Investing 102

[NOVA]

One beautiful thing that has happened in the last few days as a result of this pullback is the plummeting of mortgage rates.

I just rate locked this morning at 4.25% on a NON owner occupant 4 plex. The rate I was looking at just last Friday was 4.625%. And I was okay with that. But that's a huge spread in just 2-3 days. And that's a lot of fixed savings over 2-3 decades.

Basically, I just got lucky. :lol:

Yep, true that, last week I was quoted a 4.0 for my personal home and today at 3.8750 %

[Vegas69]

One beautiful thing that has happened in the last few days as a result of this pullback is the plummeting of mortgage rates.

I just rate locked this morning at 4.25% on a NON owner occupant 4 plex. The rate I was looking at just last Friday was 4.625%. And I was okay with that. But that's a huge spread in just 2-3 days. And that's a lot of fixed savings over 2-3 decades.

Basically, I just got lucky. :lol:

Sweet....Get the payments on auto draft with extra principal to get that baby free and clear in 15. Otherwise, you'll blow it on diapers and car warehousing. hahahaha

[WSSix]

I'm a little uneasy with the pull back that's occurring as well. Mainly because I'm just not sure what to do with a couple stocks. KMP is a big one that I'm really not sure if I should pick up more shares in it knowing that it is going to be bought soon. I won't be getting rid of any of my shares but should I buy any more? I honestly don't know how to approach it since it will be rolled into KMI soon. This one may be beyond the scope of Investing 102 though.

OXY is going to suck for a while longer simple as that really. I'll add some more there I do believe and just ride it out. If I owned any of the other big oil companies I'd be doing the same thing.

My last oil stock is an MLP as well. It was and still is a gamble so there's not a lot of money invested there. It is so cheap that I really think I should spend some more on it and just see what happens. The dividend is well over 10% now because of the price drop. So yeah, decisions decisions. I'm glad I'm in this for the long run.

[GregWeld]

Yep,

I think everything I have is red except for 1 name I own in the financials sector...

it feels bad man, haha

But I am pretty confident in the stuff I bought, just everything seems to be dropping, I keep trying to channel my inner GregWeld and say "look at the 5 year chart, look at the dividends" haha




Trust me ---- everyone does the same thing no matter when they got started. At some point you're going to be dripping red ink. But you actually only LOSE the money if you sell!!! You don't sell --- you collect dividends --- and if you have extra dough - you but and bring your average down. Just don't get greedy.


Think about a guy that bought shares in 1935 --- or 1950 --- or 1986 or 1996! We are far higher today than at any of those points (just random numbers I typed). At each and every one of those points - they were most likely talking about how over valued the market was... or their houses.... or whatever else they'd bought -- like the nickel loaf of bread.

When I was a kid -- McDonalds sold you a burger and a coke --- 25 CENTS for both items! We thought it was ridiculous..... You only got 50 cents for raking old lady Smiths entire yard of fall leaves.

[GregWeld]

Trey -- I'm a little pooped after driving the semi 600 miles today. But I wanted to respond.


First thing people need to remember -- YOU NEVER HAVE TO BE IN A RUSH TO BUY.

Playing KMP is now what's called "arbitrage". In other words -- you need to do the calculations for what KMI stock is going to be -- because you're going to get "X" KMI shares PLUS CASH - for each KMP share.

I sold KMP (posted it up here) at high prices --- and it's come down a lot since -- but I bought KMI.... I took a hit in the dividend percentage (for now) but I had a huge cash gain in the KMP.....

RIGHT NOW - OIL SUCKS..... people are freaked out - hell - entire countries are freaking out. IMHO that's when you buy. We all know oil is a requirement for daily life. It might be on sale now - but everyone will figure out how to get it back up. It's too important to too many governments.

Just don't get greedy -- you'll feel better if it goes lower -- and of course - when things snap back you'll kick yourself for being such a wimp! LOL








I'm a little uneasy with the pull back that's occurring as well. Mainly because I'm just not sure what to do with a couple stocks. KMP is a big one that I'm really not sure if I should pick up more shares in it knowing that it is going to be bought soon. I won't be getting rid of any of my shares but should I buy any more? I honestly don't know how to approach it since it will be rolled into KMI soon. This one may be beyond the scope of Investing 102 though.

OXY is going to suck for a while longer simple as that really. I'll add some more there I do believe and just ride it out. If I owned any of the other big oil companies I'd be doing the same thing.

My last oil stock is an MLP as well. It was and still is a gamble so there's not a lot of money invested there. It is so cheap that I really think I should spend some more on it and just see what happens. The dividend is well over 10% now because of the price drop. So yeah, decisions decisions. I'm glad I'm in this for the long run.

[GregWeld]

GORDON..... as a borrower you suck. Nice score on the 4 plex!!!

[ErikLS2]

Some good advice I read once on whether to hold onto a stock that has declined or not:

Regardless of what you paid for it, if you would be a buyer at the current price you keep it. If you would not be a buyer at the current price, then you sell it.

[Flash68]

Sweet....Get the payments on auto draft with extra principal to get that baby free and clear in 15. Otherwise, you'll blow it on diapers and car warehousing. hahahaha

That would be nice if the building wasn't 108 years old (literally) and needing a tad bit of work. More upside!

GORDON..... as a borrower you suck. Nice score on the 4 plex!!!

Thanks. Let's hope it just stays upright for awhile. Kinda like you.

:hello:

[WSSix]

Playing KMP is now what's called "arbitrage". In other words -- you need to do the calculations for what KMI stock is going to be -- because you're going to get "X" KMI shares PLUS CASH - for each KMP share.



This is why I think I'll just let it ride. I don't think I want to get into crunching the numbers to figure out if it's a good deal or not or at what price that changes. I have the shares now, they are earning a dividend, and I'll be rolled into another great company soon. If the sale of KMP wasn't already known, I'd be all over buying more though. Otherwise, things are peachy as far a I'm concerned. Thanks Greg.

Erik, I think that's a decent way to look a stock choice.

[GregWeld]

Here's a better way to look at a stock that is falling --- or a "market" which is falling.


If you loved the stock at 100 -- then you should love it at 80...


Here's why I don't play in the "priced for perfection" stocks. It's a given that not all of them blow up.... many go on to make people small fortunes...but when they blow up - they blow up.


You guys check out NETFLIX (NFLX) today..... DOWN 100+ ---- That's in ONE DAY. I can't personally stomach stuff like that.


BTW -- Yesterday while the market was taking a drubbing.... the account I use for sharing info on here was UP. It's also UP this morning. That's what I love, and can live with.

[SSLance]

I noticed the same thing, this is what I'm really starting to like about dividend Growth investing...

Of the 4 I bought yesterday morning, 2 ended up for the day, the other 2 down a bit. Overall the account was up a half a point.

I'm shopping yet again this morning. It's real hard to not be tempted to get too greedy with oil stocks right now.

[GregWeld]

I noticed the same thing, this is what I'm really starting to like about dividend Growth investing...

Of the 4 I bought yesterday morning, 2 ended up for the day, the other 2 down a bit. Overall the account was up a half a point.

I'm shopping yet again this morning. It's real hard to not be tempted to get too greedy with oil stocks right now.



Well --- so here's something everyone needs to guard against -- and that's the opposite of FEAR -- it's GREED. We've had such fabulous market conditions for so long now - we've forgotten about real fear... and we just "ASSume" it's going straight back up. That can come back to bite people. We should never FEAR the market given what we should be invested in... but we should RESPECT the market. We don't control it - we're just along for the ride. There's so many old adages -- like Pigs get fat - hogs get slaughtered... etc. And these all ring true!! They're age old -- they're factual... and they're time tested.

So for those of you that are fearless --- remember these things. Scale in -- tip toe in -- don't go buying whole hog - and don't buy stuff you don't really understand -- "just because it's on sale". You'll end up with scratchy pants if you didn't know they were notoriously scratchy which is why the store put the on sale!! Yeah they looked great... yeah they're on sale half price. But buy ONE pair -- not a pair in every color! LOL



In the meantime -- I've made an absolute killing in the last two days. That doesn't mean I'll get to hold on to the gains... and I bought some stuff really well. But that's all that means -- is that I bought some stuff well. It could turn around in one day and I'd be bleeding in the streets. It's okay - I've been there many times. I'm still living to talk about it. :>)

[SSLance]

I spent some time yesterday just selectively adding to positions I already held. I'm still not quite half invested again in my IRA account and I added some of the same shares into my ROTH.

This time it was much easier for me to hit the submit button on the orders as I'm 8 months in and have history and a good feeling/history on the stocks I own. Like Greg says, I'm tip toeing in...and I'll probably at some point regret not buying more during the dip...but given where I was a year ago, I'm happy where I'm at.

[chichirone]

Anyone using OptionsHouse for their online account?

http://www.optionshouse.com/rates/

My wife ran across the site doing some stock research. Never heard of them but the prices look good. Just curious if anyone has any direct experience for how it compares to Schwab besides the rate differences they claim. Research tools? Reporting tools? Support? Etc...

[GregWeld]

Remember how skeptical you used to be??? After being burned in the market...


Isn't this different this time around? You're invested rather than just buying and hoping stuff goes up. That's a HUGE mental difference which WILL make a difference in your future. Being INVESTED and being comfortable being invested is what keeps you in the game.


Now -- A few posts back I told you guys about building 10,000 share investment in Energy Transfer Partners (ETP).... I was discussing the use of LIMIT ORDERS in order to insure I got a lower price during the day (you can set these for longer horizon if you choose that option). Well -- those shares are now UP 68 GRAND in just 3 or 4 days. MY POINT??? That's good money right? I would have blown those shares out so fast in the old days. I'd have scooped up the 68 Grand - had a 40% tax bill... and then been looking to put that back into something else. Sometimes that something else ate the rest of the gain the gubernut didn't take. THAT WAS STUPID.... Yes I made huge money on an annual basis "trading" -- but what I also did was paid monumental tax bills -- and my NET WORTH didn't go up. It was just trade trade trade.

Now -- I don't look at the paper gains... I look AHEAD at the dividend payments - what those are worth to me... and I pay a tiny fraction of the taxes I used to (my money is NOT in a IRA) --- and my net worth is growing. BIG CHANGE!!! HUGE!!! <Pretty Woman>

[SSLance]

Remember how skeptical you used to be??? After being burned in the market...

Isn't this different this time around? You're invested rather than just buying and hoping stuff goes up. That's a HUGE mental difference which WILL make a difference in your future. Being INVESTED and being comfortable being invested is what keeps you in the game.



Or...just relying on a FA to make those decisions for me and then second guessing him or being pissed when I wasn't happy with the results or didn't understand the strategy.

Being invested myself lets me have a much clearer picture of what is really going on and actually takes less effort now and I understand the big picture better.

One can get bogged down in the details while trying to do too many things at once in the market. With just 10 equities to watch (I've actually got 11 now that I picked up some ETP) it's very simple and very rewarding.

[captainofiron]

Question.

My dad and I were talking about investments, he has been asking me lots of questions since he has seen me acting on what I have learned here. And yesterday he asked me to look at his 401k/IRA and asked what I would do.

Here are the specifics, he works for Halliburton (25+ years cant remember), he quit for a couple years to go with an independent oil co. they started to go south and Halliburton begged him to come back so before goign down with the ship my dad jumped back on board.

So he has his regular 401k, he has some restricted stocks with the company, and a bunch of unrestricted stocks and paid dividends just sitting in his account.

He is already retirement age, but wants to work till 2025.

My gut instinct (from what I have learned here) is to:
1)dump the unrestricted stock he has in halliburton
2)use it and the dividend cash he has sitting to buy some small stocks, and build a little mutual fund (it totals about 25k)

BUT is it "too late" as in he is too close to his retirement date? Should he just reinvest in the mutual fund his 401k is in?

I tried looking through the thread but couldnt find a similar situation

thanks gents

[ErikLS2]

I'm not sure if this will apply to your father but for the masses here there is a little known fact about 401k's when you leave your employer. If you have a 401k with a former employer (and it's typically a poor assortment of investment choices) you can transfer it to a traditional IRA account at a brokerage of your choosing, Schwab, Fidelity, etc. If you do a "trustee to trustee exchange" this is a tax free event for you. The money can't touch your hands or go through your bank account, if it does it's a taxable even to you. It must be transferred directly from the 401k administrator to the brokerage handling the traditional IRA account. This opens up the possibility of investing in anything you choose, through that Traditional IRA account. The key is you can no longer be employed with that company that the 401k is with (you can't do this while you still work for the company). I just did this and didn't even change employers. The company I work for was bought by another company so my job is still the same but I still was able to take advantage of this and moved all of my 401k over to my Schwab Traditional IRA which I can now invest the "Investing 102 way".

My guess is that this does not apply to your father since he is now back employed by the company tied to the 401k but he might want to check since I'm not sure. Schwab or any of the brokerage firms that do this can answer that question for him. I talk to a lot of people that still maintain past 401k's with previous employers and the poor investment choices that usually come with them when they could be taking advantage of this perfectly legitimate "trick" (if done correctly).

[captainofiron]

I'm not sure if this will apply to your father but for the masses here there is a little known fact about 401k's when you leave your employer. If you have a 401k with a former employer (and it's typically a poor assortment of investment choices) you can transfer it to a traditional IRA account at a brokerage of your choosing, Schwab, Fidelity, etc. If you do a "trustee to trustee exchange" this is a tax free event for you. The money can't touch your hands or go through your bank account, if it does it's a taxable even to you. It must be transferred directly from the 401k administrator to the brokerage handling the traditional IRA account. This opens up the possibility of investing in anything you choose, through that Traditional IRA account. The key is you can no longer be employed with that company that the 401k is with (you can't do this while you still work for the company). I just did this and didn't even change employers. The company I work for was bought by another company so my job is still the same but I still was able to take advantage of this and moved all of my 401k over to my Schwab Traditional IRA which I can now invest the "Investing 102 way".

My guess is that this does not apply to your father since he is now back employed by the company tied to the 401k but he might want to check since I'm not sure. Schwab or any of the brokerage firms that do this can answer that question for him. I talk to a lot of people that still maintain past 401k's with previous employers and the poor investment choices that usually come with them when they could be taking advantage of this perfectly legitimate "trick" (if done correctly).

I was looking through the options on his account (its through Fidelity) and on his 401k, its on a target date fund, and an assortment of target date funds and some bonds are the only options as far as the 401k

But I was talking more along the lines of the unrestricted stock he owns in Halliburton.

my only hesitation is because he is planning to retire in 2025, and I dont know if ~10 years is long enough to even out with stocks versus putting it back in his mutual fund

PLUS I know he will not actively look after it, which is why my thought turns to mutual funds even though I know they arent ideal

[WSSix]

I don't know about the rest of you but this whole market down turn on the waves of dropping oil prices and ebola fears sure as hell wasn't as bad as they made it out to be. While I'm still down overall on a number of my shares, the trend has definitely been up, sometimes just as quickly as it went down, to the point where I'm going to miss some deals waiting for money to get transferred etc.

Ignore the noise.

[WSSix]

I was looking through the options on his account (its through Fidelity) and on his 401k, its on a target date fund, and an assortment of target date funds and some bonds are the only options as far as the 401k

But I was talking more along the lines of the unrestricted stock he owns in Halliburton.

my only hesitation is because he is planning to retire in 2025, and I dont know if ~10 years is long enough to even out with stocks versus putting it back in his mutual fund

PLUS I know he will not actively look after it, which is why my thought turns to mutual funds even though I know they arent ideal

As a former employee of Halliburton, I'm setup the same way. I don't have a crystal ball but I would think ten years is plenty for the market to go down and come back up. Oil is cyclical just look at the charts before 2010. If he was buying stock through the down time, he's sitting pretty with fantastic gains just like I am. I would pay attention of course but I wouldn't move the HAL stock just yet. It's what I am doing with mine. I'm no where near retirement age though. If he or you are wanting something more steady with better dividend payments, then there are plenty of options for you. I have no idea on the tax implications of selling the stock. I believe it simply follows the one year and a day rule even though it was bought through the ESPP.

[captainofiron]

As a former employee of Halliburton, I'm setup the same way. I don't have a crystal ball but I would think ten years is plenty for the market to go down and come back up. Oil is cyclical just look at the charts before 2010. If he was buying stock through the down time, he's sitting pretty with fantastic gains just like I am. I would pay attention of course but I wouldn't move the HAL stock just yet. It's what I am doing with mine. I'm no where near retirement age though. If he or you are wanting something more steady with better dividend payments, then there are plenty of options for you. I have no idea on the tax implications of selling the stock. I believe it simply follows the one year and a day rule even though it was bought through the ESPP.

Great, thanks for the info.

Also your post made me think of something that I had completely forgotten about, its not in an IRA, its just stock, so the tax side of it completely was not in my thought process.

Thanks again

[sebtarta]

OK, I will remove my tin foil hat after this post. GPRO, we know its IPO was a few months back and then it took off hovering around $90 a share for the last month. We then get a report stating that some famous race car driver's accident could have been caused due to the GoPro camera on its helmet.

On October 30th GPRO is scheduled to report their Q3 earnings. Which from financial report articles they claim they meet or exceed the earnings projected. Which if this is the case it could send the stock price back up.

NOW, could that article about the injury come out just in time to send the actual stock price down to allow more buyers to jump ship before the Q3 reports? This is where my tin-conspiracy-foil hat comes into play. Am I crazy to think this way? Or should I just stop talking and keep reading more.

[Vortech404]

sebtarta,

That would be something more like a day trader would do. We are investors.
You want time in the market not timing the market. What happens when you buy on the dip because of that helmet issue and then when the Q3 earnings report comes out they didn't do as good as well as they thought and the stock drops even further? Would you be mad?

Unless your portfolio is already loaded with good dividend paying stocks and your reinvesting those dividends and its some play money.

Just my thoughts
John

[WSSix]

I'm going to agree with John on this. If you're playing with the GoPro money, then maybe you should be concerned. If you're investing in the company, don't sweat it and maybe consider it as a sale on GoPro stock. Go ahead and have the cash in the account waiting to buy if that's what you want to do. Don't wait until the reports come out to transfer the cash. It may just go right back up within a day or two and you'll miss it. Which doesn't matter in the long run but it's one of those small I wish I would've things that could just make you feel a little better.

[GregWeld]

Are you gambling or investing? When you're "betting" on something (one way or the other), that's gambling. When you're investing - then you're not trying to game the latest tick by tick info. And if the stock you own is DOWN and you're worried about it... then maybe you shouldn't be in that stock.

Nobody can answer your questions. Which is why I advise EVERYONE... know what you own - why you own it - what your goals are. To advise someone what they should do, or what they "think" some stock is going to do is fools advice. Nobody knows how you're doing financially - what someones risk tolerance is - someones mental capacity for handling market swings etc. Only one person can possibly know how they feel and what their guts are doing.

The reason I advise people reading INVESTING 102 to start out with great businesses - great names - things they can monitor themselves and that pay dividends... is so they stand some chance of feeling good about their investments. It takes awhile to gain some confidence investing in a market where you have ZERO control. I advise AGAINST gambling - because this thread is for beginner investors. While they "might" miss out on the next hot stock -- they might also miss out on losing their money. I'd rather see people stay in the market - and get healthy over time. Once they feel comfortable and can afford it - they'll know when it's time to take a gamble on "X".


Personally -- if "I" owned GoPro (GPRO) I'd be a holder. I wouldn't add to my position on weakness nor on any news. There's way too much speculative money in the name. These are not "strong hands".... people are just betting that it's going higher. That's usually when you get your ass handed to you. Just when EVERYONE thinks one way in the market - look out below. Companies like this can report a stellar quarter -- but the quarter isn't "stellar" enough for the market and the stock can drop. Read the posts about "priced for perfection".











OK, I will remove my tin foil hat after this post. GPRO, we know its IPO was a few months back and then it took off hovering around $90 a share for the last month. We then get a report stating that some famous race car driver's accident could have been caused due to the GoPro camera on its helmet.

On October 30th GPRO is scheduled to report their Q3 earnings. Which from financial report articles they claim they meet or exceed the earnings projected. Which if this is the case it could send the stock price back up.

NOW, could that article about the injury come out just in time to send the actual stock price down to allow more buyers to jump ship before the Q3 reports? This is where my tin-conspiracy-foil hat comes into play. Am I crazy to think this way? Or should I just stop talking and keep reading more.

[96z28ss]

OK, I will remove my tin foil hat after this post. GPRO, we know its IPO was a few months back and then it took off hovering around $90 a share for the last month. We then get a report stating that some famous race car driver's accident could have been caused due to the GoPro camera on its helmet.

On October 30th GPRO is scheduled to report their Q3 earnings. Which from financial report articles they claim they meet or exceed the earnings projected. Which if this is the case it could send the stock price back up.

NOW, could that article about the injury come out just in time to send the actual stock price down to allow more buyers to jump ship before the Q3 reports? This is where my tin-conspiracy-foil hat comes into play. Am I crazy to think this way? Or should I just stop talking and keep reading more.

Buying stock like FB and Gopro to me is just gambling. I invest in dividend paying stock. Invest in long term growth stock with dividends. which is what this thread is about. if your going to gamble on a few stocks, gamble with money that you can afford to lose some on. Gambling a bit allows me to use some of the winnings if there is some and purchase more investment stock.

example of what transpired in the last 1.5 years with me and FB

My Gambling thought process.
I use facebook, 98% of my friends are on it. the IPO didn't go as well as most thought. they just started advertising on mobile. I'm going to take a chance.

1-15-13 bought 16 shares of FB @ $31.53, cost $514.47 again in my house this is a couple weeks of eating out and keeping the wine-o at home supplied. I'm already pissing money like this away.
3-23-13 bought 12 shares of FB @ $25.92, cost $321.03 this brought my cost average down and I still believed in the stock and that it would turn around and show that it can make money.

On Gopro, my friend is on a reality show and they use suitcases full of these and demolish gopro cameras at a large rate. They are always buying more. Robyn's brother has one mounted on his mountain bike. He convinced me to buy one for my bike. I'll use it in my Camaro on track days also. I see a ton of people have them. I also been watching the crazy videos on facebook that users submit. I decided to gamble again and get in early but slowly.
7-1-14 bought 8 shares of GPRO @ $46.4 cost $381.20
7-14-14 bought 10 shares of GPRO at $38.85 cost $398.50

I gamble with small chunks of money. If I lose half my money its like me going on a trip to Vegas and gambling and losing $100 a day for a few days.

I have been watching my FB for a month or so going on a roller coaster ride so I decide to take some of Greg's advice and sell some when the pig was fat.
On 8-7-14 sold FB 15 shares @ $73.37 nice little profit.
ON 9-10-14 sold FB 13 shares @ $77.67 nice little profit.

Still holding onto my Gopro, I feel it will go back to its high soon.

The market stared to correct a bit past couple of weeks and gave me a buying opportunity so I used the money and profits from my Facebook and bought and added to my investing 102 type stuff.

10-10-14 bought 20 shares of BPT @ $82 which I already owned at a higher price point.
10-14-14 bought 10 shares of BPT @ $77.5 allowed me to bring my cost average down on my already existing shares.

This is how I'm starting to build my small fortune. I don't have large sums of money like GW but its a start, and I know I'm probably not going to hit onto mother load of money. However its a lot better than letting it sit in a savings account at .1%

[GregWeld]

Good stuff Bob!


It's NEVER about how much or how little money people have -- it's about earning and multiplying what you do have so that LATER you'll have SOME rather than NONE.

Baby steps.... Learning... understanding the market... WINNING.

Money is all "relative". Large investments also LOSE large on big market swings. So it's not all just fun and games! What I'm trying to imply here is that how a guy feels about losing is as important and how he feels about making money. Because as you have success -- and that pot grows -- so do the swings! This is why I encourage people to look at PERCENTAGES rather than dollars. Percentages are much more relational!

If a guy invests $500 and it doubles to $1000 --- that's a 100% profit!! How do you handle that? Do you skim some of the fat and reinvest in something else? Do you let it all ride and hope it doubles again? Do you look at that and think that over time it might be 10 times that? Or do you freak out and sell it all? Are you checking the market every 15 seconds... or do you look at your account once every quarter...


These are all thoughts that people go thru.... and it's what each individual needs to learn about themselves. It makes little difference to ANYONE if it's 50 bucks or 50 thousand bucks... The feelings and thoughts will be there.

[sebtarta]

I understand everyone's point of view on this.

One thing though is that you all assumed I wanted to buy GPRO and all. Maybe I do maybe I don't. My question was, could that article come out a perfect time to allow for a stock to go down in order to allow buyers to jump ship before their Q3 earning revealed?

[captainofiron]

What do you guys look for in 401k mutual funds?

My new employer has a pretty good number of funds we can select. My old job only had target date funds at decade intervals.

I looked at their charts, expense ratio, trailing returns and the percentages as far as stock/bonds/cash

Anything else I missed?

I selected 6 at 15% and 1 at 10%

they have different categories, like growth, income, bonds, growth/income, aggressive growth

I picked 3 out of the growth, and 4 out of aggressive growth

quite a few of the funds dont have a ticker, so I really didnt know how to research them

[GregWeld]

Given your age -- Growth, Growth and Income, and Aggressive growth are good choices.


Now you begin to see why I'm not a fan of "mutual funds" or company IRA's.... Wouldn't you sleep better if you actually KNEW what you were invested in?? Rhetorical question so don't respond. Not to mention there are all manor of fees and expenses that support just about everyone on the planet except you! UGH! I truly hate them -- but they're still far better than doing nothing... and there are tax advantages etc. so just roll with it.






What do you guys look for in 401k mutual funds?

My new employer has a pretty good number of funds we can select. My old job only had target date funds at decade intervals.

I looked at their charts, expense ratio, trailing returns and the percentages as far as stock/bonds/cash

Anything else I missed?

I selected 6 at 15% and 1 at 10%

they have different categories, like growth, income, bonds, growth/income, aggressive growth

I picked 3 out of the growth, and 4 out of aggressive growth

quite a few of the funds dont have a ticker, so I really didnt know how to research them

[dhutton]

What do you guys look for in 401k mutual funds?

My new employer has a pretty good number of funds we can select. My old job only had target date funds at decade intervals.

I looked at their charts, expense ratio, trailing returns and the percentages as far as stock/bonds/cash

Anything else I missed?

I selected 6 at 15% and 1 at 10%

they have different categories, like growth, income, bonds, growth/income, aggressive growth

I picked 3 out of the growth, and 4 out of aggressive growth

quite a few of the funds dont have a ticker, so I really didnt know how to research them

Given that index funds have been shown to outperform actively managed funds I would have been tempted to stick with simple index funds. After that I would have gone with Vanguard funds if they are available. Their fees and expenses tend to be the lowest in my experience. I would not put any money into anything I can't research or track.

Don

[GregWeld]

Given this information - which we all know is true.... all I have to say to those folks is --- SUCKS TO BE YOU!!

Retirement SHOULD BE a happy place... when you get to play golf at all the places you wanted to but were busy working... or you finally get to build that car you really wanted but never had the time. Working part time at McDonalds or WalMart to make ends meet would not be a future that would be very satisfying IMHO.



http://natmonitor.com/2014/10/24/typical-american-worker-has-saved-just-20000-for-retirement-survey-finds/

[CornHusker4Life]

Everyone should pull their money out of the market TODAY! Why? Because I just opened and fully funded my wife and Is Roth IRAs. This means the market will inevitably plummet today. Blame this thread and all the contributors to it(esp Greg Weld):sarcasm_smiley:

[B]Honestly, Thanks for everyone who has posted on this thread(esp Greg) and made investing easier to understand![/B

Jarrod

[captainofiron]

Given your age -- Growth, Growth and Income, and Aggressive growth are good choices.


Now you begin to see why I'm not a fan of "mutual funds" or company IRA's.... Wouldn't you sleep better if you actually KNEW what you were invested in?? Rhetorical question so don't respond. Not to mention there are all manor of fees and expenses that support just about everyone on the planet except you! UGH! I truly hate them -- but they're still far better than doing nothing... and there are tax advantages etc. so just roll with it.

Thanks for the info, yea the funds that we can chose from have pretty high expense ratios compared to my old company (0.8-1% vs 1.3-1.8%), not sure why the difference.

I was able to see the top holdings in each fund, but I guess they didnt want to show the bottom, hahaha

I was just calculating, and at my old job I had a 48% return on my 401k contributions, which are now helping me in my personal IRA, :thankyou:

Given that index funds have been shown to outperform actively managed funds I would have been tempted to stick with simple index funds. After that I would have gone with Vanguard funds if they are available. Their fees and expenses tend to be the lowest in my experience. I would not put any money into anything I can't research or track.

Don

How can I tell if its an Index fund versus managed funds?

I know some of the ones I looked at had the managers listed, but didnt see any that did not.

I can list the ones that do have tickers if necessary.

As far as the bolded part, I had the exact same feeling

[GregWeld]

Everyone should pull their money out of the market TODAY! Why? Because I just opened and fully funded my wife and Is Roth IRAs. This means the market will inevitably plummet today. Blame this thread and all the contributors to it(esp Greg Weld):sarcasm_smiley:

[B]Honestly, Thanks for everyone who has posted on this thread(esp Greg) and made investing easier to understand![/B

Jarrod



I SHORTED the S&P and the NASDAQ on your first post - knowing a newbie was about to invest. The short worked out fabulously so I thank you! LOL




Kidding of course. I never go short anything. Well... I AM short... but that's a physical trait.

[GregWeld]

Today is just another shining example of why I just can't get behind the high flying IPO's that have come to market lately. Maybe we LOVE their products -- Maybe they have really great businesses... but the IPO's valued them so richly... that they are priced for perfection and beyond. We need to learn to separate the STOCK from the COMPANY some times.


GoPro (GPRO) doubled a guys money since the IPO. Stunning! I like to make about 10% a year on my money --- and am perfectly happy with 5% cash flow from it. So looking at 100% return in a matter of weeks is far better than good! AS LONG AS YOU BOUGHT IT SOMEWHERE LOWER -- as in FAR LOWER -- than where it went... And that's the issue for me. Sure - if you bought at IPO prices... you caught a double. But if you were buying on the way up - then you most likely do not have a double. Maybe you have 10 or 15% which is far more likely... and then you wake up one morning and BAM!! The stock is DOWN and down hard in one day...

Personally --- I can't stomach that... it churns my guts (used to when I invested in this kind of stuff). It's like walking on pins and needles... euphoria on the big up days --- and suicidal when it all gets washed away in minutes!

Amazon -- Down today BIG. GoPro down today BIG... Netflix down the other day HUGE...

I prefer to invest... and go play... get checks regularly in the mail... and have restful sleep.

Just saying. Not saying people shouldn't invest in this stuff.... if you're young - have great incomes - have money to spare... have your investments totally squared away. Then by all means you SHOULD BE investing in these things. Just make sure you meet the above criteria - or gamble at your own risk.

[dhutton]

Thanks for the info, yea the funds that we can chose from have pretty high expense ratios compared to my old company (0.8-1% vs 1.3-1.8%), not sure why the difference.

I was able to see the top holdings in each fund, but I guess they didnt want to show the bottom, hahaha

I was just calculating, and at my old job I had a 48% return on my 401k contributions, which are now helping me in my personal IRA, :thankyou:



How can I tell if its an Index fund versus managed funds?

I know some of the ones I looked at had the managers listed, but didnt see any that did not.

I can list the ones that do have tickers if necessary.

As far as the bolded part, I had the exact same feeling

Generally index funds have the index in their name. Any Vanguard funds on your list of available funds? What company manages your 401k? If the fund lists a manager then it is likely actively managed.

Don

[captainofiron]

Generally index funds have the index in their name. Any Vanguard funds on your list of available funds? What company manages your 401k? If the fund lists a manager then it is likely actively managed.

Don

the 401k is through Baird

We dont have any Vanguards

we have a few Franklin funds, a couple Fidelity funds, Hartford, American Century, Blackrock, Prudential, alot of SSgAs

the only ones that have Index names is SSgA S&P 500 Security lending series, a couple other SSgAs have the Index in their names, but I couldnt find info on those

[dhutton]

the 401k is through Baird

We dont have any Vanguards

we have a few Franklin funds, a couple Fidelity funds, Hartford, American Century, Blackrock, Prudential, alot of SSgAs

the only ones that have Index names is SSgA S&P 500 Security lending series, a couple other SSgAs have the Index in their names, but I couldnt find info on those

Sounds like you did the best you could with the information available. My wife's 401k is completely blind. She just puts in her money and hopes for the best. Drives me crazy....

Don

[captainofiron]

Sounds like you did the best you could with the information available. My wife's 401k is completely blind. She just puts in her money and hopes for the best. Drives me crazy....

Don

Glad to hear, yea while it sucks that we dont have more options it is nice that they offer a pretty good match, so I'll take that free money thank ya very much, haha

[dhutton]

Glad to hear, yea while it sucks that we dont have more options it is nice that they offer a pretty good match, so I'll take that free money thank ya very much, haha

Did you research those SSGA funds here:

http://www.ssgafunds.com/

Don

[captainofiron]

Did you research those SSGA funds here:

http://www.ssgafunds.com/

Don

I tried, but I didnt find ours on there

Ours say: Class J, IX or VIII

[GregWeld]

This is the part that just kills me on this company funds... they obscure... and add fees... and all manor of stuff that just makes investing harder and harder for the uninformed.

I agree that matching (free) money is a good thing --- but if you kick in 6% and they kick in 3% -- but then hit you with 1% annual management fees etc... AND you don't get growth and or income... then you can be putting money into a black hole. Sometimes the "match" just isn't worth it when you do the math.

People forget that they can open up IRA's and ROTH IRA's etc outside of their work plan... and then control and or understand what their hard earned money is going in to. Frankly -- I'd rather MAKE 30% than I would get a 3% match. But then again - that is putting a burden on the investor and the average guy/gal just isn't up to the task.

[dhutton]

People forget that they can open up IRA's and ROTH IRA's etc outside of their work plan... and then control and or understand what their hard earned money is going in to. Frankly -- I'd rather MAKE 30% than I would get a 3% match. But then again - that is putting a burden on the investor and the average guy/gal just isn't up to the task.

There are income limits beyond which you cannot contribute. For those people 401k plans are the only option as far as I understand it. Married couples quite often exceed those limits.

Don

[CornHusker4Life]

There are income limits beyond which you cannot contribute. For those people 401k plans are the only option as far as I understand it. Married couples quite often exceed those limits.

Don

Yep 181,000 adjusted gross income for married filing jointly for Roth IRAs.

[GregWeld]

There are income limits beyond which you cannot contribute. For those people 401k plans are the only option as far as I understand it. Married couples quite often exceed those limits.

Don



All true and I agree Don -- but that wasn't my point. The point is that people should at the very least - look into alternatives.

Personally --- I've NEVER been allowed to open these types of accounts due to their limits... I still looked into them.

[dhutton]

All true and I agree Don -- but that wasn't my point. The point is that people should at the very least - look into alternatives.

Personally --- I've NEVER been allowed to open these types of accounts due to their limits... I still looked into them.

I fully agree. I research this stuff extensively in large part due to what I've learned from you in this thread. Thanks!

Don

[captainofiron]

This is the part that just kills me on this company funds... they obscure... and add fees... and all manor of stuff that just makes investing harder and harder for the uninformed.

I agree that matching (free) money is a good thing --- but if you kick in 6% and they kick in 3% -- but then hit you with 1% annual management fees etc... AND you don't get growth and or income... then you can be putting money into a black hole. Sometimes the "match" just isn't worth it when you do the math.

People forget that they can open up IRA's and ROTH IRA's etc outside of their work plan... and then control and or understand what their hard earned money is going in to. Frankly -- I'd rather MAKE 30% than I would get a 3% match. But then again - that is putting a burden on the investor and the average guy/gal just isn't up to the task.

From what I understood in their 401k presentation is our company takes care of all the fees while I am with the company and if I leave then I am responsible for those fees from the point of my termination on.

My company matches 100% up to 4% and 50% above 4% to 6%

so its not bad, and I see what you mean about trying to make it seem like magic, by the way, the guy that does this is that fast talking used car salesman guy who wanted me to roll over my old 401k to my new companies 401k or an IRA with them

Anyways, I picked the funds that had the best returns over the past few years, had the top 10 companies that I knew, and the lowest fees.

So hopefully in the end I will come out with much more than matching percentage that the company gives

[GregWeld]

You do the best you can do with what you have to work with. Just looking into your holdings is more than most folks do.








From what I understood in their 401k presentation is our company takes care of all the fees while I am with the company and if I leave then I am responsible for those fees from the point of my termination on.

My company matches 100% up to 4% and 50% above 4% to 6%

so its not bad, and I see what you mean about trying to make it seem like magic, by the way, the guy that does this is that fast talking used car salesman guy who wanted me to roll over my old 401k to my new companies 401k or an IRA with them

Anyways, I picked the funds that had the best returns over the past few years, had the top 10 companies that I knew, and the lowest fees.

So hopefully in the end I will come out with much more than matching percentage that the company gives

[GregWeld]

Because it's CURRENT and CONTINUING... let's look at an EXAMPLE of a stock vs the stock price.

GoPro (GPRO) came out with an IPO with much hype (by TV talking heads) and fanfare! It has THE NAME - and all cameras that are of the type will forever be called GoPro's regardless of their actual brand.

WE - as sports people - know the name and brand and quality. So accordingly this is all of great interest for us.

Here's where we can learn from the IPO market -- using GPRO solely as an example.

When the market is "hot" and there's too much money chasing too little stock GROWTH... people get all manic (ma ny ick) chasing STOCKS. The latest greatest shiniest new toy is the hot money. When there's more buyers than sellers - the stock price climbs. Many times it climbs for no other reason than it's climbing!! This is where the old adage comes in - if you were a fortunate buyer of the issue - early! Pigs get fat - hogs get slaughtered.

So here's what happens -- some NEWER hot IPO comes out and the money flows out of the hot stock from last week into the new hot stock this week... OR people that bought at the TOP -- begin to see losses and then start to bail. What happens when there's more sellers than there are buyers??? Prices FALL.

LET'S SEPARATE your beliefs that a product or company is the next killer deal -- and begin to understand THE MARKET. The two things are completely independent of each other!

The tricky part for EVERYONE is to be able to INVEST in good companies with a good FUTURE long term -- versus getting caught up in the "hot investment". Some of these issues (IPO's) take flight and never look back. Some of them take flight and then once they leave the nest - find themselves falling to the ground. Some of them just quietly go away. The problem for US as investors is that we just don't know which one is going to be the real deal.

Here's what I've learned to do. I wait. I wait until the dust settles from the big coming out party. I investigate the underlying business.... I don't listen to the talking heads -- in fact -- the more they talk -- the farther I run. That's the first sign that you're in the hype mode! So I wait for cooler heads to come out and talk -- and when they also begin to dissect the DOWNSIDE of the stock but then say they're still buyers.... that's when I begin to take notice. But if the talking heads including guests are all saying "well... it could grow into the stock price" but right now it's a little "rich". PASS! If you still like the story and the company -- you have time to get some shares at far better prices!

I recently bought ALIBABA (BABA). I actually now have a gain in it. But the difference is this. Every talking head has said that the growth going forward should be (SHOULD BE) just huge... and that while it "seems expensive" it's not. Now - if you take GoPro - the talk is dying or dead... it's not even mentioned anymore -- and all have said "it will have to grow into the price". HUGE difference!

BTW -- I bought a whopping 500 shares of BABA. I only bought this little teeny tiny bit and will buy no more. Compare that amount next to my normal holdings of 20,000 to 40,000 shares.

Now -- I hesitate to post stuff like this -- because what I never want on here is for people to do what I'm doing. That's NEVER the point of these posts. What I'm trying to do is to use examples for what they are. Examples. Ways to think. What to watch out for. GoPro might grow into it's share price - BABA might be a huge flop in the US.... IT'S GAMBLING. LEARN HOW TO GAMBLE AND WHAT THE BET IS before you just get caught up in the hype. Open your eyes and ears and learn what to look for... This is a MARKET.. and markets can pick you apart if you're the rookie on a pro playing field.

[AMSOILGUY]

Proud to say I just sealed the envelope and put the stamp on my son's custodial account application for Schwab. He has 1600 bucks to start with. Its been in a CD up until this point. Now we wait. Hes excited, I'm excited, sort of like the blind leading the blind here! I'll be rereading this thread again over the next week until the funds hit his account. Hes 11 so he is getting started 20 years before his old man did.

Thanks for the motivation!

[GregWeld]

Proud to say I just sealed the envelope and put the stamp on my son's custodial account application for Schwab. He has 1600 bucks to start with. Its been in a CD up until this point. Now we wait. Hes excited, I'm excited, sort of like the blind leading the blind here! I'll be rereading this thread again over the next week until the funds hit his account. Hes 11 so he is getting started 20 years before his old man did.

Thanks for the motivation!



Buy him $500 worth of three different stocks... Toss one in like FaceBook -- or Alibaba -- something like that. He's young and has to take a little risk on at his age.

[GregWeld]

Here's another one of those hot IPO's that are going to blow up right before your very eyes.... Twitter (TWTR). I actually had bought some of these shares early on -- they ran up FAST - and I cut and ran and pocketed a nice profit. Here's why I did that rather than INVEST in it. I found the service very helpful during the big Sun Valley fires last year... but after the fires were out... I couldn't find anything that was of interest to me -- and I certainly don't do anything that's tweetable! LOL

So here's where the Peter Lynch style of investing I've mentioned before comes in to play for INVESTING. I'm pretty damn comfortable knowing I'm mister Joe Average.... and If I stop eating at McDonalds -- and I can't find a reason to Tweet... then maybe others are feeling the same way. Guess what... Twitter reported less usage. SEE!! My guts and my head were telling me early on to listen to what I was thinking and I was thinking this is nothing but kind of a Fad that really doesn't serve a big purpose for me. Dumped the stock. Made some money.

My point isn't that I'm smart - I'm lucky as hell and I know it... my point is that you need to continue to be aware of your own senses... How you feel about a store - a product - the advertising - whatever! Invest in stuff you feel good about using... and if you stop using something and own the company.. DUDE! Time to sell!


For those that don't recognize the Peter Lynch reference -- he was the head of Magellan and grew that into the largest Mutual Fund in existence at the time... He's written many books on investing and you should all read them. One of his early "themes" was to invest in stuff where he was a shopper or was familiar with the products etc. I preach that method here because it works -- and it's easy to pay attention to your own habits and activities. The problem becomes on the sell side --- when you don't listen to yourself and recognize when you're no longer happy with "X". Say if you switched to shopping at Lowe's when you own stock in Home Depot etc. Or you're going to Chipotle and not going to McDonalds -- or you quit drinking Starbucks... or Budweiser...

[sebtarta]

Greg where do you read most of your information? I usually look at the news ticker next to the stock on google, but sometimes it takes you to these sites that make you question how true to their word they are.

[GregWeld]

Greg where do you read most of your information? I usually look at the news ticker next to the stock on google, but sometimes it takes you to these sites that make you question how true to their word they are.



I pay for a lot of the information I read... and I have multiple investment accounts at various institutions. As such - I have direct contact with people at those institutions. So the answer is -- I have a bunch of different ways I get
info.

Here's something that I get to do that most wouldn't have available to them. Let's say I'm having lunch with one "banker"... and he's telling me about blah blah blah. I shake my head and listen etc. But when I get in the car - I'm on the phone to my other guy... and I'll say "Hey... I was thinking about blah blah blah...." And I'll get another perspective.

The problem with "news" is that it's just that. News. It can be very factual - and it could leave out some pertinent facts. Example. The news headline reads "Obama raises tax rate on dividends to 39.6%"..... Catchy - factual.. but missing some serious details... like the fact that you'd have to have 400+ grand in adjusted income in order for that to take affect. So I never trust one source. Keep digging and see if there's something more you should know. The initial information should only whet your appetite.

By the way --- I have little or no life.... and I've been doing this stuff for 30 years... "Investing" funds everything else I do in life - so it's job one.

[GregWeld]

So here's a couple more of those "priced for perfection" stocks -- which in my opinion has little to do with the actual performance of a growth company...


Yelp! Reports it has 256% growth from the previous quarter -- the stock get hammered! Down 12% in 5 days...

FaceBook -- Huge growth in almost every metric - but not good enough - BAM! Drops like a rock after hours - it's down 10%

What do we learn from this kind of action?? Seriously? What's the take away... the companies have HUGE growth -- they're making money...

You learn that the STOCK PRICE isn't always connected to the actual facts.. and when that price is connected to huge expectations... even if the company does really really well.... YOU GET HAMMERED in the price.

Are these stocks good to buy on the dips? If I was a young man looking for some long term growth -- I'd be a buyer of FaceBook on the pull back. Not much but I'd dip a toe in. THEN WAIT! Wait for them to report another quarter... Never go jumping into the deep end without knowing the depth of the pool! Check it out first...

[96z28ss]

Why do they have pre market and after hours buying and selling?
Doesn't seem fair that they allow this. it should be open or closed.

[GregWeld]

Why do they have pre market and after hours buying and selling?
Doesn't seem fair that they allow this. it should be open or closed.




It's fair NOW -- didn't used to be fair -- Used to only be open for high net worth guys and pros... now anyone with a brokerage account can trade pre-market or after hours.

There's many RISKS to trading like this. Most of it is done only with limit orders... and since you can't get a quote - you're basically trading blindly -- and in a very small pond. Meaning not many people around selling or buying. The volumes traded like this are generally very small.

YOU could go out and research why they allow it on the internet. :>)

[96z28ss]

YOU could go out and research why they allow it on the internet. :>)

Nah! easier to ask you, its not like your busy or anything.

[XLexusTech]

So here's a couple more of those "priced for perfection" stocks -- which in my opinion has little to do with the actual performance of a growth company...


Yelp! Reports it has 256% growth from the previous quarter -- the stock get hammered! Down 12% in 5 days...

FaceBook -- Huge growth in almost every metric - but not good enough - BAM! Drops like a rock after hours - it's down 10%

What do we learn from this kind of action?? Seriously? What's the take away... the companies have HUGE growth -- they're making money...

You learn that the STOCK PRICE isn't always connected to the actual facts.. and when that price is connected to huge expectations... even if the company does really really well.... YOU GET HAMMERED in the price.

Are these stocks good to buy on the dips? If I was a young man looking for some long term growth -- I'd be a buyer of FaceBook on the pull back. Not much but I'd dip a toe in. THEN WAIT! Wait for them to report another quarter... Never go jumping into the deep end without knowing the depth of the pool! Check it out first...

What does a 10% drop really mean? To me it means If I were to sell today I would only get just over 100% increase in share price on my FB stock... I wish things got "hammered" like tat more often :-)

[GregWeld]

What does a 10% drop really mean? To me it means If I were to sell today I would only get just over 100% increase in share price on my FB stock... I wish things got "hammered" like tat more often :-)




AWESOME!! And that's the thing the talking heads do over and over.... they harp on the minute by minute action... and talk about "big drops" (that are 1 or 2% in reality).... and nobody ever does the calculations that if the market is UP 30% - so what if you drop 5 or 10% !!


But it is what we live with.

Buying LOW is fantastic! It's when people come in at the much higher prices and then take a hit... then they throw in the towel. The minute they do - the stock goes up and recovers the drop and adds some! LOL


BTW --- Have to add --- This is a good time to go look at a long term chart of FaceBook (FB) even the one year chart looks RIGHT -- low on the left and climbing to the right. Choppy sure... but the trend is your friend! LOL

[ErikLS2]

Just a quick share, not pitching this stock. I've been a mechanic for far too long so I've long known that Snap On makes the best tools, period, and you pay accordingly. Anyway, I decided to look at the stock because it's something, like Greg says, "I know" (even heard Jim Cramer prasising it). I can talk to my tool guy each week and I will know right away if something with the company is sliding. Bought some on this recent dip, but look at this chart over 5 years, or even 10.

http://finance.yahoo.com/echarts?s=SNA+Interactive#%7B%22range%22%3A%225y%2 2%2C%22scale%22%3A%22linear%22%7D

[GregWeld]

See how easy this is? Brilliant! You simply invested in something you actually know - and trust - the chart is right - it pays a dividend... and you're right there to see if you start to notice anything going sideways.

It's when people try to get "cute" when things go badly. Buying stuff they know nothing about - because they heard some dipwad on TV saying it's a "buy". Or buying what they think they can put $500 in to and be a millionaire by the end of the week...

I've looked at Snap-On many times - each time it's the low dividend that's kept me out of this fantastic name. I'm a customer. I love their stuff... maybe I'll buy some today.






Just a quick share, not pitching this stock. I've been a mechanic for far too long so I've long known that Snap On makes the best tools, period, and you pay accordingly. Anyway, I decided to look at the stock because it's something, like Greg says, "I know" (even heard Jim Cramer prasising it). I can talk to my tool guy each week and I will know right away if something with the company is sliding. Bought some on this recent dip, but look at this chart over 5 years, or even 10.

http://finance.yahoo.com/echarts?s=SNA+Interactive#%7B%22range%22%3A%225y%2 2%2C%22scale%22%3A%22linear%22%7D

[GregWeld]

Done! I bought 500 Snap-On (SNA) with a limit order @ $130.25

A very small buy for me because of the terrible dividend. But now when the big truck rolls up to the shop - I'll feel better being an owner! LOL


Funny about that truck -- and my dealer is a good guy -- I always tell the guy - "just let me look - I don't NEED anything..." But I can never get out of there without buying stuff!

[GregWeld]

Looks like GoPro (GPRO) owners will wake up very happy tomorrow.... They SMASHED earnings numbers.


That's what a stock MUST do when they're priced for perfection... they can't just equal... they certainly can't even hint that business was only just great... This one smashed the expectations.

[AMSOILGUY]

Can someone explain to me looking at these 3 stocks why one would be a better choice over the other? I enjoy all 3 companies drinks and wouldn't have a problem owning any of them. KO, PEP, DPS.

KO=Div/yield .31/2.95 and cost 41.40

DPS=Div/yield .41/2.38 and cost 68.94

PEP=Div/yield .65/2.74 and cost 95.65



All 3 looking at the 5yr start lower on the left and get higher on the right. Are you better off purchasing more of one stock and earning multiple Div or purchasing less stock and earning a higher Div? I'm sure the name of the game is to try and figure out which one is going to do better long term and thats what you should base you choice off of. But lets just say for discussion sake that they are going to continue to perform equally.



Or am I trying to make it to simple?

[WSSix]

Can someone explain to me looking at these 3 stocks why one would be a better choice over the other? I enjoy all 3 companies drinks and wouldn't have a problem owning any of them. KO, PEP, DPS.

KO=Div/yield .31/2.95 and cost 41.40

DPS=Div/yield .41/2.38 and cost 68.94

PEP=Div/yield .65/2.74 and cost 95.65



All 3 looking at the 5yr start lower on the left and get higher on the right. Are you better off purchasing more of one stock and earning multiple Div or purchasing less stock and earning a higher Div? I'm sure the name of the game is to try and figure out which one is going to do better long term and thats what you should base you choice off of. But lets just say for discussion sake that they are going to continue to perform equally.



Or am I trying to make it to simple?

When I'm faced with the decision between multiple good choices, this is what I typically default to. I'm in a growth mode with some choices and simply steady eddy with others though. Because dividend payments are based on the number of shares owned, I go for as many shares as I can for a set dollar amount on any stock I'm looking for growth in. I did this when comparing Altria and Phillip Morris. I could get many more shares with the price of Altria at the time. This in turn allowed me to receive many more shares with each dividend payment.

Everyone is going to be different and have different priorities, tolerances, and goals. A good, general rule though is to invest in quality names so that over the long haul, you are comfortable with your choice and make money. With that said, I don't think you'd be making a bad choice investing in any of those choices. You may want to dig a little more into Pepsi though as they do have a large snack food component to them versus purely beverages like Coke and Dr Pepper/Snapple. That may or may not matter to you. I just mention it as it is a differentiator that I doubt most people would know about the company when it's mentioned.

[GregWeld]

Can someone explain to me looking at these 3 stocks why one would be a better choice over the other? I enjoy all 3 companies drinks and wouldn't have a problem owning any of them. KO, PEP, DPS.

KO=Div/yield .31/2.95 and cost 41.40

DPS=Div/yield .41/2.38 and cost 68.94

PEP=Div/yield .65/2.74 and cost 95.65



All 3 looking at the 5yr start lower on the left and get higher on the right. Are you better off purchasing more of one stock and earning multiple Div or purchasing less stock and earning a higher Div? I'm sure the name of the game is to try and figure out which one is going to do better long term and thats what you should base you choice off of. But lets just say for discussion sake that they are going to continue to perform equally.



Or am I trying to make it to simple?




You failed to add to the thought process the TOTAL RETURN of the 3 --- go back and check those numbers out then come back. I'd do it for you but I won't. Ya gotta do the work on your own. See if the TR helps you make the choice.

[GregWeld]

Trey....


Good thought process. The only "correction" I would do for you (and others) is that dividends are paid in dollar amounts.... but the MATH is PERCENTAGES. 3% dividend is 3% dividend regardless of the number of shares owned. So - If you were comparing two stocks and they both paid the same PERCENTAGE dividend but ones share price is TWICE AS HIGH.... it's still earning the same percentage dividend on your dollars invested (given that you'd have the same exact dollars to invest).


10K invested in one company buys you 100 shares ---- and in the other company only 50 shares --- but the PERCENTAGE of return (dividend) would still be the exact same.

I got what you were saying.... but mathematically it doesn't work out the way you were saying.


HERE is what I would rather see people thinking about..... THE FUTURE as in 10 or 20 years from now. What is the BRAND they like and buy. Don't get trapped in the past. Do you no longer buy the product even though if you did - you'd buy "X"? OR ---- is there another company that might be in the SAME CONSUMER STAPLES SPACE that has better growth and a higher dividend.... So don't get locked into just comparing Coke vs Pepsi.... expand that to look at other "food/grocery/retail/consumer" products for comparison. Are their names that you love even better? That have better growth? That are just as stable?

Not saying there is ---- I'm saying open yourselves up to expanding your research. It will make you a better investor - it will give you ideas for future money - it will make you more rounded in your knowledge so that when you do make a choice -- you KNOW that's the right one for you!

[CornHusker4Life]

Correct me if I am wrong Greg but to calculate total return the equation is below:

(Ending stock price minus Initial stock price) plus Dividends
divided by the initial stock price.

Maybe I am wrong

[GregWeld]

Correct me if I am wrong Greg but to calculate total return the equation is below:

(Ending stock price minus Initial stock price) plus Dividends
divided by the initial stock price.

Maybe I am wrong




That is correct.


I just go to Schwab when I'm researching a name (symbol) and click on the RESEARCH tab - enter a symbol - and then click on Total Return.

I'm generally doing comparisons when I'm researching and I can do this all from the comfort of my laptop sitting on my ass. Actual calculations take me too long. But for figuring your total return since you actually bought something is done the way you posted.

[Woody]

Can someone explain to me looking at these 3 stocks why one would be a better choice over the other? I enjoy all 3 companies drinks and wouldn't have a problem owning any of them. KO, PEP, DPS.

KO=Div/yield .31/2.95 and cost 41.40

DPS=Div/yield .41/2.38 and cost 68.94

PEP=Div/yield .65/2.74 and cost 95.65



All 3 looking at the 5yr start lower on the left and get higher on the right. Are you better off purchasing more of one stock and earning multiple Div or purchasing less stock and earning a higher Div? I'm sure the name of the game is to try and figure out which one is going to do better long term and thats what you should base you choice off of. But lets just say for discussion sake that they are going to continue to perform equally.



Or am I trying to make it to simple?

If we are assuming they are going to perform equally, it would not matter which stock you choose.

Depending on your situation you may prefer a stock that pays a higher dividend which could help you narrow your selection. You may also want to compare earnings and revenue growth, as well as the dividend growth rate. I will tell you this about the three stocks you have selected. You will pay a premium for KO for its brand strength, long term history, etc. That is not necessarily a bad thing, because sometimes it does make sense to own the best. It may be the more conservative choice, for which you get a slightly lower return (risk/reward).

[GregWeld]

Just to add to the thought process... of which to pick.


I've always only gone on two factors... How I PERSONALLY feel about the company... and if most things are equal -- then the historical TOTAL RETURN. I might love one company - but when I compare the TR -- and the "other" company is higher by a good margin.. I'm buying that company. The reason for this is that a large part of TR is the GROWTH in the share price.... and that's where I must turn into a lemming by following the collective herd. "They" have pushed the share price higher... (more buyers than sellers) and I have to respect that market force.


Just using your three stocks mentioned


KO is 1 year 9% - 3 year is 32% - 5 year is 78%

PEP is 1 year 18% - 3 year is 66% - 5 year is 79%

DPS is 1 year 48% - 3 year is 83% - 5 year is 180%

Now ---- I'm going to go look to see WHY did DPS have such a huge TR --- was there a merger? Acquisition? Big change that skewed the numbers.... or was there a fundamental shift to the products they carry vs the other two? I like to be able to explain any anomaly! So I'll research to see what's up and if I can find something to explain the huge difference. If I can't -- then I might choose the DPS over the others because you can't fight history and momentum. Quadrupling your money is better than only doubling your money. 5K turns into 20K vs only 10K. Big difference.

I own KO for the record. It's a steady eddie for me.

[GregWeld]

And here's where you dig a little and expand your investing knowledge...


Why not also take a look at MONSTER (MNST)?? OR similar brands. I don't like the stuff - don't like what it stands for (getting jacked up) and personally I wouldn't buy it because of that.... but if I was a younger guy and used this product and understood the market for it (all my friends were buying it over KO or PEP) then I MUST pay attention to that kind of info/intel.

It's 1 year TR - 70% - 3 year 112% - 5 year 422%


This is what I was saying earlier --- I want you guys to go out and use the info you learn here - but apply it to your own situations and age and incomes etc. Don't buy stuff or limit yourselves to just the EXAMPLES used in this thread! Put your own thinking cap on and learn and make your own decisions!

[captainofiron]

Hey Greg,

I own KO too, but lately there has been alot of articles on KO because they are seeming to stagnate. Is this noise in your opinion or something we should be watching?

To me it seems more like noise becasue its a large company that has been around forever, and I doubt their board will allow it to stagnate and are probably working to continue its growth. BUT I dont have a fraction of your experience

[GregWeld]

Hey Greg,

I own KO too, but lately there has been alot of articles on KO because they are seeming to stagnate. Is this noise in your opinion or something we should be watching?

To me it seems more like noise becasue its a large company that has been around forever, and I doubt their board will allow it to stagnate and are probably working to continue its growth. BUT I dont have a fraction of your experience




Coke (KO) is an "institutional" brand... and they own many more products than just soft drinks. Soft drinks have a LOT of competition in the last 5 years or so... I don't even try to keep up with what everyone is drinking these days. The beverage aisles at the grocery store are loaded with brands of stuff... many of which are just subsidiaries of the big boys. But what you have with Coke - is power... and global... and cash flow... and Warren Buffet... and I sleep just fine owning it. And theres's NOTHING in the rule books of investing that says if you own KO you can't also own a Monster (MNST) or own Pepsi AND Coke. I used to own Verizon AND AT&T... and I slept just fine knowing the dividend would be paid on time and that I wasn't suddenly going to wake up to a DOWN 25% investment.

A lot of the time the "noise" or discussion is the very same discussions that are going on at the board level. These people aren't idiots. They know what's going on. They have feedback from the customer. Their customers are HUGE. They have the clout to buy or invest in anything they see that will aid them going forward. They're not "nimble" and they might not always get it right and they might even have let a competitor get the jump on them... but they're NOT going away.

There has been a fundamental shift away from carbonated drinks. I don't think I have single can in my house. But the big guys own more than just carbonated drinks. Coke (KO) doesn't just own Coke - they own Dasani water - Minute Maid - Schweppes - Powerade - Vitamin Water... They're invested partners in Green Mountain Coffee... There are SEVENTEEN brands that are BILLION DOLLAR BRANDS on their own...

In other words - it's not the greatest make you millionaire next week investment... but owning it gives you the confidence you need to hang in there when the market sucks... and allows you to dabble in the "millionaire of the week" hot investment going forward when you're ready.

[WSSix]

captain, I've got Coke as well for many of the reasons Greg mentioned. Plus, I'm in the south. Pepsi tastes terrible. Don't bring that crap around here, lol. I've been doing some reading on KO though because like you, I'm hearing a lot of potentially worrisome information. I bought it as a steady eddy so I'm not trying to get rich off of it. However, I don't want to lose my money on it either. Since I'm long term on Coke, I have no intentions of selling at this point. I fully expect there will be times when it goes down. I fully expect there to be big changes over the course of years for all soft drink companies because people are changing their habits and preferences. In 10 or 20 years, I expect to be able to say I've made plenty of money on my investment in KO. To me, everything we're hearing now will be looked upon as noise in a few years when looking back.

[GregWeld]

Good post Trey! Even "steady eddies" need to be monitored for fundamental changes... Sears would have been a steady eddy just a few short years ago.. There are several names I could come up with that barely or don't even exist today! Every stock you own deserves to be looked at with a critical unemotional eye.

[AMSOILGUY]

Can someone explain to me looking at these 3 stocks why one would be a better choice over the other? I enjoy all 3 companies drinks and wouldn't have a problem owning any of them. KO, PEP, DPS.

KO=Div/yield .31/2.95 and cost 41.40

DPS=Div/yield .41/2.38 and cost 68.94

PEP=Div/yield .65/2.74 and cost 95.65



All 3 looking at the 5yr start lower on the left and get higher on the right. Are you better off purchasing more of one stock and earning multiple Div or purchasing less stock and earning a higher Div? I'm sure the name of the game is to try and figure out which one is going to do better long term and thats what you should base you choice off of. But lets just say for discussion sake that they are going to continue to perform equally.



Or am I trying to make it to simple?

So using the Oct 30th cost and the equation given with the Oct 31st close date I get the decimal given. So what does that number mean to me. I'm thinking you multiple that number by the cost of the stock to get a $ amount you earned?

What is the time frame you should use?

Sorry guys this is the first I have really ever paid any attention to this stuff. I will say that I had my son figure out the decimal listed so he is learning also. I wish somebody would have taken the time to try and teach me this at 11.

Also, what is the Div/Yield? Is it Daily/ What time frame?

KO=Div/yield .31/2.95 and cost 41.40
Oct 31st Cost 41.88 =.018863419
DPS=Div/yield .41/2.38 and cost 68.94
Oct 31st Cost 69.25 = .010493864
PEP=Div/yield .65/2.74 and cost 95.65
Oct 31st 96.17=.012232096

[GregWeld]

First off -- understand that the dividend is paid as a DOLLAR amount... but the PERCENTAGE of dividend YOU receive is based on your cost. The Dividend is paid as a set amount... your stock cost is fixed... as the Dividend payout grows -- you're getting a higher and higher percentage on your cost basis.

DIVIDENDS are paid every QUARTER. You'll therefore get 4 payouts per year.

Don't forget to multiply the quarterly dividend by FOUR to get the annual dividend payout.


KO - pays .31 per quarter (X's 4 = 1.24 per year) - based on Fridays close that is 2.91%

Mathematically expressed as --- Dividend (annual) divided by the cost basis = a decimal answer. In this case 1.24 / 41.88 = .029608

Move the decimal 2 places.... 2.96%


Your cost of 41.40 makes the dividend 2.995%


You're calculation ANNUAL percentage dividend yield.


Total RETURN --- is the stock price appreciation (if any) with dividends reinvested - over a period of time. Total return - imho - is the most critical thing you can go for with your investments. It's the real return on the money you've invested. If you were lucky enough to see 100% total return in 3 years and then manage to keep that percentage of return going for every three year period --- you can only imagine the growth of your money. Good luck with the kind of return... LOL But it does happen!!!









So using the Oct 30th cost and the equation given with the Oct 31st close date I get the decimal given. So what does that number mean to me. I'm thinking you multiple that number by the cost of the stock to get a $ amount you earned?

What is the time frame you should use?

Sorry guys this is the first I have really ever paid any attention to this stuff. I will say that I had my son figure out the decimal listed so he is learning also. I wish somebody would have taken the time to try and teach me this at 11.

Also, what is the Div/Yield? Is it Daily/ What time frame?

KO=Div/yield .31/2.95 and cost 41.40
Oct 31st Cost 41.88 =.018863419
DPS=Div/yield .41/2.38 and cost 68.94
Oct 31st Cost 69.25 = .010493864
PEP=Div/yield .65/2.74 and cost 95.65
Oct 31st 96.17=.012232096

[68Cuda]

Total RETURN --- is the stock price appreciation (if any) with dividends reinvested - over a period of time. Total return - imho - is the most critical thing you can go for with your investments. It's the real return on the money you've invested. If you were lucky enough to see 100% total return in 3 years and then manage to keep that percentage of return going for every three year period --- you can only imagine the growth of your money. Good luck with the kind of return... LOL But it does happen!!!

Yep, either have to find something in the right stage of development or a real bargain. For example, I am planning on off-loading INTC tomorrow, it no longer meets my requirements of a bargain stock. I bought 230 shares @21.47 in Nov 2012, and another 220 shares @ 20.97 in April 2013. So my total cost was $9560 and change. Between reinvesting dividends and the current price above $34 I will sell for more than $16,600. When I bought the stock the dividend was close to 4%. Now it pays 2.6% and no longer fits the profile of the stocks I want. The way I look at it is that it was a bargain @ $21 and a good company, and it was undervalued based on the high dividend. Now that the ratio of dividend to price has dropped it is now closer to the correct value. Time for me to sell and find another stock that has an artificially depressed value.

Now do not get me wrong, Intel is a great company, and I will keep an eye on them in the future.

[GregWeld]

Michael ---

Those are good thoughts and good points.... except that I'd have to correct the misinformation that the stock now pays a smaller percentage dividend. YES --- Based on todays price the dividend is a smaller percentage of yield....


BUT ---- Always the big butt....


The percentage of dividend you have been collecting has been on YOUR lower cost - so you were still collecting a 4% dividend on your cost basis! The dividend didn't go DOWN... the share price simply has appreciated.

And --- if these are taxable accounts - you've now created a taxable event by selling. Long term capital gains with a low percentage of tax for sure... but taxed non-the-less!

NOW don't get me wrong --- there's nothing with taking a nice capital gain and feeling that you can do better somewhere else. Nothing wrong with that at all. I just didn't want to CONFUSE THE NEWBS by saying the percentage was no longer in your favor. It was still paying YOU a decent percentage dividend on your cost.


I like your thinking though!! I might have sold HALF the shares -- choosing the best tax lot... and let the other ride. But that's just me. The TOTAL RETURN on INTEL (INTC) hasn't been all that "hot" at 55% for 3 years -- 110% for 5 years...



HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!!

[68Cuda]

The percentage of dividend you have been collecting has been on YOUR lower cost - so you were still collecting a 4% dividend on your cost basis! The dividend didn't go DOWN... the share price simply has appreciated.


Yes - I understand the math, cost basis and all. But now that the stock price has appreciated I can take the profit and buy something that pays 3.5% to 4% on the current dollar amount. Still INTC is a good company, hard to make that jump, maybe I will do the 1/2 thing you were suggesting.

And --- if these are taxable accounts - you've now created a taxable event by selling. Long term capital gains with a low percentage of tax for sure... but taxed non-the-less!

NOW don't get me wrong --- there's nothing with taking a nice capital gain and feeling that you can do better somewhere else. Nothing wrong with that at all. I just didn't want to CONFUSE THE NEWBS by saying the percentage was no longer in your favor. It was still paying YOU a decent percentage dividend on your cost.

Good points - this is inside a 401k, so no taxes. I did run into something annoying in that respect recently. I was taxed on a dividend inside my 401k on a foreign owned company. That is dirty pool!


HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!!

Wow - thanks for the reminder, guess I will wait until the 6th! (Maybe 7th to be safe)

[AMSOILGUY]

HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!![/QUOTE]


What is the EX you speak of?

[captainofiron]

Coke (KO) is an "institutional" brand... and they own many more products than just soft drinks. Soft drinks have a LOT of competition in the last 5 years or so... I don't even try to keep up with what everyone is drinking these days. The beverage aisles at the grocery store are loaded with brands of stuff... many of which are just subsidiaries of the big boys. But what you have with Coke - is power... and global... and cash flow... and Warren Buffet... and I sleep just fine owning it. And theres's NOTHING in the rule books of investing that says if you own KO you can't also own a Monster (MNST) or own Pepsi AND Coke. I used to own Verizon AND AT&T... and I slept just fine knowing the dividend would be paid on time and that I wasn't suddenly going to wake up to a DOWN 25% investment.

A lot of the time the "noise" or discussion is the very same discussions that are going on at the board level. These people aren't idiots. They know what's going on. They have feedback from the customer. Their customers are HUGE. They have the clout to buy or invest in anything they see that will aid them going forward. They're not "nimble" and they might not always get it right and they might even have let a competitor get the jump on them... but they're NOT going away.

There has been a fundamental shift away from carbonated drinks. I don't think I have single can in my house. But the big guys own more than just carbonated drinks. Coke (KO) doesn't just own Coke - they own Dasani water - Minute Maid - Schweppes - Powerade - Vitamin Water... They're invested partners in Green Mountain Coffee... There are SEVENTEEN brands that are BILLION DOLLAR BRANDS on their own...

In other words - it's not the greatest make you millionaire next week investment... but owning it gives you the confidence you need to hang in there when the market sucks... and allows you to dabble in the "millionaire of the week" hot investment going forward when you're ready.

Great! Thanks for clearing that up.

captain, I've got Coke as well for many of the reasons Greg mentioned. Plus, I'm in the south. Pepsi tastes terrible. Don't bring that crap around here, lol. I've been doing some reading on KO though because like you, I'm hearing a lot of potentially worrisome information. I bought it as a steady eddy so I'm not trying to get rich off of it. However, I don't want to lose my money on it either. Since I'm long term on Coke, I have no intentions of selling at this point. I fully expect there will be times when it goes down. I fully expect there to be big changes over the course of years for all soft drink companies because people are changing their habits and preferences. In 10 or 20 years, I expect to be able to say I've made plenty of money on my investment in KO. To me, everything we're hearing now will be looked upon as noise in a few years when looking back.

Haha, yea I know what you mean. Im in Texas and there are few meals that I can think of when I wouldnt have a bottle/can of Coke next to me

[68Cuda]

HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!!

What is the EX you speak of?

Ex-Dividend date.

Declare date: 9/12/2014 - this is the date Intel "declared" they were paying a $0.225 per share dividend on 12/1/2014.

Ex-dividend date: 11/5/2014 - If you own the stock before this date you receive the dividend, if you acquire it this day or after you do not. If I sell you my stock on or after 11/5/2014 you buy it "Ex-dividend", without the dividend.

Record date: date the company records the owners for the purpose of the dividend. A few business days after the Ex date.

Pay date: when the dividend pays out.

So, since I will own this stock tomorrow, I will get the dividend on 12/1 even if I sell it before 12/1.

[AMSOILGUY]

Ex-Dividend date.

Declare date: 9/12/2014 - this is the date Intel "declared" they were paying a $0.225 per share dividend on 12/1/2014.

Ex-dividend date: 11/5/2014 - If you own the stock before this date you receive the dividend, if you acquire it this day or after you do not. If I sell you my stock on or after 11/5/2014 you buy it "Ex-dividend", without the dividend.

Record date: date the company records the owners for the purpose of the dividend. A few business days after the Ex date.

Pay date: when the dividend pays out.

So, since I will own this stock tomorrow, I will get the dividend on 12/1 even if I sell it before 12/1.

Once a stock goes EX-Dividend does that mean it will never pay a dividend again as long as it is traded? Can the company later on down the road say we are going to pay a dividend again on a later date?

[Vortech404]

amsoilguy
You would just miss that dividend payment for that quarter only.

John

[AMSOILGUY]

amsoilguy
You would just miss that dividend payment for that quarter only.

John


AHHH ok!:EmoteClueless:

Thanks John


Now doing research over the last week I have noticed something. The majority of the stocks I have looked at are all up. Is the market overall up and it would be hard to choose something stable that isn't going to be up? Just because it is up does that mean its not a good time to get in? I have mainly been focusing my efforts on dividend paying stocks and ones that I feel are products my family uses. Along with the TR that was brought to my attention

I'm going to follow your advice Greg and split the 1500 over 3 stocks. He actually has 1600 to start with so the extra were going to put in FB which actually is the less exspensive of the 3 I am leaning towards.

I like the mention of FB everybody I know and all businesses have a Facebook page. That is going to be the higher risk and the only one that doesn't pay a dividend.

I'll throw the other two stocks out there that I'm leaning towards and if anybody has information to add I'll take it. I would love to get started today but the up market worries me some.

JNJ
PG

Thoughts anybody?

[Woody]

AHHH ok!:EmoteClueless:

Thanks John


Now doing research over the last week I have noticed something. The majority of the stocks I have looked at are all up. Is the market overall up and it would be hard to choose something stable that isn't going to be up? Just because it is up does that mean its not a good time to get in? I have mainly been focusing my efforts on dividend paying stocks and ones that I feel are products my family uses. Along with the TR that was brought to my attention

I'm going to follow your advice Greg and split the 1500 over 3 stocks. He actually has 1600 to start with so the extra were going to put in FB which actually is the less exspensive of the 3 I am leaning towards.

I like the mention of FB everybody I know and all businesses have a Facebook page. That is going to be the higher risk and the only one that doesn't pay a dividend.

I'll throw the other two stocks out there that I'm leaning towards and if anybody has information to add I'll take it. I would love to get started today but the up market worries me some.

JNJ
PG

Thoughts anybody?

Regarding buying when the market is up. As long as you plan on holding for the long term, I think most people will tell you to just buy when you are ready and not try to time the market. I actually have a hard time following that advice and tend to wait for pullbacks in price to make my purchases. Sometimes I get the pullback I am waiting for and get a good buying opportunity. Sometimes, I completely miss buying the stock because I am waiting for a pullback and it never comes. The stock keeps going up and up and I kick myself for not having bought it. The other downside in waiting to purchase is that you are not collecting the dividend you could be collecting while waiting for the stock to go down.

You may want to do some research on "dollar cost averaging", if you are going to consistently put money in the market.

[toy71camaro]

As mentioned above, timing the market is too risky. Especially with that amount of money. a 1% swing either way isn't going to make much difference. And what happens when that stock you bought today, goes up again tomorrow? Now you missed on the gain, and now your paying even more.

I dont worry about timing the market. I'm only buying in small chunks in general. Which you are hitting in chunks of $500, so that's really small. Now if I were buying $500k worth shares, I'd be a little more conscious of the up/down swing, as now that translates to a couple grand difference.

But either way, if they're long term holds, then it doesn't really make any sense. You'll miss the good days waiting for trying to time the one bad one.

[ErikLS2]

You can say what you want about Jim Cramer on CNBC, I like to listen to him but don't really invest with him. Sometimes he'll praise something I'm familiar with that's right under my nose, such as Snap on (SNA) which I recently bought some of. I do like that he puts his neck out there on a recommendation and owns up to it if he's wrong. He gives a lot of good tips, often, but not always, in line with what Greg's been saying here. I especially like his tip for using the PEG ratio (PE Ratio:Earnings Growth) to determine valuation of a company.

Anyway, his show this past Friday, Halloween, was right up Investing 102's alley and full of valuable tips. You can view it (for a limited time I think) here:

http://www.cnbc.com/id/15838459

[68Cuda]

AHHH ok!:EmoteClueless:

JNJ
PG

Thoughts anybody?

They are both in the same business.

About 5% of my total is in JNJ. JNJ makes a lot of household products that will always be in demand. Big, stable company. They have a 51 year record of increasing their dividend, and pay every quarter. They pay out close to half their earnings to the stockholders. Buy in the next few days if you want the dividend. If your account has the option (I think all do, I could be wrong) make sure to check the option for re-investing the dividends. This way the dividend pays you in company stock instead of cash.
http://www.dividend.com/dividend-stocks/healthcare/drug-manufacturers-major/jnj-johnson-and-johnson/

About 2% of my total is in PG. PG is pretty much the same as JNJ. They have a 57 year record of increasing their dividend, and pay every quarter. You are already past the Ex date on PG, so you will not get the 11/17 payout if you buy now. Their dividend is slightly higher than JNJ at the moment and they pay out a slightly higher ratio to the stockholder.
http://www.dividend.com/dividend-stocks/consumer-goods/personal-products/pg-procter-and-gamble/

If you are buying three not sure I would do two in the same group, but these two are rock solid so no surprises either way. Thoughts Mr. Weld?

[GregWeld]

Once a stock goes EX-Dividend does that mean it will never pay a dividend again as long as it is traded? Can the company later on down the road say we are going to pay a dividend again on a later date?



A stock that declares the dividend - and they declare a dividend EVERY quarter... also declares the EX DATE and the PAY DAY... the EX DATE is the date by which you must have LEGALLY OWNED the shares in order to receive that dividend. The fact that you put is a buy order and see the shares in your account - does NOT MEAN that you are the legal owner. Typically you have to figure in the settlement date which is when the money is cleared from your account and blah blah blah... This is normally at least 3 BUSINESS DAYS...

So given that information --- if the company declares the dividend - and stated the EX DATE is NOVEMBER 30th -- then you need to have bought the shares by the 24th... to give yourself some breathing room if you wan to be sure to "capture" that dividend.

Conversely --- you could SELL the shares on December 1st (the next BUSINESS DAY) and you'd get paid the dividend even though you no longer own them.

EX dates have NOTHING to do with "never getting a dividend again" etc per your post. They're simply the date declared by which you must have been the legal owner to get THAT QUARTERS declared dividend.

[GregWeld]

As mentioned above, timing the market is too risky. Especially with that amount of money. a 1% swing either way isn't going to make much difference. And what happens when that stock you bought today, goes up again tomorrow? Now you missed on the gain, and now your paying even more.

I dont worry about timing the market. I'm only buying in small chunks in general. Which you are hitting in chunks of $500, so that's really small. Now if I were buying $500k worth shares, I'd be a little more conscious of the up/down swing, as now that translates to a couple grand difference.

But either way, if they're long term holds, then it doesn't really make any sense. You'll miss the good days waiting for trying to time the one bad one.




WHAT HE SAID!!


Even I don't wait for something to come down... to me that's just stupid! If I thought it wasn't a good company and that maybe I'd save a 1.00 per share if I "waited"....why would I invest in it in the first place!!

Now --- I don't buy on UP days.. but there's plenty of days (not weeks and months) of little ups and downs... so since I usually have money on the side I'll buy on a big blowup day... Why not? The stocks I like just went on sale... but I'm not waiting and waiting and waiting for another .10 drop. I buy when I'm ready on the first down tick I see. Don't be penny wise and pound foolish.

[Woody]

You can say what you want about Jim Cramer on CNBC, I like to listen to him but don't really invest with him. Sometimes he'll praise something I'm familiar with that's right under my nose, such as Snap on (SNA) which I recently bought some of. I do like that he puts his neck out there on a recommendation and owns up to it if he's wrong. He gives a lot of good tips, often, but not always, in line with what Greg's been saying here. I especially like his tip for using the PEG ratio (PE Ratio:Earnings Growth) to determine valuation of a company.

Anyway, his show this past Friday, Halloween, was right up Investing 102's alley and full of valuable tips. You can view it (for a limited time I think) here:

http://www.cnbc.com/id/15838459

Jim Cramer sometimes provides some good information, but he contradicts himself all the time on his recommendations. I think you are right that he provides some good information on general topics, but I would never listen to his specific stock recommendations. Did you ever see the John Stewart videos on Cramer. Here is one of them. Watch them all if you want a really good laugh.


http://www.youtube.com/watch?v=NkytKDzCEeU

[WSSix]

I said when I started this thread that I'd keep people updated on my progress or lack there of. So today I point to Whole Foods. I've had it for a couple years now, and I'm long on it. If you look at the chart for just this year you can see it took a huge dive. I said it a few pages back that I considered it noise because nothing at WFM had changed to cause the drop. All that happened was the traders, people trying to get rich, didn't like that WFM didn't make as much money as they projected they would. So WFM revised it's projections for the rest of the year and promised to meet those numbers. They beat their projections for the quarter and now have posted a 10% gain as I type this and they are raising the dividend another penny. I'm back to the break even point I believe. I'll see when I get home and access my account.

My point is that you have to be patient and ignore the noise if you're trying to invest. I had no problems leaving my money in WFM and riding the slump out, or selling it if it some how appeared to not recover which is something I was not at all worried about. Hell, if I had this outside of my Roth I would have bought more shares but I max that out at the beginning of each year. So just be patient, invest in quality names that you trust, and ignore the traders.

[captainofiron]

Just got my first 2 dividend payments this week.

Feels pretty good.

Thanks everybody!

[WSSix]

Woot! Congrats Captain!

[toy71camaro]

Just got my first 2 dividend payments this week.

Feels pretty good.

Thanks everybody!

Congrats!!!

[captainofiron]

Congrats!!!

Woot! Congrats Captain!

Thanks!

it was only like 50 bucks, BUT its 50 bucks I didnt have before :thumbsup:

[WSSix]

That's exactly the attitude to have.

Case in point, my shares in OXY. It's an oil stock so it's down. I unfortunately bought at a record high a couple years ago so I'm perpetually down for now. However, I go into my cost basis where it lists all transactions, and I just sit back and look at all the free money I was given for being invested with them. It's not a lot but it adds up. It has really helped soften the current down trend.

[AMSOILGUY]

That's exactly the attitude to have.

Case in point, my shares in OXY. It's an oil stock so it's down. I unfortunately bought at a record high a couple years ago so I'm perpetually down for now. However, I go into my cost basis where it lists all transactions, and I just sit back and look at all the free money I was given for being invested with them. It's not a lot but it adds up. It has really helped soften the current down trend.


So besides the dividend you have earned over the last couple years. Seems like you can hold on and save your money and continue to purcahse more shares and consider them on sale? Correct me if I am wrong but that seems to be a main point I have taken from this discussion. Understand why you have the stock and when it go on sale purchase more?

[sik68]

Hi Greg / Others,

Sears announced it is going to offer 200 to 300 stores for sale to a REIT to raise cash, and lease them back. Any insights on what this can signal for a company that uses this strategy?

My thoughts are unchanged after the announcement: they cannot survive with the current business model. They raise one-time cash, so what...now their ongoing expenses are higher. Assets are to be bought and held, like we do... not sold.

[Vince@Meanstreets]

So besides the dividend you have earned over the last couple years. Seems like you can hold on and save your money and continue to purcahse more shares and consider them on sale? Correct me if I am wrong but that seems to be a main point I have taken from this discussion. Understand why you have the stock and when it go on sale purchase more?

thats what I gather, buy more for the long.

As soon as OPEC reduces output, prices should come back or if another war breaks out.

[WSSix]

So besides the dividend you have earned over the last couple years. Seems like you can hold on and save your money and continue to purcahse more shares and consider them on sale? Correct me if I am wrong but that seems to be a main point I have taken from this discussion. Understand why you have the stock and when it go on sale purchase more?

Correct. If you pull up the 10 year chart on OXY, you'll see it looks great. If you do research on OXY, you'll see they are a solid company with a great history of paying a dividend and being managed properly. They are very big too. They just aren't as well known as the others because they don't have gas stations. They are down right now because of industry wide issues not something they have done. Nothing at OXY has changed to cause the price drop. So over the long run, I have no doubt they will do just fine and I'll make money. Right now would be a great time for me to buy because shares are much cheaper, ie on sale, compared to what my average cost basis is for all the shares I currently own.

For my particular situation, my intent at this point though is to simply wait until the beginning of next year when I go to make my next Roth payment. OXY is in my Roth account, and I've already maxed my contribution for 2014. If I had it in my regular brokerage account, I would have been buying more already.

One other good thing about OXY being down, or any dividend stock you're in, is that your dividend payment buys more. Remember, it's on sale. So OXY pays me for owning them, I get a larger chunk of shares with each payment they give me since the stock is on sale, and when the price goes up I make that much more on the free money they gave me for owning them.

Did that answer your questions?

[ErikLS2]

Hi Greg / Others,

Sears announced it is going to offer 200 to 300 stores for sale to a REIT to raise cash, and lease them back. Any insights on what this can signal for a company that uses this strategy?

My thoughts are unchanged after the announcement: they cannot survive with the current business model. They raise one-time cash, so what...now their ongoing expenses are higher. Assets are to be bought and held, like we do... not sold.

To me this is the same thing as someone taking out a home equity line of credit because they need money.

[GregWeld]

To me this is the same thing as someone taking out a home equity line of credit because they need money.





Couldn't agree more with this statement. The retail world has changed... and Sears didn't - hasn't - or couldn't. IDK and really don't care because to me the store ceased to exist about 25 years ago. I wouldn't bet against them - but I wouldn't invest in this name either because it has just about nothing a guy wants in an investment. A dying business... in an overcrowded retail space... with virtually no hope of regaining it's luster. Buy / invest in businesses that are solid and not on the cusp of having a bankruptcy auction.

[AMSOILGUY]

Is anybody on here investing in 3D printing? Has this been talked about? I see lots of this being talked about in the news. I can't remember where or when but sometime this year I believe the first 3D car was printed. Whos leading the way in this technology?

[captainofiron]

Is anybody on here investing in 3D printing? Has this been talked about? I see lots of this being talked about in the news. I can't remember where or when but sometime this year I believe the first 3D car was printed. Whos leading the way in this technology?

believe it or not, I think (if I remember right) SpaceX and NASA (Marshall) have 3D printed rocket engine chambers.

they are very precise cross sections that normally take alot of welding/machining and many months to fabricate one, so 3D printing would be great here

[gearheads78]

Is anybody on here investing in 3D printing? Has this been talked about? I see lots of this being talked about in the news. I can't remember where or when but sometime this year I believe the first 3D car was printed. Whos leading the way in this technology?

Long term there will be huge winners here but its to early in the game to know who will come out on top. A year ago anything with the word 3D in it was just skyrocketing but they have all been on a steady decline since. I made a little money and sold when things started to fall back. Many have been really beat up over the last 6 months. I have re-purchased a little SSYS and I am currently a little down but I think long term it will pay out. DDD has really been killed but if it goes much lower I may buy a little again. Its a good company but HP announcing they are getting in the 3D game and them trying to incorporate all their companies they have bought is causing the stock to be really beat up. I have one more I own and am in the green on but it is a pure gamble so I won't even mention the name.

[mach1stang]

Ok sorry if it's been posted in here before but I'm a slow reader and have only made it to page 4 lol! But I'm 23, working 50+ hours in heavy equipment and not making $15.75 and I'm just not happy with my financial situation, I'm trying to start my own business and a family and just don't feel comfortable with money and the long weeks are taking their toll on me now so I gotta do something.

I don't make a lot so the thought of shelling money out without really knowing exactly whats gonna be returned or when scares me, but whats a good starting amount of money to put towards stocks for somebody in my position?

Thanks
Kody

[Woody]

Ok sorry if it's been posted in here before but I'm a slow reader and have only made it to page 4 lol! But I'm 23, working 50+ hours in heavy equipment and not making $15.75 and I'm just not happy with my financial situation, I'm trying to start my own business and a family and just don't feel comfortable with money and the long weeks are taking their toll on me now so I gotta do something.

I don't make a lot so the thought of shelling money out without really knowing exactly whats gonna be returned or when scares me, but whats a good starting amount of money to put towards stocks for somebody in my position?

Thanks
Kody

It is a really difficult question to answer not knowing anything else about your financial situation. If you have any high interest rate credit card debt, I would pay that off before investing anything in the stock market. Also, not knowing if you have any savings set aside, I would advise you to have enough of an emergency fund for 9 to 12 months of living expenses. Home ownership is a goal many people have and if that is a desire of yours you may choose to make that a priority as well. Once those items are taken care of you can start to think about investing in the stock market and assuming you do not have a 401k at work, a Roth IRA may be your best option.

I learned to pay myself first when setting aside money for investing. I set up my budget to be able to save a minimum of 10% of my earnings for investment purposes. So if you make $787.50 a week (50 hours x 15.75), set aside $78.75 per week, once you save $1,000 or so, buy a stock that you like. Repeat the process until you have 10 to 20 stocks, then start adding more funds to your existing holdings. As you make more money, you will invest more by keeping the budget set to invest 10% of your earnings.

[mach1stang]

I have most all of my credit cards paid off and my auto loan I've managed to work down to 3.49% and I've also got a 401k going and have for a few years now.

What all do I need to start getting into stocks?


Sent from my iPhone using Tapatalk

[GregWeld]

I have most all of my credit cards paid off and my auto loan I've managed to work down to 3.49% and I've also got a 401k going and have for a few years now.

What all do I need to start getting into stocks?


Sent from my iPhone using Tapatalk




Kody --- I'm on the road in my rig so will keep this short. Start reading this thread before you do anything. Sounds to me like you're very sensible. Reading this thread will help you understand "investing" at it's most basic form - THEN you'll know exactly how to get started.

[mach1stang]

Disregard, my phone sent the same post twice and I didn't realize it.

[SSLance]

So I did a little number crunching this morning.

I tip toed back into the market for the first time since 2008 starting on Feb 07, 2014. I made a few more purchases of the same stocks in early March, and then again in early April. I sold one stock in August then bought the dip in the middle of October pretty hard across the board. Still only holding 11 equities total and still only about 25% of my total portfolio is invested in the market.

So far YTD, my total return is just over 15% on the invested portion. My biggest gainer on an individual purchase is up 40%, overall my purchases in that stock are up 27%. My smallest gainer is up 3.34%. I've also earned about 2.5% of my total current invested amount in actual dividend payments.

Mentally...I feel pretty good. While there is a little part of me that is hindsight wishing that I would have dove in head first back in February...the smart angel on the other shoulder is reminding me just how happy I've been all year long and how the dips have NOT bothered me at all. In fact, I look for them anxiously now as more opportunities to pick up my stocks on sale. One thing that I enjoy is how stable my group of stocks are...even on the wildest of days of the DOW going up and\or down...these stocks just rock on with little blips, not huge dips.

I want to thank the board for all the help along the way, I can honestly say I would have NEVER ventured back into the market had it not been for this thread. I have a whole new perspective on this now and am enjoying the ride so much more than I ever have in my investing history that goes back to 1997.

Here's to more of those dividends rolling in and the total return rising right along with them. :cheers:

[toy71camaro]

Awesome news Lance!

[Evil_s10]

So I did a little number crunching this morning.

I tip toed back into the market for the first time since 2008 starting on Feb 07, 2014. I made a few more purchases of the same stocks in early March, and then again in early April. I sold one stock in August then bought the dip in the middle of October pretty hard across the board. Still only holding 11 equities total and still only about 25% of my total portfolio is invested in the market.

So far YTD, my total return is just over 15% on the invested portion. My biggest gainer on an individual purchase is up 40%, overall my purchases in that stock are up 27%. My smallest gainer is up 3.34%. I've also earned about 2.5% of my total current invested amount in actual dividend payments.

Mentally...I feel pretty good. While there is a little part of me that is hindsight wishing that I would have dove in head first back in February...the smart angel on the other shoulder is reminding me just how happy I've been all year long and how the dips have NOT bothered me at all. In fact, I look for them anxiously now as more opportunities to pick up my stocks on sale. One thing that I enjoy is how stable my group of stocks are...even on the wildest of days of the DOW going up and\or down...these stocks just rock on with little blips, not huge dips.

I want to thank the board for all the help along the way, I can honestly say I would have NEVER ventured back into the market had it not been for this thread. I have a whole new perspective on this now and am enjoying the ride so much more than I ever have in my investing history that goes back to 1997.

Here's to more of those dividends rolling in and the total return rising right along with them. :cheers:

That is awesome to hear and is not terribly far off from my stock journey.

Starting around June 2013 I came across this thread which has been nothing short of a huge wealth of information. It has really dumbed down the process and made me feel very comfortable investing.

I started off very small, just purchasing 5 shares. I waited several more months and added more to my original.

To date I have investments in 3 sectors. I invest a short amount each week into my brokerage account, then once I feel comfortable I will purchase more. My situation does not allow me to invest more frequently but this has given me the tools necessary to succeed.

To date I am up 1.14%. I have taken a big hit when stocks went down this October. But I have take advantage and purchased more stocks.

Rambling over, thanks again Greg and everyone else.

[mach1stang]

Kody --- I'm on the road in my rig so will keep this short. Start reading this thread before you do anything. Sounds to me like you're very sensible. Reading this thread will help you understand "investing" at it's most basic form - THEN you'll know exactly how to get started.



I plan on reading this thread and making sure I can wrap my head around the concept before jumping in.

I just want to make sure I can provide the best life possible for my fiancé and I and our future kids so I want to start now rather than later.

[GEN_X]

Greg and others, what a great read.

can anyone explain exactly what each line item is and how it works on the attached chart. Some are pretty self-explanatory but some i dont understand. Thanks Jesse

[captainofiron]

http://www.autoblog.com/2014/11/15/ferrari-pay-fiat-chrysler-prior-spinoff/

Ferrari IPO coming soon?

[Woody]

Greg and others, what a great read.

can anyone explain exactly what each line item is and how it works on the attached chart. Some are pretty self-explanatory but some i dont understand. Thanks Jesse

Beta measures volatility. A stock with a 1.26 beta is 26% more volatile than the market.

Market cap is the size of the company. Apple's market cap is $677 billion which is calculated by multiplying the number of outstanding shares by the stock price. You may have heard of large cap stocks, small cap stocks,etc. It refers to the market cap of the stock.

P/E is the price earnings ratio which is calculated by dividing the annual earnings per share of the stock by the current stock price. It is used as a valuation tool. In theory, the higher the P/E the more over-valued the stock is. However, there are many things to consider when comparing P/E ratios.

EPS is earnings per share which is the net income divided by the number of outstanding shares.

Div & Yield is the dividend that the stock pays on a quarterly basis. To calculate the Yield you must multiply the quarterly dividend by four and then divide that by the stock price.

[silvermonte]

Two days ago on Monday I was looking at my dividend payouts and noticed a few of my holding had been listed at 100X what they are worth. I knew it was a listing error because nothing had changed except where the decimal had been placed.

I know this wouldnt work but if I had sold and they gave me the listed price and then noticed the error what would of happened? This is kinda off topic but it was fun to see my account jump up by many zeros at the end of the account balance for the day.

[GregWeld]

Two days ago on Monday I was looking at my dividend payouts and noticed a few of my holding had been listed at 100X what they are worth. I knew it was a listing error because nothing had changed except where the decimal had been placed.

I know this wouldnt work but if I had sold and they gave me the listed price and then noticed the error what would of happened? This is kinda off topic but it was fun to see my account jump up by many zeros at the end of the account balance for the day.



They would catch the error and fix it - and that's also why SETTLEMENT dates are not for several days after a transaction.

[GregWeld]

I plan on reading this thread and making sure I can wrap my head around the concept before jumping in.

I just want to make sure I can provide the best life possible for my fiancé and I and our future kids so I want to start now rather than later.




A couple things you'll take away from this thread --- being EARLY saver/investor -- and being a methodical investor, not a get rich overnight guy. The fact that you're willing to read this puts you way ahead of others that don't/won't take the time.

[GregWeld]

Okay "newbs" --- time to start to put on your YEAR END REBALANCING hats.

What is that? It's a review of your portfolio with an eye to tax efficient trades IF -- BIG IF - your accounts are taxable. Tax trades inside a IRA shouldn't be concerned as all those trades are tax deferred. This is about people that will pay taxes on their gains (or taking tax losses) for 2014.

#1 --- Assets should be looked at as a "whole". If you invested 10,000 and you now have 12,000 you are AHEAD. Don't be afraid to sell something at a "loss" when overall you're way ahead!

#2 --- It is nearly impossible to have "everything" working well. When you look there are probably a couple "employees" (stocks) pulling most of the wagon... and one or two that are sitting on their ass.

#3 --- Rebalancing in taxable accounts is merely a look to see where you have gains (and maybe want to pare that down) and offset those gains with sales of losers. That way you offset the gains with loses and then have no or minimal taxes due.

#4 --- Don't forget to check the dividend EX dates before selling anything. It's stupid to hold something for months only to sell it a few days or weeks before it pays it's dividend.

#5 --- Don't SELL anything just because you have a nice gain in it... or to offset a loss. DO examine every holding with the thought process of where it's going long term. Just because I have a 20% gain in Altria (MO) doesn't mean I'm looking to capture that. I have to really like the shares long term -- and if I sold to lock in a gain in this name -- where else would I invest that money to make an even better gain going forward.

#6 --- Year end rebalancing accounts (TAXABLE) can be a chance to prune gains - offset losses - and expand your diversification.

#7 --- BEWARE the long term cap gain vs the short term cap gain!!! Long term is ONE YEAR AND ONE DAY.... short term is anything less than that! The tax rate difference can be huge. In my case the difference is 40% vs 20% (on LTCG)

[captainofiron]

This is a pretty good article about 401k vs IRA

thought I would post it for any newbs that are lurking this thread but dont want to read it all (BUT YOU SHOULD)

http:// lifehacker.com/should-i-put-money-into-my-employers-401-k-or-invest-o-1665628446

[GregWeld]

I haven't added to this thread -- because frankly - there's not much more to add to it.

This morning I got an email from a buddy asking about whether or not now is a good time to put more money to work - or was the market too high. I think I get this same style question hourly. I also respond to it the same way.

I.E.,


The longer you wait for just the right moment to invest - the longer you're out of collecting the dividends. The longer you wait - in an UP market - the more gain you loose out on. Will it go down from where you get in today or tomorrow. ABSOLUTELY. Are you investing for next Saturday, or for 10 - 15 - 30 years?

I hate this question because it shows me the "asker" isn't really committed to INVESTING -- they're only committed to instant gratification. They'll be the first people to sell when the market goes down - losing money - and throwing in the towel. The minute they're "out" the market will go on a 10 year tear upward - leaving them behind - when everyday they once again think the market is "too high". If it wasn't going UP for the last 40+ years.... nobody would have ever invested in it. LOL

[96z28ss]

Anyone here invested in KMP. Have you received your payout and swap to KMI already?
I haven't received it yet, but I know someone who has already.
I even had more shares than they did. I wonder how they determine who gets switched over first.

[GregWeld]

Anyone here invested in KMP. Have you received your payout and swap to KMI already?
I haven't received it yet, but I know someone who has already.
I even had more shares than they did. I wonder how they determine who gets switched over first.



Smart traders took their profits (in my case a quarter million bucks) in KMP right after they made the announcement.... and bought the KMI shares.

It's just book keeping and think of the MILLIONS of shares to be handled and payments made. They'll get to you.

[WSSix]

So, I'm sort of in the middle of a dilemma and am unsure what to do. Since I used to work for Halliburton and they had a fantastic ESPP set up, I took full advantage of it and now have a very lopsided portfolio. I'm not at all worried about that honestly. I took advantage of an opportunity that was only available to me because I was an employee at the time and it has paid off greatly.

Until this current and unforeseen drop in oil prices, my attitude was to simply let the shares sit there and make money. I no longer get the discount as an employee, and I'm very lopsided so I don't need to invest any more in that position were my thoughts. I'm now questioning those thoughts because the stock has dropped so much in value. My dilemma is do I take advantage of what is, I believe, a great buying opportunity and continue to make my portfolio lopsided, or do I just stay patient, let my shares ride, and continue to work towards a more balanced portfolio? My cost basis is such that I'm still sitting pretty with great returns right now even with the price down so much.

Thoughts? Opinions?

[GregWeld]

DIVERSIFY. ALWAYS.


Nothing wrong with keeping and holding what you have - but try to broaden your positions until you have 10 or 15 or 20 great names.






So, I'm sort of in the middle of a dilemma and am unsure what to do. Since I used to work for Halliburton and they had a fantastic ESPP set up, I took full advantage of it and now have a very lopsided portfolio. I'm not at all worried about that honestly. I took advantage of an opportunity that was only available to me because I was an employee at the time and it has paid off greatly.

Until this current and unforeseen drop in oil prices, my attitude was to simply let the shares sit there and make money. I no longer get the discount as an employee, and I'm very lopsided so I don't need to invest any more in that position were my thoughts. I'm now questioning those thoughts because the stock has dropped so much in value. My dilemma is do I take advantage of what is, I believe, a great buying opportunity and continue to make my portfolio lopsided, or do I just stay patient, let my shares ride, and continue to work towards a more balanced portfolio? My cost basis is such that I'm still sitting pretty with great returns right now even with the price down so much.

Thoughts? Opinions?

[68SS2]

I have read every post in this thread over the past couple years and it has been very helpful to me, so thanks to all the contributors and specifically Greg. We have talked a lot about mindset and how to view your investments and the market with some discussions about the how.

I would like some opinions about which online brokerage firms people are using and why. I have been doing most of my investing within Vanguard and some real estate, but I would like to have access to more information and specifically be able to closely track my investments and returns (I'm an engineer and love data). I don't buy or sell very often, as this is investing and not trading...so the difference between $7 and $9 trades is secondary to how well their website works for me, but some thoughts on what drove you to a firm would be helpful.

Thanks
Doug

[toy71camaro]

I use Sharebuilder (soon to be Capital One Investing).

Reason why? I got a free $100 signing up because I'm a Costco member. And they do a "auto investment" feature, where you can buy a stock on Tuesdays for $2 (as long as the auto investment was setup by monday). They also have i think $6.95 normal trade rates. And every once in a while, have coupon/special codes to get a free trade.

But I've been happy with them.

[GregWeld]

I have read every post in this thread over the past couple years and it has been very helpful to me, so thanks to all the contributors and specifically Greg. We have talked a lot about mindset and how to view your investments and the market with some discussions about the how.

I would like some opinions about which online brokerage firms people are using and why. I have been doing most of my investing within Vanguard and some real estate, but I would like to have access to more information and specifically be able to closely track my investments and returns (I'm an engineer and love data). I don't buy or sell very often, as this is investing and not trading...so the difference between $7 and $9 trades is secondary to how well their website works for me, but some thoughts on what drove you to a firm would be helpful.

Thanks
Doug


Doug -- Personally I like SCHWAB best for overall research and being able to find the info I want. I have several brokerage accounts and I always end up doing research on Schwab. I have a brokerage account at Wells Fargo - and find it one of the worst... but they do other things for me that only large banks can do...

Make certain that you are SIPC insured -- which covers CASH on deposit up to $250K - and the securities held in the brokerage.

[Woody]

So, I'm sort of in the middle of a dilemma and am unsure what to do. Since I used to work for Halliburton and they had a fantastic ESPP set up, I took full advantage of it and now have a very lopsided portfolio. I'm not at all worried about that honestly. I took advantage of an opportunity that was only available to me because I was an employee at the time and it has paid off greatly.

Until this current and unforeseen drop in oil prices, my attitude was to simply let the shares sit there and make money. I no longer get the discount as an employee, and I'm very lopsided so I don't need to invest any more in that position were my thoughts. I'm now questioning those thoughts because the stock has dropped so much in value. My dilemma is do I take advantage of what is, I believe, a great buying opportunity and continue to make my portfolio lopsided, or do I just stay patient, let my shares ride, and continue to work towards a more balanced portfolio? My cost basis is such that I'm still sitting pretty with great returns right now even with the price down so much.

Thoughts? Opinions?

If it was me I would definitely diversify for the exact reason you are discussing. An unforeseen event has significantly impacted your major holding. I had a friend that worked at WorldCom several years ago. He used to brag to me how much money he was accumulating in his retirement account. I don't know if you were following the market when WorldCom went bankrupt, but his entire account evaporated because he had all of his money in one stock. The same thing happened to people at Enron.

[Woody]

I have read every post in this thread over the past couple years and it has been very helpful to me, so thanks to all the contributors and specifically Greg. We have talked a lot about mindset and how to view your investments and the market with some discussions about the how.

I would like some opinions about which online brokerage firms people are using and why. I have been doing most of my investing within Vanguard and some real estate, but I would like to have access to more information and specifically be able to closely track my investments and returns (I'm an engineer and love data). I don't buy or sell very often, as this is investing and not trading...so the difference between $7 and $9 trades is secondary to how well their website works for me, but some thoughts on what drove you to a firm would be helpful.

Thanks
Doug

I second the vote for Schwab. I have accounts at Schwab, TD Ameritrade, Etrade and Interactive Brokers. I generally prefer Schwab for research and the general lay-out of the website. However, I like the Think or Swim Trading Platform at TD Ameritrade the best for the charting and monitoring my positions. Interactive Brokers is more of a trader's brokerage. It has a good platform and very low commissions at $1 or $.005 per share, but there are additional fees if you don't trade much.

Edit: I forgot to mention that Schwab, TD Ameritrade and Etrade have dividend reinvestment programs. Scottrade has a modified reinvestment program, but it is not the same. If you would like to automatically reinvest your dividends, do some research into the brokerage you select.

[WSSix]

If it was me I would definitely diversify for the exact reason you are discussing. An unforeseen event has significantly impacted your major holding. I had a friend that worked at WorldCom several years ago. He used to brag to me how much money he was accumulating in his retirement account. I don't know if you were following the market when WorldCom went bankrupt, but his entire account evaporated because he had all of his money in one stock. The same thing happened to people at Enron.

Thanks Woody and Greg. I'm diversified in how many different companies I'm invested in but dollar wise I'm very heavy in HAL in that account.

[toy71camaro]

I opened an account (savings) at Schwab just so I could open a brokerage account and use their research tools. LOL. they are top notch, but I still have my accounts at Sharebuilder.

Sharebuilder also does the normal dividend reinvesting option (on by default). and its 1 price per trade, regardless of # of shares. You get a discount on trades due to being a Costco member, and the "automatic investment" option is the $2 one, which i think is normally $4 from them, but discounted due to Costco membership.

[GregWeld]

I just hope everyone made a little money this year!

[Vegas69]

I'm stoked, I employed your philosophy about 14 months ago. The money I used to "let the bank rent for nothing" is now up 11.5% over that time. It's starting to snow ball into some real money. :relax: :D

[GregWeld]

I'm stoked, I employed your philosophy about 14 months ago. The money I used to "let the bank rent for nothing" is now up 11.5% over that time. It's starting to snow ball into some real money. :relax: :D



There ya go!!

[silvermonte]

So I have an update and a question. CASY is the stock I am referring to for anyone that wants to look it up. Almost 2 years ago I bought a small amount of a stock $1500 worth, at the time it had a dividend of 1.3%. I was super happy with the stock for all the reasons listed earlier in this thread. Now this stock has had the growth I was looking for but the dividend is going down. The share has grown $20 apiece and the dividend is now down to .97%. Is this a normal rate? I know as one goes up the other will go down.

I guess what Im asking is, is this is normal or should I continue to hold on to it? Or is it time to sell and buy something with a higher dividend. I feel the company is not even close to done growing and I have been continuing to buy more, just in much smaller chucks to keep everything balanced within my account. Im happy in every way with this company. I just wondering if there was a smarter way to be using my money.

[GregWeld]

Miles --- you've got TWO fundamental mistakes in this line of thinking... and I'm not calling you out or flaming you on it. In fact... it's good because others can learn from this post.




#1 -- The dividend did not go down. IN FACT the dividend has gone up! It was paying .18 a quarter - it's now paying .20 per quarter.

What you're doing is a failure to understand the way dividends are looked at for a comp. The dividend is paid in DOLLARS -- and figured as a PERCENTAGE. The dollar amount stated has to get calculated into a percentage AT CURRENT SHARE PRICE. So as the share price goes UP -- the PERCENTAGE that the dividend represents appears to go down. It works the other way in a falling stock market - as the price of the shares drop - the percentage of the share price the dividend represents goes up.

You - having paid a lower price per share - are getting a higher percentage of dividend rate on your money invested. So you always need to do your own calculations on what YOU PAID - and what you're currently receiving. I don't know what you paid so can't calc that for you.

The MATH for doing that is:


The ANNUAL DIVIDEND amount (4 times the quarterly amount) in this case the annual amount is .80 (4 x .20) DIVIDED by the share price. And move the decimal two places.


So let's use this actual stock and price.


.80 dividend by 82.63 = .009681

Move the decimal point -- and you have .97 %


#2 -- You've fundamentally made another mistake in your thinking by not looking at the TOTAL RETURN. Remember that if we're going to "accept" a low dividend percentage - then we need the offsetting GROWTH in the share price so that our TOTAL RETURN is appropriate. TOTAL RETURN is the ultimate goal here - and should alway be the main consideration for ANY investment regardless of whether or not it's stocks - bonds - or real estate etc.

CASY has a TR of almost 10% for one year -- 62% for 3 years - and 184% for the last 5 years.

While this year isn't particularly stellar - overall this stock is a grower and if you're happy with them - I'd continue to hold or add to the name. Their earnings are growing (as reported) and that's a very good thing.







So I have an update and a question. CASY is the stock I am referring to for anyone that wants to look it up. Almost 2 years ago I bought a small amount of a stock $1500 worth, at the time it had a dividend of 1.3%. I was super happy with the stock for all the reasons listed earlier in this thread. Now this stock has had the growth I was looking for but the dividend is going down. The share has grown $20 apiece and the dividend is now down to .97%. Is this a normal rate? I know as one goes up the other will go down.

I guess what Im asking is, is this is normal or should I continue to hold on to it? Or is it time to sell and buy something with a higher dividend. I feel the company is not even close to done growing and I have been continuing to buy more, just in much smaller chucks to keep everything balanced within my account. Im happy in every way with this company. I just wondering if there was a smarter way to be using my money.

[silvermonte]

Thank you Greg for getting me straightened out. You are 100% correct about me being confused about how the dividend payout works. What you said makes perfect sense and I feel much better about it now. I was just doing my 6 month review of my holdings. Im well in the green on this one, but had a thought that maybe it was time to review this particular holding and look for something better.

[GregWeld]

Thank you Greg for getting me straightened out. You are 100% correct about me being confused about how the dividend payout works. What you said makes perfect sense and I feel much better about it now. I was just doing my 6 month review of my holdings. Im well in the green on this one, but had a thought that maybe it was time to review this particular holding and look for something better.



EXCELLENT!

[WSSix]

congrats Todd and Miles! Glad to hear you guys are having success with this.

[GregWeld]

I personally have huge holdings in "oil and oil related" companies... anyone that has these types of holdings is getting killed right now. This morning has them down hard once again. I call this action the "death of a 1000 cuts". Every day they go down. Here's the reason for writing this morning - because it's the end of the year - and people should be assessing where they are and where to put new money etc.

"Never try to catch a falling knife" is a very good statement that has been around far longer than we have been.


Many times I "average down" in an investment that I think has long term potential to either provide me with current income (making the cuts acceptable) or that I think is being oversold for a temporary issue. I've made great money on the snap backs - I've also had my ass handed to me - so in a nutshell - these are risky ways to play.

Now - back to the "never try to catch a falling knife". I always have cash waiting to be invested. Unlike most - I don't have to put money to work all the time. I'm lucky and can hold pretty healthy positions in cash and not have it affect my future or current income. So I'm ALWAYS on the prowl to get this wasted money off the sidelines and into something. BUT -- ALWAYS THE BIG BUTT IN THE ROOM -- I've learned to be patient! When something is falling -- you don't want to just rush in and be a buyer.... In the market we need to learn that. Be patient and watch and wait - it's better to wait for a bottom to be put in the stock - have a stabilizing period - and then maybe even wait for it to start to go back up. While you might not get the absolute lowest price of the decade -- you'll also not suffer the unknown "death of a 1000 cuts" which is really more important to your mental health than your pocketbook (if you're a long term investor). One or two names going down hard can affect your return for the year. Oil has definitely hurt my percentages this year.... where last year they were leading the charge higher.

Now --- if you are trying to adjust your portfolio -- and or you have new money to go into the market -- it's also paid off for me to buy the sectors or names that are DOWN over the ones that are up big. It's more painful and is far harder mentally to do -- but if it's the right sector/names they often do have nice outsized gains when (and if) they come back to more normal levels. They also pay nicer PERCENTAGE of dividends while you're waiting for that to happen. Remember as the share price falls - the percentage of yield rises... which is what generally builds a floor for the share price.

Think about this like rental real estate... as the price of the house falls - if it can collect the same amount of rent - that rent is a better ROI (return on investment) as a percentage. If it keeps going down (the price) eventually you might have to lower the rent --- but that's the part we don't know and have to "okay" with. What we do know is that it won't stay this way forever and we will be made whole again down the road.

[WSSix]

Good post, Greg. It's going to be interesting for the next few months or year I think.

[GregWeld]

Anyone in here still playing with BITCOIN?? I see today it's down to $364 USD.... that's a long hard downward slope from people talking about it being $1000 plus per coin.

My point here.... Most of you had already forgotten the name of the thing... and had I not brought it up here - you would have. OUT OF THE NEWS -- The Talking Heads on CNBC quit mentioning it... the clerk at the store quit talking about it. DONE. GONE. Bubble popped.

Not the kind of "investment" where I want to put my money. Lucky for me - I've lived long enough to have seen many of these kinds of "investments" come and go. My job is to have you guys (and gals) all watch this and learn from it. Better to learn from the sidelines rather than the far harder lesson of losing your money.

Oh sure - there's money to be made "while it lasts" - on the way up - and the mania that ensues.... just like people made money flipping houses. The problem is they lose it all because people don't get out at the top. Most likely they finally got IN at the top...

[toy71camaro]

You - having paid a lower price per share - are getting a higher percentage of dividend rate on your money invested. So you always need to do your own calculations on what YOU PAID - and what you're currently receiving. I don't know what you paid so can't calc that for you.

The MATH for doing that is:


The ANNUAL DIVIDEND amount (4 times the quarterly amount) in this case the annual amount is .80 (4 x .20) DIVIDED by the share price. And move the decimal two places.


So let's use this actual stock and price.


.80 dividend by 82.63 = .009681

Move the decimal point -- and you have .97 %






This brings up a good reminder. When you log into your brokerage accounts, your not going to see your "Total Return", and this could play tricks on your mind! hahaha.

I ended up writing my own tracking spreadsheet using Google Docs. Where I document each purchase I make for each stock (price/qty/total amount), and also note each dividend payment. It then calculates my total shares, my Avg Cost on those shares. Then it automatically grabs the current share price. I then have a "Summary" tab/sheet (I have a "sheet or Tab" for each stock), where it monitors the daily basics such as todays price +/- %, todays Dividend %, MY dividend % based on my original purchase, plus the TOTAL RETURN.

Just as an example, when I log into my brokerage account and take a quick peek at my page, it shows I'm DOWN 0.22% on my AT&T. :disgusted: Bummer right? Well, not really. My Total Return for it is actually 28%. There's a HUGE difference there. :G-Dub:

Once again Greg, thanks for taking time out of your day to keep us all on the Up and Up and moving forward with this stuff. It's made a huge difference in my retirement accounts since starting this within the last 2 years. :G-Dub: :thumbsup:

[GregWeld]

You're more than welcome Albert! I'm so happy this is working out well for you.

Correct data - and correct thinking are CRITICAL Albert. Good for you for doing the work on the spread sheet.

The thing with stocks - versus other types of assets such as housing etc... is that we tend to look at them all the time. It's like a moth to a flame... we like to see our investments all going green all the time. Of course - it doesn't work like that. But really understanding where you're at is key.

I've said it here many times -- if you're UP 30% over a two year period -- and suddenly the market "tanks" and goes down hard (10%)... you must put that in perspective. You can't open your account and go HOLY CRAP! I'm down 10K! When in fact --- you might be up 40 over all.

[silvermonte]

I would like to ask some theoretical questions. Lets say a year or even 2 years from now a stock has has no growth and the dividend payout has not increased at has been a low value. My money could be put to better used in a best of breed. Now assuming the company is not doing anything wonky behind closed doors, what would be a reasonable time frame for a person to wait on a stock to start doing something again?

I can use my CASY stock as an example. I bought in 2 years ago and it has had great growth and I'm well in the green on it. So if for some reason it was to just go stagnant and nothing would change for a year, how long should I wait if there is no news coming in from their side on what is going on.

That's not what is going on with this but I was just using it as an example. I could see myself saying well I've made X and if I wait a bit longer I might make more. That would be the emotional side taking over with investing. What clues should a person look for to know its time to move to greener pastures?

[GregWeld]

I would like to ask some theoretical questions. Lets say a year or even 2 years from now a stock has has no growth and the dividend payout has not increased at has been a low value. My money could be put to better used in a best of breed. Now assuming the company is not doing anything wonky behind closed doors, what would be a reasonable time frame for a person to wait on a stock to start doing something again?

I can use my CASY stock as an example. I bought in 2 years ago and it has had great growth and I'm well in the green on it. So if for some reason it was to just go stagnant and nothing would change for a year, how long should I wait if there is no news coming in from their side on what is going on.

That's not what is going on with this but I was just using it as an example. I could see myself saying well I've made X and if I wait a bit longer I might make more. That would be the emotional side taking over with investing. What clues should a person look for to know its time to move to greener pastures?



Good / fair question. Selling is probably the hardest part to figure out - particularly when the name is a winner. That in itself brings up LOTS of quandaries. Why would you want to sell when it's done exactly what you wanted it to do? Has there been a FUNDAMENTAL change in the business which now changes the reason you invested in it originally? Are sales flattening or headed down? Are margins shrinking? Has another player come in to the market and taken market share? Has the position grown to be too much of your overall portfolio?

Now - here's a harder unknown question I always ask myself. If I sell - I now have cash to invest. What makes me think I can do "better" or even as well as what I'm in and just sold? Usually I don't trim or sell unless the name is a loser -- or I have my eyes on something that I need/want in the portfolio. Or the position has done so well that I just need to trim a little off the top.

Your question is actually unanswerable with a "pat" do this style answer. The reason for this is because you can't just take a particular name and what's it's doing in a vacuum. What has it been doing relative to the market? Is the whole market flat or down... or is the whole market UP and the name you're looking at down or flat. Thus not keeping pace with the overall market.

The other thing is to pull it up on Google Finance -- and then scroll down to where the page shows other names which Google adds as "comparable" businesses. Where is it compared to those?

By the way -- I never worry about stocks that have done what I thought (hoped) they'd do. The ones I worry about are the ones that don't. That's when I start looking at why -- and why did I choose the wrong one. Right now - we have a FUNDAMENTAL change in Oil... all my oil related stuff is getting killed. I KNOW why that is - there is nothing I can do about that. I then have to make a judgement as to whether or not I think this change is permanent or temporary in nature. I then check the dividend yield on my cost basis and decide if that's enough to keep me holding the investment... how much pain am I willing to accept and what's the future (crystal ball) say.

In other words -- there's a hell of a bunch of factors to think about before hitting the sell button. And I guarantee the day you sell - the stock will take off upward again. Just like the day you buy it will go down. It's the nature of the market to test you.

[GregWeld]

The "oil complex" is just killing the market here... and of course -- a DOWN market can have a MARVELOUS affect on your investments down the road. You'll have to be long term thinkers in a down market. Harder to do than many people think it is. To put money to work when you're almost certain you're going to feel pain... ain't easy.. but here's my point.

AS PRICES FALL --- the DIVIDEND PERCENTAGE rises.... and some very very great companies are starting to peak my interest. STARTING doesn't mean I put every dollar I have to work tomorrow.... Starting means I'm researching - building my plan - and preparing to put that plan to work with buying.

When you have big companies like Conoco Phillips (CON) paying almost 5%... Exxon (XON) is at 3.11%.... Chevron (CVX) is paying over 4%.. British Petroleum (BP) is over 6%

These are just some EXAMPLES to use to show as prices drop - dividends rise. The question is how SECURE is the dividend etc. NEVER buy a company just because of the dividend percentage -- that's known as a "value trap" where all you're focused on is the percentage. That CAN BE a mistake. Make certain your buys are always something you want to own come hell or high water. Don't get lazy and just see one metric.

Class dismissed! LOL

[96z28ss]

I just hope everyone made a little money this year!


You just had to jinx us all didn't you!

[GregWeld]

You just had to jinx us all didn't you!

Yeah -- I shoulda kept my big yap shut! Actually I've done real well... but this oil dropping like a rock is either a blessing or a curse. We just don't know yet.


This is why we always have to keep our eye on the FUTURE - not this week or next month. We have to say - where do I need to be 15 years from now.... for many - even way longer!


Interesting statistic I heard today --- there were FOUR stocks that accounted for the DOW being down over 80 points. I've written about this earlier... that there is a weighted average... and some days it appears to be a blood bath - and you open your account and didn't do all that bad. Right now I own too much of the oil complex and it's not helping me one bit. LOL

[So Cal Camaro]

Yeah -- I shoulda kept my big yap shut! Actually I've done real well... but this oil dropping like a rock is either a blessing or a curse. We just don't know yet.


This is why we always have to keep our eye on the FUTURE - not this week or next month. We have to say - where do I need to be 15 years from now.... for many - even way longer!


Interesting statistic I heard today --- there were FOUR stocks that accounted for the DOW being down over 80 points. I've written about this earlier... that there is a weighted average... and some days it appears to be a blood bath - and you open your account and didn't do all that bad. Right now I own too much of the oil complex and it's not helping me one bit. LOL

You have to be confident in your selections are solid companies with good management/financials to stay in and buy more at a discount...I own Conoco and Exxon for a very long time, buying more as the dip continues...look to the companies that are dependant on oil/gas to operate for the pop in those stocks, airlines, UPS/Fedex will improve with lower fuel costs...open your eyes and you will see lots of opportunity to get into good companies when volatility comes around...

[SSLance]

Mr Market's response today should be interesting... I'm looking to buy this dip as well but the oil stocks drawbacks are typically a bit longer lived so there shouldn't be any hurry to start tip toeing in.

I have a feeling the retail stocks are going to do well this quarter. We've been busy shipping a lot of Christmas presents here and the mood from the customers this year so far seems pretty joyful.

[GregWeld]

I have really tried to avoid the discussions regarding an individual and an individuals stock picks or pans.... that's a bottomless unrewarding pit. The reason I say that is because the very nature of any "market" is that one person wants to own something and the other wants to sell - and they both may have very valid reasons that SUIT THEMSELVES AT THAT TIME. Each of us has different views of the world - have different levels of wealth - disposable income - savings needs etc. So that's a long disclaimer.

Having said all of that ---- I think you should be feeling pretty rosy TODAY having NOT sold your CASY.

Just to make this into an example... I had stated in an earlier post that the day you sell - the market will go bonkers (I didn't use those words) and it will go up. Today - for CASY is a prime example of that.

Now then -- this line of thinking, while hypothetical at best -- can get you into trouble when you really want to sell something but are afraid to pull the trigger because you're absolutely sure it will go up 15 minutes after you sell. GET OVER IT. Go back to the charts - refresh your brain looking at the SQUIGGLY line. It goes up and down like a yoyo. You'll never get it right - you can only do the best you can do at the time.

Use the squiggly line to either confirm or deny your thoughts. While it might be squiggly - is it on the general glide path UP ----- or has the line turned decidedly south and it's squiggling down. I'm talking about using the line as a general reference here. A longer term (albeit historically) view if you will.

Now -- I tend to also look at how much that line tends to "oscillate". I use that to show myself visually that perhaps this particular name (whatever that name is I'm looking at) is "volatile" if the squiggles are large... or it's a pretty steady eddy and the line has small oscillations in price. If I see this - then maybe it correlates with what's freaking me out at the time --- i.e, the stock is volatile as seen in the graph and the price fluctuation is pretty "normal" for this particular name.

Go to whatever platform you (when I say YOU -- I mean anyone reading this) and pull up a chart --- YEAR TO DATE -- and plug in GoPro (GPRO) and then add to the chart (using comparison function) Altria (MO). Keep this at Year to Date so you have a visual of the stock price movement.

I have always warned about KNOWING YOURSELF in investment. Look at the movement in GoPro vs Altria. Sure GoPro has really moved up huge since it's debut -- that's not what I'm talking about here --- What I'm talking about is COULD YOU STAND THE GIANT NASTY PRICE SWINGS.

It's easy to see that had you bought GPRO early -- you'd be way up -- but that's hindsight. Would you have been able to put your hard earned money in and then have it down 4 or 5 dollars two days later??

Okay --- I'd use this chart to help me understand that a name like GPRO is VOLATILE... and that maybe these big price swings are "normal" for a stock like that..... but looking at MO -- I see super steady -- and then if there was a big whoop-te-do downward in the chart THAT would make me nervous and I'd have to go research to see what happened because thats not normal for this name.


The short answer or reason for this post is that --- make certain you do a little "work" before you buy and before you sell. Make certain that you truly understand the particular stock you're looking at. The trend - the trend vs the market in general - the "action" of the name (big swings or steady). The reason for that is for your MENTAL STATUS because your mental status is about 90% of the battle. Panic and sell or buy too quickly without doing the right amount of work will kill your long term performance.







I would like to ask some theoretical questions. Lets say a year or even 2 years from now a stock has has no growth and the dividend payout has not increased at has been a low value. My money could be put to better used in a best of breed. Now assuming the company is not doing anything wonky behind closed doors, what would be a reasonable time frame for a person to wait on a stock to start doing something again?

I can use my CASY stock as an example. I bought in 2 years ago and it has had great growth and I'm well in the green on it. So if for some reason it was to just go stagnant and nothing would change for a year, how long should I wait if there is no news coming in from their side on what is going on.

That's not what is going on with this but I was just using it as an example. I could see myself saying well I've made X and if I wait a bit longer I might make more. That would be the emotional side taking over with investing. What clues should a person look for to know its time to move to greener pastures?

[GregWeld]

Here's a VERY GOOD article.... It's well worthwhile reading.



http://seekingalpha.com/article/2747265-myth-dividends-dont-mean-much-when-you-lose-a-bunch-of-capital?ifp=0

[gearheads78]

Well it now been a little over a year since I started reading this thread and about 9 months since I rolled over my 401K and started a IRA and opened a roth. I had about $25,000 to put in and my account currently sits about $27,000. I was quite a bit higher a few months ago but about 20% of my holdings are in two big oil stocks that have taken me down a lot. I'm not worried about either one bit since I have a 20-25 yr time line.

I just want to say how happy I am they this thread is hear and the information Greg and others have shared. Its going to change mine and my families future.

I do have one quick question. This week I opened a new taxable account since I can add to the IRA and the Roth is maxed for the year. Tax wise is there any rule about re-buying a stock you are taking a loss deduction on?

Lets say for example I own and love XYZ stock at the end of next year. It' down but I believe in it and I still want to own it. Can I sell it to take the loss but jump right back in it?

[GregWeld]

Well it now been a little over a year since I started reading this thread and about 9 months since I rolled over my 401K and started a IRA and opened a roth. I had about $25,000 to put in and my account currently sits about $27,000. I was quite a bit higher a few months ago but about 20% of my holdings are in two big oil stocks that have taken me down a lot. I'm not worried about either one bit since I have a 20-25 yr time line.

I just want to say how happy I am they this thread is hear and the information Greg and others have shared. Its going to change mine and my families future.

I do have one quick question. This week I opened a new taxable account since I can add to the IRA and the Roth is maxed for the year. Tax wise is there any rule about re-buying a stock you are taking a loss deduction on?

Lets say for example I own and love XYZ stock at the end of next year. It' down but I believe in it and I still want to own it. Can I sell it to take the loss but jump right back in it?





Joe.... You are why I pour my heart and soul into this thread. It's my Democratic way of being a Republican... in other words - I like to give back. I'm so happy you're having some success!


Now -- I have at least 2.5ish million in "oil and oil related" stocks. They're not helping my annual performance one bit. I'm getting ready to buy more. I think there is more downside so I'm waiting until I'm pretty certain they've hit bottom - maybe another quarter. But the dividend payouts are JUCIY and getting better by the day!!

OKAY -- On to the larger picture/question!


The rule is called "a wash sale". Yes you can sell anytime you want to - remembering to take the loss in the tax year you're in - and take a loss. There are tax rules about the size of the loss etc --- and you NEED TO DISCUSS this briefly with your tax guy so you have a very clear understanding what that all looks like. Like most things - it's never as simple as you "hear".

Okay -- the "WASH SALE" rule says you must wait 60 days or more before you buy the same stock you just took a loss on if you want to be able to write off the loss.

There is NO RULE that says you can't sell Chevron (CVX) at a loss on Friday and buy Exxon (XON) on Monday. They're not the same company.




SO HERE'S A VERY IMPORTANT NOTE - Make damn sure you understand what a capital loss can be written off against!!! It does NOT reduce ORDINARY INCOME dollar for dollar... and lots of people think that's the way this works! It does NOT! Capital gains are offset with capital losses... and there's a way that is done according to tax law.



Capital losses from the sale of stock are claimed on Schedule D, which is attached to your Form 1040 tax return. Capital losses offset capital gains of the same type, then capital gains of the other type, and then other income. So, if your stock loss is a short-term loss, it first offsets your short-term gains for the year. Any remaining short-term loss would then be used to offset long-term gains. Finally, if your loss from the sale of stock was greater than the total of your combined long- and short-term capital gains, up to $3,000 in capital loss can be used as a deduction against other income. - See more at: http://wiki.fool.com/How_Much_to_Write_Off_on_Your_Taxes_With_a_Loss_in _Stocks%3F#sthash.IXvneuzk.dpuf

[GregWeld]

I sat here thinking about this --- and for a new investor there's a lot of things they've heard about "investing" that are just so wrong.

I get into lots of conversations with various people - and I love to hear a guy bragging about the big "write off" he's going to take on something. I smile knowingly. I know this guy doesn't know squat about investing or taxes and that he's bragging about something that most likely didn't or isn't going to happen anyway. He THINKS this is the way all the rich guys talk so by mentioning it - he too must be one of them. He's also the same dipsh!t that in the next sentence is going to tell me he pays his VISA off every month.

TAX LOSSES are used to OFFSET (cancel or reduce) GAINS. Those losses and gains have to be what's called REALIZED. You can't have a gain in your account on paper that you haven't actually realized (sold the shares and taken that gain!) and try to sell some losers and "account" for that gain. You have to have sold the gaining shares - and then figure out what you've gained - and then sell some loser shares for the offset.

You CAN NOT - just sell some shares, for let's say 100K loss -- and then try to completely offset your entire years income from working (Ordinary income). It doesn't work that way!!

The tax man doesn't live in a cave somewhere... they write all manor of rules to keep people in line! LOL.

At the end - or coming up to the end - of the year... you'll hear about TAX LOSS SELLING. Yeah -- this is done all the time and is normal... but that selling is only done to reduce (tax wise) the amount of GAINS taken in the same year. It's simply a way to reduce your tax bite on those gains. So in other words you would have had to have realized gains - and then realized losses... This is NOT a way to make a ton of money and write it all off like the big shot bragger dumbass is trying to tell you he's going to do.

[69hugger]

He's also the same dipsh!t that in the next sentence is going to tell me he pays his VISA off every month.



Greg,
I love this thread. I am in awe of your level of knowledge about this very complicated subject. And is willing to share it here... a car site. More than cool.
The line above gave me pause. Are you suggesting it isn't wise to pay off your credit cards monthly? Or are you saying you'd bet he really has CC debt because his previous statements demonstrate his BS level, so you wouldn't believe anything he says?
Just curious...

[GregWeld]

Greg,
I love this thread. I am in awe of your level of knowledge about this very complicated subject. And is willing to share it here... a car site. More than cool.
The line above gave me pause. Are you suggesting it isn't wise to pay off your credit cards monthly? Or are you saying you'd bet he really has CC debt because his previous statements demonstrate his BS level, so you wouldn't believe anything he says?
Just curious...




THIS! LOL

[glassman]

I sat here thinking about this --- and for a new investor there's a lot of things they've heard about "investing" that are just so wrong.

I get into lots of conversations with various people - and I love to hear a guy bragging about the big "write off" he's going to take on something. I smile knowingly. I know this guy doesn't know squat about investing or taxes and that he's bragging about something that most likely didn't or isn't going to happen anyway. He THINKS this is the way all the rich guys talk so by mentioning it - he too must be one of them. He's also the same dipsh!t that in the next sentence is going to tell me he pays his VISA off every month.

TAX LOSSES are used to OFFSET (cancel or reduce) GAINS. Those losses and gains have to be what's called REALIZED. You can't have a gain in your account on paper that you haven't actually realized (sold the shares and taken that gain!) and try to sell some losers and "account" for that gain. You have to have sold the gaining shares - and then figure out what you've gained - and then sell some loser shares for the offset.

You CAN NOT - just sell some shares, for let's say 100K loss -- and then try to completely offset your entire years income from working (Ordinary income). It doesn't work that way!!

The tax man doesn't live in a cave somewhere... they write all manor of rules to keep people in line! LOL.

At the end - or coming up to the end - of the year... you'll hear about TAX LOSS SELLING. Yeah -- this is done all the time and is normal... but that selling is only done to reduce (tax wise) the amount of GAINS taken in the same year. It's simply a way to reduce your tax bite on those gains. So in other words you would have had to have realized gains - and then realized losses... This is NOT a way to make a ton of money and write it all off like the big shot bragger dumbass is trying to tell you he's going to do.


Greg thanx. I'm still learning all this and your way of putting it really makes me understand it (well most of it).
I'm still having a hard time "settling in" with managing my portfolio with transforing my 5 mutuals, while running a successful company and three kids in college. I'm currently "dumbing" down my positions as i can't "do" a spread sheet. My wifey is brilliant at this (spreadsheet management), but she won't spend the time to "manage" it, which will hurt both of us later on if I dont manage it. Right know we're prospering (the biz is worth a fair amount of coin, same with the equity we have in the house, but thats for much much later, which will come sooner than we think).
So for me, reading this when people post new questions or have different perspectives than I do, much education occurs, :thumbsup:

In the mean time, The pension i did last year for my company and its employees, has a tax accountant, a third party pension administrator, and will soon be going to a management company to help with managing the growth of the account. I looked into where Schwab's advisors have put the pension monies (mutual fund, and man, the diversification just in the financial sector its like 300+/- banks.
So while I have to do this because of the laws regarding fiduciary responsibility, I advise all my employees to start a Roth IRA, and to read the basic fundamentals of this 102 class....

So, everybody remember a couple of things:

"Its not what you make, its what you keep that matters"
"Its not "timing the market, its time in the market"

If any body doesn't believe that last one, look at the chart before, during, after the great depression, the market came back stronger than before, it just took 15 years...

[ErikLS2]

Okay the "WASH SALE" rule says you must wait 60 days or more before you buy the same stock you just took a loss on if you want to be able to write off the loss.

Greg, did the time frame change? I know the last time I checked it was 31 days to repurchase and be ok, but that was a long time ago.

[Sonar Chief]

:thankyou: for investing your time into this thread, I have been reading this post for some time now (long time listener, first time caller, LOL), anyway .... I am beginning to understand most of the terminology because of my classes I'm taking for my MBA. I do have some money in a Roth and a 401K, but now I can read INTO the report and determine what is best for me.

I do appreciate the comments from other folks too ... keep beating the dead horse, I'm listening:thankyou:

Michael

[mach1stang]

Any one have any experience with capital one sharebuilder?


Sent from my iPhone using Tapatalk

[GregWeld]

Greg, did the time frame change? I know the last time I checked it was 31 days to repurchase and be ok, but that was a long time ago.



I originally typed 30+ days -- then decided I'd better double check my facts and found the 60 day info so posted it. I was ALWAYS under the ASSumption it was 31 (30 plus a day).

[GregWeld]

:thankyou: for investing your time into this thread, I have been reading this post for some time now (long time listener, first time caller, LOL), anyway .... I am beginning to understand most of the terminology because of my classes I'm taking for my MBA. I do have some money in a Roth and a 401K, but now I can read INTO the report and determine what is best for me.

I do appreciate the comments from other folks too ... keep beating the dead horse, I'm listening:thankyou:

Michael




Awesome Michael!!!


Been over to Pinkee's and checked out my '40?? Okay.... LOL -- me either.

[Sonar Chief]

Awesome Michael!!!


Been over to Pinkee's and checked out my '40?? Okay.... LOL -- me either.



No I haven't been over to Pinkee's .... homework is keeping me pretty busy, I take the day after my assignments due to work on the Camaro and then its back at it.

Michael

[toy71camaro]

Any one have any experience with capital one sharebuilder?


Sent from my iPhone using Tapatalk

I've been using them for quite a few years now.

[SSLance]

Holey Crap... Nice run up today...

I've been busy shipping Christmas packages all week and haven't paid attention, what'd I miss?

[Woody]

Holey Crap... Nice run up today...

I've been busy shipping Christmas packages all week and haven't paid attention, what'd I miss?

FOMC meeting - no rate hike announced

Also, oil prices are actually up today.

[GregWeld]

I don't even know what to post in this thread as far as NEWBS -- i.e., 102 investing -- which to me - is entirely different than say - what "I" do.

You've all now witnessed the roller coaster ride the market can take you on. This is why I've preached to all --- buy great companies -- that pay dividends -- and then sit back and relax.

This last couple of weeks wiped half a million of gains (paper) from the account that I use here for examples. Did I sell or panic or freak out? NO. Why? Because I've seen it all before. WHAT DID I DO?? I began to look at where the damage was done -- and began to think about what I'd do differently or how I'd REBALANCE going forward should the opportunity present itself.

In other words --- I didn't act --- but I did put on my thinking cap.

There's an old old saying about "BUY THE DIPS -- SELL THE RALLY'S". I warn against this "trader" mentality. You should be thinking longer term - calm - steady - invest when you are ready. Not firing from the hip. If you're a seasoned pro -- then that kind of thinking "can" work. We're not seasoned pro's. We're investors in this thread -- just working our way to retirement - looking for ways to get us there over time.

Now - in full disclosure - I thought about where I'd lighten up and I waited for this mornings rally (I had no idea the market would fall so quickly - nor did I think we'd have a two day rally that snapped a lot of stuff back so quickly!) - and pulled the trigger on some trades. I have really large positions. When you're holding 10 or 20 or 30,000 shares per name -- you can lighten up by 5 or 10,000 shares while still maintaining a healthy investment. It's year end -- I see some losers that could be trimmed if we got a rally where I could hide (cover) those losses with trimming some gainers. That's what I did. I also had some stuff in very small positions that weren't paying much dividend that I looked at and thought --- okay --- going forward is it really worth it to me to have less than a 2% dividend, and in such small amounts (500 or 1000 shares). When I could just take that gain - and reinvest it going forward in something that will pay me north of 5%. I answered that question with the sell button.

Now I have way too much cash -- so I'll discuss with my banker dudes some of their ideas (an email was already sent)... and I'll see what's what going forward.

Now -- I pay attention to this stuff big time! You could say that I make my living paying attention to the market, because I do. I'm already retired -- and the gains and dividends I get from the market are what puts fuel in my race cars. So what "I" do is different than what YOU should be doing if you're a long way from retirement or your money is inside a retirement account. There - you just keep putting money in - come hell or high water - you plug that money in!! The LAST THING you want to do is to quit putting money to work because this week the oil complex tanks... THAT IS HOW NOT TO REACH YOUR GOAL!!

[SSLance]

Greg, I have to tell you...during these last two large drops and subsequent rallys the DOW has taken...I've just sat back and watched smiling the whole time. Watching the charts from this different angle that I now see things from has been so much easier to stomach. These quality companies this thread has helped us pick just don't take the violent rides the rest of the market does. They also seem to be the first ones to recover as well.

I briefly thought about dribbling some more in during this last drop, but I was busy MAKING MONEY at the shipping store and by the time I got a break, the dip was over. No biggie, I'll get them next time.

Merry Christmas everyone!!

[toy71camaro]

Merry Christmas to you too, Lance.

And everyone else. Enjoy the holidays with the fam, let the market do its thing. :)

[GregWeld]

Really good to hear this Lance... it is an "attitude" and it's a learned attitude. While we need to "respect" the market... once we understand the ebbs and flows -- we can start to see the beauty versus fear.

Merry Xmas to everyone!





Greg, I have to tell you...during these last two large drops and subsequent rallys the DOW has taken...I've just sat back and watched smiling the whole time. Watching the charts from this different angle that I now see things from has been so much easier to stomach. These quality companies this thread has helped us pick just don't take the violent rides the rest of the market does. They also seem to be the first ones to recover as well.

I briefly thought about dribbling some more in during this last drop, but I was busy MAKING MONEY at the shipping store and by the time I got a break, the dip was over. No biggie, I'll get them next time.

Merry Christmas everyone!!

[GregWeld]

So here's why it's important to not just throw a dart at the stock market dart board. I always say to invest in best of breed companies that pay you a decent dividend - the dividend is the gift that keeps on giving even when the stock price isn't particularly going your way. AND you want to invest in companies with HIGH HISTORIC TOTAL RETURNS. While this TR won't be a guarantee of the future - it is a "metric" (measure) of what the market thinks of the investment over time.

There's steady eddies -- there's high beta (volatile) -- there's high risk that pays high dividends -- there's ETF's that are baskets of stocks that cover every conceivable category -- there's even higher risk IPO's (initial public offerings)... and this is what confuses people. There's just so many choices. Pick the wrong ones and they can kill your investment nest egg... while getting "lucky" could make you a millionaire. My feeling there is you might as well go out and buy $300 a month worth of Lotto tickets. I'll wave to you while you're dining in the food line. LOL


We've used ALTRIA (MO) many times as a steady eddy that pays a decent dividend. It's a SIN STOCK (Booze and smokes). It's very unsexy.... it's even hated for what it is! But it's GROWTH (share price increase) this year is like 33%.... all the while paying out a 4% dividend.


IBM (IBM) meanwhile is DOWN almost 16% while paying a paltry 2.7%


These are just examples I'm going to pick on -- to show why I use the history of their TOTAL RETURN to help guide my investment decisions...


IBM has a 1 year TR of DOWN 9.6% a 3 year of DOWN 8.8% and worse yet is a 5 year TR of UP 35.6%.....

MO has a 1 year TR of UP 39% -- a 3 year of UP 97% and a 5 year TR of UP 231.5%

Which one would you have rather invested in?? So my point is -- don't just pick names that you know (like IBM) because you THINK they're best of the best... do just a tiny bit of research and really make those important comparisons!

So just using the TR as a guiding light.... I would have bought the Altria (MO) over IBM.... and IF I'd done that - I'd have made a better return in ONE year with MO than 5 years with IBM. That's HUGE guys -- just huge. Is that metric 100% accurate? No. Nothing is.... but it's a pretty decent place to hang your hat. I ALWAYS use it as another point of reference before I hit the buy button.

[68Cuda]

We've used ALTRIA (MO) many times as a steady eddy that pays a decent dividend. It's a SIN STOCK (Booze and smokes). It's very unsexy.... it's even hated for what it is! But it's GROWTH (share price increase) this year is like 33%.... all the while paying out a 4% dividend.


I love my MO stock and I do not smoke or drink. I started managing my own 401k at the end of 2010. Here is a cross-section of my holdings (some of which I sold) along w/ total return, hold period and APR. I have about 5-6 others I have bought and sold, and a few I picked up recently that I am not showing. I also took a bath on Bank of America somewhere along the line. But, overall, I am averaging a bit over 17% annual return.

You may also notice a trend, most of these are big boring companies that pay decent dividends. I just looked for them to be on sale (high dividend rate for the sector) then bought them. Of course the stock market is doing well this year, that makes all of us look smart.

[68Cuda]

IBM has a 1 year TR of DOWN 9.6% a 3 year of DOWN 8.8% and worse yet is a 5 year TR of UP 35.6%.....


It also helps to learn a little about the company before you throw money in just looking at a chart. I work in the same industry as IBM and 14 years ago was a design engineer at a factory building tools to sell them for their NY and VT factories. IBM used to be one of the 4 companies we partnered with on semiconductor process development. I have a lot of respect for where they have been. In recent history though, they have suffered. Their semiconductor MFG has been bleeding red for a while and the CEO has been under pressure to offload it.

They recently made a deal with a foundry to take the semiconductor MFG group, a large amount of their intellectual property, and gave the "buyer" $1.5 Billion in cash and a deal to buy chips from them. That is why the stock has suffered. So, when you see a company's stock drop, make sure you do a little research and find out the backstory before you just dive in! Now, looking forward, can they do well without the in house MFG? Historically some companies, like Qualcomm, have, others, not so much. Sometimes owning the MFG can be a competitive advantage (just ask Intel and Samsung). Their stock could take off, time will tell. For better or worse I will stay away from this one.

An article on the IBM deal:
http://www.bloomberg.com/news/2014-10-19/ibm-agrees-to-pay-globalfoundries-1-5-billion-to-take-chip-unit.html

Generally I stay out of the semiconductor stocks, I am too close to it if that makes sense to you. The Intel deal I picked up on early last year was too obvious to pass on. I then sold it when I thought it was back in line, still made me nervous to hold on to it.

[GregWeld]

It also helps to learn a little about the company before you throw money in just looking at a chart. I work in the same industry as IBM and 14 years ago was a design engineer at a factory building tools to sell them for their NY and VT factories. IBM used to be one of the 4 companies we partnered with on semiconductor process development. I have a lot of respect for where they have been. In recent history though, they have suffered. Their semiconductor MFG has been bleeding red for a while and the CEO has been under pressure to offload it.

They recently made a deal with a foundry to take the semiconductor MFG group, a large amount of their intellectual property, and gave the "buyer" $1.5 Billion in cash and a deal to buy chips from them. That is why the stock has suffered. So, when you see a company's stock drop, make sure you do a little research and find out the backstory before you just dive in! Now, looking forward, can they do well without the in house MFG? Historically some companies, like Qualcomm, have, others, not so much. Sometimes owning the MFG can be a competitive advantage (just ask Intel and Samsung). Their stock could take off, time will tell. For better or worse I will stay away from this one.

An article on the IBM deal:
http://www.bloomberg.com/news/2014-10-19/ibm-agrees-to-pay-globalfoundries-1-5-billion-to-take-chip-unit.html

Generally I stay out of the semiconductor stocks, I am too close to it if that makes sense to you. The Intel deal I picked up on early last year was too obvious to pass on. I then sold it when I thought it was back in line, still made me nervous to hold on to it.



LOL -- There are 469 posts here -- 300 of them probably mention that you should start out buying companies you know or understand their business. Then once you've identified some of those names -- there's another 200 posts discussing what to look for and how to compare their performance. Total Return is just ONE metric I like to use because it's a big bold brush stroke that shows HISTORICALLY how an investor would have done over time - as compared to the other company(s) someone might be comparing to.

The entire thread is about how to think - how to compare - where to look for information... the actual names used are just for examples since everyone has to use something for discussions sake. The thread is how to catch a fish - not catching someone a fish sort of thing.


I had a call the other day asking "what is an acceptable dividend percentage" -- and this is a tough answer - which is why I go straight to the total return metric - because I can accept a lower dividend payout if that payout comes with capital growth (the stock price rises) - thus a good or great TR. Total return factors in both the dividend (reinvested) and the share price appreciation. It represents the growth of your money. Period. I'll take something that has historically made 100% over 5 years versus gambling on a the competitor that has only had a 30% TR over the same period. Why do I call it gambling? Because if you buy the 30% TR - you're just hoping and praying that for whatever reason that company (thus the MARKET) is going to suddenly reward them. That's a gamble. All of this is making the ASSumption that you've already identified a few names to invest in... so you're still just doing research and it's just one more thing to help you in making a decision.

[ironworks]

So I have been looking at some more stocks to pick up to make myself diversified and I struggle to just drive around in my world and know what to pick. Sure I should have picked Chipotle but they don't have a dividend, but there stock really started to sore around the time we started eating there and the line was always 30ft out the front door.

But my question goes along with you last posted, How does a guy find out about the stocks that are good ones that he would never ever know about in his day to day life. Your Alteria (MO) stock I would never know about, the KMI that seems to be a good one. I don't see that stuff and I live in the oil patch since its a pipeline company. I don't think watching all the stock trading shows are really that great.

Currently I find a stock that Think might be growing and I look at it on the long term to see if it constantly grows upward. Then I look at the dividend and make my choice from there. But I'm sure there are way more stocks out there then I will ever know about.

[68Cuda]

LOL -- There are 469 posts here -- 300 of them probably mention that you should start out buying companies you know or understand their business.

Greg - I have been in the semiconductor field since 1997, prior to that I was an auto mechanic. Basically I am a technician that went to college and became an engineer. I have been riding the roller coaster of this industry for a while. In 2003 the factory I was working for made semiconductor capital equipment shut down permanently and I was out. Pre-9/11 we were trying to cope w/ growth with over 250 employees and working to expand from $5M per month to $40M per month to fill demand. In 2002 our sales were about $5M total and they ended up shutting down MFG and dropping in several steps down to about 60 employees. At the end of May 2003 I was the only person left in the building as I transferred all the design and documentation to the parent company. I took the opportunity to go to graduate school rather than transfer to the main office in Kyushu. In 2006 I left a "quiet" research engineer job at the university to go back to the semiconductor field, this time in the more "stable" MFG side of the chip business. I was rewarded in 2007 when that factory was shut down. Fortunately I was able to find another position in the company at a smaller facility at the same site.

Investing in this industry scares me because I understand the business and consider myself a long term investor, it is bad enough that my income is somewhat dependent on this sector.

[GregWeld]

It's a HUGE - make that GIANT - mistake to invest money is the stock of the company you work for... essentially ending up with "all of your eggs in one basket". Ask the folks at WorldCom... or PG&E...or Chrysler... or Conseco... or Enron... or Washington Mutual...


When I say to invest in companies you understand and know... I'm talking about if you shop at Home Depot or Lowe's... or you love your Ford... or use AT&T or Verizon.





Greg - I have been in the semiconductor field since 1997, prior to that I was an auto mechanic. Basically I am a technician that went to college and became an engineer. I have been riding the roller coaster of this industry for a while. In 2003 the factory I was working for made semiconductor capital equipment shut down permanently and I was out. Pre-9/11 we were trying to cope w/ growth with over 250 employees and working to expand from $5M per month to $40M per month to fill demand. In 2002 our sales were about $5M total and they ended up shutting down MFG and dropping in several steps down to about 60 employees. At the end of May 2003 I was the only person left in the building as I transferred all the design and documentation to the parent company. I took the opportunity to go to graduate school rather than transfer to the main office in Kyushu. In 2006 I left a "quiet" research engineer job at the university to go back to the semiconductor field, this time in the more "stable" MFG side of the chip business. I was rewarded in 2007 when that factory was shut down. Fortunately I was able to find another position in the company at a smaller facility at the same site.

Investing in this industry scares me because I understand the business and consider myself a long term investor, it is bad enough that my income is somewhat dependent on this sector.

[GregWeld]

This is a great question! And don't think you're alone with this dilemma!


Okay - I know I'll miss something in this response - but you'll get the gist of where we're going with this.

Everyone should make a small list of the SECTORS that make up the US stock market. All you need to do is Google - "List Stock market sectors" to come up with this. Here - this is a link to a list:

http://www.investorguide.com/sector-list.php

From a list like this -- you should pick some of INTEREST TO YOU... not the ones you know absolutely nothing about... start with some that are somewhat familiar to you. Try to get to 7 or 8


From there - you can start to search for the biggest well known names from each SECTOR.... So let's just do a quickie here... let's pick "banking" (everyone does some kind of banking). First thing I'd think about is where do I bank - or what's the biggest bank name around me? West coasters might come up with Bank of America or Wells Fargo... Midwest will come up with some different big regional bank names - east coast will be familiar with a different set of names etc.

Go to Google Finance --- look up the name or two that you came up with... Let's say - since the poster is from California - he picks Wells Fargo. Start typing Wells Fargo in the box where it says SEARCH FINANCE -- when you see the name and symbol come up - choose it and hit enter...

Now -- this is going to bring up a selectable chart --- you can choose 1 day or up to 10 years or ALL.... I always start with YTD -- then I look at the 3 year or 5 year - and 10 year. I just want to see the general direction of the line. If it's flat - or looks like camel humps etc -- I think maybe I'll keep looking...

More importantly here -- if you scroll down just a bit -- there's a list (short) of companies they (Google in this case) feel are "RELATED". If you look at the list of related companies - there may or may not be other companies shown there that you know. I start to look at the ones I know... look at their chart - check out whether or not they pay a dividend - is the dividend increasing (you can see the dividend payouts clearly using the 5 year view on the chart... and you can also see some interesting information at the top of the page to the right of the daily closing price.... you can see the price range - the div/yield - the beta - the P/E etc. EACH TIME you put in a different company name in the search field -- go down and write down some of the "RELATED" companies they show... all you need is two or three to start the process.

What this PROCESS is going to do for you is to lead you to names you're familiar with... and you'll start to look them up and you'll start to get a feel for which ones are "better" than others. Maybe you find CHIPOTLE MEXICAN GRILL -- but realize that at $600 a share - and no dividend -- that's not something you want to put your money into -- but maybe during your search for them - you see JACK IN THE BOX.... and during your peak at JACK -- the related companies shown there leads you to somewhere else.

Here's what I do to shorten the process just a bit. There is a column to the right of the names shown in the RELATED list -- it's titled d/m/y. And there's a squiggly line corresponding to each name. d = day. m = month. y = year. I click on the "y" for year -- and that gives me a real quick look at the trend the line is heading. I skip the ones who's lines are headed down.... LOL

Try this whole scenario searching for ALTRIA (MO) -- you can either type in Altria -- or since we've given you the trading symbol - MO - you can just type in MO...

So to sum it up --- make a list of SECTORS you'd like to research -- then find out what kinds of companies make up that sector... and search one you know - then check out others in the same "related" field and compare them. Maybe you decide you don't want to be in that sector at all ---- but what the sectors do is to help you diversify and broaden your research. You don't want to have a portfolio of all retailers or all industrials just because that's a sector you're most familiar with.

Think about this like if you wanted to know something about football --- you might just Google FOOTBALL -- from there you might see there are leagues - and in the leagues are teams etc. Then you could check out their records etc.

If you have up to 100K to invest - you'd only need 20 names.... that would get you 5% of your investable $$ per name -- and that's what we TRY to achieve. It's harder to do that when you have smaller amounts - but the GOAL is to get to where you have around 5% per investment. Maybe that starts out at 100% in one name - and then the next time you have some dough you buy name #2 -- then you have 50% in each name - next time you add another name - now you're at 33% and so on. Diversity will get you 10 names in 10 sectors -- from there you can circle back and add to or expand.

DON'T FORGET TO CHECK EACH NAMES TOTAL RETURN!! You can do this on Schwab easily.... or perhaps the other discount brokers as well.

Another really good site for checking stuff out is MORNINGSTAR.COM -- go to the main site and then look for "STOCKS" -- click that -- then on the left you can scroll down to find "SECTORS" -- click that and it starts giving you charts of performance by sector. Choose a sector -- and it comes up with a list of names in that sector --- now --- click on the "5 YEAR" and it will sort by the best performance over that period....

I choose FINANCIALS -- then went to the chart and clicked 5 year and MASTERCARD came up as the top performer over the 5 year period... below that was VISA etc then BLACKSTONE GROUP (one I own).... click on the name and it takes you to the info for that particular company -- and then there's all manor of info to click on! Oh hell yeah you'll get lost for sure!! LOL







So I have been looking at some more stocks to pick up to make myself diversified and I struggle to just drive around in my world and know what to pick. Sure I should have picked Chipotle but they don't have a dividend, but there stock really started to sore around the time we started eating there and the line was always 30ft out the front door.

But my question goes along with you last posted, How does a guy find out about the stocks that are good ones that he would never ever know about in his day to day life. Your Alteria (MO) stock I would never know about, the KMI that seems to be a good one. I don't see that stuff and I live in the oil patch since its a pipeline company. I don't think watching all the stock trading shows are really that great.

Currently I find a stock that Think might be growing and I look at it on the long term to see if it constantly grows upward. Then I look at the dividend and make my choice from there. But I'm sure there are way more stocks out there then I will ever know about.

[68Cuda]

It's a HUGE - make that GIANT - mistake to invest money is the stock of the company you work for... essentially ending up with "all of your eggs in one basket". Ask the folks at WorldCom... or PG&E...or Chrysler... or Conseco... or Enron... or Washington Mutual...


When I say to invest in companies you understand and know... I'm talking about if you shop at Home Depot or Lowe's... or you love your Ford... or use AT&T or Verizon.


Yes, I tell guys at work that all the time! I participate in the Employee Stock Purchase Program (ESPP) which allows you to purchase company stock at a 15% discount quarterly through payroll deduction for up to 10% of your base salary. Each offering I sell as soon as I get it. I work with a guy who was a multi-millionaire on paper before the double whammy of the "dot-com" bust and 9/11. He had his entire savings in company stock and had a large number of options in the 40 dollar range when the stock crested 90 and was headed toward 100. He held on to it all because "everyone" knew it was going to keep going up. Now he is delaying his retirement to try to scratch enough together to be comfortable. The stock did not climb back above 40 until recently and by then most of his big options had expired. In the past ten years the company has not been as generous with the options because the tax laws changed regarding them and they are no longer as attractive for the companies to use as incentive.

I do not work for INTC, but I know the business quite well and we all share the same vendors. Since the business is quite volatile I also have ex-coworkers and people who were my customers when I was a designer at almost every manufacturer in the US. The industry is relatively small. When a company is hiring I will almost always get a call from a headhunter trying to get me or at least give them a lead on someone who needs the job.

[GregWeld]

Speaking of AT&T (T).... it was mentioned above. Here's another reason I love dividend paying investments. They announced a 2.2% dividend increase again this year. Okay -- it's a ONE PENNY raise... to .47 per quarter. Hardly earth shattering. I don't think I'll order a new LSA motor because of it... but these raises - over several years - are what increase your YIELD ON COST (as your cost stays stagnant and the dividend rises) --- and more importantly they help with INFLATION.

The above is NOT about "buy AT&T"!! It's about dividend investing... and companies that increase their dividend over time. Don't discount the importance of these. Inflation - even benign inflation (meaning it's really low) - over time eats away at your ability to live life as you desire if you're not keeping even or better yet - getting ahead of it.

The reason you want your home paid for by the time you retire -- is to keep that cost off the debit side of the cash flow... We all know that we'll most likely be buying less car stuff as we age... Our kids should be well out of college... but property taxes and upkeep - food - insurance - travel expense - these costs rise steadily and you need to be able to keep up. A company like AT&T has demonstrated that it's willing to share with it's owners (yes! That is what you are when you own the shares!) and 2% dividend increases year after year starts to add up 10 years down the road!! In 2010 - the dividend was .42 a share --- now it's .47 per share! WTF is wrong with that?? Nothing!!

In full disclosure, own 20,000 shares of T --- quick math says --- in 2010 I was getting $8,400 per quarter or $33,600 annually. Now just 4 short years later -- I'm collecting $9,400 per quarter or $37,600 annually. That's $4,000 per year MORE for doing nothing excepting holding on. That's a coupe sets of Hoosiers that I didn't used to get. LOL

[Woody]

So I have been looking at some more stocks to pick up to make myself diversified and I struggle to just drive around in my world and know what to pick. Sure I should have picked Chipotle but they don't have a dividend, but there stock really started to sore around the time we started eating there and the line was always 30ft out the front door.

But my question goes along with you last posted, How does a guy find out about the stocks that are good ones that he would never ever know about in his day to day life. Your Alteria (MO) stock I would never know about, the KMI that seems to be a good one. I don't see that stuff and I live in the oil patch since its a pipeline company. I don't think watching all the stock trading shows are really that great.

Currently I find a stock that Think might be growing and I look at it on the long term to see if it constantly grows upward. Then I look at the dividend and make my choice from there. But I'm sure there are way more stocks out there then I will ever know about.

I find a good way to learn about new stock investing ideas is through reading seeking alpha: http://seekingalpha.com/

On the home page is a list of the top articles. Just by browsing through some of the articles you will get some new ideas for stocks that you may want to research further.

This website: http://dripinvesting.org/tools/tools.asp has a pretty good list of stocks in the "Dividend Champions" spreadsheet that may give you some additional investing ideas.

The above sites are just starting points to give you ideas. Make sure you do your own research.

[gearheads78]

I find a good way to learn about new stock investing ideas is through reading seeking alpha: http://seekingalpha.com/

On the home page is a list of the top articles. Just by browsing through some of the articles you will get some new ideas for stocks that you may want to research further.

This website: http://dripinvesting.org/tools/tools.asp has a pretty good list of stocks in the "Dividend Champions" spreadsheet that may give you some additional investing ideas.

The above sites are just starting points to give you ideas. Make sure you do your own research.

This is exactly what I was going to say. I would look up the user named Chower and read everything he has ever writting there. Make sure to read all the comments at the end of each article and branch off to other posters there. There a lot of smart people that never do an article or a blog but they comment from time to time with great insite. I started with this thread and ended up on seeking alpha and find myself there more of the last year than car sites. I learn something new every time I log in there.

I just wish I started this at 21 instead of 41

[WSSix]

You guys can sign up for email notifications on new topics within the category or about specific stocks from Seeking Alpha. I get them everyday and read through them usually as well. I completely agree the comments after an article are great as well, typically. SA could easily be a forum just like this with the way the comments section usually goes.

[GregWeld]

This is a "behavioral" warning!



I read SeekingAlpha every day as well as many other newsletters and articles etc. Some of the worst investments I've ever made were from reading about the next great blowout investment - get all excited about it and pushed the buy button.

Be very wary of that "type" of investing in yourselves. Once a person finally "discovers" investing - has some success - and becomes enthusiastic... they are looking for ways to stretch their wings. They have a fresh pile of cash and are just itching to put this work.

By NOT having something on the horizon - where they've "pre-selected" the name and then have some time to watch it - read about it - "live with it" a little while leads to the frantic search to get their money to work. All it takes is one well written (even well meaning!) article - and they jump into it (whatever it is).

Don't be a Rob Lowe investor. Make your shopping list... double back on that list and watch and read everything that comes your way on all your names - feel free to modify the list. Substitute or add a name. Stay abreast of the "market" in general... and make certain you have your BASE built on a solid foundation. After you have 20 names... and by the time you've gotten to that point -- then you can buy some outliers... you can jump on an IPO or two... you can broaden your risk. You'll have experienced ups and downs - success and failures - you'll no longer look to the grocery store clerk for investing ideas - you'll be comfortable with your own choices - and why you chose them.

I'll make you this guarantee:

You WILL lose the most money when buying a company that you know nothing about - haven't known about before last week... and didn't "follow" for awhile. When that "investment" turns south -- and doubt creeps in -- and the base in your brain doesn't really get why you bought it in the first place... you'll hit the sell button and lock in a loss.

Why do I say this? Because after doing this for 30 years - I've been there and done that.

I'm thrilled you guys are into reading - and are poking around - and are discussing all this stuff. That is how you learn. I'm not talking about not readying everything you can get your hands on. I'm talking about tempering the new info and not jumping in too quickly. Think about how many pieces of clothing you've bought because it's "on sale" - brought it home - and then never worn it... did you buy it because it's something you've really wanted for a long time - or was it the shiny new thing and it was on sale - but it's blue and you never wear blue...

[GregWeld]

We've discussed IPO's about a million times -- but now that we're coming up to the end of the year - we can start to get some YEAR TO DATE data to see how some of these have done.

Again -- this is not a BUY THIS and DON'T BUY THAT. I don't really want to get this thread into that sort of discussion because it leads to a lack of research and a lack of knowledge about why YOU bought what you did. There's a TON of websites that have that as their goal.

There's been a couple of names discussed here over the last two years. FaceBook (FB) - GoPro (GPRO) - Twitter (TWTR) are three of the big ones. I've personally advised jumping into any of these - and particularly on the IPO... I've said instead to wait and see how they go - and if you still want in - then okay. Keeping in mind this is 102 investing so ASSuming that most don't have a stock pile large enough that they can afford to loose that much. If you're starting out and have 10 grand invested and you lose 1 grand -- that's 10%!! Trust me - it's easy enough to do that just with market swings!


Facebook is UP YTD 47% and since inception you'd have doubled your money. It's been a wild ride with big swings in share price... and this is what I've warned about. CAN YOU STOMACH these $10 swings... if you can't you panic and sell. Hindsight is great - but doesn't help you sleep well at the time.

GoPro is the big winner - being UP 117% Year To Date! But once again -- here's the killer part that EXPERIENCE tells me this is a tough investment! It's seen a high of almost $94 and a low of $53. It now trades at $68 giving you a double IF -- IF you'd been able to buy at the IPO price. Still there was ample time to get in for a month or two after the IPO and you'd still have huge gains. But ask yourself if you'd have freaked out having seen $94 and watched it glide down to $53. Would you have sold out? Would you have really seen this as a long term investment or would you have started to really question this holding? They call that being "a weak hand" on wall street. Weak hand holders lose their asses.

Twitter is DOWN 40% YTD.... and this was the one that everyone was certain was going to be the biggest IPO ever - the next "Microsoft" millionaire maker. I heard this morning that it loses 50 cents for every dollar of revenue. OUCH.

I'll toss another one in.

Alibaba(BABA)is up a whopping 13%.... that's 6 points BEHIND the NASDAQ. In other words - you could have just bought the QQQ (NASDAQ ETF) and made more money.

Kimberly Clarke (KMB) - the toilet paper maker is up more @ 14%... LOL

My point is not that you could have gotten in these and made a gain - my point is more that it isn't going to be easy. Pick the right one and you're golden - pick the wrong one and you suck. Up 100% is fun - DOWN 40% sucks. That's why I don't "INVEST" in IPO's and the more they're talked about the farther I want to be away from them.

[XLexusTech]

Well then you may want you quickly learn something about Twitter....

Speaking as a guy who bought FB during IPO and more below 20 and am sitting pretty ... With FB only trailing JNJ as my best 2014 gainer


Correction my Apple is up 67% ... Because buying low is where all the money is :-)
Just saying. :G-Dub:

Ok now adding something meaningful ... Their is more to learning about a company then how it's finances look... You have to learn about the market segment and company vision ... In there might be we're you find companies with upside... Take FB as an example... Many people focused on the perceived lack of revenue strategies ... Opposed to market dominance and technical vision ... Which is why I bought held and bought more close to the all time low $$$$$$

[GregWeld]

Well then you may want you quickly learn something about Twitter....

Speaking as a guy who bought FB during IPO and more below 20 and am sitting pretty ... With FB only trailing JNJ as my best 2014 gainer


Correction my Apple is up 67% ... Because buying low is where all the money is :-)
Just saying. :G-Dub:




Thanks for making my point. Which was - you didn't need to GAMBLE on the IPO's to have nice gains.... Johnson and Johnson (JNJ) and Apple (AAPL) and many other tried and true names did as well or better than some of the IPO's.

I've never said DON'T BUY -- my point is more about NEWBS being able to stomach some of the wild rides these TYPES of stocks take you on.

[XLexusTech]

Thanks for making my point. Which was - you didn't need to GAMBLE on the IPO's to have nice gains.... Johnson and Johnson (JNJ) and Apple (AAPL) and many other tried and true names did as well or better than some of the IPO's.

I've never said DON'T BUY -- my point is more about NEWBS being able to stomach some of the wild rides these TYPES of stocks take you on.

Ok now adding something meaningful ... Their is more to learning about a company then how it's finances look... You have to learn about the market segment and company vision ... In there might be we're you find companies with upside... Take FB as an example... Many people focused on the perceived lack of revenue strategies ... Opposed to market dominance and technical vision ... Which is why I bought held and bought more close to the all time low $$$$$$

No disagreement however I believe long I will make exponentially more on FB then JNJ which I actually bought for the dividend but my timing was optimal...

[GregWeld]

No disagreement however I believe long I will make exponentially more on FB then JNJ which I actually bought for the dividend but my timing was optimal...



No -- Let's be HONEST... not arguing - just pointing out the reality. I personally made money this year on Twitter - Facebook - Alibaba and GoPro TRADES (I bought and flipped). I don't post that because I don't want people copying what I'm doing/do. Everyones situation is different. You were LUCKY. That's my point. Had you bought Twitter instead of Facebook - you'd be DOWN 40%. Whatever your choice(s) might have been doesn't matter -- some readers here would have missed the FB IPO and watched it stream ahead - and therefore plowed into TWITTER and lost their asses (SO FAR). That's not to say they, or you, might have bought some other name, and been equally up or down. The point of the OP was that these IPO's are not guarantees of success... the way you'd think they might be given the way they are touted on TV. The biggest IPO ever in history (BABA) lags behind if you'd just bought the NASDAQ.

[XLexusTech]

No -- Let's be HONEST... not arguing - just pointing out the reality. I personally made money this year on Twitter - Facebook - Alibaba and GoPro TRADES (I bought and flipped). I don't post that because I don't want people copying what I'm doing/do. Everyones situation is different. You were LUCKY. That's my point. Had you bought Twitter instead of Facebook - you'd be DOWN 40%. Whatever your choice(s) might have been doesn't matter -- some readers here would have missed the FB IPO and watched it stream ahead - and therefore plowed into TWITTER and lost their asses (SO FAR). That's not to say they, or you, might have bought some other name, and been equally up or down. The point of the OP was that these IPO's are not guarantees of success... the way you'd think they might be given the way they are touted on TV. The biggest IPO ever in history (BABA) lags behind if you'd just bought the NASDAQ.
I can't disagree more I wasn't lucky by buying FB I was strategic an have and maintain a significant knowledge if the tech sector... Which will eventually lead to a twitter purchase ...
I understand more about the sector then the financials which is a very big lever that folks should explore...

I don't flip and stocks and I am up 31% market value this year on a whole yet couldn't tell you what the P/E is on any of my holdings :grouphug:

[ironworks]

What so I took "some" of you advice over the weekend and check out the competition part at the bottom of the stock page. I also tried to find a stock that I had no idea was even on the exchange. I have seen the Polaris market explode in the past few years. They really are the only ones in the industry with a 100hp 20" travel offroad buggy that really works and Polaris must be selling a ton of them as they are now leading sponsors for huge events all over. Do you see something like this as risky or will this growth if capitalized on set them up for a bigger future? I get nervous thinking every bubble can burst. They have decent dividend and over the long term seem to keep going up.

I wish I would have thought out Polaris and Chipotle 4 years ago when they both became aware in my life.


Also what is your take on the slump in the oil? I feel it has to come back again. I live in a heavy oil community and its sad to see all the parked rigs but I have seen this a few times before. Chevron stock is at a 20 year low and I'm trying to diversify my holdings, but I also see a market I think is on sale and has to come back strong as there is nothing to replace it. Should I continue to diversify or hold off and take advantage of what seems to be on "sale". It could go lower but the dividend is descent from what I have understood you to say to get in now and maybe buy more later.

[XLexusTech]

[/QUOTE]

Also what is your take on the slump in the oil? I feel it has to come back again. I live in a heavy oil community and its sad to see all the parked rigs but I have seen this a few times before. Chevron stock is at a 20 year low and I'm trying to diversify my holdings, but I also see a market I think is on sale and has to come back strong as there is nothing to replace it. Should I continue to diversify or hold off and take advantage of what seems to be on "sale". It could go lower but the dividend is descent from what I have understood you to say to get in now and maybe buy more later.[/QUOTE]

I am Not an energy sector expert by any means.. however the thing that causes me pause on the oil market is that it is artificially manipulated by OPEC.
So even though you know that demand is going to go up... (emerging markets in China India Ect..) however what about the supply?

OPEC manipulates the supply routinely to control the prices... Some theories around the recent drop is that OPEC isn't cutting supply (forcing prices to rise) as a way of hurting IRAN or ISIS or even Russia... Who knows... but at the end of the day.. since its artificially manipulated.. its a gamble...

I am staying neutral but will be keeping all of my CVX and XOM

[GregWeld]

What so I took "some" of you advice over the weekend and check out the competition part at the bottom of the stock page. I also tried to find a stock that I had no idea was even on the exchange. I have seen the Polaris market explode in the past few years. They really are the only ones in the industry with a 100hp 20" travel offroad buggy that really works and Polaris must be selling a ton of them as they are now leading sponsors for huge events all over. Do you see something like this as risky or will this growth if capitalized on set them up for a bigger future? I get nervous thinking every bubble can burst. They have decent dividend and over the long term seem to keep going up.

I wish I would have thought out Polaris and Chipotle 4 years ago when they both became aware in my life.


Also what is your take on the slump in the oil? I feel it has to come back again. I live in a heavy oil community and its sad to see all the parked rigs but I have seen this a few times before. Chevron stock is at a 20 year low and I'm trying to diversify my holdings, but I also see a market I think is on sale and has to come back strong as there is nothing to replace it. Should I continue to diversify or hold off and take advantage of what seems to be on "sale". It could go lower but the dividend is descent from what I have understood you to say to get in now and maybe buy more later.




Polaris (PII) has gone balistic since 2010. I do not know that market - but obviously you're involved in it so should be able to keep abreast... and be aware of any big competitors catching up or doing something better.... So that is EXACTLY what I'm always saying to invest in --- whatever that is --- something that you can stay aware of what's going on.

The dividend isn't very good on this name - BUT - you have to look at two factors. #1 huge recent growth and #2 This stock is a "splitter"... there's several splits in their history. Splits generally tend to be good for the investor.

#3 (I don't care that I said two things) -- you're relatively young - and it's okay to invest in higher growth (riskier) stocks as part of your portfolio.



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


Oil is definitely "on sale"... and yes -- even if the USA becomes a net producer - as China's growth comes back on line and Russia's economy mends and European Union stops stalling and begins to grow again (just as the US has done) then DEMAND will / should pick back up.

Short term pain? Yeah most likely.... Longer term gain? I think so. Like anything - DO NOT OVER DO IT. That's gambling. Make INVESTMENTS - keep the percentages in line. People get screwed (screw themselves) when they gamble and lose the bet. NOBOBY KNOWS what the future has in store. So choose your bets wisely and keep them (keep yourselves) in check.

[XLexusTech]

http://www.bloombergview.com/articles/2014-12-29/this-era-of-lowcost-oil-is-different

[Flash68]

Don't be a Rob Lowe investor.

:lmao:

[GregWeld]

I read an article this morning which contained this little snippet as a paragraph...
I talk about this often. Investors damage themselves - the market just moves up and down like waves on the ocean... It's when the investor doesn't understand what they own or have invested in names where their expectations are on the gambling side vs investing - that's when the panic sets in...

I've also taught myself to look at my finances as a WHOLE. I might be down in one or two or three investments - but if as a total I'm up - and I know for a fact that I'll never have every single investment in the green - I'm okay with it.




Any market segment can have some sort of event that even if unjustified fundamentally can still do permanent portfolio damage to the investor whose panic threshold is breached. This is why diversification and emotional control are both so important to long term investing success.

[GregWeld]

Here's something to watch out for -- or at least to be thinking about regarding the big OIL price decline. I have a bunch of money invested in oil and oil pipes etc and these investments have paid a higher than normal dividend. Dividends can typically build a "floor" in a share price because as the share price drops -- the dividend percentage payout increases -- investors searching for YIELD are then attracted to the shares (remember the market is about buyers and sellers - period).

BUT --- ALWAYS THE BIG BUTT -- At some point if a company is losing money they can and will CUT the dividend!! When they do that - then the price drops yet again.

The reason I say this now is because I don't want you to get caught up in trying to catch a falling knife. It's a mental game - where you've been in a great up market - everything you've touched has been good... and all of a sudden you're seeing companies share prices dropping and the yield rises - and you're like a moth to a flame. Have patience! None of us know what's going to happen with oil --- we have a new metric in place with the US production numbers rising dramatically... When there's too much of something - the price goes on sale... how much is too much? We don't really know... We don't really know what it costs certain oil producers to produce... We're not experts - we're just investors.... So WAIT until this settles out. I'm not selling what I had -- I've trimmed some to balance up and make other more diversified investments going into the end of the year. In other words I'm not panicking. We'll have plenty of time to sit back and let someone else battle it out - and then we can step in when the picture is clearer.



In the market this is called a VALUE TRAP. Where the value suddenly looks so enticing... but I'd still prefer to buy stuff that is on the upswing over dropping. Let the experts try to pick the bottom. They've got way more money than we have.

[WSSix]

I've also taught myself to look at my finances as a WHOLE. I might be down in one or two or three investments - but if as a total I'm up - and I know for a fact that I'll never have every single investment in the green - I'm okay with it.



I just sat down and did my updates to see how I'm doing. I'm ok with the numbers I'm seeing overall. My oil stocks are in the toilet and MCD wasn't looking so hot. I was expecting my returns to be lower than they are. We'll see what I do since it's quickly becoming time to max my Roth out again, but it was nice reality check to see that even with some big numbers in the red, I'm doing alright overall.

What's funny to me is my boring, old stocks like KMB, CLX, and JNJ are killing it. Guess I got lucky on when I got into them because I'm seeing mainly CG gains from them.

Oh, something else that was nice to see. My one oil stock was/is a gamble. I wanted it for the low entry price and good dividend. It's 67% down. I intend to hold on for the ride because all indications are it will recover eventually. Time will tell of course. However, even if I lose it all, my overall returns will be fine. Before, my attitude was meh I might lose it. Now, I'm Meh whatever knowing that I'm fine even without it. Only gamble with what you can afford to completely lose.

[sik68]

I am fortunate my company disburses SEP IRA checks each year. Each year I would make all my stock purchases in a single day. This year, if for no other reason than to practice 'scaling in' I plan to buy over a 6 month period, having some money on the sidelines for a while. The impending rate-rise seems to loom over the market, so I would like to have some cash ready when the market reacts.

[WSSix]

The last two years, I have put my money into my Roth very early in January so it can start earning money. Both years the market went down right after. I think I'm going to wait a couple weeks with some of the stocks and see what happens this year. I'll have it all in by the end of January though.

[GregWeld]

This is the type of news I was referring to in my earlier post about OIL companies cutting dividends... So even if the share price right now looks like a bargain - they could fall further when the dividend payout doesn't provide support like it can and does many times.




Linn Energy LLC (LINE:US), the oil and natural gas partnership that’s lost almost 70 percent of its value in six months, cut its investor payout and production budget by more than half amid a rout in crude prices.

The company and its affiliate LinnCo. LLC will lower the annual payout by 57 percent to $1.25 a share or unit, Houston-based Linn said in a statement today. Production spending will drop 53 percent from last year, to $730 million. Internal cash is expected to cover both, Linn said.

[chichirone]

Greg, wondering if you can simply explain a master limited partnership (MLP). They seem to be a discount (falling), as is the entire oil/gas market, but how do these differ from a stock such as KMI? Is it an alternative tool or how does it complement a dividend investing strategy? Just curious on your thoughts as I feel I am over-analyzing the tool.

I have looked at: Alerian MLP (AMLP) or Kayne Anderson (KYN)

[GregWeld]

Greg, wondering if you can simply explain a master limited partnership (MLP). They seem to be a discount (falling), as is the entire oil/gas market, but how do these differ from a stock such as KMI? Is it an alternative tool or how does it complement a dividend investing strategy? Just curious on your thoughts as I feel I am over-analyzing the tool.

I have looked at: Alerian MLP (AMLP) or Kayne Anderson (KYN)



Master Limited Partnerships (MLP's) "dividend" is actually structured as a "return of capital" rather than a dividend or interest. Therefore the taxes on the "dividend" which is really a return of your capital is treated differently ---- UNTIL YOU SELL!! Of course this is over simplified...

90% of the income of an MLP by definition must be derived from REAL ESTATE - or NATURAL RESOURCES or COMMODITIES. Thus there is no "bank" MLP etc.


The two you mentioned are not themselves MLP's but rather ETF's (exchange traded funds) that INVEST in MLPS to drive their own income and thus declare a dividend to the shareholders.


Of the two mentioned - I'd personally invest in KYN (Kayne Anderson) over Alerian (neither of these are actually MLP's - they derive their income from MLP's).

It's important to note AND UNDERSTAND an MLP (where you are not a shareholder but rather - you are a PARTNER) versus being a STOCKHOLDER in a publicly traded company... So I'd direct anyone interested in these (MLP'S) to go here and make sure you "get it".



http://www.naptp.org/PTP101/Print/Basic_Tax_Principles.pdf

[GregWeld]

SO --- many of you guys have now been invested for a year or more.

What I'd love to ask you to do is to review your FEELINGS about being invested and more importantly.... HOW MANY OF YOU WOULD HAVE BEEN FREAKING OUT with the market this last week? How many of you would have panicked and punched the SELL button? Versus - sitting back and saying - Hmmmmmmmm I see some stuff to buy.


Interesting to review your mental status and see what you have or haven't learned with time.

[Payton King]

I know this is a little off track, but consider it company research. My step dad just sent me this video of the Tesla factory. Talk about cutting edge technology and cubic bucks spent on the factory. I was impressed.

https://www.youtube.com/embed/8_lfxPI5ObM?rel=0

[SSLance]

I've said just recently how much different I look at the market and my investments now as compared to in the past...thanks mainly to this thread.

The main difference for me is things are scaled way down with only a handful of really stable companies in my portfolio. This lets me be clearer with things going on, keep a closer eye on things, and more importantly the quality companies in my portfolio do not take the wild up and down swings with the DOW that the investments I held before used to take. This is comforting and exciting to me. I do look for down spots to invest more as I'm still less than a third reinvested, thankfully though, all of my companies are still up over where I originally bought them starting early last year. XOM is toeing the line but with dividends is still in the green.

Many thanks to Greg Weld and the rest of you touting this thread over the years, it has made a difference in my life and many others I'm certain.

[Vegas69]

The biggest difference for me is taking on more responsibility for my retirement. I had a little to much faith in my buddy which is my advisor and that's a poor excuse. I've analyzed all those moves and made adjustments and like the self managed stocks as part of the pot.

[captainofiron]

oil stuff and ATT has me feeling uneasy, but the others arent too bad. I guess that means I picked well

Unfortunately I lost my job right before Christmas, so no more investing for the time being.

I did get my 401k rolled over and bought some Conoco to bring down my cost basis on that one, actually its the first time I have used the limit function. I put it like 1.50 less than it was trading in the morning and amazingly (or not) it filled later in the day.

[gearheads78]

I tell folks that I get my investing advice on a car forum and they think I am crazy. Crazy like a fox as they say.... :cheers:

Thanks Greg,
Don

LOL I get crazy looks when I tell people too

[chichirone]

It is a fun conversation with others when we start talking lat-g investing 102 thread. Their faces always crack me up when the topic of dividend reinvesting comes up and the valuable information shared here. Most commonly we receive blank stares and deer in headlights looks.

Buy when others are selling and sell when others are buying.

Thanks to all for the sharing and willingness to educate! It's opened up another world to generating income, wealth, and the ability to pass it forward to family and friends.

[GregWeld]

I appreciate all the positive feedback! I really do! I pour my personal info out here in an effort to stir people to action. I fully understand that investing - in anything - comes with a certain amount of gut wrenching. Even buying something as simple as a rental house... we always second guess ourselves. It's a big deal. I get it.

I wasn't really asking for posts about feelings -- it was really a rhetorical question. But I'm glad to hear these reports of success! I like the interaction because that gets me thinking about what "newbs" need to know - or think about. Just like the recent MLP question.

So RE: Investing 102

Here's the takeaway I want you guys to get from the action in the market like this week.

These big "drops" don't always come with big rebounds. Put a couple of the names you hold in your charting - via Google Finance or Yahoo Finance - and take a look at the TEN YEAR chart. Notice the LONG VALLEY beginning after the peak mid to late 2007.... there's about a 3 year "DIP" there. You have to be mentally ready for that kind of long dip. The last couple years you've been QUICKLY rewarded buying on dip (on sale!) events. But there will be a time when you buy the dip - and then the market drips lower - you buy some more - and the market goes lower and so on.

So now stretch your chart out from 10 year to "ALL".... Look at how many "valleys" are in that chart!! Many of them look violent - some are just flat spots - some are longer.... BUT THE LINE WILL BE LOWER ON THE LEFT SIDE AND HIGHER ON THE RIGHT SIDE. I'm yelling that (really just emphasis) in order to fortify your resolve to STAY INVESTED. You have to trust that you will be rewarded for holding. When the market turns around - you'll look brilliant! And you'll be richer than the asswipe that tried to time the market sold low and buys high.

Timing the market will have you OUT of the market when it's on sale - and all those quarterly dividends WON'T be buying shares that have gone on sale (and come with a higher yield!!).... adding to your pile at lower prices. Then the market will turn up and you'll be out -- and then you'll get back in at higher prices and own fewer shares.

Getting rich takes time... resolve... intestinal fortitude. The guys that are laughing all the way to the bank right now are the ones that bought houses when you couldn't give one away. Ditto the INVESTORS in the market. They HELD and bought - they didn't sell and hide... They know TIME and history is on their side.

[GregWeld]

oil stuff and ATT has me feeling uneasy, but the others arent too bad. I guess that means I picked well

Unfortunately I lost my job right before Christmas, so no more investing for the time being.

I did get my 401k rolled over and bought some Conoco to bring down my cost basis on that one, actually its the first time I have used the limit function. I put it like 1.50 less than it was trading in the morning and amazingly (or not) it filled later in the day.




So awesome! Here's the deal about using limit orders... over the long run - given the amount of shares to be bought or sold the actual total amount doesn't really make much of a difference. Where the difference comes into play is that you FEEL good about it. And that's very very important for people. Never underestimate the power of feeling "successful" regardless of the size or dollars. Even scoring $20 on a bet can be a far more powerful feeling than being on the losing side of that $20.

Beware of the pitfalls though of using limit orders when they DON'T get filled - and then RISE and you can end up paying more. So they can swing both ways on you and they do so quickly. You also have to stay on top of these kinds of orders... you can't just push BUY and then forget about them. If you're trying to capture the next dividend - you can miss out on something like that if you get too cute.

[captainofiron]

So awesome! Here's the deal about using limit orders... over the long run - given the amount of shares to be bought or sold the actual total amount doesn't really make much of a difference. Where the difference comes into play is that you FEEL good about it. And that's very very important for people. Never underestimate the power of feeling "successful" regardless of the size or dollars. Even scoring $20 on a bet can be a far more powerful feeling than being on the losing side of that $20.

Beware of the pitfalls though of using limit orders when they DON'T get filled - and then RISE and you can end up paying more. So they can swing both ways on you and they do so quickly. You also have to stay on top of these kinds of orders... you can't just push BUY and then forget about them. If you're trying to capture the next dividend - you can miss out on something like that if you get too cute.

Yea I wasnt trying to get too cute or too smart for my own good

Well I set aside some cash to invest in oil while its down, call it a gamble if you will. But I used half one day with the limit order and it dropped about 0.50 less than what I got it for, so the next day I did the same thing, but it dropped again, today its up, so I definitely feel good about it, I was down like 10% with all the oil price drops on my energy sector, but after I used that limit stop, its only like 7%
Feels like a winning move to me, haha

thanks again

[GregWeld]

Yea I wasnt trying to get too cute or too smart for my own good

Well I set aside some cash to invest in oil while its down, call it a gamble if you will. But I used half one day with the limit order and it dropped about 0.50 less than what I got it for, so the next day I did the same thing, but it dropped again, today its up, so I definitely feel good about it, I was down like 10% with all the oil price drops on my energy sector, but after I used that limit stop, its only like 7%
Feels like a winning move to me, haha

thanks again


Good moves! Glad this worked out for you. Wasn't singling you out -- when I respond I need to respond in a way that everyone learns something or gets some info to think about.

Half the game is MENTAL --- the other half is just doing. Many get paralysis by analysis... or "wait fever" and never can pull the trigger because they just know they're going save a nickel tomorrow.... tomorrow never comes and the waiting turns into wasting time.

[chichirone]

Master Limited Partnerships (MLP's) "dividend" is actually structured as a "return of capital" rather than a dividend or interest. Therefore the taxes on the "dividend" which is really a return of your capital is treated differently ---- UNTIL YOU SELL!! Of course this is over simplified...

90% of the income of an MLP by definition must be derived from REAL ESTATE - or NATURAL RESOURCES or COMMODITIES. Thus there is no "bank" MLP etc.


The two you mentioned are not themselves MLP's but rather ETF's (exchange traded funds) that INVEST in MLPS to drive their own income and thus declare a dividend to the shareholders.


Of the two mentioned - I'd personally invest in KYN (Kayne Anderson) over Alerian (neither of these are actually MLP's - they derive their income from MLP's).

[B]It's important to note AND UNDERSTAND an MLP (where you are not a shareholder but rather - you are a PARTNER) versus being a STOCKHOLDER in a publicly traded company... So I'd direct anyone interested in these (MLP'S) to go here and make sure you "get it".[/B


http://www.naptp.org/PTP101/Print/Basic_Tax_Principles.pdf


Thanks for the insight Greg. Very helpful. The link helps provide greater detail to the topic.

[captainofiron]

Good moves! Glad this worked out for you. Wasn't singling you out -- when I respond I need to respond in a way that everyone learns something or gets some info to think about.

Half the game is MENTAL --- the other half is just doing. Many get paralysis by analysis... or "wait fever" and never can pull the trigger because they just know they're going save a nickel tomorrow.... tomorrow never comes and the waiting turns into wasting time.

no worries, didnt take it personal, haha you have made me money, how could I get mad at you, hahaha

[GregWeld]

Here's a very boring - but interesting if read correctly - article on dividends. It's comparing the dividend "growth" and payouts of AT&T (T) and a couple other familiar names.


http://seekingalpha.com/article/2810585-3-companies-with-better-dividends-than-at-and-t?ifp=0


I wish I'd know you'd all read it - and then we'd come back and dissect it before I make this next statement.

When you're reading this article - he stated that he was NOT considering the dividend reinvestment. To me - that ignores a FAR FAR larger "key" to growing your retirement funds. Reinvesting the dividend is where the snowball affect comes into play. The dividends buy more shares every quarter - paying more dividends buying more shares and so on. So here's my takeaway on the article. If AT&T pays TWICE what PEPSI (PEP) does per quarter... without doing any math - I would think that long term you'd be buying more shares of T thus growing that investment at a faster rate.

It would take me hours to calculate a hypothetical 10,000 investment - then factor in if the stock stayed at the same price year after year - how many shares you'd buy each quarter and so on... to be able to factually work this all out. But it's really really good food for thought when you're COMPARING various investments. It's just another tool in your box to think about.

I think - again - without doing the math here... that the TOTAL RETURN of an investment over the same period of time (we only can see historically what this is) is telling us the historical advantage or disadvantage each investment has.

100% return over 5 years doubles your money in 5 years! Regardless of the dividend percentage you still did a double. If the comparable company is less, then you didn't do as well.

So to use this articles names:

PEPSI (PEP) 5 year TR = 61.4% Pays 2.71%

AT&T (T) 5 year TR = 61.6% Pays 5.6%

TEXAS INSTRUMENTS (TXN) 5 year TR = 128.3% Pays 2.54%

VERIZON (VZ) 5 year TR = 108% Pays 4.7%


So here's my "thoughts" -- and in full disclosure I own 20,000 shares of AT&T...
When we are looking at the TR we're only looking HISTORICALLY -- we then MUST make some kind of wild ass guess about what the company is going to do going forward. History is nothing but the past - it doesn't guarantee the future. You still must live day to day with your choices and those choices are for reasons only you can detail. I say this because numbers are numbers - they help us and can guide us - but if you buy PEP based on just the numbers -- but you don't like PEPSI and actually buy and drink Coke (KO) products... then what happens to your mind when PEPSI goes down or does something you think is stupid? Ditto this argument on Verizon vs AT&T. I used to own both - I might have made more money holding both... but I like and use AT&T so that's the one I've kept.

What I'm saying here in too many words is -- you still must know and like the companies you invest in. Return numbers are important - don't discount them! 100% is far better than 40%... make no mistake about that. But in DOWN MARKETS you have to be comfortable in your own skin. You can't get to 100% if you sell the first time you freak out.

[glassman]

Great points again Greg. I had forgotten "compounding dividend vs stock growth" (either are important when comparing your ROI vs TR) and refreshing our memories about this is an important (cause its mentioned a few hundred pages back).

On another note, AT&T bought Directv some time back and I missed this transaction on the news. I'm a huge Directv fan and also just found out they launched some "gigatron spaceship" satelite for better band width as video and on demand will become bigger "players".

I see them A- merging (still pending FTC approval) for better market diversification and B- Directv i'm sure sees the programming side "not growing as much" (with the competitors changing how we can prescribe our own programming) so i believe their positioning themselves into a much more wholesaler role. Does this make sense?

Sorry i know this is a "how to buy" thread, not "what to buy" but i'm hoping my third paragraph is more related to thinking theory.....

[GregWeld]

Great points again Greg. I had forgotten "compounding dividend vs stock growth" (either are important when comparing your ROI vs TR) and refreshing our memories about this is an important (cause its mentioned a few hundred pages back).

On another note, AT&T bought Directv some time back and I missed this transaction on the news. I'm a huge Directv fan and also just found out they launched some "gigatron spaceship" satelite for better band width as video and on demand will become bigger "players".

I see them A- merging (still pending FTC approval) for better market diversification and B- Directv i'm sure sees the programming side "not growing as much" (with the competitors changing how we can prescribe our own programming) so i believe their positioning themselves into a much more wholesaler role. Does this make sense?
Sorry i know this is a "how to buy" thread, not "what to buy" but i'm hoping my third paragraph is more related to thinking theory.....





First rule of investing.... don't buy anything based on what could or might happen. Buy based on what is at the time. Anything from then on is considered being lucky and is a gift.

What happens is you buy based on some proposed merger or acquisition.... then the government steps in and doesn't allow it or a competitor steps up and makes a competing offer.... and on and on. Sometimes the brains that are much larger than ours - and they have more money (remember that we're always just along for the ride) step in and sell their shares because the purchasing company is acquiring too much debt in the deal... OH BUDDY --- I've seen all these scenarios. I'd refer to this as "being cute". The minute you do that - you get your ass handed to you.

This "being cute" (not saying you did this or that anyone is doing this - remember just responding to "everyone" reading) is called ARBITRAGE on wall street. You're trying to place a bet based on what you think will be the outcome... you can bet on the company being acquired... by buying their shares thinking the board will reject the first offer and the acquirer will raise their bid... or you can buy a competitor thinking that if this deal goes thru for the higher price (usually buyouts come with premium price paid) that it will raise the P/E for the "others".... There's a hundred scenarios to be played. I used to do this all the time. Most of the time it never worked out the way I thought. When it did - I was a hero in my own mind.

If you're young - and smart - and want to game this stuff... and have 10K you're willing to play with... it's fun as hell and can be very profitable. Nothing wrong with it. It's only "wrong" when you bet and it goes against you. Then you sell - and the next week - there's different news and your bet would have paid off.... it's just the way these kind of bets go. Then it's more about knowing what you're doing and knowing yourself and how strong or weak your hand is.

[GregWeld]

Sitting here this morning and the talking heads on CNBC mentioned "Comcast" (CMCSA). Comcast has three classes of stock... but I don't want to talk about "a" stock... and this isn't about Comcast. I don't own it - never looked at it - hate the service when I had it in my house. Here's what I noticed when I looked at the 5 year chart and what I wanted to post about:


Think about if you were retired in 2010... and you owned Comcast "A" shares... and they paid you .09 per quarter. FOUR YEARS later - they're paying you .23 cents per quarter (did you ever get a 100% raise in four short years while working??) - and as a bonus the price of the shares is up 230%

With that kind of a number you could then sell HALF your holdings in this name - and buy something(s) else - and still get the same income you'd counted on 4 years earlier - and use the gain to diversify some more. The shares you held would be considered "playing with the house's money" as they would essentially be "free money" (the gain on the shares).

THAT IS WHY I LOVE DIVIDEND INVESTING -- which, by the way, is not the only way to invest! It's just one way to look at stocks. I like it because it works for me in good times and bad.

[GregWeld]

Today -- actually the last few days -- have been real "interesting". These kinds of swings used to freak me out -- I'd be all in on one day and the next afternoon the sky was falling, and I'd sell all. Then I'm sitting with a pile of cash - and things would flatten out or rise a bit and I'd be all in again. I look back 20 years and think that had I stayed put what my net worth would be today. I bought STARBUCKS IPO at $14.50 a share (1000 shares).... flipped them out the following Friday for a gain of $500 and thought what a score I'd just made. IDIOT! LOL


So let's talk about MOMENTUM.... Momentum is when a stock trades up (or down) just because.... there's no real fundamentals... the earnings (P/E) couldn't possibly enter into the equation because it's so far out of whack... but everybody you know is into "it". And the talking heads on CNBC/Bloomberg discuss "it" every half an hour. These kinds of names work magic.... while they're working. That's the hard part. Nobody can know when they're going to quit working and the UP momentum turns south. All the people that were in it to win it -- suddenly don't want to touch "it", and sell out as fast as they can.

Let's use the action in GoPRO (GPRO) today as nothing more than an example... Pull up a chart and stretch it out to "all". What I want you to look at this time is the VOLUME hashes along the bottom of the chart. Notice the SPIKES UP in volume and follow that spike in volume straight up to the PRICE action in the line representing the price. Notice it DIPS (drops) at almost every spike in share "volume" (meaning shares exchanged hands). That's people selling -- and of course others have to buy or you wouldn't have a transaction. My guess is people are trying to buy on the dips... That can turn into trying to catch a falling knife -- or can work well if the momentum continues in the name. Hard to know which way it will go.

Note that there's also a couple spikes where the shares go UP as well. They seem to be EARLY ON in the life of this stock. Since then the spikes have all been selling pressure.

I don't care if you own GoPro - what I'm showing you here is just some more "fodder" to look at when you're thinking about jumping into or out of a name. Remember that the rule of any market is that prices RISE when there's more buyers than sellers - and the reverse is true when there's more sellers than buyers.

In this example -- had you gotten in early enough - you'd still have a very nice gain (60%)... but if you got in later -- after you kept hearing that this was the next free rocket ship to wealth -- well then, you might not be so happy with it right now (a decline of 21% YTD). This is when you start to question your intentions. Not a bad thing. It happens. You never question yourself when the stuff is shooting to the moon! You only start to question your holdings when they're going down or go underwater. Was this an INVESTMENT? Or did you think/hope it would just go up 10 or 20 bucks a share and you'd scoop the gain and be gone? Now what to do. Maybe now you're underwater for 10 instead of up 10....

THIS IS WHAT PEOPLE HATE ABOUT INVESTING!!

It's EASY when everything is going your way.... it's damn hard when it isn't. That is what I'm always talking about when I say - I like to own stuff I can sleep with. A couple bad names in the portfolio can kill the performance of the good ones. Not sure why that is - but they always seem to fall harder and faster than they went up. They tend to creep up - a buck here - 50 cents there... but when they suck - they suck in a day or two!

I don't care about this name (GoPro)... I'm discussing the market... how you see the market... and learning from it. That's the key - we want to be better next time... we want to understand BEFORE we go into something what the pitfalls are. It's hard to make and KEEP money - it's really way easier to lose it. Whether you're into this kind of stuff or not - you should be watching it. Learning from it. Many times we get clobbered by something we'd never have guessed. That's life. It happens. Oil is a great example. Anything to do with oil is just getting hammered right now. Unforeseen! Who the hell would have guessed that! Not me! There is always "market risk". I build that in when I look at the dividend percentage. I think - if this sucks - am I okay with the dividend? It helps. It doesn't cover the sin - but it helps take some of the sting out. It's another lesson I've learned along the way. Another one is the 5% rule. If you can try to stick with that rule the losers don't hurt as much. Load the boat up (get greedy?!?) and one bad period can ruin your performance temporarily (or longer!).

[GregWeld]

Warren Buffett once famously said, "If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes."



That's pretty good thinking right there.....

[GregWeld]

By the way... to be certain of what I'm discussing above is NOT that nobody should buy these types of stocks - The GoPro's / Tesla's / Alibaba's etc.... there "can be" huge money made in these kinds of stocks! What I'm talking about is if you're a relative newb to investing - you're trying to build some retirement - you have "limited" funds (say less than 100 grand already saved and invested)... BEWARE the gut wrenching drops stocks like these can take. You won't know if you're ready to stomach that until it's actually your hard earned money. It's not hard to take if you're just watching them do this. It's far far harder when it's real money.


Another one today is Tesla (TSLA).... down $13 ish today and $100 off it's high. This was a market darling - and plenty of people have made a nice gain on the shares... but many bought it $100 "ago". OUCH.

[SSLance]

I sold out of MCD several months ago at about what I paid for it. It wasn't until just the other day when I noticed their new ad campaign on TV that I went back to look at their chart since I sold it. Still glad I sold it. :)

And I'm happy with the rest of what I kept, plenty happy enough to own them for 10 years.

The DOW chart the last 5 days has been CRAZY.

On a side note, commodities... I know it's not talked about on here much, but I have some grain (corn and soybeans) from the 2014 harvest that I've stored until 2015 to delay the income tax on the sale. Watching the grain prices go up and down is VERY much like watching just the DOW...and just about as frustrating. The commodity traders are just like the damn equity day traders, for the most part they drive the price of grains up and\or down, only instead of earnings, news bumps, rumors, etc to spike or drop the prices, it's yield counts, cargo sales overseas and fund buying making spikes and dips for the traders to make money on.

[GregWeld]

All I can say is ---- I sure hope some of you own NetFlix (NFLX)! Just WOW!

[WSSix]

All I can say is ---- I sure hope some of you own NetFlix (NFLX)! Just WOW!

Nope, but I did snatch up some JNJ yesterday. So far, my waiting a little bit to fund my roth this year is paying off. Normally, I would have had JNJ funded by now and taken the hit instead of getting it on sale.

A few more of my positions are set to report q4 2014 earnings soon. I may wait to fund them after their reports come in.

[glassman]

All I can say is ---- I sure hope some of you own NetFlix (NFLX)! Just WOW!

Just heard that. I woulda put money on them "going down", meanwhile, my dumass is watching everybody and their brothers buying this product. I really should start paying attention....

[GregWeld]

This thread was started December 2011.... Thought I'd take a look at a few of the names that have been used in this thread for examples, for no other reason than to see where a guy would be if he'd put some money in the market at that time.


This is purely a price comparison - no dividends included or re-invested etc.

AT&T - Up 15.65%

Con ED - Up - 23.32%

Coke - Up - 33.77%

Pepsi - Up - 55.91%

McDonalds - DOWN - 2.16%

Altria - UP - 99.01%

Philip Morse - Up - 18.76%



An even better eyeopener would be what dividend (in dollars) they were paying and what they're paying now.

These numbers are PER QUARTER.... so annually the increases need to be multiplied by FOUR.


AT&T - then .44 - NOW .47

Con ED - then .61 - NOW .63

Coke - then .24 - NOW .31

Pepsi - then .52 - NOW .66

McDonalds - then .70 - NOW .85

Altria - then .41 - NOW .52

Philip Morse - Then .77 - NOW 1.00

[captainofiron]

Just heard that. I woulda put money on them "going down", meanwhile, my dumass is watching everybody and their brothers buying this product. I really should start paying attention....

Im in the same boat, only thing that keeps me from buying is that I think it will inevitably go down as some other tech/service comes out that becomes hot and makes Netflix obsolete

[captainofiron]

Seagate (STX) took a dump on me today, I was looking at it and my other big performer and was thinking about selling what I had made on them to buy something else, then the rug got pulled out from under STX this morning

[GregWeld]

There are so many "things" happening around the world that it makes a guy have mixed feelings about what picture we should have going forward. Europe in recession... Russia in recession... China growth slowing... Terrorism around the globe.

Falling oil prices are supposed to be a "gift" to everyone's pocketbook. Even I notice the difference when I fill up. Yet - there is little doubt that people in the oil patch will suffer as layoffs occur and drillers etc slow their buying of whatever it is that they need to operate.

HO HUM! The same news with different headlines has been going on since the beginning of time. Just put a different name on a country with problems... or a "monetary" crisis somewhere... and I can't ever remember when there wasn't a war somewhere in the world.

Here's what I have noticed lately that may be a little different. If a company misses their numbers - they get HAMMERED. Not often have I seen companies sell off 10% in minutes after they've reported a miss. What this signals to me is that people want an excuse to sell something. Anything. To me that means people have grown "skittish". Something in the air is making people nervous or unsure. When you're unsure or nervous - you sell.... sellers deflate the price.

The biggest gainers usually deflate the fastest. But remember, if you've been in the market awhile - and the stock has run 30% - and drops 10%.. you still have a gain.

Don't forget that you're the best human intelligence around. How's your company doing. Business good? Are your friends businesses good? Or? Be aware of what's going on around you. Houses sitting or are they sold in a month or so... The restaurant you go to frequently busy or just plugging along... Doesn't mean you need to react in your accounts - it's just another thing in investing to learn. Be heads up and pay attention to your own sense of wellbeing.

[captainofiron]

my Conoco has been hit pretty hard the past week.

My dad works for Halliburton and works alot in the Eagle Ford, and he says they are slashing costs left and right

I hadnt seen gasoline this cheap in a long long time

its definitely unnerving, but like you said Greg, you dont lose money until you sell

[Vince@Meanstreets]

Buy buy buy! well soon.

[Vince@Meanstreets]

There are so many "things" happening around the world that it makes a guy have mixed feelings about what picture we should have going forward. Europe in recession... Russia in recession... China growth slowing... Terrorism around the globe.

Falling oil prices are supposed to be a "gift" to everyone's pocketbook. Even I notice the difference when I fill up. Yet - there is little doubt that people in the oil patch will suffer as layoffs occur and drillers etc slow their buying of whatever it is that they need to operate.

HO HUM! The same news with different headlines has been going on since the beginning of time. Just put a different name on a country with problems... or a "monetary" crisis somewhere... and I can't ever remember when there wasn't a war somewhere in the world.

Here's what I have noticed lately that may be a little different. If a company misses their numbers - they get HAMMERED. Not often have I seen companies sell off 10% in minutes after they've reported a miss. What this signals to me is that people want an excuse to sell something. Anything. To me that means people have grown "skittish". Something in the air is making people nervous or unsure. When you're unsure or nervous - you sell.... sellers deflate the price.

The biggest gainers usually deflate the fastest. But remember, if you've been in the market awhile - and the stock has run 30% - and drops 10%.. you still have a gain.

Don't forget that you're the best human intelligence around. How's your company doing. Business good? Are your friends businesses good? Or? Be aware of what's going on around you. Houses sitting or are they sold in a month or so... The restaurant you go to frequently busy or just plugging along... Doesn't mean you need to react in your accounts - it's just another thing in investing to learn. Be heads up and pay attention to your own sense of wellbeing.

Plus the airlines must be getting killed right now. They hedge fuel and they might be stuck with 2014 pricing for a while.
Mark my words, this oil drop is going to start WWIII or conflict XXVVIIM

[GregWeld]

The oil price drop is definitely a "disruptor"..... Good in so many ways -- terrible in so many ways... We can't even imagine all the ways good and bad. If you're buying oil to make a product etc -- you're a happy guy! If you're a driller - or in that "supply" side of things -- we've yet to see all the fallout. For me -- I'm just holding what I have... KMI -- ETP -- BPT.... These three in the oil "space". They pay me good dividends --- and that's the take away here. They pay me to wait and see. I'll only get killed if it's so disruptive that they cut or suspend the dividend.

My "oil / pipes / infrastructure" dividends at risk are 124K per year.... so there's some risk there.


Now --- Per my earlier discussion about maniac (ma nye ick) swings in prices.... WOW --- AMAZON reports and the shares jump $40 in aftermarket trading... Alibaba (BABA) doesn't make as good of a growth number as people expect and it drops 8 or 9 bucks...


It's so fun to be on the sidelines and watch this stuff.... and man I wished I owned AMZN and got that $40 pop!! But it's those pops and drops that just cut a guy to pieces! For every POP up you get --- if you're into these kinds of high fliers -- they CUT just as easily on the way down. That's the old "risk / reward" of the market.

[GregWeld]

Interesting how much of a difference being in the "right" stock makes...


I saw that Chipotle Mexican Grille (CMG) was going to be down "pre market" about $46 bucks a share. So of course I had to go see what that was all about (I don't own it)... Seems they only grew their net income 52% for the quarter. What bums!! (being factious here).


Being the stock investigator I am... it's a habit... I always learn something snooping around. I decided to pull up their chart. Bumpy?!?!? OMG.... so real roller coaster ups and downs there to be sure... but remember the big goal? Lower on the left and higher on the right! It's UP 600% in five years. HUGE.

So I overlay McDonalds (MCD) over the chart ---- it's UP 50% in five years. Not horrible. Not the 100% in that time that many stocks are - but it always was a good steady grower. Older bigger companies don't grow as fast as smaller new companies (generally). But 50% vs 600% ----- WOW. So the point is down 50 bucks today isn't a big deal if you've owned the shares for more than about 6 months. LOL

[SSLance]

Anyone following the refinery workers strike (and it's effects on other parts of the oil market)?

My brother is in the non-destructive testing field of work, they do a ton of work for refineries. They have enacted contingency plans as a large portion of their business just stopped or is getting ready to stop completely...until this gets straightened out.

[GregWeld]

As I sit here on the balcony of my room overlooking the Pacific Ocean... and listening to the relentless pounding of the surf... Reading the latest "market news" I saw a news line about Coke (KO) raising prices - which lead to a quarterly earnings beat. Of course I had to go read this and check the price action out. A nice move today on a $42 stock. Nothing earth shaking - no doubling.. just a move in the way the surf does... a little up and little down -- the surf struck me as the way the market works. Sometimes storms make bigger moves - some days are strikingly calm... but it's always moving.

Going to KO chart -- It's UP over 60% in five years - shows a 2 for one split - pays over 3% dividend. 60% over five years is a very nice steady surf like growth in your money. What's more important is that you most likely won't wake up one morning to find half of your money gone in an instant. Very comforting... owning it won't get you bragging rights at the office water cooler... but you might retire quite nicely one day and join me on the beach. Fat and happy. LOL


Just for fun I overlayed the latest market darling.... GoPro (GPRO). No question about it -- had you bought at the IPO price... you'd have a nice QUICK gain of 38% in about a 6 month time frame.... no dividend payment... you must rely on it to continue to expand it's already lofty P/E.... If it can grow the earnings - your price will MAYBE expand. In the meantime you've been on a huge roller coaster. Nothing wrong with the roller coaster ride IF you can stomach it. That is for you and you only to know. Your time line - your confidence - your stockpile. I am not advocating either stock or either way of investing... and the best bet would be to perhaps own a little of each once you're in the comfortable position of feeling secure in your base holdings.


To be sure - my statements about what I'm doing - or my personal positions are to GOAD you all into raising your game. It is NOT bragging - nor is it meant to stick my tongue out at you. Think of it more as a build you're watching - If you're watching Stielow build his cars - you should want to emulate and learn from what he's doing. Money is the same way - or should be... but nobody ever talks about "that"! Investing is like building your skills and building a car... you learn from others - you aspire to be like that guy... or have a car like that.