Investing 102

[WSSix]

I've had a number of stocks do just that to me as well. The fun part is that I haven't lost a dime on any of my investments. Granted, I have only made a few dollars on a couple of them but those dividend payments are what made up for any drop in share prices. Fun times.

[GregWeld]

I've had a number of stocks do just that to me as well. The fun part is that I haven't lost a dime on any of my investments. Granted, I have only made a few dollars on a couple of them but those dividend payments are what made up for any drop in share prices. Fun times.



The beauty of the dividend.


I remember one poster here questioning whether or not "dividend investing" was just trendy --- or posted that perhaps it was even in a bubble....


I don't understand what's trendy about actually EARNING MONEY on your investments. SMH


A bubble is another question all together. That would happen if so many people bid up the prices of dividend stocks that they were paying unusually low dividend percentages vs the "market" rate on other investments. I'm positive that AT&T (T) paying 5% isn't out of line with other marketable investments - so I don't see any bubble forming in what I own..... LOL

[GregWeld]

Since I mentioned AT&T (T) ----- which is a name I own some 40,000 shares of.... *that's called full disclosure*



It reported earnings yesterday. The earnings were "fine" - a small beat on top line - good subscriber growth... but this is a very large company with lots of competition. I don't own it for a big surge of growth. I own it because I feel safe investing my money in that name and they pay a pretty decent dividend.

The Investing 102 post is about paying attention to the ups and downs....


T is UP about a buck in the last 5 days. That's typical of many stocks that get bid up BEFORE earnings reports. It's called buying the rumor. Then many times - a guy would think -- GREAT!! My blah blah company just beat the whisper number and we're going higher from here.... and POP! Somebody pops your excitement... because the stock sells off! WTF is with that! That's called "selling the news". So there was a run up of expectation.... and then profit taking.

I used to try to TRADE like that. Making 50 cents here and there. Constantly trying to game the news. Getting ahead of the news and then getting out.

Here's the point --- I think T will trade off a buck today.... and years ago that would have freaked me out.. but I'm smarter than that now - and I go see (check a chart) that GEE! The stock ran up a buck just last week.... So it's not OFF a dollar so much as it is just trading where it was a mere week ago.

[SSLance]

T is currently off 3.2% today...dragging VZ down 1.6% with it.

I'm trying to decide now which one to buy more of on the dip. :D

[MX145]

I'm hooked! I don't know what I'm doing and have anything to share but I read this thread every morning. It's become the first thing I read for the day. :thumbsup:

[96z28ss]

So Apple just announced a 7 to 1 split, to take place in June.
The stock just jumped $40 after hours.

[CamaroMike]

While it was a big jump, thats the price they were at back in January, ive been watching it too but im not a owner. Its been too expensive. I wonder if Forrest Gump still owns it

[GregWeld]

I'm hooked! I don't know what I'm doing and have anything to share but I read this thread every morning. It's become the first thing I read for the day. :thumbsup:




That's funny -- good funny.... Investing is addicting -- and way more fun down the road.




So Apple just announced a 7 to 1 split, to take place in June.
The stock just jumped $40 after hours.





It is a move to make the shares more "affordable" --- but Microsoft did this (many many times) ---- and what that did was to give MSFT the largest "float" (the most shares issued) of any publicly traded company. Eventually that made it so that even if there were buyers -- there was so much stock out there that it wouldn't go up. Nobody was/is capable of bidding it up. Well -- that and Billy G - is selling 100's of millions monthly. When you have a seller just pounding the stock into the ground month after month.... it's hard to lift it.


I don't think Apple is there yet --- but there will now be 7 times more shares out there.


And I think CHINA is the big grower for them. Remember there's 3 times as many people there.... so that's a very big market.


Here's the INVESTING 102 takeaway.... don't CHASE a stock up. If you want to own a name --- watch it.... there will be an opening to let you in. Don't rush to buy on the excitement day. Let the great news settle a bit... and wait for a big MARKET down day that creates an opportunity for you. That might not ever come by the way... Some times these things just keep going to the moon... but usually things settle down a bit.

RETAIL investors (us) rush to get in --- they buy on the big hype.... while the news is hot. Don't be that guy. Mark your buys -- wait and watch and buy (nibble) away when opportunity opens up.




While it was a big jump, thats the price they were at back in January, ive been watching it too but im not a owner. Its been too expensive. I wonder if Forrest Gump still owns it




EXACTLY. Go to the charts and there's been many opportunities to buy well below the high prices.

This doesn't pay much dividend -- it's all about GROWTH. Having said that --- I do think they're a grower and that's mostly because of China.

[GregWeld]

Here's something about Apple (AAPL) I wasn't aware of.... apparently part of the 7:1 stock split (which means for every one share you own - you'll get 7 - and the price will be DIVIDED by 7)... is that they didn't have enough "float" (number of shares issued) to be included in the DOW. With the split - that removes that barrier.

THAT is a very big deal - because it means that every ETF or Mutual Fund MUST buy the shares if their "fund" is based off tracking the DOW. MANY MANY companies mirror the DOW. So typically once a company gets included in the DOW --- there is a lot of pent up buying demand.

Now -- the INVESTING 102 takeaway --- buying just based on something like that -- is GAMBLING -- it's not INVESTING. If you want to own the company make certain that you're buying it because LONG TERM it's a company that you want to own.... DO NOT buy because you THINK you're going to get a big pop. When you buy like that -- the pop doesn't happen -- the stock disappoints - and YOU LOSE MONEY. Don't fall into that line of thinking because it's a scenario that sets you up for failure. You'll be right one in ten times.... that's not good odds and isn't how you get fat financially. If you're rich already -- and have money you can afford to throw around - then maybe you can afford to do that.... but that's not smart money.

[CamaroMike]

Duly noted.

[toy71camaro]

When that big pop happens, It'll likely be time to get ride of the 0.025 shares I have of it. LOL.

Back in '98 or so I bought i think $25 or $50 in my personal account and my Roth. And havent touched it since. I think my purchase price was around $200.

I've been waiting for some big news to happen to get them back up to where they were for a short time ($700) to make it worthwhile to get rid of those minuscule shares, and put the $200 profit to work elsewhere. Tiny numbers, but hey, that was my first purchase I think. lol

[GregWeld]

When that big pop happens, It'll likely be time to get ride of the 0.025 shares I have of it. LOL.

Back in '98 or so I bought i think $25 or $50 in my personal account and my Roth. And havent touched it since. I think my purchase price was around $200.

I've been waiting for some big news to happen to get them back up to where they were for a short time ($700) to make it worthwhile to get rid of those minuscule shares, and put the $200 profit to work elsewhere. Tiny numbers, but hey, that was my first purchase I think. lol



I would't sell it --- why bother? It's in your account -- it's a GREAT company -- it costs you nothing to hold it. And now they're going to give you 700% more shares... and they raised their dividend payout by 8%... WTF is wrong with that.

Seriously -- I don't know how you could take $200 and do any better than have it in AAPL.

[GregWeld]

Since we're smack dab into high gear with EARNINGS season (happens every quarter)....


How many of you have come to the realization that EARNINGS MATTER when companies report.

Two things matter the most to your holdings -- EARNINGS and FORWARD GUIDANCE. In other words --- is the company growing (more sales) and better profit margins --- AND what they think they're going to do in the future. Miss earnings -- or give poopie forward guidance and they get taken to the woodshed.


This is where the P/E ratio comes in to play. P (price) to E (earnings)... P what the stock price is --- divided by E earnings.


When you have a HIGH P/E -- people are betting that the company will grow into the stock price... Own a high P/E company that misses -- or gives poopie forward guidance (or both) and it's Kattie bar the door.... the price comes down BIG TIME.

People ask me all the time about P/E. It's not a metric I use because for the most part the P/E's on the companies I own are "in line"... Since they're dividend paying companies - they're really not the big "growth" companies. Big growth companies are Amazon (AMZN) P/E 483 - Tesla (TSLA) P/E 0 because it has no earnings (I own it just because it's cars - and they're cool) - NetFlix (NFLX) P/E 125 etc

Versus -- Altria (MO) P/E 17 -- AT&T (T) P/E 10 -- British Petroleum Prudhoe Bay Trust (BPT) P/E 9.5

[glassman]

So, let's use "Tesla" for example, because their a publically traded company, do we know how long it will be before they have earnings? Are they sorta considered r&d (research and development) for now until we "know" when they will start posting earnings relative to production?

I'm glad you resaid what you did about earning p/e cause I'm just begining to grasp that mathematically.

[sik68]

Tesla has shown a profit (which would result in a Positive P/E ratio) in one or two quarters in the past, but they are intermittent. For a company that's drastically ramping up like Tesla, turning a profit really depends on when the big checks are being written.

[GregWeld]

So, let's use "Tesla" for example, because their a publically traded company, do we know how long it will be before they have earnings? Are they sorta considered r&d (research and development) for now until we "know" when they will start posting earnings relative to production?

I'm glad you resaid what you did about earning p/e cause I'm just begining to grasp that mathematically.



To use Tesla as an example only - not a particular "stock" pick....



I bought Tesla (TSLA) more for "fun" than as an investment. While I HOPE that it will grow and prosper (I do have a quarter million dollar investment in it)... I don't expect it to be anything but VOLATILE. Big swings up and down -- because a name like this is MOMENTUM and NEWS driven. Bad news -- stock gets hammered -- Things going well -- the momentum investors jump in and drive it up (until they find a new name to jump on).


A "start up" company often is not expected to be profitable (WTF -- AMAZON HASN'T REALLY BEEN PROFITABLE IN 20 YEARS!). It's more about GROWTH -- FUTURE PROSPECTS... and blah blah blah. It's gambling pure and simple. You're gambling that the management can grow the company and finally make a profit. In the meantime - they must manage cash flow to expand - experiment - acquire - ramp up people and processes... so while FREE CASH FLOW might be fine -- that doesn't make them profitable. The cash flow is supporting the expenses to build a business.

Why people pay up for this kind of a name (pick one) is because they can return HUGE returns over time. Take Amazon -- which really isn't very profitable and trades at a P/E of almost 500 (their stock price is 500 times what they're earnings are).... the stock (different really than the company) has returned a 17,681% growth to an early investor. Pretty good gamble.

The quarterly reports are the best place to find the type of info you asked about. Or a guy can get in on the conference call - the numbers to call are always published usually easiest to find on the company website... You dial in - you can not interact. Companies are very skillful in managing what they say "going forward". They are best off to err on the low side of what they really think - so that they don't get into an investor lawsuit.

For instance - with Tesla (TSLA) they reported higher than forecasted sales numbers -- and have said that they expect a 55% sales increase..... and that CHINA and Europe are just huge untapped markets. So that's what is driving the stock price.

Now -- If you go back in this thread -- I've discussed stocks that are "priced for perfection" -- and a name like Tesla fits this to a T. They can not hiccup... they need to continue to not only forecast correctly -- they must EXCEED their forecasted numbers. If the do - they stock continues to be okay -- but hiccup and a guys gets cut in half before he can hit the sell button. It's gambling. Play with money you can afford to watch go up in smoke. And this can happen at any time! You can go along and be fat and happy -- and overnight you get your ass handed to you. And we're talking about any name that fits this type of "investment" --- Facebook -- Amazon --- Netflix --- Tesla --- They're fun while they're going UP -- but they can fall far faster than they go up. So be careful with this stuff.

[GregWeld]

This is truly sad..... Not hard to understand - but sad - because so many people will live really poorly in retirement IF they can retire at all.





Why do Americans have such a love-hate relationship with the stock market? Despite being proven, time and time again, as one of the best wealth generators in history, U.S. adults grow hot and cold about the market, embracing it as it fills their 401k plans with assets, but shunning and distrusting it at the first sign of risk.

The latter mindset is taking hold right now, according to a brand new survey from Bankrate.com Across all adult age levels, 73% of Americans say they are “not inclined” to invest in the stock market right now. That, despite low interest rates on cash and fixed income, and stock market returns exceeding 30% in 2013, Bankrate points out.

If you think that Americans are growing fickle about stocks because it’s a relative off year for equities, think again. In 2013, when the stock market soared, 76% of Americans said they were largely avoiding stocks, in a similar Bankrate study.

“Americans may be avoiding the buy-high, sell-low habit seen in previous market cycles, but only because they’re not buying at all,” notes Greg McBride, CFA, Bankrate.com’s chief financial analyst. “An overly conservative investment stance compounds the problem that so many Americans have of not saving enough for longer-range goals like retirement.”

[CamaroMike]

Everyone I talk to wants to spend it all and they want to spend it NOW! Its becoming very scarce to find people who actually save. There is so much stuff out there these days that people want! So many temptations! While they are surrounded with new flat screen TV's and the newest cell phones I will be picking up some free money from my dividends using my old (2 year old) cell phone that does the same thing. :headspin:

[sik68]

Here is a relevant article posted on Forbes: Buffett's Bad Advice (http://www.forbes.com/sites/brianportnoy/2014/04/28/buffets-bad-advice/)

The headline is obviously for click traffic, but he makes an interesting point that got me thinking. He argues that an index fund is NOT diversified, particularly in 'bubble phases', because high valuations in a particular sector skew the index away from representing the broader market.

He doesn't back this hypothesis with actual return scenarios, because he knows that he is just trying to stir the pot without backing anything up. It's pretty easy to see that over the long run, the S&P 500 tracks like the Russell 2000, tracks like the Wilshire 5000.

Granted, it's not the investing strategy of this thread, but index investing is another form of investing 101 that helps people grow their wealth to retire. I think he's doing a huge dis-service by scaring people away from even the most basic form of saving and earning compound interest. For some credibility, I wish he would have just said "buy an even broader index than the S&P if you're a risk averse investor" rather than spooking people away from Buffett's reasonable advice.

[GregWeld]

Here's my problem with an "index" fund.... The index is only a basket of names made up to "reflect" the particular sector a guy wants to invest in... let's say "financials" or "industrials" or "transportation". I have always advocated for small investors to invest in the companies and names they know and understand. And to buy "best of breed". But when you buy a basket of stocks -- you get just that - a basket. You get the good the bad and the ugly... and the ugly pulls down the performance of the good. So that gets you a basket of boring and I would ask you --- why bother? If you don't or can't figure out what the best of the best is in that sector -- then why invest in it if you don't even care to do a minimum of work.


If some of the companies that make up the index pay a dividend -- and many of the other names don't -- that just dilutes your dividend - because you have "X" amount of money invested but aren't getting much of a dividend --- compared to say -- the top company that pays a dividend.


Here's my bottom line opinion -- and this is for INVESTING 102.


If you have 100 grand - you probably don't own that many companies to start with --- 20 would be the max you should own... 20 names and that much to invest should get you well diversified -- with a dividend yield somewhere in the 4 to 5% range.

If you have 250K to 500K invested -- now you can start to put the bulk of your money into the above 20 or so names -- AND take some dough and add some "risk" assets.... in other words -- now you can put 10K EACH into some names like Tesla -- or NetFlix -- or <pick a name>. You can "afford" to take on some growth risk. If I had 250K --- I'd gamble with 50K max -- 500K and maybe I'd increase that t0 75K.

Once you get beyond these kinds of numbers to invest -- GD it! --- you'd better be real sharp about investments -- your returns - your risks - you should be into some real estate -- you should be taking an ACTIVE role in your money management. You can take on some higher paying (more risk) investments to get your returns up a bit since now you can afford to. You should have little debt - certainly shouldn't be making car payments or have ANY credit card debt.

Mutual Funds and Index Funds are a way for people to choose to NOT learn about investing - they're places for people to park money and forget about it - only to wake up 5 years later and realize they didn't do very well. They're just dumbed down "investments".

I just don't think that the guys that are reading this thread -- and trying to learn about investing from this thread - and then are finally branching out to read other stuff in order to learn more - "need" index funds in their accounts. The returns are just market returns without the dividend --- and if you're "only" getting a 2.5% dividend on the index fund -- and you could have bought the top name in that index and gotten 5% --- your total return is going to suck over time and that's not what we want.

For fun I went to Schwab and hit the research area -- they have a category for ETF's (exchange traded funds)... I chose LARGE VALUE - and then there's a button for ETF Select list - once you get there you can sort this -- so I sorted for highest dividend. The name comes up with (DIV) Global X SuperDividend.... it pays 6.08%

Here's the part I DO NOT LIKE -- they're only UP 7.59% in FIVE YEARS... THAT'S A HORRIBLE TOTAL RETURN.

If you just scroll down to their TOP TEN HOLDINGS -- you can now get the names that make up the fund. Check them out and buy the one or two that make sense. Bingo! LOL








Here is a relevant article posted on Forbes: Buffett's Bad Advice (http://www.forbes.com/sites/brianportnoy/2014/04/28/buffets-bad-advice/)

The headline is obviously for click traffic, but he makes an interesting point that got me thinking. He argues that an index fund is NOT diversified, particularly in 'bubble phases', because high valuations in a particular sector skew the index away from representing the broader market.

He doesn't back this hypothesis with actual return scenarios, because he knows that he is just trying to stir the pot without backing anything up. It's pretty easy to see that over the long run, the S&P 500 tracks like the Russell 2000, tracks like the Wilshire 5000.

Granted, it's not the investing strategy of this thread, but index investing is another form of investing 101 that helps people grow their wealth to retire. I think he's doing a huge dis-service by scaring people away from even the most basic form of saving and earning compound interest. For some credibility, I wish he would have just said "buy an even broader index than the S&P if you're a risk averse investor" rather than spooking people away from Buffett's reasonable advice.

[GregWeld]

I know there was some talk about "3D" printing -- and it's investable "growth" in that industry.... Can't remember who was in or out of it... and that's not even a point here. But here is why I can't afford to gamble on this kind of stuff...


The actual company "3D" (DDD) is down 51% year to date.... and now reported "slower growth".....


Remember the discussion about stocks being "priced for perfection" and what happens if they're not perfect plus some? You get killed... The stock was down almost 10% just today.

I can't afford to invest 100K in a name and get cut 50% or 10% in a single day. So I stay away from them. Down 50% YTD kills 10 other names in your account that are all "okay"!


I AM NOT SAYING to not invest in this name - or the industry - I'm just using this as an example of what happens when you buy stocks -- pick a name and pick an industry -- that is in that "priced for perfection" / "momentum" / "hype" stage.

Hell yeah you can hit a home run.... you can also loose a lot of money very quickly. So if you play in this stuff... do so with a very small percentage of your investable assets. Odds are against you. And here's why..... remember me telling you that when the clerk at the grocery store starts talking about all the money they've made lately in "X"?? And that's when you run for the hills!!
When I hear the talking heads all touting "3D" printing (not this company in particular - just the industry in general) and the big stock gains.... that's when it's too late to get in.

You have to be EARLY to this kind of stuff -- not after it's big news. If you bought at $8 and it runs to $80.... you're a winner.... but if it runs to $70 and you jump in - watch it go to $80 and then plummet to $45.... that SUCKS!


I'm not smart enough to know what's ahead -- I can't spend enough time to try to be "out front" of this stuff... So I shy away from it (or similar). By the time I'm aware of the phenomena - it's too late to be investable. It's why I invest in British Petroleum and then just go play in the shed....

[toy71camaro]

Once again Greg, thanks for the extremely helpful guidance you've given all of us here.

Thanks also on the thoughts on what I posted previously about AAPL. I felt that way because I just didnt see/feel the strength of the company at the personal/local level. I dont see people lining up in droves (maybe they will this next time), and I personally jumped ship last year and couldnt be happy. But, its not always personal. lol. Good points from the "other side" to keep my mind in the game, and not just a simple feeling. To whole at the "whole thing".


And that leads me to my next topic to get some guidance on. Which that is trying to decide what stock to "add more" to, since I'm fairly diversified at the moment, and reaching my next purchase limit (for the record, I set aside $ monthly for my ROTH IRA, then when that amount reaches $1k, I then buy something).

So, here's where I stand. I've got the money ready. Do I wait for the sell in May and go away before throwing it in? or do it now. And then, the big question, What to put it in? I've got a few "runners" and a few "trotters".

For teaching purposes, I'll put some numbers along with these to help us/me explain, and see what/how I should be "thinking" about this process. I'm going to "think out loud" here, and see what happens.. lol

My thoughts are around these stocks:

MO: 4.79% div. I'm up 62% total return.
KMB: 3% div. Up 59% total return.
T: 5.19% div. Up 24% total return.

I'm sure all 3 of those are "fine" choices. But, since i'd like to get my overall Div % higher, I'm leaning towards MO and T. MO has a 8% div growth rate avg the past 5 years. T has a 2.4%. MO 5yr Total Return is 210%. T is 80%.

Looking at those numbers.. It seems MO is the obvious choice based on Div Growth and overall growth. Seems MO will surpass T quickly on the Div side. But am I looking at the right numbers? I think the forward look on both stock have great potential.

Edit: Oh, and each of these started as a $1k investment and have grown to what they are now. I'm about to add another $1k to it, almost doubling my position in it.

[GregWeld]

Geez Albert! Posts like this are what keeps me "putting myself out there" and sharing what normally should be personal info. I absolutely love seeing people being successful at this! Good for you!

Two thoughts:


#1 --- A guy MUST remember these big gains (%) when the market is going SOUTH! So --- you have a 62% "gain" --- and the market turns to poop. Then you hear the market is down 20% -- and that's when people SELL. Idiots -- that's when you buy more!! Because it will turn up -- and will then go beyond your 60%. Sell -- and you start buying again when the market is already up 40%. Because it's human nature to sell when down and buy once they figure it's safe to get back in... but we never get that quite right.



#2 --- I like your thinking about adding to the larger dividend payer to bring your average dividend % up. That "cash flow" helps to keep you in the game when the market is crap. It also is a big part of the overall TOTAL RETURN. The larger the dividend - the more support the stock has when interest rates start to rise.


#3 --- There is the unwritten "rule" that an investment shouldn't be larger than 5% of your total investable funds... but frankly - that's nothing but a guide to keep people from piling in to some investment -- that then breaks both their legs. Only let this be a guiding principal but it's not hard and fast. When you're in to names like MO - KMB - COKE etc.... these aren't "risky" assets. These are great companies with long histories of being rock solid. So if you end up with one or two of them at 10% --- so what...

Look at Warren Buffett with most all of his personal net worth in Berkshire... or Bill Gates with most of his in Microsoft... or Howard Shultz with his piled into Starbucks. Hasn't seemed to hurt them much to break that rule. LOL







Once again Greg, thanks for the extremely helpful guidance you've given all of us here.

Thanks also on the thoughts on what I posted previously about AAPL. I felt that way because I just didnt see/feel the strength of the company at the personal/local level. I dont see people lining up in droves (maybe they will this next time), and I personally jumped ship last year and couldnt be happy. But, its not always personal. lol. Good points from the "other side" to keep my mind in the game, and not just a simple feeling. To whole at the "whole thing".


And that leads me to my next topic to get some guidance on. Which that is trying to decide what stock to "add more" to, since I'm fairly diversified at the moment, and reaching my next purchase limit (for the record, I set aside $ monthly for my ROTH IRA, then when that amount reaches $1k, I then buy something).

So, here's where I stand. I've got the money ready. Do I wait for the sell in May and go away before throwing it in? or do it now. And then, the big question, What to put it in? I've got a few "runners" and a few "trotters".

For teaching purposes, I'll put some numbers along with these to help us/me explain, and see what/how I should be "thinking" about this process. I'm going to "think out loud" here, and see what happens.. lol

My thoughts are around these stocks:

MO: 4.79% div. I'm up 62% total return.
KMB: 3% div. Up 59% total return.
T: 5.19% div. Up 24% total return.

I'm sure all 3 of those are "fine" choices. But, since i'd like to get my overall Div % higher, I'm leaning towards MO and T. MO has a 8% div growth rate avg the past 5 years. T has a 2.4%. MO 5yr Total Return is 210%. T is 80%.

Looking at those numbers.. It seems MO is the obvious choice based on Div Growth and overall growth. Seems MO will surpass T quickly on the Div side. But am I looking at the right numbers? I think the forward look on both stock have great potential.

[toy71camaro]

Total Return info :

5yr:
T: 80%
MO: 210%
KMB: 168%

3yr:
T: 30%
MO: 76%
KMB: 90%


1yr:
T: -3.8%
MO: 14.6%
KMB: 9.1%


As for the other questions. Adding the $ to either of these positions doesn't put me over the 5% rule for my entire investment amounts. So I'll still fall under that general rule of thumb.

And yes, those % gains/returns I mentioned above are merely paper gains at this point. They'll just help keep me in the green (or closer to it) once the market decides to turn around for a bit. I'm not so concerned about that. I don't have any plans of selling any of them unless something in their business model changes. MO is starting to jump into the e-cig biz, so thats something they got looking forward for them. T announced jumping into the WiFi service on Air Travel arena too, but I dont think that will be as big of a bottom line revenue enhancement like e-cigs. But I havent personally seen the details of the WiFi Air stuff either.

:)

[GregWeld]

Albert --- I like the way you're informed about what YOUR companies (and once you buy stock you ARE an owner!) are doing! Good for you!

Frankly --- I'm glad that everyone is having fun doing this stuff. It is fun - it might not seem like it's all that exciting -- but it can be! And it really doesn't take all that much time to keep track of what the companies you own are doing. That's why I say there's not really a need to have more than 20 -- and that's only if you have big bucks in total. You can track 10 or 15 companies in just a few minutes time. And with BIG best of breed stuff -- you don't need to look every 15 seconds to see if they've hiccuped!

Back in the day when I was trading -- I had to stop and take a breath... you're on pins and needles every second worrying about their performance and what the news is and whether or not it was good or bad and how to trade that info. Funny -- I make more money now doing way less. That has to be a win win right?

[sik68]

Back in the day when I was trading -- I had to stop and take a breath... you're on pins and needles every second worrying about their performance and what the news is and whether or not it was good or bad and how to trade that info. Funny -- I make more money now doing way less. That has to be a win win right?

Just for fun, I watched the 3-Part BBC series "Million Dollar Traders" (http://youtu.be/v6ciY8u04Kk) on youtube. They take a group of average Joe's and give them trading desks. THEY SUCK at it...they stare at the Bloomberg terminals and drive themselves nuts. By the end, whole group looks like hell. It's definitely a "don't be a trader" reminder. :twak: Good entertainment though!

[GregWeld]

Be like Warren Buffett......



"Overall, Berkshire and its long-term shareholders benefit from a sinking stock market much as a regular purchaser of food benefits from declining food prices. So when the market plummets - as it will from time to time - neither panic nor mourn. It's good news for Berkshire."



And this is just absolutely AMAZING.... Berkshire owns 9% of Coke (KO) which is 400 MILLION SHARES.... do the math.... at .31 cents per share dividend they collect...............


ONE HUNDRED AND TWENTY FOUR MILLION DOLLARS PER QUARTER in dividend.... that's half a billion per year in dividends just from Coke!

[WSSix]

Albert, I'm in both T and MO as well. First, I wouldn't beat myself up about which one to put money into. Either one is a fine choice IMO and I'll be adding to my accounts in the future. Second, what I did and think you might want to look at, is which one is down right now. I just recently added T and mentioned it and my thoughts a few pages back. I added T because VZ and T are in a pricing war right now and both were/are down. I already own VZ. I consider them both to be solid investments so I added T not only because of their good dividend but because they were down at the time. I believe MO is not down right now at least not the last time I looked. So you might be able to get T in one of those little dips that ultimately doesn't make a huge difference in the long run but might help just a little. Just a thought but again, neither one is a wrong choice. Good luck!

[toy71camaro]

All good points. I'm probably just over analyzing it. :goggles: But its good i'm at least analyzing it in general. lol.

I think I'm going to go with MO, for the reason that they have 1 more dividend payout at their current rate (which I will catch with this purchase), then (historically speaking) they should (hopefully) have a bump in the next dividend payout. So I'll get a quick raise. :G-Dub:

Next I'll probably look at adding to T, in 2ish months.

[Vegas69]

I've been at this about 6 months and my account is up 7.45%. Not bad for money that would've been rotting in Wells Fargo.

I have one real dog out of the 10. I'm noticing that it tends to gain on down days quite often. Am I right in thinking people are buying in on the down days in hopes of some movement in the right direction? I know the company is expanding it's stores and business model currently, that's why I bought it.

[toy71camaro]

I've been at this about 6 months and my account is up 7.45%. Not bad for money that would've been rotting in Wells Fargo.

I have one real dog out of the 10. I'm noticing that it tends to gain on down days quite often. Am I right in thinking people are buying in on the down days in hopes of some movement in the right direction? I know the company is expanding it's stores and business model currently, that's why I bought it.


Great!! It certainly is better than getting $.001% interest at the bank, isnt it? lol


Not sure on your second question. Its hard to say without knowing the investment. Some investments tend to mirror the market, some are the opposite.

[RECOVERY ROOM]

Im going to the Berkshire shareholders meeting Sat here in Omaha, should be interesting to hear what is said, The "b" stock has done well the last 2 years. slow growth but always consistent,

[GregWeld]

I've been at this about 6 months and my account is up 7.45%. Not bad for money that would've been rotting in Wells Fargo.

I have one real dog out of the 10. I'm noticing that it tends to gain on down days quite often. Am I right in thinking people are buying in on the down days in hopes of some movement in the right direction? I know the company is expanding it's stores and business model currently, that's why I bought it.



I've been doing this for a very long time --- and there's always some picks that just never do what you intended them to do. Out of 10 -- people usually have 2 that lead the way -- 3 that are pretty decent -- 4 that are "okay" or barely okay -- and one or two that just flat suck. Hold 'em long enough -- and it's like a horse race - the barely makin' it jump into the lead the the leader falls back to 4th. It's just the way it is ---- as long as they're all mostly headed in the right direction.


Never be afraid to dump a stock you've bought that you thought was going to do X --- and doesn't. You hold when you're absolutely positive it's still going to do what you thought... but that's hard to do. Sometimes the market just speaks their collective idea with their feet... and no amount of hoping will correct that.

[GregWeld]

Im going to the Berkshire shareholders meeting Sat here in Omaha, should be interesting to hear what is said, The "b" stock has done well the last 2 years. slow growth but always consistent,





Say hello to Charlotte Guyman for me! She's on the board and a friend... I just can't afford their stock without a dividend to support the ownership. Charlottes brother in law Greg - owns one of my old boats (a Grady White) and they're both members of Seattle Yacht Club. Great people -- Charlotte is SUPER smart and super nice.

[Vortech404]

Sounds like you guy's are having fun with this. I know I am. I went from just having money in the Funds in my 401k to having 13 names COP,GIS,KMI,KO,MCD,MMM,MO,NU,OHI,PFE,PG,VZ,WFC. Not sure if this is enough names or I should add to the ones I already have. I think I hit most sectors to am somewhat diversified. I also get UPS stock through work.

I went from a small amount of reinvested dividends to 4K annually so far. I also started A Roth for me with CVX,O,DFS and one for the wife with XOM,NNN,JNJ,PM. Working on diversifying these.

I now look forward to the dividend pay dates!

I know this is not a stock pickers thread so please I just post these as examples. These are not recommendations! lol Just investing 402 examles. ha

All this was possible because of this thread. Thanks again. Just wanted to pass on I'm having a good time with this. I also just got the Wall Street Journal. So I should have Greg Weld money here pretty soon. haha

next goal is to get to 5k in annual divies. I ckeck this thread everyday.

John

[Vortech404]

Thought this was a good read.

http://seekingalpha.com/article/2189233-dividend-growth-investing-and-the-benefits-of-being-patient

John

[WSSix]

Congrats, John! Glad you're getting a lot out of this thread as well.

[toy71camaro]

Sounds like you guy's are having fun with this. I know I am. I went from just having money in the Funds in my 401k to having 13 names COP,GIS,KMI,KO,MCD,MMM,MO,NU,OHI,PFE,PG,VZ,WFC. Not sure if this is enough names or I should add to the ones I already have. I think I hit most sectors to am somewhat diversified. I also get UPS stock through work.

I went from a small amount of reinvested dividends to 4K annually so far. I also started A Roth for me with CVX,O,DFS and one for the wife with XOM,NNN,JNJ,PM. Working on diversifying these.

I now look forward to the dividend pay dates!

I know this is not a stock pickers thread so please I just post these as examples. These are not recommendations! lol Just investing 402 examles. ha

All this was possible because of this thread. Thanks again. Just wanted to pass on I'm having a good time with this. I also just got the Wall Street Journal. So I should have Greg Weld money here pretty soon. haha

next goal is to get to 5k in annual divies. I ckeck this thread everyday.

John

Thats awesome!!! woohoo!!

:king:

[GregWeld]

Many of you have asked about P/E RATIOS.... to which I say it's a metric that I don't use much -- except to determine if a stock is priced to perfection or as a comparison against other companies in their sector. BUT ---- If you eliminated all high P/E ratios -- that would mean that you're not buying companies that the market (and management) is telling you they EXPECT to earn more going forward. High GROWTH is usually rewarded with high P/E's. So don't use just that metric to buy -- and don't use that metric to stay out of a good company. Thus I "down play" this metric.


Here's were P/E (P = price of the stock - divided by - E = EARNINGS) ratios matter.....


When a company with a "high" P/E "misses" and or takes guidance down (tells you they're not going to make as much EARNINGS going forward.


WHOLE FOODS (WFM) missed (as they have done several quarters now) AND they said "we're not going to have the high growth in EARNINGS that we have had in the past" <not an actual quote>. The stock gets crushed. Why? Because the P/E was unusually high compared to others in the industry and the "market" had expectations that they'd grow into the high P/E.



Now the "market savvy" INVESTING 102 takeaway...... if it was a name you've been looking at -- or perhaps already own.... and you see this big "DIP". Do you buy more --- or SELL?


When a company comes out and misses -- and lowers guidance... That is a FUNDAMENTAL CHANGE which I've said many times in the past is an event that really needs to be examined!!! BUYER BEWARE!! WARNING -- DANGER AHEAD.... DO NOT TRY TO CATCH A FALLING KNIFE would be the normal mantra.

Here's when you step back and WAIT and WATCH. This is a really good company.... but the STOCK needs to settle in with the new earnings (we don't know what that is going to be in the future!).... LONG TERM it might be great -- but there is a "reset" to the share price... Let's wait and see what that is. YOU don't set that --- the big boys do.... wait until they're done if you want to buy. This might take a couple QUARTERS not days....

The rest of their story might be fine -- but the EARNINGS matter.


I'm using WHOLE FOODS today as nothing but an example --- I don't own it - I have in the past -- This is not a STOCK PICKING DISCUSSION.... I'm not saying buy or sell WFM ---- I'm simply using it's recent miss --- as an opportunity to discuss P/E's and WHEN they matter.

[glassman]

Thats a good explanation Greg. I had to read it twice to understand it, and will read it again to make sure i "get it". sometimes (lol) i'm a very slow learner.

ps, had a great time this weekend, i looked for you guys to say by, but couldnt find you and siegster anywhere, so hopefully dave said later for me...

[GregWeld]

Thats a good explanation Greg. I had to read it twice to understand it, and will read it again to make sure i "get it". sometimes (lol) i'm a very slow learner.

ps, had a great time this weekend, i looked for you guys to say by, but couldnt find you and siegster anywhere, so hopefully dave said later for me...




Yes Dave said goodbye - rather - he actually just waved one finger to us... if that's how "goodbye losers" is signaled.


Great weekend. Glad you had a good time.

[NovaJ]

First time I have posted in this thread, but have been trying to follow it and have certainly learned a lot.

I have decided that it is time to start doing more than just my company 401k stuff and am therefore looking at the online brokerages available. I think I have basically narrowed it down to Scottrade and Schwab. I like Scottrade because they have the option of an actual office fairly close to me, while Schwab's office that is also in the same area is listed that it is "Open by appointment only" which seems potentially inconvenient.

The one thing keeping me from pulling the trigger and going with Scottrade is I am not so sure about the FRIP (Flexible Reinvestment Program) that Scottrade uses. For those who might not be familiar, the FRIP pools your dividends into one sum and then buys stocks based on how you have set the pool to be allocated to investments which does not necessarily have to be buying the stock that generated the dividend. It does seem nice to have the option to use your dividends on things other than what paid you the dividend, however, the fact that you can only buy whole shares with the FRIP seems like it might be restrictive, especially in the beginning since I will be working with a relatively small account (hopefully not for too long though, right).

Any thoughts on this type of system? Or even other reasons why you chose the firm you're using vs. the others?

[CamaroMike]

First time I have posted in this thread, but have been trying to follow it and have certainly learned a lot.

I have decided that it is time to start doing more than just my company 401k stuff and am therefore looking at the online brokerages available. I think I have basically narrowed it down to Scottrade and Schwab. I like Scottrade because they have the option of an actual office fairly close to me, while Schwab's office that is also in the same area is listed that it is "Open by appointment only" which seems potentially inconvenient.

The one thing keeping me from pulling the trigger and going with Scottrade is I am not so sure about the FRIP (Flexible Reinvestment Program) that Scottrade uses. For those who might not be familiar, the FRIP pools your dividends into one sum and then buys stocks based on how you have set the pool to be allocated to investments which does not necessarily have to be buying the stock that generated the dividend. It does seem nice to have the option to use your dividends on things other than what paid you the dividend, however, the fact that you can only buy whole shares with the FRIP seems like it might be restrictive, especially in the beginning since I will be working with a relatively small account (hopefully not for too long though, right).

Any thoughts on this type of system? Or even other reasons why you chose the firm you're using vs. the others?

I really like the FRIP system, sure I have $10 in there every now and then doing nothing until the next pay date but im not too worried about that. Ive been taking my dividends and buying shares of one particular company to "even out" my cash amount so I close to the same dollar amount invested in each company. So far no complaints with scottrade and ive been using them for a few years.

[barrrf]

Interesting question I was asked today - where would you put $2k today if you had it and had to invest in the stock market?

I was kind of taken aback by this. I had no answer.

[toy71camaro]

First time I have posted in this thread, but have been trying to follow it and have certainly learned a lot.

I have decided that it is time to start doing more than just my company 401k stuff and am therefore looking at the online brokerages available. I think I have basically narrowed it down to Scottrade and Schwab. I like Scottrade because they have the option of an actual office fairly close to me, while Schwab's office that is also in the same area is listed that it is "Open by appointment only" which seems potentially inconvenient.

The one thing keeping me from pulling the trigger and going with Scottrade is I am not so sure about the FRIP (Flexible Reinvestment Program) that Scottrade uses. For those who might not be familiar, the FRIP pools your dividends into one sum and then buys stocks based on how you have set the pool to be allocated to investments which does not necessarily have to be buying the stock that generated the dividend. It does seem nice to have the option to use your dividends on things other than what paid you the dividend, however, the fact that you can only buy whole shares with the FRIP seems like it might be restrictive, especially in the beginning since I will be working with a relatively small account (hopefully not for too long though, right).

Any thoughts on this type of system? Or even other reasons why you chose the firm you're using vs. the others?

I'm with Sharebuilder. They let you buy "fractions" of shares, if using the auto-investment tool (which buys the stock on "tuesdays"). If your a Costco member, you usually get some free $$ by signing up, plus discounts on all trades (standard trades or the auto-investment). No fees (at least not for my ROTH IRA or my Personal account). I've never needed a reason to go "into" an office at this point. That sort of banking is slowly going away.

They dont offer a "frip" system, but you CAN choose NOT to re-invest the dividends. You can also setup the Auto-Investment feature to auto buy "X" when you have "$Y" in your account. So essentially, it is the same as the FRIP, but it would also include any other deposits you made into the account.

Personally, I reinvest dividends for now. We'll see if that ever changes. Not sure yet, I've considered mixing it up. But I don't feel i earn enough div anyway to make much of a difference to start hoarding it on the side to buy another stock.

Anyway, just my 2 cents.

(I also set up a schwab account, with the minimum amount in it, just to utilize their Research tools. Which are really good).

I doubt you can go too wrong with whatever you choose. Just look at the costs involved to make purchases and such. My Auto-Investments are $2, and standard on the fly purchases are $6.

[GregWeld]

Interesting how we think about ourselves and whether or not we're doing okay or if we 'have enough'......






You need an annual income of $34,000 a year to be in the richest 1% of the world, according to World Bank economist Branko Milanovic's 2010 book The Haves and the Have-Nots. To be in the top half of the globe you need to earn just $1,225 a year. For the top 20%, it's $5,000 per year. Enter the top 10% with $12,000 a year. To be included in the top 0.1% requires an annual income of $70,000. America's poorest are some of the world's richest.

[hifi875]

That's amazing ^^^ great to be an American. We don't know how good we have it comparatively speaking.

[GregWeld]

That's amazing ^^^ great to be an American. We don't know how good we have it comparatively speaking.



You realize what truly poor is -- when you travel to other countries.

We have plenty of water... people might be poor but they live in a house of some kind not out in the elements... if you're hungry - you can go somewhere and someone will feed you. If you're sick - you can get medical care regardless of whether or not you can afford it. Other countries have NONE of those luxuries.

If you want a job in this country you CAN get one... might not be the one you like or want but there are jobs. In other countries there are no jobs - of any kind.

We really are lucky to live in the USA despite all that we find to bitch about.

[Che70velle]

You realize what truly poor is -- when you travel to other countries.

We have plenty of water... people might be poor but they live in a house of some kind not out in the elements... if you're hungry - you can go somewhere and someone will feed you. If you're sick - you can get medical care regardless of whether or not you can afford it. Other countries have NONE of those luxuries.

If you want a job in this country you CAN get one... might not be the one you like or want but there are jobs. In other countries there are no jobs - of any kind.

We really are lucky to live in the USA despite all that we find to bitch about.


8% of the worlds population owns a car. Let that sink in.

[GregWeld]

8% of the worlds population owns a car. Let that sink in.




BUY FORD STOCK!! There's lots of room for growth!! LOL


Joking --- but WE think everyone has a car!

[toy71camaro]

Joking --- but WE think everyone has a car!

Or 2, or 3, or 4... lol.

[96z28ss]

I just got a really good raise on PSX dividend up 28%.
it went from .39 a share to .50 a share.

[GregWeld]

I just got a really good raise on PSX dividend up 28%.
it went from .39 a share to .50 a share.



FREE MONEY!! LOL



I love dividends --- for all these kinds of reasons.

They (not guaranteed) pay you when the face value is down

They give you a raise once in awhile

In the end - Dividend payers generally have STELLAR capital growth over time

What's wrong with that!?!?!?




I was just looking at my AT&T (T) holdings this morning -- full discloser I own 40,000 shares -- because THEY pay a dividend over 5%.... but are spending 50 BILLION to buy Direct TV (DTV) which has NOT paid a dividend... and wondering how that will play out.

I don't want to get into a "stock" discussion ---- rather --- I mention it because I often talk about "fundamental changes" to companies - in both a good or bad way. And spending 50 Billion on an acquisition is pretty fundamental!!

Why is it important to INVESTING 102?

I would have to go with a Wait and See attitude - because I would ASSume that AT&T has a good reason - thus a plan - to make this pay off. So what to do in the meantime creates a dilemma. So I would look at BOTH companies and say -- Well -- AT&T is well run by smart people -- they're not merging because they're in trouble... They're acquiring. Direct TV is a well run company with a pretty good well known name... So there must be "bundling" and billing synergies.

Sometimes taking NO ACTION is the best course and just pay attention to what the market is saying - are they voting with their feet -- or is the news benign? So far there's no big move one way or the other... so I'll do the wait and see - which means to PAY ATTENTION.

[toy71camaro]

Thanks for the discussion about AT&T... I've got a position in them (a few 000's less than you. LOL), but, keeping an eye on them right now is a good thing.

It obviously wont break my retirement if it did go south. As I've only got 1.5% of my retirement in their bucket, but still worth keeping an eye on.

[GregWeld]

It depends on WHY you've bought a particular stock. Did you buy GROWTH -- did you buy a DIVIDEND - did you buy SAFETY... or some combination of these.


McDonalds and Coke and IBM's are about buying a dividend with some sense of "surety" about your capital.

Big companies used to be known as "blue haired old lady stocks" because people could count on them. They're the tortoise stocks...

Once you get to a certain size in sales -- it's very difficult to GROW by large numbers. That's where MCD is... Same store sales are "okay but sub par" single digets. Growth has to come from overseas expansion... or menu changes etc. It's a difficult business but MCD is very good at it. I sold my position because I simply don't eat that way anymore and like to own things that I keep an eye on as a customer... The Peter Lynch version of investing.

[CamaroMike]

It depends on WHY you've bought a particular stock. Did you buy GROWTH -- did you buy a DIVIDEND - did you buy SAFETY... or some combination of these.


McDonalds and Coke and IBM's are about buying a dividend with some sense of "surety" about your capital.

Big companies used to be known as "blue haired old lady stocks" because people could count on them. They're the tortoise stocks...

Once you get to a certain size in sales -- it's very difficult to GROW by large numbers. That's where MCD is... Same store sales are "okay but sub par" single digets. Growth has to come from overseas expansion... or menu changes etc. It's a difficult business but MCD is very good at it. I sold my position because I simply don't eat that way anymore and like to own things that I keep an eye on as a customer... The Peter Lynch version of investing.



Does this correlate to how many shares are out there? Like you said about Microsoft and how it was hard for the price to increase because gates was selling so much of it every month.

[GregWeld]

Does this correlate to how many shares are out there? Like you said about Microsoft and how it was hard for the price to increase because gates was selling so much of it every month.



Great 102 question!


There has been NO DEAL announced yet -- it's "discussions" at this point.... so we won't know what the deal looks like until they reach one.

At that point it could be "dilutive" -- diluting the current shareholders value... or it could be "accretive" either immediately or in the near future -- which would be good for shareholders.

We don't know if it's an all cash deal -- a stock swap - or part of both of those. We just have to wait and see.

Also - there may be "regulatory" issues.... again - we don't know that now... but the government might make them sell off certain assets or divest certain markets so as to keep things competitive.

[GregWeld]

Makes sense. If its too dilluted then volatility is very slim so they buy back shares to increase the volatility? I think ford does this every few years as well to stay "competetive"



Diluted is an EARNINGS PER SHARE ISSUE.... too many shares divided into the earnings.


Volatility is NOT something you want in any stock --- if you want volatility -- watch TESLA (TSLA) -- it's a friggin yo-yo.


Companies buy back their shares to REDUCE the number of shares available (the float)... and increase shareholder value. Many times companies do this because they think they're shares are undervalued. Sometimes they just can't figure out a better use for the cash on hand.

[GregWeld]

Well --- I'm no market predictor -- and I don't "trade" the market.... but it certainly looks and feels like we're going to go into the sell in May and go away mode.

I ALWAYS hold a large pile of cash going into summer (May). Remember that I park cash in names like JNK and HYG which pay a decent monthly dividend... and most of the time - I also pick up some capital growth. I consider these holdings as "cash" - but in April I turn these into REAL cash and just sit tight waiting for stuff to pick on in August. Summer is more fun to go use the cars and trips etc - and not worry about what the market is doing.

The old saying is "you can't fight the fed" --- and I don't like to "fight" the market... and more often than not - the market takes a dump in May and stays that way until August/September.

DON'T take this as a "sell your stocks" message --- that is NOT what I'm saying. I never sell my normal dividend payers! You won't make any money with that kind of a strategy -- you'll just end up selling low and then re-buying them higher. I'm saying if you have cash -- sit tight a bit because you have MONTHS to put it to work and possibly at lower prices -- which will then YIELD more on a percentage basis in dividends.

[WSSix]

I intend to keep my eyes open and be ready to add to some of my positions. I wouldn't mind bringing my average costs down. I doubt I will add any new positions. I'm happy with the number of stocks I have right now.

[GregWeld]

I keep checking Bitcoin... just because... no other reason than that.


If you look at a Bitcoin price chart --- it's CLASSIC lower lows and lower highs since December... it just peaked and has been on a death march ever since.


The only reason I bring this up --- is because some stocks do this from time to time and you should be able to recognize when something is going nowhere fast. There are people that like to "bottom fish" -- or try to find "value" in stuff that has sold off...

What I do is RUN --- why try to play a crap shoot when there's great companies with classic GOOD charts and solid business and profits.

[GregWeld]

I was watching -- as I do every morning -- CNBC... and they begin talking about World Wrestling Entertainment (WWE). I'm laughing -- because it was a "who knew?" moment for me. Really? WWE is a publicly traded stock? WOW... So as usual I poke around on the internet to see about this "down for the count" winner... UGH. Who would invest in TV "wrestling" in the first place? Never mind - that's a rhetorical question.

So -- pull up a chart -- it's been a sub $10 stock since 2011... and HAD never been above $20 since day one... SUDDENLY it climbs to $30 since December - and this thing has a chart that goes straight up! Like a tsunami. By the way - it pays a dividend despite have ZERO P/E... so they're losing money (which is explained by seeing a "Dash" where P/E should be... Money losing companies shouldn't be paying a dividend --- and if you're in a money losing company that is paying a dividend -- you SHOULD EXPECT THAT DIVIDEND TO DISAPPEAR. But that's a different issue -- but one you should KNOW and UNDERSTAND. (One of the reasons I'm writing this morning).

Now -- I have no idea why WWE (and frankly don't care)... would be a $10 stock and in mere months it goes parabolic and runs to $30... so if that's happening -- there should be a FUNDAMENTAL REASON for that and it should be well known. A FUNDAMENTAL reason would be something like -- they started minting cash... or they're getting bought out... or they signed a big deal that will start minting cash... But I couldn't find any reason for this gigantic move. Warren Buffet didn't announce that he just bought a big position in the company.

For Investing 102.... when you see something like this... PLEASE AVOID IT LIKE PLAQUE.

Once it peaked -- the selloff began -- it peaked in Mid-March... and this morning it opened DOWN 47%. How would you like to wake up and see you've lost half of your investment? GEEE --- My bigger question would be -- why did you "invest" in something like this in the first place!?!?!?!

The take-away here.... Unless there is some fundamental NEW information --- that would be reason to buy a name -- the fact that it's going up based on nothing.... is reason to avoid whatever it is. Because when people realize there's no reason behind the move -- it will fall back down. If you bought at the high or near the high -- you now own a $11 stock -- that's down $20 in 60 days.

[GregWeld]

I love to wake up in the morning -- walk down to the shed -- knowing that I can buy parts and go racin' and weld up stuff.... and those dividends just keep coming.


Remember! Dividends come 4 times a year!! So just about the time you've forgotten all about them.... BINGO! Somebody makes a deposit in your account --- and for most of you - it buys more shares -- and then the next quarter it buys more shares than last time - and so on.




05/15/2014 Cash Dividend NNN
NATIONAL RETAIL PPTYS RE...
$8,100.00
05/15/2014 Cash Dividend KMP
KINDER MORGAN ENERGY LP ...
$30,360.00

[WSSix]

KMP sent me a dividend payment on my birthday. I thought that was really thoughtful of them. :D

[GregWeld]

KMP sent me a dividend payment on my birthday. I thought that was really thoughtful of them. :D




Well isn't that sweet!!!



LOL



I like them so much... well .... once every quarter anyway.

[Vortech404]

I hope none of you have to do this. Not good investing 102

https://finance.yahoo.com/news/early-tap-401-k-replaces-040006302.html;_ylt=AwrBEiSqxnZTmSIARViTmYlQ?.tsrc =sun


John

[GregWeld]

I hope none of you have to do this. Not good investing 102

https://finance.yahoo.com/news/early-tap-401-k-replaces-040006302.html;_ylt=AwrBEiSqxnZTmSIARViTmYlQ?.tsrc =sun


John




John ---


Here's the part that kills me and for the life of me - I can't understand!


If having STUFF is so f'n important to a person NOW -- that they refi'd the house 10 times to stay afloat -- and now they can't live within their means so need to cash out the tiny bit they have in the IRA..... just to buy stuff..... Which tells me NOW is the most important part of their lives. How do they expect to live and have STUFF in the future -- when they'll have no savings - and little income?

When a person turns 70+ -- and has no retirement - the house isn't paid for - the have a leased car... and the savings is drained to zero. NOW WHAT ARE THE PLANS TO IMPRESS THE FRIENDS WITH ALL THE "WEALTH"?

Americans are headed to the poorhouse as fast as they can get there.

First it was credit cards that bailed them out charging when the paycheck wouldn't cover - then the house ATM bailed them out again - and now it's the IRA... or all of the above.

[glassman]

Yeah, it frosts my hide to. Like a place to take (actually leave) a crap isnt important. A senior living in an apartment community is really going to have their rent at "25%" of their income, bunch bs. My 69 year old dad who preached saving and being conservative fiscally is in the poorhouse. My brotherr and I have to "help" him, and hes to "prideful" to get a job at Home Depot or walmart, so kids today arent the only ones with that "entitlement"......sux.

Eff those reverse mortages, live within your meens.....

And speaking of "stuff", its all temporary anyways, aren't we just "renting" it? last time i checked, weve all got an "expiration" date....:thumbsup: :thumbsup: :thumbsup: ....'..La dolce vita"......Live the good life, dont work too hard and dont work too little. And for heavens sakes people, manage your money (i didnt do it well for years and would be much better off now had i)......

[Vegas69]

I've been encouraged with many of my clients since the deflation of the economy. I'm seeing more people with less debt and more conscience of the amount of house they buy.

It really comes down to self awareness. I don't think it's unreasonable to think that many expect some type of magic to happen down the road that will allow them a life of riches.

It happens with vision, discipline, and time. :flag2:

[GregWeld]

We've talked about -- or discussed -- LIMIT ORDERS.


I've said that I use them -- but that if someone is buying 10 to 100 shares of something - then a few pennies one way or the other probably doesn't matter very much. Just do a market order. Get the shares bought - and sit back and start collecting the dividends. What can happen is if you get cute with a LIMIT ORDER, you might miss the fill by a penny... and it expires at the end of the business day... and you forget that it was a Limit Order so you think you now own the shares.. and the dividend goes EX and you miss that. So sometimes being cute doesn't work out all that well.

The reason I thought about this today - was that I had put in a limit order for JNK... this is a name I move in and out of frequently... (meaning maybe I'm in it for months... we're not talking about trading it hourly!). I figured that what was a good open this morning might fizzle out - like the market does many Fridays. Since we're getting near the end of the month - and JNK will go EX shortly -- I wanted to at least pick up this months dividend rather than sit in cash... AND I used a limit order because when I'm buying 20,000 shares of something -- a few pennies here and there add up. AND because I didn't want to pay market price in the morning - only to see the market go south in the afternoon selling.

I'm telling you all this because it's a THOUGHT PROCESS. The dividend is .20 for the month... why - when this is just a placeholder - should I pay UP .05 when I can use a limit order and PERHAPS buy them cheaper... which is the same as making money. That's the way I have to look at it. As it turns out - many of my names sold off in the afternoon - just as I had expected them too -- but, of course, JNK closed UP... and my order went unfilled.

I'm okay with this -- I'm on top of what I'm doing -- I will try again Monday (if it wasn't a holiday!) or Tuesday. I'm not as likely to forget what I'm doing with $800K as perhaps you might be with $1,000.... You're not active in the market daily, and you have a job to do, and kids at home, and blah blah blah. I have none of those distractions...

[mdprovee]

I checked on my apple today. It is back over what I bought it for.

Because of this thread I didn't sell it when it plummeted down and lose my butt on it. Leave it there, don't panic, long haul. Thanks Greg.

[WSSix]

Glad to hear it, Mike. Here's to continued success.

[GregWeld]

I checked on my apple today. It is back over what I bought it for.

Because of this thread I didn't sell it when it plummeted down and lose my butt on it. Leave it there, don't panic, long haul. Thanks Greg.




Well now there ya have it!!


But ---- Did ya have the guts to buy more when it was LOW??


Don't answer that - it's none of our business... but oh how people wished they could learn that behavior. Really hard to do... I know.

[mdprovee]

Unfortunately not....didn't have the free cash. Paying off bills at this point is our main focus.

But as you said I did learn a valuable lesson for next time.

[barrrf]

I took a chance on BAC today. Hoping it climbs to around $18 in the coming couple of months.

I hated pressing that buy button - I hate BofA with all of the hates I have to give.

[GregWeld]

I took a chance on BAC today. Hoping it climbs to around $18 in the coming couple of months.

I hated pressing that buy button - I hate BofA with all of the hates I have to give.




I've been a client of Bank of America (BAC) for YEARS.... but have never done anything with them except checking -- and trust me when I say I burn their Alaska Airlines VISA down every month. Other than that - I'm in your camp - as a bank they suck.

Because of that -- I own Wells Fargo (WFC) -- in full discloser I own 15,000 shares -- because Warren Buffet is a HUGE investor in WFC -- and the little amount of dealings I've personally had with them - I was really impressed. While it's one of the smallest dollar amounts I have in an investment - it's one
of my biggest gainers... but I bought WAY AHEAD of when I thought I saw the economy turning the corner.

EITHER ONE - when we're going in to a better housing market with incrementally higher mortgage rates etc - is a good investment if you need "Financials" in your portfolio.


Sorry -- It's EARLY -- and I had a long drive yesterday -- Forgot my train of thought:


What I bought "the banks" for (I chose WFC) -- is the RETURN OF them paying dividends comparable to what they did before the big bank debacle. IF --- ALWAYS A BIG IF -- the government allows them to do that.... and if they return to profitability and WANT to do that -- then the price will/should rise -- giving a double whammy --- bigger dividend and capital growth.

[barrrf]

I've been a client of Bank of America (BAC) for YEARS.... but have never done anything with them except checking -- and trust me when I say I burn their Alaska Airlines VISA down every month. Other than that - I'm in your camp - as a bank they suck.

Because of that -- I own Wells Fargo (WFC) -- in full discloser I own 15,000 shares -- because Warren Buffet is a HUGE investor in WFC -- and the little amount of dealings I've personally had with them - I was really impressed. While it's one of the smallest dollar amounts I have in an investment - it's one
of my biggest gainers... but I bought WAY AHEAD of when I thought I saw the economy turning the corner.

EITHER ONE - when we're going in to a better housing market with incrementally higher mortgage rates etc - is a good investment if you need "Financials" in your portfolio.


Sorry -- It's EARLY -- and I had a long drive yesterday -- Forgot my train of thought:


What I bought "the banks" for (I chose WFC) -- is the RETURN OF them paying dividends comparable to what they did before the big bank debacle. IF --- ALWAYS A BIG IF -- the government allows them to do that.... and if they return to profitability and WANT to do that -- then the price will/should rise -- giving a double whammy --- bigger dividend and capital growth.

That's just it - if the FEDs green light BofAs capital plan then that $18 is attainable. Otherwise, looks like I'll be owning BAC for awhile.

This particular stock is just a hand of blackjack for me. Not really a portfolio stock at this stage.

[GregWeld]

Please note - IF YOU READ THIS -- I miscalculated (used the wrong math for this purpose!) so look at the dividend numbers again!





This thread is not about individual stocks or what to buy or when to sell etc.... that's just a whole 'nother problem maker... My personal posts have always been intended to get you to think - and to look at investing with a different mindset. Obviously in order to do that - we need to discuss various names as examples etc.

With that in mind -- I was reading an article that mentioned COSTCO (COST) and decided - as I usually do - to go check it out. I wasn't interested in buying the name - nor do I own any of it. I just like looking around - staying "abreast" of the market etc.


What I was surprised to see - is that a name that doesn't particularly excite me as a dividend payer with it's paltry 1.22% dividend - is this...

A five year chart shows that this name (and I'm just using this name as an example here!) had more than doubled in price (UP 132% in five years) AND had doubled it's dividend payout. 5 years ago this stock was paying 18 cents per share -- it's last dividend payout was 36 cents per share.

WOW comes to mind.

So in overlooking the name because of the lousy PERCENTAGE payout -- I never bothered to really look further into it. But obviously a stock that doubles in 5 years - and doubles it's dividend payout WOULD HAVE / COULD HAVE been a good solid investment!

So my take away from this little eye opener is that from now on I will look a little deeper into a companies history of RAISING IT'S DIVIDEND.

Here's why that's important.

If you'd have bought the shares in 2009 -- and paid $44.97 per share -- and at that time they'd have paid 18 cents per share... for a dividend payout of 1.6% (don't miss the POINT here).... it would have been a real HO HUM -- but maybe bought for the GROWTH of this retailer.... but NOW... fast forward to the last dividend - which is paid - and is calculated as a percentage of return on investment.... You're now getting paid 3.2% AND YOU'VE DOUBLED YOUR MONEY in the meantime!

Okay -- Not a bad "long term" investment - with a 5 year TOTAL RETURN of 171%. So let's not overlook a companies HISTORY of raising it's payout to it's shareholders. That's how people get rich.


NO I'm not buying it. I can't buy dividend payers at 1%. I live off my money NOW...but if I was younger and starting out -- I'd certainly say this company (or more importantly OTHERS that have similar history) is one to look at because of it's history of rewarding the shareholder.

[So Cal Camaro]

Greg, There are quite a few of these types of stocks out there....I have TJX which is discount retailers group, bought it back in 2008, worth triple what I paid for it with 1.3% dividend....not a bad stock for growth and getting a dividend too.

The reason I bought this stock, I happened to be in a Marshall's with a line going half way down the center of the store on a Wednesday night...I asked the clerk if it was always like this and when she said yes, I checked a few other locations, then checked the stock price and figured this one had to go up based on sales. Family Dollar stores was another that I saw from my cross country trip for Power Tour in 2010 was one of the few stores that always had a lot of cars in front of them....

Inspiration for stock buys are always around you, just have to be paying attention to what others are not....

Dannie

[GregWeld]

Dannie --

The problem becomes - for INVESTING 102 - which is all about NEWBIE investors... trying to pick a growth stock is far far harder to do than to pick great (best of breed) names that pay real decent dividends in good times and bad.

The entire thread has been about getting people to BEGIN to invest -- see some success... and to CONTINUE to invest.

Most people only need 10 different stocks in their accounts -- probably 20 maximum... and there's a ton of great names with great dividends that they need to own before investing for "growth". Because they can get growth AND a solid dividend giving them serious total returns.

[GregWeld]

That's just it - if the FEDs green light BofAs capital plan then that $18 is attainable. Otherwise, looks like I'll be owning BAC for awhile.

This particular stock is just a hand of blackjack for me. Not really a portfolio stock at this stage.




If you look at almost any chart -- you'll see why I went with WFC over BAC... The 10 year is one of the worst charts out there = With BAC's share price DOWN 61% while WFC is UP 73% over that same 10 year period.


Those numbers are HUGE by WIDE... and can make one hell of a difference in your investment portfolio.

[barrrf]

Totally agree with you Greg. And if I were broadening my portfolio and looking to add another bank stock - I would look at WFC.

That why I mentioned this is a short term stock for me. Like 2 months pending FEDs findings with BACs books. Its only 620 shares worth. Not 15000.

I mean, Im not lookin for much. Just 20% lol.

[Vegas69]

I've personally dealt with both banks many times throughout my real estate career. B of A's name is mud in the business. Agents don't want to accept offers from buyer's that are obtaining mortgages from them. They tend to close way late. On the short sale side of the equation (debt forgiveness), they are a bit weak in my opinion. They just don't fight very hard.

Wells Fargo isn't perfect on the lending side but I've had more good experiences than bad. I've also dealt with them on short sales and they have required cash contributions to short sale, even in hardship situations.

I do bank with Wells and have for 15 years. I've always been happy with them and many times I'm greeted with a smile and hello when I walk in the door.

Sounds like a company that meets the conditions Greg has laid out.

[Tony_SS]

Speaking of BoA...

http://blogs.wsj.com/moneybeat/2014/05/15/soros-sells-out-of-j-p-morgan-bank-of-america-citigroup/

[GregWeld]

Very good insightful info Todd!


I've always said that investing is made easy - if you just look around at what you do every day.... and who you deal with on a regular basis. Gasoline - cars - banks - stores. Do you like the way they do business? Do you like the feel of the store and the merchandise? Are they busy? Do you feel good about doing business with them. Nothing too rocket science about that... because chances are if you do -- others feel the same way. Then you dig a little deeper and see how their stock stacks up to the competition...






I've personally dealt with both banks many times throughout my real estate career. B of A's name is mud in the business. Agents don't want to accept offers from buyer's that are obtaining mortgages from them. They tend to close way late. On the short sale side of the equation (debt forgiveness), they are a bit weak in my opinion. They just don't fight very hard.

Wells Fargo isn't perfect on the lending side but I've had more good experiences than bad. I've also dealt with them on short sales and they have required cash contributions to short sale, even in hardship situations.

I do bank with Wells and have for 15 years. I've always been happy with them and many times I'm greeted with a smile and hello when I walk in the door.

Sounds like a company that meets the conditions Greg has laid out.

[GregWeld]

Just waiting for a CNBC report on --- "you need way more than a million dollars to retire on".... will be interesting to see what they say.


I have been saying this for a long time... A guy can only make 5% or so on a million bucks -- that's 50 grand a year GROSS.... you will be paying taxes on that gross! 50 grand a year -- is now NET 40 grand or less depending on where you live. Add some Social Security -- and factor in INFLATION.... Retirement isn't going to be the golden years. You're going to need a RISING income -- and capital growth... in order to live for an additional 20 plus years after retirement.


I know this info sucks - but facts sometimes suck.

[im4u2nvss]

A guy can only make 5% or so on a million bucks -- that's 50 grand a year GROSS.... you will be paying taxes on that gross! 50 grand a year -- is now NET 40 grand or less depending on where you live.

Quick question. On a Roth IRA account, are all gains tax free(growth and dividends)? I believe it would be hard to get to a million$ in a roth IRA given annual contribution limits, unless you made some lucky picks.

[GregWeld]

Quick question. On a Roth IRA account, are all gains tax free(growth and dividends)? I believe it would be hard to get to a million$ in a roth IRA given annual contribution limits, unless you made some lucky picks.




FIRST ---- YES all growth and dividends are completely TAX FREE... at withdrawal. ROTH IRA was the greatest gift from the tax man - EVER.


Second - Yes you're correct. Unless you began contributing the maximum to a ROTH IRA in your teens or early 20's. But this is just ONE AVENUE for retirement planning. ROTH contributions are AFTER TAX = which is why they come out tax free... You can still participate in a PRE TAX retirement account to it's maximum as well... And there's nothing saying you can't also invest outside the ROTH and IRA/401K type accounts to reach your personal goals.

That's the whole thing that is wrong with "people" in general -- they get focused on only being able to save in one account or the other - to the exclusion of other proper investing. Too bad -- because it's THEIR future and it will suck if they don't put money away for when the gravy train stops.

[GregWeld]

Here's a point that was made on CNBC when discussing the current interest rate environment -- and how this affects retired people and retirement plans.


With low interest rates -- the returns on capital have been pretty terrible... as the safer investments that used to be good for retirement accounts are paying crap rates of 2 and 3%... That's killing spending and income for a large segment of the population.

With HIGHER rates - comes better income... at the same risk level. What people have had to do is to raise their risk level to get the same income. This is why you can really only "expect" to get 4 or 5% because you have to trade off the income potential with the risk potential. This might seem easy to do but it's not. Once you have no more ability to generate income other than off your investments... you become a different investor. You do not want to lose capital! You don't have the ability to replace it if you do. That's why you take more risk when you're YOUNG... because you have many years to stage a comeback and you just might end up being a big winner if you've made good investments.

Personally I'm always hoping for raging inflation... I'd love to invest and make a 10% return in relative safety! That would double my income... WTF would be wrong with that?! But I'm not buying stuff where the inflation that comes with that, would hurt me. It kills everyone else - and especially those with businesses to run and overhead and rents etc.

WE WILL SEE RISING RATES... period - end of story. They're not going lower from here. What will kill EVERYONE is if they rise too quickly. If they just inch up and hold steady and then inch up a little more -- that's good because it means business is good - and people have time to adjust to the costs etc. So it's the RATE AT WHICH THEY RISE is what's important. That's what the FED is trying to control right now. We'll see if they can contain it.

[GregWeld]

This is pretty cool stuff! It doesn't make the shares worth more.... but if you go back to the days of Dell and Microsoft and Intel et al --- the splits were what made people really rich. They'd split and double and split and double. Not saying that is going to happen here... because the company is already "fairly" valued. But it's still kool for you NEWBS to watch and see what happens -- and if you own it - you're going to have 7 times as many shares! Then - if the shares just go up 50 cents -- that's really $3.50 and that's what you want to see.

This stock is already "volatile" -- in that it moves 5 or 6 or 7 dollars now... but let's see if you get a $5 move --- and it's multiplied by 7!! EEEEEEHHHHHAAAAA









Apple, Inc to split stock 7-1 after Friday June 6 market close

[barrrf]

So if I understand this correctly - If I owned 1 share of Apple at $100 after the split I would then own 7 shares @ $14.29?

Meaning if said share value changes by $1 then I'll be making/losing $7 vs the $1 I would've made/lost if the split didn't happen?

[GregWeld]

So if I understand this correctly - If I owned 1 share of Apple at $100 after the split I would then own 7 shares @ $14.29?

Meaning if said share value changes by $1 then I'll be making/losing $7 vs the $1 I would've made/lost if the split didn't happen?




CORRECT.


You'll get 7 shares for every one you owned --- but of course, you'd also divide the current price by 7

On MONDAY they'll begin to trade at the new split adjusted price.


Will be interesting to see if people BUY because it's now "affordable" -- or if the current holders SELL because now they have 7 times as many shares.

We need more buyers than sellers... it's just real simple that way. :>)

[barrrf]

Guy at work claims he owns Apple stock. He was all on the fence about what to do with the stock - this morning its a little late. Might as well hold it now.

I know a lot of people who want to buy it just because of the name. Those who know nothing about trading. That may be enough to increase the value of the stock in and of itself.

Lettuce hope there are more buyers than sellers.

[Vince@Meanstreets]

Aapl is a long stock. He shouldn't panic, $1000 dollars worth is still a $1000 worth of shares. He just has more to play with.

[GregWeld]

I've discussed here many times - that this is NOT a stock pickers thread... but that we have to use stocks to discuss all the things that you should be paying attention to in order to either invest (buy) or to know when to sell... or when to take a profit (taking some off the top when you have a nice gain).. or perhaps when it might be prudent to "average down".


I've often stated that paying attention to FUNDAMENTAL changes to the businesses you're invested in is probably the single most important "metric" to good investing. These fundamental changes can be good - or they can be bad.

It would take three pages to describe "fundamental"... so let's just make it real easy and say that it's anything that's big and basic that you would ASSume would be important longer term.


So this morning - let's use McDonalds (MCD). I just read that SALES have slipped again. Down 1%... and that the CEO has once again stated they have some "challenges".

I sold out of my MCD position well over a year ago based on my personal feelings -- and I did that because I felt (gut hunch) that peoples eating habits are changing. There seems to be a movement for healthier eating habits - and I'd include myself as being one of those folks that pays more attention to how they're eating. I eat WAY less hamburgers and milkshakes than I used to (I'm still short and fat - but WTF - I feel good about myself! LOL). I also felt the stores quality was slipping. Cold food - dirty tables and floors - and just generally a slip in way I personally viewed MCD retail outlets. That, to me, is FUNDAMENTAL. And I've said that investing is simple if we just look around and react to what we see/feel.

Fundamentally - when you have SLIPPING SALES... i.e., sales going DOWN - that doesn't bode well for an investment. So if you compare this to another company in the same space - let's say Chipotle Mexican Grill (CMG) and their sales are UP 10% (just making this up)... then maybe there's something you should be thinking about. Don't just let things like this slip by you - open your mind to INVESTING - and ask yourself if there's a better place for your money... whatever that is.... Just don't pass off fundamental changes, shrug your shoulders, and bury your head in the sand because you actually have to THINK about your investments.

Look at the 10 year chart of Wells Fargo Bank (WFC) versus Bank of America (BAC)... the difference is staggering! And one made your portfolio pretty snappy and one sunk you like a boat anchor... (I own WFC)

If Apple computers (AAPL) stores were absolutely swamped with customers last Xmas - and this year you walk by and there's nobody in them - That is a fundamental change you should pay attention to! (I own this name)

One of the reasons I advocate for owing fewer names (but no more than 5% in any investment -- is so that you can scan the news quickly for information on your investments. If you own 50 names - you won't even be able to remember what they are! If you own 10 or 20 -- you can stay on top of 'em.

[Code510]

Not to change the subject y'all have going....but I actually am looking at investing.

This morning I was driving to work and it just hit me: I need to start doing something for retirement. There's a lot of reasons for this thinking, but those aren't important.

When I was younger, I had a Roth IRA with ING Direct. During college I cashed it out in order to live and keep my debt to a minimum. It was only about 5-6K or so, not 50-60K.

I see that ING Direct is now owned by Capital One 360. Should I start another Roth IRA with them? I do love how you guys buy and sell stocks...and I want to get up to that level, but right now time isn't affording me that luxury, nor do I have the skill/knowledge to do that.

So here's my question: What company should I start a Roth IRA with?

Thanks for the help guys!

[toy71camaro]

Not to change the subject y'all have going....but I actually am looking at investing.

This morning I was driving to work and it just hit me: I need to start doing something for retirement. There's a lot of reasons for this thinking, but those aren't important.

When I was younger, I had a Roth IRA with ING Direct. During college I cashed it out in order to live and keep my debt to a minimum. It was only about 5-6K or so, not 50-60K.

I see that ING Direct is now owned by Capital One 360. Should I start another Roth IRA with them? I do love how you guys buy and sell stocks...and I want to get up to that level, but right now time isn't affording me that luxury, nor do I have the skill/knowledge to do that.

So here's my question: What company should I start a Roth IRA with?

Thanks for the help guys!

Welcome to the group!

As far as where to open the account, I would suggest somewhere you're comfortable with (ie. do you need a local branch or no? personally, Having a branch local does nothing for me). And the costs.

I opened mine through Sharebuilder, via Costco. If your a Costco member to to their Services page and check out the link through to Sharebuilder. They usually give you a credit for opening an account. On top of that, their market trades are $6.95. Which is on the cheaper side of the industry if i recall. Their "Auto investment" trades (happens on Tuesdays) are only $2.

By the way, they're also owned by Capital 1 now. I've been using them for several years and havent had any issues.

[GregWeld]

Not to change the subject y'all have going....but I actually am looking at investing.

This morning I was driving to work and it just hit me: I need to start doing something for retirement. There's a lot of reasons for this thinking, but those aren't important.

When I was younger, I had a Roth IRA with ING Direct. During college I cashed it out in order to live and keep my debt to a minimum. It was only about 5-6K or so, not 50-60K.

I see that ING Direct is now owned by Capital One 360. Should I start another Roth IRA with them? I do love how you guys buy and sell stocks...and I want to get up to that level, but right now time isn't affording me that luxury, nor do I have the skill/knowledge to do that.

So here's my question: What company should I start a Roth IRA with?

Thanks for the help guys!





This has been covered here many times --- and there's really no right answer except to use a "discount broker". Brokerage fees can, and do, affect your returns... so you want to keep those costs low.

Personally I use several - but for different reasons. Some investments I need help with - some I don't. For me personally - I don't want to have too much at any one company - so I spread it around to reduce risk.

But the point is - if you're comfortable with the website - and or just like a particular company - then go with that one. Investing is more about putting money away - INVESTING (not gambling) and reaping the rewards over time.

When you feel you have some time -- go to page one and start reading... it will help you overall and that's what this thread has tried to be about. Not WHAT to do but WHAT TO THINK ABOUT AND WHY....

[barrrf]

I've discussed here many times - that this is NOT a stock pickers thread...

Soooo where is that thread then?

:G-Dub:

[GregWeld]

Soooo where is that thread then?

:G-Dub:




Think about it this way.... Catch a man a fish - or teach him how to fish...

[Vince@Meanstreets]

Think about it this way.... Catch a man a fish - or teach him how to fish...

was he asking what stream you like or what fish taste the best?

[barrrf]

Think about it this way.... Catch a man a fish - or teach him how to fish...

That's a fine way to put it!

What about the guys that day trade for fun? I mean there is The Street, Motley Fool, ect........but it would be cool to hear some thoughts or get speculation from car guys, not from stiffs in suits.

I don't know - prolly :wrongforum:

[Code510]

This has been covered here many times --- and there's really no right answer except to use a "discount broker". Brokerage fees can, and do, affect your returns... so you want to keep those costs low.

Personally I use several - but for different reasons. Some investments I need help with - some I don't. For me personally - I don't want to have too much at any one company - so I spread it around to reduce risk.

But the point is - if you're comfortable with the website - and or just like a particular company - then go with that one. Investing is more about putting money away - INVESTING (not gambling) and reaping the rewards over time.

When you feel you have some time -- go to page one and start reading... it will help you overall and that's what this thread has tried to be about. Not WHAT to do but WHAT TO THINK ABOUT AND WHY....

I do realize that my question was kind of like "What's the best shade of blue?" haha.

That is really smart though, putting your money across multiple channels. For me personally, I have a house and its currently being rented out. For the last two years, that has been my "retirement" fund. I'd actually like to get more houses and rent them out, as I like tangible assets.

On top of that, I've been focusing on becoming debt free. I'm getting close to that(minus the mortgage payments). Now that I have some extra money available, I'd like to start investing some of that into some sort of Roth IRA.

I'll have to start reading all these pages and teaching myself.

[GregWeld]

That's a fine way to put it!

What about the guys that day trade for fun? I mean there is The Street, Motley Fool, ect........but it would be cool to hear some thoughts or get speculation from car guys, not from stiffs in suits.

I don't know - prolly :wrongforum:




See -- the thread title is INVESTING 102.... if you go back and read from the beginning you'd see why it's called that... and not GAMBLING 101


Jokers and fools day trade... rich guys get rich because they INVEST.... there is a magnitude of order of difference. If you want to - you can start a Day Trading thread and I'm sure you'd get some followers and plenty of discussion on that topic.

[Vince@Meanstreets]

What Greg is trying to say is you have to understand the tools you are using to get the results that you want.

I don't know anyone that trades for fun. It's about investing and collecting a pay check when you are retired.

Read the thread and you'll soon get the point around page 275.

The tools and advice are there you just have to use them to make the choice of what suites your needs.

[WSSix]

I do realize that my question was kind of like "What's the best shade of blue?" haha.

That is really smart though, putting your money across multiple channels. For me personally, I have a house and its currently being rented out. For the last two years, that has been my "retirement" fund. I'd actually like to get more houses and rent them out, as I like tangible assets.

On top of that, I've been focusing on becoming debt free. I'm getting close to that(minus the mortgage payments). Now that I have some extra money available, I'd like to start investing some of that into some sort of Roth IRA.

I'll have to start reading all these pages and teaching myself.

Welcome to the club. Good luck to you too. I have Vanguard for my Roth and Fidelity for company match 401k. I prefer the way Fidelity has their website laid out. I know Greg has said he likes his Schwab account and the tools available to him on the website. So you might want to check out the different company's websites and see which one you like best. The various discount brokerage houses are or should offer Roth IRA accounts with low costs. You can choose your own stocks like I have done or put it into a targeted retirement account which will adjust the risk level through the years as you near retirement age. There's a lot out there so be sure to read and ask questions. You'll quickly learn what you're interested in and what your risk level is going forward. This will help you concentrate on what matters and help keep you from being overwhelmed as the options.

[barrrf]

MMmkay then............I guess back to Investing 102

Question about diversity (just searched and found that Greg likes to be as diverse as possible and like 8 segments). Im in 5 different segements - is that enough? Its the bulk of the paltry $100k I have put away since starting work 10 years ago.

Banking
Energy (solar)
Tech
Industrial (Aerospace Mfg)
Shipping (Rail - not sure if this the right category though)

Looks good? Thoughts on those sectors?

[GregWeld]

MMmkay then............I guess back to Investing 102

Question about diversity (just searched and found that Greg likes to be as diverse as possible and like 8 segments). Im in 5 different segements - is that enough? Its the bulk of the paltry $100k I have put away since starting work 10 years ago.

Banking
Energy (solar)
Tech
Industrial (Aerospace Mfg)
Shipping (Rail - not sure if this the right category though)

Looks good? Thoughts on those sectors?



There is no way to always follow every "rule" -- which really should be thought of as "guide lines" rather than rules...

Owning 5 different sectors is excellent overall.

But what's really important -- is which names you own in each sector.... Do they pay you to own them (do they pay a dividend)?.... and what's the name you own TOTAL RETURN over a longer period of time (5 and 10 years) as compared to the other companies in that sector (in other words - their competitors).

Doing this research yourself -- gets you involved in understanding the possibilities and can affirm (or not - LOL) why you are invested in them.

Investing is about MAKING MONEY.... and MAKING MONEY LONG TERM. So take a look at every name you're invested in - and look at PERCENTAGES more than dollar amounts -- because you can directly compare percentages. Obviously 10% is better than 2% -- but you might have a gain of $10,000 on the 2% earner.... and only a gain of $1,000 in the 10% earner. Obviously you'd be way farther ahead having that reversed!

But what you're really looking for is the TOTAL RETURN on your investments. That's the ultimate metric. That's a combination of the dividend (if any) and the growth of capital. It doesn't make any difference where that total return comes from - as long as it compares favorably to what else you could have invested in.


Just looking at Bank of America (BAC) vs Wells Fargo Bank (WFC) over the last 5 years ---


Total return for BAC -- 33.7%


Total return for WFC -- 131.7%


So both are "Financials" --- one more than doubled your money in 5 years -- one only added a 1/3rd


There is no better comparison than TOTAL RETURN on your investment IMHO. You need to look at everything you own and make these kinds of comparisons and see how your's stack up. Sometimes it's a real eye opener.

[barrrf]

Greg, thanks for all of your input over the last few years here.

How did you get so knowledgeable? Just years of experience and paying attention and learning what the numbers mean?

[GregWeld]

Greg, thanks for all of your input over the last few years here.

How did you get so knowledgeable? Just years of experience and paying attention and learning what the numbers mean?



I have been managing large sums of money for 30 years... and yes... experience is sometimes the best teacher. And yes -- I once day traded for a number of years. That experience will only teach you how to pay the maximum income tax... and how NOT to become wealthy.

[CamaroMike]

I currently have a "loss" but my portfolio is worth more than what I started with. I love dividends!

[SSLance]

Just had an interesting email show up in my inbox, I bet several of you did as well. It is in regards to a company going public and the email is an invite to participate in the IPO. It is kind of a "friends and family" deal but the company is including their customers on the friends and family list.

I'm torn, and this is probably more of a "gamble" type investment than an "investing 101" type investment...but I like the company and I like their products which are hugely successful. One just doesn't know if the success will continue and show itself in the growth of the share price.

There are limitations that are included with the email about how to share it so I won't share it here, but I'm curious if anyone else got it and what do you think about it?

[WSSix]

I haven't received anything like that, Lance. I'd approach it as a gamble possibly since I'm not sure what company you're talking about. If they make a good product that is popular, I think I would seriously consider taking the gamble if I had some money to play with.

Of course, I'm assuming this isn't some sort of scam, right? I watched Wolf of Wall Street couple weekends ago so yeah...

[SSLance]

Well, a quick google search shows it's not totally secret...

http://www.reuters.com/article/2014/06/11/us-gopro-ipo-idUSKBN0EM0Y620140611

I think you have to have a link from the email to get into the friends and family deal though...

[gearheads78]

Well, a quick google search shows it's not totally secret...

http://www.reuters.com/article/2014/06/11/us-gopro-ipo-idUSKBN0EM0Y620140611

I think you have to have a link from the email to get into the friends and family deal though...

I don't see that as a long term money maker. Might pop and catch a wave up but it could flop just as quick.

[GregWeld]

Well, a quick google search shows it's not totally secret...

http://www.reuters.com/article/2014/06/11/us-gopro-ipo-idUSKBN0EM0Y620140611

I think you have to have a link from the email to get into the friends and family deal though...




I'd be all over it. But keep it real. Only money you can truly afford to play with.


In 2004 I invested in a start up. That $385,000 returned $20M in 2010. So it's okay to take on risk if the rest of your life is good to go.

[WSSix]

I would too now that I see who it is for. I think it might turn out good. GoPro has really done a lot with their cameras.

[So Cal Camaro]

I do realize that my question was kind of like "What's the best shade of blue?" haha.

That is really smart though, putting your money across multiple channels. For me personally, I have a house and its currently being rented out. For the last two years, that has been my "retirement" fund. I'd actually like to get more houses and rent them out, as I like tangible assets.

On top of that, I've been focusing on becoming debt free. I'm getting close to that(minus the mortgage payments). Now that I have some extra money available, I'd like to start investing some of that into some sort of Roth IRA.

I'll have to start reading all these pages and teaching myself.

While not a Roth IRA, one way to buy stock over time is through direct investment plans, Computershare has many of the blue chip dividend type stocks with reinvestment plans...https://www-us.computershare.com/Investor/3x/Plans/PlansList.asp?bhjs=1&fla=1&cc=us&lang=en or Sharebuilder is another good resource that has Roth IRA's, part of the Capital One group.https://www.sharebuilder.com/sharebuilder/accountsetup/default.aspx

I have participated in a number of Computershare stock purchase programs, you can contribute as little as $50 month and over time with dividend reinvestments, adds up...

[Code510]

While not a Roth IRA, one way to buy stock over time is through direct investment plans, Computershare has many of the blue chip dividend type stocks with reinvestment plans...https://www-us.computershare.com/Investor/3x/Plans/PlansList.asp?bhjs=1&fla=1&cc=us&lang=en or Sharebuilder is another good resource that has Roth IRA's, part of the Capital One group.https://www.sharebuilder.com/sharebuilder/accountsetup/default.aspx

I have participated in a number of Computershare stock purchase programs, you can contribute as little as $50 month and over time with dividend reinvestments, adds up...


Awesome, Thanks for the tips on both of those. Haven't heard of the Computershare before.

[barrrf]

What do you guys think of investing in one of the companies pushing forth development of the new protocol IoT (Internet of Things).

Like Cisco? Or?

It looks like a solid 7-10year investment.

[SSLance]

I'd be all over it. But keep it real. Only money you can truly afford to play with.


In 2004 I invested in a start up. That $385,000 returned $20M in 2010. So it's okay to take on risk if the rest of your life is good to go.

Well, my brokerage house doesn't have access to the pre-IPO shares, so it looks like I'll have to open an account with Level3 to get any of the pre release shares or just buy it on the open if I want.

I still haven't decided what to do...

[GregWeld]

Well, my brokerage house doesn't have access to the pre-IPO shares, so it looks like I'll have to open an account with Level3 to get any of the pre release shares or just buy it on the open if I want.

I still haven't decided what to do...

Typically, in order for any brokerage to offer IPO's you have to be a pretty big customer. Perks like that usually start when your account is 10MM plus.

[GregWeld]

Home sales info just came out this morning and they're UP smartly.... even though there is some "moderation" in housing price RISES... and that's because the inventory is up.

I put this house up for sale the middle of May and it sold in TWO HOURS for almost full price... and the only item I had to fix on the inspection was to have the A/C serviced. The buyer is all cash - no contingencies. This seems to be the "norm" according to my two buddies that are agents. I only mention this because of the real estate connection.

So what?

Well... to me - it sends up the old interest rate balloon. When people are borrowing - then interest rates TEND to rise with demand. Yet - we still have the federal government pledging to keep rates low.. We'll see how that plays out because nobody really knows.

In the meantime the "market" seems to be just going up day after day. Yipppeeee. BUT -- I'll remind everyone -- the market doesn't go straight up day after day forever. So remember these fantastic days when the market turns against us.

Personally I'm all in.... I have the lowest cash positions that I've had in a number of years actually. And for now - that's worked out really well. There's an age old saying - "don't fight the fed". Everyone I talk to says their business is MUCH better... that they learned A LOT about business and managing their overhead etc during the downturn - and that they intend to keep their fixed costs in check and increase their profit. But more importantly - they learned the value of having low debt. That has to be good for the country in general.

[GregWeld]

Well, my brokerage house doesn't have access to the pre-IPO shares, so it looks like I'll have to open an account with Level3 to get any of the pre release shares or just buy it on the open if I want.

I still haven't decided what to do...




GO PRO is selling a million cameras PER QUARTER....

Here's where I'd be concerned regardless of who or what company we are talking about... doesn't make any difference if it's an IPO or a big company like APPLE.

Every QUARTER a company reports it's earnings... that's every three months guys! And every three months - they have to meet or beat the street. Sales - profits - unit sales - and on and on... have to be growing. IF not - the stock gets crushed. Never forget this key metric. The entire market is all about growth and growth gets rewarded - misses get clobbered.


So regardless of whether or not a company is selling cameras or cell phones or bread... Your investment needs to be based on the future - and what the market thinks they'll be able to do going forward. End of story.

[CamaroMike]

I recently started an account for long term growth. Can you guys give me some input on if its a good idea and if I am diverse enough?

Im currently at 4 companies $1k basis in each company. I plan on adding at $1k increments until I hit 15-20 companies and reinvest all my dividends. Of course if there are any opportunites within I will add/subtract accordingly to how I feel about how that company is doing.

Currently with Ford, KMP, Att, Home Depot. Am I on the right path with diversity and my slow way of getting this account rolling for some big long term gains?

[GregWeld]

I recently started an account for long term growth. Can you guys give me some input on if its a good idea and if I am diverse enough?

Im currently at 4 companies $1k basis in each company. I plan on adding at $1k increments until I hit 15-20 companies and reinvest all my dividends. Of course if there are any opportunites within I will add/subtract accordingly to how I feel about how that company is doing.

Currently with Ford, KMP, Att, Home Depot. Am I on the right path with diversity and my slow way of getting this account rolling for some big long term gains?




You are doing quite well! Congrats!!



Remember that your "big long term gains" are going to come with long time lines... Money doubles about every 7 to 10 years. That's IF you stay invested and you reinvest the dividends. It's all about COMPOUNDING.... 2 becomes 4 - 4 becomes 8 - 8 becomes 16 - 16 becomes 32 - 32 becomes 64....

Note how the last "doubling" is also the biggest?!?!?! 64 becomes 128

That's how ordinary earners become wealthy retirees. It's not rocket science. It's common thinking - Saving first versus pissing away every dime... and avoiding debt on high interest rate stuff like 20% credit cards.

I was discussing retirement and spending with a retired buddy yesterday. This guy never made 50K a year in his life -- and he's a millionaire just in stocks - not counting his house. They're thinking about selling the current house (paid 49K - selling for 850K and has been paid off for at least 10 years) and moving to a lower cost - less stressful area. The house they're looking at is twice as nice and half the cost. So their lifestyle will improve and they'll pocket some cash which will create even more retirement income. His biggest worry.... where they're going to take their Airstream next.

His biggest mistake -- investing in 10 year treasury bonds instead of stocks. He made the switch to stocks with my help about 15 years ago. He'd have 3 times the net worth now - if he'd have bought stocks 40 years ago instead of bonds... but regardless of that "mistake" the point is that he's pretty well set.

[CamaroMike]

You are doing quite well! Congrats!!



Remember that your "big long term gains" are going to come with long time lines... Money doubles about every 7 to 10 years. That's IF you stay invested and you reinvest the dividends. It's all about COMPOUNDING.... 2 becomes 4 - 4 becomes 8 - 8 becomes 16 - 16 becomes 32 - 32 becomes 64....

Note how the last "doubling" is also the biggest?!?!?! 64 becomes 128

That's how ordinary earners become wealthy retirees. It's not rocket science. It's common thinking - Saving first versus pissing away every dime... and avoiding debt on high interest rate stuff like 20% credit cards.

I was discussing retirement and spending with a retired buddy yesterday. This guy never made 50K a year in his life -- and he's a millionaire just in stocks - not counting his house. They're thinking about selling the current house (paid 49K - selling for 850K and has been paid off for at least 10 years) and moving to a lower cost - less stressful area. The house they're looking at is twice as nice and half the cost. So their lifestyle will improve and they'll pocket some cash which will create even more retirement income. His biggest worry.... where they're going to take their Airstream next.

His biggest mistake -- investing in 10 year treasury bonds instead of stocks. He made the switch to stocks with my help about 15 years ago. He'd have 3 times the net worth now - if he'd have bought stocks 40 years ago instead of bonds... but regardless of that "mistake" the point is that he's pretty well set.

Thanks! Thats very inspiring considering I have time on my side :P. Compunding is awesome when it works in your own favor! Im not a big spender either so that helps quite a bit.

My next question is when interest rates rise where do I put my new investment money? Do I keep going into stocks or diversify a little more with CD's or something since they should be paying with higher interest rates?

[GregWeld]

Thanks! Thats very inspiring considering I have time on my side :P. Compunding is awesome when it works in your own favor! Im not a big spender either so that helps quite a bit.

My next question is when interest rates rise where do I put my new investment money? Do I keep going into stocks or diversify a little more with CD's or something since they should be paying with higher interest rates?



Don't try to play that game. You'll be in the wrong side of that trade every time. It's nearly impossible to "time" the market - which includes Bonds.

Historical data will show you that the stock market is the best money maker/compounder over every other investment. Bonds only have capital growth when rates are going DOWN and your interest rate is higher. The problem with that strategy is that you've lost the compounding affect of dividend reinvestment. If you go back thru the thread -- you'll read about dividend reinvesting and why it works. You get the dividend every three months... and every three months you buy shares at whatever price they happen to be that day. What happens with that is they buy MORE shares at lower prices and fewer when they price is high... the more shares you own the more dividend is paid buying ever more shares which pay more and more dividend.

A bond pays a flat rate of return and is only going to give you your capital back dollar for dollar - there is no reinvestment option. So while you hide behind the 'safety' of knowing you'll get back your initial investment.... you've lost out on the capital growth.

Many companies RAISE their dividend payouts. When that happens - the stock you bought for $10 that paid 4% -- is now getting 6%.... and the $10 is now trading for $13.

This is how Warren Buffet gets his entire initial investment in Coke (KO) back in dividend EVERY YEAR.

You have Home Depot (HD).... in 2004 they paid 8.5 cents per share per quarter and the stock price was $37.... today the share price is $80 and they're paying .47 cents per quarter. Compare that to a 10 year bond where you got 4% per year and got your money back after 10 years.... UGH.

Just keep putting money in the market - good market or bad market... reinvest the dividends.... stay with being diversified. Keep it real simple... and when you get scared... refer to a 10 year chart - ignore the little ups and downs (the squiggles in the line) and see that the chart is lower on your left and higher on your right despite all the little steps along the way.

[CamaroMike]

Wow, thats really simple!!! LOL! I always make things more complicated than they really are. Thanks again Greg!

[rocketrod]

Here is a simple example NOT a recommendation to buy.

I bought MO (now called Altria) in Jan 2008. Shortly afterwards they spun off PM (Phillip Morris) with a special dividend so for each share of MO I owned, I received a share of PM.

MO stock price has since appreciated 80%, and in addition I receive a dividend, which has increased from 5.27% to 8.72% on an annual basis.

PM stock price has since appreciated 90%, and in addition I receive a dividend, which has increased from 4.17% to 7.61% on an annual basis.

The investment, with dividends, has more than doubled in 6.5 years.

In hindsight, my only regret is not reinvesting my dividends from the beginning as my returns would have been even better. I have since started re-investing my dividends.

[GregWeld]

Here is a simple example NOT a recommendation to buy.

I bought MO (now called Altria) in Jan 2008. Shortly afterwards they spun off PM (Phillip Morris) with a special dividend so for each share of MO I owned, I received a share of PM.

MO stock price has since appreciated 80%, and in addition I receive a dividend, which has increased from 5.27% to 8.72% on an annual basis.

PM stock price has since appreciated 90%, and in addition I receive a dividend, which has increased from 4.17% to 7.61% on an annual basis.

The investment, with dividends, has more than doubled in 6.5 years.

In hindsight, my only regret is not reinvesting my dividends from the beginning as my returns would have been even better. I have since started re-investing my dividends.




And it truly is just that Fn simple. It's when people try to get cute that it goes all wrong.

Simple ='s Great companies, a little diversity, reinvest the dividend, don't try to get all excited about the CURRENT value... You must trust Father Time. That all works when you stick to basics. When you start to loose your ass is when you try to game the IPO market -- or buy the "next hot stock" the traders on TV are talking about.... or you buy companies you know absolutely nothing about.

The other thing that works over time - is real estate that is RENTAL... not your own house (that is NOT an investment nor is it the piggy bank!). Having someone else make a mortgage payment for you --- so they're paying your loan down -- and the house or apartments go up in value at the same time over a LONG period of time. That's a winning strategy.

Getting into some cockamamy scheme your buddy just got into.... that's how you end up having nothing to show for your years of labor. You'll never find rich people that invest that way. EVER. You'll find SALESMAN on TV trying to get rich selling you their book about how they got rich (if they're rich... why are they on TV trying to sell you something?).

[rocketrod]

.......
You'll find SALESMAN on TV trying to get rich selling you their book about how they got rich (if they're rich... why are they on TV trying to sell you something?).Exactly....

[WSSix]

Every QUARTER a company reports it's earnings... that's every three months guys! And every three months - they have to meet or beat the street. Sales - profits - unit sales - and on and on... have to be growing. IF not - the stock gets crushed. Never forget this key metric. The entire market is all about growth and growth gets rewarded - misses get clobbered.


So regardless of whether or not a company is selling cameras or cell phones or bread... Your investment needs to be based on the future - and what the market thinks they'll be able to do going forward. End of story.

This is what happened to Whole Foods. You can even pull up the chart and see the very day this occurred. I feel it's a result of the traders not liking what they saw versus a fundamental change in the business. I'm confident that they will rebound and learn to better compete against the new companies that are slowly expanding and becoming more of a competitor to them. I'm in this for the long haul so I'm not worried. Now, if they don't turn it around and continue to lose out, I'll reevaluate my position. For now though, I'll hold tight and see.

[GregWeld]

This is what happened to Whole Foods. You can even pull up the chart and see the very day this occurred. I feel it's a result of the traders not liking what they saw versus a fundamental change in the business. I'm confident that they will rebound and learn to better compete against the new companies that are slowly expanding and becoming more of a competitor to them. I'm in this for the long haul so I'm not worried. Now, if they don't turn it around and continue to lose out, I'll reevaluate my position. For now though, I'll hold tight and see.



Tough call there Trey! Whole Foods (WFM) is in a very competitive space and margins for grocery stores are tighter than a frogs ass (water tight!). I think what is happening with this phenomena is that the other markets are waking up to the concept of better quality and organic... and then the margins WFM was able to make are going to be squeezed. At the end of the day -- while consumers will win -- the market only wants to see profits and growth.

My wife shops there... but I won't because I feel like I'm paying way too much when I shell out $300 for 3 bags of food.... and I'm just not the fussy and don't care about "organic" or not. That's a personal issue for sure.... but I think you have to have a pretty healthy budget (is that an oxymoron?) to shop there. This was a stock I owned early on -- but sold when I realized that I wasn't shopping there because of the above and thought -- WTF!?! If I feel that way - maybe others do to!

I still LOVE their stores! Clean - great vegetables - nice displays... but I also have to understand "Wall Street" and what it is they reward, or not.

In this case -- WALL STREET can get it real wrong -- and a great buying opportunity can present itself when others fear and doubt cause selling --- and then the company (any company) comes roaring back and proves the street wrong! I hope for your sake this is the case at WFM. The honeymoon period ended and now they have to show they can maintain sales growth and margins.

We're not trying to discuss the individual merits of each and every investment - but I felt this is worth discussing for 102 because it involves EXPECTATIONS and What the Street wants -- vs -- what we'd like because we like a particular company.

Now -- this is also called a "reset" on The Street.... where expectations are reset. This is where P/E comes into play... a metric that I typically discount because it doesn't mean much a lot of times -------- and then just as you say that ---- it does mean a lot. People will pay it forward (raising the P/E) when they think the growth is there... and then the shares becoming a shrinking violet when this doesn't prove out and growth slows or stalls. THEN the P/E becomes real important because now it's too high!

Part of becoming a savvy investor is to have some patience in these cases. No need to go running in to catch a falling knife at the first price drop (trying to average down etc). Sometimes a guy can just sit back and watch and wait - keeping a sharper eye on the ball and then try to be ahead of the game either dumping the shares or buying more at better prices just ahead of the nice upside surprise. The problem with that kind of investing is it takes TIME - and it takes some kind of inside track to the industry as a whole - and the economy - etc. Unless you have plenty of extra money - then that's usually just not worth the extra effort. Sometimes it's just time to hold and hope -- or sell and move on to a better investment that doesn't have to deal with the issue. This is when it becomes tough to be an investor. The age old "what to do"?

[WSSix]

I read a few articles on what happened since it caught me by surprise honestly. What I was able to find out, and why I say the traders simply didn't like it, was that they, WFM, simply didn't meet their goals. They still made a good profit but not what they expected. So they've adjusted their outlook going forward. I think they'll adjust to the new competition and be fine but it may not be what the traders want. I'm not a trader so I'm ok with that. The reasons I'm invested in them are still there so I'm good for now anyway.

It's funny though. I'm like you in that I don't care about organic etc. I actually only shop at Whole Foods when I'm near one, which isn't often, and it's usually their bulk trail mixes and bakery items I'm after. That's about it really.

[GregWeld]

The key is -- you've learned patience -- not to just freak out and sell indiscriminately... and you did your work by reading up and trying to understand the "cause". THAT IS GOOD INVESTING!!


Now you keep your nose to the ground and a keen eye on the company to make sure they're DOING what they say they can do. If it's all good - then you stay in... But you ALWAYS QUESTION and pay attention. That's one of the reasons I don't like to see people in too many investments -- they can't even tell you what they own after awhile.

[barrrf]

May or may not affect WFM in the long term - but they've been ordered to pay $800k for over charging. This was local to CA - it may or may not spread.

http://www.nbcnews.com/news/us-news/whole-foods-agrees-pay-800k-overcharging-customers-n140311

[SSLance]

Well, today is the day...

http://seekingalpha.com/article/2284963-gopro-ipo-set-to-launch

I didn't buy any before the open... should be interesting to watch though.

[GregWeld]

Well, today is the day...

http://seekingalpha.com/article/2284963-gopro-ipo-set-to-launch

I didn't buy any before the open... should be interesting to watch though.



They set the price at $24 which was at the high end of the original quoted.

What that means is high demand for the shares - so expect a nice pop at the open.

Here's where I'm at -- who cares where it opens - or where it ends the first day. I care about where it is a YEAR from now.... Cause it's easy to get all jacked up on this stuff only to have it fade into the sunset.... OR they are really kickin' it and it's a double or a triple. Ya just never know when they're IPO's.


GoPro - Be a Hero.... LOL

[GregWeld]

So this might be really interesting for Investing 102 to watch the whole GoPro IPO...

We watched the Facebook IPO - ultimately it was kind of a flop vs expectations of everyone that bought 2 shares was going to be an instant millionaire (LOL but close to the truth)

I was watching the interview with Nick Woodman, the CEO of GoPro, on CNBC this morning. He was asked a very simple question:

Going forward what's to stop competitors from jumping in and making a better camera - or getting into the business?

Frankly - he fumbled the response - which means he has no answer... He launched into a spiel about the "experience" and "sharing the human experience" blah blah blah - but he didn't have an answer for the actual question.

I think it's the best - most simple question..... if you're an INVESTOR... What does this (or any company) have that others don't - and what do they have going forward to continue making money and growing their business? It will be very interesting to see what GoPro has going forward. Right now they have the brand name! So did Walkman... So did BlackBerry.... I can think of many companies that OWNED their markets at some point. But then what happened to them?

Now - I think GoPro has an outstanding quality camera as far as video quality - I also (and I own a couple) think they suck to run... and I also have other video cameras that are just as good - and are easier to operate - but they're also more expensive and they're certainly not as "handy". So the big question is - can someone come along and make a better mousetrap? That remains to be seen. Apple iPod killed the Walkman... and when was the last time you bought anything with the SONY brand name?

I'm using this as a THOUGHT PROCESS -- not to discuss GoPro and whether or not they're going to have a huge IPO etc. But it will be interesting going forward I think and we can maybe revisit this 5 years from now.

[SSLance]

I've enjoyed reading comments from both sides of the GPRO camp, and there are two distinct different sides for sure. :peepwall:

I like the product and think they have the best thing out there...right now, but Greg is right in thinking that someone else may come along and make a better product eventually. To me this is about the difference between getting paid back for prior success vs continuing to create new success. None of us have any idea exactly how GPRO is going to be going forward...that is the gamble.

Now, there is also another factor in this...and this has been my bugaboo with the stock market as a whole for a long time now. Success as a company is one thing, success in keeping the company's share price high is completely different. If the naysayers of GPRO are eventually successful, Mr Market can tank the stock regardless of whether the company can stand on it's own two feet or not. This is where the CEO has to stop working in the company and start working "On" the company. He has to make the rounds both on the air and in private and keep on convincing the institutions that GPRO is a worthwhile investment. So far, I'm not sure he has been successful at this, maybe he can learn on the fly though.

[toy71camaro]

All good points about GPRO. Honestly, I was already in the thought process where Greg was when I heard about them going public... My first thought was "someone hasn't challenged them and made something better by now?"

I dont own one. I know a few people that do. Im a techie so I do hear a lot about them. But really, I never understood the hype. They're a small video camera with a whole bunch of different mounts. Why hasn't someone came along and stole the thunder yet. lol And I think its just a matter of time before someone does.

[CamaroMike]

Why hasn't someone came along and stole the thunder yet. lol And I think its just a matter of time before someone does.

Hmmm maybe I will!

[SSLance]

All good points about GPRO. Honestly, I was already in the thought process where Greg was when I heard about them going public... My first thought was "someone hasn't challenged them and made something better by now?"

I dont own one. I know a few people that do. Im a techie so I do hear a lot about them. But really, I never understood the hype. They're a small video camera with a whole bunch of different mounts. Why hasn't someone came along and stole the thunder yet. lol And I think its just a matter of time before someone does.

I learned something yesterday I was unaware of...

While making money off content may be a logical next step, thus far GoPro has been successful because it sells novel hardware. Much of what has made the company successful is the technology inside its cameras. GoPro makes light mountable cameras which feature high quality components from Sony (SNE), Qualcomm (QCOM) and Ambarella (AMBA). Qualcomm and other semiconductor companies like Intel (INTC) and Micron Technology (MU) have been on fire lately.

Ambarella has largely been flying under the financial media's radar, despite the company's meteoric rise. Ambarella makes the internal memory chip which allows GoPro to record HD video. Ambarella's chips can also be found in DropCamera products. DropCamera was acquired by Google's (GOOG) (GOOGL) Nest Labs a few days ago for $555 million. Shares of Ambarella have experienced heavy volatility since January, but the company has beaten every earnings consensus and the stock has climbed 169% since the start of 2013. In GoPro's S-1 filing the action camcorder company basically admitted that it had no alternative to using Ambarella's chips.

http://seekingalpha.com/article/2287963-gopro-goes-public-heres-what-you-ought-to-know

I've seen videos from just about all of the other cameras currently in the market and none of them can hold a candle to GoPro's video quality (as of yet). Their small size, virtual indestructibility, and mounting versatility are also above and beyond the rest. That's why they have the market's interest and the aftermarket as well (other companies making accessories for GoPros).

It'll be fun to watch what they do from here, I'll be watching from the sidelines though.

[Sieg]

GoPro is interesting. I've owned every one of their models and had some very negative experiences due to performance shortcomings associated with product engineering. As for warranty support, they're quite evasive.

GoPro is as much marketing company as it is a video camera company. Their marketing is better than the camera even though the images the camera can capture are sometimes spectacular. That works with today's consumer.

I don't know actual numbers but I'd speculate that GoPro's market share is greater than Apple's iPhone. GoPro's market penetration is pretty impressive as is their client list.

Many think the iPhone is the ultimate, but to myself they have numerous performance shortcomings and are extremely over priced compared to their competition yet they sell like hotcakes and every up and coming consumer wants one. I imagine similar can be said for GoPro. Both companies have substantial global recognition.

It will be interesting to watch the stock performance.....so far it's a flatliner. Considering the market conditions since IPO flat isn't that bad........IMO. :EmoteClueless:

[GregWeld]

GoPro (GPRO) is running like the IPO's of 1998/99.... and it's interesting that the "market" is so hot on what (on the surface) is a one trick pony. I'm saying that because basically they just have ONE camera. At this point we don't know if it's just the latest "trader" darling - or if there's real intrinsic value that is yet to be discovered.

Here's the 102 version of this:


MANY IPO's come out and all the TV talking heads can do is discuss it -- and the stock flies -- for awhile.... then the next big IPO comes out - and the old one stalls out and the new one is all they can talk about.

Make CERTAIN that if you choose to invest in these IPO's - that it's play money. And make certain you're investing in the COMPANY and not just your personal love for a product. There's a difference... and in order to hold long term - you must understand the company and whether or not they can make money. In the longer run - the market will only reward "making money" because their love of the hype is pretty short lived.

Obviously there's many more people that want to own this company right now and it's painful to watch it run and not be in it. It's what people wanted out of Twitter and FaceBook.... it's fun when they go straight up.

What happens is that you missed this one -- so the next one you're NOT MISSING IT NO MATTER WHAT.... and that's the trap. The mind screams at you that you missed a double on "X" and by god you're not going to do that again. Be careful of that thinking

If a STOCK (not a company) is going to double and triple.... while you might not have gotten in at the bottom -- there's still plenty of time to watch and learn and get in and make 30% or 40% somewhere along the line. Sometimes that's far better than LOSING 30% when the air comes out.

[SSLance]

or 60%... or worse...

Good advice as always Greg...

[GregWeld]

or 60%... or worse...

Good advice as always Greg...



Lot's of times I'm dead wrong Lance.... it's just a discussion -- and my view is nothing more than "think about this".... rather than a Do this or do that. It's just an old dog that's been at it awhile trying to have others avoid some of the stuff that can bite them in the ass. My point of view is neither right nor wrong -- it based on just trying to give guys stuff to think about.

I can think of at least half a zillion companies that I should have invested a million bucks in and I'd have my own Jet now.... and I missed them - or sold them or whatever before they went to the moon....

I can think of a least another half a zillion that never ever did what I thought they'd do. Whether that was go up or tank.

I was an early investor in Amazon - Starbucks - Costco - Dell - Cisco - Intel.... if I held the original investments in them I'd buy everyone on here a Rolls Royce.... Starbucks was bought on the IPO at the IPO price and flipped within a couple days for a whopping $500 gain..... I'd bought 1000 shares. At the time - I thought -- how many cups of coffee can these bozos sell.... Well -- Apparently they can sell quite a few!!!

Amazon was an internet book seller.... big whoop... when they couldn't make a profit - I bailed.

Costco was a CLUB only at the time -- and made 10 or 11% markup... How were they going to survive in a downturn? Obviously - quite well.

So when you're looking at a stock like GoPro --- who the hell knows. I don't and we won't know until it plays out.

What I do know is that there was plenty of time to get back into any one of the above names and there was plenty of room to run. A guy didn't have to buy it the first day to get it right.

That's all.

[Vegas69]

Greg, Thanks for the humility buddy. :captain:

[GregWeld]

Greg, Thanks for the humility buddy. :captain:



Welcome! Just don't get used to it! LOL

[GregWeld]

Many people ask me "when should I sell"? Good question... and maybe a harder one to answer than "when should I buy"? So this mornings coffee and reading - while the sun comes up (it's truly glorious here in the valley).... I came across an article on Seeking Alpha. The author is attempting to set up a strategy for buying on the dips and for when to sell. In a nutshell he's selling 25% of his stake if the shares rise 50% and he's selling 50% of his stake if they double.

Here's my problem with a strategy to sell WINNERS..... They're usually winners for very good reason(s). They're doing things right and making money and investors want to own them. So my question would be - why would you sell? Just to take profits? You pay taxes on profits - either long term capital gains - or if you're not careful - short term capital gains. You pay ZERO taxes on gains that are paper.

Here's my other problem with selling winners.... now what do you do with the money? You want to keep invested... so if you're not selling because you need money to buy a house or apartment building or something like that... you're just selling because you have a profit. So now you have to come up with another winner. That's usually harder to do than you think.

We've been in a market where the saying is "a rising tide floats all boats". Pretty much everything is going up - mostly because the market has nowhere else to put their money and make anything on it. Remember a market goes up when there is more buyers than sellers. It's really just that f'n simple. Right now - nobody wants to put their money in a 1% bank account or a 2% bond. But here's the thing to remember. If you've gone up 40% -- and the market takes a downturn (who knows for what reason and it doesn't really matter)... and it goes down 15%... it's down 15% but you had a 40% increase - so it's really still up HUGE.

People love to sell when the market is "down"... but if you keep your head on straight - and really look at the numbers - you've made a pretty nice gain even when it's down. That's usually when I'm a buyer not a seller. And I almost never sell my winners.

Look at a chart -- stretch it to 10 years -- if you'd have bought 10 years ago - how many doubles would you have now in that name (whatever you choose to look at)? If you sold at the first double - where would you be? And that's my point for this morning. Sell for a good reason - not just because you enjoyed a superior gain.

[glassman]

This might be a dumb question, as sometimes i'm rather slow.

Where can i find or what sectors are there? in other words, from this list , what am i missing?

Manufacturing
Technology
Bio tech
Transportation
Food (and entertainment?)
Communications
Global stocks?
Energy (types? differences between say Chevron and KMP)
Property stocks (REITS?)

Im trying to build a well diversified dividend portfolio if you will...So as i research and grow. I am slow to the game in building all this.

Im averaging in every month...and currently only have Food and Energy stocks so far (besides my Roths, 401k and biz and property).

Were trying to build a pension for the company (us and our few employees) and what a pain in the a$$) so many different opinions and bs, everybody keeps pointing me in different directions....Any advice out there while doing this?

[GregWeld]

Mike,

You've asked a really loaded question with a whole bunch of answers.

There's MANY MANY ways to "diversify" your investments without trying to own each category in the S&P...

#1 -- It's not about just owning something in every category. There's sub categories... such as large cap or small cap - or even micro cap... within each category.

#2 -- I firmly believe too much diversification only leads to poor performance

#3 -- To be really diversified only means that you don't have all your eggs in one basket. That could also be defined as everything in stocks!

#4 -- Diversification depends on how much money you have. A guy with 10 grand can be somewhat diversified by just owning 5 different investments. He could own a bank - oil - drugs - retailer - and a food stock. For 10K I'd call that about as diversified as he/she should get.

#5 -- That wouldn't be nearly enough diversification for a guy with 100K or 1MM


#6 -- Just pay attention to QUALITY over trying to spread out "just because".

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


RE: Pension


Only discuss this with a qualified Pension pro. There's so much to know and understand about pensions. And remember -- once you're involving other people - such as your employees... now you're taking on a fiduciary responsibility and you put yourself / company at risk if you don't do things right.

Personally -- in today's litigious environment - I'd never involve myself taking on that responsibility unless I had a really large company. I used to have to deal with this when I owned a company in NYC -- and also as a Board Director
at Seattle Yacht Club... it's a nightmare. No thanks!

[glassman]

Mike,

You've asked a really loaded question with a whole bunch of answers.

There's MANY MANY ways to "diversify" your investments without trying to own each category in the S&P...

#1 -- It's not about just owning something in every category. There's sub categories... such as large cap or small cap - or even micro cap... within each category.

#2 -- I firmly believe too much diversification only leads to poor performance

#3 -- To be really diversified only means that you don't have all your eggs in one basket. That could also be defined as everything in stocks!

#4 -- Diversification depends on how much money you have. A guy with 10 grand can be somewhat diversified by just owning 5 different investments. He could own a bank - oil - drugs - retailer - and a food stock. For 10K I'd call that about as diversified as he/she should get.

#5 -- That wouldn't be nearly enough diversification for a guy with 100K or 1MM


#6 -- Just pay attention to QUALITY or trying to spread out "just because".

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


RE: Pension


Only discuss this with a qualified Pension pro. There's so much to know and understand about pensions. And remember -- once you're involving other people - such as your employees... now you're taking on a fiduciary responsibility and you put yourself / company at risk if you don't do things right.

Personally -- in today's litigious environment - I'd never involve myself taking on that responsibility unless I had a really large company. I used to have to deal with this when I owned a company in NYC -- and also as a Board Director
at Seattle Yacht Club... it's a nightmare. No thanks!

THanx Greg, its very important to me as an employer to take care of the people and spread around the wealth a little, and yes wat a clusterfuc. And thats what my accountant keeps saying "fiduciary responsibility/liability", so yeah, things need to be done right. We used a good pension company, have a good accountant, and attorney. So I'll just keep doing my homework and sell as much glass and aluminum and service as I can.....and keep digging away.....:thumbsup:

Anyways, thanx for your input. I really respect your opinion, even if you are just full of sh$t lol....

[JKnight]

Mike,

Are you guys going down the path of a pension plan, as in defined benefit, or something like a profit sharing plan (defined contribution)? The defined contribution plan might be quite a bit easier from an administration standpoint, but everything Greg said above would still apply. Just clarifying terms as it might be important to make the distinction in your conversations with the pros.

[GregWeld]

To me -- the issue with pension plans etc - is that once started - they're no longer optional. So they're fine as long as you're making money hand over fist - but if something happens to change that -- now you're stuck funding the SOB.... and or it can become a liability if you wanted to sell the business at some point.

Just make sure you really understand what you're getting into as business -- 'cause it's like getting married -- it's great as long as things are fine -- but being married sucks when it's not so fine - and worse if you want to get a divorce!

[GregWeld]

Mike ---


Let's touch on that statement "fiduciary responsibility" --- particularly if you're also going to benefit from this pension plan.


What that statement really boils down to is SAFE - BORING - Low returns due to low risk.


You might be better off with some kind of plan -- unofficial by the way -- of paying bonuses -- or doing some kind of savings matching... That way you escape all the paperwork and accounting expenses as well as the OBLIGATION... I hate that word by the way.... Because an OBLIGATION is no big deal when it's easy -- it's a huge word when it's not so easy.

[glassman]

Mike ---


Let's touch on that statement "fiduciary responsibility" --- particularly if you're also going to benefit from this pension plan.


What that statement really boils down to is SAFE - BORING - Low returns due to low risk.


You might be better off with some kind of plan -- unofficial by the way -- of paying bonuses -- or doing some kind of savings matching... That way you escape all the paperwork and accounting expenses as well as the OBLIGATION... I hate that word by the way.... Because an OBLIGATION is no big deal when it's easy -- it's a huge word when it's not so easy.

Yeah, spot on with the word "Obligation"/marriage. I hadn't thought about that, i was figuring if we get "slow", the contributions "slow" down, which i'm ok with, as long as were profitable. I have a hard time putting into a "retirement" account if were bleeding money (which as most of you know you dont make money EVERY day in biz, hopefully just most).

[glassman]

Mike,

Are you guys going down the path of a pension plan, as in defined benefit, or something like a profit sharing plan (defined contribution)? The defined contribution plan might be quite a bit easier from an administration standpoint, but everything Greg said above would still apply. Just clarifying terms as it might be important to make the distinction in your conversations with the pros.

Jeff, i'm not sure which path we're going down. I knew at some point, but the process of starting this thing up is going on 22 months. Were only starting with like 40k and apparently thats not enough for somebody to make a decent commission on, not sure.

So as we "begin" this, (again) i will clear things up in terms of what i can understand. Like my accountant, he speaks to me in "accountantease" and i speak English. But when i "get it" i really "get it", just takes a while.

He explained to us three different plans, and i forget which one we chose. Pam will know, as her and I are in this (well that part) together and fortuneately for me i married a smart cookie...

[GregWeld]

Once again I'll try to use a company as an EXAMPLE.... not actually discussing whether or not the actual company is good bad or indifferent...

TWITTER (TWTR) was a highly anticipated IPO... frankly since the IPO it's not been a good buy. If you were lucky to get some at the actual IPO price (the issuance price) you'd be down around 9%.

Regardless of the above ---- I always talk about FUNDAMENTAL CHANGES... and I found this info to be of the TYPE of fundamental change that as an investor - you should take notice of. IT will affect your money! Not saying it is good news or bad news - as sometimes changes at the top are good but the REASONS behind the change are really what matters.


The changes come three weeks after Ali Rowghani resigned as Twitter’s chief operating officer after a power struggle over responsibilities, according to people familiar with the matter. The social-media company has experienced decelerating user growth and has struggled to boost people’s engagement with the service. Chief Executive Officer Dick Costolo is reshaping management as he seeks to increase members.

[GregWeld]

RE: ABOVE POST


The point - which I failed to include in the above post..

Companies that come to market -- or are in the market already - who's SHARE PRICE are built on HIGH GROWTH EXPECTATIONS... need to have every metric GROWING not "decelerating". They can fail to make a profit for quite a few quarters and still be rewarded with a high P/E share price... but high growth needs to be high growth or you get your ass handed to you. That's pretty basic fundamentals.

[sebtarta]

Greg what do you think about this company Mannkind being approved on their insulin inhaler for diabetes? MNKD

[GregWeld]

Greg what do you think about this company Mannkind being approved on their insulin inhaler for diabetes? MNKD



I don't -- because I don't know anything about the company. Plus I don't do recommendations about when - who - what - how much - etc.... I'm more or a "how to think about stuff" kinda guy.

Only names that really get discussed on here are the ones just used as examples or what to think about and here's why kind of discussions.

[JKnight]

As an addition to the "way of thinking" discussion as it pertains to boutique pharma companies...I would never want to invest (remember investing and gambling differ) my $$ with a firm whose revenue, income, hopes and dreams are riding on the FDA approval of one product. Not saying the one you mentioned is, as like Greg, I know nothing about the company.

These firms are not valued the way most best-of-breed companies you've seen discussed in this thread are. So might you miss out on a 400% gain when the new product gets green lit through the final stage of FDA approval? Sure...but you might also miss out on a 50+% loss when the thing dies on the vine since the market knows their product pipeline had nothing else in it.

[GregWeld]

Good reply JK...


I looked at the company after the OP... Just because I love this stuff.


So to use them as an example... MannKind (MNKD).


Over the long term chart - they're DOWN 27% -- and that's AFTER a 58% run up in the stock prior to getting the FDA approval for the newest drug.

No dividend. And the stock was at $20 in '07 then dropped like a rock to $3 and less for about 5 years. A couple short term blips to the $10 range when I would ASSume some news about stage this or that trials were favorable. Then sold off right back to the bottom.


Here's the investing 102.

I can't possibly spend enough time to be up to date on the latest greatest drug trial - or who has a competing product in the pipeline... Not to mention I hate Yo-Yo stocks. Rich one day broke the next. No dividend. No knowledge. No investment.

There's no doubt that if you can stay on top of this stuff - there's HUGE money to be made... There's also huge money to be lost when your picks fail to get approval - or get sued because somebody did something which is blamed on the drug or treatment. I'm not being negative -- I'm just being truthful for what happens to 9 out of 10 investments like this.

If you're in the business -- up to date -- understand the MARKET or the product that is ultimately brought to market... Then maybe you can make some money in these.

But this is INVESTING 102... not "let's pick the next hot stock to lose money on"... and I would think that unless a guy is playing with several hundred thousand dollars -- he should steer clear of the "next hot thing".

I play with some of this kind of stuff... but I don't discuss it in this thread because it's just not appropriate. That would need to be a different thread titled --- What rich guys do with their play money -- or something along those lines... Or Stock market gambling how to lose money overnight. :>) Maybe "I went to bed rich and woke up broke"? I kinda like that one. HAHAHAHAHAHAHA

[CamaroMike]

Maybe its just me but whenever I hear something about pharmaceutical stocks I think of JP Marlin and Stratton Oakmont lol

[toy71camaro]

Maybe "I went to bed rich and woke up broke"? I kinda like that one. HAHAHAHAHAHAHA

lmao. Thats a good one. That could be a bit interesting!

:G-Dub: :drowninga:

[toy71camaro]

Oh, and a side note:

7/1 = DISTRIBUTION REINVESTMENT: KO
7/2 = DISTRIBUTION REINVESTMENT: KMB
6/27 = DISTRIBUTION REINVESTMENT: LMT

Woot! Paydays. :):G-Dub:

[GregWeld]

Maybe its just me but whenever I hear something about pharmaceutical stocks I think of JP Marlin and Stratton Oakmont lol





I had to look that up to see what the reference was. I never saw the movie. But yes --- the parallel could be made there. And not just pharma stocks - but any company where there is similar "amazing upside" but little in actual real business to back that up except a lick and a promise.

To be clear --- with all due respect to Sebtarta (the OP) I mean no disrespect for his question. If you're new to the thread -- without reading about half a billion pages -- you would have missed the full idea behind the thread. So - Sebtarta - please don't take our pokes at this type of investing as a personal shot. But this type of investing is EXACTLY what this thread is about in a 180* way. The thread became a blog almost - but about how to safely invest - how to get started investing - how to stay invested without gambling or stewing about big quick losses etc. So unfortunately for your questing -- it played right into the "WHAT NOT TO DO" that this thread has tried to cover.





lmao. Thats a good one. That could be a bit interesting!

:G-Dub: :drowninga:




It happens all the time....







Oh, and a side note:

7/1 = DISTRIBUTION REINVESTMENT: KO
7/2 = DISTRIBUTION REINVESTMENT: KMB
6/27 = DISTRIBUTION REINVESTMENT: LMT

Woot! Paydays. :):G-Dub:



Don't ya just love getting paid like that! It's just such a satisfying feeling. Regardless of the AMOUNTS --- just seeing those credits to your account brings a smile to a guys face.

[GregWeld]

So let's just stay on this question about MannKind (MNKD) for another post.



A couple days ago -- the big news was about the FDA approval of a new product for them --- which created the question from Sebtarta. To which I responded that "I don't know anything about them".

That quote is really larger than just about the one single company. I have often stated in this thread to stick to what you know and understand. To do otherwise is a tar pit trap. You buy based on something you've heard - or buy because something is going up and CNBC is talking about it... But you really have no GD idea what the larger picture is - competitors - revenue - growth potential - management... etc.


So this is TODAYS news on MannKind (MNKD) --- and bam! Down 4.5% from yesterday. When I'm trying to earn 4.5% or 5% in dividends (and get capital growth on top of that) I don't need to be down that much in one day. And these kinds of stocks are purely NEWS DRIVEN or event driven. UP DOWN UP DOWN... Personally... my stomach can't deal with that.

Now -- the stock could shoot to the moon.... and many people could make a killing on it. But you could also just as easily get killed. I don't want to invest in that kind of risk. I'd rather be like Albert and roll out my dividend calendar! LOL



Cut and pasted:



MannKind Corporation (NASDAQ:MNKD)’s inhaled insulin drug Afrezza won the USFDA approval on Friday, June 27 for type 1 and type 2 diabetes. Though it’s a positive for the biopharma company that doesn’t yet generate a revenue, there are some big concerns around potential commercialization of Afrezza. That’s the key reason JPMorgan’s biotechnology analyst Cory Kasimov still has a Neutral rating on the stock with $6 price target, reflecting about 40% downside potential.

[CamaroMike]

^ 100% agree with what Greg said as usual. Sebtarta, If you understand the company and industry and know why you want to invest in that company then go for it! I just know nothing at any kind of medical companies, and in my reference I just remember hearing lines in movies about how this pharma company could be "the next big thing." Which who knows, it could be! I just stick with super basic names I understand and can keep up with by scanning through their stuff a few minutes each day.

I highly encourage reading through as much as you can of this thread, good real life stuff here, good luck :thumbsup:

[dhutton]

Speaking of GoPro I read that the stock fell 10% and triggered the circuit breaker today. That could have been painful for folks that were late to jump in.

Don

[sebtarta]

Thank you all for the responses. I am not ready to invest by any means, just researching and see if I would do any good. Lots of good info here as usual, will keep reading and keep learning.

[GregWeld]

Thank you all for the responses. I am not ready to invest by any means, just researching and see if I would do any good. Lots of good info here as usual, will keep reading and keep learning.



Glad you came back in --- because when I re-read the posts referencing yours -- I thought --- wow --- they kind of sound like we're all in flame mode. And that's just not Lateral-G --- nor is it the intent of anyone in this thread.

If you're "new" to investing -- or just want info and ideas (not on what company to buy but things to think about)... just start reading this thread from page one. The thread is not the end all be all to investing. Rather - it's attempting to have people that are new to investing try to make some sense of it all. Trying to take the mystery out of Wall Street... And an attempt to have people see that they don't need to start out rich - to get rich given enough TIME.

There's no "dumb" question. Everyone is willing to help... some that started investing with this thread -- have now actually witnessed their own success and really have gotten a good handle on what it's all about -- and more importantly -- what to think about.

The thread is more about teaching how to fish rather than catching the fish.... which is why everyone had made a valiant attempt to keep it about the thought process vs a buy this or that.

[GregWeld]

It's time to start to pay attention here if you're invested in INTEREST RATE SENSITIVE investments. The unemployment rate is dropping... T Bill rates are rising... Won't be long now til the FED raises rates.


This is a Yin/Yang issue for investors.

Rising interest rates can hurt capital growth on rate sensitive investments.... but HELPS stocks such as industrials etc -- as the rising rates tend to signal an expanding economy. An expanding economy helps the stock market....


I'm never a fan of moving money to try to get out of one sector to buy another. Rather -- if you have new money - that's what you put to work in something that should benefit from better housing - better car sales - better infrastructure spending... Think Caterpillar... PACCAR... Railways... that type of thing. But I'd also remind people to look AHEAD... because the big boys on wall street are 6 months to a year ahead of you THUS the rising market we've been seeing.

[sebtarta]

Glad you came back in --- because when I re-read the posts referencing yours -- I thought --- wow --- they kind of sound like we're all in flame mode. And that's just not Lateral-G --- nor is it the intent of anyone in this thread.

......

No worries. I had put on my flame suit before hitting the post button :lol:


edit--
I never really elaborated as to why I asked about MNKD. Well we all know that diabetes here in the US is a very big number unfortunately. I read that MNKD got approved for their Afrezza drug which is a insulin in the shape of an inhaler. I know the company really has no profit currently as they have been putting every cent into this drug. For some reason (no idea why) I feel that if the correct partners join MNKD to distribute this drug could sky rocket.

[GregWeld]

Do ya think maybe stuff like this is what makes GoPro (I do not own) GPRO - so "loved" in the market?? LOL





MBaIlQOGgwc&feature

[GregWeld]

#1 -- I do not own GoPro (GPRO) nor do I expect to... and once again - I'm not trying to discuss buying or selling this particular name. However... since it's the recent IPO and Market Darling.... I'm always interested and I pretty much spend my day either messing with cars - or reading and scanning news which relates to stocks....


So we always are discussing FUNDAMENTAL CHANGES -- what to look for - and to look out for. They're important. Not all news is FUNDAMENTAL... but we're always wanting to scan for things where it can be. Here - for INVESTING 102... is an example I just found by accident on GoPro.

REVENUES are what drive share prices. End of story. Big profits. Big revenue. Big expectations.

BEWARE big expectations - because then we have to think about the "priced for perfection" scenario where the stock gets crushed even if they did pretty well - but they didn't meet "expectations". We've discussed this earlier. I tread lightly when expectations get overblown.

BUT the 'news' here, is news to me -- because we discussed the fact that many think GoPro is a one trick pony - with basically a camera and attachments to sell ------ yet here's an article bringing up the possibility of a huge advertising revenue stream... that's pretty fundamental and can be a real runner if it proves to be A) True and B) bigger #'s than expected (ah beware!).

Again -- nothing about GoPro -- But about the little nuggets and changes that can make or break any investment -- That's what I want readers/investors to start thinking about. Don't just look at the share price gain today or tomorrow... look for nuggets, good or bad. Learning these things is what we're all about.




Long-term investors in GoPro can probably ignore today's drop. While it's important to be aware of the short interest in the stocks you hold, heavily shorted stocks can also quickly spike on good news due to short squeezes from short sellers attempting to cover their bets. Even after the pop, shares still seem reasonably priced at a P/S of 6, and the company, which is only 10 years old, is already profitable. GoPro dominates the niche market of stunt and extreme sports-based video, and is set to begin collecting money from advertisers, which should give the company another valuable revenue stream. As video usage and wearable technology continues to grow in the Facebook/YouTube generation, I'd expect GoPro to thrive

[glassman]

So as i was thinking about "said stock" the other day, and while this isn't a stock picking thread (rather a discussion on the fundamental's of stock/investing) I was thinking about "insert company with the recent IPO in the manufactoring-technololgy--lol".
I was kinda wondering about the stocks potential. As you "go" public (pun intended), you raise money for capitol growth (Greg correct me if i'm wrong)..
As you raise more money/capitol, you can then grow your target audience.
In this case, if they can land "government" contracts, with a durable camera/video device, think of the growth in numbers that way, potential markets. And/or placing the products anywhere security is required, and a monitering network (think big brother), it may have future potential....
Just another something to ponder in investing, try to think of "whats next?"

[GregWeld]

So as i was thinking about "said stock" the other day, and while this isn't a stock picking thread (rather a discussion on the fundamental's of stock/investing) I was thinking about "insert company with the recent IPO in the manufactoring-technololgy--lol".
I was kinda wondering about the stocks potential. As you "go" public (pun intended), you raise money for capitol growth (Greg correct me if i'm wrong)..
As you raise more money/capitol, you can then grow your target audience.
In this case, if they can land "government" contracts, with a durable camera/video device, think of the growth in numbers that way, potential markets. And/or placing the products anywhere security is required, and a monitering network (think big brother), it may have future potential....
Just another something to ponder in investing, try to think of "whats next?"



Generally most of the money raised is capital that goes back into the shareholders pockets. The founders are usually sellers - which means those shares that are sold come from their personal holdings and thus the cash goes into their personal accounts -- and then you have the VC's that were the early seed money -- those shares, likewise, get sold to replenish their pockets.

IPO's are about unlocking cash, rather than just holding equity, for the early investors.

SOME shares might be from the company coffers -- but you'd have to read the prospectus to find out how much, and what their intentions are... balance sheet repair -- cash burn rate if they're not profitable -- R&D -- Marketing...

GoPro is all about mobility and about "self". They do best at Marketing and have managed to beat out better products that are more niche market... i.e., the SmartyCam HD which is all about recording car events with it's OBD II interface cables etc... or Contour - with their GPS enabled cameras.

Personally -- And I own all three of the above mentioned devices... I think the GoPro camera sucks. Their video quality is great - their sound quality sucks and their user interface is dreadful. But they're cheap - easy to mount - sound doesn't seem to be that important for most things - like who cares what your skateboard sounds like (unless you're doing an epic fall and we hear bones crunching).... so their compact size - goes anywhere - waterproof cases.... those things are why they sell well -- and their display or what is called POS -- POINT OF SALE... is by far the best in the market.

It remains to be seen what or where they go from here. But the name is already like Kleenex or Clorox.... every camera is referred to as a GoPro... and that can be taken a long way. It's called BRANDING. And branding is very important if the company doesn't screw it up.

BUT ---- FOR INVESTING 102 ---- a STOCK can quickly be separated from the company... a stock can have it's very own momentum which can vary widely from the actual company performance. People begin to bet on the "what's ahead"... stretching the P/E way out. Or the traders start flipping it -- this is where you see the volumes in daily trading shoot well beyond what is "normal"... People just start flipping shares in and out - 1000 shares up .50 is $500 bucks... so WTF -- making $500 on a trade that took 5 minutes is easy money in a hot stock. Until it isn't.

So the analogy is -- two 6'5" people make a 4' baby at birth... EVERYONE sees the next Yao Ming.... and people push the child to be a basketball player... and everyone watches the boy's every move. He can rise to be the star that people thought he would be.... or he discovers Ballet.... and all bets get crushed. Or he signs a big contract and turns pro - but breaks his ankle in practice and never plays a pro game...

The point? All we can go by right now is what the company has done in the past -- pretty impressive so far. What we don't know is what they'll do going forward -- and THAT is making the shares a gamble. Paying too much now for results that disappoint... or are we paying CHEAP prices for a rising star in the future. WHO THE HELL KNOWS.

If you like the company and have some extra PLAY MONEY and want to buy some shares --- JUST DO IT. Just understand what you're doing.

Dude -- I buy stuff like this all the time... I don't talk about it on here because this is INVESTING <first> and 102 <beginners>.... and I don't want people to do what I do because I did it. I want them to THINK about what's right for them - their wallet - their goals - their stomach. So I walk a fine line of what's appropriate for this thread. My goal is to point out what can happen to a stock - what's really important - what affects things - what to think about - and if someone wants to use all the tools at their disposal and buy "X" and does so with wide open eyes. That's their choice and I hope it works out and makes them the next millionaire.

Just don't do this like you do with $10 buying a lottery ticket. In this game you have to THINK. If you think you want to own it - whatever It is - then go for it. It's nobodies money but the guy that made the choice. I'm not here to approve or disapprove of anyones investment choices.

I'm no smarter about these IPO's than anyone else on the planet. $385K angel money in one investment made me 20MM in 2010.... $500K in another investment went to ZERO in 2008. I was far more certain of the $500K investment. Management made the difference there and I was just flat wrong about their skills and honesty. Given the chance to do it over again - I'd put the 500K right back into the same idea. My point? Only play with money you can afford to loose 'cause you just never know.

Another real life example.....


LuluLemon (LULU) and NetFlix) NFLX..... I would have bet you LULU would go to the moon - and NetFlix was going to be history after the gigantic faux pas the CEO made..... <BUZZER> It all came down to management and how they handled the fallout of what happened and whether or not they continued to shoot themselves in the foot -- or learned from it and moved on and became better. I lost money on LULU and never invested in NFLX..... which is now a 4 bagger or so. Stocks like these don't have HISTORY.... they're young - they're going by feel - they flourish or they wilt... I make my money on the right stuff being invested in big names - rock solid - dividend payers..... and once in awhile I have some extra that I play with and hope to hit a home run. Sometimes it works and most times it doesn't. I can afford to play like that. Most people can't and that's what this thread hopes to fix.... so that they CAN once they've built a base.

Okay --- off my soap box. :>)

[WSSix]

Good post, Greg. Thanks for taking the time to type it.

[glassman]

Great explanation Greg. Personally, get back on top of or stay on that soap box cause i think you know what the f__k your talking about. I've never met ANY investors that can put it in layman's terms like you can.
I thought the same way about Google vs Apple three years ago, i "woulda" put all of it into Apple thinking they were the cats meow and Google just didn't have enough bling....well we know what happened(ing).....

So ya, thanx for your explanation, some times i can actually here you yelling at me lol, but i needs to learn. i'm still trying to put the basics together for me in my Schwab....

[XLexusTech]

A few months ago I posted on this thread asking about peer lending... I ended up going in with the equivalent of 10% of my post tax discretionary investment account.

Thus far my Net is 17 percent including charge offs :topic:

[WSSix]

Good job! Be safe with it.

[GregWeld]

Speaking of GoPro I read that the stock fell 10% and triggered the circuit breaker today. That could have been painful for folks that were late to jump in.

Don



Actually - that drop was 15% !


So here's what happens to small - retail investors.... that's "US".

A guy gets tired of hearing how much "X" stock is going up every day... and he finally listens to the idiot in his head telling him "WTF - why am I the only guy in the entire universe not making a fortune off this!?!?"

Then he plunges in with 5K.... and in hours or days --- He is now the only idiot in the entire universe that is DOWN $500 "already".... and he is now walking around with his stomach churning... and burning... and a couple days later when it goes up .10 a share - he sees his chance and bails out.

Give it another week and it's a buck a share more than he paid.... and he's confused - estranged - and can't figure out why he can't figure it all out. Now the worlds dumbest investor in the entire universe is walking around telling everyone how he WAS in X..... and WAS is the key word here. But now the worlds dumbest investor in the universe is afraid to pull the trigger on ANYTHING - buy or sell.... because he just showed himself that he can't buy right and worse - he can't even get the sale right! He now sees that he could have waited and bought on the dip -- and even better - he could have sold high and made a months wages in a matter of days... but he's now frozen like a deer in the headlights.

DON'T BE THIS GUY....


Be "okay" with stuff that gets away from you. Buy what you can hold on to and you can afford to buy. That includes houses - cars - woman.... Be the tortoise... the same one that your Mother read you the story about. That's a very sage story.

Does this mean DON'T buy a GoPro?? HELL NO! It means -- understand yourself - your expectations - your guts for pops and drops.... Can you really stomach losses and not have it affect your thinking.

102 investors should build a nice base -- live thru some ups and downs - watch their money grow and then watch as some or all of that growth melts away... what's that do to you.... can you handle it.... can you keep putting money in the market when it's down - and then it goes down more... can you put the next $500 in regardless or do you fold like a kleenex.

The dividends offer a "buffer" for the above scenario. That's why I recommend beginners invest in them. Reinvesting the dividend happens when you're looking the other way or laying under your car banging your knuckles... It puts your "investing" on autopilot.

Once you understand yourself... and the market (write me when you think ya got that goin' and good luck with that thinking!)... THEN MAYBE you're equipped to spread your wings and take a flier.


Think about a guy that hasn't ever seen Soccer... he runs out on the field and promptly gets the ball taken from him - has not a clue which end he should be at or what just happened to him. Versus the guy that stands on the sidelines --- studies a bit - talks to others on the sidelines and asks why this or that happened... runs some scenarios in his head... watches and understands who on the field seems to really be a good player.... When he THINKS he can play he finally goes out and has some success (vs the guy that just ran out there). The first idiot walks off the field humiliated and never plays soccer again, KNOWING that it's too hard for him, and he'd never be any good at it..... The other guy is enjoying a brew with the boys at the pub, enjoying his modest success, and his new found soccer buddies.

[GregWeld]

Sometimes -- if you're a real stupid "investor" -- all you're left with... is the crumbs. I'd call this a crumby investment...

#1 -- I had no idea they'd "list" some company like this...





http://abcnews.go.com/US/wireStory/cupcake-shop-crumbs-shuttering-stores-24461104

[GregWeld]

This is NOT a recommendation to own this name... it's just another example or at this point A REMINDER of why DIVIDEND INVESTING (nothing more than a particular style)... has proven to be a good thing OVER TIME....

I own 20,000 shares of this name... but what's important for 102 is -- I just got a RAISE for doing nothing. Not much of a raise... but a raise is a raise -- and over time raises in the dividend rate can keep you ahead of inflation...

And even more importantly --- A raise is on your cost basis! So over time you're earning a higher and higher PERCENTAGE on your investment!


I'm actually now being paid 13.56% on this investment because my cost basis is $89.41 a share.

See how that works! Sweet!






BP Prudhoe Bay Royalty Trust (NYSE:BPT) announced a quarterly dividend on Monday, July 7th, Analyst RN reports. Investors of record on Tuesday, July 15th will be paid a dividend of 3.0326 per share on Sunday, July 20th. This represents a $12.13 annualized dividend and a dividend yield of 12.47%. The ex-dividend date is Friday, July 11th. This is an increase from BP Prudhoe Bay Royalty Trust’s previous quarterly dividend of $3.01.

[96z28ss]

This is NOT a recommendation to own this name... it's just another example or at this point A REMINDER of why DIVIDEND INVESTING (nothing more than a particular style)... has proven to be a good thing OVER TIME....

I own 20,000 shares of this name... but what's important for 102 is -- I just got a RAISE for doing nothing. Not much of a raise... but a raise is a raise -- and over time raises in the dividend rate can keep you ahead of inflation...

And even more importantly --- A raise is on your cost basis! So over time you're earning a higher and higher PERCENTAGE on your investment!

I'm actually now being paid 13.56% on this investment because my cost basis is $89.41 a share.

See how that works! Sweet!

BP Prudhoe Bay Royalty Trust (NYSE:BPT) announced a quarterly dividend on Monday, July 7th, Analyst RN reports. Investors of record on Tuesday, July 15th will be paid a dividend of 3.0326 per share on Sunday, July 20th. This represents a $12.13 annualized dividend and a dividend yield of 12.47%. The ex-dividend date is Friday, July 11th. This is an increase from BP Prudhoe Bay Royalty Trust’s previous quarterly dividend of $3.01.

I love raises. How do you calculate the yield for the investing 102 newbie crowd. I have very few shares of BPT but my Cost average is $86.79

[Vortech404]

Bob, pretty sure you divide annual dividend by share price.
$12.13 divided by $86.79 =13.9 percent. Yeeha



John

[GregWeld]

Bob, pretty sure you divide annual dividend by share price.
$12.13 divided by $86.79 =13.9 percent. Yeeha



John



Exactly right.


Make sure you do this calc with the ANNUAL yield not the quarterly! There's 4 quarters (DOH!)...


Annual yield (in dollars and cents) divided by the share price (using your cost).


It will NOT come out with the decimal point in the right place -- but you'll get the number and you put the decimal where it belongs


i.e., 1.60 / $10.00 will show up as .16 ------ move the decimal 2 points --- 16%

[cspecken]

Came across this chart today and thought it was interesting. It shows who makes the food you buy at the store. Might help influence your stock purchases.

http://knowmore.washingtonpost.com/2014/07/08/this-chart-shows-who-makes-the-food-you-buy-at-the-grocery/

[GregWeld]

Just happened to check in on FaceBook (FB) this morning.... WOW! Those guys that bought and stayed in it -- it's climbing nicely... but WOW what a gut churning ride that has been!!

So here's why I post this....

Remember we talked about GoPro (GPRO) and about "waiting" -- and rather than thinking you missed the biggest "deal" ever... that if you wait and be patient -- there is always time to get in. FaceBook looks like the HYPE has been wrung out of the stock, and now it might actually be trading based on MAKING A REAL PROFIT. That's important -- because without that key metric -- stocks go down faster than they go up! And that's where people get killed in the market. They buy the hype -- and then sell out when the air goes out of the name.... Sometimes those names NEVER come back -- and sometimes they report that they're making real money (as in profits and margins) and then they can stand on their own two feet without the hype baked in. Now you can make a real decision based on facts and not just hyped hopes.

Not saying to buy or sell it -- just using it as a recent example on buying IPO's

[sebtarta]

Yep, I mentioned to my financial adviser about FB when it was going public and to buy the IPO. Got denied, now LOOK! :confused18:

[Sieg]

Decent read related to retirement planning: http://seekingalpha.com/article/2314615-retirement-income-planning-with-altria-group?ifp=0

[glassman]

Yep, I mentioned to my financial adviser about FB when it was going public and to buy the IPO. Got denied, now LOOK! :confused18:

What do you mean by "got denied"?

[sebtarta]

What do you mean by "got denied"?

He did not agree on jumping on it.

[XLexusTech]

Just happened to check in on FaceBook (FB) this morning.... WOW! Those guys that bought and stayed in it -- it's climbing nicely... but WOW what a gut churning ride that has been!!

So here's why I post this....

Remember we talked about GoPro (GPRO) and about "waiting" -- and rather than thinking you missed the biggest "deal" ever... that if you wait and be patient -- there is always time to get in. FaceBook looks like the HYPE has been wrung out of the stock, and now it might actually be trading based on MAKING A REAL PROFIT. That's important -- because without that key metric -- stocks go down faster than they go up! And that's where people get killed in the market. They buy the hype -- and then sell out when the air goes out of the name.... Sometimes those names NEVER come back -- and sometimes they report that they're making real money (as in profits and margins) and then they can stand on their own two feet without the hype baked in. Now you can make a real decision based on facts and not just hyped hopes.

Not saying to buy or sell it -- just using it as a recent example on buying IPO's
Well thanks if remember you in the beginning very down on "facey book" I got in during IPO at 38 the more at the drop ...... I hope to be posting a similar opine message on peer to peer in a year....

[GregWeld]

He did not agree on jumping on it.



He did not agree -- because maybe he knows - that like MOST PEOPLE they are in love with the stock - as long as the stock goes UP..... and when it doesn't - or drops in HALF like this one did -- then -- since they only really like the prospects of the stock going up --- they SELL OUT... losing money. MOST PEOPLE don't stick it out. See below for ONE that did.... and like I always say -- better LUCKY THAN SMART!



Well thanks if remember you in the beginning very down on "facey book" I got in during IPO at 38 the more at the drop ...... I hope to be posting a similar opine message on peer to peer in a year....


Good for you! As per above -- most would have bailed on this one way before it ever turned around. Here's my point for INVESTING 102.

Had you NOT bought on the IPO --- and you waited --- you might have bought shares for half what you paid.... IF YOU LOVED THE COMPANY VS THE STOCK... you would have really loved it at $22 instead of $38.... So there was plenty of time to sit on the sidelines and watch this one....

THAT'S MY ONLY POINT ON IPO'S..... Let's not discuss THIS COMPANY or some other company --- We learn from EXAMINING this stuff. GoPRO is off and running to the moon since day one -- they DO NOT always do this! It's fun when they do... but FaceBook was a classic example of the most hyped IPO that I can remember in a very long time -- and it was an EPIC FAIL. Since then they have been able to calm down - show they're making money (the goal after all).... and now people can get in without the hype.

We'll watch GoPro and see what happens -- because it's all very interesting.

Glad to hear you stuck it out -- bought more at lower prices -- and are now being rewarded for your faith. Good for you!

[GregWeld]

Once again - not saying whether or not someone should buy - hold - or sell any particular stock --- just picking on this name as ANOTHER example of the IPO market.


Twitter (TWTR) was another highly anticipated IPO "block buster".... But Year-to-date it's DOWN over 40% from it's high.... It opened at $44 -- ran to $70 with HYPE... and is now $38....


If you LOVE TWTR as a company and think they have a bright future, with the EARNINGS to go with it.... great. My point is -- there was plenty of time to take a step back and see where the shares would go.


Some of these remind me of the late 90's IPO market when the key "metric" used to hype the market was "EYEBALLS" --- everyone was going to make money because they had eyeballs. The problem though was -- you don't pay your bills with eyeballs... you have to monetize the eyeballs with earnings and profits. That's harder to do. There is only so much advertising dollars to go around. MySpace had eyeballs and "users". Do you even remember who they were? LOL

[CamaroMike]

Just an example that a safe dividend stock can occasionally have a nice run as well.


http://seekingalpha.com/article/2317005-at-and-t-will-the-stock-soon-climb-over-40-per-share

[GregWeld]

Just an example that a safe dividend stock can occasionally have a nice run as well.


http://seekingalpha.com/article/2317005-at-and-t-will-the-stock-soon-climb-over-40-per-share



What happens with dividend stocks that makes them "somewhat" safe -- is that their share price gets supported on the way down -- by the rising percentage of dividend payout.

AT&T (T) pays 5.08% dividend at this mornings per share price... It doesn't take much of a dip in the share price and it's suddenly paying 6%.... That's where you get the downside protection. And even better --- is that you don't need to sell when they're down to earn a return on your investment. Which is why they (dividend payers) become better holdings during market downturns.

WHAT DOES HAPPEN though is that interest rates COMPETE for dollars when the rates are rising... money flows from "other" interest rate paying investments and flow to where there is equal safety with equal or better rates. The problem with attempting to follow this money trail by selling one asset class to buy the "new" asset class is that individual investors are never ahead of the curve. They will sell at the wrong time every time. That's a game better left for the big boys with armies of economists and accountants on their team. They figure it down to the last 1/4% on a daily basis. That's why we just have to become INVESTORS...

That doesn't mean that if interest rates on Muni Bonds etc start to look like they're headed to 6 or 7% TAX FREE --- that I wouldn't lighten my stock portfolio and add some Munis. But you don't do that in your 401K or IRA or ROTH....

[JasonElvisHeard]

Any CFA's in the house?

Weld, I'm sure you know of a few but maybe they are not on latg.

jason

[GregWeld]

Any CFA's in the house?

Weld, I'm sure you know of a few but maybe they are not on latg.

jason



I don't use any "professional" investment advisors except for Muni Bond investing.

I just don't think they're any smarter than I am... and if it involves THEM making money on my money -- then their interests are ahead of mine.

[WSSix]

grrrr, kind of wishing my MCD stocks were in a different account today. They are some what "locked in" sitting in my Roth IRA. If they were in my simple brokerage account I'd snatch up a few shares right now. Looking at my cost basis over the last couple years of owning the stock, the current share price is lower than every cost entry except one maybe two entries. Would be a good time to buy right now I say.

[GregWeld]

grrrr, kind of wishing my MCD stocks were in a different account today. They are some what "locked in" sitting in my Roth IRA. If they were in my simple brokerage account I'd snatch up a few shares right now. Looking at my cost basis over the last couple years of owning the stock, the current share price is lower than every cost entry except one maybe two entries. Would be a good time to buy right now I say.


I bailed on McDonalds (MCD) - as documented in this thread - and while we are not discussing particular stocks or what to buy... this name can be used as an example of "Fundamental change". What's that? That's a business that is experiencing sales declines or profit shrinkage or declines -- BECAUSE -- Because their business is positioned wrong. I think that is where MCD is right now. I say this because Chipotle Mexican Grill (CMG) just reported 17% sales INCREASE and a profit margin increase - vs - MCD reporting (now for a number of quarters in a row) another sales decline and weaker profit margins. These are both fast food retailers. One is growing - one is shrinking... I don't want to own companies that are shrinking. That's not to say they can't change and or react to market forces... but so far they don't seem to be able to find that magic bullet. There are better dividend payers if you just want to be paid to wait - and I want dividend AND growth (total return). This name doesn't seem to be in the mode to deliver that.... so that means those employees (you investment equals one employee per dollar invested) seem to be on vacation. I don't pay employees to be on vacation.... which means they need to be retrained (sold and buy something better).

Each investment is up to the individual... and I'm not saying anyone should buy sell or hold.... it's just a "way to look at an investment".

[SSLance]

MCD is right back down to where my cost basis is with my current holdings...might have to think about picking some more up myself.

[Vegas69]

I bailed on McDonalds (MCD) - as documented in this thread - and while we are not discussing particular stocks or what to buy... this name can be used as an example of "Fundamental change". What's that? That's a business that is experiencing sales declines or profit shrinkage or declines -- BECAUSE -- Because their business is positioned wrong. I think that is where MCD is right now. I say this because Chipotle Mexican Grill (CMG) just reported 17% sales INCREASE and a profit margin increase - vs - MCD reporting (now for a number of quarters in a row) another sales decline and weaker profit margins. These are both fast food retailers. One is growing - one is shrinking... I don't want to own companies that are shrinking. That's not to say they can't change and or react to market forces... but so far they don't seem to be able to find that magic bullet. There are better dividend payers if you just want to be paid to wait - and I want dividend AND growth (total return). This name doesn't seem to be in the mode to deliver that.... so that means those employees (you investment equals one employee per dollar invested) seem to be on vacation. I don't pay employees to be on vacation.... which means they need to be retrained (sold and buy something better).

Each investment is up to the individual... and I'm not saying anyone should buy sell or hold.... it's just a "way to look at an investment".

I think American's are finally waking up to the fact that what you eat matters. Chipolte is a solid business model pushing hot buttons with where they source their components.

[ErikLS2]

I think American's are finally waking up to the fact that what you eat matters. Chipolte is a solid business model pushing hot buttons with where they source their components.

I think this is right on about where things are going. I'm a big organic food, healthy eating kind of person and have been for a long time. Up until recently I would talk about it and people would look at me like I was nuts. Not so anymore,
tons of people are now waking up to what their food contains and so on. I asked a 22 yr old kid at work today if he or his buddies ever went to McD's. He said, "not really, we don't really eat fast food like that".

I go to Chipotle a lot and there's almost always a line to the door and they put up a sign when any of their ingredients had to be sourced from "conventional" suppliers.

[WSSix]

I agree with you guys to a large extent. I do think people are starting to care more about where they eat. What I do worry about when it comes to places like Chipotle is the price. It's expensive to eat there. Is it more of a new fad versus a fundamental change in eating habits? I wonder if they can keep the people coming in the door in the long run. Chic-fil-a seems to be able to and they are fast food. Quality fast food but fast food all the same. Time will tell that's for sure.

Thanks

[GregWeld]

I think American's are finally waking up to the fact that what you eat matters. Chipolte is a solid business model pushing hot buttons with where they source their components.



100% agree with you here Todd!



RE: Chipotle Mexican Grill and similar stocks that are "priced for perfection" or have HUGE P/E Ratios they MUST grow in to... Just look at Amazon (AMZN) today. This is why - as much as I'd like to - I don't own them. You absolutely get murdered IF -- always the big IF - ANYTHING happens along the way that the street doesn't like. Instantly taken to the woodshed!!

Once in awhile I'll bite on a "big / fast growth" name.... I'll do this is tiny way (relatively) and I'll flip it if I get lucky... sometimes I win - sometimes I loose. I don't mention that stuff here because it's not pertinent to THIS thread. So I'm not against growth stocks and in fact think that you young guy SHOULD own them - because even if they hiccup - if the fundamentals are there - then long term the growth "should be" too. But in the meantime it can be ugly.... so you have to have the guts AND conviction to hold this stuff and or average down (what I'd be doing this AM if I owned Amazon). Just look at NetFlix (NFLIX) when the CEO did a major faux pas... if you were smart enough (do ya feel luck, punk?) to buy that one... I wasn't - but a friend that's on their board did... and he's absolutely killed it!

[COYBILT]

Sounds like I really need to move into your shop, so i can use your tools and then you can advise me on stocks while I live there. sound good? I will agree with you though you have to be in it to win it with stocks, sort of like a marriage.


100% agree with you here Todd!



RE: Chipotle Mexican Grill and similar stocks that are "priced for perfection" or have HUGE P/E Ratios they MUST grow in to... Just look at Amazon (AMZN) today. This is why - as much as I'd like to - I don't own them. You absolutely get murdered IF -- always the big IF - ANYTHING happens along the way that the street doesn't like. Instantly taken to the woodshed!!

Once in awhile I'll bite on a "big / fast growth" name.... I'll do this is tiny way (relatively) and I'll flip it if I get lucky... sometimes I win - sometimes I loose. I don't mention that stuff here because it's not pertinent to THIS thread. So I'm not against growth stocks and in fact think that you young guy SHOULD own them - because even if they hiccup - if the fundamentals are there - then long term the growth "should be" too. But in the meantime it can be ugly.... so you have to have the guts AND conviction to hold this stuff and or average down (what I'd be doing this AM if I owned Amazon). Just look at NetFlix (NFLIX) when the CEO did a major faux pas... if you were smart enough (do ya feel luck, punk?) to buy that one... I wasn't - but a friend that's on their board did... and he's absolutely killed it!

[COYBILT]

Sounds like I really need to move into your shop, so i can use your tools and then you can advise me on stocks while I live there. sound good? I will agree with you though you have to be in it to win it with stocks, sort of like a marriage.


100% agree with you here Todd!



RE: Chipotle Mexican Grill and similar stocks that are "priced for perfection" or have HUGE P/E Ratios they MUST grow in to... Just look at Amazon (AMZN) today. This is why - as much as I'd like to - I don't own them. You absolutely get murdered IF -- always the big IF - ANYTHING happens along the way that the street doesn't like. Instantly taken to the woodshed!!

Once in awhile I'll bite on a "big / fast growth" name.... I'll do this is tiny way (relatively) and I'll flip it if I get lucky... sometimes I win - sometimes I loose. I don't mention that stuff here because it's not pertinent to THIS thread. So I'm not against growth stocks and in fact think that you young guy SHOULD own them - because even if they hiccup - if the fundamentals are there - then long term the growth "should be" too. But in the meantime it can be ugly.... so you have to have the guts AND conviction to hold this stuff and or average down (what I'd be doing this AM if I owned Amazon). Just look at NetFlix (NFLIX) when the CEO did a major faux pas... if you were smart enough (do ya feel luck, punk?) to buy that one... I wasn't - but a friend that's on their board did... and he's absolutely killed it!

[SSLance]

I read this article with a much different perspective than I would have had just a short while ago...

http://seekingalpha.com/article/2343795-the-day-i-sold-everything?ifp=0

Thanks to Investing 102...

[GregWeld]

I read this article with a much different perspective than I would have had just a short while ago...

http://seekingalpha.com/article/2343795-the-day-i-sold-everything?ifp=0

Thanks to Investing 102...



It's a good article and I like the honesty of it. WE ALL HAVE DOUBTS and we all sometime worry about whether or not what we're doing is right. Here's where I personally sit. Everyone needs to take a longer term perspective. This is why I preach DIVIDENDS and being paid to wait - as long as you're in the best of the best. Because if you're reinvesting those dividends -- then they'll be buying more shares when the market does take a dive. That's EXACTLY WHAT YOU WANT. More share paying dividends buying more shares.... that's the power of compounding.


If Warren Buffet sold his Coke (KO) shares every time he was worried about this or that --- then he wouldn't be getting that dividend that is now larger or equal to what his original investment was.

Everything goes up and down -- the key is what your reaction is to that. Nature has us buying when prices and things are high - and we sell when they're low... the key to the whole investing thing is to stop doing that --- and buy when things SUCK.

The problem is -- we never know when those things are going to occur. I've learned over time - to just let the great law of averages make me a winner - and the law of market averages tells me that over the LONG RUN I'll be fine. In the meantime I spend my dividends and I don't worry much about what the market is going to or not going to do 'cause I've never been able to figure it out.

I never thought once about the market as I watched a GTR run 237MPH or a Bugatti run 246 today.... 'cause I know I'll get my dividends whenever they're paid.

[GregWeld]

You Twitter (TWTR) holders will be happy campers this morning....


A good example for 102 -- Twitters (TWTR) metrics were better than "expected" so the stock will get a nice boost.... but Amazon (AMZN) got shot in the head because of a lack of profit...

My point is - that for me personally.... I can't own this kind of stuff because I don't like waking up to a 30 point drop in a name, even when it's fun as hell to wake up with a 10 point gain. And if I do own them - they're very very fractional stakes. I might buy 1000 shares of something like this - when a normal position in my accounts is 20,000 to 40,000 shares. Tiny positions. That way I can 'enjoy' a nice gain (if I owned TWTR I'd wake up to a nice 9 to 10K dollar gain this morning)... but I don't get whacked with a big haircut that affects my retirement when they drop like rocks.

It's taken me a long time - but I've learned to watch from the sidelines... and not be upset with myself when some other lucky bastard scores big. My dividends just keep plugging along and keep Gwen and I near the style we'd like to live for a long time. You YOUNGER GUYS should be taking some risk with some of these names... just don't get crazy betting the farm on them.

[sik68]

Just checking in to say hello...I still follow this thread religiously! I will try to post more and earn my keep.

Due to dividend growth alone, I am earning $75 MORE per quarter now than at the beginning of the year. Gotta love it!

[GregWeld]

Just checking in to say hello...I still follow this thread religiously! I will try to post more and earn my keep.

Due to dividend growth alone, I am earning $75 MORE per quarter now than at the beginning of the year. Gotta love it!




Money for nothing and your chicks for free! Gotta love that Steven!

[GregWeld]

Remember what I've been saying about interest rates! The economy will take a real hit if we see a sudden spike up in rates. We are at a crossroads here where the economy is okay/decent which should support stocks --- but the FED can kill that party real quickly if they lose control of the rates.

[mdprovee]

Watching closely. Saw the news last night....and I started thinking of a few thing, ie. time to buy, why dropped so big, things like that. First time I can remember hearing news of the stock market, and me thinking about it.

On a side note, over the last year to year and a half, we have cut our credit debt in half, and pay things in cash now. What credit we have is no interest for another year. Hope to be completely payed of by April next year. I am dying to make changes to the car, but this thread has taught me not until the cards are payed off, and you can pay cash.

Thanks

[SSLance]

I've got an itchy finger on the buy trigger myself.

[WSSix]

Good job and good luck, Mike. It'll feel great being out of debt.

[GregWeld]

Nice headline if you own this name.... I'd still prefer Wells Fargo (WFC) over it but that's beside the point... if you own BAC you just got a nice raise. It's the yield that kills it for me.



Bank of America Corp. (BAC) Raises Quarterly Dividend 400% to $0.05; 1.3% Yield

[toy71camaro]

400% wow. Now there's a raise. ;)

[GregWeld]

It's not my job - or desire - to keep everyone informed about companies we've discussed in this thread over the last couple of years.... but we have discussed Kinder Morgan Partners (KMP) and it's various other companies quite a bit.

This is a Master Limited Partnership -- which has many rules about distributions etc.

I just read where they're are going to abandon that structure and consolidate their various companies under one name. What that's going to look like - or do to the dividend and share price etc is anyones guess at the moment.

I own a fairly substantial stake in these shares (11,000 shares) -- so obviously I hope that it's beneficial. My guess is - there will be some selling pressure as people tend to bail when they don't understand (or don't want to understand) what's going on.


http://www.bloomberg.com/news/2014-08-10/kinder-morgan-merges-oil-gas-pipeline-partnerships.html

[Sieg]

I'm due for some KMP love and certainly need it after last weeks pummeling! LOL

[GregWeld]

I'm due for some KMP love and certainly need it after last weeks pummeling! LOL




It's a long term hold for me - so I'll just trade my KMP in for the KMI (when they offer the swap) whatever that looks like. I'll roll with Richard Kinder whom seems to have a very good handle on the oil and gas and pipe biz. I liked the tax free income (they do this as a "return of equity" vs a dividend) but that's not really a big deal as it's only $60K per year in "tax free" income...

What I hope is that the savings of Admin etc --- is given back to the shareholders in the form of higher dividend - which will offset the taxes.

[GregWeld]

I'm due for some KMP love and certainly need it after last weeks pummeling! LOL




You'll be happier when you pick up the $1.39 dividend on the 14th.....

[Sieg]

You'll be happier when you pick up the $1.39 dividend on the 14th.....

Haven't lost sight of that! I bought it at what looked like a good price and it went lower thanks to my Midas touch. Then the legality issues surfaced and now for phase three. It's still minimal, so no worries, not compared to the 35% hit I took on Sprint last week! :sieg:

[WSSix]

Yeah, there's been a lot of talk about KMP for a while now. I figured I'd just be patient with it as they aren't going anywhere. There may be bumps along the way but Kinder Morgan has their stuff together. This, however, is news to me. Guess I'll have to be a little more vigilant until they get this sorted out.

[rocketrod]

KMP is up big pre-market. Here is more information on the deal
http://seekingalpha.com/article/2408435-kinder-morgan-merger-is-a-win-for-all?app=1&uprof=45&dr=1


First, let's address the core financial parameters of the deal. KMP holders will receive 2.1931 shares of KMI and $10.77 in cash, which translates to an 11.4% premium. KMR holders will receive 2.4849 shares of KMI for a premium of 16%. As a reminder, KMR is merely an LLC that holds KMP units and reinvests distributions. EPB holders will receive .9451 shares of KMI and $4.65 in cash for a 15% premium. Thanks to this deal, KMI expects to increase its 2015 payout to $2.00 from $1.72. It also aims to grow its dividend by 10% annually through 2020.

Now while KMP is being sold at a premium, it should be noted that investors will see less cash flow up-front. In 2015, KMP was on track to pay out at least $5.75. With the $2 anticipated dividends, KMP holders will now receive about $4.39 per KMP unit from their new KMI holding. Even if they were to automatically reinvest their $10.77 cash payment, their dividends will be about 14% lower. Functionally, with the new tax status, the payout will be a bit lower. At first glance, this might upset some KMP holders, especially those in retirement who rely on the distributions. That's an understandable but short-sighted reaction.

[CamaroMike]

Im late to the party, but yes there was a big hike in KMP. Im still holding though!

[GregWeld]

Okay --- We'll use this Kinder Morgan Partners (KMP) as a good example today of how I work.

I owned 11,000 shares at a cost of $81.43 a share = $895,730

These shares paid me $15,290 per quarter. The dividend is already "X" for the period - so on August 14th I'll be paid.

I sold this morning - the entire lot - for $1,120,290 netting a nice $224,560K

Add in the dividend capture and it's $240,000 this quarter.


My point in all this is --- whenever I have an unexpected windfall like this -- I'm going to take that gain. I'll buy the new entity when and if it's approved and takes place if the new dividend meets my needs --- or I can buy something else. Nobody ever went broke taking a profit.

OKay -- but for "102" -- you guys should be longer term thinkers and your profits (actual real dollars) are probably not quite as large as mine. Nearly a quarter million dollars is real money. Not that $2500 isn't -- but I'm saying that you have to balance the gain against your total - and whether or not this is a taxable event for you (long or short term hold). And then make a judgement call. For me -- that gain pays for the Pinkee's build... so I'll take it and say thank you very much. If it was in a 401K or IRA or ROTH -- and was only a $200 or $1000 gain - I'd probably let it ride and pick up the dividend - and the cash that's going to get paid and the shares in the new entity. I still LOVE this company so will bet with them again.

[SSLance]

Nice 1 day gain there Greg... Hard to say no to that especially when you figure in the toiling for so long in the red...

I bought some KMI a couple of times early on when I got back in and the 9% gain today put me at about 22% gain overall since February. I'm keeping my couple hundred shares in hopes that Richard keeps paying his shareholders back like he has been for years. Nice to see the big green days though, they sure are fun.

[WSSix]

So if this deal is approved, does that mean those of us who owned KMP will be cut a check for $10 per share and have it sent to us? Will it be received simply as a payout like the dividend is/was? I wonder what the tax implications are since KMP was an MLP. Not knowing any better, I'm looking at the shares received in KMI and cash payout as a return for the sale of the business I am a partner in.

[GregWeld]

So if this deal is approved, does that mean those of us who owned KMP will be cut a check for $10 per share and have it sent to us? Will it be received simply as a payout like the dividend is/was? I wonder what the tax implications are since KMP was an MLP. Not knowing any better, I'm looking at the shares received in KMI and cash payout as a return for the sale of the business I am a partner in.




You will receive the appropriate amount of shares in KMI... some 2+ for 1... and yes -- a cash payment deposited to the account holding your shares of $10.77 per share you hold in KMP.

That will be treated as a return of capital - which is how a MLP does things. So it's not a gain and while I'm not an accountant -- I don't think it's taxable.. but it depends on how the paperwork goes for the transaction. If they SELL the shares to KMI it might be taxable --- but I'm thinking they're doing a dissolution of KMP and giving you back your $10 and then swapping the balance for the new KMI.

These things can change - so up until it actually happens -- it's fluid.

[GregWeld]

Nice 1 day gain there Greg... Hard to say no to that especially when you figure in the toiling for so long in the red...

I bought some KMI a couple of times early on when I got back in and the 9% gain today put me at about 22% gain overall since February. I'm keeping my couple hundred shares in hopes that Richard keeps paying his shareholders back like he has been for years. Nice to see the big green days though, they sure are fun.





Every once in awhile even a blind squirrel finds a nut. LOL

I fully intend to re-invest in the new KMI -- at what level remains to be seen but I believe in their business and I like the way ownership has treated the investor... and that goes a long way for me.

[GregWeld]

Okay --- We'll use this Kinder Morgan Partners (KMP) as a good example today of how I work.

I owned 11,000 shares at a cost of $81.43 a share = $895,730

These shares paid me $15,290 per quarter. The dividend is already "X" for the period - so on August 14th I'll be paid.

I sold this morning - the entire lot - for $1,120,290 netting a nice $224,560K

Add in the dividend capture and it's $240,000 this quarter.


My point in all this is --- whenever I have an unexpected windfall like this -- I'm going to take that gain. I'll buy the new entity when and if it's approved and takes place if the new dividend meets my needs --- or I can buy something else. Nobody ever went broke taking a profit.

OKay -- but for "102" -- you guys should be longer term thinkers and your profits (actual real dollars) are probably not quite as large as mine. Nearly a quarter million dollars is real money. Not that $2500 isn't -- but I'm saying that you have to balance the gain against your total - and whether or not this is a taxable event for you (long or short term hold). And then make a judgement call. For me -- that gain pays for the Pinkee's build... so I'll take it and say thank you very much. If it was in a 401K or IRA or ROTH -- and was only a $200 or $1000 gain - I'd probably let it ride and pick up the dividend - and the cash that's going to get paid and the shares in the new entity. I still LOVE this company so will bet with them again.



I maybe should have explained how I arrived at the sales numbers. I live the market and wake early... and saw the premarket trading activity and put in a sell order... The early bird gets the worm sometimes.... LOL

In other words --- the premarket HIGH this morning was $104 per share.


Pre-Market Volume: Pre-Market High: Pre-Market Low:
1,424,588
(08:17:37 AM)
$ 104

(04:00:00 AM)
$ 84.23

[GregWeld]

For those interested in seeing a HISTORY of a particular stocks dividends -- and or when they pay and go ex etc... this is a freebie NASDAQ site with that info... you just have to put in the symbol or name.


My other link didn't work as modified and posted..... so here's a "starter link" -- this chart is showing Wells Fargo (WFC) so just change the symbol to check the stock of your choice.


http://www.nasdaq.com/symbol/wfc/dividend-history

[GregWeld]

To all of you that bought Kinder Morgan Partners (KMP) --- you've enjoyed an 18% Year to date gain.... and you just got your dividend posted today.... You're welcome! LOL


As posted earlier - I captured my gain in KMP and then started to build a position - 25,000 shares so far - in Kinder Morgan Inc (KMI) the parent company and acquirer of KMP. I already now have a nice gain in it (3% but that's in just a few days).


Here's the point for Investing 102... The market is both kind and an evil douche at any given time. But you'll never reap any of the rewards if you're not "in" it. Being on the sidelines and watching or waiting for just the right moment - will always have you OUT when good things happen. While it's true that being out when bad things happen might save you some sleepless nights... you'll never get ahead that way.

Build your trust over time... average your way in to positions over time - but most importantly - continue to put money to work when it's the darkest days. Know that you're buying the best companies in the world and that eventually they will go your way and you will be rewarded.

[CamaroMike]

Good stuff!

[WSSix]

I was actually going to post a nice update involving KMP and why it's a great example of what drew me to dividend investing but Greg beat me to it. For me, I'm hitting 25% returns after 2 years of owning KMP. So much of it is from when the dividend payments were being reinvested while the value was down. Everything that Greg and others have mentioned is happening for me. KMP is simply the name that's in the news right now but it's not the only stock that's working like that for me. OXY and SO definitely fall into that category, too. I've thought about selling and taking my gains with KMP, but I'm not so sure I'm going to now. I was seriously considering grabbing up some KMI before this news broke. Now, it's just going to happen for me anyway is my thinking. Any one have a different opinion they care to share and why? After all, this is about learning.


Thanks

[GregWeld]

Glad to see you got something out of the thread you started!!!

LOL




I was actually going to post a nice update involving KMP and why it's a great example of what drew me to dividend investing but Greg beat me to it. For me, I'm hitting 25% returns after 2 years of owning KMP. So much of it is from when the dividend payments were being reinvested while the value was down. Everything that Greg and others have mentioned is happening for me. KMP is simply the name that's in the news right now but it's not the only stock that's working like that for me. OXY and SO definitely fall into that category, too. I've thought about selling and taking my gains with KMP, but I'm not so sure I'm going to now. I was seriously considering grabbing up some KMI before this news broke. Now, it's just going to happen for me anyway is my thinking. Any one have a different opinion they care to share and why? After all, this is about learning.


Thanks

[WSSix]

lol. Yes, I certainly have. I'm really glad others have too. This is a great thread.

[GregWeld]

Here's another Investing 102 moment.... Home Depot (HD) is a boring old stock that pays a dividend... That's trading UP $3.00+ a share in premarket trading. Why? Because they knocked the earnings ball out of the park.

My point for Investing 102 --- you don't need to gamble on the latest greatest IPO's all the time in order to have some real nice positives in your accounts. Here we are with TWO names that we've used for examples in this thread on a regular basis -- Kinder Morgan (KMP) and now Home Depot (HD) that have nice jumps in value just THIS MONTH!!

I'm not saying that you should own stocks that we've discussed! Not at all! What I'm saying is that these are "boring" names... these are just examples of names you can buy and sleep well at night... and here they are hitting home runs for you.

[96z28ss]

just got another 8.3% dividend raise with MO. This crap is so boring.

[GregWeld]

just got another 8.3% dividend raise with MO. This crap is so boring.




Oh Yeah.... I'm pretty sure everyone on this board got AT LEAST an 8.3% pay raise this year right?? Sure they did!


HAHAHAHAHAHAHAHAHA


I'm glad you guys are having "some" success with all this stuff. It's so difficult isn't it? LOL

[chetly]

I finally jumped on the Apple bandwagon and bought 10 shares. I already owned 15 shares of Tesla and have another 8k in my 401k. Not to shabby for a 35 year old that just started building his stuff 2 years ago.

Actually, I got a 10.9% raise this year, so yes, some people did a nice raise...

[GregWeld]

I finally jumped on the Apple bandwagon and bought 10 shares. I already owned 15 shares of Tesla and have another 8k in my 401k. Not to shabby for a 35 year old that just started building his stuff 2 years ago.

Actually, I got a 10.9% raise this year, so yes, some people did a nice raise...


Good names to own for a 35 year old. But don't forget to also invest in some good old fashioned solid dividend payers.

And WOW -- That's a nice raise!! Raises have been few and far between for most folks the last 5 years. SO good for you.

[GregWeld]

I often comment to others - when discussing stocks - that I consider myself to be Mister Joe Average guy. I wear stained blue jeans and t shirts with welding holes in them... While we enjoy a meal at some of the worlds finest places - I USED TO stop at McDonalds (MCD) once in awhile.

I sold my MCD holdings when I realized that "I" no longer stopped there - and that in fact - I began to AVOID them even if I was hungry. The food quality wasn't what it was - food was served slowly - served cold - and many times I couldn't understand one word the employee was saying. They also were dirty.

For Investing 102 basics... I often mention "fundamental changes"... and to own companies that you use personally. If you're an AT&T customer... you buy (T)... if you use Verizon (VZ) then buy that one instead. That way -- you can use yourself as a gauge for how things are going. If T pisses you off every time you interact with them -- and you switch services when your contract is up.... SELL! You're a good judge of what's going on with a company in general and if you don't like them - chances are - others feel the same way.

I sold MCD because I personally no longer liked the way they were doing business. I went from liking them to thinking they sucked. If I'm average Joe - then so be it - I figure others must see the same thing I do! I don't want to own things I'm not proud of! Period.

So here's a FUNDAMENTAL CHANGE in a business --- and thus my post today....




In 2013, McDonald’s reported a decline in U.S. same-store restaurant (those open at least 13 months) sales and a big drop off in customer traffic, breaking a 10-year streak of gains in a market that generates 30% of sales. And so far in 2014, things have only gotten worse, with McDonald’s diners staying away in droves.



Pay attention to these kinds of warnings. Yes - new management etc might turn a big ship around - but in the meantime - you as an investor might have lost out on the GROWTH of some other company that is kicking your butt... Don't stick your head in the sand and be a complacent investor! Retrain your "employees".... punch out and find a similar but better growth and income story. Be heads up -- it's important to how you're going to spend your retirement.

[GregWeld]

Just for fun --- here's what I'm talking about when I say --- being heads up and pro-active with your investments WILL affect your retirement....



Go pull up a ONE YEAR chart of McDonalds (MCD) and overlay (compare) it with Jack in the box (JACK).

Now add in Chipotle Mexican Grill (CMG).


MCD is DOWN 1% for the 1 year period while JACK is UP 43% while CMG is up 66%..... If you have 10 grand invested in them that's 9900 in MCD vs 14,000 for Jack and 16,600 for CMG. Which would you choose? Did ya used to go to one and now always to the other? Pay attention to that - why would you own MCD yet always choose to eat at CMG where there's a line out the door. Or you notice that CMG USED to have a line out the door and now you're the only dude in there... HELLLLOOOOOOO. Pay attention!

I'm not saying to sell one or buy the other.... I'm saying to pay attention to ALL of your investments and keep up with basic news and your basic feelings. Always been a Windows user... and switched to Apple... but you still own Microsoft? Maybe you should listen to yourself and switch your investment too. Ditto if you were always a Ford guy and now love Chevrolet etc. or vice versa.