K down payment on a rental house - and you sell it for 50K more than you paid 3 years later. The RETURN is calculated on your actual investment (the 100K). You'd have made considerably less return had you paid all cash. So the "paid off" statement is cocky and feels good.... but not very accurate in many ways without some kind of explanation.

Like ALL investments --- it depends on a persons individual circumstances and what their situation and needs are at any given time. My feeling is that all investments need to only fit those of the individual. Investing is emotional -- and only the person owning the investment needs to feel good about it. Some folks can't stomach owning stocks - and love bonds.... or real estate... or life insurance.... or annuities. Others would consider some of these as TERRIBLE investments.

[GregWeld]

I have two of those no brainers. Your advise is always great. Slow and steady is a good motto I go by..

How much time a day on average do you spend on investments?



Every morning... from when I get up (6 AM) until Gwen makes me do something else... LOL


I'm really never "not" doing investing. Even on a road trip I've got CNBC on the satellite radio. But I'm not moving money in and out or trading... or trying to scam the next big deal. I just find "the market" interesting in general. The hard part is to separate the "trader talk" from INVESTING. I like to stick with my particular strategy - which pays me great income regardless of what "the market" is doing today or next month. I also like commercial real estate for the same reason... the renters keep on paying. The mortgage goes down and the rents go up. I like that delta! :trophy-1302:

[GregWeld]

Solid LT1 ---- Just to be sure.... My "sounds cocky" statement is not meant to be directed to you personally. It's a blanket statement. I re-read my post and thought -- hmmmmmm..... that sounds like I'm being mean to him and that's not my intention at all.

[SSLance]

Pretty interesting exercise I'm looking at now. I set up a google finance portfolio based on most of the stocks I've seen mentioned in this thread over the years so I could watch them for a while and get a feel for things as I venture back into this arena.

Given what has transpired the past few weeks, I'm looking at the portfolio now on the "fundamentals" tab, and what is most interesting to me is the current share price column, beside the 52 week high, and the 52 week low. This gives me a pretty good idea of how these stock's share price has reacted to the market conditions of the past year.

Granted, it doesn't take into consideration dividend payouts and I understand that, but this gives me a better roadmap of things I might be comfortable with to take and then go look at the dividend history of those same stocks.

The large majority of them are almost right in the middle of the 52 week highs and 52 week lows, there are some that are still hanging in pretty good though...and there are a few nearer to the 52 week low marks. It also gives a pretty good idea of how large of swings the particular stock may be more apt to go through which is a consideration for those that may not be willing to stomach the larger of the high and low swings of the market.

[SSLance]

One that jumps out to me that I can't explain yet, CVX is right near it's 52 week low while PSX is not far off of it's 52 week high...

In the grand scheme, Chevron hasn't moved a whole lot while Phillips has moved further...yet Phillips is hanging in better right now.

With almost zero research, one has to wonder if one of them isn't more involved with propane and what's going on with that market right now than the other...

Anyway, I have to go make some money at my day job right now. Good luck everyone!

[GregWeld]

Lance ---- There's a term for this! It's called "Paralysis by Analysis".


LOL




Here's how I do it. I owned 12,000 KMP --- I had 3MM in cash --- I noticed that KMP was going ex dividend. It pays 1.36 a quarter. So I bought 10,000 more shares.


All of that took 30 seconds of thought. LOL


I'll pick up the dividend.... wait for the shares to be "positive" - even by a nickel... and I'll sell 5,000.... wait a little longer and sell another 5,000. In the meantime if they sit "lower" -- I'll just hold - because in another 90 days I'll get another 1.36 a share.

[GregWeld]

I've said this in previous posts... i.e., that there is no "new" money. There is a finite amount of money invested... and it just moves around always searching for Return on Investment.


Here's a statement that came out of todays FED regarding their QE (Quantative Easing) purchases going forward... That they intend to only buy 65 Billion next month rather than the 75 to 85 billion they have been buying...


The Fed’s pullback is contributing to a global shift in investments as people who chased higher returns in foreign markets look forward to the return of higher interest rates in the United States.

[SSLance]

Lance ---- There's a term for this! It's called "Paralysis by Analysis".


LOL





My Dad refers to it as Mental Masturbation...


:D

[GregWeld]

I have a few shares of AT&T (T)... namely 30,000 shares of it... So it's a stock that while I consider it in that "steady eddy" bandwidth... because I don't expect them to suddenly spurt up --- I also don't think they'll drop much either. They pay a solid dividend... that's above 5% and that cushions downside risk.

I do however always keep up with "trends" -- and this is not only fun - but increases my awareness of what and why I'm invested in something. It takes some time - but I love it so no biggie.

I find this article about Apple - and about the cell phone industry which T is a member of very "interesting". As consumers - sometimes we just don't SEE what's happening competitively in an industry. But this article - while about Apple - sheds some really good light on cell phones in general. And particularly about how they're sold etc. What's good for one company might just affect another one negatively or vice versa. In this case -- NOT subsidizing cell phones might hurt Apple - but in the long run might be good for AT&T and Verizon (VZ) etc. Or it might be revenue neutral. Who knows.

I just thought it interesting.




http://www.fool.com/investing/general/2014/01/29/apple-inc-admits-it-needs-smartphone-subsidies-att.aspx

[GregWeld]

Today brings up a good day to talk about stocks that I avoid -- and why.


I avoid stocks that are "priced for perfection"... I've posted about this several times. Stocks that might be fantastic companies -- but they are so loved that everyone wants to be in them - which drives the share prices to levels that are
only sustainable IF * always the big IF * they can maintain spectacular growth. One teeny tiny hiccup -- and BAM! You get slammed.

Examples lately.... Apple.... slammed down $40

Amazon --- BAM! Down $30 today


These are both GREAT companies.... but their share prices have been way out in front with huge expectations of continued greatness.


I avoid LOW END retailers....(Wal Mart etc) actually I avoid anything that's main business is LOW END. Why?

Because the poor folks that shop there are just that -- poor... and they have the least amount of cushion in their budgets to absorb any offsetting cash flow disruption. Such as - a cut in hours worked - higher gasoline prices - higher heating bills etc. It just seems to take less and less "disruption" to have people slam their wallets shut - which of course - affects the sales and profit margins at these type of companies.


I like companies that pay above average dividends and whose customer base is broad based -- and companies that people MUST buy from.

When you see a down market --- you'll see that the companies that pay above average dividends will fare better. Why? Because as the share price decreases -- the dividend paid percentage increases - making them attractive relative to other income assets. It doesn't help your cost basis... if you bought at $35 and the dividend is 5% --- you're still only going to get your 5%... and you'd have a temporary paper capital loss on the books.... but your shares will most likely have gone down LESS than the market in general. So the dividend cushions on the downside... and regardless of what the current share price is - they're still sending you a check.

[Vegas69]

So I have my 10 stocks and I'm getting ready to make my next purchase in a down market. Would you invest in one of your current stocks at a lower price than your initial purchase or buy a new company? My thought was to invest in a current holding. I believe you call that cost averaging? The next question is, would it be one of the best performers or worst?

[GregWeld]

So I have my 10 stocks and I'm getting ready to make my next purchase in a down market. Would you invest in one of your current stocks at a lower price than your initial purchase or buy a new company? My thought was to invest in a current holding. I believe you call that cost averaging? The next question is, would it be one of the best performers or worst?



Good questions Todd!


So === I personally average in all the time. I added 5,000 shares of Altria (MO) on their "earnings miss". That buy in isn't enough to really bring my average cost down much (I already had 25,000 shares) -- but it makes me FEEL GOOD to buy it down a bit.

Two thoughts on your question of adding to biggest loser -- or best performer...

Examine WHY your loser is a loser.... this is critical to not try to "catch a falling knife" --- so WHY it's down is very important. If it's just down because of general market dipping --- or is there something fundamentally going on you need to be aware of.

Don't fear chasing market performance or growth. There's not a thing wrong with buying a stock or adding to shares when they're up a little. The shares are doing exactly what you wanted them to do - so why would that put you off? That's a rhetorical question.

If you feel you're diversified.... then adding to existing holdings rather than adding a new name can make you more comfortable in a down market... but sometimes if you're still trying to diversify - then the market has created a good opening for you to "get in".

I'd buy when the YEAR TO DATE price is in the 7 or 8% down... Remember that 2013 was far more than just an exceptional market... unlikely to be repeated. So 7 or 8% off "the highs" is a good starting point.

Remember that what is your worst performer this month - can be a good performer by year end. That's where patience comes in to play.

[GregWeld]

Here's another thing I think about whether it's buying or selling.


Make a list of what you want to do -- a PLAN -- Put down important things like your average cost -- what the "EX" date is for the next dividend... Making sure you put a "MUST BUY" or MUST SELL before whatever dates you plan to use. There's no rush generally to buy or sell.... so if you have a plan in place that you can look at to keep you on track it will help.

Why sell a stock 5 days before you were to get a dividend of .40 a share?

Why not try to buy a stock either just before it's EX date - or After it trades EX and either pick up the dividend -- or buy it on the dividend "dip" effectively collecting the dividend via the discount.

Check for their EARNINGS ANNOUNCEMENTS.... I'd never buy a stock like Amazon just before their earnings announcements. You can get crushed overnight... so be patient and wait to find out what they're saying about going forward (the most important part of earnings!). If it jumps up so what - things are fine and earnings are good and they say the future looks bright. Better than than buying in and they miss earnings and say going forward sucks and you get killed 15% in one day.

[GregWeld]

Okay -- I'm a post whore.... but I love this stuff -- and a mixed market - or down market gives me new stuff to talk about. Last year became difficult to find anything new to discuss because the market just went up day after day.


This morning - if you'd have looked at your accounts - you'd have had a frown on your face... EVERYTHING was red. While waiting on Adrienne (my daughter) to make breakfast... I noticed that the market was down 188 points or so -- yet I had 4 stocks green.... and frankly - the stocks that I own weren't down very much... I like that - and my theory that dividend paying big names hold up better in selloffs has always been true - and it's showing that in my accounts.

Within a hour or so --- I note the DOW is down 122 points -- but every single stock I own is GREEN...


I thought back to 1997 or so and remembered how I would have reacted to the big down red day --- I'd have SOLD everything losses be damned! Only to turn around and pay higher prices for the same shares a day later when they went green. What a fool's play that was. Now -- I look - shrug my shoulders - look to see if there's something I should be BUYING....

[Stuart Adams]

I think Walmart is getting torched by dollar stores.

[Vegas69]

Interesting info and I always like your common sense, fundamental approach. This quote fits nicely, "Success is a refined study of the obvious".

I'm certainly not saying this was obvious to me but it's not some mystical game either. I'll take your advice, do my research, and place my bets.

I go into Whole Foods for lunch quite often and I run into a gentleman in his mid eighties. Many times, we discuss life and philosophy. Today we got off on stocks. I discussed with him your common sense approach and he agreed that it was a winning approach for growth. He then admitted that he had been burned a majority of his life chasing the get rich quick stocks. It was clear that he had some serious resentment. I'd say that if he could rewind the tapes 30 years, he'd be the turtle, not the hare.

[GregWeld]

Interesting info and I always like your common sense, fundamental approach. This quote fits nicely, "Success is a refined study of the obvious".

I'm certainly not saying this was obvious to me but it's not some mystical game either. I'll take your advice, do my research, and place my bets.

I go into Whole Foods for lunch quite often and I run into a gentleman in his mid eighties. Many times, we discuss life and philosophy. Today we got off on stocks. I discussed with him your common sense approach and he agreed that it was a winning approach for growth. He then admitted that he had been burned a majority of his life chasing the get rich quick stocks. It was clear that he had some serious resentment. I'd say that if he could rewind the tapes 30 years, he'd be the turtle, not the hare.


Investing really is "obvious". I think deep down everyone knows what they should be doing. Doing it - is the part where most people fail.

Numbers don't lie. There's hundreds of websites that will tell you how much you need to retire with. Plug in age - savings amount - how long you expect to live and how much annual income you'd "LIKE TO" retire on. The amount you need is usually staggering. I think what happens is that nobody can actually see themselves ever getting that much money. So they just ignore the advice and keep on buying useless crap they don't really need at the peril of their own retirement in the future.

Let's face it - lots of people get lucky and pick up a nice chunk of change when their parents pass on. Their parents were smart enough to have a paid of house and some savings... Parents were luckier than we are - because many worked at jobs with pensions and great healthcare benefits. Most of us get NOTHING...

Investing can be a bumpy and discouraging road. Fears - greed - wanting only success and never being let down... Freaking out at the first investing disaster. Never learning about WHY they had a disaster.

Let's face it -- even if a guy buys a rental house - and he gets a good tenant that pays like clockwork. The next tenant can move in the middle of the night and cause lots of damage to the property. Suddenly there's 10 grand in carpet - paint - doors fixed - and appliances to replace. It sucks - but in the long term that's just a hiccup. 25 years go by and the house is paid for and becomes a cash cow. The 10 grand fix up becomes a tiny dip in the road.

ALL INVESTING has it's ups and downs. But if people just invest - understand that ups come with downs - and that the down part is just that - a part - in the end they'll become winners.

Investing has to be a holistic approach. At some point people need or want to quit working. In order to do that you have to have some income producing investments - but you also need to have the expenses in line. It's not rocket science to know that in order to spend 5 grand a month - you need to have at least 5 grand a month in income. Cut that expense to 3 grand - and bingo - you need less income. So "SAVING" and INVESTING... can and should be paying off the mortgage BEFORE your retirement - that might take making extra payments.... and you've got to put "X" amount away every month in income producing (compounding) investments to make your money grow.

Funny -- a friends father just passed away. The father had a condo here in Sun Valley... the friend figured it's paid for and they just got a nice freebie.... Well -- it wasn't paid for - in fact it's worth less than the mortgage. Now the friend is saddled with the house payment as well as the condo fee etc. Brings up my favorite saying: Life is what happens to you while you're busy making other plans...

[Sieg]

My hunch is that the last few generations of Americans with kids born in the late 80's forward who've been living the dream leveraged well beyond their means will put the self-titled Money Managers/Trust Fund Babies of today near extinction or a rare commodity compared to those born in the 50's and 60's.

[Vegas69]

That's why setting goals with a real game plan is so crucial. Most don't set written goals, let alone with a real plan of action. In this case, long term financial goals. "I want to be rich" How? What books are you going to read, what voice of value are you going to use to form your philosophy, what vehicles are you going to use?

It doesn't have to be real taxing either. Once you set a goal and put the game plan together, get a majority of it on auto pilot.

For instance:
My IRA & Life Insurance deposits are auto withdrawn.
The money I invest monthly into stocks is automatically transferred into Scottrade on the 15th. I just need to do some research and trade.
My rental mortgage payments are on auto withdrawal with the additional principal paid to pay them off in 15 years.
My primary residence payment is on auto withdrawal with additional principal to pay it off in just over 15.

I have a spreadsheet that breaks my budget down to replacing cars, clothes, and on down the line and includes net worth. I know approximately how much my net worth gains EVERY MONTH. Clearly, the additional funds have to be available to invest aggressively enough to achieve financial independence. That means you must live well below your income. If you don't, get into a more economical situation, pay off debts, or work harder. Even if you are living below your means, if you wish to achieve your goals faster, that may mean a move down in financial lifestyle. It's not going to take care of itself.

The key is to break it down. If you need $2,000,000 to retire, that seems like a daunting number. When you break it down to a monthly budget, it seems more manageable.

"Invest your money and spend what's left"

[GregWeld]

That's why setting goals with a real game plan is so crucial. Most don't set written goals, let alone with a real plan of action. In this case, long term financial goals. "I want to be rich" How? What books are you going to read, what voice of value are you going to use to form your philosophy, what vehicles are you going to use?

It doesn't have to be real taxing either. Once you set a goal and put the game plan together, get a majority of it on auto pilot.

For instance:
My IRA & Life Insurance deposits are auto withdrawn.
The money I invest monthly into stocks is automatically transferred into Scottrade on the 15th. I just need to do some research and trade.
My rental mortgage payments are on auto withdrawal with the additional principal paid to pay them off in 15 years.
My primary residence payment is on auto withdrawal with additional principal to pay it off in just over 15.

I have a spreadsheet that breaks my budget down to replacing cars, clothes, and on down the line and includes net worth. I know approximately how much my net worth gains EVERY MONTH. Clearly, the additional funds have to be available to invest aggressively enough to achieve financial independence. That means you must live well below your income. If you don't, get into a more economical situation, pay off debts, or work harder. Even if you are living below your means, if you wish to achieve your goals faster, that may mean a move down in financial lifestyle. It's not going to take care of itself.

The key is to break it down. If you need $2,000,000 to retire, that seems like a daunting number. When you break it down to a monthly budget, it seems more manageable.

"Invest your money and spend what's left"





A written plan and sticking to it. Once people see that they're on their way to actually doing something --- they'll get better and better at it.


Here's my question to anyone. If you can't live on what you're making NOW.... how do you suppose your life will be when you're not working at all? So that law of "averages" comes back into play. Better to have a nice long AVERAGE lifestyle all the way until you die - than to live like a baller now and a pauper later.

The key is to get started EARLY so the compounding can start to take affect.

[Vegas69]

I'm going to do a Greg Weld here..... ha

When I laid my game plan, the first order of business was to manage my income to it potential. I looked at my debts and began to eliminate the excess or eliminate the bill depending on the circumstance. Between paying off a car, eliminating some bills, and buying two income producing properties, I was able to change my balance sheet by over $20,000 a year in the black. With the new discretionary income, it enabled me to invest in my game plan. Let's say I invest only half of my additional discretionary income in the market for 30 years:

$10,000 initially
$833.33 a month
10% Interest
After 30 years: Over $2,000,000! Look at that compound interest kick butt after 20 years.
http://i200.photobucket.com/albums/aa251/Payback1969/Untitled_zpsa87fce42.jpg (http://s200.photobucket.com/user/Payback1969/media/Untitled_zpsa87fce42.jpg.html)

[GregWeld]

EEEEEEEEEHHHHHHHHHAAAAAAAAAAA!!! Now that's a f'n' plan!!




The compounding is why I always say -- START EARLY -- because it's the later years when all the magic happens!


It's the complete opposite of a mortgage where you pay all the interest at the beginning and the principal get's paid off last..... Compounding for investing purposes is principal first -- and then comes the interest income later which is exactly when you need it!


Someone just saving $500 a month can be a millionaire when they retire.

[GregWeld]

Often times you hear me say ---- is there a fundamental change in the business...




This is the kind of FUNDAMENTAL changes we're looking out for... something that is going to affect your shares long term. Shopping habits are fundamental changes... Remember that you're not only looking for the "bad"... you're also trying to look ahead and see what might benefit.



http://www.usatoday.com/story/money/business/2014/02/01/walmart-amazon-changing-shopping-habits/5085679/



Sorry -- after I hit post -- I thought of something else. Try to see ahead and WHO might benefit from the changes. I see something here that says "pay attention".... If on line shopping is going to continue on an upswing --- do I need to pick the company that will do the selling? Maybe if ALL on line shopping is growing -- maybe the shippers might be the general beneficiaries -- so think UPS and FED EX..... Think about fundamentals and all the surrounding beneficiaries.

IF we are going to continue to find oil here at home.... We'll need pipes or transportation to get it from the fields to the refiner. I'm not saying I'm investing in that (already own KMP).... I'm just saying to be aware of the broader picture. So here's another broad picture.... if homes are selling -- do you look at the home builders or do you look at the people providing the financing? Again - just "how to think".

[Stuart Adams]

Is there a great site that post dividend payouts of stocks.

[WSSix]

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

Right there in the middle is the US Dividend Champions. Fun list to read through.

[Stuart Adams]

Cool. Thanks. Interesting.

[GregWeld]

IMHO -- The market is working just as it should... The USA is NOT ready for higher interest rates... they will kill housing - they will kill autos - and the new taxes that the current Obamanites voted in (Obamacare) will suck too much money out of the economy.

Rates needed to just hold steady - and they need to hold steady for a year plus from now.

Here's the good news -- if you're in DIVIDEND paying stocks - and you're in great names -- then you're going to get paid every quarter regardless of what the market is doing "today" or "this week".


It's snowing hard in Sun Valley... think I'll go skiing. My checks keep coming...

[SSLance]

So, guess who just opened up a Merrill Edge IRA account and Roth IRA account and funded them... :D

Merrill Edge is the discount arm of Merrill Lynch and have everything available to them that is available through ML...only the accounts are completely self directed with $6.95 trades.

10 minutes total to get them opened up and funded...now just have to do some final homework and devise my plan...

[toy71camaro]

Good job!

[GregWeld]

WE are going to see an increasing sell off -- because this market has more LEVERAGE and Margin accounts (they're at historically high levels) and there will be margin calls.... When that happens - the selloff become steep and swift.

We need it - and it should happen.

It busts me up that the TV talking heads can toss out the big numbers and are all about "wow -- 300 point selloff".... do the math -- that's a whopping 1.9ish %... We need a 500 point down day. That will take out a lot of the margin accounts - which would be a good thing. If you're stupid enough to be buying stocks on margin - then I'm happy to see you getting killed in the market.

[GregWeld]

I like to see a sell off at the close of the market.... that means people have gotten margin calls and they can't come in with new money to cover by the end of the trading day -- and the brokerages take over and just sell indiscriminately.

We need this to take place.

[GregWeld]

It hurts but it hurts so good! I think I am going to wait a little longer and see what happens tomorrow before I buy in more at this "discount" and lower my average.



Not tomorrow --- wait.... we have more downside to go. Don't be in a big hurry here.

[GregWeld]

I feel like the "old man" here... trying to use my experience to herd cats...


I'd love to see a show of hands of how many felt "fear" yesterday with a measly down 300 day... vs how many saw a buying opportunity... vs how many said "ho hum" this is just the way the market works - pay no attention to it.

I bought a couple new positions in a different account yesterday. I'm not even going to say what they were because it doesn't really matter. What does matter is that I only bought part of a position. I nibbled. I expect to get another opportunity to add to my position and I actually hope to be able to average them down not up.

We need MORE earnings reports to see how the economy is going. I think it's going "okay" but I also feel it's still rather fragile. Just "okay" isn't where we need to be - we need to really get the engine humming again. It's so much more fun when things are smoking along at a good clip. STABLE is what I'd like to see -- not on top of the fence trying to balance.

Interesting by the way -- was the talking heads discussing FUNDAMENTAL changes in eating habits ---- regarding the big earnings beat by Chipotle Mexican Grill (CMG) vs the earnings "miss" by McDonalds (MCD). Is there a shift in eating by the younger generation -- to healthier "real foods"? It's something to pay attention to...

[GregWeld]

And here's another reason why DIVIDENDS actually COUNT! It's REAL MONEY!

While the market was dropping yesterday (and might again)... you're still getting paid to own this stuff! Gotta love that!

Wouldn't you love to build a PT car -- and at the same time have that car paying you while you enjoy it - drive it - wash it... all the time it's sending you a check? LOL




02/03/2014 Qualified Dividend T
A T & T INC NEW
$13,800.00

[SSLance]

It was an interesting feeling for me yesterday... When I was fully invested before, days like yesterday and the past week would have ate at me... Was pretty difficult for me to turn the PC off and go skiing. I'd be downloading my quotes into Quicken 3 or 4 times a day looking for the daily losses or gains total.

Yesterday though, I couldn't wait to get my new accounts set up and get them funded. I also spent quite a bit of time researching and formulating a plan.

Remains to be seen how I'll react to up or down days once I'm back in in one form or another though. That is actually a large part of how I'm trying to set this up...how to basically try to set it and forget it so that I don't dwell on the ups and downs.

Read this morning that we are basically at a 7% dip...not quite a 10% correction...yet.

[GregWeld]

It was an interesting feeling for me yesterday... When I was fully invested before, days like yesterday and the past week would have ate at me... Was pretty difficult for me to turn the PC off and go skiing. I'd be downloading my quotes into Quicken 3 or 4 times a day looking for the daily losses or gains total.

Yesterday though, I couldn't wait to get my new accounts set up and get them funded. I also spent quite a bit of time researching and formulating a plan.

Remains to be seen how I'll react to up or down days once I'm back in in one form or another though. That is actually a large part of how I'm trying to set this up...how to basically try to set it and forget it so that I don't dwell on the ups and downs.

Read this morning that we are basically at a 7% dip...not quite a 10% correction...yet.


Yeah --- It's also one thing to be on the sidelines and not actually have real money (skin) in the game. But that is an interesting observation on your part.

I expect more volatility going forward... We're just not going to have a market like 2013... that was like shooting fish in a barrel.

The reason (and remember that this is Investing 102) that I continue to urge folks to invest in the very best names --- and ones that pay dividends --- is because for the most part the dividend payers are buffered somewhat. And you can go to sleep knowing they're not going out of business... and when you see (read my post above showing my AT&T (T) dividends coming quarter after quarter it really helps to stay in the market.

I'd be freaked out if I was invested in pure growth stocks... and nothing else.

[toy71camaro]

The past week or to for me has just been a "aw, its bout time" sorta thing. I have no new cash to put to work right now, as I just finished my emergency fund. This year its back to investing for retirement (last year was purchase a house and rebuild emergency fund, but i already had my div stocks from an early 2013 ROTH purchase). So i got to watch my purchases and my Feb 2013 restructure of my 401k "ride the wave".

I feel tho, its just "part of the market". If i had money to put to work, i'd be looking at it a little different. But for now, i'm just holding tight.

On a side note, I keep a spreadsheet that automatically calculates the current +/- of my stocks, PLUS a separate column that automatically tracks my TOTAL RETURN. Thus, when I see stock XYZ down 3% today, I look a column over and see I'm still up 35% total return. So then its just a "sweet, maybe my next div check for that stock will purchase a few cents worth of more shares than last time." lol

[gearheads78]

I waited for a pullback for almost 3 months and just watched the train get farther and farther out of site without me on it. I finally got on board and of course had I waited maybe 2 more weeks would be in better shape. I am not scared of going down just wish I started from a lower platform to fall from. LOL
I did sell one of my 3 growth stocks FB today and bought something else I want to hold long term. I was up 19% on my FB and never intended to keep it long term so I let it go.

[GregWeld]

I waited for a pullback for almost 3 months and just watched the train get farther and farther out of site without me on it. I finally got on board and of course had I waited maybe 2 more weeks would be in better shape. I am not scared of going down just wish I started from a lower platform to fall from. LOL
I did sell one of my 3 growth stocks FB today and bought something else I want to hold long term. I was up 19% on my FB and never intended to keep it long term so I let it go.



That's EXACTLY what happens.... the longer you wait -- the market goes against you... the minute you buy -- the little man on Wall Street yells "TAKE 'ER DOWN"!!! Happens every time... I don't care who you are or how much you've invested.

The KEY is ---- to go back 10 years -- 15 years --- 5 years --- and see that the charts are GENERALLY lower on the left and higher on the right ---- and that's what you need to "invest" in. This week - next month -- tomorrow.... is just a blip in time. It's like buying a house.... you MUST believe that down the road it will be worth more regardless of what it sold for last time or next week.

At least Stocks are LIQUID if you need the dough.... good luck getting any dough out of your house if you need it next Monday! LOL

[gearheads78]

At least Stocks are LIQUID if you need the dough.... good luck getting any dough out of your house if you need it next Monday! LOL

Not mine (so far...) just working with my 401K rollover IRA

[GregWeld]

Not mine (so far...) just working with my 401K rollover IRA





True.

[SSLance]

Tell me if you see any holes in my theory here please...

What I did first was pick out 30 dividend paying stocks based on what I've read here and a few other places, I then built a model portfolio by taking 10% of the total amount I want to invest and buying however many shares I could of each of the 30 stocks. I then took the last 12 months of dividend payments for each individual stock, multiplied it by the number of shares I purchased thereby simulating what my dividend income would have been off of each stock had I owned it the past 12 months.

I then took the 10 highest performers to model my portfolio after...

I know it's looking back instead of looking forward, but it was an interesting calculation and I now have a much better idea of what I can expect from each stock and the total portfolio.

What I plan to do is to buy 25% of the total number of shares of each of the 10 stocks...every 2-3 weeks until I've got them all.

[SSLance]

If I wanted to go to no more than 5% in any stock, I just picked the next 10 best performers using the same method and I could just pick up half as many shares of each and spread myself out a bit more.

The top ten work out to about 5% dividend based on todays price as a purchase point and last years dividends. I'll take that. The second ten calculate out to a 3% dividend return figured the same way.

[toy71camaro]

hmm... Personally, I think your spending too much time simply crunching numbers rather than learning their business.

What's been preached here over the hundreds of pages is to
1. Buy "Best of breeds"
2. Buy "what you understand"

To me, just looking from the outside here, you're buying strictly on last years performance.

Now... you could do just fine with that theory. However, the first time Stock "X" is taken to the ringer, You'll be scrambling to figure out if you picked the bad one, if you should sell, or what. You don't understand the fundamentals of the company. What makes them profitable, and what can bring them down.

Personally, I would find 10 sectors of the market. Find the top 3 "best of breeds" in those sectors, then compare them against each other. Both looking back and forward as well as understanding their business model.

I'm no expert by any means. That just what I feel I've learned here. Not to simply look at the last year worth of numbers, but a bigger broader picture.

[SSLance]

I guess I should have clarified a bit better how I picked the first 30 stocks to choose from. They are all stocks that I'd own...the best of the best if you will.

I was more looking at how I should ration myself amongst those stocks that which ones to pick out of the blue. I'm concerned about diversity, so I initially picked a 10% number, no more than 10% in any one stock, then doubled that down to 5% picking another 10 stocks for a total of 20. And trying to even them out based on share price and prospective dividend income.

Sorry, I'm a number cruncher by nature...that part is NOT going to change. :D

I'm also a planner, and like to think out my moves well in advance of actually making them.

[GregWeld]

Lance --- I like your strategy.

We all have to hang our hats on "something".... And as long as you seem to understand the best of breed --- and INCLUDED in your calculations TOTAL RETURN (not Just the dividend)...

20 stocks is all ANYONE needs -- 20 gets you 5% regardless of 100K or 1MM... I actually own fewer than that! But I've owned some of them for a very long time... and I own many other non stock investments.

Averaging in every MONTH is good enough - if you're a long term investor.

I would add one other critical criteria to get a handle on ----- EX Dividend dates (subtracting at least 3 BUSINESS days) ==== Might was well time your purchases to either pick up the dividend ----- or buy they EX dividend when they typically drop the equivalent of the dividend payout. It just feels better to do this --- it's all mental --- but investing is more mental than anything. Getting a dividend payment just after purchasing is like an endorphin! Although sometimes it can be an enema in a market like we're in right now... Which is why we have to have a longer term horizon. Try to "time" it and you'll never be in.


Less than 100K ---- 10 stocks are okay ---- 15 would be better.


5% dividend rate is what I kind of plan for. The dividend is just one criteria -- coupled with the more magic Total Return -- coupled with "sleep at night" and some higher paying "risk on".

Also -- have diversity between "retail" vs "Industrial" vs "sin stocks" etc....

None of this kind/style of investing will get you bragging rights around the office cooler.... But while the braggers are still having to hang around the cooler because they're working.... you'll be at the track pounding your car... collecting money every quarter come hell or high water. Once you start to see that -- that is what has us sleep well. We can count on that income.

By the way --- good for you.... I think you've come a long ways from when you first posted. I also hope this works like you want it too. Because that mental doubt can creep in and kill a guys best laid plans.

[GregWeld]

I think you are right Greg, there should be quite a bit of volatility this year. I didn't double up what I had earlier this week, going to wait and see how it plays out.

I have a very very small amount in my one gambling stock HEMP just to have a little fun and so far its been fun! It might crumble to nothing it might be the next big thing, nobody knows. It reminds me of your boat story Greg, I know when I sell it the price will probaly go nuts so I am holding it and waiting :popcorn2:



If it's just a small amount -- I'd hold it! That is an area of great growth potential yet so much of it "depends" --- there will be many players - and it will have lumps and bumps.

There is actually a hedge fund headquartered in Seattle that was started by three big time guys that quit big jobs in the investing world to start the fund -- and it's goal is to invest in "marywanna"... I actually wrote to them to inquire about their structure and minimum investment etc. It's 100grand by the way. Not really very much - but it could be turned into millions if they invest in the right stuff.

Just a for instance on hedge funds and or angel investing. A $385K investment in a company got me 1% of all the shares outstanding. Yeah - it took about 6 years to pan out... but that company was sold in an all cash deal for 2.25 BILLION (not a typo) in 2010. Ownership of 1% of all the outstanding shares proved to be quite a nice total return. :>) Trust me when I tell you that there were several times when I figured the 385 was a big fat ZERO....


I no longer do any of that type of investing. It's a game of percentages and 90% of the time they're losses. They also take lots of input and calling people to get connections going - and it's a who knows who and on and on. Better lucky than smart... and knowing when to hang up the gloves is an important part of investing.

[SSLance]

Lance --- I like your strategy.


I would add one other critical criteria to get a handle on ----- EX Dividend dates (subtracting at least 3 BUSINESS days) ==== Might was well time your purchases to either pick up the dividend ----- or buy they EX dividend when they typically drop the equivalent of the dividend payout. It just feels better to do this --- it's all mental --- but investing is more mental than anything. Getting a dividend payment just after purchasing is like an endorphin!


5% dividend rate is what I kind of plan for. The dividend is just one criteria -- coupled with the more magic Total Return -- coupled with "sleep at night" and some higher paying "risk on".


By the way --- good for you.... I think you've come a long ways from when you first posted. I also hope this works like you want it too. Because that mental doubt can creep in and kill a guys best laid plans.


Thanks Greg...for the compliments and the help through this. I mean it.

Looks like I just missed the dividend on OLN so I'll be looking to pick it up on the cheap just after (so to speak).

My calculations were basically just to figure the return of the dividend. I had to come up with a way to figure out how many shares of each I'd be purchasing, then how much dividend each share would pay and then carry it out for a year.

It's an interesting exercise. What was interesting to me was the listed P\E ratios didn't jive at all with my calcs...like I thought it would. Shows that some companies really do pay more back in dividends than others, which is what I went looking for.

Total return including share price growth is just so much of a different animal I didn't want to muddy the water with that for this exercise. I know it is important, but market swings either way can effect a share price while not really changing anything with the way the company operates.

I guess it might not be too hard to go back into my google portfolio and change the purchase dates to a year ago at the share price then and see what my total returns might have been. Now that I'm armed with the dividend info I may try that just to see.

I'm also thinking of weighing my top 10 picks a bit heavier than 5% of the total and taking a bit away from my second 10 picks, like down to 3-4% of the total each. Going to sort them by sector and evaluate them more on that level then decide.

[GregWeld]

I had posted about a TWITTER trade that I made a while back... I made a quick flip out of it... and here's the reason for my post today. PIGS GET FAT AND HOGS GET SLAUGHTERED. I ended up buying double what I was going to - when it went up way more than I expected - I sold it all.

Had I held --- I'd have a large loss instead of the 40K profit I made.

Here's another thing that I've said before. I consider myself mister joe average. I'm not smart. I'm not some all knowing wall street big shot. I'm just an average car loving idiot. I killed my own personal Twitter account because I wasn't using it - and the things I signed up to follow - I wasn't really following. I didn't see the need for it. I like INSTAGRAM and look at it and comment on it..... I didn't even check in to Twitter.

Glad I got out a pig and didn't hang around to get slaughtered. :>)

[GregWeld]

What is your instagram name? Mine is @michaelelsea. Mainly all car pictures on my page



@gregweld33



I'd own Amazon long term... they're still growing -- and have a huge cloud business... and everyone loves shopping there. If it paid a dividend I'd buy and hold it. Too expensive (as in too much money to tie up) in a none dividend payer for me personally. 1000 shares is a quarter million --- and while I'm a fan and think it's still growing -- I'm living on my money and what it generates - so it's a different ball game for me personally.

[GregWeld]

I think Amazon could be the next google in time but like you said its too much money to tie up. Im still trying to get traction with my dividend returns so thats all I really own at the moment. I love getting FREE shares of companies!




Investing is fun when it starts to work for you. I don't care if it's commercial real estate -- or a rental house or two -- or stocks that pay you to own them. GROWTH is fun - but is hit or miss... and while we'd all like to be some big time stock guru that doubles their money every year... for most of us - that's just not the case.

Frankly -- I don't even see this strategy as SLOW growth.... many dividend paying stocks double or so every 5 to 7 years. That seems like a long time but isn't -- and the part that works is the time and the doubling of the doubling.

100K goes to 200k goes to 400K --- that's in 14 years or so! WTF is wrong with that? The next double is 400k goes to 800K -- 21 lousy years...

[SSLance]

Does anyone have a decent watch list setup that includes a column for Dividend Yield?

If so, how and\or where?

I can get to the dividend yield of a particular stock 6 ways from Sunday, I just can't seem to get it to show in a list of the equities with all of the other fundamentals...

[WSSix]

Lance, did you check that link a few pages back that I posted for Stuart? I think you might find the info you're looking for there. Not sure though and I'm not at home with my personal computer so I don't have the link bookmarked and available with this machine that I am on.

[SSLance]

Found it... thanks...

There is a US Dividend Champions spreadsheet on there that appears to be a fantastic resource for us.

[SSLance]

Alright... I'm back in. Hold on to your hats everyone, first time back in the market since 08/2011.

I picked up 10 stocks for now, about a quarter of the total amount I plan on putting back in. I've never done any online trading before, so this was all new to me. Kind of like everything else, was a bit of a learning curve to figuring out how everything works...but was pretty easy.

Now I'm going to turn it off for the weekend and let the earning begin. :D

Thanks everyone for holding my hand through this big step. Pretty sure I wouldn't have ever got back in the market if not for this thread.

[GregWeld]

Alright... I'm back in. Hold on to your hats everyone, first time back in the market since 08/2011.

I picked up 10 stocks for now, about a quarter of the total amount I plan on putting back in. I've never done any online trading before, so this was all new to me. Kind of like everything else, was a bit of a learning curve to figuring out how everything works...but was pretty easy.

Now I'm going to turn it off for the weekend and let the earning begin. :D

Thanks everyone for holding my hand through this big step. Pretty sure I wouldn't have ever got back in the market if not for this thread.



NOW all you have to do is change the way you (everyone) thinks -- rather than bailing at the first hiccup - become a BUYER not a seller... Don't take risk... Be an INVESTOR not a gambler... and sleep tight knowing that every 3 months folks are sending you money.

[Evil_s10]

Well I guess i've lurked for long enough not to chime in and say my thanks to all the contributors of this thread and especially Greg for making stocks something that I can finally look at and not feel discouraged or dumbfounded with.

Im 28 and have had a company 401k plan that is ran by 5/3rd Bank. This is one area of my saving that I dont have much control over. I am going to dig further into this in the next few weeks and try to find out if I have any chance to convert to stocks.

I setup a Schwab brokerage account about 3 months back and have set aside money each month for it. I just bought 5 shares of T (AT&T) last week and have my sights set on several more areas in the coming months.

Consumer Staples
MCD (Mcdonalds)

Consumer Staples
KO (Coke)

Energy
KMP (KinderMorgan)

Materials
PG (Procter & Gamble)

I am focusing now on making my portfolio hit on each sector and then I will focus on diversifying in each of my sectors. Right now my purchase of T has been a great learning experience and has allowed me to get my feet wet per se.

Thank you all for your time

Matthew Boehner

[GregWeld]

Good for you Matthew!!



The main intent of the posts that I do -- is to try to make sense of it all... and to take the fear out of "the market". I'm thrilled that I have been a help to you.

[GregWeld]

Anyone read up on the latest BITCOIN debacle??


You now can't get your money from one of the major "brokerages"? Mt Gox...


I don't understand the entire thing... and while Bitcoins have gone up HUGE... I wouldn't be able to stomach the gyrations.


There used to be a poster/member here that was hot on Bitcoin.... I'd love to know if he was able to make any money on this stuff -- or if it sucked him dry. My guess is - since he hasn't posted in a long time -- that the outcome ain't so hot -- but that's just guessing.

[GregWeld]

Well -- there's not much to write about.


Funny though -- when everyone talks about a 10% "correction" -- we don't get it. That's the way the market works -- which is why waiting and debating and sitting on the sidelines just costs you money over time. If you're always waiting for the perfect time to buy - you're never getting anywhere.

I had 3MM sitting waiting for the big move down - the one that hasn't come so far. So I'm just as guilty of this as anyone else. I put some of it to work last week and some more today. Can't just be sitting on cash - which is losing money IMHO since it's employees on vacation and being non-productive. Who does that?!?!?

So back into my usual parking spots.

It's okay... I'm okay with it. Not having a big down draft is okay.... nobody is spooked out of the market. Just having some normal days or weeks or months in the market is good. Trade on fundamentals... and not all this gibberish. The companies you invest in should have good solid earnings reports - that's all you need to know. They're making money - and they're willing to share it with you via dividends because you ARE an owner of the company (makes ya feel kinda important huh!? LOL).

:gitrdun:

[toy71camaro]

Yup.. Sitting and waiting is no fun either. lol

I'm finally getting "back in the game". Got the emergency account funded, and now setting $ aside to start pushing back into my Roth. Should be able to make my first purchase since early 2013 in March. :)

[SSLance]

I'm sitting here having a hard time keeping my powder dry so to speak... :D

Which is NOTHING like I thought I'd be feeling a couple of months ago.

I spent part of the morning calculating the ex-dividend dates of the 10 other stocks I've got picked out but haven't purchased yet...just to make sure I don't miss any payments from them in the near future.

By looking at most of the ex-dividend dates on the stocks that I did buy into, I was just a day late and dollar short on several of them... Oh well, I'll get them next time...

[GregWeld]

Poor BitCoin can't catch a break! LOL


I'm sorry -- and I'm not gloating here.... but I just wonder what people really were thinking when something completely new like this comes along. The idea vs the actual reality can be debated an infinitum. Mostly though -- and this is where I take issue with the entire notion -- where is the "value" derived from in an "investment" in Bitcoins??

In a nutshell -- hoping that someone will pay a higher price than you just did. Period.

While it might be fun - and it might be the "hot deal" to talk about - and you might be the "cutting edge" dude at the water cooler in the office.... it's still just gambling. Gambling that if you pay X -- someone else will come along and pay X more. It's fantastic on the way up... and you're looking really brilliant while it's going up. But that feeling when over night it goes south and all the money you "made" goes out the window. Well - that's not the feeling you want to experience in your "investments". Save those feelings for buying a lottery ticket - or going to the dog/horse races.

Bitcoin hit a high of $1100... it's half that today. OUCH!



http://www.cbsnews.com/news/bitcoin-stumbles-on-glitches-attacks-and-arrests/

[GregWeld]

I'm sitting here having a hard time keeping my powder dry so to speak... :D

Which is NOTHING like I thought I'd be feeling a couple of months ago.

I spent part of the morning calculating the ex-dividend dates of the 10 other stocks I've got picked out but haven't purchased yet...just to make sure I don't miss any payments from them in the near future.

By looking at most of the ex-dividend dates on the stocks that I did buy into, I was just a day late and dollar short on several of them... Oh well, I'll get them next time...



You're doing good Lance... but don't rush. You can ALWAYS buy. Just keep a steady hand and ease on in there.

Frankly -- it's never about getting the last 50 cents off... but think more about PERCENTAGES... If a stock is "on sale" 5 - 6 - 7 PERCENT -- then when it comes back you have a better "total return". The problem doing this is in an up market where a guy really never gets the chance to catch the train leaving the station.

Nobody can predict what the market is going to do. NOBODY. The only thing we can TRY to do is to gain some minor understanding of it. It's why I preach LONG TERM - INVESTING - and hopefully, time, and the power of compounding, work their magic.

[GregWeld]

An interesting exercise on RETIREMENT INCOME investing.... I read the entire thing.... and there are GOOD THOUGHT PROCESS going on here. So it was certainly worth the read.

Here's where I take issue with it.... WAY TOO MANY NAMES for anyone to be able to follow and feel good about knowing what they own. That's me personally... If I can't tell you what I own -- remember them ALL -- and tell you WHY... Then they're not in my accounts. This is why I personally limit my stocks to about 20 names.

Here's the way I figure it. Let's say I have 200K invested - so 20 names would give me 10K in each one. That's just about right in my book. That's enough dough in each name to have it really working.. yet it's not too much dough per name if one should crap out. So if I have 20 million in stocks - why not the same thinking? A million per name - manageable to follow and check up on... but all stuff that I can feel good about. The ratio is the same. If I felt good enough about them to stick 100K in them - then why wouldn't I stick half a mill in it if I still liked it and it was working for me. Why try to make it complicated and just go out and find something else "just because"?


ANYWAY -- Here's the link to the article because I did like some of the work he's done - or rather - the way he looked at things. You never have to agree with EVERYTHING you read - it's all just learning you take away what you want and leave the rest on the table.


http://seekingalpha.com/article/2017351-ultimate-guide-to-building-a-high-yield-dividend-portfolio?source=email_investing_income_inc_inv_st r_2_4&ifp=0

[SSLance]

I'm really starting to like Seeking Alpha, at first it was daunting when I would click on a SA link here or there that was posted in this thread...but the more and more I read there, the more I like it.

I especially like the comments after the articles that I read, one can learn almost as much from those as they can from the articles themselves.

It was also nice to see the links to some of the stocks in the article posted above by Greg, colored differently to show that I've already been looking at them, and have even purchased some.

So, did anyone else have TWC on their looking at but haven't pulled the trigger yet list?

I liked the ROI, like the product (current TWC customer), but some of the fundamentals bothered me, mainly the debt ratio. Was trying to decide on either that or CTL as a future holding in that segment.

[GregWeld]

Individual stocks are purely PERSONAL picks...



You missed Time Warner Cable (TWC) -- and apparently the debt ratio doesn't mean a single thing to anyone - because it's going to be acquired by Comcast and is trading UP $9 a share this morning.








I'm really starting to like Seeking Alpha, at first it was daunting when I would click on a SA link here or there that was posted in this thread...but the more and more I read there, the more I like it.

I especially like the comments after the articles that I read, one can learn almost as much from those as they can from the articles themselves.

It was also nice to see the links to some of the stocks in the article posted above by Greg, colored differently to show that I've already been looking at them, and have even purchased some.

So, did anyone else have TWC on their looking at but haven't pulled the trigger yet list?

I liked the ROI, like the product (current TWC customer), but some of the fundamentals bothered me, mainly the debt ratio. Was trying to decide on either that or CTL as a future holding in that segment.

[SSLance]

You missed Time Warner Cable (TWC) -- and apparently the debt ratio doesn't mean a single thing to anyone - because it's going to be acquired by Comcast and is trading UP $9 a share this morning.


That is the one part I guess I'll never understand about Stock market investing...

As a business person, I look at that balance sheet and it makes me shudder...yet someone at Comcast (or Charter as they were looking at it first) can look at it and see something completely different.

Little disappointed I missed a decent bump but have to keep reminding myself I'm in this for the long haul and for dividend income, not speculation and day trading purposes... :rules:

[gearheads78]

I think cable companies will be the next newspaper type dinasours in a few years. Might be some short term gains but long term horrizon I see many of them extinct.

[sik68]

News is coming out that the number of foreclosures in the US increased DRAMATICALLY according to RealtyTrac. +57% in California last month.

http://www.businessinsider.com/foreclosure-rebound-pattern-2014-2

http://www.capradio.org/articles/2014/02/13/realtytrac-foreclosure-starts-rebound-in-january/

Along for the ride, let's see what happens!

[GregWeld]

News is coming out that the number of foreclosures in the US increased DRAMATICALLY according to RealtyTrac. +57% in California last month.

http://www.businessinsider.com/foreclosure-rebound-pattern-2014-2

http://www.capradio.org/articles/2014/02/13/realtytrac-foreclosure-starts-rebound-in-january/

Along for the ride, let's see what happens!



Steven --


This is not directed at you or anyone in particular -- but I think more Californian's live on the ragged edge than almost anywhere else in the US. So a sharp rise in foreclosures there doesn't surprise me at all. There seems to be 2 economies in California --- the "coastal" communities that are nice... and the "rest of the state" which seems really depressing. Drive highway 99 vs 101 and you really notice the two economies.

[GregWeld]

Someone around this thread owns Occidental Petroleum (OXY) ---- whomever that is... is having a very nice day today! Good for them!!

[GregWeld]

Another BitCoin debacle... and they try to tell me this is an "investment". I don't think so.





http://venturebeat.com/2014/02/14/flaw-in-bitcoin-exchange-shutdowns-2-7-million-theft-is-the-end-coming/

[glassman]

Another BitCoin debacle... and they try to tell me this is an "investment". I don't think so.





http://venturebeat.com/2014/02/14/flaw-in-bitcoin-exchange-shutdowns-2-7-million-theft-is-the-end-coming/

was listening to this on Rob Black in the morning on KDoW here in the Bay Area this morning, interesting, him and Chad Burton (CFP) were both saying they wouldnt touch it with a ten foot poll, but that it is interesting nonetheless. I guess its fraudulent in some cases, and some countries its illegal.


On another note, why is Natural gas still on the rise? is it a winter demand heating sort of thing? Cause from what i understand, we have plenty of it, so how can it continue to rise? i see it as supply vs demand...

[GregWeld]

was listening to this on Rob Black in the morning on KDoW here in the Bay Area this morning, interesting, him and Chad Burton (CFP) were both saying they wouldnt touch it with a ten foot poll, but that it is interesting nonetheless. I guess its fraudulent in some cases, and some countries its illegal.


On another note, why is Natural gas still on the rise? is it a winter demand heating sort of thing? Cause from what i understand, we have plenty of it, so how can it continue to rise? i see it as supply vs demand...



Just because you have "plenty" of something - doesn't necessarily mean you can get it from source to end user... and I'm pretty sure the "shortage" may have been more like "holding back" (good business if you can get away with it). The government finally had to order the suppliers to put more gas in the pipe - which they did.... and I'm sure - and a hefty return.

It's the way business works... I have something you need -- I want to get paid for it when I can - and I want to charge as much as possible for it if I can. Sucks if you need it - It's great if you're the seller!

LOL

[glassman]

Just because you have "plenty" of something - doesn't necessarily mean you can get it from source to end user... and I'm pretty sure the "shortage" may have been more like "holding back" (good business if you can get away with it). The government finally had to order the suppliers to put more gas in the pipe - which they did.... and I'm sure - and a hefty return.

It's the way business works... I have something you need -- I want to get paid for it when I can - and I want to charge as much as possible for it if I can. Suck if you need it - great if you're the seller!

LOL

Point. Ya gotta love free enterprise....

[WSSix]

I'm invested in OXY. I'm still in the red but it's a nice gain that's for sure. OXY found a buyer for their Hugoton assets which is the area I work in for them. Not only that but they also raised the dividend payment 8 cents to 72. woot!

The only downside would be if the new owners don't use us for their services. Then that hits me weekly in my paycheck. Doh!

[GregWeld]

The good news for you Trey - is you probably have skills that are sough after in the Bakken or some other oil hot spot. I hear you can make 100K a year driving a truck in North Dakota! Buy yourself a nice trailer and get ready to move....


http://www.dakotaoiljobs.com

[WSSix]

No way! Too damn cold, lol. We've got plenty of other customers we work for here as well. Oxy just happens to be our number one customer. Some companies also will flat out not use Halliburton regardless of who the actual people are that will be doing whatever job they need done. I'm hoping the buyers aren't one of those companies. Guess I'll find out soon enough.

[SSLance]

Adam Aloisi

Will The Allure Of Dividend Growth Continue?

http://seekingalpha.com/article/2022841-will-the-allure-of-dividend-growth-continue?source=email_investing_income_inc_inv_str _3_4&ifp=0

Pretty interesting article but the comments below were even more interesting.

[GregWeld]

Adam Aloisi

Will The Allure Of Dividend Growth Continue?

http://seekingalpha.com/article/2022841-will-the-allure-of-dividend-growth-continue?source=email_investing_income_inc_inv_str _3_4&ifp=0

Pretty interesting article but the comments below were even more interesting.



Lance....


Since the beginning of time -- I've yelled at people to get started early! AND that 4 or 5% "return" - which is actually the CASH FLOW - off a million bucks is "ONLY" going to be 40 or 50 grand -- and then there's taxes off that!! So if a guy ONLY HAS a million bucks... at retirement... life is going to suck. Social Security is paltry... and health insurance alone is going to be a HUGE cost in retirement!

What MANY folks utterly fail to look at is TOTAL RETURN... so it's not just the dividend to concern yourself with -- your CAPITAL must grow as well. The total return for the last 5 years is utterly distorted by the LOWS of '08 and '09.... so we have to look at that number longer term -- with this latest 5 year period being an aberration. Still -- the numbers will prove -- that Dividends re-invested - along with growth -- and time (the biggest factor IMHO) will go a long ways toward helping the overall finances of most people.

The reason I yell -- DIVIDENDS and TOTAL RETURN and "GO BACK AND LOOK AT THE CHARTS" - is because the average "investor" is really not equipped PSYCHOLOGICALLY (mentally) to be a good investor. They buy when the market is on fire - and sell the minute it sells off.... As investors they suck!

So what to do? Get people to SEE their money making money... see that dividend every quarter -- see that it's being reinvested - buying them more shares - which pays a bigger dividend - which buys more shares.... I'm TRYING to help them STAY in the market. If they stay in the market (trusting the dividend etc) then - over time - they'll be winners instead of losers.

I guess my point of all of this is that there isn't a perfect strategy that guarantees success.... or that is perfect 100% of the time. Even commercial real estate can suck... or rental houses etc... because you can just as easily buy in the wrong neighborhood - or the main source of income in your town closes up (think what would happen to Seattle if Boeing or Microsoft moved)... But as long as people get started --- THAT'S WHAT COUNTS.


PS ---- I LOVED THIS COMMENT IN THE ARTICLE YOU POSTED.....




L:

Most baby boomers are freaking broke.

For the fortunate few who have a million dollars to invest in a DG portfolio, I hope that they can be happy living on 40k in dividend income.

Had they started earlier, that 40k would be closer to 80K today.

Cannot stress the importance of getting started with DG investing early. You can still play the stock market "game" with half your portfolio, but that's how many people end up having to work at Walmart as greeters when they "retire."

Dave

[SSLance]

I laughed when I read that comment as well... :rofl:

[GregWeld]

A very well written - easy to understand - article on "when" someone should invest - or wait to invest - or rather NOT wait to invest ----- and or be sitting on cash....

I can't tell you how many opportunities and how much time I've WASTED sitting in cash.... which is why - if you go back and read some of my posts - I don't really sit in cash -- I use a couple two or three "parking" spots for cash. The key to parking money in cash is not to fall into the "it's invested" and forgetting about it trap. NO NO -- Don't you do that. This isn't a game - you can not afford to fall asleep!



http://seekingalpha.com/article/2028361-optimal-cash-allocation-for-dividend-investors?source=email_investing_income_inc_inv_st r_0_2&ifp=0

[SSLance]

So I've been sharing what I've been watching and buying in my IRA account with my Wife. I also set up Edge IRA and Roth IRA accounts for her and transferred the cash out of her managed IRA accounts over.

She asked me the other day when she can start investing with her accounts? So I sent her a few links on SA and gave her some of the general guidelines that I've learned from here and what I'm working on. next thing I know she's got a user profile setup on SA and is looking up stocks and sending me links on things that she is interested in.

She kept asking me, what does N\A mean in the dividend field on companies she's looking up. :D

I finally sent her the link to DRIP and the latest dividend champions list and guided her in that general direction. She hasn't made any choices yet but I'm happy that she is interested in taking up a roll in this and wants to participate.

I am still less than an 1/8 of the way in...and am biting my trigger finger hard. I did put an order in today for more KO at $36 just in case it makes another dip when I'm not around to take advantage.

[GregWeld]

Good for you Lance! And kudos to her!!


The thing that people don't understand about investing -- it CAN BE FUN!! It DOES NOT have to be nerve wracking! Checking stuff out - making GOOD decisions - thoughtful decisions - watching stuff go up and down - but eventually mostly up -- and getting checks.... it's GOOD STUFF!


Trying to game the market - sitting on pins and needles - being freaked out when the market goes down 3%... GAMBLING... nail biting.... THAT IS NOT FUN!

[GregWeld]

We all discussed TESLA (TSLA) a few times -- and my thoughts were -- Yeah I'd buy it IF I wasn't already retired and living off my dividends and income.... BUT that you also had to be willing to really go on a ride. Whatever that was going to look like -- because the shares sell for far in excess of earnings -- and you're gambling on how well their next model will sell... and on and on.


Here's why I'm bringing this up -- they closed DOWN almost $11 per share at the market close --- and more importantly -- they had a 35% SHORT interest. So 35% of the total outstanding shares were SHORT - meaning people were betting that the share price would FALL....

After the close - they reported the quarter... which was STELLAR.... and the shares have risen "after hours" $30 isn per share.... that's a $40 per share difference from the open today - the closing price - and the after hours price.

If you are short TSLA -- you just got your ass handed to you!!

While I'd like to be a holder -- I just can't gamble like that anymore... but maybe I'll buy 50 shares... just because. HAHAHAHAHAHAHAHA

[GregWeld]

The kind of market we're in right now -- is EXACTLY WHY I favor dividend investing. Nobody can make heads or tails out of the direction of the market... One day it's hot and all the next week you die the death of a thousand cuts.


If I showed you some of the dividends I've gotten this quarter -- you'd see why I could care less what the market is doing day to day. And that's the space you want to get yourself to. Positive cash flow. That's what counts day in and day out. Cash coming thru the door.... Your investments are just the vehicle used to make you money -- and that doesn't mean the investment itself always has to have appreciated.

Like I tell my accountant -- "I" APPRECIATE the money they earn. We always get a good laugh out of that - but it's absolutely true.

[GregWeld]

A good read today in Seeking Alpha.... because it directly RELATES to smaller investors IMHO. Not taking into account the author is writing about one particular stock investment he's made --- rather --- it's his method. A good one I think and of use to many of you.

I picked up the article mostly because it was titled 5 year review... that is an investor... 5 years not 5 minutes or 5 days.


http://seekingalpha.com/article/2031571-position-review-year-5-of-owning-emerson-electric?source=email_investing_income_inc_inv_str _1_1&ifp=0

[SSLance]

I've been waiting to be able to make a post like this...

I just got a raise!!!



The Board of Directors of The Coca-Cola Company Announces 52nd Consecutive Annual Dividend Increase
5 comments | Thu February 20, 2014 10:30 AM|Business Wire | About: KO
Increases Quarterly Dividend by 9 Percent

ATLANTA--(BUSINESS WIRE)-- The Board of Directors of The Coca-Cola Company (KO) today approved the Company's 52nd consecutive annual dividend increase, raising the quarterly dividend 9 percent from 28 cents to 30.5 cents per common share. This is equivalent to an annual dividend of $1.22 per share, up from $1.12 per share in 2013. The first quarterly dividend is payable April 1, 2014, to shareowners of record as of March 14, 2014.




I didn't get to pick up the extra shares I was looking for on the drop after earnings, but that's alright...I'll take the raise. :D

[GregWeld]

This is EGG SACK LEE why people have to quit trying to be market timers. You just do what you can do - regularly - and let the chips fall where they will.

It's also why -- and I'm not a "chartist" - not in the least - but I have to constantly remind myself - via the charts - that regardless of all the gyrations stocks go through -- the charts show me "lower on the left side and higher on the right side". The longer the view - the more pronounced that usually becomes. The tighter the view - the more freaked out a guy would get! Holy Cow! Look at that "huge" dip there! FUGIDABOUDIT!

Buy good stuff - don't gamble - get paid to wait while the market sorts itself out - average in and average out. If the market takes a huge dump - prepare to buy MORE again averaging in steady as she goes - because the market always seems to come back higher each time.

The whole notion of the world is about to collapse - is just that - a notion. Even during the great depression - people made fortunes. They just happened to be the ones that took advantage of all the sellers. LOL


More importantly!! Don't ya just love getting money for nuthin'!! Your boss didn't just give you a raise... certainly not a 9% one!!

Good for you Lance.








I've been waiting to be able to make a post like this...

I just got a raise!!!



The Board of Directors of The Coca-Cola Company Announces 52nd Consecutive Annual Dividend Increase
5 comments | Thu February 20, 2014 10:30 AM|Business Wire | About: KO
Increases Quarterly Dividend by 9 Percent

ATLANTA--(BUSINESS WIRE)-- The Board of Directors of The Coca-Cola Company (KO) today approved the Company's 52nd consecutive annual dividend increase, raising the quarterly dividend 9 percent from 28 cents to 30.5 cents per common share. This is equivalent to an annual dividend of $1.22 per share, up from $1.12 per share in 2013. The first quarterly dividend is payable April 1, 2014, to shareowners of record as of March 14, 2014.




I didn't get to pick up the extra shares I was looking for on the drop after earnings, but that's alright...I'll take the raise. :D

[toy71camaro]

I've been waiting to be able to make a post like this...

I just got a raise!!!



The Board of Directors of The Coca-Cola Company Announces 52nd Consecutive Annual Dividend Increase
5 comments | Thu February 20, 2014 10:30 AM|Business Wire | About: KO
Increases Quarterly Dividend by 9 Percent

ATLANTA--(BUSINESS WIRE)-- The Board of Directors of The Coca-Cola Company (KO) today approved the Company's 52nd consecutive annual dividend increase, raising the quarterly dividend 9 percent from 28 cents to 30.5 cents per common share. This is equivalent to an annual dividend of $1.22 per share, up from $1.12 per share in 2013. The first quarterly dividend is payable April 1, 2014, to shareowners of record as of March 14, 2014.






Woohoo!

[WSSix]

Hey, thanks for the good news, Lance. I didn't know I got a raise. Sweet!

[GregWeld]

This is a name that has been discussed many times - as usual used as an EXAMPLE - which is not or ever intended to be a recommendation to buy or sell... because that's not what this thread is about. It has been discussed because it's a MASTER LIMITED PARTNERSHIP - which is different and taxed differently that a normal stock.


In full disclosure I own 22,000 shares of it.


Barron's came out with a negative article about it this week. And the shares are getting hammered. I'm writing about this because SOMETIMES this is what happens to a name you might own. What to do about it is what you need to think about it.


Some times it creates a wonderful opportunity to buy... either average down or just add to a position. Think about NETFLIX when the CEO came out with a big public gaffe and the stock absolutely plummeted. That was a HUGE opportunity to step in -- and if you did - you've gotten a 4 bagger (400%)...

Some times the negativity might have a real basis - and might very well be just the prick of a pin in a balloon.... and that's when you WOULD NOT want to try to catch a falling knife! I've tried to catch a falling knife... it doesn't buff out.

What you should do before taking any action - buying more or selling - is to try to dig deeper and read as much as you can PRO and CON.... and then maybe choose to do NOTHING... or choose to take your loss and sell... or back the truck up and buy.


Here is how Richard Kinder (CEO and Founder) responds to the article...



" Like now, back in 2006, we had an enormous backlog of projects. And like now, many experts will find that we were too big to be able to continue to grow at an acceptable rate. We proved the doubters wrong the first time around, and I anticipate the same result this time. Reflecting this belief in the Kinder Morgan companies, as many of you know, I’ve been a buyer of KMI shares. I’ve purchased over 800,000 shares in December alone. So I guess my message to those who saw the story less positively was you sell, I’ll buy, and we see who comes out the best in the long run."
-- Richard Kinder, CEO on the Jan 15, 2014 Q413 conference call

On Feb 20, Kinder revealed that he bought 100,000 more shares at a cost of around $3.3 million.

[SSLance]

I've been watching this Greg for a while, but am a bit confused on one thing. Since I'm assuming you are in tune with the companies better than I, can you expound a bit on the difference between KMI and KMP please?

I've owned limited partnerships in the past and am aware of the tax consequences, for simplicities sake would rather avoid that aspect of it but at the same time, it doesn't totally scare me away.

On the same hand though, if one could dip into the same pool with KMI without the LP aspect that might be interesting as well.

[GregWeld]

Lance ---

I never want to turn this thread into a stock pickers platform... but your question is the difference of how a stock is handled -- tax wise and therefore fits this thread because it is an important aspect.

KMI -- OWNS KMP (actually I think MANAGING PARTNER) is the correct description. As such KMI gets its "income" via an agreement with KMP. It is therefore a "stock" - with normal capital gains and dividend treatment.


KMP -- Is an MLP (Master Limited Partnership) -- and as such spins off it's income/profit back to the "partners". The "distributions" (not dividends) are treated as a RETURN OF CAPITAL. So this is a special tax treatment. And therefore are TAX ADVANTAGED.

I've said it here before - that there's no reason to own tax advantaged stocks or investments inside an IRA or ROTH etc.


Most "Limited Partnerships" are not very liquid. For instance - I own apartment complexes that are set up as partnerships. The Managing Partner is the operator - the "investors" have little control of how things are run or when the buildings might be sold and so on. I would have a hard time getting my money out of this type of investment. The MP might sell in next week - or maybe 20 years from now. Even as the largest investor - I would have little say so. I'm in for the ride.

An MLP traded on the stock market is LIQUID - since they're publicly traded and you can get in and out. But the tax advantage remains the same.

[SSLance]

Thanks Greg, I'm assuming that KMI has other "investments" that it owns besides just KMP?

We've set up Limited Partnerships up before as a way to create Passive Income to offset Passive Losses...so I'm well aware of the structure and why it is used. If you know who the managing partner is and you are all on the same page, it can be a real nice tool. Owning one can certainly add some additional Tax Return calculations though.

In fact, the very first shares of stock my wife and I ever owned were of a LP. She worked at the time for ChemLawn who was owned by ServiceMaster at the time. She received shares of ServiceMaster in her 401K as contributions that eventually rolled into her current IRA. Helluva way to dip ones toes into the stock market for the first time. :headscratch:

[67GOAT]

Greg first of all thanks for all the information you share in this thread. It is very enlightning for me. You mentioned that having a MLP in an IRA or Roth provides no advantage but what if any disadvantages do they have?

Brian

:thankyou:

[chr2002ca]

can you expound a bit on the difference between KMI and KMP please?

Google "KMI vs KMP" and the first link in the results is an article from Seeking Alpha which pretty much answers that question:

http://seekingalpha.com/article/1901881-kinder-morgan-relative-valuation-kmi-vs-kmp-and-epb

[chr2002ca]

Greg,

It always seems much harder to know when to sell than when to buy. Using your KMP for example...You own 22K shares of KMP, and the stock has been trending downwards for the past year when the market's been going straight up, and this latest news brings it back to early 2011 levels. You're still making 6.x% on the distributions which is great, but what exactly would you be looking for to convince you to sell and reallocate to something that might be a better performer moving forward? Is it a specific level, or specific news, or a downward trend of X number of years that under performs market or similar stocks' trends? Of course, if you bought KMP back in 2000, or even 2005, you're doing great on both growth and distributions, but I'm just curious about the triggering event to sell. In this case, it appears you're not bothered by the recent news and will hold, but what would bother you? :)

Thanks for all your input.

-Chris

[GregWeld]

Greg,

It always seems much harder to know when to sell than when to buy. Using your KMP for example...You own 22K shares of KMP, and the stock has been trending downwards for the past year when the market's been going straight up, and this latest news brings it back to early 2011 levels. You're still making 6.x% on the distributions which is great, but what exactly would you be looking for to convince you to sell and reallocate to something that might be a better performer moving forward? Is it a specific level, or specific news, or a downward trend of X number of years that under performs market or similar stocks' trends? Of course, if you bought KMP back in 2000, or even 2005, you're doing great on both growth and distributions, but I'm just curious about the triggering event to sell. In this case, it appears you're not bothered by the recent news and will hold, but what would bother you? :)

Thanks for all your input.

-Chris



Great question --- Not sure I have a perfectly direct answer. I sold my position in McDonalds because I don't eat there anymore - rarely - and when I did - I wasn't happy with the places or the food....


Kinder Morgan is about a 100 BILLION dollar "entity" if you factor in all their businesses. Energy prices are often volatile... and as we all know - you have risk from a pipeline break - or some environmental issue etc.

So here's why this is hard to answer. Because it all depends. Depends on why someone is holding the issue. I'm holding it because it pays me $30K PER QUARTER (29,500 actually)... which is very nice cash flow on one single holding. I have added to the position as it's slipped down. I'm currently underwater on the holding - but not by very much. Given the cash flow it represents to my portfolio... that's the trade off. If I sold it I'd have a LOSS -- and then would need to find a replacement for $120K per year. So for me - that would be a MAJOR factor. What else can I buy at todays prices - with that cash flow - that I would TRUST to not only make up for the loss - but also not go down (EVER? like that would happen). So until there is some FUNDAMENTAL reason -- I'm a holder. At the value of this position - I'm not going to ADD any more to my position. I have plenty of it.

In other words -- the CEO is a major holder - he's putting his money where his mouth is. Fundamentally the company and the way it operates hasn't changed. What changed is somebody wrote an unfavorable article. The company will still be there 6 months and 6 years from now - when the article is forgotten next week.

This is a long term holding for me - and todays or tomorrows price isn't a consideration for me and I don't see an issue with the company that currently affects my thinking. I've been wrong before - and might be this time but I'll stay the course in this one.

[gearheads78]

I have about 5% in KMI. I saw the article and knew what would happen today. At this time I plan to ride side car with Richard Kinder.
On a different note my CVX was up more than KMI was down today. :)

[chr2002ca]

Thanks Greg. I really appreciate you taking the time to share your insights on that. I was actually going to buy some late today right before close, but got a little nervous when I saw the trend for the past year. I already own some ETP so I want to be sure not to get too heavy in that field. I was thinking of maybe something like NYCB as a substitute for KMP with a similar dividend and decent track record with their dividends. KMP might be a better value though given what you just mentioned(down on basically old news). Will see what happens. Have learned a lot from you. Thanks again. :thumbsup:

[glassman]

Man, good stuff as usual. And as usual, i've have nothing to say.....but :thankyou:

[GregWeld]

Can't say you weren't warned... at least not if you've read this thread.




http://money.cnn.com/2014/02/25/technology/security/mtgox-bitcoin/

[Sieg]

Bitcoin player just got bit :rolleyes:
--------------
This market is entertaining, my good stocks are off 0.20% this morning and my risky Game Stop purchase is up 6% :knock: :D

[GregWeld]

Bitcoin player just got bit :rolleyes:
--------------
This market is entertaining, my good stocks are off 0.20% this morning and my risky Game Stop purchase is up 6% :knock: :D




When you understand how the market works day to day -- please post it up so I will finally be able to figure it out...

[Sieg]

When you understand how the market works day to day -- please post it up so I will finally be able to figure it out...

I will...........right after I hit the MegaBucks jackpot.

[GregWeld]

I will...........right after I hit the MegaBucks jackpot.



By the way -- My point was that does anyone really know or think they know why the market works the way it does... I certainly don't. One week you're clicking on all 8 -- the next week the market is going up and your stuff is all going nowhere... They report bad news on the TV and the market goes up - they report good news and the market goes down.

I've never been able to get it.

Let's just look at Microsoft the COMPANY -- they just kill it in profit - sales - money in the bank... and Microsoft the STOCK goes nowhere for 10 years. Go figure.

Another money losing company has a decent quarter and the stock puts on $10 a share. Go figure.

[GregWeld]

Every new investor should read these -- every experienced investor should have them in neon on their wall.



http://www.marketfolly.com/2009/09/top-25-warren-buffett-quotes.html

[SSLance]

By the way -- My point was that does anyone really know or think they know why the market works the way it does... I certainly don't. One week you're clicking on all 8 -- the next week the market is going up and your stuff is all going nowhere... They report bad news on the TV and the market goes up - they report good news and the market goes down.

I've never been able to get it.

Let's just look at Microsoft the COMPANY -- they just kill it in profit - sales - money in the bank... and Microsoft the STOCK goes nowhere for 10 years. Go figure.

Another money losing company has a decent quarter and the stock puts on $10 a share. Go figure.


This is basically in a nutshell...what drove me from the market in 2011. It just didn't make any sense, especially to an analytical person like myself.

The Steady Eddie dividend income investing approach is different though...as I have been shown.

The wife made her first purchase yesterday, I walked her through putting the order in on the phone. The company announces earnings today...should be interesting to watch her response.

[Sieg]

By the way -- My point was that does anyone really know or think they know why the market works the way it does... I certainly don't. One week you're clicking on all 8 -- the next week the market is going up and your stuff is all going nowhere... They report bad news on the TV and the market goes up - they report good news and the market goes down.

I've never been able to get it.

Let's just look at Microsoft the COMPANY -- they just kill it in profit - sales - money in the bank... and Microsoft the STOCK goes nowhere for 10 years. Go figure.

Another money losing company has a decent quarter and the stock puts on $10 a share. Go figure.
The variables are impossible to chart as the fluctuations appear to come from a multitude of news sources, industry and market rumors, and speculative opinion to list a few. Negative news appears to create more movement than positive news. Solid performance doesn't make for good headlines even though it may be a shoe-in for the Hall of Fame.

"The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable."
~ Warren Buffet

[GregWeld]

This is basically in a nutshell...what drove me from the market in 2011. It just didn't make any sense, especially to an analytical person like myself.

The Steady Eddie dividend income investing approach is different though...as I have been shown.

The wife made her first purchase yesterday, I walked her through putting the order in on the phone. The company announces earnings today...should be interesting to watch her response.




Dividends and "best of class" and Total Return is what will make you money longer term and get you a good nights sleep. Let the gyrations be what they will because nobody can guess what they're going to be tomorrow or next month. I like to FOLLOW the market... I like to be AWARE of trends... I want to be INFORMED...

I used to absolutely freak out if a stock I owned went down a dollar. Never mind that the dollar was .02% of the value... That was it! SELL! SELL IT ALL!

That is a great way to go thru a lot of money. Because then the next day it would go UP 3% and I'd buy it all back.

That was back in the 80's and 90's... I've learned how to make money since then.

[GregWeld]

Here's exactly what I was just posting about!!


Check out the move in Sturm Ruger (RGR) the gun company.


The earnings and profit and sales just reported were absolutely off the charts good.... the Stock however is selling off $5


Would ANYONE think that if a company grew 40% - that their stock would sell off. Go figure.


Again - we are NOT using names to discuss their particular merits of ownership - it just happens to be a perfect EXAMPLE of the market and the thinking etc. I DO NOT own this but know that other readers do. It's been a terrific growth stock.

[SSLance]

Well, her stock came out with terrible earnings...and is up 4% on the day. :EmoteClueless:

[GregWeld]

So she bought Target (TGT)....


Probably a good buy in time since the news is worse than the long term growth of the company. It just doesn't pay enough dividend % for me but the growth has been stellar!

[SSLance]

;) It fits into the buy what you know theory perfectly.

I told her while she was looking at it to pay attention to this...Do you still like shopping at the store, do they still offer everything they offered before, are the registers all staffed and the store kept clean and shopping experience good?

If so, pay no attention to the new cycle items in regard to the breach...that will pass and the stock should come back as long as the shopping experiences stay the same as they were before.

There are other factors also involved of course, but it's a company that she knows and will keep an eye on from the customer's perspective.

[GregWeld]

And that is the PROPER way to invest!!!









;) It fits into the buy what you know theory perfectly.

I told her while she was looking at it to pay attention to this...Do you still like shopping at the store, do they still offer everything they offered before, are the registers all staffed and the store kept clean and shopping experience good?

If so, pay no attention to the new cycle items in regard to the breach...that will pass and the stock should come back as long as the shopping experiences stay the same as they were before.

There are other factors also involved of course, but it's a company that she knows and will keep an eye on from the customer's perspective.

[GregWeld]

Here's something else for "newbs" or for those that have some money and just can't find somewhere to put those employees to work.

Blackrock runs several publicly traded ETF's... Exchange Traded Funds.


They're basically Funds set up to do particular "work" - Dividends - Volatility (or lack thereof) - Gold - etc.


Here's Blackrocks website -- and there's a TON of information about their various funds.

http://us.ishares.com/home.htm


I have used their Corporate High Yield (HYG) fund for a long time to park cash.


So here's the way I THINK about this type of "investment" (an ETF) -- I use them for a purpose. i.e., I use JNK and HYG to place cash in and either pick up the MONTHLY dividend ---- or if they go up enough before the dividend - I might just take the gain (taxed differently!) - and sometimes I get the dividend AND the gain. But either way -- I do not think of them as investments. They're just placeholders. They're not buy and forget.

SOME of the iShares ETF's COULD BE investments...

[GregWeld]

I just hope none of you were in Bitcoin... and I hope you all understand WHY I was against this kind of speculation. While it's fun to be cutting edge - it's fun to be "the guy" that's into the hot new deal on the internet.... I totally get that.

What IS NOT FUN is losing 40% in a month! In ANYTHING. While this might come crawling back - and frankly - I can't even speculate whether it will or not - because nobody knows what it's going to do. Does the bankruptcy filing of MTGOX exchange cause a domino affect? Who knows. Nobody knows how strong the underlying exchanges are - they're unregulated private entities.

This has - for me at least - been a great example for INVESTING 102. The Facebook IPO was another good example... as EVERYONE (including me) expected this IPO to go straight to the moon.

Here's what the take-away should be from these. Sometimes the "sure thing" isn't.

There's nothing wrong with getting into this stuff --- as long as you understand and can afford the consequences when things don't go your way. That's the take away.

It's like a guy that hawks everything his can - to build a $40,000 twin turbo whiz bang motor --- and at the dyno - it goes FIZ BANG.... It would have been great when it made 2000 hp at 5000 rpms --- but not so great when the rod opened a window in the block. THIS GUY SHOULD HAVE BUILT A $10,000 motor and lived to play another day.

That's all.....

[GregWeld]

A really well written "history" of how bubbles grow and then pop... Always worth reading - so that you can recognize one in advance or know when it's time to be a pig and not a hog?



http://www.marketwatch.com/story/are-bitcoins-just-two-bit-tulips-2014-02-28?pagenumber=1

[XLexusTech]

So I am looking to try something new I have a good breath of funds in a portfolio
A chunk of individual really solid (as in 25 or more years on the div champs list) stocks that I drip
A chunk of looking for lightning stocks ("facey book" has doubled plus for me for example)

Now I am considering peer to peer lending. Google just dropped a ton into the lending club for example.

Interested in any feedback on peer to peer lending pros cons Ect ...

go. :idea: :idea:

[SSLance]

I don't have any insight into peer to peer lending, but I do have a good friend that has dabbled in high risk loans for a long time.

He is now also a Bed and Breakfast operator in Colorado...and not by choice either. :D

[XLexusTech]

I don't have any insight into peer to peer lending, but I do have a good friend that has dabbled in high risk loans for a long time.

He is now also a Bed and Breakfast operator in Colorado...and not by choice either. :D

Yeah that was my 20s bit to old for that now :secret:

[GregWeld]

I don't have any insight into peer to peer lending, but I do have a good friend that has dabbled in high risk loans for a long time.

He is now also a Bed and Breakfast operator in Colorado...and not by choice either. :D



My next door neighbor managed to hoover thru 250 MILLION dollars doing "mezzanine" loans to builders and developers that all went bust in the housing downturn. He lost his entire families fortune -- to the point that they repossessed his Mother in Laws car and his kids houses... and chained his 69' yacht to the dock.

My response to his face when I saw him after the news broke.... "dumb-ass everyone knows you don't put all your eggs in one basket".

But... you know... the "returns" were so good! When you accept high returns - you accept high risk. It's all a whole lot of fun -- right up until you loose your family fortune.

The loss turned out to be larger than originally anticipated....

http://www.bizjournals.com/seattle/stories/2010/05/17/story1.html?page=all



A later article.... either way -- all amazing -- and even more amazing to me -- is to blame someone else because you were a stupid ass.... LOL



http://www.seattlepi.com/local/sound/article/Prominent-Eastside-family-banks-clash-in-2140363.php

[GregWeld]

Just to be clear --- I understand the OP question about Peer to Peer lending -- and Micro loans and all of that... I just thought it was a fun place to insert some information about lending... and it's perils. I'm a lender in a couple of instances and they've worked out well for all so far. Just make sure to keep it very very small.

[XLexusTech]

Just to be clear --- I understand the OP question about Peer to Peer lending -- and Micro loans and all of that... I just thought it was a fun place to insert some information about lending... and it's perils. I'm a lender in a couple of instances and they've worked out well for all so far. Just make sure to keep it very very small.

Yep that's the nature of the query .. Read through the article and it's not at all like peer to peer lending.

[GregWeld]

When I lend money --- I'm taking collateral. A title or secured creditor. First in line with hard assets. Otherwise I can just buy some more MO or T -- and collect a dividend.

While I like to help out -- I'm in it to make my money make money.

The problem with "lending" is that it's not liquid. I like / prefer liquidity. I want a premium return for giving up liquidity (think LLC apartment investing - where returns are 7% or so plus the upside).


Peer to Peer (P2P) lending typically is unsecured...

[XLexusTech]

When I lend money --- I'm taking collateral. A title or secured creditor. First in line with hard assets. Otherwise I can just buy some more MO or T -- and collect a dividend.

While I like to help out -- I'm in it to make my money make money.

The problem with "lending" is that it's not liquid. I like / prefer liquidity. I want a premium return for giving up liquidity (think LLC apartment investing - where returns are 7% or so plus the upside).


Peer to Peer (P2P) lending typically is unsecured...

Ok no disrespect but I believe your making a lot of assumptions. For example although your notes may have 36 month durations they are both callable and can be sold at anytime .. Since what your doing here is taking fractional percentages of thousands of loans it not as locked in as one might think. In fact that's one of the things I want advice on, assuming existing accounts which have solid history from someone oh wants to cash out

[GregWeld]

Ok no disrespect but I believe your making a lot of assumptions. For example although your notes may have 36 month durations they are both callable and can be sold at anytime .. Since what your doing here is taking fractional percentages of thousands of loans it not as locked in as one might think. In fact that's one of the things I want advice on, assuming existing accounts which have solid history from someone oh wants to cash out





Ah ha... so you're not making a direct P2P loan. A third party is bundling.

[SSLance]

My next door neighbor managed to hoover thru 250 MILLION dollars doing "mezzanine" loans to builders and developers that all went bust in the housing downturn. He lost his entire families fortune -- to the point that they repossessed his Mother in Laws car and his kids houses... and chained his 69' yacht to the dock.

My response to his face when I saw him after the news broke.... "dumb-ass everyone knows you don't put all your eggs in one basket".

But... you know... the "returns" were so good! When you accept high returns - you accept high risk. It's all a whole lot of fun -- right up until you loose your family fortune.

The loss turned out to be larger than originally anticipated....

http://www.bizjournals.com/seattle/stories/2010/05/17/story1.html?page=all



A later article.... either way -- all amazing -- and even more amazing to me -- is to blame someone else because you were a stupid ass.... LOL



http://www.seattlepi.com/local/sound/article/Prominent-Eastside-family-banks-clash-in-2140363.php


Sounds like they borrowed money to make "hard money" loans with... :headscratch:

It doesn't get much dumber than that...

[GregWeld]

Sounds like they borrowed money to make "hard money" loans with... :headscratch:

It doesn't get much dumber than that...




Here's the part that gets to me Lance. And he's not the first dumb ass to lose it all...


If a guy has 100 million... and makes a 5% annual return.. That's making 5 Million annually pre tax. Everything SHOULD BE paid for. No debt what-so-ever. Why would you need debt if you have 100MM dollars?

So 5MM per year is all disposable income. How much more does someone need to make to support their lifestyle? You're retired - You're worth 100MM - you earn 5MM per year - you have zero debt...

Call me old fashioned... but I think that's a pretty good life and lifestyle.... and I personally wouldn't be inclined to gamble that lifestyle/life to make a little bit more. I think my Jet and my Yacht and my waterfront house... and all my Ferraris and race cars would be enough to keep me busy and worry free.

[glassman]

Here's the part that gets to me Lance. And he's not the first dumb ass to lose it all...


If a guy has 100 million... and makes a 5% annual return.. That's making 5 Million annually pre tax. Everything SHOULD BE paid for. No debt what-so-ever. Why would you need debt if you have 100MM dollars?

So 5MM per year is all disposable income. How much more does someone need to make to support their lifestyle? You're retired - You're worth 100MM - you earn 5MM per year - you have zero debt...

Call me old fashioned... but I think that's a pretty good life and lifestyle.... and I personally wouldn't be inclined to gamble that lifestyle/life to make a little bit more. I think my Jet and my Yacht and my waterfront house... and all my Ferraris and race cars would be enough to keep me busy and worry free.

Its always the "tail" that runs you over....lol (ya know what i meen about "tail" right :theresa: ) JK of course, but i've seen many a man spend waaaaaay to much on their "girls". Like you said, "dumbass".....greedy bastards imo

[GregWeld]

I was looking for some of your names on Forbes Richest people list. You now need 31 BILLION with a "Big Capital B"..... even to make the cutoff.


Pretty amazing.


Think about a BILLION dollars:

You could have 3 30 million dollar homes -- and you'd still have 900 million dollars

If you had 3 30 million dollar jets -- you'd still have 800 million dollars

If you made 5% dividend per year on 800 million dollars -- you'd be making over 3 million dollars PER MONTH....

[SSLance]

Call me old fashioned... but I think that's a pretty good life and lifestyle.... and I personally wouldn't be inclined to gamble that lifestyle/life to make a little bit more. I think my Jet and my Yacht and my waterfront house... and all my Ferraris and race cars would be enough to keep me busy and worry free.



After I stepped away from the market a few years ago, I was talking with a friend who, while not in the 100mm net worth category, certainly has more money than he could ever spend in what's left of his lifetime. I mentioned to him about how well I was sleeping and how the load was off my chest not having to worry about the market.

He told me that the few times he's been completely out of the market over the years, he felt the exact opposite. He felt more comfortable in the game and when on the sidelines he has a restless feeling about missing the next big run up.

Some people are just wired differently I guess, they never tire of chasing the next million, ten million or even 100 million I guess.

Another favorite saying of his is... "it's just a function of zeros" It doesn't matter if it's a thousand, ten thousand or a hundred thousand in play, the game is still the same.

On another note, I guess I owe Putin a thanks...spent some time dollar cost averaging into the market a bit more again today. Didn't get everything I wanted but still added some good company holdings at a discount to the portfolio.

[GregWeld]

Whatever anyone bought yesterday is looking like a real hero today!


EEEEEEEEEEEEHHHHHHHHAAAAAAAAAAA

[Sieg]

Whatever anyone bought yesterday is looking like a real hero today!


EEEEEEEEEEEEHHHHHHHHAAAAAAAAAAA

Much more enjoyable than yesterday mornings decaf, today it's triple espresso!

[toy71camaro]

Whatever anyone bought yesterday is looking like a real hero today!


EEEEEEEEEEEEHHHHHHHHAAAAAAAAAAA

Was thinking the same thing. LOL. :headspin: :popcorn2:

[SSLance]

http://www.speedinfinity.net/forums/Smileys/default/whistle.gif http://www.speedinfinity.net/forums/Smileys/default/wereup.gif

[GregWeld]

I'm on the road in the rig...


But it's days like today that show you why it's so hard to do market timing. You just never know when those very few huge up days are going to hit. Better just to be in and ride the wave over time.

Now what you feel like, if you're not in.... is that you must "chase" the market. Then you sit and wait for the next big down day. And we run more and so on... It's why I advise against trying to "wait" for some stock to come off 50 cents. While you're waiting the shares run 8%. Painful.

[SSLance]

Now what you feel like, if you're not in.... is that you must "chase" the market. Then you sit and wait for the next big down day. And we run more and so on... It's why I advise against trying to "wait" for some stock to come off 50 cents. While you're waiting the shares run 8%. Painful.


I've thought about this a lot, and you are correct for the most part Greg. You can get left on the side of the road chasing your tail for just a few pennies on the dollar.

I still think that for someone in my shoes during this day and age, it's a better strategy for me to wade slowly in instead of just diving in the deep end. Sure I may miss some run up in a few stocks, but if I've kept a portion of my powder dry, I also have a chance to buy the dips and lower my average cost per share. Plus, if there's another big correction before I'm all in, that's even better.

I'm up just over 2% on what I've put in so far...and I haven't been paid a dividend yet. I'm about a fifth of the way in with my IRA and haven't started with my Roth account yet.

What I'm doing while dipping my toe in the water is also getting a better feel for these companies I've already bought as well as those I'm still looking at. You pay a bit more attention as you have skin in the game and the more you read, the more it starts to sink in. I was much more sure about what I was buying this Monday vs the purchases I made a month earlier when I started. I expect that to only get better the further I go along. There was a little bit of information overload at first, but it's getting better and better every day.

Not unlike how I felt the first time I read one of Ron Sutton's instructional threads on how to improve the suspension on my car. :newbie: These days, just over 6 months later, I'm helping others understand what Ron is teaching. :rules:

[takid455]

Find it interesting how Bitcon CEO is found dead shortly after Bitcon implodes and $$$ is lost.

Just saying.

[glassman]

I saw that on CNBC, not sure its Bitcoin's CEO, i think he was the CEO of one of its China affiliates. None the less......smells like foulplay to me....

[WSSix]

He is actually she, Mike. I saw the article and they said suicide was the preliminary cause. It didn't mention anything about Bitcoin having issues, beyond their normal ups and downs, so I thought it was fishy to say the least. I feel for her loved ones and family.

[Vegas69]

It's really to bad that people correlate financial success with happiness to this degree in America.

[96z28ss]

In my opinion I doubt it was suicide. She has a pretty impressive resume. I don't think she would of committed suicide over the bitcoin tanking.
She could of easily gotten another job.

The bitcoin currency was used to launder a lot of drug money. Tell a drug lord he just lost a bunch of money, you're dead. I'm sure there is more to this.

[WSSix]

You're right, Todd. Only I'm really questioning if it was suicide. She died in Singapore. Not exactly a safe, incorruptible country. I'm not big on conspiracy theories but this just seems off is my initial impression. Maybe I watch too many movies or read too many books though.

[gearheads78]

You're right, Todd. Only I'm really questioning if it was suicide. She died in Singapore. Not exactly a safe, incorruptible country. I'm not big on conspiracy theories but this just seems off is my initial impression. Maybe I watch too many movies or read too many books though.

I was thinking the same thing.

[glassman]

Just remember that truth is stranger than fiction.....

[sik68]

It went down 15% today, so I just bought Staples (SPLS) after hours. It pays a 4.23% dividend.

I REALLY like that they plan to trim back their storefronts and focus more heavily on online ordering. Last I checked, schools and offices still need supplies, and they have good brand recognition.

Thoughts?

[Vince@Meanstreets]

It went down 15% today, so I just bought Staples (SPLS) after hours. It pays a 4.23% dividend.

I REALLY like that they plan to trim back their storefronts and focus more heavily on online ordering. Last I checked, schools and offices still need supplies, and they have good brand recognition.

Thoughts?

that looks like we're being bought activity. 4.23 is nice though. I may dump 40% of my Tesla and go for more KO or CAT.

Anyone have opinion on Great Northern Iron Ore (GNI).

My buddy has had them for several years and the div is nice but they are on a big drop. My friend just bought a bunch more. On the fence.

[toy71camaro]

Remember guys.. lets keep this on topic. the Whys and Hows of "Investing".. Not a Stock picking thread. that will get us no where fast. :)

Invest in what you know and understand. Do the homework, and don't take the friends advice blindly. Do your own investigative work.

[Vince@Meanstreets]

Okfine

[GregWeld]

It went down 15% today, so I just bought Staples (SPLS) after hours. It pays a 4.23% dividend.

I REALLY like that they plan to trim back their storefronts and focus more heavily on online ordering. Last I checked, schools and offices still need supplies, and they have good brand recognition.

Thoughts?




This IS NOT a stock picking thread --- but I would like to use STAPLES (SPLS) as an example here.

Steven - I know you've read and followed this thread for awhile now... so I have to ask you:

What part of the SPLS chart is lower on the left and higher on the right - 1 year it's down - 5 year it's down - 10 year it's down

More importantly -- it's 3 and 5 year TOTAL RETURN are both negative.

Now - it's just announced store closings.


My bet would be that the next "cost cutting" they do is the dividend payout.


So here's my FOOD FOR THOUGHT when picking stocks. If all the indicators are negative - and the stock is falling week after week and month after month... WHY BUY IT WHEN YOU CAN PUT YOUR MONEY IN SOMETHING THAT'S HEADED IN THE RIGHT DIRECTION. Rather than "gambling" that after you buy - it's all going to somehow turn around?

I'm not trying to pick on you - or talk you out of your buy - I just want to use this particular buy / name to reiterate (for INVESTING 102) how to keep it easy and relatively safe - with GROWTH and INCOME... and that is to buy best of breed -- with good charts -- and total return (POSITIVE) -- so that at least we THINK we're headed in the right direction.

Another old market saying --- "Don't try to catch a falling knife".


:>)

[CamaroMike]

^Its like Sears, was once good but has been on a long downtrend.

[sik68]

This IS NOT a stock picking thread --- but I would like to use STAPLES (SPLS) as an example here.

Steven - I know you've read and followed this thread for awhile now... so I have to ask you:

What part of the SPLS chart is lower on the left and higher on the right - 1 year it's down - 5 year it's down - 10 year it's down

More importantly -- it's 3 and 5 year TOTAL RETURN are both negative.

Now - it's just announced store closings.


My bet would be that the next "cost cutting" they do is the dividend payout.


So here's my FOOD FOR THOUGHT when picking stocks. If all the indicators are negative - and the stock is falling week after week and month after month... WHY BUY IT WHEN YOU CAN PUT YOUR MONEY IN SOMETHING THAT'S HEADED IN THE RIGHT DIRECTION. Rather than "gambling" that after you buy - it's all going to somehow turn around?

I'm not trying to pick on you - or talk you out of your buy - I just want to use this particular buy / name to reiterate (for INVESTING 102) how to keep it easy and relatively safe - with GROWTH and INCOME... and that is to buy best of breed -- with good charts -- and total return (POSITIVE) -- so that at least we THINK we're headed in the right direction.

Another old market saying --- "Don't try to catch a falling knife".


:>)

Thanks Greg, I hear you on this one. It's less than 1% of my holdings... most of my other stuff falls right in line with the philosophy on this thread.

I know the stock chart looks bad...my only 'defense' is that the fire sale yesterday got me digging into their financial statements. Their books look a fair amount better than the stock chart indicates. Buying SPLS is me trying to put on my Warren Buffet cape for a stock that I think is undervalued.

[GregWeld]

Thanks Greg, I hear you on this one. It's less than 1% of my holdings... most of my other stuff falls right in line with the philosophy on this thread.

I know the stock chart looks bad...my only 'defense' is that the fire sale yesterday got me digging into their financial statements. Their books look a fair amount better than the stock chart indicates. Buying SPLS is me trying to put on my Warren Buffet cape for a stock that I think is undervalued.




As long as YOU are happy owing it -- that's all that counts. And like I said before and repeat often -- the person doing the buying needs to UNDERSTAND why they bought, and WHAT they bought.

It just was a great example of -- in my opinion -- the opposite of what kinds of stocks we've been discussing here so I had to use it to show why.

[sik68]

As long as YOU are happy owing it -- that's all that counts. And like I said before and repeat often -- the person doing the buying needs to UNDERSTAND why they bought, and WHAT they bought.

It just was a great example of -- in my opinion -- the opposite of what kinds of stocks we've been discussing here so I had to use it to show why.


I know it's all about best-of-breed, and here I go buying underdog! :walkingdog: Just my thought process...basically I'm 30 and need to learn a thing or two. If it bombs, You :twak: me


I should also mention that although Staples does sound like a 'has been', they are the #2 online retailer in the world (yes, just behind Amazon). IMO, they are positioned very well for the future. Like everyone is saying, this is not a stock-picking thread...but I am bringing SPLS to the discussion because we all think we know an overvalued bubble stock when we seen one, but it's perhaps more worthwhile to think about good businesses whose stocks have tanked. Of course I don't know the future of SPLS, but maybe they aren't as washed-up as we thought, just in the dog house.

[gearheads78]

So I learned a little lesson today. There are a hand full of stocks I want to own but they have been too expensive for me to consider an entry point at current levels. Called my local Schawb office and asked if I have limit orders for more than one stock but only enough money in the account to buy one what would happen if more than one dropped to my buy point before I had a chance to cancel other orders. I was told since I don't have a margin account the first order would go through and the next would not fill since there is no money.

This was bad information. There was a large gap over the weekend on two of the stocks and both were purchased at market open this morning leaving my account balance negative. I have 3 days to make my account current.

All in all things will be fine. I was about to put my March deposit in the account that will cover my positions and both stocks are stocks I have faith will be excellent long term stocks to hold. In fact both are up above my buy point by the end of the day. :)

[SSLance]

I received (and reinvested) my first dividend payment yesterday...thanks JNJ!!

[toy71camaro]

I received (and reinvested) my first dividend payment yesterday...thanks JNJ!!

Woohoo!!

[GregWeld]

Pretty sad information if you ask me.





http://www.usatoday.com/story/money/personalfinance/2014/03/18/retirement-confidence-survey-savings/6432241/

[Sieg]

Pretty sad information if you ask me.


http://www.usatoday.com/story/money/personalfinance/2014/03/18/retirement-confidence-survey-savings/6432241/
Very sad though not surprising considering the lifestyles "standards" of the last three decades.

The survey was a relatively small sampling and wonder how many of those surveyed were from the private vs public sector.

[Vegas69]

I send out a monthly newsletter to about 3100 people for my real estate business. I compared the affordability of a home at 4% interest vs. 5%. Not a big difference at only $113 a month for a median priced home here in Las Vegas. Seemingly, not a big difference. Unless you invest that $113 in the market for 30 years at an average of 10% return. Then that small savings per month turns into $250,000. Sound like a good chance for a free and clear home at retirement which is a major game changer for most Americans.

It's the small choices over time that either make us or break us. If you have to start with putting pennies away, do it. The key is to start the disciplines and keep the sail trimmed in the right direction.

[sik68]

Came across the '5 Golden Rules of Investing Success' (http://uk.advfn.com/newspaper/clem-chambers/21295/the-5-golden-rules-of-investing-success-3?cma=tab&utm_source=taboola&utm_medium=referral)

Pretty sure I've read these all somewhere before? :thumbsup:

[GregWeld]

I send out a monthly newsletter to about 3100 people for my real estate business. I compared the affordability of a home at 4% interest vs. 5%. Not a big difference at only $113 a month for a median priced home here in Las Vegas. Seemingly, not a big difference. Unless you invest that $113 in the market for 30 years at an average of 10% return. Then that small savings per month turns into $250,000. Sound like a good chance for a free and clear home at retirement which is a major game changer for most Americans.

It's the small choices over time that either make us or break us. If you have to start with putting pennies away, do it. The key is to start the disciplines and keep the sail trimmed in the right direction.



I think that's what kills savings for most Americans -- they don't "see" themselves saving any "real" money --- they just don't think that $50 or $100 a month is going to get them anywhere. What's more amazing to me is people that are clearly able to save $500 or $1,000 or more -- and they don't do it.

The funny part is - the more you've made during your lifetime/career... and the more you've spent on stuff.... the more you're probably going to like to live on in retirement. Yet they take no action whatsoever.

Most FEAR investing... yet what they should fear is their life after work stops if they haven't saved/invested for it.

[GregWeld]

Came across the '5 Golden Rules of Investing Success' (http://uk.advfn.com/newspaper/clem-chambers/21295/the-5-golden-rules-of-investing-success-3?cma=tab&utm_source=taboola&utm_medium=referral)

Pretty sure I've read these all somewhere before? :thumbsup:




I keep saying --- it really isn't rocket science. It's really just that PEOPLE want to buy something (an investment) and have it instantly make them rich. They're the ones that will remain poor. They'll lose faith - and lose interest.

Putting some away -- religiously... sticking with it - that's what works. Buying stuff you can believe in long term helps you stick with it -- getting dividends so you can actually see "free money" being added to your pile - that helps get you thru the down markets -- so that you'll still be invested when it turns around and heads back up. Simple to talk about -- hard to believe in... until you're in a couple years and see that by golly it really does work.

[WSSix]

I think that's what kills savings for most Americans -- they don't "see" themselves saving any "real" money --- they just don't think that $50 or $100 a month is going to get them anywhere. What's more amazing to me is people that are clearly able to save $500 or $1,000 or more -- and they don't do it.

The funny part is - the more you've made during your lifetime/career... and the more you've spent on stuff.... the more you're probably going to like to live on in retirement. Yet they take no action whatsoever.

Most FEAR investing... yet what they should fear is their life after work stops if they haven't saved/invested for it.

I'm not so sure it's fear as much as it is this materialistic carpe diem attitude so many people in this country have. I guess I'm referring to the younger people that have no clue how good and easy they have it in general. We live in a fantastic country. Combined with the I gotta have that attitude and no one seems to care about 30 years from now. Blissfully unaware I guess you could say.

I try to talk a number of the guys I work with that are hourly into getting involved in the company's 401k and ESPP. Even though they are hourly, with the significant hours we work, they make really good money. Much more per hour than what they are hired at, at least until things slow down, but almost none of them are interested in putting money away for retirement. I even put it in terms of how much more they could be making through the company match 401k if they just put away this small amount(put away 6% and the company gives you 9%). Yet, they aren't interested. They do have nice expensive cars and toys though! Me and the other salaried people for the most part get it and take advantage of it to the full extent we can.

As for investing, I've moved more money into my normal brokerage account. I hate seeing it sitting in my savings account at 0.95% so I'm putting another very small portion to work. I apparently got lucky with my purchase of VZ late last year and bought while it was a little lower. It's come back down some again so I thought I'd buy some more. Long term it should do just fine and it pays a good dividend. It's down because of the price wars between the carriers. This has also dragged down AT&T some as well. I think I'll purchase some of them too. Neither one is going anywhere anytime soon and they both pay a good dividend. Maybe I'll get lucky again and can buy while they are down. I think I might try the limit order thing this time around also. We'll see.

[gearheads78]

I try to talk a number of the guys I work with that are hourly into getting involved in the company's 401k and ESPP. Even though they are hourly, with the significant hours we work, they make really good money. Much more per hour than what they are hired at, at least until things slow down, but almost none of them are interested in putting money away for retirement. I even put it in terms of how much more they could be making through the company match 401k if they just put away this small amount(put away 6% and the company gives you 9%). Yet, they aren't interested. .

I have some much younger freinds in the oil/gas and car business make great money but can't get them to save a dime.

[Vegas69]

I think it comes down to how they were raised. If they were taught the skills as kids, they are more likely to save.

Me, I'm sure there were some lessons but those brain cells eluded me after high school and my twenties. I realized that life was coming on fast and I didn't want to be a common slave to society.

Only 5% of Americans can retire and live off their own resources. Meaning, their personal investments and cash flow not counting pensions or social security.

I've been studying psychology and they have proven that money makes no to a sliver of difference in happiness right above the poverty level. It comes down to WHY you are paving your financial independence. Is it to send your kid to college, travel the world with your wife, give it all away to the needy. That tie in is crucial to achieving wealth and gaining the joy that is often associated with wealth. Does having $750,000 liquid make you happier than $250,000?

[SSLance]

I'm not sure about the how you are raised part, my brother and I were raised the same way and his financial skillz couldn't be any more different than mine.

He makes great money, always had...but recently lost his 4 rental houses and had to claim bankruptcy to get his cash flow in order. He has always spent more than he made, lived on credit and his death blow was re-financing his homes with adjustable rate loans over and over again basically using the equity in them as an ATM. Some short stints with no renters along with rising interest rates and the inability to refinance them when the housing industry tanked did him in.

I've been trying to tell him for years he was going about things the wrong way, he wouldn't listen to me though.

He grew up just as poor as I did and had to make his way in this world the hard way, just like me...not sure why or how my financial sense turned out so much different than his.

It was probably most attributable to the budgeting I was forced to do in my senior year of high school where in my COE class I was required to bring my paycheck stubs in and keep track of every penny I spent in a budget for the whole year. To this day I still track every penny I spend in Quicken. If you don't know exactly where it's going, how can you track and manage it as it goes away?

[GregWeld]

Does having $750,000 liquid make you happier than $250,000?




Oh hell yes it does.

[WSSix]

Money may not bring you happiness, but it sure is more comfortable to cry in a Mercedes than on a bicycle. :D


I agree with you to a large extent, Todd. I definitely think how people manage their money, and even poverty itself, is more mental that physically having enough money. Attitude matters and if you're ingrained with a spend versus save approach as a kid then you'll more than likely be that way as an adult. I believe it's the same with manners and simple etiquette. Some people are willing to change and see the world around them differently. Others are too set in their ways it seems.

To answer your 750 versus 250 question, for me it wouldn't be much. I'm making really good money right now in my life. In 2010 as I approached graduating, I had big plans for the money I knew I'd be making. My TA was going to be loaded with DSE parts and have a crap ton of power. I'd have tools, a loaded crew cab Duramax, and be really finally living my dreams. I could honestly do and have all of that right now. I'd be no happier. I'd actually be worse off I think. Right now, I feel the money I'm making isn't worth what I've given up and missed out on in order to make it. I'm trying my best to save as much as possible yet balance my dreams and desires so that I can feel as if I am living, but also, so that in a few more years I can hopefully feel that everything I have given up and missed out on was worth it because of how much better I have set myself up for long term. I kind of wish I was going through this in my 20s and not my 30s. It would be a little less burdensome I believe. Give me a few more years and we'll see what I think then.

[Vegas69]

Oh hell yes it does.

Not surprised... ha They are talking averages. Some are more driven by money than others. My point is that amassing a fortune is a weak source of sustainable inspiration for the majority. I know it's the case for me. I simply wouldn't work as hard as I do for net worth.

It's my opinion that excessive responsibility and debt are great sources of unhappiness in this country. When I have X in the bank, or buy this house, or have that car, I'll be happy. Just doesn't work that way for most.

[glassman]

Todd, totally agree. Stay outa debt. I told my kids, when you go to "use" the college funds (bout 68k per kid). I said, either college, property, or a biz. I deem all three equitable. But no trips to Tahiti or fancy cars!!!

I keep telling them, in the best way i know how, start young and stay outa debt!

BTw, they all choose college, stay tuned....

I've decided that i'm buying each of them a ROTH IRA for Christmas this year, $250 each for starters....

[toy71camaro]

Woohoo.. For the first time since mid 2012 (bought a house in 2013), my emergency fund is done, and my ROTH IRA account has enough to make my first purchase.

Now on to figure out whats going on and what sector I need to be in to keep diversified. Then find me a good Dividend Champ. :)

[SSLance]

Congrats!! I know that is a great feeling to accomplish.

I've been loving the recent runup in the market, but it is making it difficult to find spots to average buy ins.

[GregWeld]

I've been loving the recent runup in the market, but it is making it difficult to find spots to average buy ins.




Not pointing at you Lance --- but I've always wondered why people are afraid of the very thing they want ---- rising prices.


I've bought many a share(s) paying higher and higher prices -- and they've gone up from there. That's why I refer to the long term charts -- I want them to be going higher OVER TIME. If you're always waiting for something to go down -- you'll miss out on the ups.

[SSLance]

I know Greg, but go for a walk in my shoes for a bit.

Been in the market for over 15 years, had good and bad times over the years but left a couple of years ago completely dissatisfied with the whole notion. Once I finally decided on a different path to choose when re-entering the market (thanks largely to this thread and the posters here) it was still pretty unnerving to go all in...all at once. My plan was to average in over time, a fifth a month for 5 months.

If you remember, back in late January, early February, you yourself were warning us to be prepared for a down market at the start or possibly all year in 2014.

Remember, I spent 3 years in cash...the little bit I'm giving up by not being all in from the get-go is NOTHING compared to what I gave up then. ;)

I've learned a ton in just the past few months, have found ways to keep myself educated on the companies I'm watching while keeping an eye out for new opportunities at the same time (seeking alpha is fantastic btw) and and still tip toeing my way in when I get the chance.

I'm still a week or so out from making my next advance in, and if I have to I'll buy in at current market prices...and still enjoy it. A dip would just be gravy for me.

[toy71camaro]

Not pointing at you Lance --- but I've always wondered why people are afraid of the very thing they want ---- rising prices.


I've bought many a share(s) paying higher and higher prices -- and they've gone up from there. That's why I refer to the long term charts -- I want them to be going higher OVER TIME. If you're always waiting for something to go down -- you'll miss out on the ups.


I hear ya.. I personally think its a psychological battle. The old adage "what goes up must come down".. Translating into something like "i want to buy MCD, but its up 10% this year, its got to come back down. so i'll wait. Otherwise, as soon as i buy it, it will drop that 10% the next few weeks" lol

But, as you mentioned plenty of times in the past. You dont get paid to wait when the cash is sitting on the sidelines. At least if your IN, and it does go down, your getting paid to wait - at a discount none the less.

[GregWeld]

Well ----- there's the age old market timing approach of "SELL IN MAY AND GO AWAY".... So maybe for those waiting -- you could wait for a dip in May.


My belief is that wait - and for those that choose to reinvest the dividend - you miss another dividend - whereas if you're in - and pick up the dividend - and it buys some shares lower you're lucky and have gotten paid AND you buy some shares lower and your next dividend is larger which buys more and on and on and on.


Personally -- I'm not worried about what price I pay NOW because I plan to own the shares for YEARS not weeks... and when and if I get ready to sell them - they should be far higher than the price I paid today.

I currently have several holdings (remember the size of my holdings) that are underwater by 100K and more. I could care less.... they're paying me 20 or 25K per QUARTER.... and that alone will take care of the red numbers. That's what I really invested for in the first place. The other part doesn't really matter because I'm not selling them now. It's even less important if your time horizon is 10 years out...


Having said all that --- I certainly understand the psychology of wanting to buy lower.

[SSLance]

I am keeping an eye on the ex-div dates of my holdings and will make sure not to miss any of those for sure.

[SSLance]

BTW Greg, don't ever let up on what your are posting and preaching...

After thinking about what you said a bit today, I went ahead and made the purchases I was looking at making. No time like the present... :D

From what I'm seeing, Dividend Champion stocks don't really make big moves, they just kind of trod along...so it really doesn't make much sense waiting for dips to buy as the dips just aren't that big of a deal.

[GregWeld]

BTW Greg, don't ever let up on what your are posting and preaching...

After thinking about what you said a bit today, I went ahead and made the purchases I was looking at making. No time like the present... :D

From what I'm seeing, Dividend Champion stocks don't really make big moves, they just kind of trod along...so it really doesn't make much sense waiting for dips to buy as the dips just aren't that big of a deal.




It really depends on the goals Lance... if the goals are to have total return over an extended period of time.... and if the goal is to own the best companies... and the goal is to get get paid every quarter... then buying down 50 cents or even 5%.... a guy can wait and miss an up 10% move - or miss a dividend payment.


I say just put the money in on a regular basis, i.e., the first of every month or the last Friday of every quarter or whatever. Just buy it - start collecting... don't freak out on down days or down periods. When ya get nervous - go back and look at the longer term charts.


Those payments they call dividends - that's why I can just go out and play and enjoy myself. 'Cause I don't really have to worry about what the market did "today" or this afternoon - or even this month. I TRUST my companies to keep plugging along and to send me my portion of the profits. :>)

[GregWeld]

In checking my accounts this morning - as I do EVERY morning.... I was reminded of the "should I buy now or wait for better prices" discussion was still fresh in my brain.

The account that I use for examples in this thread has 7.5MM in 9 names... and currently has a RED (negative) cost vs current value of 185K....


So PERFECT for this current topic right!?! I paid higher prices for the AVERAGE cost than where most of the names are trading. Kinder Morgan Partners (KMP) being the #1 underwater name... with a current (loss) of 211K on a investment of 1.82MM (22K shares). Some have green numbers but obviously not enough green to cover for the red! NORMAL investing. Over time these change and some of the "green" will come down or go red - and the red will change and go green or go more red.

Here's my point for the share this morning.


That account spins off 506K in dividend income. All the while (today) showing a "loss" of 185K in paper value. I don't care about the "loss" -- because it's not a loss until I make it a loss by selling. I'm not selling - so it's not a loss. And with that income - that loss is covered in less than 6 months of the income that is generated. The INCOME is my goal. If it was reinvested (as most all of you should be doing) then it would compound at better rates by automatically averaging down my costs. And the new shares that would be purchased at lower prices actually pay a dividend at a higher PERCENTAGE rate.

Now - that doesn't mean that I don't keep a keen (AWARE) eye on each name I own. Some of the names that are in that account are actually positive in other accounts I have. Confusing I know but I have multiple accounts - and as long as NONE of the investments in total are larger than 5% of what I have to invest... then it's okay to own them. Some of my accounts are inside trusts (for tax and death purposes). I'm laughing at this - because I wish all of you had such issues!

Anyway -- all I'm saying is -- think longer term - constantly review your holdings and WHY you hold them.... always question a loss.... why are they down? Is there an issue with the company? Is there an issue with the industry (let's compare BlackBerry (BBRY) vs the telecommunications industry) vs the companies performance? Etcetera....

If all is okay -- and you can't come up with a valid reason for selling at a loss... then sleep well. Don't fail to question... but don't freak out just because you're down 1% or .50 a share --- when they're sending you that much per quarter. But also don't hang on to a bleeder that you're worried about and can't explain to yourself WHY you own it.

[SSLance]

Hey Greg, thanks for posting the example. Just curious about one thing, if you don't plan on selling anything in your accounts (unless something changes with a company) why do you check your accounts every morning? What exactly are you looking for specifically?

Reason I ask is I'm trying to train myself to not look at the unrealized gain\loss number in my accounts every day in an attempt to change my way of thinking. I've got my holdings set up in SA and get notices from them on any breaking stories about my holdings (and companies I'm considering holding) and dividend investing in general, but I haven't yet broke the habit of watching the moves, up and down in my personal portfolios.

[GregWeld]

Hey Greg, thanks for posting the example. Just curious about one thing, if you don't plan on selling anything in your accounts (unless something changes with a company) why do you check your accounts every morning? What exactly are you looking for specifically?

Reason I ask is I'm trying to train myself to not look at the unrealized gain\loss number in my accounts every day in an attempt to change my way of thinking. I've got my holdings set up in SA and get notices from them on any breaking stories about my holdings (and companies I'm considering holding) and dividend investing in general, but I haven't yet broke the habit of watching the moves, up and down in my personal portfolios.




Doing something every day for 30 years is a hard habit to break. Besides that - I love this stuff as much as I do hot rods.

[ErikLS2]

Anyone see the 60 Minutes report tonight on the stock market? It's about how high frequency traders are beating nearly everyone to the punch and making a few pennies on most of the trades that take place each day. Some 30 year old kid from RBC discovered and has created a new "fair" exchange called IEX.

[GregWeld]

For those that care to read more detailed information on this subject -- here's a link to an article that explains what the 60 Minutes show was discussing.

http://www.cnbc.com/id/101537874



And here's my take on it --- this is only for TRADERS that are trying to game the system on a daily or hourly basis. They're trying to make PENNIES multiple times. I want to make DOLLARS for doing nothing - over a long period of time. I'll let them have their pennies.

I'm not trying to make it "nothing" but it's been going on for years. They're traders and that's how they try to make their living. I'm an investor... they're really really different strategies.

[GregWeld]

Interesting to me that Microsoft has hit a 14 YEAR high today... And this is interesting to Investing 102 only because nothing has changed at the company EXCEPT the CEO.

In fact - I would proffer that they currently have THE WORST operating system release since Vista.

So just an inside bit of info here --- my wife started working there as a Senior Director in 1984 (two years before they went public) -- when the company was quite small....

I used to work out (aerobics) with all of the senior people there... including Steve Ballmer... and I've been saying for YEARS that the man should have NEVER been appointed CEO. He's about as tech savvy as a 3 year old. His mouth far exceeds his talent or abilities -- and WALL STREET hates him. To back this up... go look at a long term chart of MSFT stock. One that shows a MOUNTAINOUS PEAK in December 1999/January 2000. The announcement that Ballmer would become CEO was made in December of 1999. From that point forward the stock began it's slide (forming that long downward slope of the other side of the mountain!).

The reason this is important for Investing 102.... is that we are always looking at OUR holdings for FUNDAMENTAL CHANGES. These changes can be GOOD or they can cost us money and thus - be bad. Something as simple as a change in the top management. Here's why this is a great example of a "fundamental change". The company has made a fortune during Ballmer's reign! Sales are gangbusters. Profits are stellar. The company "appears" to be well managed... These are all things we want in a company -- YET -- "the stock" has been completely disconnected from "the company".

Since Ballmer announced his "retirement"... which sometimes means an exec was finally pushed out the door... the stock has been on a stealth move upward. In full disclosure -- We own 10 shares. The same 10 shares that have been in the safe (we actually have the certificate) since 1994 which was Gwen's 10 year anniversary at the company (she spent 19 years there). As long as Ballmer was there - I wouldn't buy one single share. Frankly - I still wouldn't because I think their products stink - and I know about too much dysfunctional internal issues that bother me... and the dividend isn't worth the investment. However... if you were smart enough to buy on the announcement - you have a 40% gain. Stupid me! Hey - you can't own everything.... and you can't foresee everything... and that's not the reason for my post today.

The takeaway from this post is that as owners of a company (if you own the stock you're an owner of the company -- pretty fancy huh!).... be aware of FUNDAMENTAL CHANGES such as a top management change. That's not to say that a company announces the CFO is retiring (and he's 66 years old! He should be retiring!)... Or your company announces a large store closing... These are fundamental changes that should raise the hairs on the back of your neck if you own the shares.

Generally if WALL STREET likes the announced change -- they vote with their wallets and shares can get a nice pop! But beware Wall Street voting with their feet.... that's a sign to sell WITH the crowd and go find something else.

[Sieg]

So true.

I bought my first shares of MSFT on April 28, 1998 for $93.25 a share and a $29.95 commission for a total of $1,894.95. Currently I have 300 shares at a cost average of $32.62 a share.

[GregWeld]

Split adjusted Microsoft (MSFT) had an all time high of about $60....


Remember that when a company splits it's stock - the price is also adjusted. So if a company was trading at $100 a share -- and splits TWO FOR ONE (2:1) -- you'd have twice as many shares but at HALF the price. The new shares would trade at $50. You'd still have the EXACT same amount of money invested. But you'd have twice as many shares.

Splits add NO VALUE... but have generally been perceived as a "good thing".

Beware REVERSE splits -- which is when a companies shares SUCK -- and in order to not be de-listed they do a reverse split and (for example) take 10 shares trading at $1 -- and make ONE (1) share trading for $10.

[GregWeld]

Monday and Tuesday (so far) should be good reminders of WHY it's so hard to try to time the market... and I've learned after many years that I NEVER EVER EVER get it right. EVER. Thus - I just buy when I have the funds and want to add to my portfolio.

The only 'TIME' in timing is TIME. Over time you will be rewarded. I'm timing the market... I buy and let TIME gloss over my mistakes. LOL

[96z28ss]

Well a few weeks ago I sold all my stocks in my IRA and bought some Bitcoin. I lost my shirt I should of just stayed to the basics of this thread.

[CamaroMike]

Well a few weeks ago I sold all my stocks in my IRA and bought some Bitcoin. I lost my shirt I should of just stayed to the basics of this thread.

April fools or for real?

[GregWeld]

If you remember - I recently posted about the "value" shown in an account (mine) vs it's intended purpose (dividend cash flow) and that --- here's the important part --- at some point a loser would become a winner (green) and a winner might suddenly be a loser (red)...


Today my FORD (F) stock is up .80 per share --- and with 20,000 shares --- that becomes a decent move. It was in the RED - but with it's 16K move today - went from loser to gainer. That holding is (today) in the green by 5K.


My point? I can't go around worrying about which name is red vs green day to day... they'll change - they are fluid - they all PAY ME regardless of their current green or red status. I just don't use that metric to stew over. I stew over the general economy - how that might affect ME long term.... I stew more over having MISSED a good opportunity because I was "afraid".... (as in - I should have bought a lot more property investments when they were giving them away).

[GregWeld]

Well a few weeks ago I sold all my stocks in my IRA and bought some Bitcoin. I lost my shirt I should of just stayed to the basics of this thread.



HAHAHAHAHAHA good one!!!

[GregWeld]

I shaved a little earnings this morning, nobody even went broke taking a profit right? :G-Dub:


Hopefully this momentum continues throughout the week. Maybe kmp will jump back up if they stay out of Barrons... Until then bring on those dividends!



Shave a little when the gains make the holding more than your 5% allowable investment. Or when you've bought a speculative name just for that purpose.

The problem with always selling your winners -- you're left with losers and you're paying taxes on the gains...

I'm not saying you shouldn't sell... just make sure you understand why you're selling... the tax implications... and do you have your eye on a name to put the gain back to work.

It's always hard to see a "TOTAL RETURN" number of 100% or 400%.... when looking at the numbers BEFORE investing.... and then selling when you have a 20% gain. You won't double or triple your money if you're always taking the gain. If you're not well diversified -- then yes -- take the gains and keep branching out.

[96z28ss]

April fools or for real?

April fools

[GregWeld]

Everyone has their own plan Mike! Glad you're working yours.

Remember that when I respond to a post -- I'm writing for EVERYONE that reads this. Not really responding directly to the poster as much as I am trying to use the info as a learning tool for everyone.

I own Ford --- and it's been an okay stock. I really bought it because I was pretty sure the autos had bottomed... and I think there was lots of rebound room there. Same with my purchase of Wells Fargo (WFC)... the banks had been killed and I figured they were done going down. You have to be EARLY to catch big moves - and sometimes "we" are too early and suffer along the way -- but as long as your theory holds up or comes to be correct then Viola!

Right now - WFC is my biggest gainer.

[GregWeld]

Cut and pasted this from an article about how LOUSY Amercians are about saving for their own retirement. You've all heard me say it before --- fees and expenses can and DO affect your savings over time. Whether it's 20 or 30% really doesn't matter --- those are HUGE numbers over time!






401(k): High costs, poor returns

By far the most common way employees save for retirement these days is through a workplace 401(k), which over the last three decades has supplanted pensions as the employer plan of choice. Here's the problem: As originally conceived, that's not what 401(k) plans were designed to do.

Created in 1978 as a minor part of a major tax law, 401(k) plans were intended to help well-paid corporate executives shelter income from taxation. Congress later decided to expand access to the plans to rank-and-file workers, and even then the idea was for such investments to merely supplement, not replace, ordinary pensions.

Critics point to a number of defects in 401(k) plans. The most serious, some experts say, is that they require individuals to manage their investments, exposing them to risks they lack the expertise to discern. That point was driven home during the financial crisis, when millions of people saw the value of their 401(k) holdings plunge.

"Employees are neither equipped nor trained to handle risk," Webb said.

Another strike is the high administrative, marketing, asset-management and other fees many financial firms charge for 401(k) plans. Hiltonsmith calculates that such fees diminish a person's nest egg by an average of about 30 percent. Webb comes up with a slightly lower figure, saying that relative to a low-cost index fund, an actively managed 401(k) reduces retirees' wealth by about 20 percent.

Notably, meanwhile, higher fees don't add up to better investment returns.

"If the fees on actively managed funds were buying better investment performance, then those fees might be money well spent," Webb said. "But evidence suggests that the average actively managed fund underperforms an index fund."

[GregWeld]

History shows the last 13 bear markets* lasted an average of 21 months, with an average 40% decline.
But no matter how long or strong these bear markets, the subsequent bull markets were almost always longer and stronger. On average, bull markets have returned 164% and lasted over 57 months--almost five years!




http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/BullMarket-1.gif (http://s919.photobucket.com/user/gregweld/media/Fun%20Fotos/BullMarket-1.gif.html)





http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/BullMarket-2.gif (http://s919.photobucket.com/user/gregweld/media/Fun%20Fotos/BullMarket-2.gif.html)

[CamaroMike]

Everyone has their own plan Mike! Glad you're working yours.


Right now - WFC is my biggest gainer.


Thanks! I am happy to hear that my employer is paying you well :lol:

[GregWeld]

Thanks! I am happy to hear that my employer is paying you well :lol:



They don't pay very well -- but I have $10 a share gain in the name! I expect that to go higher if and when they raise the dividend back to the percentage they used to pay.

[GregWeld]

BTW Greg, don't ever let up on what your are posting and preaching...

After thinking about what you said a bit today, I went ahead and made the purchases I was looking at making. No time like the present... :D

From what I'm seeing, Dividend Champion stocks don't really make big moves, they just kind of trod along...so it really doesn't make much sense waiting for dips to buy as the dips just aren't that big of a deal.



Regardless of whether or not the shares are on the famous "Dividend Champions" list... or where they place on that list.. the beauty of dividend stocks in general is that they continue to spin off cash - which is either re-invested or used for some other purpose. That's the beauty of the simplicity of this type of investing.

For instance (another example only please!) Kinder Morgan Partners (KMP) has been down for awhile now... when it was one of my biggest gainers... but REGARDLESS of what it's trading for today or last week.... it pays me $9973 PER MONTH in dividend. It doesn't make any difference what that number is - each person has their own level of shares in various names etc - but for me - that is the number. Now.... when I look at the holding --- that's a very good cash return (over 7%) and my larger concern going forward is -- will they continue to pay this kind of return? So my larger concern is how is their business going and are they capable of earning enough to continue to pay me. As long as I see that their capable of continuing to pay -- then I'm happy. The share price will only become important IF I wanted to sell. Even then.... I'd have to say to myself -- WELL -- They've paid me $5.44 per year per share... I've owned them for 3 years and collected $16.32 in cash.... the shares are "underwater" (for example) $6.... Do I really have a loss in the shares if I sell??

I would have less of a return on a percentage basis -- but I wouldn't have a cash loss. The longer I hold and the more I collect... eventually they will have returned to me everything that I paid. At current prices I have to hold this name 13 years.... after that -- everything they send me is free money! We will ASSume that the share price is even and has no growth during this time period. That's not a bad return over time -- so once again the actual share price day to day becomes less important.

Does that make sense?

[GregWeld]

Just to be sure --- What I'm discussing above is more about a WAY TO THINK about prices - and when to buy and blah blah blah. The goal is important... the amount of time allotted to that goal. What is your purpose for investing. Is buying down .50 cents today more important than the long term goal?

I posted the "bull market" vs "bear market" charts to show the returns available over various periods of these kinds of markets.

Here's something that I've been shown in my own accounts time after time....


IF I'm up 100% over the last 4 year period -- and I'm now down 30% this year (example only!) -- I'm still ahead, right?

If I'm NOT in the market at the beginning of a bull market I probably lost part of that market's run. Example - if you waited until '10 to get back into the market after the '08 bear was done -- you'd have lost a huge part of the overall return. So look at it this way (made up numbers for example) --- '08 sucked you started with 100K and went down 40% - so you started '09 with a big loss and "only" had 60K invested....but since then you're UP (using the QQQ Dec 08 til today) 191%... You've made all your money back plus some! Had you sold and gone all cash and sat on your hands... you'd just have a huge loss. You'd have made .25% interest on a bank account.... versus the 4 or 5% dividend (compounded and reinvested in shares all along at cheaper prices) and blah blah blah.

Those bull / bear charts show the REMARKABLE rebound the markets make ----- and thus ---- my oft repeated the "chart is lower on the left and higher on the right". Over TIME you are rewarded. Over time - you WILL suffer pain and angst - and then be richly rewarded.

IF YOU'RE REALLY SMART -- YOU'll BUY LIKE A PIG WHEN THE MARKET IS AT IT'S WORST.... but who really does that? It's far more typical to buy when the market is doing well... regardless of whether we're buying stocks - or houses - or cars.

[CamaroMike]

Michael Lewis :rolleyes:

[CamaroMike]

I feel more secure every time you post Greg.

[GregWeld]

Michael Lewis :rolleyes:



Michael Lewis may have some good points with his discussion -- there's never ANYTHING wrong with putting something like this under the microscope. But his calling the market "rigged" etc -- is just book selling BS.

Anyone that knows anything about anything knows the market has always been in favor of the large institutions and funds that trade. They're the ones setting the price action. We are all just along for the ride. I'm perfectly okay with that. I never try to game what they're doing or try to get ahead of the big boys when their is possible news of a merger etc. When you try to do that - you'll get squashed. This is why I always say to just buy good stuff with a dividend and sleep well.

[GregWeld]

BTW Greg, don't ever let up on what your are posting and preaching...

After thinking about what you said a bit today, I went ahead and made the purchases I was looking at making. No time like the present... :D

From what I'm seeing, Dividend Champion stocks don't really make big moves, they just kind of trod along...so it really doesn't make much sense waiting for dips to buy as the dips just aren't that big of a deal.




UP or DOWN.... That's why people don't think they're (dividend payers) worth investing in.... they're not Google or the OLD Microsoft.... where people (including me) got rich in months not years.

The part of dividend stocks that I like the best is that while the interest rates (rising) kill the stock market... the dividend payers are supported on the way down (their share price falling) by the dividend percentage. So let's say the interest rate market (CDs/Bonds/Treasuries) starts to pay decent rates (remember those?) they then compete for investment money with stocks... so if Altria (MO) is only paying 5% and a blue haired old lady can buy a 5% tax free bond.... the bond becomes more attractive (tax free 5% vs 5% taxable dividend) --- so the price of MO would then fall until that dividend rate equals the bond payout. But once they're pretty equal -- then MO would stabilize in price.

What people fail to add in to the mix is that the TOTAL RETURN, over time, will be far far higher (historically) on stocks. Just refer to the Bull vs Bear returns on stocks... pretty hard to go find a chart showing a 100% return on bonds... you get nothing but your money back on a CD...

Just remember that there is only "X" amount of money floating around -- and various investments all compete for that same amount of money. When one thing is "hot" there will be outflow from something else - and it ebbs and flows from various types of investments looking for the current best return. Right now - we're in a period where the market seems to be the best place. But it's also why we need to be vigilant about interest rates because they can't possibly go down from here.... and as long as you UNDERSTAND that and what it means to your holdings etc... then you're good. If you don't understand your investments - then you freak out - sell out (having bought high now you're selling low)... and thus loose out.

I personally agree with the FED --- they need to keep interest rates low for a decent period of time yet. People (some) are just now recovering from the great recession. Some are doing really well -- but the average man in the street is still in recovery mode... and the low interest rate will help housing... spurs investments by business... and all that trickles down to jobs/labor.

[GregWeld]

In checking my accounts this morning - as I do EVERY morning.... I was reminded of the "should I buy now or wait for better prices" discussion was still fresh in my brain.

The account that I use for examples in this thread has 7.5MM in 9 names... and currently has a RED (negative) cost vs current value of 185K....


So PERFECT for this current topic right!?! I paid higher prices for the AVERAGE cost than where most of the names are trading. Kinder Morgan Partners (KMP) being the #1 underwater name... with a current (loss) of 211K on a investment of 1.82MM (22K shares). Some have green numbers but obviously not enough green to cover for the red! NORMAL investing. Over time these change and some of the "green" will come down or go red - and the red will change and go green or go more red.

Here's my point for the share this morning.


That account spins off 506K in dividend income. All the while (today) showing a "loss" of 185K in paper value. I don't care about the "loss" -- because it's not a loss until I make it a loss by selling. I'm not selling - so it's not a loss. And with that income - that loss is covered in less than 6 months of the income that is generated. The INCOME is my goal. If it was reinvested (as most all of you should be doing) then it would compound at better rates by automatically averaging down my costs. And the new shares that would be purchased at lower prices actually pay a dividend at a higher PERCENTAGE rate.

Now - that doesn't mean that I don't keep a keen (AWARE) eye on each name I own. Some of the names that are in that account are actually positive in other accounts I have. Confusing I know but I have multiple accounts - and as long as NONE of the investments in total are larger than 5% of what I have to invest... then it's okay to own them. Some of my accounts are inside trusts (for tax and death purposes). I'm laughing at this - because I wish all of you had such issues!

Anyway -- all I'm saying is -- think longer term - constantly review your holdings and WHY you hold them.... always question a loss.... why are they down? Is there an issue with the company? Is there an issue with the industry (let's compare BlackBerry (BBRY) vs the telecommunications industry) vs the companies performance? Etcetera....

If all is okay -- and you can't come up with a valid reason for selling at a loss... then sleep well. Don't fail to question... but don't freak out just because you're down 1% or .50 a share --- when they're sending you that much per quarter. But also don't hang on to a bleeder that you're worried about and can't explain to yourself WHY you own it.






This exact same account - with ZERO changes - is now only "red" (negative) 19K....


So there's the point I'm making all the time in this thread. Have some patience! Instead of freaking out and selling because "this week" your account has a couple bleeders in it... Next week they could be your account heroes!


I did absolutely NOTHING ---- and literally since that post and this one the change is UP 166K

[MX145]

Keep it coming! I read this thread every morning. It become more of a habit than the news. :thankyou:

[GregWeld]

Keep it coming! I read this thread every morning. It become more of a habit than the news. :thankyou:



Thank you! I always wonder if I'm just talking to myself. So appreciate the feedback.

[toy71camaro]

I dont post much (only if i have something to "add" and not just drivel) lol. BUT I do check this post at least 5 times a day (I'm on PC all day. lol)

[nicks67ca]

I still read this every time it comes up on the new posts list. I appreciate the information that's shared.

[glassman]

Me to you guys. Look. Learn. Listen. Apply.

[GregWeld]

This morning -- as usual -- I'm having my coffee and watching CNBC --- and shooting zingers over to Sieg about all the "luck" I've had on a couple names that were bought for pure speculation (in other words - a trade).

Someone on CNBC mentioned that "Buffet" liked Procter & Gamble (PG). So, of course, I had to go check it out.


Talk about your BORING with a capital B name.... and crappy dividend payout of a whopping 3.02% !!!! Who the hell is going to get rich in a name like that! Really --- 3% dividend. You've got to be kidding me....


Oh.... Wait.... it's TOTAL RETURN for the last 5 years??? EIGHTY EIGHT PERCENT.... oh yeah -- 88%..... that's almost doubling your investment in 5 years.


See that's the thing. You've got to dig into the details and while the office hangs around the cooler discussing the latest HOT name... you could be just kicking back with a nice smile on your face knowing that you're going to retire with a huge pile of stock that's paying you to go play golf.

NO I DON'T OWN THIS NAME. It's just another example of investing rather than GAMBLING (is that a pun when discussing this name?).

[SSLance]

PG was one of the first stocks I picked out, plan on holding it forever....

I'm enjoying my 7 % pay raise I got today...

[Evil_s10]

Thank you! I always wonder if I'm just talking to myself. So appreciate the feedback.

I dont post very often but check here everyday. Your knowledge has helped me out tremendously.

Proud to say today is my first Ex-Dividend date on my AT&T stock. Im like a kid anticipating the ice cream truck waiting til the end of the month to receive my first dividends (reinvesting of course).

Thanks Greg.

[Sieg]

Take a look at Ford's 5-year Total Return and tell me why you shouldn't buy it and forget about it. :sieg:

[GregWeld]

Lance --- Gotta love those dividends and the raises that come with them from tme to time!



AT&T (T) went "ex" dividend today.... Thus it's trading down when everything else in my accounts are green. I needed a good dividend to pay for the two neon signs I bought last week! So, timing is everything.... LOL



6 foot by 6 foot.... as in BIG!




http://i919.photobucket.com/albums/ad33/gregweld/Commercial%20Building/_12.jpg (http://s919.photobucket.com/user/gregweld/media/Commercial%20Building/_12.jpg.html)





And this one is 4 1/2 feet by about 4 feet wide....







http://i919.photobucket.com/albums/ad33/gregweld/Commercial%20Building/image.jpeg (http://s919.photobucket.com/user/gregweld/media/Commercial%20Building/image.jpeg.html)

[GregWeld]

I dont post very often but check here everyday. Your knowledge has helped me out tremendously.

Proud to say today is my first Ex-Dividend date on my AT&T stock. Im like a kid anticipating the ice cream truck waiting til the end of the month to receive my first dividends (reinvesting of course).

Thanks Greg.




OMG I got a great belly chuckle out of this post --- because it's TRUE! Amazing what getting that dividend does for you!

The thinking needs to change (or be) "I'm an owner of "X" company - and I'm on their payroll until I quit (sell).

An awesome post! I'm always glad to hear this kind of success!

[GregWeld]

Take a look at Ford's 5-year Total Return and tell me why you shouldn't buy it and forget about it. :sieg:





I personally think FORD (F) is the best of the autos and own this name. The problem is their dividend sucks -- if it was better -- I'd buy more of it than I already have (ditto Wells Fargo). I bought Ford more for the growth story than the dividend. This kind of stuff is where you have to be ahead of the curve... so once I saw the economy beginning to make the turn up - I started building a position in the name. (same with WFC). Being early can come with pain... but if you stick to your original reasoning - and you're right (eventually) the payoff is great.

[SSLance]

Lance --- Gotta love those dividends and the raises that come with them from tme to time!

AT&T (T) went "ex" dividend today.... Thus it's trading down when everything else in my accounts are green. I needed a good dividend to pay for the two neon signs I bought last week! So, timing is everything.... LOL



So far I've made two allotted purchases of T so far and I have to admit, it looks enticing to make my third (early) on today's dip. I'm up 9.25% on my first two purchases already.

I thought Dividend Investing was boring? :relax:

[96z28ss]

I personally think FORD (F) is the best of the autos and own this name. The problem is their dividend sucks -- if it was better -- I'd buy more of it than I already have (ditto Wells Fargo). I bought Ford more for the growth story than the dividend. This kind of stuff is where you have to be ahead of the curve... so once I saw the economy beginning to make the turn up - I started building a position in the name. (same with WFC). Being early can come with pain... but if you stick to your original reasoning - and you're right (eventually) the payoff is great.

Ford has been real good to me I bought in may of 2012 @ $10.54, I kept buying and averaging down all the way to my last purchase of 100 shares @ $9.07
I have a total of 871 shares, and have had 2 dividend raises from $.05 to $.125
I'm happy with this stock even with a 3% yield, my savings account can't do that.

[Sieg]

I thought Dividend Investing was boring? :relax:
As boring as golf........if you're not a golfer. :D

Ford has been real good to me I bought in may of 2012 @ $10.54, I kept buying and averaging down all the way to my last purchase of 100 shares @ $9.07
I have a total of 871 shares, and have had 2 dividend raises from $.05 to $.125
I'm happy with this stock even with a 3% yield, my savings account can't do that.
I was watching it at 10 and didn't pull the trigger. Shoulda Coulda Woulda. Now I have it at $15 and want to add more. :bang:

[WSSix]

Love the new signs, Greg. The classic Mobil Pegasus was a gorgeous company logo in my opinion.

Well, I just bought T last week and now I get a raise. Woot!

[GregWeld]

#1 --- for Investing 102 I would use this name as an example for 2 things


1: Invest in whatever you are comfortable doing. Everyone is different - has different views - has a different level of cash - different times til retirement or other need for the money. As long as you sleep well at night - go for it.


2: When you gamble or take on a "risky" name - regardless of the industry -- then EXPECT --- V O L A T I L I T Y.....

As you pointed out in your post - you can afford a loss if it happens and you have other names which are diversified. And that's the important part. I think everyone that can afford it - needs some percentage of their portfolio in "risk assets". It IS how people get 4 baggers or 10 baggers (4 X's or 10X's their investment). But it's also where it's the easiest to make the right bet in the wrong company. In other words -- the thinking was correct -- but the market rewarded some other company. That's when an ETF in the sector works for some folks. They can just throw a blanket over the whole "sector bet".

[GregWeld]

Im definitly going to start looking more into ETF's. You are 100% correct, some companies in that sector have made their shareholders lots of money already where some have not. I like that term, "Right bet in the wrong company." Describes it perfectly.




HAHAHAHAHA ---- That's what I'm here for!

[CamaroMike]

:king:

[gearheads78]

Mike for the same reasons you are dabbleing in HEMP I have a little bit tied up in a couple additive manufacturing (3D printing)companies. I 100% believe the industry is going to grow in a huge way over the next 5-10 years but who knows if i have picked the right companies or not. If I lose it all its not going to kill me but if I win on either one or both:G-Dub: I could make a few bucks. Currenty both stocks are the only two down stocks I have but they swing way up to way down weekly.

[rocketrod]

... (3D printing)companies. I 100% believe the industry is going to grow in a huge way over the next 5-10 years
I totally agree 3rd printing is going to be a game changer in ways we have yet to even fathom, but as you stated trying to pick the right company is speculative at best.

[GregWeld]

Dabbling and speculation is fantastic in my book..... one caveat though.... do this AFTER you have a good base of basic top notch investments.

Capital is hard to come by --- profits are hard to get and keep... Losses come fast and are easy to do.

My high school buddies Dad told me 40 years ago -- when we were talking stocks and investing..... Making money is easy, keeping it is hard.

So true!

[GregWeld]

Today - while the market was taking a dump.... and I was driving the 12 hours from Seattle to Sun Valley.... I listened to CNBC on the satellite radio... and thought ----- YEAH ---- This is why I LOVE dividend stocks... let the market be what it's going to be...


Note the dates --- while the market is a yo-yo --- I can continue to spend my "cash". That doesn't mean I don't keep a keen eye on what's going on -- but I'm not going to panic and sell my money makers. If I did -- what would I buy that would produce similar results for doing "nothing". :>)




04/10/2014 Qualified Dividend MO
ALTRIA GROUP INC
$14,400.00


04/09/2014 Cash Dividend JNK
SPDR BARCLAYS ETF HIGH Y...
$3,958.20

[GregWeld]

We hear the talking heads on CNBC and Bloomberg throw out terms, and they use them over and over... One that I heard yesterday "it's a stock pickers market".


Okay --- isn't every market a stock pickers market? I mean - you can't own every name right? SO you have to pick something. Well, of course, what they're saying is that even in a down market - there are stocks you can own that go against the grain -- or go down LESS than the overall market. The other day you heard me say that you can make the right bet on the wrong name. Your theory was right about the direction of the industry - but you got the wrong horse in the race. Okay -- Let's say you think "telecom" is a growth story ---- you picked BlackBerry instead of AT&T or Verizon.... You lose <buzzer>. Why am I bringing this up?

Because that's where I've been telling you to stick with "BEST OF BREED". Pick the top of the industry... Don't think you're a hero and know (or gamble) that just because this company you like is down and everything else is up -- so you can buy "cheap" and it will magically turn around. <BUZZER>


Leaders are usually leaders for a variety of reasons. Just go with it.


Now --- Sometimes it's FAR HARDER to pick the best of breed in an industry... Sometimes we just really don't know -- or we don't know enough and we really don't even know how to find out. Then what do you do?

Personally that's when I bet with someone else that I trust to "know" -- someone that really has put their money where there mouth is... That's not my barber... that's not my buddy at work.... I'm talking about real investors that do this stuff day in and day out and really know what they're talking about!

All this was brought to the forefront this morning when Wells Fargo (WFC) and JP MORGAN (JPM) reported earnings.... one sucked -- and one doesn't. WFC had good earnings.... JPM not so much. I own WFC. WHY??? I really don't know which bank I would have chosen to invest in ---- but I knew I wanted to be in "banking/financials" BEFORE the housing market recovered so I could what?..... Come on!..... BUY LOW.... But if I'm making a "sector bet" -- trying to get ahead of the market by betting that there is going to be a turn around... I have to pick the right name! So what did someone like me do? I went with WARREN BUFFET! He's HUGE investor in Wells Fargo. So I'm putting my money with Warren. BINGO --- winner!

I'm not saying I'm smart.... rather... I'm saying that sometimes you have to just trust other people that are! But you also have to pick what person you want to bet with. I'm not betting with Donald Trump because I think he's a smarmy idiot who I know has bankrupted many companies... I'm going with Iowa Warren who's been hugely successful and I'll just roll with it.

Does someone like this win every time --- hell no! But they win more than they lose. Good enough for me.

[SSLance]

That is pretty much the same reason I'm in KO instead of PEP.

[GregWeld]

I noticed this morning something that's important to Investing 102...


McDonalds (MCD) which I owned - past tense - is back up near $100 a share.... and where it pinged my interest - because this is more of a steady eddy than anything - is I wondered how many of you own it --- noticed you've received nice dividend INCREASES --- all the while those dividends buying shares AT LOWER PRICES when it was languishing in the low 90's.


THAT IS HOW YOU BUILD WEALTH OVER TIME... the re-invested dividend automatically buying shares - whether they're high or low at the time... and those shares paying a high PERCENTAGE of dividend - buying even more shares and so on. THAT'S CALLED INVESTING.

[GregWeld]

Here's something I forgot to add to the above McDonalds (MCD) post... I just haven't had enough coffee yet to get my act together...


If you go look at Google Finance -- pull up a chart of MCD -- stretch the chart out to ONE YEAR ---- You'll notice that the DIVIDEND bought shares almost at the bottom of every big dip.


The reason that's important is because many of you ask about buying on the dips - but it's so hard to try to time the market. Almost impossible -- yet here is MCD doing it AUTOMATICALLY almost as if though it was timed. Of course this doesn't always happen like that --- but this is plain and easy to see that for the last year (and that's FOUR QUARTERLY DIVIDEND PAYMENTS) it's really worked in your favor!

[CamaroMike]

I didnt even notice that about MCD, I have a small position in them. So far its been very very steady

[GregWeld]

I didnt even notice that about MCD, I have a small position in them. So far its been very very steady



That's why I'm here dude! LOL



The devil is always in the details.... and this just happened to be a PRIME example of how this IS SUPPOSED to work for you over time.


MCD -- is a "steady eddy" stock IMHO.... yet it's also a stealth grower --- certainly in the last 5 years - it's TOTAL RETURN is UP 105%. Who would think you've gotten a double out of MCD in 5 short years.

NOW --- CAVEAT --- Many 5 year Total Returns look good on paper because they've really RECOVERED from the '08/'09 LOWS..... But many of us (raising hand wildly) were buyers of stocks at or near those horrible dark days...

Remember -- You BUY when others are selling -- and you sell (which means trim huge gains etc) when they're buying. The problem with SELLING is that then you have to buy something else. When the market if flying high - then EVERYTHING is high priced. Yet you must train yourself to understand and acknowledge that even though those prices seem ridiculous now --- 10 years from now they won't seem too high and you'll have collected a nice dividend all the while. That's 40 QUARTERS of dividend payments.... HUGE! Just HUGE!

[GregWeld]

I will admit, I keep having to remind myself about this over and over again. Time goes by very fast which nobody really likes, but on the plus side the more time that goes by the more dividend/growth possibilities. So there is ONE good thing about time flying by!




The month isn't over yet --- and THIS is real money. The kind you can retire on and spend having a great time. LOL




04/20/2014 Cash Dividend BPT
B P PRUDHOE BAY RLTY TR ...
$33,099.41
04/10/2014 Qualified Dividend MO
ALTRIA GROUP INC
$14,400.00
04/09/2014 Cash Dividend JNK
SPDR BARCLAYS ETF HIGH Y...
$3,958.20

[96z28ss]

I bought MCD when it was $95 and it was red pretty much since I owned it. Like you said it was buying shares all the way down. Then I bought some more at $85 which helped bring my average down. So its in the green now.

[GregWeld]

I bought MCD when it was $95 and it was red pretty much since I owned it. Like you said it was buying shares all the way down. Then I bought some more at $85 which helped bring my average down. So its in the green now.




Such a much better outcome than the "norm" which would be buy at $95 --- freak out and sell at $85...



Good for you!!