Investing 102

[GregWeld]

So what are your thoughts on General Mills (GIS) and American Electric Power (AEP)?

GIS - div/yield .31/3.00, P/E 17.29

AEP - div/yield .47/4.53, P/E 12.75 , but doesn't have a distinct rising growth over the past 10 years.

Regarding the Greg and Chad conversation involving taxes .... would you approach the dividend differently in an tax deferred IRA vice a straightforward brokerage account?


Nice yields... and the growth on a good old standby - GIS (General Mills) is outstanding...steady eddy.

AEP (American Electric Power) has been not so hot - but has that 4.5% dividend. My advice -- BUY CON EDISON (ED) has near the same dividend (3.87%) but has capital growth of 40% on top of that... compared to a capital loss for the 10 year period for AEP.

That chart will make you even sicker if you go out and compare the time period "ALL" -- ED is up 900% compared to AEP @ "only" 69%

Just saying -- that if you want to own "best of breed" in any given sector - they're best of breed usually for very good reasons -- and here's a perfectly good example of the difference.


Long time periods for sure -- but here's the way I think about this stuff... I'm 58 already (damn) but I plan to live to at least 88 -- THAT IS THIRTY MORE YEARS -- and I want to have growth in capital to sustain my superior spending spree.... :willy:

[billscamaros]

Long time periods for sure -- but here's the way I think about this stuff... I'm 58 already (damn) but I plan to live to at least 88 -- THAT IS THIRTY MORE YEARS -- and I want to have growth in capital to sustain my superior spending spree....

Thanks for putting so much thought into this thread, Greg. It's very timely for me. I'm 52 now and although I've contributed into my 401K for many years, I can't say that I've given alot of thought to retirement. Over the past year or so, I've realized that retirement is approaching in the next 15 years or so, and it's time to fine tune my plans.

I can't imagine not working, simply because I always have. However, I'd like for it to become an option vice a neccessity.

This thread has been cool because it's motivated me to look at my current investments a little more critically, and because it's given me the opportunity to learn something new. In the vein of learning something new, any advice on basic investing books, newsletters, or websites? I'd like to better understand how to evaluate the P/E, yield, etc of different stocks. I thought that the "beta" chat between you and Chad was interesting, but I don't understand the relevance of it in respect to the stock market.

Thanks

Bill

[GregWeld]

Good questions Bill, and I'm glad you've found this interesting. I've been working hard to try to make it EASY (need that big red E A S Y button)....

So along that EASY theme.... I don't use ANY of the stuff you asked about. Don't need it. Don't need to clutter my head with useless info such as the Beta. That - in my HUMBLE (yeah right!) opinion is where people go sideways.

Investing IS NOT COMPLICATED and doesn't need to be "learned". Follow my steps - that I have listed and discussed in previous posts... regarding simple easy to understand "anyone can do this" investing approach. Pick names you know - compare them to the competition - check the long term chart - make sure they pay a dividend - diversify. If the companies growth is steady eddy - then I want a bigger dividend payout. If the stock meets all of the above and has a smallish dividend then it must have stellar growth as the 'offsetting factor'. If I have too many boring smallish payers -- and can AFFORD SOME RISK I offset that smallish dividend/growth with a bit more risk (JNK - HYG - NLY) just for "instance".

Lots of people can argue numbers and such all day long - they pull stuff from here and there... but like a drag race car - can they put it DOWN? I know guys that spout all manor of info about motors and traction etc - but when you line up they get crushed. Some can talk and some can DO.

The important STEPS are to pick - compare - make a list - compare 'em again to make sure you understand... check for diversity... do what your brain says is right for you... if you like CHEVRON GAS over EXXON then buy the Chevron. If you shop Home Depot over Lowes - buy the Home Depot (if all the info is pretty comparable). If you don't do it that way - you kick yourself in the ass when it doesn't go your way.

The guys that listen to the talking heads on TV all the time... and listen to the news and then REACT constantly -- they're getting BEAT. Now - obviously you have to listen for BIG NEWS - let's just pick SEARS.... because if you're in that name (and you shouldn't have been because it doesn't meet ANY of the above criteria) then you need to make a decision to hold 'em or fold 'em... But if you sold McDonalds because the news said someone spilled coffee - and you think that is really going to kill the company - REALLY? - then you're reacting to just "news" and you'll lose.

Whenever I'm thinking too much -- I go back and revisit those charts and stretch 'em out as long as they'll go... and if it's a good chart... and the dividend is intact and growing - then I can soothe myself. If I'm thinking about a pick too much -- and stressing over it - then I go and look at all the stuff - try to remember why I picked it - and if I'm still stewing - I sell it and start looking (may take me days or weeks to find/settle on the new one) for a better INVESTMENT.

It really is just that simple. I'm running mid 8 figures... and this is EXACTLY how I do it. And I kid you not when I say this is just exactly how I've been doing it for YEARS. I retired at 41 and I'm 58 now and this is all I've done for "work" all this time - running my own investments. I've never once looked at a beta... or anything else more complicated than what I just wrote. If it works for me - it will work for you.

[asifnyc]

hey Greg,

I've been glued to this thread as well and wanted to get your take on a stock: SXL. seems to have the right shaped chart with growth and growing dividend.

how do you "read" this one? thanks again for all your insights in this thread and happy new year everyone :thumbsup:

Sunoco Logistics Partners L.P. (Public, NYSE:SXL)

Range 38.90 - 39.62
52 week 24.40 - 39.98
Open 39.48
Vol / Avg. 253,411.00/226,762.00
Mkt cap 4.07B
P/E 16.35
Div/yield 1.24/12.59
EPS 2.41
Shares 103.33M
Beta 0.18
Inst. own 24%

link to chart (http://www.google.com/finance?q=sxl)

[LS1-IROC]

What your thoughts on HSY?

Range 61.72 - 62.19
52 week 46.24 - 62.26
Open 62.05
Vol / Avg. 606,311.00/1.09M
Mkt cap 13.91B
P/E 22.86
Div/yield 0.34/2.23
EPS 2.70
Shares 225.12M
Beta 0.26
Inst. own 54%

They have been steadily increasing dividends and they split in 2004. It's my wifes favorite company...LOL

[GregWeld]

hey Greg,

I've been glued to this thread as well and wanted to get your take on a stock: SXL. seems to have the right shaped chart with growth and growing dividend.

how do you "read" this one? thanks again for all your insights in this thread and happy new year everyone :thumbsup:

Sunoco Logistics Partners L.P. (Public, NYSE:SXL)

Range 38.90 - 39.62
52 week 24.40 - 39.98
Open 39.48
Vol / Avg. 253,411.00/226,762.00
Mkt cap 4.07B
P/E 16.35
Div/yield 1.24/12.59
EPS 2.41
Shares 103.33M
Beta 0.18
Inst. own 24%

link to chart (http://www.google.com/finance?q=sxl)


I'd own it - if I didn't already own EEP and KMP etc. Great dividend and excellent growth. What I like to do is to keep the "pigs get fat and hogs get slaughtered" counter balance so don't just go dividend hoggish and load the boat up with all high dividend payers -- balance is key. But good picking here!

[GregWeld]

What your thoughts on HSY?

Range 61.72 - 62.19
52 week 46.24 - 62.26
Open 62.05
Vol / Avg. 606,311.00/1.09M
Mkt cap 13.91B
P/E 22.86
Div/yield 0.34/2.23
EPS 2.70
Shares 225.12M
Beta 0.26
Inst. own 54%

They have been steadily increasing dividends and they split in 2004. It's my wifes favorite company...LOL


This holding - Herseys - would be the perfect counterbalance to the previous stock pick - SXL.... because of the "smallish" dividend it needs (IMHO) to be balanced out with a higher paying dividend of something. Otherwise you're losing out to inflation. But a great name with a decent chart and the only downside is that under 3% dividend.

[68 stang]

Greg,

How often do you suggest us new guys be checking up on the stocks that we own? It seems to me that you can get a little OCD with it all.

How often do you suggest we rebalance our portfolio?

What exactly is a EFT? You have mentioned them before. It appears to me to be more like a mutual fund that buys bonds. Is there a fee for using them? On the EFT JNK, back in January of 11, they paid a short term, and a long term capital gains. Instead of the dividend of being around .25 it jumped to .90. Could you explain this please?

Do you look at the Price to Earning ratio, when choosing a stock? Do you also look at the earnings per share when make a decision?

Thanks again for the wealth of information you have given us.

[GregWeld]

Greg,

How often do you suggest us new guys be checking up on the stocks that we own? It seems to me that you can get a little OCD with it all.

How often do you suggest we rebalance our portfolio?

What exactly is a EFT? You have mentioned them before. It appears to me to be more like a mutual fund that buys bonds. Is there a fee for using them? On the EFT JNK, back in January of 11, they paid a short term, and a long term capital gains. Instead of the dividend of being around .25 it jumped to .90. Could you explain this please?

Do you look at the Price to Earning ratio, when choosing a stock? Do you also look at the earnings per share when make a decision?

Thanks again for the wealth of information you have given us.


Great question -- and I would say it depends -- because if you're investing in the kind of stuff I've been saying is where my money is - then you don't need to check but about once every quarter... just to make sure you're on track -- but if you're buying some speculative stuff - then daily. Mostly what you need to do is to just pay attention to the news - interest rate announcements by the FED etc...and then if you're not sure what that "means" and the affects it can have then jump up and ask someone.

REBALANCE any time you're out of balance - i.e., you have a big run up in one stock - then take the gain - leave the balance - and spread out (diversify) or if you have a loser - make sure you know why it's a loser and see if it has a chance of coming back or is it 'broken'. I would call the recent announcement of the SEARS closing news - a 'broken' stock. You just have to sell that kind of news and move on.

ETF - Exchange Traded Funds - are NOT like Mutual Funds - but kinda are - they typically are a basket of a sector/type. So lets just say you want to invest in oil and gas - then there are probably several ETF's that just buy that basket of stocks. It's an easier way to buy a few companies in a narrow focus... without having to pick just one or two names. Very effective and cost effective. The downside is that a bad pick can pull down the performance of the ETF... so I'm not a fan. I think people are smart enough to make good picks and are generally happier knowing what stocks they own and why they own them. Just IMHO.

Paying out a special dividend or returning a capital gain - can be done for many reasons and is quiet common in Mutual funds or ETF's... You own the shares of the companies they have invested in - and lets say they owned a bunch of APPLE and they have a 1000% gain and decide to sell some of it in a big way -- they pass that gain down to the share holders... along with paying the regular dividend.

P/E (price to earnings ratio) is not something I pay attention to. I like LONG TERM GROWTH in the price of the stocks I own - and I pay attention to that -along with the dividend payout and the long term growth of that dividend payout. This really tells me all the info I need to know. It tells me the company is well managed - over a long period of time - and that they're making money enough to pay an increasing dividend out - again over a long period of time. Right now Apples P/E is quiet "low" - but to me the stock is "expensive" and priced for perfection. I own it - but I've owned it since it was at $85 and have taken profits (gains) in the name... but it doesn't pay a dividend so I have to have the stock price growth to compenstate which it has provided handsomely. McDonalds has a higher P/E and the talking heads on TV will mention it - but I don't really care about such matters - because what I'm looking for is good management - growth (sales and same store sales - and growth in new markets etc) and as long as they have things like that - then the rest takes care of itself.

It's kinda like two cars - one guy has 1000 hp and one guy has 650 hp -- everything else is the same. Put the two on the track and if you just looked at the 1000 hp number you'd bet on that car to win... EXCEPT -- the driver sucks and the guy in the 650 car runs circles around him. I'd prefer to bet on the management and history over just "numbers". It has to be the complete package - not just one set of numbers. The numbers might be good indicators but if you'd just bought stocks on those - you might make a lot of bad bets. That's not to say you just ignore them - but you're making the entire process more complicated than it really is. I'll harp again and again - names you know - companies you like to do business with - good track record - good dividends - diversified portfolio... (relative to what you have to invest).

Does that make sense?

[billscamaros]

A question regarding capital gains ........

In your example of the stock that made huge gains, and now you want to rebalance your portfolio. Let's assume that you've owned this stock a few years. You sell off some shares off and buy shares in a different stock. So you have fees for the buying and selling. But do you pay capital gains now on the money that you made, or do you not have any gains since you have reinvested those dollars?

[GregWeld]

A question regarding capital gains ........

In your example of the stock that made huge gains, and now you want to rebalance your portfolio. Let's assume that you've owned this stock a few years. You sell off some shares off and buy shares in a different stock. So you have fees for the buying and selling. But do you pay capital gains now on the money that you made, or do you not have any gains since you have reinvested those dollars?

Excellent question -- with multiple answers - and my answer is going to give you just enough info so that you'll know that you should contact your tax pro BEFORE you sell!

There are three different ways to make a trade for accounting purposes and these ways must be selected at the time of the trade BEFORE the trade is "settled" (check with your brokerage for this info).

FIFO -- First In - First Out

LIFO -- Last In - First Out

Specified Lot

These "methods" can be used PER TRADE - and obviously affect your gain or loss. Because if you've bought shares over time - they're at different costs, thus have different gains/losses.

What I can't answer for you - is - say you bought 10 shares at $100 ($1000) and it's now worth $3000 -- and you just want to take your original $1000 out and leave the "Gain" ------- and that is what I think you're asking...... and I have to tell you I honestly do not know the answer.

[GregWeld]

Bill -- I wanted to SEPARATE the answer to your question because this is so complicated.

There is another selection of "method" that is selectable in my Schwab account but I didn't research to see if it's available (selectable) in my other brokerage accounts.... I've on "vacation" and just didn't want to take the time...

But Schwab has a "Tax Lot Optimizer" selection where the sales are selected via various conditions to MINIMIZE the tax consequences. LEGALLY of course... so they'd sell the least gains first and so on until the sold the number of shares you wanted to sell.

BUT I CAN'T EMPHASIZE ENOUGH - this is an IRS / TAX PREPARER question don't listen to what some bozo like me tells you on a forum.

:lateral: :cheers: :woot:

[pw2006]

A question regarding capital gains ........

In your example of the stock that made huge gains, and now you want to rebalance your portfolio. Let's assume that you've owned this stock a few years. You sell off some shares off and buy shares in a different stock. So you have fees for the buying and selling. But do you pay capital gains now on the money that you made, or do you not have any gains since you have reinvested those dollars?

Hey billscamaros- You would pay taxes on the gains in the year they were incurred, the tax basis does not roll into your new stock purchase.

[GregWeld]

Hey billscamaros- You would pay taxes on the gains in the year they were incurred, the tax basis does not roll into your new stock purchase.

Don't take this post personally -- I just wanted to respond because there are so many people reading this stuff... and we don't want to give some info that might be right for some and wrong for others...

Really - that's not enough information - because we don't know if he's asking about an IRA - a ROTH - or just a regular account.... We don't even know if there are LTCG taxes due because his income might not be high enough to pay ANY... there are ZERO LTCG taxes for some folks... and for some of us there is the AMT and all manor of other mitigating circumstances. That's why I didn't want to give him some "pat" answer. Because it "depends". Maybe all his gain is from reinvested dividends that he's already paid taxes on?

That's why I said his questions can really only be answered by HIS tax pro...

I think questions like this are GREAT because they give people information they should at least think about etc -- but can't be answered in a forum. And they're just as critical as the timing on an engine - which we know there is no pat answer because it depends on the cam - the gears - the use - and blah blah blah... What you really need to know is that it's critical to find out BEFORE you act - so you can form a PLAN.... and act accordingly.

By the way folks -- note that when I say LTCG are ONE YEAR AND A DAY -- that "DAY" is critical because the IRS rule is "longer than one year" -- which doesn't mean ONE YEAR -- it's LONGER THAN ONE YEAR. Thus I always add that "one year and a DAY". The devil is always in the details.

[pw2006]

Don't take this post personally -- I just wanted to respond because there are so many people reading this stuff... and we don't want to give some info that might be right for some and wrong for others...

Really - that's not enough information - because we don't know if he's asking about an IRA - a ROTH - or just a regular account.... We don't even know if there are LTCG taxes due because his income might not be high enough to pay ANY... there are ZERO LTCG taxes for some folks... and for some of us there is the AMT and all manor of other mitigating circumstances. That's why I didn't want to give him some "pat" answer. Because it "depends". Maybe all his gain is from reinvested dividends that he's already paid taxes on?

That's why I said his questions can really only be answered by HIS tax pro...

I think questions like this are GREAT because they give people information they should at least think about etc -- but can't be answered in a forum. And they're just as critical as the timing on an engine - which we know there is no pat answer because it depends on the cam - the gears - the use - and blah blah blah... What you really need to know is that it's critical to find out BEFORE you act - so you can form a PLAN.... and act accordingly.

By the way folks -- note that when I say LTCG are ONE YEAR AND A DAY -- that "DAY" is critical because the IRS rule is "longer than one year" -- which doesn't mean ONE YEAR -- it's LONGER THAN ONE YEAR. Thus I always add that "one year and a DAY". The devil is always in the details.

Great points Greg, taxes totally depend each person's set of circumstances. :cheers:

[GregWeld]

Great points Greg, taxes totally depend each person's set of circumstances. :cheers:


Yep -- and that's why I said earlier that we really don't want to turn this into a tax discussion -- only in the BROADEST of terms etc and give people enough info to at the very least KNOW THEY SHOULD ASK - because TAXES are a real trap we can all fall into. There's just too damn many circumstances.

A retiree on SS might be able to sell enough gains to supplement their SS and not have any tax due...

And I get the root of the question.... and it's a good one. But the answer "depends". :willy:

I will answer honestly for my own personal situation -- I don't give any thought to what the tax consequences are for a trade. I just do what's best for making (or not loosing) money. The taxes are what they are. I just can't clutter my head with all the rules etc in order to save $500... and then lose $2000 because I didn't want to pay taxes. But that's my personal "method". I pay way more taxes than I need to - my tax guy yells at me - and I tell him "sorry dude... I just don't care.... I made money didn't I?" and he always concedes that in fact "yes I did"... And to me - that's the bottom line. But that's not good advice for others... because it CAN AND DOES make a difference!

[CRCRFT78]

This thread is making me realize there is ALOT more to this than just buying and selling. Now comes into play the questions about taxes and being taxed. I recently dumped a stock and two mutual funds I wasn't happy with in favor of purchasing some other stocks. Because this is a rollover IRA account (not sure if that affects anything tax wise) should I be worried about the taxes now or does that come into play when deductions begin to come out at retirement?

[CRCRFT78]

I also have a brokerage account with Schwab that I'd like to start using to help supplement my retirement accounts. Do you suggest getting started with that in the same manner? Pick some names we know, study the charts and buy some stocks? Or should I sit down with my tax guy before getting started with that to discuss everything?

[GregWeld]

This thread is making me realize there is ALOT more to this than just buying and selling. Now comes into play the questions about taxes and being taxed. I recently dumped a stock and two mutual funds I wasn't happy with in favor of purchasing some other stocks. Because this is a rollover IRA account (not sure if that affects anything tax wise) should I be worried about the taxes now or does that come into play when deductions begin to come out at retirement?

IRA/401 are TAX DEFERRED ACCOUNTS -- no taxes due UNTIL you retire and start the withdrawals. The PREMISE is that you would then be a far lower tax brackets and that your withdrawals are controlled to minimize taxes etc. So if you made the transactions inside these types of accounts -- then you don't need to worry - there is no taxable action NOW.

If the transactions are within a ROTH IRA - there is NEVER any tax due - because that was after tax funds. You pay no further taxes even upon withdrawal. They're WONDERFUL but are very limited with their own "maximum funding per year" rules and they have limits as to WHO (by income) can fund them.

[GregWeld]

I also have a brokerage account with Schwab that I'd like to start using to help supplement my retirement accounts. Do you suggest getting started with that in the same manner? Pick some names we know, study the charts and buy some stocks? Or should I sit down with my tax guy before getting started with that to discuss everything?

Any account that is OUTSIDE of a "tax deferred" type retirement account - is going to be subject to tax accounting. So depending on your trading - your amount of dividends received - whether or not those dividends are "qualified" etc. Your income at the time. Whehter or not you OFFSET the gains with sales of loses etc (which is what people do at year end -- they take gains and offset those gains with taking a loss thus rebalancing their accounts if they need to etc).

If you're not going to TRADE -- so you're not in and out of stuff all the time - You buy and hold for that magic ONE YEAR AND A DAY - which makes the trade Long Term Capital Gain.... taxed currently at 15% -- and the QUALIFIED dividends are currently taxed at maximum 15%... OR you don't do anything - you just let the stuff grow -- then you're only taxed on the dividends received . You have to make a lot of dividend income to really incur much tax due. 15% is pretty dang small amount - and you should be happy as a clam if you're picking up 10 grand a year in dividends and only owe 1500!

:cheers:

[CRCRFT78]

On top of the rollover IRA and the Schwab brokerage account, do you recommend also opening a Roth IRA and possibly more than one brokerage account? I'm trying to get the ball rolling but don't want to overwhelm myself either. I'm definitely having a good time reading all of the posts and absorbing all of this information.

[billscamaros]

What I can't answer for you - is - say you bought 10 shares at $100 ($1000) and it's now worth $3000 -- and you just want to take your original $1000 out and leave the "Gain" ------- and that is what I think you're asking...... and I have to tell you I honestly do not know the answer.

Not quite. So I still have 10 shares that are now worth $300/share. I want to leave the original $1000 in place and move the $2000 in "gain" to some other stock because I want to rebalance my portfolio. So I sell $2000 of the stock and buy $2000 of stock in some other company ... all within my brokerage account .... I don't receive any of this in actual cash payout. (And let's assume that it's a straightforward brokerage account .... not a regular or Roth IRA account. So I already paid tax on the original $1000.)

Let's assume that I had that original stock for a couple of years, so that $2000 gain is a long term capital gain - correct? And I immediately re-invested the gain into another stock. I guess that my question is: given this scenerio, when do I pay tax on my capital gains .... in the tax year that I make the capital gains, or when I actually take the payout from the account?

[billscamaros]

Hey billscamaros- You would pay taxes on the gains in the year they were incurred, the tax basis does not roll into your new stock purchase.

Ahhh .... I didn't read thru all of the posts prior to asking my latest question. So, the answer is 'yes' .... the capital gains are defined immediately upon selling the stock.

[GregWeld]

Not quite. So I still have 10 shares that are now worth $300/share. I want to leave the original $1000 in place and move the $2000 in "gain" to some other stock because I want to rebalance my portfolio. So I sell $2000 of the stock and buy $2000 of stock in some other company ... all within my brokerage account .... I don't receive any of this in actual cash payout. (And let's assume that it's a straightforward brokerage account .... not a regular or Roth IRA account. So I already paid tax on the original $1000.)

Let's assume that I had that original stock for a couple of years, so that $2000 gain is a long term capital gain - correct? And I immediately re-invested the gain into another stock. I guess that my question is: given this scenerio, when do I pay tax on my capital gains .... in the tax year that I make the capital gains, or when I actually take the payout from the account?

When you'd take the action to SELL the stock - that very instant if you have a gain - you've got a taxable event. So let's say you'd bought stock in 2009 and sold some for a gain in 2012 -- you'd have a taxable event in 2012 to report (provided it's in s normal account for this discussion). Doesn't make any difference that you rolled it into another stock - you took the gain. That help??

[GregWeld]

On top of the rollover IRA and the Schwab brokerage account, do you recommend also opening a Roth IRA and possibly more than one brokerage account? I'm trying to get the ball rolling but don't want to overwhelm myself either. I'm definitely having a good time reading all of the posts and absorbing all of this information.


Jose -- A ROTH IRA is the best thing that ever happened to the American SAVER.... because you could put $4000 in there and it could go to a MILLION and upon retirement (proper age per the rules) you could pull out the retirement amount (again - allowed by the rules) and have NO TAXES....

Dude! It just doesn't get any better than that!

So yes - by all means - if you qualify for - and can contribute to a ROTH - HELL YES! Pound it! That's free money!

[billscamaros]

When you'd take the action to SELL the stock - that very instant if you have a gain - you've got a taxable event. So let's say you'd bought stock in 2009 and sold some for a gain in 2012 -- you'd have a taxable event in 2012 to report (provided it's in s normal account for this discussion). Doesn't make any difference that you rolled it into another stock - you took the gain. That help??

Yes ... that answers the question! Thanks again for your insight and your willingness to share it!

[68 stang]

Yes Greg that all makes sense to me. I just have 2 more questions.

What to do when the FED raises the interest rate?

Would you sell your shares in a company if the management team starts to leave the company, and it has been a proven performer?

[GregWeld]

Yes Greg that all makes sense to me. I just have 2 more questions.

What to do when the FED raises the interest rate?

Would you sell your shares in a company if the management team starts to leave the company, and it has been a proven performer?


I'll do NOTHING once the FED starts to raise interest rates... because that would mean that the economy is IMPROVING so stocks will get a nice boost from that (MY GUESS ONLY SINCE WE DON'T KNOW). But maybe by the time the FED gets back to 2 or 3% -- I might start thinking about thinning (raising cash) so I can be ready to buy more bonds. BUT Remember that for most of you - you're on the 20 - 30 - 40 year plan... and steady and not moving around is what is going to work best for you.

If the economy is good - then you're stocks should provide you with growth and that nice dividend. Compounding that dividend is - over time - what works.

What most people do is buy at the top - and sell at the bottom - and then buy something else at the top and sell low etc. You really can't "time" the market or when it's going move - you'll always be behind the curve. SO for 99.9% of investors (including me) they're better off just staying where they are and putting NEW MONEY into the alternative (Bonds/CD's etc).



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

If the news is bad on a company - and the board is firing the heads etc because of it - I'd bail.... Otherwise you're gambling that the "new guys" can right the ship. I'd rather be in shares that don't have that issue.

[Woody]

Greg,

You have mentioned in a couple of your posts that you believe Apple is priced for perfection. A few of questions.

Does that mean you think it is currently over-valued?

Would you buy it now if you did not own it already?

Can you take us through your thought process in determining why it is priced for perfection.

You mentioned that the PE is roughly 14 and the overall market PE is about 15. Would that not indicate it is slightly undervalued or am I misinterpreting the use of the PE.

Thanks

[GregWeld]

Greg,

You have mentioned in a couple of your posts that you believe Apple is priced for perfection. A few of questions.

Does that mean you think it is currently over-valued?

Would you buy it now if you did not own it already?

Can you take us through your thought process in determining why it is priced for perfection.

You mentioned that the PE is roughly 14 and the overall market PE is about 15. Would that not indicate it is slightly undervalued or am I misinterpreting the use of the PE.

Thanks


Good question -- and buy the way (pun intended) -- I'm not trying to be or going to be the threads "stock guru" -- but the question is put in a fashion that is the correct (IMHO) way so that we can discuss what something means. We'll use this particular stock - but it's not a recommendation - rather - it's a discussion of thought process to be applied to ANY stock.

The statement "priced to perfection" is not a PREDICTOR of price - nor does it set the current price of a stock (in my mind)... what it does say to me is this:

IF ANYTHING HAPPENS - a "sales miss" - a "product slip up" - a "profit decline" etc -- THE STOCK GETS HAMMERED.

I would buy APPLE on a price decline -- why? Because I think there is a huge shift to their products and the way they work. They're the market makers, not the market followers - and I like that in a company - ESPECIALLY in TECH. Apply that thought to any company -- are they the "best of breed" or are they "me too's"? I like best of breed.

So the statement priced to perfection is just generally used as a "buyer be ware" statement - that the MOMENTUM in a stock is based on everything CONTINUING to go their way. The EXPECTATIONS are very high and the company MUST perform at 100% or even better.

NO I DO NOT THINK IT IS OVERVALUED -- If I did - I'd be a seller... rather than a "holder" -- BUT -- I have taken my profits on this company and am mostly holding free money in the name. When someone buys today - they're betting the stock can and will rise from here. That's a question NOBODY can answer. My GUESS is that they can...

OKAY ---- INVESTING 102 will give you this THOUGHT PROCESS.

One share of a stock trading at 4 or 500 dollars per share and no dividend.

How many shares can you buy? 10? 20? 30?

So let's use the 30 share number. If the stock goes up 10% and it's $400 a share - you have a $40 per share gain - X's 30 ='s $1200 paper gain.

REALLY? 12 GRAND invested to MAYBE make 1200?

So the same 12 Grand invested in Annaly Capital Management (NLY) just to use ONE EXAMPLE ONLY -- would buy you 700 shares (@ $17 a share) and pays you .57 per share - per quarter - or - DRUM ROLL -- $1600 a year!

So that's the problem -- IF -- big if -- you're a beginning investor - and prefer NOT to gamble on pure capital gains - but would prefer to plod ahead... Personally -- I do "both" -- but it depends on your risk tolerance and how much you have to invest etc.

Now -- if you have 12 grand to invest in one stock - that should be only 5% of the total you have to invest - so you should have around 200 grand. At that amount - I think it's probably "okay" to have one stock like this in your portfolio. But if you only have 50 grand to play with... this is pretty "rich".

[camcojb]

Greg,

if Congress raised taxes on capital gains to say 35% do you think that would have investors sitting on their investments instead of selling, or moving into a foreign market? Or would it have little effect on the way things are going? I would think that this move would not bring more revenue in necessarily, it may have the opposite effect.

[GregWeld]

Greg,

if Congress raised taxes on capital gains to say 35% do you think that would have investors sitting on their investments instead of selling, or moving into a foreign market? Or would it have little effect on the way things are going? I would think that this move would not bring more revenue in necessarily, it may have the opposite effect.

Greg enters the room with a funny hat/towel wrapped around his head - sits down at small table and stares into his crystal ball.... soft music (like Led Zeppelin or ZZ TOP) playing in the background...

And pronounces.......... wait for it.........


I have absolutely no idea.


IF -- HUGE - GIANT - LARGE - MONUMENTAL "IF" - Congress can do ANYTHING - they'll do it ALL WRONG. That's my bet. Don't even get me started with those 535 assholes - 536 if you count the head asshole.

If taxes revert to the code (we're currently enjoying a tax holiday) then it's a math issue. The TOTAL RETURN - vs some other investment. And there are calculators that will calculate the return you have to have, say, in a dividend at "X" tax rate to equal the return on a tax free bond.

So as interest rates RISE -- BOND face values will get hit first... since they are a known time - known interest rate... they'll sell off - because they have an inverse relationship - their face value has to DECREASE in order to pay the equivalent "new" interest rate. Too complicated??

Stock prices will no doubt DECREASE -- based on the same issue - the price has to go down in order to keep the dividend % "higher". Again - an inverse relationship. And if the dividend is now taxed at ordinary income levels -- people will sell and look for "other" investments - thus the price will decline (more sellers than buyers - and that in a nutshell is ANY MARKET FOR ANYTHING). They will also decrease because as the cost of money rises - it come out of operating profits... and the costs increase faster than the ability to raise prices and margins etc.

I'm very heavily invested in stocks and bonds - and I would tell you that I'd begin to move from taxable investments to more tax free income - but I'm LIVING off my dividend and interest income. If I was in an IRA/401K situation - I'd do absolutely nothing because those dividends etc aren't taxed until withdrawal.... so like most answers to these questions -- it all DEPENDS... age - length of time - what kinds of accounts - etc.

[camcojb]

Greg enters the room with a funny hat/towel wrapped around his head - sits down at small table and stares into his crystal ball.... soft music (like Led Zeppelin or ZZ TOP) playing in the background...

And pronounces.......... wait for it.........


I have absolutely no idea.


IF -- HUGE - GIANT - LARGE - MONUMENTAL "IF" - Congress can do ANYTHING - they'll do it ALL WRONG. That's my bet. Don't even get me started with those 535 assholes - 536 if you count the head asshole.

If taxes revert to the code (we're currently enjoying a tax holiday) then it's a math issue. The TOTAL RETURN - vs some other investment. And there are calculators that will calculate the return you have to have, say, in a dividend at "X" tax rate to equal the return on a tax free bond.

So as interest rates RISE -- BOND face values will get hit first... since they are a known time - known interest rate... they'll sell off - because they have an inverse relationship - their face value has to DECREASE in order to pay the equivalent "new" interest rate. Too complicated??

Stock prices will no doubt DECREASE -- based on the same issue - the price has to go down in order to keep the dividend % "higher". Again - an inverse relationship. And if the dividend is now taxed at ordinary income levels -- people will sell and look for "other" investments - thus the price will decline (more sellers than buyers - and that in a nutshell is ANY MARKET FOR ANYTHING). They will also decrease because as the cost of money rises - it come out of operating profits... and the costs increase faster than the ability to raise prices and margins etc.

I'm very heavily invested in stocks and bonds - and I would tell you that I'd begin to move from taxable investments to more tax free income - but I'm LIVING off my dividend and interest income. If I was in an IRA/401K situation - I'd do absolutely nothing because those dividends etc aren't taxed until withdrawal.... so like most answers to these questions -- it all DEPENDS... age - length of time - what kinds of accounts - etc.
thank you Greg. Having a discussion regarding this on another board, and not sure that raising capital gains like that wouldn't have unintended consequences.

[GregWeld]

thank you Greg. Having a discussion regarding this on another board, and not sure that raising capital gains like that wouldn't have unintended consequences.

Oh - I think it will have major consequences... and that's the problem with messing with the tax code - people can't plan and can't invest not knowing what is going to be next year or the year after.

Congress ends up doing what is POLITICALLY CORRECT at any given time.... rather than doing what is the RIGHT thing for all time. They are a collective group of useless morons. Sadly we voted for them.

So politically I would EXPECT them to vote for higher taxes -- and what that does is once again - affect the people that don't understand what's going on - the most. In their effort to ever spend MORE AND MORE of your money - they'll grab every last dollar they can see or get their hands on. And when they do that - the PEOPLE are smarter - and they just move in a different direction. Like the 10% "luxury tax" the idiots put on boats and cars and furs a few years back --- the only people that hurt was the boat builders and the people that worked there. Congress is reactive not proactive. They never get it right.

However - I will come back to what I've always said about taxes.... they only take a percentage so I'm happiest when I have to pay - because that means I've made money. End of story. I'd prefer to pay them the maximum over the minimum. To think of it any other way - is just wrong headed.

[camcojb]

Oh - I think it will have major consequences... and that's the problem with messing with the tax code - people can't plan and can't invest not knowing what is going to be next year or the year after.

Congress ends up doing what is POLITICALLY CORRECT at any given time.... rather than doing what is the RIGHT thing for all time. They are a collective group of useless morons. Sadly we voted for them.

So politically I would EXPECT them to vote for higher taxes -- and what that does is once again - affect the people that don't understand what's going on - the most. In their effort to ever spend MORE AND MORE of your money - they'll grab every last dollar they can see or get their hands on. And when they do that - the PEOPLE are smarter - and they just move in a different direction. Like the 10% "luxury tax" the idiots put on boats and cars and furs a few years back --- the only people that hurt was the boat builders and the people that worked there. Congress is reactive not proactive. They never get it right.

However - I will come back to what I've always said about taxes.... they only take a percentage so I'm happiest when I have to pay - because that means I've made money. End of story. I'd prefer to pay them the maximum over the minimum. To think of it any other way - is just wrong headed.

those damned unintended consequences coming back to haunt 'ya. :yes: Thanks Greg, appreciate the input.

[sik68]

I am young (28, everyone on this forum tells me this is young) and have been biding my time until 2012 to convert my SEP into a Roth IRA...my wife started school, so her not working lowers our tax rate. Seems to be prudent to switch to a Roth early in your investing career or other low tax situations, when your income is less. Give as little to the man as possible.

The Roth cynics have warned me that in the long run, congress will not be able to keep their hands off the Roths and will implement a tax to get us again at withdraw. Can't say I disagree with their cynicism but I'm sure you will still come out way ahead vs. not converting in the first place.

PS Greg, I put some of my money where your mouth is today...did you feel the bump in your portfolio? :P

Steven

[realcoray]

I am young (28, everyone on this forum tells me this is young) and have been biding my time until 2012 to convert my SEP into a Roth IRA...my wife started school, so her not working lowers our tax rate. Seems to be prudent to switch to a Roth early in your investing career or other low tax situations, when your income is less. Give as little to the man as possible.

The Roth cynics have warned me that in the long run, congress will not be able to keep their hands off the Roths and will implement a tax to get us again at withdraw. Can't say I disagree with their cynicism but I'm sure you will still come out way ahead vs. not converting in the first place.


It's hard to predict what will happen but it seems unlikely that they'd go after roths as they are essentially for the middle class, and Congress has shown an aversion to doing anything that will bother older people, the people who tend to vote, and by the time they would consider this (after they look at the various other ways being talked about in this thread), most people with strong Roths would be part of that group.

[GregWeld]

I am young (28, everyone on this forum tells me this is young) and have been biding my time until 2012 to convert my SEP into a Roth IRA...my wife started school, so her not working lowers our tax rate. Seems to be prudent to switch to a Roth early in your investing career or other low tax situations, when your income is less. Give as little to the man as possible.

The Roth cynics have warned me that in the long run, congress will not be able to keep their hands off the Roths and will implement a tax to get us again at withdraw. Can't say I disagree with their cynicism but I'm sure you will still come out way ahead vs. not converting in the first place.

PS Greg, I put some of my money where your mouth is today...did you feel the bump in your portfolio? :P

Steven

Steven -- I agree with RealCoray that the idiots in congress would try to suddenly backtrack on one of the greatest savings inventions of all time... and they'd have legal fights for years from huge groups of people - so I really doubt there's going to be any changes to that program.

On the other note --- I'm glad you're getting started... but my portfolio went backwards today (in the one Schwab account I always use for this thread) because of the Xmas gift I got my lovely wife Gwen -- I'd written a check out of this account to pay for it. BUT -- my bond account rose nicely with a whole slew of interest payments on the first of the year - so all in all a "wash". :cheers:

[GregWeld]

PS -- STEVEN --- Very smart move at your age to do the ROTH conversion! You have say 40 years to retirement - and hopefully you live at least another 30 years after that! So you have many many great years for that ROTH to grow absolutely tax free.... It just doesn't get any better than that!

[CRCRFT78]

I also jumped on the Roth IRA bandwagon today. Now I've got to get these accounts stuffed with some money and look towards acquiring some other assets that pay. Made a couple of stock moves (sell the duds and picked up some new ones) also. Looking forward to a financially fit 2012. We'll see where its at this time next year.

[GregWeld]

I also jumped on the Roth IRA bandwagon today. Now I've got to get these accounts stuffed with some money and look towards acquiring some other assets that pay. Made a couple of stock moves (sell the duds and picked up some new ones) also. Looking forward to a financially fit 2012. We'll see where its at this time next year.

That's what I'm talkin' 'bout!! Good for you Jose!



I had an opportunity to spend some time with my kids while we were down in Scottsdale this last week -- Alex's GF's Dad is a broker - owns his own financial firm....(has no money and went broke recently because he gives advice but doesn't follow his own - the dumbass!) and I had the paperwork with me from just having closed on a commercial building for my Brother in law (I'm the banker, not the buyer). So we got talking over breakfast about "her" wanting to buy a new car etc. Her car is already a newer 2006 Mustang with low milage - SO I'm saying "why"? Why don't you SAVE those payments (her's in going to be paid off next month) for the next three years and pay cash for a car when you're ready. So the "payments" talk came up -- and I whipped out my amortization schedule for this building - and showed her (and Alex) HOW MUCH INTEREST I'M GOING TO COLLECT OVER THE NEXT FIVE YEARS! They were shocked (they're only 25 year old) - and when they saw page after page of large monthly payments, and the breakdown of how much each month was interest, and HOW LITTLE was paying towards principal -- I think it woke them both up!

She's already a "saver" -- but I was trying to show that if they put new cars off now - and saved instead -- that they could buy all kinds of cars LATER when it really matters more.

[GregWeld]

This is just a coincidence but I saw this article this afternoon - using APPLE and McDonalds as it's subjects - and happens to use these two to make the very same "argument" that I had posted earlier about APPLE VS ANNALY CAPITAL MANAGEMENT... just pointing out that the dividend was a "sure thing" vs the possible capital growth...

Not saying ANY of this is RIGHT OR WRONG - just pointing out the THINKING that goes into investing... and I think that's what we are using this thread for...



http://seekingalpha.com/article/317249-mcdonald-s-will-outshine-apple-in-2012

BTW -- I read all of these kinds of articles just for "thinking" -- I don't use ANYBODY else's reasoning or stock tips etc to make up my own mind. I just try to find things to think about and keep in mind when I'm making CHOICES because that's really what stock picking is all about - choices... And trying the best we can to make "informed" choices and understand those choices.

[asifnyc]

hey Greg,

I opened a T Rowe Price account 5 years ago. It's one of those accounts that automatically deducts money from your checking account every month to invest in mutual funds. I have 2 funds. A domestic eqty index and an international eqty index. after 5 years they are flat (with todays near 200pt gain they are just slightly above my contribution).

I think I want to dump them and put the money in a few individual stocks as we've been discussing. The current account I have with T Rowe doesn't enable me to trade individual stocks. I have to open a brokerage account for that. No biggie but my question is, should I open the brokerage account with T Rowe for stocks or should I go with someone else?

thanks!

[GregWeld]

hey Greg,

I opened a T Rowe Price account 5 years ago. It's one of those accounts that automatically deducts money from your checking account every month to invest in mutual funds. I have 2 funds. A domestic eqty index and an international eqty index. after 5 years they are flat (with todays near 200pt gain they are just slightly above my contribution).

I think I want to dump them and put the money in a few individual stocks as we've been discussing. The current account I have with T Rowe doesn't enable me to trade individual stocks. I have to open a brokerage account for that. No biggie but my question is, should I open the brokerage account with T Rowe for stocks or should I go with someone else?

thanks!


Your story is repeated all too often - and is the #1 reason I detest Mutual Funds... they draw people into believing that they're "well invested"...

RE Brokerage -- as long as it's a low cost brokerage and you can invest on line etc -- I'm not a fan of one over the other. It's a very competitive arena out there and most play follow the leader. I use Schwab for some of my accounts just because there's one just down the street.

It might be easier for you to do T Rowe -- and if one department talks to the other - they might allow you to just have your work withdrawals go into a "sweep account" (cash) and then allow you to transfer from time to time into your other account... but be very careful in how this is handled. IRA's and 401's etc must STAY within a IRA or 401 account...

[billscamaros]

Here's a tidbit that I'll toss out ..... it doesn't have anything to do with the overall thread topic - Investing 102 - but it is relative to this thread and it's timing in my world ......

I mentioned in my first post in this thread that the topic has motivated me to look at my retirement accounts. I had an IRA account with some dollars that were sitting in "cash reserve", and so I used the theory of this thread to move that cash into several stocks. Then, I looked at my current 401K and rebalanced those funds so that hopefully this coming year I'll see some growth there, other than my contribution.

Since I was on a roll, I decided to contact two previous employers concerning any pension benefits that I may have. I had rolled my retirement account dollars from one employer to the next as I moved thru my career, but I hadn't thought about much beyond that. So I contacted my employer from the 1989 thru 2000 timeframe and asked about any pension benefits, beyond my 401K. Lo and behold, when I retire at 65, I'll receive a small pension from them! Feeling good, I called my 1983 thru 1989 employer ... yep, pension cash from them also once I retire.

Although I'm only 52 and don't plan to retire until my mid-60's .... I'll pull in close to $800/month more than I had anticipated. All due to the energy around this thread!!!!

Now for that old man I cut grass for when I was in elementary school ......

[GregWeld]

Here's a tidbit that I'll toss out ..... it doesn't have anything to do with the overall thread topic - Investing 102 - but it is relative to this thread and it's timing in my world ......

I mentioned in my first post in this thread that the topic has motivated me to look at my retirement accounts. I had an IRA account with some dollars that were sitting in "cash reserve", and so I used the theory of this thread to move that cash into several stocks. Then, I looked at my current 401K and rebalanced those funds so that hopefully this coming year I'll see some growth there, other than my contribution.

Since I was on a roll, I decided to contact two previous employers concerning any pension benefits that I may have. I had rolled my retirement account dollars from one employer to the next as I moved thru my career, but I hadn't thought about much beyond that. So I contacted my employer from the 1989 thru 2000 timeframe and asked about any pension benefits, beyond my 401K. Lo and behold, when I retire at 65, I'll receive a small pension from them! Feeling good, I called my 1983 thru 1989 employer ... yep, pension cash from them also once I retire.

Although I'm only 52 and don't plan to retire until my mid-60's .... I'll pull in close to $800/month more than I had anticipated. All due to the energy around this thread!!!!

Now for that old man I cut grass for when I was in elementary school ......


That is the best friggin' news I've heard all year! Good for you Bill!

Funny how we ALL somehow manage to kind of "disassociate" ourselves from our retirement and the funds etc. Yet - it is one of the most important things that we can, and should, manage to the best of our abilities!

Simple functions such as just being AWARE of what the money is doing - or not doing - and then spending as little as a couple of hours here and there a YEAR - to make sure there is something there when you'll really want it. All to often people start to take control AFTER they have retired. WTF - the time to do that is NOW -- when most have TIME on their sides to make hay while the sun shines....

[GregWeld]

On another note --- Way back up in the thread - someone asked me about a couple of stocks -- that were "defense" related... I don't remember the names or who it was that asked - but my thought was to be careful with this sector because I think with a couple wars winding down and the budget cuts coming - that defense spending is most likely going DOWN not up.... And todays news confirms that...

That is news that needs to be "traded" --- because you can't sit on your hands for 10 years or so while a company shrinks... So if you own "defense" related stocks -- I'd be getting out of those. Boeing has commercial aircraft and hopefully their sales overall can continue to grow.

Boeing and other defense companies face shrinking Pentagon budgets. The Defense Department is currently trimming some $450 billion over the next decade, and cuts could go deeper.

[GregWeld]

So here's something that "newbs" to investing 102 might not understand --

You get up one morning and your stock is "down" for the day -- and everything else you have is UP... WTF? What's wrong with that stock?

Dividend paying stocks go "ex" dividend on a particular date - it's well known - and is announced in advance.... and once they pay the dividend - the stock goes down because many dividend players just want to pick up the dividend and then sell the shares... AND the company has just paid out CASH so that affects the balance sheet.

I'll use AT&T as an example - since it went "ex dividend" today and it's down .50 this morning.... Here's what the notice looks like.


Regular Dividend of $0.44 went Ex: T began trading ex-dividend today, payable to shareholders of record as of 01/10/2012.

[CRCRFT78]

Since you brought up dividends, is there a time frame of when you'll start to receive them if you own some shares of that stock? If you bought Monday and Friday they're paying dividends, will you receive that? Lastly, is there a schedule when dividends are paid?

[James OLC]

Since you brought up dividends, is there a time frame of when you'll start to receive them if you own some shares of that stock? If you bought Monday and Friday they're paying dividends, will you receive that? Lastly, is there a schedule when dividends are paid?

The Ex-Dividend date is a declared date which you must purchase the shares on or before. It's a couple of days prior to the technical date of record to receive the dividend (to allow for processing, etc.) Most (or probably all) dividend paying companies press release the declared dividends that will be and the ex-dividend date. I am not sure if all have fixed schedules (or if there is some latitiude allowed to ex-dividend dates) but all of mine are the same month-to-month or quarter-to-quarter.

[GregWeld]

Since you brought up dividends, is there a time frame of when you'll start to receive them if you own some shares of that stock? If you bought Monday and Friday they're paying dividends, will you receive that? Lastly, is there a schedule when dividends are paid?

Each company is separate - and pay dividends on different days. So you'd have to look up each company and see what their pay dates are.

Most pay quarterly.

They will make an announcement as to what the "ex dividend" date is... and if you own the shares prior to that day.. you will get the dividend even if you sold it after the ex date... but the actual pay date is sometimes weeks after the "ex" date.

Confusing, I know. But we're "INVESTING" not trading. There are traders that will just attempt to trade around the dividend - by coming in the day before - and selling shortly after - and picking up the dividend and perhaps a few pennies gain but they're very sharp - and have all the details down.

Here's a website that you can get that kind of info - such as the declare date - the ex date - the pay date...but you'll have to check each company separately. This sites info is easy to read - just scan down and it gives you all the pertinent info.

http://www.dividendinvestor.com/

[Sieg]

I'll use AT&T as an example - since it went "ex dividend" today and it's down .50 this morning.... Here's what the notice looks like.

Regular Dividend of $0.44 went Ex: T began trading ex-dividend today, payable to shareholders of record as of 01/10/2012.

Greg,

Since I'm close to pulling the trigger on T is the first of the week traditionally a good time to buy in?

Sprint at $2.19 today.........short-term opportunity?

[GregWeld]

Greg,

Since I'm close to pulling the trigger on T is the first of the week traditionally a good time to buy in?

Sprint at $2.19 today.........short-term opportunity?


Sorry -- I just don't pay any attention to that kind of stuff. T (AT&T) trades in a very narrow range -- whether I buy it down .25 or up .35 just isn't important to me... I'll get that back the first dividend payment -- which is what I'm after.

With the amount of shares I buy (1000's of shares in a name) I tend to scale in and scale out... so if I want to own 10,000 shares -- I might start with 5000 -- then buy another 2,000 on a big down day (market wise)... But that's just because it's the way I work. Not for any other reason than that. I never just punch the button and buy or sell all 10,000.

That's a little different "level" than most on here will be doing. So I don't think saving - or trying to save - .50 a share on a 500 share buy is very important. The important part is that next year - or 3 years out - the stock will be higher and I'll have gotten all those dividends.

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


RE: Sprint -- again -- that just isn't the way I invest. I don't "gamble"... so unless the stock is something I think is a good -- make that a great -- long term investment... I just don't even look at them. I'd rather "miss an opportunity" than I would wake up in the middle of the night wondering if I'm getting creamed in the morning.

I also look at the possible gain scenario.... so If I was going to buy 1000 shares at 2.15 and they went up a buck.... I'd have a gain of $1000 and since that would be my "goal" (short term pop) then I'd have to sell - now I have a SHORT TERM CAPITAL GAIN (since I'm not trading IRA/401) and now I have an income tax event taxable at ordinary income tax rates rather than the 15% long term capital gains rate.

Just trying to explain so that others can "think" about all of these things....

[Sieg]

Thank you - I'm guessing I'm not the only one that can have a tendancy to micro-manage the purchase price of a stock......so hopefully there's a lesson learned from the question.

Then there's the Sprint or XXX stock get rich quick gambling temptation and risk vs net reward factoring - another lesson.

[GregWeld]

Thank you - I'm guessing I'm not the only one that can have a tendancy to micro-manage the purchase price of a stock......so hopefully there's a lesson learned from the question.

Then there's the Sprint or XXX stock get rich quick gambling temptation and risk vs net reward factoring - another lesson.

Yep -- and that was the point of my response.... That "we're" not chasing pennies... "we're" investing in long term capital growth and dividend streams. The pennies aren't really important long term.

I used to chase every opportunity - and buy stocks and flip them out up 50 cents or a buck... I paid the taxes on all that - and then looked back and saw that while I was making 50 cents a share -- the shares have climbed 40%... and had I just bought the first time and let 'em ride - I'd have made A LOT more money. I stopped doing that in 1998 to be exact... and started to invest . It's a much better strategy.

Now - if everyone on here already had 3 or 4 or 5 million - then we'd be discussing the next hot opportunity.... because at some point "you have enough" and can now truly "afford" to take some risk...(gambling) and then we'd be having an entirely different discussion.

[Sieg]

Now - if everyone on here already had 3 or 4 or 5 million - then we'd be discussing the next hot opportunity.... because at some point "you have enough" and can now truly "afford" to take some risk...(gambling) and then we'd be having an entirely different discussion.
I'll pm you....................:rofl: :rofl: :rofl:

[GregWeld]

I'll pm you....................:rofl: :rofl: :rofl:



I don't have the next hot opportunity.... :D



I've hit a couple in the past... but don't have any in the works now. In fact, I quit even looking for them. I'm too old. :willy: :unibrow:

[GregWeld]

Greg,

Since I'm close to pulling the trigger on T is the first of the week traditionally a good time to buy in?

Sprint at $2.19 today.........short-term opportunity?


Went back to make sure I hadn't said anything too "off" -- and this got me to thinking about the "short term" Sprint question.

Think about this... and I'm just tossing this out there as a way of thinking rather than sitting down and doing all the math required etc.

A $2.15 stock.... Hold that thought -- AT&T pays a dividend of .44 per quarter -- so they pay you $1.76 per share per year in income.... so in 5 stinky quarters you'd have made in dividends what the cost of the Sprint shares were. By the 6th quarter (one and a half short years) you're ahead of the game... and you didn't have do to a thing.


One is "sure money" - the other is a gamble... If it's in my IRA/401K -- I'll take the sure money. If I have spare money or just some "what the hell" money - then the Sprint play (pick a name here) can be entertaining and some times you'll make a couple bucks.

[WSSix]

Well, I haven't been able to research stocks as much as I had hoped to by now but that's ok. I'll get to it soon enough. It is however the beginning of the year which for me means it is time to max my Roth IRA out for this year. It also means it is time to check out what my Roth has done over the past year. I have my Roth set up with Vanguard in their Target Retirement 2045 account. The good news is it is up. I've had this account since 2003 and haven't maxed it out each year. I've added what I could when I could. Now that I actually have a career, I can max it out with $5000 a year. According to the info on my account, since inception in 2003 my average annual returns have been (drum roll please)..... 5.32%

Honestly, I haven't a clue if this is any good or just how much my investment has returned as a whole ie I've put in a total of X and it's now worth Y which means my return is Z%. I'm having trouble reading the website and finding the info I want. Then again, is it important or is what I need to know the 5.32% part and that's it?

Over a 5 year period I've had both growth and dividend/earnings. More dividends/earnings than growth but only slightly.

[Sieg]

Went back to make sure I hadn't said anything too "off" -- and this got me to thinking about the "short term" Sprint question.

Think about this... and I'm just tossing this out there as a way of thinking rather than sitting down and doing all the math required etc.

A $2.15 stock.... Hold that thought -- AT&T pays a dividend of .44 per quarter -- so they pay you $1.76 per share per year in income.... so in 5 stinky quarters you'd have made in dividends what the cost of the Sprint shares were. By the 6th quarter (one and a half short years) you're ahead of the game... and you didn't have do to a thing.


One is "sure money" - the other is a gamble... If it's in my IRA/401K -- I'll take the sure money. If I have spare money or just some "what the hell" money - then the Sprint play (pick a name here) can be entertaining and some times you'll make a couple bucks.

Now I feel much better about the spare change order at $2.19 for 1K............:hail: :woot:

[GregWeld]

Now I feel much better about the spare change order at $2.19 for 1K............:hail: :woot:


Well... this thread is all "theory" and ways to think about the market/investing. It's not the absolute "do this and don't do that" kind of thread...

And for people that want to play in the market I say go for it. I've done this for years so I understand it completely. I don't think there is a right way or a wrong way (well - yeah there is a wrong way) to try to make some money and each person has to find out what that is - what their risk tolerance is etc.

Along those lines -- my buddy wanted to get into the market - and we discussed all the things that we've discussed here.... and he can "take risk" no problem - so he says. The very first stock he buys is a splitter. LuLuLemon (LULU)... buys at $120 - and it splits 2:1 - and he's certain it's going to the moon from there... but instead it starts dropping... and it drops to $45 or so... and he's like a cat on speed over it. When it finally gets back to about 52 or 3 he sells it all...

The take away from that is he has now recognized something in himself that will stick with him -- his appetite for risk really wasn't what he thought it was.. so this was a cheap lesson for him. It will make him a better investor.

[Sieg]

What I've noticed about myself is that I tend to look at a risk like the Sprint buy as a gamble and challenge...........as to why it entices me to buy a stock like that I'm not sure as I DO NOT like to gamble in the traditional casino, card game, or sports fashion at all. I will wager on a game when my performance and skill is involved but don't really get a rush from it.

I don't consider myself lucky either which adds to "why the heck did I do that" factor. On a roulette wheel I've bet red 7 times in a row, switched to black 6 times and lost every time. :D

Help..............:D

[WSSix]

Well, I finally sat down and did some quick research on what companies I may be interested in. I tried to first come up with four different categories and companies within those categories that I use or like. I ended up blending some of them simply because I had no clue how they were officially listed. I chose petroleum/energy, utility, retail, and food. The retail and food ones got blended as you'll see. I haven't spent any money yet because I haven't opened the accounts etc. So these are just my choices of who I intend to invest in unless I can be convinced otherwise. I'm more than open to having my choices critiqued.

Petroleum- Chevron. High dividend and good growth over the last ten years. My first choice in gas for my vehicles is Chevron and Marathon. Marathon isn't doing so well stock wise though. I considered Exxon but their growth and dividend were less than Chevron.

Utility- Southern Company. Good dividend and good steady growth over the last ten years. They own Georgia Power and I'm biased towards all things Georgia. I considered Black Hills Energy(my current provider) and Con Ed based on Greg's recommendation. Southern Company has a slightly smaller dividend than Con Ed but more steady growth and again I'm biased so I like Southern Company.

Retail/Food- I'm in a tie right now between Walmart, Whole Foods, and CostCo. Walmart's dividend is nearly 100% higher than Whole Foods but their growth is flat. I'm aware they are trying to get into just the grocery store market and I think they will do well there. However, Whole Foods has tremendous growth over the last ten years. I also really like them even though I do not shop there. I do not foresee their popularity waning any time soon. If anything, I believe more people are going to shop there and the entire healthy/fresher food area of the market is going to grow. I also really like how they treat their employees. CostCo is another choice that has good dividend, good growth, and treats their employees in an excellent manner. So I'm really kind of torn between these three and am unsure which would be a better/wiser choice.

I looked into the soft drink segment as well because no matter how much health people declare soft drinks to be terrible for us, I doubt they will ever slow down sales enough to hurt. So again, my Georgia and Southern bias has stepped in an I'm looking at the Coca Cola Company(not Coke Bottling Company) and Dr Pepper. You can't get any more Southern than those two unless RC Cola can be found somewhere near you. It's basically a tie between the two with Coca Cola having a higher dividend and more history. So I think I'll lean towards Coca Cola. The only negative I see against it is that is costs a lot more than Dr Pepper. Does that really matter though? The dividends are paid out based on dollar amount not shares so unless the stock splits, cost shouldn't matter, correct?

For food, I wanted either Subway or Chic-fil-a but both are private so I looked at McDonal's and YUM Brands(Taco Bell etc). I'm going with McDonald's. Very high dividend, great growth, Greg's endorsement:bow: haha, and just like with soft drinks, people aren't going to stop slowing down their consumption of that stuff any time soon I feel.

So, how do those look to people in the know? Any suggestions or critiques are welcome like I said. I'm trying to learn and get involved but at the same time keep it simple.

I think I should also point out that I do own Halliburton stock. I work there and have money in the ESPP. I'm not including them though simply because I'm putting my money into them regardless since it's through the ESPP which is discounted. However, because I do own them I am not considering any of my competitors though there are some good choices in that segment. Schlumberger, Baker Hughes, and Weatherford to name the biggest ones. For those that don't know, we are service companies within the petroleum market. We are not petroleum companies. We are contracted with the petroleum companies like Chevron, Shell, etc. So I guess you could call it a subcategory of the petroleum market.

Thanks

[WSSix]

Well crap. Right after I posted I thought of another petroleum company to look into and now I am torn slightly. Occidental Petroleum has tremendous 10 year growth compared to Chevron but a much lower dividend. So which should I really pay attention to, dividend or growth? I'm leaning towards dividend because that's paid out and some what guaranteed where as growth may not be. Is that an ok way to look at it or not?

Conoco Philips is also on par with Chevron but their dividend is slightly lower so between those two, I choose Chevron.

[GregWeld]

Trey ---

Your thought process is right on the money... and that is really what investing is all about. NOBODY can pick the exact right company or exactly perfect sector/s to invest in. The key is to do exactly what you're doing.... All good names that you understand - you've done the comps - and now the only choice is which is the right one for YOU. One guy buys Exxon - the other guy buys Shell... if all things are fairly equal - you go with the one where you shop and do business with. Because in the end -- you're an OWNER of that company. You bought a piece of it. So if you're going to buy a company - shouldn't you buy the one you like personally? SIMPLE AS THAT.

What that does is gives you a peace of mind... and you're not freaking out over every little hiccup in the stock market.

I just bought Conoco (COP) - an initial smallish amount of shares. I'm a Chevron customer... and I might buy some of them as well.

Now to answer the growth and dividend question. The key metric for me is the TOTAL RETURN... and you can find those numbers for comparison sake. Usually for the last 1-3-and 5 year period.

So let's do a total return FIVE YEAR comp:

Chevron -- 80.9%

Conoco -- 27.3%

Exxon -- 29.7%

++++++++

Whole Foods -- 54.8% --- but the THREE YEAR is 642.1%

Costco -- 61.1%

Walmart -- 44.2%

++++++++

Coke -- 65.4%

Dr Pepper/Snapple -- no 5 year since it's a merger -- but 3 year is 137.6%

++++++++

Yum brands -- 122.4%

McDonalds -- 163.2%



Really - could you have gone very far wrong with ANY OF THESE?? With the exception of the Chevron where you'd be a lot farther ahead -- they would have all been good investments.

[GregWeld]

I forgot to include Occidental Petroleum!! Five year total return 110.1%


I'll add this information about what the TOTAL RETURN calculation is based on.....


The Total Return is the rate of return representing the price appreciation of a stock with cash dividends reinvested on the pay date for the most recent 1, 3 and 5 fiscal years.

[WSSix]

Thanks for checking out my thought process Greg. That's ultimately what I'm trying to learn as well. I'm not in this to get rich quick. I just want to hopefully make sound choices and know why they are sound.

Where can you find the total return numbers at on Google Finance or is it listed elsewhere? I used them for checking the numbers but didn't see a total return listed. I simply got my numbers by clicking on ten year and then looking at the dollar value and percentage in green, hopefully, listed next to the date range.

How important do you think having a history is in your opinion? Take Dr Pepper/Snapple for instance. It's only been around for 3 years but has shown good gains. Would lack of a history be something you'd see as a reason to maybe reconsider a particular stock? I'm guessing this requires more research into maybe how the company is structured and its business model or goals before anything more than a WAG can be given.

Thanks

[GregWeld]

Total return numbers came from Schwab website. I don't know if you can get to them without having an account.

I think the Google site % is share price gain only but I'm not sure. I do all the research using Schwab website since it's easy and gives me all the info I can use.

I've been writing in a manor that will just get people going and to show thought process and what you're doing is exactly what I've been preaching. Pick some sectors - compare some stocks - then go with what you feel. It's easy for someone else to talk you into buying this or that -- but that's not comfortable when they're going down or sideways. The person that did the research - can go back and reassure themselves why they picked what they did... and they can trust their own instincts.

Will they always be right - hell no - will they always pick the name with the best return - hell no.... but just looking at those stocks above should be enough to show anyone - that there is real power in those stocks... 40 - 50 - 60% returns... are nothing to sneeze at!


I think HISTORY is a great guide - not the only guide - but it's a very good predictor of future behavior. I can't see into the future - but a stocks history of good steady growth and dividend increases etc -- I can't fight that trend. Is it 100% right -- nope.... but it works until someone shows me a better way.

LUCK also plays a large part in investing. So if you're lucky - you can pick a name - and hit 400% returns... or more... but trust me when I tell you that when you're NOT lucky -- it sucks. Money is too hard to come by to watch it go down the drain.

Now -- Dr Pepper and Snapple are hardly new names or brands. The companies have a far longer history than the 3 years since the merger - and obviously they're having some success. But again -- I LIVE off my dividends and bond income - so I tend to pick "for certain" names over something else... but I'm OLD - and RETIRED - and have a big appetite for cash flow... :unibrow: :D I don't like to second guess myself - so if "I" am picking - I'll give up the "perfect chart" and a 1% difference in dividend payout - in order to just be happy and content. So even if Hansen Soda is going gangbusters - I'll buy Coke over it because I think I have some certainty.. So that's just the way I think. Remember too -- that I think differently NOW than I did 20 years ago -- and my personal situation is far far different than the 99%... So just keep that in mind. My thought process is probably more conservative than someone that's trying to hit a double - and has 30 years to go before they retire. But unless they have lady luck on their side -- my "method" is going to kick their ass. :D

[Sieg]

I don't have the next hot opportunity.... :D



I've hit a couple in the past... but don't have any in the works now. In fact, I quit even looking for them. I'm too old. :willy: :unibrow:
That's OK, I don't have the 3 or 4 or 5 million either. :D

Again thanks for creating this thread and generously sharing your knowledge, one of the most valuable threads I've read in years.

[WSSix]

Well, I intend on getting a Schwab account since I found their website easy to use. So I'll be sure to look up the info there. To me, and with my expectations, that's a better way to view a stock. After all, growth and payouts(dividend) create value/money which is what I'm trying to do. I'm tired of my money earning 0.crap in a money market account. I really like the way you approach stocks and investing Greg. It's easy and it produces results over the long run. Thank you for taking the time to educate all of us. If we ever meet and I hope we do as I really want to attend some of these events, dinner's on me.

Thanks

[GregWeld]

That's OK, I don't have the 3 or 4 or 5 million either. :D

Again thanks for creating this thread and generously sharing your knowledge, one of the most valuable threads I've read in years.

Stay thirsty my friend.....



:lol: :thumbsup:

[GregWeld]

Well, I intend on getting a Schwab account since I found their website easy to use. So I'll be sure to look up the info there. To me, and with my expectations, that's a better way to view a stock. After all, growth and payouts(dividend) create value/money which is what I'm trying to do. I'm tired of my money earning 0.crap in a money market account. I really like the way you approach stocks and investing Greg. It's easy and it produces results over the long run. Thank you for taking the time to educate all of us. If we ever meet and I hope we do as I really want to attend some of these events, dinner's on me.

Thanks


Your thanks is enough === really! I love this stuff... and I love that a few people might be better off down the road. The gift that keeps on giving.

Your philosophy is sound... you have a good grip on what to look for... and it really is pretty dang simple.

Just remember - the road winds around - it's not a drag strip... There will be periods of time you'll ask yourself what the heck? When that happens - you remember a couple thoughts.... when the stock price is lower - you're buying more shares with the dividends... So really what you'd like to see is for the stock to go down by about half - but keep paying a growing dividend - and then suddenly be worth double the year you retire. :lol: Of course that would only be in our dreams... but you know what I'm saying.

[GregWeld]

So, on MONDAY -- it's the start of what's known as "earnings season" - which always kicks off by ALCOA (aluminum) AFTER the close of the trading session (1:00 PM on the "best coast").

I mention this because EARNINGS are what drives the market higher or lower... and this will be the beginning of a glimpse, perhaps, of where we're headed. If earnings start to become UPSIDE surprises - then Katie bar the door... a rising tide floats all boats... BUT -- (I really hate the big butt!) -- if company after company starts to report sales or profit declines, or woes over european sales etc... then we'll sink like a rock.

So what's the Investing 102 reason for the post?

If you're NOT in the market -- you don't get the kick if things are going better than expected -- and if you are IN the market and things are worse than expected - then you're going to loose (on paper only) value. The PROBLEM IS -- nobody knows BEFOREHAND... and it's IMPOSSIBLE to "TIME" the market correctly. Trying to do so - puts you in an always "behind the curve position". You have to take a longer look at the market. It's like a YoYo... it goes up and down - daily - weekly - and from year to year... but the GENERAL DIRECTION has been - and continues to be - upward and onward. So if your view is next week.... good luck. But if your view is "I'll be retiring in 2020 and I'm going to die in 2050..... then forget all the gyrations and just get in.

Here's what I'd do if I'm putting "new" money to work... (which is really what you're doing - you're making your MONEY go to work!)... ALCOA has ceased to be the bellwether stock that it used to be.. but it can and does "move" the market. Remember that YOU are INVESTING - but you're playing in a market that can move with TRADERS... IF ALCOA reports decent numbers that spells good news for automotive and manufacturing (think car blocks - heads - trim - and window frames in houses etc... and all manor of stuff that uses aluminum) And it's an international player (think China)... If they report poopie numbers -- I'm going to be a BUYER! I want to buy when things go on sale... I don't want to pay high prices! I want to buy when everyone else is selling. Will I buy at the bottom ..... never (I'm not that lucky).... the minute I buy - "they" take it down some more... but I'll scale in (buy a little) kick back and wait to see what happens... and make another trade (I'll buy a little more, whether its up or down).

Remember -- if the dividend stays the same - and the price goes DOWN - the dividend PERCENTAGE rises.... so I'm getting paid MORE to hold the shares -- and they're shares I want to own long term anyway. I just got them cheaper (perhaps) - but the opposite is true if the shares RISE.. then the dividend percentage decreases... so pay attention to that! If the market is rising - then I should offset the smaller dividend with more capital growth - so really -- either way - it's almost a non issue.

If the market is off to the races.... I'll buy a bigger initial position...because when the earnings season settles down a bit - there will be days that will "let me in" (down days). If the market looks to be headed lower -- I'll buy in smaller steps so I'm not "ahead" of a falling market... the more it falls the more I buy but I'll wait until I'm seeing the next earnings season.

This might be a bit too much info... but I'm trying to just explain some stuff as we go along here. I don't know which way the market is going to go. Nobody does. We're all just guessing. SO what I'm saying here is my STRATEGY for buying "in general"... because I'm never going to get it exactly right. Those people that freak out and sell every time the market goes down are LOSERS... because their attitude is all wrong...

Much of the new money I've made lately - was money put to work in 07 and 08 when things were BLEAK... and while everyone else was selling -- I was buying a little here and a little there... This last month (December) I rebalanced some great growth positions (I sold 1000 APPLE up HUGE and kept 250 on) - spread out a bit more - kept my LTCG's down by offsetting with some sales of losses (Goldman Sachs has tanked and I owned a big position so I can sell some of that and offset the big gain (and I have more gain than I have loss so overall I'm ahead) while still holding some GS long term). That's just TAX PLANNING for me - because my money is not IRA/401K stuff.

BTW ----- I'm not buying ALCOA ---- I'm just talking about the 'market' in general.

[pw2006]

So, on MONDAY -- it's the start of what's known as "earnings season" - which always kicks off by ALCOA (aluminum) AFTER the close of the trading session (1:00 PM on the "best coast").

I mention this because EARNINGS are what drives the market higher or lower... and this will be the beginning of a glimpse, perhaps, of where we're headed. If earnings start to become UPSIDE surprises - then Katie bar the door... a rising tide floats all boats... BUT -- (I really hate the big butt!) -- if company after company starts to report sales or profit declines, or woes over european sales etc... then we'll sink like a rock.

So what's the Investing 102 reason for the post?

If you're NOT in the market -- you don't get the kick if things are going better than expected -- and if you are IN the market and things are worse than expected - then you're going to loose (on paper only) value. The PROBLEM IS -- nobody knows BEFOREHAND... and it's IMPOSSIBLE to "TIME" the market correctly. Trying to do so - puts you in an always "behind the curve position". You have to take a longer look at the market. It's like a YoYo... it goes up and down - daily - weekly - and from year to year... but the GENERAL DIRECTION has been - and continues to be - upward and onward. So if your view is next week.... good luck. But if your view is "I'll be retiring in 2020 and I'm going to die in 2050..... then forget all the gyrations and just get in.

Here's what I'd do if I'm putting "new" money to work... (which is really what you're doing - you're making your MONEY go to work!)... ALCOA has ceased to be the bellwether stock that it used to be.. but it can and does "move" the market. Remember that YOU are INVESTING - but you're playing in a market that can move with TRADERS... IF ALCOA reports decent numbers that spells good news for automotive and manufacturing (think car blocks - heads - trim - and window frames in houses etc... and all manor of stuff that uses aluminum) And it's an international player (think China)... If they report poopie numbers -- I'm going to be a BUYER! I want to buy when things go on sale... I don't want to pay high prices! I want to buy when everyone else is selling. Will I buy at the bottom ..... never (I'm not that lucky).... the minute I buy - "they" take it down some more... but I'll scale in (buy a little) kick back and wait to see what happens... and make another trade (I'll buy a little more, whether its up or down).

Remember -- if the dividend stays the same - and the price goes DOWN - the dividend PERCENTAGE rises.... so I'm getting paid MORE to hold the shares -- and they're shares I want to own long term anyway. I just got them cheaper (perhaps) - but the opposite is true if the shares RISE.. then the dividend percentage decreases... so pay attention to that! If the market is rising - then I should offset the smaller dividend with more capital growth - so really -- either way - it's almost a non issue.

If the market is off to the races.... I'll buy a bigger initial position...because when the earnings season settles down a bit - there will be days that will "let me in" (down days). If the market looks to be headed lower -- I'll buy in smaller steps so I'm not "ahead" of a falling market... the more it falls the more I buy but I'll wait until I'm seeing the next earnings season.

This might be a bit too much info... but I'm trying to just explain some stuff as we go along here. I don't know which way the market is going to go. Nobody does. We're all just guessing. SO what I'm saying here is my STRATEGY for buying "in general"... because I'm never going to get it exactly right. Those people that freak out and sell every time the market goes down are LOSERS... because their attitude is all wrong...

Much of the new money I've made lately - was money put to work in 07 and 08 when things were BLEAK... and while everyone else was selling -- I was buying a little here and a little there... This last month (December) I rebalanced some great growth positions (I sold 1000 APPLE up HUGE and kept 250 on) - spread out a bit more - kept my LTCG's down by offsetting with some sales of losses (Goldman Sachs has tanked and I owned a big position so I can sell some of that and offset the big gain (and I have more gain than I have loss so overall I'm ahead) while still holding some GS long term). That's just TAX PLANNING for me - because my money is not IRA/401K stuff.

BTW ----- I'm not buying ALCOA ---- I'm just talking about the 'market' in general.

Great post Greg! I love this stuff! I sold part of my ISRG investment (sold 300 and kept 200) last week and will be putting that money back to work soon.

[RECOVERY ROOM]

I already have some Alcoa..Lol

[Bucketlist2012]

That's OK, I don't have the 3 or 4 or 5 million either. :D

Again thanks for creating this thread and generously sharing your knowledge, one of the most valuable threads I've read in years.

:hail: :hail: Amen to that.. Most of my money was made during the Crash of 2008. i was lucky enough to have the balls during the opportunity of a lifetime..

But now it is mostly dividend payers in different sectors that fuel my income.. But i have to say, i am still hungry for more and the thread, and Greg's input on how he is doing things, is worth reading...Twice..:cheers:

[GregWeld]

I already have some Alcoa..Lol

Well Tracy -- I'm real sorry to hear that buddy... 'cause as an investment goes - it sucks bilge water. I'm a member of AA and that's their trading symbol... but I still wouldn't buy it!

[GregWeld]

:hail: :hail: Amen to that.. Most of my money was made during the Crash of 2008. i was lucky enough to have the balls during the opportunity of a lifetime..

But now it is mostly dividend payers in different sectors that fuel my income.. But i have to say, i am still hungry for more and the thread, and Greg's input on how he is doing things, is worth reading...Twice..:cheers:


Good to hear! I'm not a "contrarian" - but I do tend to buy when the other guys are running for their lives.... This same "habit" served me well with buying class A apartment complexes in Scottsdale, AriDzona during the savings and loan crisis days... We could buy them from the RTC or the lenders... for 50 cents on the dollar. Those where the days buddy -- Cash was king (still is)... and there were deals to be had if you had the cojones!

[GregWeld]

Great post Greg! I love this stuff! I sold part of my ISRG investment (sold 300 and kept 200) last week and will be putting that money back to work soon.

Great stock! Doesn't pay a dividend so I'm not buying it, but man that's been a good ride!

Intuitive Surgical (ISRG) -- 5 year growth 389%

Buddy -- ya only need to hit these every once in awhile to really explode your savings to the upside... the problem is finding them and getting in BEFORE the big growth hits. Lucky you! :thumbsup:

[RECOVERY ROOM]

Well Tracy -- I'm real sorry to hear that buddy... 'cause as an investment goes - it sucks bilge water. I'm a member of AA and that's their trading symbol... but I still wouldn't buy it!

Thats why I'm a regular reader of this thread...And still working like a dog every day. (Its going to be sold)

[GregWeld]

Not to turn this thread into the "stock pick of the day" kind of thread....

There have been a couple of "picks" by readers that are "gambles" or at least that's what they are in my opinion....

So this is outside Investing 102 --- but a stock I might purchase if I want to stick with my usual - when they're selling, I'm buying - mode of operation...

I'm looking at Banco Santander (STD) which I used to own - but it's now down around $7 a share (terrible PRICE performance) - but at this depressed level - it's paying a 12+% dividend.

This wouldn't be for the faint of wallet/heart - because this bank is squarely in the eurozone fight for it's life...

[Bucketlist2012]

Good to hear! I'm not a "contrarian" - but I do tend to buy when the other guys are running for their lives.... This same "habit" served me well with buying class A apartment complexes in Scottsdale, AriDzona during the savings and loan crisis days... We could buy them from the RTC or the lenders... for 50 cents on the dollar. Those where the days buddy -- Cash was king (still is)... and there were deals to be had if you had the cojones!

I remember those days, but I was too stupid to have money.

Again, i was very fortunate to wake up at the right time in life, my 40's and around 2005.. You could see what was coming, and i was lucky enough to be patient, and to put lots of money out there in 2009...:woot:

I am still a novice, and have a lot to learn. my Wife doesn't think so because her Life is cushy sweet, But I know better... At 52, i am just getting started..2008/2009 was the opportunity of a Lifetime..Like a dream..

Ah Greg, the old days...Cash would just sit there and make double digits in the bank.. But I was too stupid then..Spending faster than I made it..Leverage....Not good..

But again, in between a kitchen remodel, my car being pampered at East bay Muscle cars, and all the other fires I have lit, i will be following your Tips, and advise...

I think while we get dividends for our money, things will be volatile for a while with the Euro, and sabre rattling all over the world.. the printing and spending. The Left vs. the Right.

And I am with you, a big Dip would just be a buy op for my dry powder..I had more powder, but I budgeted some cash for my car because ...well, I just had to..

Thanks for the thread, and advise..:cheers:

[GregWeld]

We all -- always have to have cash for car projects... Hell -- I've spent more money on cars and shops and tools and stuff than anyone I know but Charley...

BUT -- the ever present big butt -- I did that AFTER I could afford to. Like I always tell the kids -- "you can't spend your way to wealth". So I'm all for crazy car stuff... but it's my savings and investing that allows me to be able to do that. Another thing I tell my kids (they don't listen) is -- if you get $1000 for a bonus -- save HALF -- and blow the other half... but it's the saving half that will pay off in the end.

Had a buddy - he was budgeting $85K for a 3 year car build... and we got to discussing that. He had no money in the bank - but was willing to spend $85K building a car (that was going to cost him $125K.... like we all know!). He was YOUNG at 30 years old.... All I could do in my head was run the numbers that if he had the ABILITY to spend $85K in three years -- what he could SAVE and how much car he could build when he was 50 and pay cash and not bat an eye. But he started building the car anyway - then the overtime went away - then the house - and the car.... :rolleyes: :faint:

[Bucketlist2012]

We all -- always have to have cash for car projects... Hell -- I've spent more money on cars and shops and tools and stuff than anyone I know but Charley...

BUT -- the ever present big butt -- I did that AFTER I could afford to. Like I always tell the kids -- "you can't spend your way to wealth". So I'm all for crazy car stuff... but it's my savings and investing that allows me to be able to do that. Another thing I tell my kids (they don't listen) is -- if you get $1000 for a bonus -- save HALF -- and blow the other half... but it's the saving half that will pay off in the end.

Had a buddy - he was budgeting $85K for a 3 year car build... and we got to discussing that. He had no money in the bank - but was willing to spend $85K building a car (that was going to cost him $125K.... like we all know!). He was YOUNG at 30 years old.... All I could do in my head was run the numbers that if he had the ABILITY to spend $85K in three years -- what he could SAVE and how much car he could build when he was 50 and pay cash and not bat an eye. But he started building the car anyway - then the overtime went away - then the house - and the car.... :rolleyes: :faint:

I know.. Simple money management first..

I roll debt free except a small 4% fixed mortgage. no other debt.. Keep the emergency fund of dead presidents in a different account.. .5%, but it is my sleep at night cash knowing I have it.. I have an account with Schwab, no day Trading.. Keep an eye on my NET worth, rather than the amount of assets. you and I both know that what looks like a Rich life, may be someone Hocked up to their eyeballs , and they own nothing.. If people could understand that first, then they probably could invest, because they would have money.

i have watched this thread and waited to comment because i am still newish to investing. Sure I own McDonalds, and Kinder Morgan, and i rode the commodity train from 2008 to now, just like the Big Banks did..Holy crap, they made 55% on their money in the first quarter of last year, in commodities, with our money !! I just tagged along for the ride. :woot:

But you have skills brother...I can see that, and I thank you for sharing..:cheers:

[GregWeld]

Thanks Solar.... I really don't have any special knowledge or skills... what I'm trying to bring to the table is blue jeans and t-shirt common sense...

[Bucketlist2012]

Thanks Solar.... I really don't have any special knowledge or skills... what I'm trying to bring to the table is blue jeans and t-shirt common sense...

Haha..that is the skill...:thumbsup:

Taking some of the mumbo jumbo they try to feed us, and to break it down to common sense, and also adding in the yield numbers, and other knowledge about certain investments.. Sure they are accessable to everyone, but hearing it another way is refreshing.

I don't expect the answer to it all, but success leaves clues...And I am constantly hungry for knowledge..

Oh, and Solar used to be my Career until 2008 came along..

Medical issues, and the golden opportunity , changed all that, for the better...

[dhutton]

Just wanted to say thanks to Trey for starting this thread and Greg (and others) for taking the time to post here and get me going. I sold my Firebird a few months back and I've taken that money and opened a Schwab account. I picked 12 stocks (aka Don's Dirty Dozen :lol: ), a few have done well, a few are possibly shaping up to be turkeys but overall the advice here has gotten me on a good start.

Thanks again,
Don

[Bow Tie 67]

Two days to finish getting through this thread. :thumbsup: Thanks to all who have contributed, and a special thanks to Greg.

I have been planing on sitting down with my daughters ( 18 and 19 ) to talk finances. This thread lit a fire under my rump, I am excited as they are young enough were it can make an enormous difference.

As far as I go, I'm getting ready to move my Roth over to the brokerage account. The credit union is only paying .750% :wow: I want control of it.

Scottrade account:

Own Ford

Played with AMR recently ouch!!


Added:

Verizon
Merck
Altria
Kinder Morgan


I'm one that has never been diversified and always made the wrong choice.

I own SNWT not sure why just a click of the keyboard, Duh! look if you dare. reverse split to 5000 shares worth $12 now started with $1500

I'm liking the steady less risky approach to well known names.




....

[pw2006]

Not to turn this thread into the "stock pick of the day" kind of thread....

There have been a couple of "picks" by readers that are "gambles" or at least that's what they are in my opinion....

So this is outside Investing 102 --- but a stock I might purchase if I want to stick with my usual - when they're selling, I'm buying - mode of operation...

I'm looking at Banco Santander (STD) which I used to own - but it's now down around $7 a share (terrible PRICE performance) - but at this depressed level - it's paying a 12+% dividend.

This wouldn't be for the faint of wallet/heart - because this bank is squarely in the eurozone fight for it's life...

Don't let the ticker symbol scare you :D , this one looks very interesting. Lots of bad news has driven this stock down and they have been selling assets to increase their capital requirement. Despite the Euromess and selling some of their assets, they have stated that their intention is to maintain the dividend. They compare very favorably to their peers on many of the financial ratios (PE, price to book, net profit margin, etc), and they have a HUGE dividend. Like Greg said, this is not for the faint of heart as it will take a while for Europe to dig their way out of the current mess, but with a 12%+ yield, you are getting paid pretty good to wait.

[Bow Tie 67]

Here's a question, I refinanced to a 15 year fixed 3.375% loan. I'm paying extra principle to cut the loan to 9 years according to one online calculator an investment with a 6% return suggested go with investing vs buy down. Thoughts?

[ErikLS2]

Here's a question, I refinanced to a 15 year fixed 3.375% loan. I'm paying extra principle to cut the loan to 9 years according to one online calculator an investment with a 6% return suggested go with investing vs buy down. Thoughts?

Easist way to look at this is the extra money you're paying is effectively earning you that 3.375%. The general consensus is if you can earn more than that elsewhere then do that. You're already in the best mortgage position you can be in with that term and interest rate.

[Bucketlist2012]

Easist way to look at this is the extra money you're paying is effectively earning you that 3.375%. The general consensus is if you can earn more than that elsewhere then do that. You're already in the best mortgage position you can be in with that term and interest rate.
I am not positive, but I think that if you subtract inflation, you are paying even less for the money that you borrowed..Also the deductions..

For me, i have a 4% loan i could pay off, but my Investments pay way more.

Some people need a paid off house. But if the rate is that low, i personally won't pay it off..

If California does away with the mortgage deduction, i will have to re-crunch the numbers.

i think you have the sweetest of loans, and I would not put more on the principal..But that is such a personal decision.. Not my call... But IMHO

[Bow Tie 67]

I'm leaning that way, then start dumping it into my roth. That way its accessible in a dire emergency but earmarked for retirement.

Although I'm only 2 payments in, with interest being front loaded are there benefits to paying down the mortgage in the beginning for a set time frame?

[GregWeld]

Good questions and it's one of those "it depends" answers again.

Personally if I had a fixed rate - LOW - mortgage there's no way I'd pay it off or make extra payments.

The interest is tax deductible so your real cost of money is even lower than the "rate" you're paying.

Saving for IRA/401K is "tax deferred" growth and income. Even better if you get company matching participation!

ROTH is TAX FREE GROWTH AND INCOME

Your payment is fixed... so with inflation - your costs are going DOWN...

Time with dividend reinvestment and TOTAL RETURN is on your side to double or triple or quadruple your investments... and without the time on your side you'll never get that kind of return.

The "key" to homeownership WAS (note that key word - WAS) supposed to have growth of the home value... and when you calculate that return on the actual money invested (down payment and payments) you're getting the growth of the home price without having much of an investment.... etc. If it's paid for - and the value only goes up the average 4% a year -- then that's all you're making on your money and you can't spend it.

[RECOVERY ROOM]

Weld, Erik, Solar...the three wise men. Keep up the questions guys, The answers are getting good. I check this first anymore before the other sections

[Bucketlist2012]

Weld, Erik, Solar...the three wise men. I ran out of ink printing this thread off.. I think Ill invest in printer ink companies. That crap is expensive. Keep up the questions guys, The answers are getting good. I check this first anymore before the other sections

Tracy...Now that was funny...Those damn cartridges!!

Hey, thanks for including me, in the Wise men...I am trying my best to be one...

Mike V..:cheers:

[GregWeld]

This took me awhile to upload - etc - AND TO SEE THE CHARTS YOU'LL HAVE TO CLICK THE PDF LINK - But what I wanted to show was the relationship -- or the NON relationship between the P/E Ratio (price to earnings) and the RETURN on any particular stock. Back a few posts - someone asked whether or not I paid attention to the P/E's and I said - No... because they're really not relevant and it's too much information for me to keep track of - and I again referred to the "I" look at good charts / history / dividend / best of breed - over all these other technical "numbers.

What this chart is showing is the 3 MO - 1 YR - 5 YR Cumulative Return - and if you keep moving to the right - it shows the PRICE/EARNING RATIO.

What you'll see is really NO relationship of the 5 YR return vs the high or low P/E ratio. If I'd have chosen to NOT select a stock due to a "high" P/E ratio - I'd have LOST OUT on some very nice RETURNS.... So I just can't pay attention to too much data. Most of the time (like a political candidate?) they just don't tell the whole story.





33497

[Bucketlist2012]

[QUOTE=GregWeld;388919]This took me awhile to upload - etc - AND TO SEE THE CHARTS YOU'LL HAVE TO CLICK THE PDF LINK - But what I wanted to show was the relationship -- or the NON relationship between the P/E Ratio (price to earnings) and the RETURN on any particular stock. Back a few posts - someone asked whether or not I paid attention to the P/E's and I said - No... because they're really not relevant and it's too much information for me to keep track of - and I again referred to the "I" look at good charts / history / dividend / best of breed - over all these other technical "numbers.

What this chart is showing is the 3 MO - 1 YR - 5 YR Cumulative Return - and if you keep moving to the right - it shows the PRICE/EARNING RATIO.

What you'll see is really NO relationship of the 5 YR return vs the high or low P/E ratio. If I'd have chosen to NOT select a stock due to a "high" P/E ratio - I'd have LOST OUT on some very nice RETURNS.... So I just can't pay attention to too much data. Most of the time (like a political candidate?) they just don't tell the whole story.


Thanks. although I have the money management part together, and I have a lot of investments, I appreciate you taking the time to upload the information.
I still consider myself a Novice, and any info is appreciated.

I plan on both keeping my game plan going the way it is, and also adding to it. So now I have more food for thought.

One of the best threads:lateral: :cheers:

[James OLC]

One caution with using P/E as an evaluation tool is that it's only a fair(ish) comparison metric within a common industry. I don't use it much (if at all) either because the ratio is often completely out to lunch in the oil and gas exploration sector as different companies try to assess value for different, sometimes intangible assets and the ratios can get completely blown out of proportion.

[GregWeld]

Exactly James!

That's why I keep pounding the table - just buy good stuff - stuff you know and understand - the dividend really helps... and just keep life simple. No need to get all confused and caught up in what the talking heads are hyping this week on TV... 'cause "next week" for a time horizon isn't really important...

My old partner had a saying he used all the time... Figures lie - and liars figure.

All these numbers are "interesting" perhaps - but they don't tell you what you REALLY need to know to buy a stock, i.e., IS THIS SOMETHING YOU WANT TO OWN AND WHY.

[Bucketlist2012]

Exactly James!

That's why I keep pounding the table - just buy good stuff - stuff you know and understand - the dividend really helps... and just keep life simple. No need to get all confused and caught up in what the talking heads are hyping this week on TV... 'cause "next week" for a time horizon isn't really important...

My old partner had a saying he used all the time... Figures lie - and liars figure.

All these numbers are "interesting" perhaps - but they don't tell you what you REALLY need to know to buy a stock, i.e., IS THIS SOMETHING YOU WANT TO OWN AND WHY.

My Wife and I were just talking about why we own what we own. She is amazed that we can both build the wealth and draw monthly income, at the same time.

We Buy what we use, and what is busy.. Mc Donalds, Energy Transmission, Medical, ect...

Her family spends money that they don't have and then Envy those that do.
I have stopped helping because they won't listen..

Going to Europe twice, BMW, and lost the house, and no retirement...WTF.

And they keep asking for advise ???:willy:

My Wife asked how we are making money in this economy. I explained about the Yield's and being owner's and getting paid, ect...

After what has been a long term test, she gets it now.. i told her to just wait...

I am just getting started.:lateral:

[flagmissd]

Let me start off by thanking everyone that has posted on this thread. I don't know how many times I have looked at starting an online account only to not do it because I was afraid of I would mess it up. I have saw this thread on here before but did not bother to check it out till yesterday.

(What do car guys know about investing?):wow:

Could I ask your thoughts on:

Anheuser-Busch InBev NV (ADR)
61.14 +0.26 (0.43%)
Range 61.00 - 61.72
52 week 49.05 - 64.53
Open 61.62
Vol / Avg. 1.06M/1.03M
Mkt cap 97.47B
P/E 20.22
Div/yield 1.18/1.93
EPS 3.02
Shares 1.59B
Beta -
Inst. own 4%

The dividend is at 1.18 which seems high compared to all other company's that are mentioned on this thread. They also seem to have been steady in growth except for at the end of 2008. I think that spike and dip was cause by there sale to Inbev.

Any feedback would be great just to make sure I am reading the charts right and have not missed anything.

Thank you
Nathan

[GregWeld]

Let me start off by thanking everyone that has posted on this thread. I don't know how many times I have looked at starting an online account only to not do it because I was afraid of I would mess it up. I have saw this thread on here before but did not bother to check it out till yesterday.

(What do car guys know about investing?):wow:

Could I ask your thoughts on:

Anheuser-Busch InBev NV (ADR)
61.14 +0.26 (0.43%)
Range 61.00 - 61.72
52 week 49.05 - 64.53
Open 61.62
Vol / Avg. 1.06M/1.03M
Mkt cap 97.47B
P/E 20.22
Div/yield 1.18/1.93
EPS 3.02
Shares 1.59B
Beta -
Inst. own 4%

The dividend is at 1.18 which seems high compared to all other company's that are mentioned on this thread. They also seem to have been steady in growth except for at the end of 2008. I think that spike and dip was cause by there sale to Inbev.

Any feedback would be great just to make sure I am reading the charts right and have not missed anything.

Thank you
Nathan


Nathan -- Glad you're checking in!

The dividend on this stock is 1.93% which is L O W compared to the companies we've been discussing (most of which are 3% or above).... So unless the TOTAL RETURN is better than say (just to pick one or two) - Coke - or Pepsi - or one of the other beverage companies why settle for a 1.93% dividend? Unfortunately they only have a one year "history" for total return - and it's under 6% which is "okay" but is HALF of what Coke (KO) is... and over time - half is a big difference... so I wouldn't buy given other better comparisons out there. Just my opinion on the WAY I think... no other "opinion" than that. A simple comparison where the charts and dividend point to better (perhaps) opportunities.

[Sieg]

(What do car guys know about investing?):wow:

Like drug addicts, they too have to fund their addiction, this is a legal way to do it. :unibrow:

[GregWeld]

Going to Europe twice, BMW, and lost the house, and no retirement...WTF.


The great American way..... SPENDING their way to wealth!


:faint: :faint: :wow: :willy:

[Bucketlist2012]

The great American way..... SPENDING their way to wealth!


:faint: :faint: :wow: :willy:

Yes, but we know it did not work out well for them..

[GregWeld]

Yes, but we know it did not work out well for them..

That doesn't have a happy ending for anyone!

Can you imagine waking up one day -- and it comes QUICKLY as us older guys know -- and being forced to retire at 65ish / or getting laid off at that age -- and you OWE everybody for everything and you have ZERO savings etc. OMG! I can't imagine the feeling in the pit of your stomach that could come from that.

You'd look back at your life and think of all the Louis V... purses... and the lease payments for cars you never owned... and the 25 years you still owe on the last refi of your house (that should be paid for by now!)..... Would all of that "lifestyle" put a smile on your face... or would you think "man, if only I "woulda when I "coulda" when I "shoulda".... :woot: :rofl:

[CRCRFT78]

Whats your thoughts on Reynolds American, Inc. (RAI)?

Range 40.93 - 41.63
52 week 31.54 - 42.18
Open 40.93
Vol / Avg. 2.28M/2.31M
Mkt cap 23.99B
P/E 18.08
Div/yield 0.56/5.44
EPS 2.28
Shares 582.91M
Beta 0.62
Inst. own 46%

I was comparing this with Altria Group & Philip Morris and ended up going with Altria Group just based on the amount of shares I could purchase at the time with the amount of money I had. I do like all three but felt like the quantity of shares along with the dividend/percentage was a better choice.

[flagmissd]

Nathan -- Glad you're checking in!

The dividend on this stock is 1.93% which is L O W compared to the companies we've been discussing (most of which are 3% or above).... So unless the TOTAL RETURN is better than say (just to pick one or two) - Coke - or Pepsi - or one of the other beverage companies why settle for a 1.93% dividend? Unfortunately they only have a one year "history" for total return - and it's under 6% which is "okay" but is HALF of what Coke (KO) is... and over time - half is a big difference... so I wouldn't buy given other better comparisons out there. Just my opinion on the WAY I think... no other "opinion" than that. A simple comparison where the charts and dividend point to better (perhaps) opportunities.

Thanks for setting me straight Greg. I can now see what to look for more clearly.:hail:

[GregWeld]

Well -- the simple answer is -- any of the "terbacky" stocks work really really well... I own PM and MO in a big way. Love 'em. Hate the product don't use it - but ya gotta put your money to work - and these work real hard.

Phillip Morse (PM) has no 5 year "total return" numbers because this is a spilt off of Altria (MO)... but BOTH have fantastic T/R numbers and great dividends... these stocks - and you can include Reynolds American (RAI) and Lorillard (LO) are all just big fat cash cows.... and while the USA has all manor of anti smoking legislation - other countries DON'T....

What will derail these "hate 'em" stocks is a worldwide ban on smoking/terbacky products... but that will be well telegraphed - so I'm not worried about waking up one morning and having my hat handed to me.

The number of shares won't really affect the TRUE NUMBERS that you have to worry about because true numbers that count are PERCENTAGES -- you can have one share at $100 and have a 50% T/R and therefore have $150 or you can have 10 shares at $10 and have the same T/R and you'd still have $150.... The dividends are paid PER SHARE -- but they're still (for our purposes) a % number. And 5% is 5% if you follow what I'm saying. The TOTAL RETURN (T/R) is what you're after in the long run -- growth AND dividend... and when you do these comparisons in % terms -- there's a huge difference between one company that has 5 year T/R of 113% vs 65%! So if at all possible -- I tend to blend these "trade offs" -- if all things are rather equal. For me -- I can own several stocks in a sector... so even then I'll tend to take middle of the road to high end with consideration for the blended dividend % (since I live off mine rather than re-invest it).

This is a great question by the way - because this is one sector that has several really good choices in it... so it's kinda hard to say this one, over that one. They're all pretty dang good! It's like that old Coke vs Pepsi argument. Same sector - similar dividend - similar T/R (when looking at T/R - I don't think about one being 50% and one is 63% -- what I don't want here is one at 12% and one at 63% - then I'm taking the 63%!)... so these almost become throwing a dart at the board. As long as you hit the board - you're pretty good.

Same can be said with Verizon vs AT&T - same sector - similar dividend % - so I own both! :woot: :lol:

[GregWeld]

So just to add some info -- 5 year % of share price growth:


PM -- 57.31%

MO -- 33.59%

LO -- 55.07%

RAI -- 31.32%

So really -- the dividends are all good -- and the share price growth is good and steady - I always like to ADD steady into the portfolio! Steady offsets the big down days - and while you might not hit any home runs on stocks like these -- steady is good!

[Musclerodz]

The great American way..... SPENDING their way to wealth!


:faint: :faint: :wow: :willy:someone needs to point Obama to this thread. It might help......:faint:

[Bucketlist2012]

That doesn't have a happy ending for anyone!

Can you imagine waking up one day -- and it comes QUICKLY as us older guys know -- and being forced to retire at 65ish / or getting laid off at that age -- and you OWE everybody for everything and you have ZERO savings etc. OMG! I can't imagine the feeling in the pit of your stomach that could come from that.

You'd look back at your life and think of all the Louis V... purses... and the lease payments for cars you never owned... and the 25 years you still owe on the last refi of your house (that should be paid for by now!)..... Would all of that "lifestyle" put a smile on your face... or would you think "man, if only I "woulda when I "coulda" when I "shoulda".... :woot: :rofl:

Amen.. I would of , should of, and could of ... LONG ago.. I drank the Louis X111 on credit like a big man.. I lost everything in 1990.. My fault. But I did wake up, .. a lot of wasted years, but I made up for it in the last 12 years big time.. Still a novice, but the compounding of money management , and some key moves, and 2008/2009, helped greatly.

My Wife and I will never have to be in that situation.. And I know that a lifetime's wealth can be lost in a few years...My Parents ended up spending everything... bad decisions, multiple moves, losses.. So what I have aquired must be protected and invested for long term income..

My wife and I cherish the calm, peace of Mind, and Security that it brings...More than the Toys and things...

Again, I am the Novice, but I am learning quickly as I can..

And it is not only Business, but it is Fun...In my meeting with a High powered Attorney today, he asked how the portfolio was going, and when i told him, he said, " in this economy ? are you sure it isn't bernie madoff ? I laughed and said it was with schwab, and he had looked over the papers a few years ago. So it is a custodian and legit..

I feel for my family, but I can only guide them, and not let them bleed me..:cheers:

[GregWeld]

Amen.. I would of , should of, and could of ... LONG ago.. I drank the Louis X111 on credit like a big man.. I lost everything in 1990.. My fault. But I did wake up, .. a lot of wasted years, but I made up for it in the last 12 years big time.. Still a novice, but the compounding of money management , and some key moves, and 2008/2009, helped greatly.

My Wife and I will never have to be in that situation.. And I know that a lifetime's wealth can be lost in a few years...My Parents ended up spending everything... bad decisions, multiple moves, losses.. So what I have aquired must be protected and invested for long term income..

My wife and I cherish the calm, peace of Mind, and Security that it brings...More than the Toys and things...

Again, I am the Novice, but I am learning quickly as I can..

And it is not only Business, but it is Fun...In my meeting with a High powered Attorney today, he asked how the portfolio was going, and when i told him, he said, " in this economy ? are you sure it isn't bernie madoff ? I laughed and said it was with schwab, and he had looked over the papers a few years ago. So it is a custodian and legit..

I feel for my family, but I can only guide them, and not let them bleed me..:cheers:


Thank god you recovered and learned from it!

I've been poor -- poor sucks!

The other day I was having b'fast with my son and his girlfriend... she has the $700 Louis ViNell purse... I told her she could have bought one on the street when we were in NYC in September - and put $650 into the bank... Would have looked exactly the same.

I don't get it. The "pride" is in "things". Those purses are for people that are ALREADY RICH... and even then I don't get it. I have stuff -- lots of killer stuff... but I can afford it... and that doesn't mean "I can make this months payment". So all I said to her was -- sweetheart -- you're 24 years old - if you put the $650 in the market - you could buy LOTS of those purses LATER... :faint:

$650 in 7 years - $1300 - 7 years later $2600 - 7 more years $5200 - 7 stinky years later $10,400 and in just 7 more years when you've long forgotten the beat up looking purse -- it's $21,800 and you're only 59

Now you're a classy ol' babe with the dough to carry off the nice purse... and all that from just the savings off ONE STINKY PURCHASE. :rofl:

[Bucketlist2012]

Mike -- how dare you! You know EVERYONE is ENTITLED to a great way of life whether they work - pay taxes - or are part of the great society or not!

My question to all is -- Are you part of the problem or part of the solution....

BTW -- I was pretty sure that NOBODY was ever turned away from getting the very best medical treatment this country has to offer. All anyone ever had to do was to show up at the emergency room -- the price for that is that you must wait your turn.... but you will be seen and you will be treated - and you most likely will never pay a bill if you can't. In this country we will "life flight" two gangbangers that just shot each other - and we will keep them alive FOREVER if that's what it takes - and THEY will never pay a bill... We will pay their care regardless of what it takes or costs.

Does that have a cost to it? Oh hell yeah - we all pay higher costs for OUR medical treatment... the old "there's no free lunch".... But must we force everyone to BUY medical insurance? Do you really think that someone that can't afford it now - is somehow going to pay for it? Do they get it free? If so - isn't it already free now? So what does the Obamacare plan change? Does it control everyones costs? Nope.... does it address the high costs of pills? Nope. Or does it burden the very people it's meant to help? I already can afford healthcare - so it doesn't affect people like me.... It's a very regressive tax on the very folks it's meant to help by giving them medical insurance. The government will hire 1000's of people to administer it -- and build buildings to house them all - and buy computer systems etc... so the costs will now double or triple...

Don't even get me started!

:willy: :willy: :rofl:


Having said all of that --- There's not a single REPUBLICAN candidate so far that I have ANY interest in at all.... so we're back to McCain and the idiot from Alaska... And nobody could vote for that pair....

HELP!!!!!


RANT OVER.

I will just say that I agree, and I won't even get started...

[Bucketlist2012]

Thank god you recovered and learned from it!

I've been poor -- poor sucks!

The other day I was having b'fast with my son and his girlfriend... she has the $700 Louis ViNell purse... I told her she could have bought one on the street when we were in NYC in September - and put $650 into the bank... Would have looked exactly the same.

I don't get it. The "pride" is in "things". Those purses are for people that are ALREADY RICH... and even then I don't get it. I have stuff -- lots of killer stuff... but I can afford it... and that doesn't mean "I can make this months payment". So all I said to her was -- sweetheart -- you're 24 years old - if you put the $650 in the market - you could buy LOTS of those purses LATER... :faint:

$650 in 7 years - $1300 - 7 years later $2600 - 7 more years $5200 - 7 stinky years later $10,400 and in just 7 more years when you've long forgotten the beat up looking purse -- it's $21,800 and you're only 59

Now you're a classy ol' babe with the dough to carry off the nice purse... and all that from just the savings off ONE STINKY PURCHASE. :rofl:

It is all over my town..Purses, cars, wheels....most on credit, and the stuff purchased from before, was pulled out of their equity. Nicer cars than ME...Most with no net worth, while I am , the almost millionaire next door... I will have money for all my tomorrows...First priority and checked off my List.

More stuff will come later...paid for of course.. No rush...I am a young 52. So I have made my future a full time job...

Thanks..yes, it is only up from here.. The money management for me is really important, and the calculating of NET worth yearly to see what I really have.. Just a nice feeling..

I have some skills with investments, but I am still a novice..I do good , but know that there is more to learn, so in turn, more to gain..

If you tune out the noise, and the media, and the Volatility, and listen to those that are doing it right, great things will come..

The ups and downs have been madness, but sticking with the plan worked out in the end..

I do play the Political Climate in my choices... Example would be the Printing and Spending. Due to that , I do own 15% in PM's, like CEF, Silver Wheaton, GTU, TDLDX...

I am not a Gold Bug, and i do not recommend it to the faint of heart, or anyone else..just my INSURANCE...So far it has worked as planned..

Although I was in the Solar Business 10 years, all my energy assets are Distribution, Transmission, Royalty trusts in Texas, and Prudoe Bay.., Kinder Morgan, Sea Drill.

That's just me..

Only green energy I want is the Dead Presidents...

[GregWeld]

It is all over my town..Purses, cars, wheels....most on credit, and the stuff purchased from before, was pulled out of their equity. Nicer cars than ME...Most with no net worth, while I am , the almost millionaire next door... I will have money for all my tomorrows...First priority and checked off my List.

More stuff will come later...paid for of course.. No rush...I am a young 52. So I have made my future a full time job...

Thanks..yes, it is only up from here.. The money management for me is really important, and the calculating of NET worth yearly to see what I really have.. Just a nice feeling..

I have some skills with investments, but I am still a novice..I do good , but know that there is more to learn, so in turn, more to gain..

If you tune out the noise, and the media, and the Volatility, and listen to those that are doing it right, great things will come..

The ups and downs have been madness, but sticking with the plan worked out in the end..

I do play the Political Climate in my choices... Example would be the Printing and Spending. Due to that , I do own 15% in PM's, like CEF, Silver Wheaton, GTU, TDLDX...

I am not a Gold Bug, and i do not recommend it to the faint of heart, or anyone else..just my INSURANCE...So far it has worked as planned..

Although I was in the Solar Business 10 years, all my energy assets are Distribution, Transmission, Royalty trusts in Texas, and Prudoe Bay.., Kinder Morgan, Sea Drill.

That's just me..

Only green energy I want is the Dead Presidents...

You seem to be doing great....

I think what we need to do is to give everyone everything -- and then at say 50 -- take it all away.... for like a year and a half.... just wipe them out... and then ask them "if you could do it all over again - what would you do differently?" If they answer correctly - we give half of it back - if not.... oh well... :rofl: :rofl:

I don't have the guts to gamble on gold and silver....

I agree on the energy plays -- I can't know enough - or learn enough - or see in a crystal ball to know what is going to be "it" 10 years from now... wind - solar - fracking - lasers.... So I stay out of that stuff -- it's my own advice - buy what you know and can understand. It's over my head.

When I hear others discussing this and that - I listen - I like to learn - I like to know and to keep up - but I'm not parking my money where they do... because I'll get killed when I didn't see the shoe drop coming. I always remind myself -- You're just average Joe - stick to what you know like (insert a name here).... I'll watch from the sidelines - I'll write from Monaco.... :D

[Bucketlist2012]

You seem to be doing great....

I think what we need to do is to give everyone everything -- and then at say 50 -- take it all away.... for like a year and a half.... just wipe them out... and then ask them "if you could do it all over again - what would you do differently?" If they answer correctly - we give half of it back - if not.... oh well... :rofl: :rofl:

I don't have the guts to gamble on gold and silver....

I agree on the energy plays -- I can't know enough - or learn enough - or see in a crystal ball to know what is going to be "it" 10 years from now... wind - solar - fracking - lasers.... So I stay out of that stuff -- it's my own advice - buy what you know and can understand. It's over my head.

When I hear others discussing this and that - I listen - I like to learn - I like to know and to keep up - but I'm not parking my money where they do... because I'll get killed when I didn't see the shoe drop coming. I always remind myself -- You're just average Joe - stick to what you know like (insert a name here).... I'll watch from the sidelines - I'll write from Monaco.... :D

For sure the PM's and the Energy are not something I recommend, even though I use them in my Plan.. Most of them that I own, are dividend paying, but they are harder than normal to work with. I followed the Big banks lead on some of this. Again, I cannot tell people to buy them because it is something that must be watched and there are many other places to make money.

On energy, I think it is the Land Trusts, and the distribution like Kinder Morgan.. The speculation on oil is the killer..HFTrading..

I plan on putting more money to work and the stuff you are doing and researching, is what I am learning next. To me ,this is the Best Job I have ever had...My Future.

Thanks.You have inspired many car nutts on this site, and I watch for a while before chiming in.. I will be listening and watching and taking notes..



:cheers:

[Bucketlist2012]

You seem to be doing great....

I think what we need to do is to give everyone everything -- and then at say 50 -- take it all away.... for like a year and a half.... just wipe them out... and then ask them "if you could do it all over again - what would you do differently?" If they answer correctly - we give half of it back - if not.... oh well... :rofl: :rofl:

I don't have the guts to gamble on gold and silver....

I agree on the energy plays -- I can't know enough - or learn enough - or see in a crystal ball to know what is going to be "it" 10 years from now... wind - solar - fracking - lasers.... So I stay out of that stuff -- it's my own advice - buy what you know and can understand. It's over my head.

When I hear others discussing this and that - I listen - I like to learn - I like to know and to keep up - but I'm not parking my money where they do... because I'll get killed when I didn't see the shoe drop coming. I always remind myself -- You're just average Joe - stick to what you know like (insert a name here).... I'll watch from the sidelines - I'll write from Monaco.... :D

For sure the PM's and the Energy are not something I recommend, even though I use them in my Plan.. Most of them that I own, are dividend paying, but they are harder than normal to work with. I followed the Big banks lead on some of this. Again, I cannot tell people to buy them because it is something that must be watched and there are many other places to make money.

:cheers:

[Bucketlist2012]

Some numbers... 2005 to 2011

CEF Gold fund 284 % up

SPDR Gold 275% up

Google 258% up

Mc Donald's 208% up

SPDR S and P 3% up, big deal....

So your point of staying out of Metals is a sound call. 208 % and 258% with less Volatility makes sense... I own three of the five, and the 3% one is not one of them, haha:cheers:

But for sure, cash is not king right now... Only for daily and monthly expenses, emergency cash, and for buying more investments... and car parts..

[CRCRFT78]

Let me see if I've got an understanding of this investing 102:
1. Look into companies I know and use, companies with a history and a good understanding of their business.
2. A nice paying dividend is good, but a higher yield % is better?
3. Positive growth (share price & dividend)
4. Positive total return

Is there something I'm missing? Because I'm open to sharing what I have going on in order to better understand "Investing 102" I will share my most recent moves. Here is what I started with:

Stocks
Apple (AAPL)
Caterpillar (CAT)
Disney (DIS)
Harley (HOG)
Nike (NKE)

Mutual Funds
Fidelity Freedom Fund 2045 (FFFGX)
Spartan Total Market Index Investor Class (FSTMX)
Vanguard Total International Stock Index Fund (VGTSX)

Here is what I now have:

Stocks
Apple (AAPL)
Caterpillar (CAT)
Disney (DIS)
Nike (NKE)
Pepsi (PEP)
Altria Group, Inc. (MO)
Consolidated Edison, Inc. (ED)

Mutual Funds
Spartan Total Market Investor Class (FSTMX)

I sold Harley because I wasn't happy with its performance. It sort of just stayed where it was at and I replaced it with Pepsi, Altria Group & Consolidated Edison. I also dumped the Fidelity Freedom Fund because I just couldn't wrap my head around the idea that I had to pay Fidelity to invest money back with Fidelity. And last, I dumped the Vangaurd Total International Stock Index Fund because of its lackluster performance.

Doing this also gave me the opportunity to put my newly acquired information to the test. I will say I'm happy with the performance so far and know that this is a marathon, not a sprint so I look forward to the future and its possibilities.

[Musclerodz]

Mike -- how dare you! You know EVERYONE is ENTITLED to a great way of life whether they work - pay taxes - or are part of the great society or not!

My question to all is -- Are you part of the problem or part of the solution....

BTW -- I was pretty sure that NOBODY was ever turned away from getting the very best medical treatment this country has to offer. All anyone ever had to do was to show up at the emergency room -- the price for that is that you must wait your turn.... but you will be seen and you will be treated - and you most likely will never pay a bill if you can't. In this country we will "life flight" two gangbangers that just shot each other - and we will keep them alive FOREVER if that's what it takes - and THEY will never pay a bill... We will pay their care regardless of what it takes or costs.

Does that have a cost to it? Oh hell yeah - we all pay higher costs for OUR medical treatment... the old "there's no free lunch".... But must we force everyone to BUY medical insurance? Do you really think that someone that can't afford it now - is somehow going to pay for it? Do they get it free? If so - isn't it already free now? So what does the Obamacare plan change? Does it control everyones costs? Nope.... does it address the high costs of pills? Nope. Or does it burden the very people it's meant to help? I already can afford healthcare - so it doesn't affect people like me.... It's a very regressive tax on the very folks it's meant to help by giving them medical insurance. The government will hire 1000's of people to administer it -- and build buildings to house them all - and buy computer systems etc... so the costs will now double or triple...

Don't even get me started!

:willy: :willy: :rofl:


Having said all of that --- There's not a single REPUBLICAN candidate so far that I have ANY interest in at all.... so we're back to McCain and the idiot from Alaska... And nobody could vote for that pair....

HELP!!!!!


RANT OVER.

I have no intresest in getting the best thread on this forum turning political and getting locked down. Just a knee jerk post to spending our way out of a recession. :willy: I wil quietly go to the corner now........

[GregWeld]

Let me see if I've got an understanding of this investing 102:
1. Look into companies I know and use, companies with a history and a good understanding of their business.
2. A nice paying dividend is good, but a higher yield % is better?
3. Positive growth (share price & dividend)
4. Positive total return

Is there something I'm missing? Because I'm open to sharing what I have going on in order to better understand "Investing 102" I will share my most recent moves. Here is what I started with:

Stocks
Apple (AAPL)
Caterpillar (CAT)
Disney (DIS)
Harley (HOG)
Nike (NKE)

Mutual Funds
Fidelity Freedom Fund 2045 (FFFGX)
Spartan Total Market Index Investor Class (FSTMX)
Vanguard Total International Stock Index Fund (VGTSX)

Here is what I now have:

Stocks
Apple (AAPL)
Caterpillar (CAT)
Disney (DIS)
Nike (NKE)
Pepsi (PEP)
Altria Group, Inc. (MO)
Consolidated Edison, Inc. (ED)

Mutual Funds
Spartan Total Market Investor Class (FSTMX)

I sold Harley because I wasn't happy with its performance. It sort of just stayed where it was at and I replaced it with Pepsi, Altria Group & Consolidated Edison. I also dumped the Fidelity Freedom Fund because I just couldn't wrap my head around the idea that I had to pay Fidelity to invest money back with Fidelity. And last, I dumped the Vangaurd Total International Stock Index Fund because of its lackluster performance.

Doing this also gave me the opportunity to put my newly acquired information to the test. I will say I'm happy with the performance so far and know that this is a marathon, not a sprint so I look forward to the future and its possibilities.


GIVE THIS MAN 5 GOLD STARS!


The moves were made for the CORRECT reasons... "you weren't happy with them or you couldn't really get your head around it" --- THAT IS ALL you need... When the "market" goes against you - you can look at what you own and be happy with it... because it WILL go against you.... and that's when you need the knowledge and those warm fuzzy feelings.

[GregWeld]

I have no intresest in getting the best thread on this forum turning political and getting locked down. Just a knee jerk post to spending our way out of a recession. :willy: I wil quietly go to the corner now........



Thank you -- I was having the very same thoughts!! NO politics! This is LAT G - well.... and a little investing.... but that's only so we can all get rich and buy more car stuff!!! RIGHT??

[Bucketlist2012]

Thank you -- I was having the very same thoughts!! NO politics! This is LAT G - well.... and a little investing.... but that's only so we can all get rich and buy more car stuff!!! RIGHT??

This thread is too important... No politics...Investing 102, and maybe some money management.. No politics or attitudes..

we need this thread:lateral: :woot:

[SWAPMEETCRAZY]

but that's only so we can all get rich and buy more car stuff!!! RIGHT??

xxxx2222!!! but then I look over at the tube and "MITT" has won New Hampshire.......:offtopic: ........Whoops I'm sorry ...I'm off to the corner too..(p.s I love this thread!!)...:D ..jim

[GregWeld]

I just deleted my rant....

[Sieg]

Politicians deliver this kind of math:

http://www.usdebtclock.org/

The exact opposite of this thread's primary objective :thumbsup:

[GregWeld]

^^^^^^^^^^^ That is one scary clock!!!

Kool though!

[GregWeld]

So here's a good question --- and probably needs addressing....


"What if someone only has $1,000 to invest?"


First -- make CERTAIN this isn't money you're going to need -- and isn't the money you're really saving for vacation... It needs to really be "investing" money.

With $1,000 you can't be worried about being "diversified"... what you really need is relative safety with a solid "return" - so that you feel good about ADDING when you have more to invest. So if it was my kids money -- I'd buy Altria (MO) or similar stock. I'd try to find a great stock where the price is less than $50 a share - so you can actually get some shares -- and I'd want it to be a STEADY EDDY -- and I'd want an above average dividend... so you could see some results. Let's be real --- $1,000 - even at 6% -- you're only going to get about $60 a year in dividends -- but if that's buying 2 more shares per year -- it starts to gain a little steam about 5 years into it.

IF I ONLY HAD $5,000 to invest -- I'd buy TWO steady eddies - per above -- but buy $2,500 each.

IF I ONLY HAD $10,000 to invest -- I'd buy FIVE -- steady eddies per above and make sure they were in 5 different sectors.... and out of the 5 -- I might buy ONE riskier stock -- such as an Annaly Capital Management (NLY) just to TRY to boost the overall account. So I'd look for great companies -- keeping the share price at the $50 or less price -- and I'd want to get that bigger dividend.

The reason I'd stretch for the dividend is to gain a little traction "early on"...

So just a SAMPLE for an EXAMPLE:

65 shares of MO @ $28.91 - div is 5.67% -- Tobacco

65 shares of T @ $29.76 - div is 5.91% -- Teleco

120 shares of NLY @ $16.28 - div is 14% -- risky mortgages

75 shares of NNN @ $26.83 - div is 5.74% -- retail property - shopping ctrs

60 shares of EEP @ $32.93 - div is 6.47% -- pipelines

So the average dividend percentage is 7.558% -- so you can see what the ONE high yielder (NLY @ 14%) can do to an otherwise pretty average dividend. Which is why I tossed it in there. Put this all inside the IRA/401K and you're going to get those dividends and share growth compounding TAX DEFERRED -- so for years you'll have no taxes to pay - which allows your compounding to work at warp speed.

[Sieg]

Consumer staple, who makes the toilet paper? :unibrow:

[Sieg]

Greg - Great 1/5/10K investing models. :thumbsup:

[LS1-IROC]

Put this all inside the IRA/401K and you're going to get those dividends and share growth compounding TAX DEFERRED -- so for years you'll have no taxes to pay - which allows your compounding to work at warp speed.

As opposed to what? I love your advice, just curious if you could expand on that statement a little. I don't understand the tax very well and how they come into play.

I am in a position to throw around $10K into investments right now, looking to move on this very soon.

This thread in #1...the first thing I check everyday when I log in.:hail: :cheers:

[GregWeld]

Consumer staple, who makes the toilet paper? :unibrow:

Kimberly Clark (KMB) -- a very good steady eddy consumer staples stock!

Proctor and Gamble (PG) - another good steady eddy consumer staple...

These are in the same group as Johnson and Johnson (JNJ) and bring "stability" to a stock portfolio while paying "decent" dividends. I own JNJ and used to also own KMB... but realized I had too many "steady eddy's".

[Woody]

Greg,

I had a question about T.

It looks like the stock price has decreased about 20% to 25% in the last ten years. I see it has a dividend rate of 6%. So my question is: I thought we were looking for stocks with good charts and a good dividend rate? The chart is not good over the last ten years. Is that offset by the 6% dividend rate? I realize a 6% rate over ten years is approximately 60% (not compounded). So the total return would be somewhere close to 35%to 40% over 10 years, which is about 3.5% to 4.0% per year.

Maybe this is what you would consider a "steady eddy" that is a conservative pick due to its high dividend return?" I am just trying to understand the reasoning on selecting T as compared to some other stocks with better charts.

Thanks

[GregWeld]

As opposed to what? I love your advice, just curious if you could expand on that statement a little. I don't understand the tax very well and how they come into play.

I am in a position to throw around $10K into investments right now, looking to move on this very soon.

This thread in #1...the first thing I check everyday when I log in.:hail: :cheers:


Well -- very good question!

A lot of folks have their "main" savings vehicle as a IRA/401K -- and most just salt money out of every paycheck into these -- and then promptly ignore that actual investments inside them. So I'm urging people to at the very least take a look at these accounts and do some "accounting" of where they're at... so that's why I mention them often.

Now to the question. IRA/401 accounts are retirement accounts that are "untouchable" until age 59ish (I don't want to go into all the rules)... and at retirement age - you're able to start to take "withdrawals" known as distributions - from them. When you take the distributions - it's at that time that it becomes "taxable". The THEORY IS - that you should be at a lower income tax bracket when you're retired - and that - since you were allowed to avoid paying taxes for what can be years and years - your investments should have grown more because you got to work with 100% of your dividends and interest....

If you are QUALIFIED (income wise etc) you can put AFTER TAX money into a ROTH IRA.... and ALL of the growth and income from a ROTH IRA comes out at retirement (distributions) TAX FREE.... That's a hell of a deal. If someone was lucky enough to have bought Apple shares in their ROTH back in 1995 or so -- all that zillions of growth is going to come out absolutely tax free. Dude - that's what makes America great! :lol:

Otherwise -- you're "savings" and investable money is just in normal accounts -- and any dividends - short term capital gains - long term capital gains etc has to be accounted for each year on your income tax forms.

For someone with 10K to invest - that's not going to be a big income tax "swinger" -- because if you invested tomorrow and got all dividends -- you're paying that on your 2012 tax - and dividends are taxed at a max rate of 15% - so if you got 1000 in dividends (a 10% rate) you'd owe a whopping $150 (MAYBE -- because theres all manor of the usual tax code rules etc).

So ---- Since I can only use "me" as a real life example -- Let's take my personal situation just for "investing 102":

I already am retired. I have INCOME from apartment and other real estate investments - these are taxed at ordinary income tax rates and I'm in the Max tax bracket on them -- then I have a giant batch of DIVIDENDS and no matter what - they're taxed at the max tax rate of 15% -- Then because I don't want to add tax to my already max tax bracket taxable income -- I have a giant TAX FREE BOND portfolio -- and that gives me considerable income NET NET - no taxes and nothing added to my dividend tax bill or income tax bill.

All of these "strategies" need to be discussed and planned for using your professional advisors - CPA's and or Trust department advisors etc. They're complicated and there's lots of math and lots of "what if's" etc. But for our Investing 102 we're trying to stay with "normal" investing and normal IRA/401 accounts... and it's more about what to look for and what to think about over - Do this - don't do that. This is more about stuff to think about and ask questions about. Things we don't get up in the morning and say "oh yeah - I should look into that".

By the way -- PLEASE make absolutely certain that you don't need the 10K -- It's always better to have some CASH even if it doesn't make any money! So if you have 10K to invest -- start by just investing 4 or 5K -- and then kick back - learn - watch - listen to the market... and then after 3 or 4 months buy another 2K... and so on. Get comfortable. See if when the market goes DOWN that you can stomach those moves without freaking out. You might be amazed at your reaction... I've learned - and that's the right word - to be a buyer during DOWN days... but I didn't used to be! It's taken YEARS to learn that. So walk... get started.... get comfortable. Don't be the Tasmanian Devil (as Charley calls me when I get behind the wheel of the Mustang)... You have to learn to breathe - enter the turns slowly - and exit hard... etc. It takes some time.

[GregWeld]

Greg,

I had a question about T.

It looks like the stock price has decreased about 20% to 25% in the last ten years. I see it has a dividend rate of 6%. So my question is: I thought we were looking for stocks with good charts and a good dividend rate? The chart is not good over the last ten years. Is that offset by the 6% dividend rate? I realize a 6% rate over ten years is approximately 60% (not compounded). So the total return would be somewhere close to 35%to 40% over 10 years, which is about 3.5% to 4.0% per year.

Maybe this is what you would consider a "steady eddy" that is a conservative pick due to its high dividend return?" I am just trying to understand the reasoning on selecting T as compared to some other stocks with better charts.

Thanks


Great question --- and you answered it. It's a steady eddy... where I can take a large position and get the outsized dividend WITH some safety. It's not a stock that goes up and down like a yoyo... It's ACTUAL total return for ONE year is 9.4% --- THREE year is 27.9% --- and FIVE year is 16.1%

Steady - payer - growth that is better than any savings or CD rate - and I can sleep well holding it. It brings stability to the portfolio. There are always "balances" that need to be maintained. I own (using my personal information for examples) a huge position in Annaly Capital Management (NLY) I balance this RISKY high dividend payer with stock like JNJ and T and KO.

[GregWeld]

I'm a posting whore this morning ----

So I was checking the facts on the WOODY question and went to Schwab to use their info - and while there - checked the history on my account... and HERE'S WHY I LOVE DIVIDEND PAYERS..... This is real cash - deposit into my account.


Would this make your day or what? Not bragging here -- I'm URGING YOU to get to where this kind of stuff comes YOUR way!


01/10/2012
PM PHILIP MORRIS INTL INC
type: QUALIFIED DIV
$3,465.00

01/10/2012
MO ALTRIA GROUP INC
type: QUALIFIED DIV
$4,100.00

[LS1-IROC]

Thanks for the additional info Greg! I'm pretty comfortable with the $10K investment, but I might stagger in like you suggest.

I think I'll keep my current 401K where it's at now for retirement purposes and use this additional money to invest as I see fit and be more liquid. If I can grow this investment I'd like to eventually split some of it off to help my (unborn) child with education. Is that a sound idea, or should I start a separate fund all together for the child?

[Bucketlist2012]

So I talked to the wife.

I have approx.92% of my Portfolio in Taxable Schwab doing really well , with almost all dividend paying..

I have an additional approx. 8% in a 401K , and it is 52K to play with , as I won't be touching it for 10 years at least..

I am busy with other things, but I am ready to try the Investing 102 Strategy.

My plan is to see what is available in the Piece of Poo 401K plan, and then move 10k in the next 30 days.

Since Schwab is doing so well, my Wife says to leave it alone, but the 401K, is different.

Also, Any Cash I have is for my present projects, and rainy Day sleep well cash.. So that money is off limits.

So Greg, other than the obvious things you have told us, is there something I should be considering ? Mike V.

I have been reading for days, and just started posting back recently. I told my Wife that these guys are smart and i wanted to Listen for a while before putting in my two cents, or asking advise...

This Thread is Great.... It will fund our Toys!!!:lateral: :cheers: :woot:

[Bucketlist2012]

So the update is that my 401K has limited options.:rolleyes:

I am getting 4.5% out of it, and it has gone up...:thumbsup: So that is good news..

So I may just leave things for now, and put together 10K Of Mad Money/Investing 102 , some other way..:willy:

:lateral: :cheers:

[GregWeld]

Thanks for the additional info Greg! I'm pretty comfortable with the $10K investment, but I might stagger in like you suggest.

I think I'll keep my current 401K where it's at now for retirement purposes and use this additional money to invest as I see fit and be more liquid. If I can grow this investment I'd like to eventually split some of it off to help my (unborn) child with education. Is that a sound idea, or should I start a separate fund all together for the child?


Well -- I'm a "buckets" kind of guy. I like control -- and I like to see results -- and I don't like to commingle. So for my kids - I opened separate Schwab accounts for each one - with mom and I as joint tenants... It's easier to see your progress -- and depending on their ages - you may want to be much more aggressive in their accounts than you would your "retirement" bucket.

So - for instance - I might buy a 5 year old - $500 worth of Pandora... or Facebook when it comes out... which are stocks I'd NEVER buy for myself... but these are SMALL purchases that can have big upside potential... and if you have 13 or 15 years before college year one -- you could hit a lucky one.

For me - different "goals" different mindsets - Different accounts...

So now you have 9K for you to play with and 1K for beginning school savings bucket! :unibrow:

I just put two through OUT OF STATE college. The real costs are not just the tuition -- it's the LIVING expenses... they have to eat - drive - books - live somewhere... have a pizza once in awhile... and they have to come home once in awhile or you go there.... Even if you live 5 blocks from the college - they won't want to live at home... Trust me. You won't WANT them home past the freshman year.

[GrabberGT]

Alright, its taken me 2 days but Im now caught up on this thread from having taken a holiday break. I have a couple questions:

How about a little investing advise rearding fund selection. I already understand your viewpoint towards funds in general (Why paysomeone else to make selections you could make foryouself) but my Fidelity 401k provides only Funds as selections. I'm 37 with 30 years till retirement so I can afford to play with the riskier stuff. Rather than just throw a dart at a list of stock based funds, what should I look for? Highest annual return over the life of the fund with the lowest expense ratio? Fund information is limited. Its easier to look up the fund on Google. If a fund pays a dividend, (Not shown on Fidelity) do I get that dividend or does Fidelity?

Next step is to open a Roth IRA. What should I look for in a broker for my IRA. From Fidelity's page: "Investment choices - A wide range of mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs" This leads me to believe that my choices, though wide, are limited to a selection. Are all brokers like this? Which one has the widest range of choices?

Thanks. I Love this thread and have learned a lot.

[GregWeld]

Alright, its taken me 2 days but Im now caught up on this thread from having taken a holiday break. I have a couple questions:

How about a little investing advise rearding fund selection. I already understand your viewpoint towards funds in general (Why paysomeone else to make selections you could make foryouself) but my Fidelity 401k provides only Funds as selections. I'm 37 with 30 years till retirement so I can afford to play with the riskier stuff. Rather than just throw a dart at a list of stock based funds, what should I look for? Highest annual return over the life of the fund with the lowest expense ratio? Fund information is limited. Its easier to look up the fund on Google. If a fund pays a dividend, (Not shown on Fidelity) do I get that dividend or does Fidelity?

Next step is to open a Roth IRA. What should I look for in a broker for my IRA. From Fidelity's page: "Investment choices - A wide range of mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs" This leads me to believe that my choices, though wide, are limited to a selection. Are all brokers like this? Which one has the widest range of choices?

Thanks. I Love this thread and have learned a lot.



You need to find their TRADING SYMBOLS... and then do the exact same research using Google or Yahoo Finance as you would with stocks... look for the best long term track record... or best total return over the long haul.

For diversification -- you can buy Large Cap - Mid Cap (this is the size of the companies they invest in) etc -- or you can also get some "International" exposure in various geographical regions - such as "Asia" etc... and they're also usually "Growth" or "Total return" or "Growth and Income"... The PROBLEM is that just because they have the "Growth and Income" label - doesn't mean they're invested in the right stuff to actually EARN their names!

Did I mention that MUTUAL FUNDS SUCK? They're designed to lull the masses into hibernation while they make massive fees for doing nothing... Don't even get me started...

IF THE FUND GETS DIVIDENDS -- they're reinvested. So yeah -- you get 'em -- and it will be reflected in the total return of the fund.

Did I mention that MUTUAL FUNDS SUCK?

Here's the other problem with mutual funds. You buy their "NAV" -- Net Asset Value" on any given day... but that can go DOWN just because maybe some company lays off half a zillion people - and those people MOVE their IRA's into Rollover IRAs and cash out of the stinkin' mutual fund they were all forced to be in.... so the mutual fund has REDEMPTIONS -- CASH they have to pay out - so they SELL shares of stock to cover the redemptions. They're not in control -- and more important - NEITHER ARE YOU.

But treat them as if they were individual stocks -- research them - look for the best PERFORMANCE over the longest period of time.

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

ROTH IRA -- Just pick ANY of the BIG NAME discount brokers.... Schwab - Fidelity - TD Ameritrade etc... I have a Fidelity account -- I don't particularly like them -- or their website - but you can buy/invest in anything there that Schwab has. I prefer Schwabs website. But I actually have accounts about half a dozen DIFFERENT brokerages. One for bonds... Wells Fargo for an IRA (they have a division that if you're a big enough customer they'll hold "private paper" for you - most brokerages won't)... but for just good old fashioned information and ease of use... I like Schwab. It could also be that I've been using them for years... so I'm familiar with their website etc.

[Bucketlist2012]

You need to find their TRADING SYMBOLS... and then do the exact same research using Google or Yahoo Finance as you would with stocks... look for the best long term track record... or best total return over the long haul.

For diversification -- you can buy Large Cap - Mid Cap (this is the size of the companies they invest in) etc -- or you can also get some "International" exposure in various geographical regions - such as "Asia" etc... and they're also usually "Growth" or "Total return" or "Growth and Income"... The PROBLEM is that just because they have the "Growth and Income" label - doesn't mean they're invested in the right stuff to actually EARN their names!

Did I mention that MUTUAL FUNDS SUCK? They're designed to lull the masses into hibernation while they make massive fees for doing nothing... Don't even get me started...

IF THE FUND GETS DIVIDENDS -- they're reinvested. So yeah -- you get 'em -- and it will be reflected in the total return of the fund.

Did I mention that MUTUAL FUNDS SUCK?

Here's the other problem with mutual funds. You buy their "NAV" -- Net Asset Value" on any given day... but that can go DOWN just because maybe some company lays off half a zillion people - and those people MOVE their IRA's into Rollover IRAs and cash out of the stinkin' mutual fund they were all forced to be in.... so the mutual fund has REDEMPTIONS -- CASH they have to pay out - so they SELL shares of stock to cover the redemptions. They're not in control -- and more important - NEITHER ARE YOU.

But treat them as if they were individual stocks -- research them - look for the best PERFORMANCE over the longest period of time.

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

ROTH IRA -- Just pick ANY of the BIG NAME discount brokers.... Schwab - Fidelity - TD Ameritrade etc... I have a Fidelity account -- I don't particularly like them -- or their website - but you can buy/invest in anything there that Schwab has. I prefer Schwabs website. But I actually have accounts about half a dozen DIFFERENT brokerages. One for bonds... Wells Fargo for an IRA (they have a division that if you're a big enough customer they'll hold "private paper" for you - most brokerages won't)... but for just good old fashioned information and ease of use... I like Schwab. It could also be that I've been using them for years... so I'm familiar with their website etc.

Did I mention you are right... Mutual funds and most 401K plans SUCK..

That is why approx. 10% of my investments are there . I used my old company to match me for the time i was there, and 90% of my Investments are in Schwab, which i control, and the Fees are plain..

Did I mention that i agree that Mutual Funds Suck, and most 401K's are POO...

[Woody]

Greg,

You have really opened my eyes to investing in stocks. Up until now I have been investing most of my retirement funds in mutual funds. I own six funds right now and have my money evenly divided between small cap, mid-cap and large cap funds. I was just doing some research on the ten year performance of my funds. The ten year total returns (including dividends) has ranged from 22% to 147% with an average return of 68%. That equates to roughly 6.8% per year (simple interest).

Just for comparison sake, I took 12 stocks, most of which have been mentioned in this thread and calculated ten year total returns (including dividends) The stocks included were HD, PFE, CVX, MCD, MO, KFT, JNJ, KO, T, KMB, PG and CAT. Ten year returns ranged from -2% to 383% and averaged 143% which is approximately 14.3%, more than double my mutual funds average return.

I have reviewed the stock holdings of my mutual funds and I believe I own all of the stocks mentioned within the mutual funds. However, the funds also own 100+ other stocks, some of which I have no clue as to what they do.

Anyway, this has been a real eye opener for me. Thanks again for your insight.

[GregWeld]

Greg,

You have really opened my eyes to investing in stocks. Up until now I have been investing most of my retirement funds in mutual funds. I own six funds right now and have my money evenly divided between small cap, mid-cap and large cap funds. I was just doing some research on the ten year performance of my funds. The ten year total returns (including dividends) has ranged from 22% to 147% with an average return of 68%. That equates to roughly 6.8% per year (simple interest).

Just for comparison sake, I took 12 stocks, most of which have been mentioned in this thread and calculated ten year total returns (including dividends) The stocks included were HD, PFE, CVX, MCD, MO, KFT, JNJ, KO, T, KMB, PG and CAT. Ten year returns ranged from -2% to 383% and averaged 143% which is approximately 14.3%, more than double my mutual funds average return.

I have reviewed the stock holdings of my mutual funds and I believe I own all of the stocks mentioned within the mutual funds. However, the funds also own 100+ other stocks, some of which I have no clue as to what they do.

Anyway, this has been a real eye opener for me. Thanks again for your insight.


Fantastic work Woody!!

This really is so simple ANYONE can do it -- but somehow we'd rather "leave it alone" or ignore it altogether... :faint:

So you just summed up WHY I THINK MUTUAL FUNDS SUCK.... because they're not going to buy anything you can't on your own... but there PERFORMANCE will be pulled down because of DILUTION.... They can't just own the best of breed -- they're just going to buy EVERYTHING... because most are simply set up to mimic some "standard" -- whether it's the S&P 500 or some other index. Then they churn the stocks -- and charge you fees for all this... and in the meantime you have no idea what's what.

If you can buy 10 to 20 top stocks - you have a mutual fund. No fees. And you are in control.

Mutual funds were great for people -- they get a job -- and they can "save" $50 or $100 per paycheck... so they have a "place"... but you can do better on your own as soon as you have 10 grand or so.

[Bucketlist2012]

Fantastic work Woody!!

This really is so simple ANYONE can do it -- but somehow we'd rather "leave it alone" or ignore it altogether... :faint:

So you just summed up WHY I THINK MUTUAL FUNDS SUCK.... because they're not going to buy anything you can't on your own... but there PERFORMANCE will be pulled down because of DILUTION.... They can't just own the best of breed -- they're just going to buy EVERYTHING... because most are simply set up to mimic some "standard" -- whether it's the S&P 500 or some other index. Then they churn the stocks -- and charge you fees for all this... and in the meantime you have no idea what's what.

If you can buy 10 to 20 top stocks - you have a mutual fund. No fees. And you are in control.

Mutual funds were great for people -- they get a job -- and they can "save" $50 or $100 per paycheck... so they have a "place"... but you can do better on your own as soon as you have 10 grand or so.

Again I am still learning, so bear with me. I really hate 401K and the Mutual Funds in them... Fees and terrible choices....

But in my Schwab self run plan, I do own , along with many other things, these Mutual Funds. I am not saying to buy them, remember , I am a novice, but I picked Great performers, but i am not sure if it is the best route..

I have the following

OIBAX,LSBRX,TGLDX,TPICX,SAMIX,TGINX,PTTDX,

I did the research, and these picks crush the similar funds of others.. But they are really cut up into a thousand investments..

But I am going to have to do so much homework after reading this thread...

[RECOVERY ROOM]

I now what you mean, Im looking at everything now because of the info hear....WOW. ( I take it that GW hates funds)

[Bucketlist2012]

I now what you mean, Im looking at everything now because of the info hear....WOW. ( I take it that GW hates funds)

Yes.. I truly believe that just doing the investing and research, and networking like we are doing, will be more than most will ever do...

With study and Smart work, we will do well...But with a little more effort and research, we can do even better, without being greedy...IMHO:cheers: :lateral:

[GregWeld]

Again I am still learning, so bear with me. I really hate 401K and the Mutual Funds in them... Fees and terrible choices....

But in my Schwab self run plan, I do own , along with many other things, these Mutual Funds. I am not saying to buy them, remember , I am a novice, but I picked Great performers, but i am not sure if it is the best route..

I have the following

OIBAX,LSBRX,TGLDX,TPICX,SAMIX,TGINX,PTTDX,

I did the research, and these picks crush the similar funds of others..

But I am going to have to do so much homework after reading this thread...




Here is the AVERAGE ANNUAL RETURN PRE TAX....

So here's the thing -- If I can get a 5% DIVIDEND annually -- that's near where your total return is on some of these! And that's discounting any growth in the share price! Still -- there's a couple good ones in there and if you can get 10% annualized growth rate - that's doing pretty well. Not great - but "okay". The GOLD fund -- TGLDX is the one that's gone exceptional... so lucky you IF you bought it 3 plus years ago. I wouldn't buy it now thats for sure because that would be to assume gold is going higher from here... and I wouldn't make that bet.


The OBIAX 10.47%

The SAMIX 5.29%

The LSBRX 9.71%

The TPICX since inception is DOWN 7.67%

The TGINX 10.04%

The PTTDX 6.47%

The TGLDX 23.80%

[GregWeld]

I now what you mean, Im looking at everything now because of the info hear....WOW. ( I take it that GW hates funds)



Hate is not a strong enough description....

[GregWeld]

Yes.. I truly believe that just doing the investing and research, and networking like we are doing, will be more than most will ever do...

With study and Smart work, we will do well...But with a little more effort and research, we can do even better, without being greedy...IMHO:cheers: :lateral:


What I hate the most about FUNDS - is the comparisons -- because it's so hard to do... and there's so many BAD funds out there...

People say to me - man the stock market really sucks - my mutual funds are down 20% and I just want to slap them! Because somehow they think "their mutual fund" is hooked to the hip of the stock market... and they're NOT...

[Bucketlist2012]

What I hate the most about FUNDS - is the comparisons -- because it's so hard to do... and there's so many BAD funds out there...

People say to me - man the stock market really sucks - my mutual funds are down 20% and I just want to slap them! Because somehow they think "their mutual fund" is hooked to the hip of the stock market... and they're NOT...

Being the novice, it is hard for me to compare my funds to anything other than similar funds of it's kind. But they are so sliced up, I can't compare them to anything individual ..

A lot of my stuff doesn't follow the Market...Heck, some of my Gold funds don't even follow the price of Gold...

So I am still figuring things out.. I am just trying to limit my errors, and any:cheers: under performing..

but the process of learning, and the rewards of doing something, are well ....addicting..:lateral:

P.S. If their funds are down 20%, they have the wrong funds...

[GregWeld]

Being the novice, it is hard for me to compare my funds to anything other than similar funds of it's kind. But they are so sliced up, I can't compare them to anything individual ..

A lot of my stuff doesn't follow the Market...Heck, some of my Gold funds don't even follow the price of Gold...

So I am still figuring things out.. I am just trying to limit my errors, and any:cheers: under performing..

but the process of learning, and the rewards of doing something, are well ....addicting..:lateral:

P.S. If their funds are down 20%, they have the wrong funds...



Well -- that's the big issue with funds -- it's really so hard to accurately gauge the performance. Most are just mediocre... and when you factor in the 1% fees (many are slightly less and many are more)... that's just money for nothing. You funds - except the one - are decent. But I still would be willing to bet that you can do BETTER on your own.

Ya know -- 1% fee on a 100K IRA account is 1 grand.... after 10 years -- that's 10 grand in someone else's pocket. It's one thing if I'm paying people to MAKE me money - then one could argue that the 1% is money well spent... but when people wake up and after 10 years they're barely ahead... then that fee is beyond stupid! 100 grand - after 10 years - better be 200 grand or something is wrong!

[Bucketlist2012]

Well -- that's the big issue with funds -- it's really so hard to accurately gauge the performance. Most are just mediocre... and when you factor in the 1% fees (many are slightly less and many are more)... that's just money for nothing. You funds - except the one - are decent. But I still would be willing to bet that you can do BETTER on your own.

Ya know -- 1% fee on a 100K IRA account is 1 grand.... after 10 years -- that's 10 grand in someone else's pocket. It's one thing if I'm paying people to MAKE me money - then one could argue that the 1% is money well spent... but when people wake up and after 10 years they're barely ahead... then that fee is beyond stupid! 100 grand - after 10 years - better be 200 grand or something is wrong!

Thanks Greg..

Man, I will have to run some other holdings i have , by you on another day. I really do appreciate your taking the time to give me your opinion.:thumbsup:

Yes, most of my buys were in 2008/2009, so I am a happy guy..:) :)

Again I kept most of my money out of my 401K and self invested. the hidden fees in a company plan are madness..:willy:

On another note, I go by the car shop tomorrow to get pictures underneath before they take it off the lift..Then it is a test drive....WOOT.

[Bucketlist2012]

Ok, I thought I would wait , but here are some other holdings I have.

BPT, KMP, SDRL, SLW, SPH,CEF, GTU, TIP,SCHO for cash on hand

[GregWeld]

Ok, I thought I would wait , but here are some other holdings I have.

BPT, KMP, SDRL, SLW, SPH,CEF, GTU, TIP,SCHO for cash on hand



You need to get diversified.....

[Bucketlist2012]

Thanks, I thought so...

[CRCRFT78]

Here are the top 10 holdings in the only fund I have left:
FSTMX Fidelity Spartan Total Market Index Inv
Exxon Mobil Corporation (XOM) 2.75%
Apple, Inc. (AAPL) 2.48%
International Business Machines Corp (IBM) 1.58%
Chevron Corp (CVX) 1.45%
Microsoft Corporation (MSFT) 1.33%
Johnson & Johnson (JNJ) 1.25%
The Procter & Gamble Co (PG) 1.24%
AT&T Inc (T) 1.21%
General Electric Co (GE) 1.19%
Pfizer Inc (PFE) 1.09%

The current value of the fund is $12,530.74 after my initial investment of $10,000 about 3 years ago. I believe that if I were to divide that $10,000 between those top 10 holdings 3 years ago I would be in a much better position. Something I will be considering within the next couple of weeks. I may not go with the exact 10 listed but I think I can do a lot better than this.
Once I can get my Rollover IRA working for itself I will focus my attention on my Schwab account and my Roth IRA.

[GregWeld]

Here are the top 10 holdings in the only fund I have left:
FSTMX Fidelity Spartan Total Market Index Inv
Exxon Mobil Corporation (XOM) 2.75%
Apple, Inc. (AAPL) 2.48%
International Business Machines Corp (IBM) 1.58%
Chevron Corp (CVX) 1.45%
Microsoft Corporation (MSFT) 1.33%
Johnson & Johnson (JNJ) 1.25%
The Procter & Gamble Co (PG) 1.24%
AT&T Inc (T) 1.21%
General Electric Co (GE) 1.19%
Pfizer Inc (PFE) 1.09%

The current value of the fund is $12,530.74 after my initial investment of $10,000 about 3 years ago. I believe that if I were to divide that $10,000 between those top 10 holdings 3 years ago I would be in a much better position. Something I will be considering within the next couple of weeks. I may not go with the exact 10 listed but I think I can do a lot better than this.
Once I can get my Rollover IRA working for itself I will focus my attention on my Schwab account and my Roth IRA.

Yep -- you see that over and over again with mutual funds. The top ten are dragged down by the bottom 100

[Bucketlist2012]

Greg,

Thanks for any tips. I am going to be changing some things around within my portfolio, in regards to some of my Mutual Funds vs. Some Top Holdings .

I know I have been heavy Commodities since 2008. I have and will be riding the Fiscal policies of the Euro, and the Dollar. Still in 2012, I think I will do really well. I never day Trade, but Commodities are a form of speculation or feeling ,on which way things will go. I calculate as best as possible what I think the FEDS, and others will do.. Not for this thread, and I won't comment too much.

Your way of investing seems solid, most of mine is, and I know some is added risk.

But again, being the Novice, I want to stick with Investing 102, and what you have been saying on this Thread.:lateral:

I can be doing better. Not that things aren't good, but there is so much to learn, and so many ways to Make money.

You have many Readers thinking and doing something really IMPORTANT.

We are never taught this in school, certainly most Bankers, Advisors, and GOD forbid, a Broker, they won't tell you this stuff..It is Voodoo.

But like anything, we have to Study wealth, if you want to be Wealthy. It ias not going to come to you unless you work at it.

[GrabberGT]

Fantastic work Woody!!

This really is so simple ANYONE can do it...

I read this last night while watching some TV and I swear I busted out in laughter. It reminded me soo much of one of those late night infomercial, get rich quick shows. You hear testimony from someone who's bought into the plan (Woody) and then host comes back to say "This is so simple ANYONE can do it..." soon to be followed by "...all you have to do is make 4 easy payments and I'll send you this highly valued packet of secrets to get you started." This just emphasis how valuable this information is we are getting here for FREE from REAL people who are doing it. Solid, non-biased information from great people. Thanks again.

[Sieg]

Solid, non-biased information from great people. Thanks again.
It's somewhat biased, but this time the catch is it's in our best interest. :thumbsup:

[GregWeld]

It's somewhat biased, but this time the catch is it's in our best interest. :thumbsup:

EXACTLY.....

[GregWeld]

Here's WARREN BUFFET on Coke (he's a very large shareholder in it) === And I cut and pasted this here because it really shows all the trials and tribulations that occurred SHORT TERM during Cokes first few years.... but then read on.




“Coca-Cola went public in 1919. The stock sold for $40 a share. One year later it’s selling for $19. It had gone down 50% in one year. And you might think that’s some kind of disaster. And you might think that sugar prices increased and the bottlers were rebellious and a whole bunch of other things, you can always find a few reasons why that wasn’t the ideal moment to buy it. Year’s later you would have seen the great depression and you’d see World War 2, and you’d see sugar rationing, and you’d see thermal nuclear weapons, the whole thing. There’s always a reason, but in the end if you’d bought 1 share for 40 bucks and reinvested the dividends it’d be worth about $5 million now... And that factor so over rides anything else. I mean if you’re right about the business, you’ll make a lot of money. The timing part of it is a very tricky thing. So I don’t worry about any given event if I’ve got a wonderful business... You can figure out what will happen, you can’t figure out when it will happen. You don’t want to focus too much on when; you want to focus on what. If you’re right about what, you don’t have to worry about when very much.”

[Sieg]

Do you feel the market is about ready to climb for a while or are we going to see another dip or two before historical trends repeat? Election year impacts on the market trend with the exception of '00 appear positive?

[GregWeld]

If you're asking me? I never think in those terms -- I just buy and cash the checks.... Sorry.

[Sieg]

If you're asking me? I never think in those terms -- I just buy and cash the checks.... Sorry.Understood and the answer does give a better understanding of the mindset. I was researching on a couple short-term revenue building opportunities to fund additional steady Eddies.

[Bucketlist2012]

If you're asking me? I never think in those terms -- I just buy and cash the checks.... Sorry.

Again, I am the Novice Newbie to the thread, and I only share what I am doing with Greg to get his input.

What I think will happen , is not for me to say..

[pw2006]

Trying to time the market is nearly impossible. As Greg mentioned in an earlier post, there is some dude somewhere watching to see if you you are a buyer or a seller. As soon as you make your move, that dude calls his buddies and moves the stock in the opposite direction. They attacked me twice today!

Earlier this week I decided to reduce a little risk in my portfolio and decided to sell ~50% of one of my speculative position and put that money into a something with less volatility. I wasn't trying to time anything, but ran into some bad timing. That dude was watching me!

One of my speculative positions is in a small, thinly traded biotech (FOLD). I've owned it for a couple years with an average cost of around $5.50. It has been trading between $2.10~$4 for the past few months with lots of volatility. So I sold ~1/2 my FOLD position for ~$3.55 and added to my Chevron (CVX) position.

After the market closed yesterday, Chevron pre-announced they were going to miss their earnings and the stock traded down nearly 2.5% today. And as if that wasn't bad enough, FOLD jumped 30% today and ended the day at $4.54! As I mentioned, I wasn't trying to time anything, just bad timing.

[GregWeld]

Trying to time the market is nearly impossible. As Greg mentioned in an earlier post, there is some dude somewhere watching to see if you you are a buyer or a seller. As soon as you make your move, that dude calls his buddies and moves the stock in the opposite direction. They attacked me twice today!

Earlier this week I decided to reduce a little risk in my portfolio and decided to sell ~50% of one of my speculative position and put that money into a something with less volatility. I wasn't trying to time anything, but ran into some bad timing. That dude was watching me!

One of my speculative positions is in a small, thinly traded biotech (FOLD). I've owned it for a couple years with an average cost of around $5.50. It has been trading between $2.10~$4 for the past few months with lots of volatility. So I sold ~1/2 my FOLD position for ~$3.55 and added to my Chevron (CVX) position.

After the market closed yesterday, Chevron pre-announced they were going to miss their earnings and the stock traded down nearly 2.5% today. And as if that wasn't bad enough, FOLD jumped 30% today and ended the day at $4.54! As I mentioned, I wasn't trying to time anything, just bad timing.


It's NOT BAD TIMING -- there is some SOB back there watching your every move! I'm telling' ya! :willy: :lol:

That's EXACTLY why I throw that into my posts once in awhile! Because I swear - a stock can go up every day for a month - and 5 minutes after you buy in - they take 'er down! Ditto on the sale side. I sold 1000 Apple a week or so ago -- I had a nice (huge) gain in it so didn't particularly care about the very last dollar -- but we all want to get the max -- and it was just kinda floating around 400 --- so I pulled the trigger -- within about two days it was up to $420+ --- and that's 20 GRAND! But.... it never fails so you just have to get over it... and understand it... then it doesn't get your goat.

[Sieg]

Trying to time the market is nearly impossible. As Greg mentioned in an earlier post, there is some dude somewhere watching to see if you you are a buyer or a seller. As soon as you make your move, that dude calls his buddies and moves the stock in the opposite direction. They attacked me twice today!

Earlier this week I decided to reduce a little risk in my portfolio and decided to sell ~50% of one of my speculative position and put that money into a something with less volatility. I wasn't trying to time anything, but ran into some bad timing. That dude was watching me!

One of my speculative positions is in a small, thinly traded biotech (FOLD). I've owned it for a couple years with an average cost of around $5.50. It has been trading between $2.10~$4 for the past few months with lots of volatility. So I sold ~1/2 my FOLD position for ~$3.55 and added to my Chevron (CVX) position.

After the market closed yesterday, Chevron pre-announced they were going to miss their earnings and the stock traded down nearly 2.5% today. And as if that wasn't bad enough, FOLD jumped 30% today and ended the day at $4.54! As I mentioned, I wasn't trying to time anything, just bad timing.

I understand completely, that dude bites me in the butt 8 out of 10 times. So I do like to attempt to cover it with a little due diligence if at all possible. :D I guess I'm really trying to protect myself from real bad timing but it's still timing. :rolleyes:

I bought a 100 shares of Nike 35 years ago when they first began trading for $5..........that dude convinced me doubling my money was a good thing and I sold it for $10........the rest is history.

But learning what's important to other successful people is where the learned lesson is.

Right now I'm evaluating my portfolio sector diversity vs risk level and plotting the best options to fill the weak spots in Consumer Staples, Energy, Health Care, Industrials, Materials, and Utilities. I'm weighted heavy in Information Technologies but don't feel too bad because the over-weight products are DELL, HP, INTC, MSFT, MU, ORCL.

Thanks to this thread and the research tools Schwab online provides it's becoming a very entertaining challenge. Business is slow this time of year and our sector outlook is not promising, so at least I feel like I'm accomplishing something.

[Sieg]

It's NOT BAD TIMING -- there is some SOB back there watching your every move! I'm telling' ya! :willy: :lol:

That's EXACTLY why I throw that into my posts once in awhile! Because I swear - a stock can go up every day for a month - and 5 minutes after you buy in - they take 'er down! Ditto on the sale side. I sold 1000 Apple a week or so ago -- I had a nice (huge) gain in it so didn't particularly care about the very last dollar -- but we all want to get the max -- and it was just kinda floating around 400 --- so I pulled the trigger -- within about two days it was up to $420+ --- and that's 20 GRAND! But.... it never fails so you just have to get over it... and understand it... then it doesn't get your goat.


1:06 PM "Time to sell Apple," declares Thomas Kee of Stock Traders Daily, as it doesn't treat its customers properly. Kee isn't refering to the end users but to carriers like Verizon (VZ) and Sprint (S), whose margins are suffering because of the high cost of the iPhone. These resellers will look for alternatives and eventually find them.

I can understand how easy it is for you to fall victim to a short-sell though. :woot:

[GregWeld]

1:06 PM "Time to sell Apple," declares Thomas Kee of Stock Traders Daily, as it doesn't treat its customers properly. Kee isn't refering to the end users but to carriers like Verizon (VZ) and Sprint (S), whose margins are suffering because of the high cost of the iPhone. These resellers will look for alternatives and eventually find them.

I can understand how easy it is for you to fall victim to a short-sell though. :woot:


Wasn't really a "short sale" --- I owned those shares since $85 a share..... :cheers: :woot: I took some of the gain off with a loss in Goldman Sachs... the main reason is - APPLE does not pay a dividend - GS pays a very small dividend... I had a GIANT gain in one and a loss in the other -- so year end house cleaning. I still own 1000 shares of GS and will hold them paper loss and all.

I had half a million bucks in Apple - and needed to just do some rebalancing as I do at the end of every year. While it's THE HARDEST to sell winners.... it's the right thing to do --- so I kept 250 shares and bought some Connoco Phillips and raised my cash position for right now. I had also just lopped off a chunk of cash buying that building for my brother in law... and since I paid all cash for it - I looked at the Apple as a cash replenishment. I've ridden that horse for quite awhile - and the pigs get fat hogs, get slaughtered argument won out.

[GregWeld]

A quicky little story about the Apple purchase.... We had just bought the house we're in -- and I wanted to get away from having a desktop computer and a laptop (too much computer management!) so went to look at the Apple laptop. Bought one --- and while there - noticed that it was the ONLY STORE IN THE MALL WITH A LINE OF PEOPLE WAITING TO BUY STUFF! -- Pretty simple research in my mind... every other store was empty -- and these guys have a line up! I come home and realize that everywhere I looked the kids had an iPod... we had like 4 or them!

Bought the stock.... every time I went to the mall (once a year MAX - I hate malls) the dump was PACKED with people... buy a little more... and hold.

And the rest - as they say - is history.

[Sieg]

KISS theory works.....all said and done it's simple fundamental logic. The amount of marketing clutter these days can really cloud those basic tried and true fundamentals.

[GregWeld]

KISS theory works.....all said and done it's simple fundamental logic. The amount of marketing clutter these days can really cloud those basic tried and true fundamentals.


It's actually the Peter Lynch school of investing....:unibrow: and he was a fantastic money manager! For those that don't know - he ran Fidelity Magellan fund for years... and that was his way of investing. It worked then - and it still works today.

He has a great book -- "Beating the Street"... which he wrote about his style of investing. Smart guy - and fantastic results over a long period of time.

[Sieg]

So......thanks to this thread I've been digging in the files and found a State Farm Flexible Premium Annuity IRA that I opened in 1983 which a fund it and forget about it deal.........total premiums paid $6,500, current value $13,200....cha-CHING!

Then I quizzed the wife about her 401K plan at work which I've paid little attention to..........comprised of 3 Mutual Funds (SUPAX, OUTDX, SMCAX) through DWS Investments (Deutsche Bank Group) asset allocations are Growth & Income and Growth. The Sept 30, 2011 YTD performance was -$13,600. :_paranoid

I researched each fund's performance and Morningstar basically rated 2 of the 3 as dogs and the other mediocre.

I will definitely be making modifications as I figure she's still got a good 15 working years left in her! :D

Having 66% of that fund in say 5 Steady Eddies and one decent mutual fund would have certainly beat -$13.6K over the same period right?

[GregWeld]

So......thanks to this thread I've been digging in the files and found a State Farm Flexible Premium Annuity IRA that I opened in 1983 which a fund it and forget about it deal.........total premiums paid $6,500, current value $13,200....cha-CHING!

Then I quizzed the wife about her 401K plan at work which I've paid little attention to..........comprised of 3 Mutual Funds (SUPAX, OUTDX, SMCAX) through DWS Investments (Deutsche Bank Group) asset allocations are Growth & Income and Growth. The Sept 30, 2011 YTD performance was -$13,600. :_paranoid

I researched each fund's performance and Morningstar basically rated 2 of the 3 as dogs and the other mediocre.

I will definitely be making modifications as I figure she's still got a good 15 working years left in her! :D

Having 66% of that fund in say 5 Steady Eddies and one decent mutual fund would have certainly beat -$13.6K over the same period right?


Sadly -- Another reason mutual funds SUCK!

Yes -- you could throw a dart at a board and beat that performance!

[GregWeld]

Just a note on some numbers I read today on Coke (KO)... which I own.

Given the size of - and the maturity of - Coke as a company... they're still 'growing'. And the better part - to me - is something that I look for in a DIVIDEND payer i.e., GROWTH IN THE DIVIDEND because that keeps you ahead of INFLATION even if your share price is static.

Coca-Cola has grown its revenue by 8.7%, its earnings by 19%, and its dividend by 9.5% annually over the past 5 years.

[GregWeld]

I found this and clipped it from an article.... and I have two takeaways from it:

Long term - and being counter or contrarian investor (I have LEARNED to be somewhat of a contrarian)... and maybe a third takeaway - eventually your earned interest/dividends will add more than you can on your own!

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

As the past two centuries have shown, there has never been a 15-year period in which stocks delivered losses. That means when an investor buys in a given year, they can be reasonably certain of earning positive returns on their investment within 15 years—with gains ranging from just above zero to over 100%. Averaging the returns over the long run works out to 7% to 9% per year.

Investments made during the bullish phases are more likely to have long-term results closer to the zero bound. Conversely, investments made during the bearish phase are more likely to end up closer to the 100% level.

Not to be overlooked is the compounding of returns. Someone investing a portion of their income each year has a good chance of finding that, after 15 to 20 years, the return on their portfolio rather than salary deductions, is making a greater contribution to their retirement fund.

[GregWeld]

Louis Navellier is a super smart guy... and this is a very good - short - read about super easy to follow things to look for in a stock. Forget the stock advice at the end - that's not the reason for this post -- but rather his "reasoning" behind looking for GROWING EARNINGS... in his stock picks.



http://www.moneyshow.com/investing/article/1/regBook-26163/5-Things-Every-Investor-Needs-to-Know-Before-Investing-in-2012/

[Sieg]

Thanks, that was a good read. :thumbsup:

[fleetus macmullitz]

Louis Navellier is a super smart guy... and this is a very good - short - read about super easy to follow things to look for in a stock. Forget the stock advice at the end - that's not the reason for this post -- but rather his "reasoning" behind looking for GROWING EARNINGS... in his stock picks.



http://www.moneyshow.com/investing/article/1/regBook-26163/5-Things-Every-Investor-Needs-to-Know-Before-Investing-in-2012/

Enjoyed it, danke schoen Herr Veld. :unibrow:

[Blake Foster]

Just got a call from my broker today, one of my stocks went up 5.00 today and the company is being taken over, he suggested we sell and move to a different energy stock that pays 7.5% dividend.
my plan ended up with a 20% return over the last year and is up 5% this year already.
He was saying it has been the best performing plan he has reviewed this year sofar. i just wish i had way more in there.
but all i do is look at it and forget about it,i have averaged about 17% over the last 8 years

[GregWeld]

Just got a call from my broker today, one of my stocks went up 5.00 today and the company is being taken over, he suggested we sell and move to a different energy stock that pays 7.5% dividend.
my plan ended up with a 20% return over the last year and is up 5% this year already.
He was saying it has been the best performing plan he has reviewed this year sofar. i just wish i had way more in there.
but all i do is look at it and forget about it,i have averaged about 17% over the last 8 years



Some guys are better lucky than smart.... which category do you fit? :lol:

Are you mostly in Canadian stocks and funds?? Eh?? I don't track "their" market but it wouldn't surprise me a bit that overall that market might be better than the US! We have managed to spend ourselves into oblivion... and just about wrecked our housing market (because we're a nation of over spenders!). Maybe we should swap places?!?! But you have to leave the Nova behind. :_paranoid

[Sieg]

(because we're a nation of over spenders!)
Glad I wasn't taking a drink when I read those words coming from your keyboard! :lol: :cheers:

[Blake Foster]

Some guys are better lucky than smart.... which category do you fit? :lol:

Are you mostly in Canadian stocks and funds?? Eh?? I don't track "their" market but it wouldn't surprise me a bit that overall that market might be better than the US! We have managed to spend ourselves into oblivion... and just about wrecked our housing market (because we're a nation of over spenders!). Maybe we should swap places?!?! But you have to leave the Nova behind. :_paranoid

Definatly in the SMRT catagory!!!! oh wait I just reread the question, you must be talking about someone else cuz smart and lucky are not in my vocabulary. Now the broker he might be smart??? or lucky i really don't care which it is
yes mostly Canadian bought 2 new ones today one canadian oil company and one us fuel distribution company.

[GregWeld]

Glad I wasn't taking a drink when I read those words coming from your keyboard! :lol: :cheers:

Spending is RELATIVE.... to the income. :unibrow:

[GregWeld]

Definatly in the SMRT catagory!!!! oh wait I just reread the question, you must be talking about someone else cuz smart and lucky are not in my vocabulary. Now the broker he might be smart??? or lucky i really don't care which it is
yes mostly Canadian bought 2 new ones today one canadian oil company and one us fuel distribution company.



I agree with you Blake! Doesn't make any difference... lucky vs smart or both or none.... as long as it's going UP!

:cheers: :woot: for you!

[Bucketlist2012]

I agree with you Blake! Doesn't make any difference... lucky vs smart or both or none.... as long as it's going UP!

:cheers: :woot: for you!

I am working on being smarter..:lateral:

Luck ?? Oh my... I have plenty of that..:thumbsup:

Right place, at the right time..Not all by my doing, but I will take it...:rofl: :woot:

I bought at the right time in life...Again some by sheer Luck.

Looking back after reading this thread, i could have done even better...

Most of it was by not being too greedy, by getting in when everyone else would not, and by just being in the game. And not on the sidelines..

Sure the easy money was made from late 2008 to 2010. But even in 2011, with volatility at it's peak, money was made, and dividends were earned, so better to be in, than to be on the sidelines.

And the over spending ??? Well not being one of them, I got the deals of a Lifetime on Property after 2009...While the overspending of fake equity crushed them.

you would think that over spenders would learn ? remember , I have the family members with zero retirement money, going over and over to Europe, and foreclosed and bankrupt, by overspending..

I tried to help for a while...What a waste of time and money that was..

[GregWeld]

Solar --- What you've done is both smart and lucky.... you have to be smart enough to make some luck!

Anyone that is buying properties NOW -- they're lucky that someone else took a big hit on it -- and you're SMART buying at these depressed prices! That building I just bought (I'm the bank only) for my brother in law -- cost $600K to build -- He bought for $335K -- how can that not be good for him long term??He's lucky I can bankroll it for him (6% interest), but HE is smart making the move.

The oldest saying in the Universe (thanks AL!) is BUY LOW, SELL HIGH.... it aint' rocket science!! :lol:

When we look at those long term charts of good stocks.... IF -- IF -- they continue on the historic path -- they SHOULD BE higher over time... as should real estate. My bet is - if you wait to see when they're going higher - you're already late. Sometimes it's just hard to take the plunge when things don't look so hot. The folks that do - they're the lucky ones! Or are they just being smart enough to create their own luck?

[Bucketlist2012]

Solar --- What you've done is both smart and lucky.... you have to be smart enough to make some luck!

Anyone that is buying properties NOW -- they're lucky that someone else took a big hit on it -- and you're SMART buying at these depressed prices! That building I just bought (I'm the bank only) for my brother in law -- cost $600K to build -- He bought for $335K -- how can that not be good for him long term??He's lucky I can bankroll it for him (6% interest), but HE is smart making the move.

The oldest saying in the Universe (thanks AL!) is BUY LOW, SELL HIGH.... it aint' rocket science!! :lol:

When we look at those long term charts of good stocks.... IF -- IF -- they continue on the historic path -- they SHOULD BE higher over time... as should real estate. My bet is - if you wait to see when they're going higher - you're already late. Sometimes it's just hard to take the plunge when things don't look so hot. The folks that do - they're the lucky ones! Or are they just being smart enough to create their own luck?

Well I always say that Luck is the meeting of preparation and opportunity.

I had been preparing and all the numbers were wrong.. The house i ending up buying was sold for 660K in 2006...I ended up getting it for 267K..in late 2008. it is holding at about 330K, which should be the bottom for several years..But it is home, and i don't plan it in the retirement mix until very late in the game...had i bought six months sooner, I would be down 100K.. i was lucky, because we both know you can't time the bottom...being close enough would have been ok, but i hit it just right..





You are right , partially by creating my own luck, and partially by being at that moment in history, 2008..




your thread has made me look back and forward.. None of my investments have done bad, I just know i would have done even better, had I followed my gut even more..
my money management skills got me to where I am.. Being a somewhat novice investor, I could have even done better, but that is part of the learning...

Oh , and you can call me Mike...I was a Solar guy until 2009..When I changed my life after the crash.. I invested my way to wealth. took a big risk in 2008/2009..

And thanks for the words of encouragement..I have been studying investing, money management, the housing bubble before it happened,ect.., for a while now...Late starter but quick learner.

This studying has by far been the best thing in my life.. The rewards are life changing for me, and my family..

so thanks for the thumbs up, and all your advise and opinions...

[Blake Foster]

I recently read a good book "The Weathy Barber Returns" it was written by a Canadian Eh. it is an easy read (thats how i read the whole thing lol) and ALOT of practical advise in it ,20 bucks well spent.
his big deal is "PAY YOURSELF FIRST" not the easiest concept to wrap your head arround when the bills are piling up but it makes sence for sure.
I am a guilty of not putting enough away, but have made some realestate investments that will pay off soon and that then will open the door to catch up, Oh and there is this little thing I call SpeedTech.......:willy: lol that seems to be at the top of the list.
I suggest everyone run out and buy the book. then let the wife read it, then your best friend, oh and make sure you rent it to them... lol

[RECOVERY ROOM]

I'll check in to that Blake, Might have to look at some of those Canadian companies to

[Sieg]

I'll check in to that Blake, Might have to look at some of those Canadian companies toBuy a Speed Tech Track Time Package and I bet he throws in a book for ya eh? :yes:

[GregWeld]

I recently read a good book "The Weathy Barber Returns" it was written by a Canadian Eh. it is an easy read (thats how i read the whole thing lol) and ALOT of practical advise in it ,20 bucks well spent.
his big deal is "PAY YOURSELF FIRST" not the easiest concept to wrap your head arround when the bills are piling up but it makes sence for sure.
I am a guilty of not putting enough away, but have made some realestate investments that will pay off soon and that then will open the door to catch up, Oh and there is this little thing I call SpeedTech.......:willy: lol that seems to be at the top of the list.
I suggest everyone run out and buy the book. then let the wife read it, then your best friend, oh and make sure you rent it to them... lol


One of my best friends lives up the street -- he and his wife have probably never grossed $125K per year -- and they both work full time.... He's 66 now... and here's the deal - HE PAID HIMSELF FIRST since he was about 20. His house is paid for - it's a nice small house, neat as a pin - perfect for 2 of them (no kids)... he has a brand new diesel F-250 (with roll up windows and cloth seats and zero chrome) and an Airstream -- paid for cash - he has a brand new car - paid cash.... He is without a doubt the most FRUGAL guy I know and I give him SERIOUS crap about that... I buy Snap-On he buys tools from the $1 bin.... I help him with his investments - and I'll tell you this guy qualifies for the book "The millionaire next door". And I'm so proud of him - because he's done all of this because he pays himself first.

When I met him 20+ years ago -- we were on a dock at the Grand Banks Rendezvous.... Yep -- he had a super nice little 32' GB (neat as a pin)... and no payments.

I still remember the day I popped his bubble -- his little 32' GB was super stingy on the fuel - according to him - at a burn rate of 3.5 gallons an hour - he made 7 knots.... my bigger 47' GB with TWIN turbo Cummins burned 11 GPH...and made 14 knots.... and he says to me -- after a trip from Seattle to Friday Harbor. "Man that big pig of yours cost you a fortune to run up here..." ME, being the figurer --- did some quicky math -- and said -- Dickie, You burned 30 gallons running up here.... I burned 55..... but I've been here since NOON! :woot:

[Bucketlist2012]

One of my best friends lives up the street -- he and his wife have probably never grossed $125K per year -- and they both work full time.... He's 66 now... and here's the deal - HE PAID HIMSELF FIRST since he was about 20. His house is paid for - it's a nice small house, neat as a pin - perfect for 2 of them (no kids)... he has a brand new diesel F-250 (with roll up windows and cloth seats and zero chrome) and an Airstream -- paid for cash - he has a brand new car - paid cash.... He is without a doubt the most FRUGAL guy I know and I give him SERIOUS crap about that... I buy Snap-On he buys tools from the $1 bin.... I help him with his investments - and I'll tell you this guy qualifies for the book "The millionaire next door". And I'm so proud of him - because he's done all of this because he pays himself first.

When I met him 20+ years ago -- we were on a dock at the Grand Banks Rendezvous.... Yep -- he had a super nice little 32' GB (neat as a pin)... and no payments.

I still remember the day I popped his bubble -- his little 32' GB was super stingy on the fuel - according to him - at a burn rate of 3.5 gallons an hour - he made 7 knots.... my bigger 47' GB with TWIN turbo Cummins burned 11 GPH...and made 14 knots.... and he says to me -- after a trip from Seattle to Friday Harbor. "Man that big pig of yours cost you a fortune to run up here..." ME, being the figurer --- did some quicky math -- and said -- Dickie, You burned 30 gallons running up here.... I burned 55..... but I've been here since NOON! :woot:

Love the stories... I get a little something out of each one...

I tell my Wife to watch and see long term how we will be doing....In 5 years....in 10 years...

My Father that passed, cut my Teeth on 42' Farallon Eagle Trawlers, and 34' CHB Trawlers.. Not the Grand Banks of Yachts, but still we were living....

The problem was, way beyond our means. I was 16 and did not know anything, even about Cars and Girls. Nothing...

And apparently, he did not either.. No investments, and we lived it up..

So in approx. 10 years, my father went from Well Off to broke... If that is not a painful memory that i will carry to my grave, i don't know what is...

He was a doctor, so he went back to work teaching at 70 to 85...

That is why money management is so important...as well as investing..

My wife and I will use our life experiences and wealth to build more wealth, while enjoy life as we go, debt free except the 4.5% small fixed mortgage..

I learned how not to do it, and i am learning how to do it really well.. The Journey and the Goals achieved, and the rewards, keep me motivated and pumped up..:lateral: :cheers: :woot:

[Blake Foster]

Buy a Speed Tech Track Time Package and I bet he throws in a book for ya eh? :yes:

And that offer will stand for ANYONE on the fine board!!! from this day forward.
details available by calling 1-888-467-1625
Please have your visa card ready.
:thumbsup:

[Bow Tie 67]

And that offer will stand for ANYONE on the fine board!!! from this day forward.
details available by calling 1-888-467-1625
Please have your visa card ready.
:thumbsup:

My cash back program is better with Discover. I wish I could pay my mortgage with it.

My Roth hit my trading account today.

Seeded it with:

Coke, AT&T, P & G, Exxon, and Walmart


I really like the " pay yourself " concept, I will be using this the next time I'm beating the war drums on money management.

[GregWeld]

I hate that little man on Wall St!

I mentioned that I sold half my Goldman Sachs --- since it was way down -- and I had to counter some gain from the Apple sale at the end of the year... And today it jumps $6

Okay - so the lesson here is -- SCALING IN == SCALING OUT.... I only sold HALF of the position and still hold 1000 shares... so I get HALF the gain at least.
Had I sold it all at the lower $ I would just be "out". Remember -- this little SOB is watching you! And the minute you're OUT - he takes it UP. Hate that little guy!:rofl:

If you scale into a position - sometimes it raises your cost basis... IF the stock is rising over time. But ---- isn't that what you wanted when you bought it in the first place? So if you buy 50 shares at $50 and buy another 50 @ $52 does it really affect your basis that much to care? No --- you really want it to go to $60 so you still have a nice gain. Don't be a hog.... :unibrow:

[GregWeld]

Here's another PET PEEVE with Wall Street..... A major rating firm (Goldman) CUTS it's rating on a stock while RAISING the price it expects the stock to trade to.... the REASON for the "ratings cut".... IT HAS GONE UP 36% in ONE YEAR. DOH! Really -- so the stock has gone up 36% and they expect it to go higher!

OMG -- no wonder people go crazy listening to these idiots!

Here's the cut and paste:


Cigarette maker Philip Morris International Inc. (PM) on Tuesday caught a big downgrade from analysts at Goldman Sachs.

The firm said it cut its rating on PM from “Buy” to “Neutral” with an $80 price target, suggesting a 3.5% upside to the stock’s Friday closing price of $77.32.

Goldman defended the move by noting the company lacks any form of near-term catalysts.

Philip Morris International shares, which have gained more than 36% in the past year, fell 38 cents, or -0.5%, in premarket trading Tuesday.

[pw2006]

I hate that little man on Wall St!

I mentioned that I sold half my Goldman Sachs --- since it was way down -- and I had to counter some gain from the Apple sale at the end of the year... And today it jumps $6

Okay - so the lesson here is -- SCALING IN == SCALING OUT.... I only sold HALF of the position and still hold 1000 shares... so I get HALF the gain at least.
Had I sold it all at the lower $ I would just be "out". Remember -- this little SOB is watching you! And the minute you're OUT - he takes it UP. Hate that little guy!:rofl:

If you scale into a position - sometimes it raises your cost basis... IF the stock is rising over time. But ---- isn't that what you wanted when you bought it in the first place? So if you buy 50 shares at $50 and buy another 50 @ $52 does it really affect your basis that much to care? No --- you really want it to go to $60 so you still have a nice gain. Don't be a hog.... :unibrow:

Greg- I've got my eyes out for that dude, and I totally agree with scaling in and scaling out (unless one of the fundamental reason you bought a stock changes, ie- you bought a stock for the dividend and the company suspends the dividend and issues a poor outlook, etc). To follow up on my earlier post of scaling down my position in FOLD and increasing CVX... My fundamental reason for purchasing FOLD hasn't changed, which is why I held half my position, I just wanted a little less volatility in my portfolio. FOLD is up nearly 120% since I made that move! :willy: Good news, I kept half, bad news I sold half. Let me know if you find the little man from Wall Street!

[GregWeld]

Greg- I've got my eyes out for that dude, and I totally agree with scaling in and scaling out (unless one of the fundamental reason you bought a stock changes, ie- you bought a stock for the dividend and the company suspends the dividend and issues a poor outlook, etc). To follow up on my earlier post of scaling down my position in FOLD and increasing CVX... My fundamental reason for purchasing FOLD hasn't changed, which is why I held half my position, I just wanted a little less volatility in my portfolio. FOLD is up nearly 120% since I made that move! :willy: Good news, I kept half, bad news I sold half. Let me know if you find the little man from Wall Street!




Had you not done ANYTHING -- FOLD would have stayed flat. So thank yourself for being a market maker! :rofl: :rofl: :woot:

I've warned of this phenomena on several occasions. I don't know why it happens - but it does. I have a rope with a noose ready when I find the little
basterd.

Rules of the road -- the one you sell - goes up - the one you buy - goes down. It's a total ying and yang thing. :lol:

[mdprovee]

I wish I understood more...I am going to try and learn about it more this year, and start investing.

In the mean time, I am just going to start sending you checks Greg, and you can invest for me.

Great subject!!

[GregWeld]

I wish I understood more...I am going to try and learn about it more this year, and start investing.

In the mean time, I am just going to start sending you checks Greg, and you can invest for me.

Great subject!!



Mike == Buy low - sell high.... :rofl:


Just kidding of course.... this isn't TRADING 101 -- it's INVESTING 102!


Just give the checks to Laura.... she'll find a lot of investing to be done at the mall! :woot:

[CRCRFT78]

I have decided to take an investing class at school. It won't hurt to broaden my horizons while gaining some insight into this game. This thread is a great source of information. I really want to step it up a little.

BTW, I'm also looking for that little Wall Street Leprechaun. As soon as I sell the stock it goes up after being stagnant for the better part of my ownership in it. You let me know when you find him Greg, I'd also like to stick my foot up his ass.

[GregWeld]

I have decided to take an investing class at school. It won't hurt to broaden my horizons while gaining some insight into this game. This thread is a great source of information. I really want to step it up a little.

BTW, I'm also looking for that little Wall Street Leprechaun. As soon as I sell the stock it goes up after being stagnant for the better part of my ownership in it. You let me know when you find him Greg, I'd also like to stick my foot up his ass.



Just don't let them make it complicated - because it's NOT!

Maybe you should teach the class! You know everything there is to know!

Names you know and understand - Good stuff - good chart (long term i.e. 5 years or better) - rising dividend payer - earnings growth... CLASS DISMISSED!

Give that man 5 stars and some gold bars!!

:rofl: :woot:

[CRCRFT78]

Catching up on a little reading and I thought I'd share this article in the December 12th issue of Fortune magazine.
http://finance.fortune.cnn.com/2011/11/21/dividend-stocks-investing/

[GregWeld]

Catching up on a little reading and I thought I'd share this article in the December 12th issue of Fortune magazine.
http://finance.fortune.cnn.com/2011/11/21/dividend-stocks-investing/

Good article.... and is what I've been pounding here... remembering that this is Investing 102 -- not anything more or less.... because we can veer off and get into all kinds of investing/investments/hedge strategies etc. But that was not the OP question or direction...

I did go back and check out United Technologies (UTX) since it was mentioned here - and had been asked about in this thread.

I'm still not a "fan" for the reasons stated earlier.... which is -- in my portfolio --- the growth (18% over 5 years) doesn't overcome the relatively low 2.48% dividend. When I have a lower dividend - it's okay - if it's offset by better than average growth. In this case I don't think 18% over 5 years is worth the 2.48% cash flow. I think there are better opportunities out there when you do the comps.... Coke (KO) comes to mind -- with it's "low" dividend % of 2.79% but even this steady eddy has a 5 year growth DOUBLE that of UTX....

So remember... do your homework... no guessing. These comparisons are easy and just take a few minutes. And I'm using this as an EXAMPLE only of the way I personally think and do my investing. If there are OTHER REASONS someone wants to own UTX over COKE - I'm totally good with that -- that's their choice... and their reasoning. Just make sure if you're investigating companies to invest in - that you've done your own work and UNDERSTAND your choices. That's the key takeaway.

I compared UTX against a boring holding I have in the portfolio - Johnson and Johnson (JNJ) and the growth rate is "horrid" on JNJ -- it's actually DOWN 4% over 5 years.... and I mention this to make a point out of the above statement... I own this because of the stability it gives my account - and more importantly - my head. If you look at the long term chart - it (JNJ) don't go down much either. So for me - that's every bit as important. And here's why - to me - maybe we're in a funky market for 4 years or so and I'm down 35% overall -- and along comes a "deal" I want to do... I look around for available funds - and everything I own is down 35%... do I want to sell low? No! Am I getting good dividends off most of these "losers" -- YES! So here sits JNJ -- not much of a dividend - and it's only down 15%... guess where the cash is going to come from? I can sell JNJ - not be down "much" and won't loose much income either.... so it's what I call "parking" money... and everyone needs to have some money "parked".

[GregWeld]

So just for fun -- do a "visual" on my theory of "parking money".... remembering that all of us have different goals and different "means" etc... and trust me - I'm the first one that understands that.

Go to Google Finance -- pull up a 10 year chart of JNJ -- then in the COMPARE box at the top of the chart -- compare UTX - KO - GE

For years I used General Electric (GE) to "park" money. But as you'll see - if you didn't change that when Jack Welch retired (the GREATEST CEO) then that strategy bit you...

But what I want you to see is how "narrow" that line is of JNJ near the "ZERO" mark - so it isn't growing (above the line) but it doesn't go far below it either...and for that segment of "money" that has importance to me.

It's about BALANCE.... I want to balance the risk stocks with steady stocks -- Knowing that I might give up being the biggest winner in a competition had I put everything in the big risk/reward bracket.... but I'm not going to be the biggest loser in a down market either... and I might be able to take advantage of the big losers when they're giving away their apartment complex or building or hot rod etc. :unibrow: :D

[Woody]

Good article.... and is what I've been pounding here... remembering that this is Investing 102 -- not anything more or less.... because we can veer off and get into all kinds of investing/investments/hedge strategies etc. But that was not the OP question or direction...

I did go back and check out United Technologies (UTX) since it was mentioned here - and had been asked about in this thread.

I'm still not a "fan" for the reasons stated earlier.... which is -- in my portfolio --- the growth (18% over 5 years) doesn't overcome the relatively low 2.48% dividend. When I have a lower dividend - it's okay - if it's offset by better than average growth. In this case I don't think 18% over 5 years is worth the 2.48% cash flow. I think there are better opportunities out there when you do the comps.... Coke (KO) comes to mind -- with it's "low" dividend % of 2.79% but even this steady eddy has a 5 year growth DOUBLE that of UTX....

So remember... do your homework... no guessing. These comparisons are easy and just take a few minutes. And I'm using this as an EXAMPLE only of the way I personally think and do my investing. If there are OTHER REASONS someone wants to own UTX over COKE - I'm totally good with that -- that's their choice... and their reasoning. Just make sure if you're investigating companies to invest in - that you've done your own work and UNDERSTAND your choices. That's the key takeaway.

I compared UTX against a boring holding I have in the portfolio - Johnson and Johnson (JNJ) and the growth rate is "horrid" on JNJ -- it's actually DOWN 4% over 5 years.... and I mention this to make a point out of the above statement... I own this because of the stability it gives my account - and more importantly - my head. If you look at the long term chart - it (JNJ) don't go down much either. So for me - that's every bit as important. And here's why - to me - maybe we're in a funky market for 4 years or so and I'm down 35% overall -- and along comes a "deal" I want to do... I look around for available funds - and everything I own is down 35%... do I want to sell low? No! Am I getting good dividends off most of these "losers" -- YES! So here sits JNJ -- not much of a dividend - and it's only down 15%... guess where the cash is going to come from? I can sell JNJ - not be down "much" and won't loose much income either.... so it's what I call "parking" money... and everyone needs to have some money "parked".

How about over a 10 year period which was what I was looking at. UTX up 143%, KO up 49%, JNJ up 12%.

That brings up a question. Depending on the time period you look at, one stock may look better over 5 years, but another may look better over 10 years. How do you decide what time period to use?

[GregWeld]

How about over a 10 year period which was what I was looking at. UTX up 143%, KO up 49%, JNJ up 12%.

That brings up a question. Depending on the time period you look at, one stock may look better over 5 years, but another may look better over 10 years. How do you decide what time period to use?



Great question --- and I look at BOTH for my decision making...

And you're right on - because the more you try to compare - one stock vs the other... it begins to look more like a horse race.... ya know -- the announcer shouting out "blackie jack is ahead by a nose - now comes lucky lady... and making a charge from the back is two socks..."

IMPOSSIBLE.... :lol:

This is where a small amount of brain power needs to be exercised and you just have to gather all the info - look at the time frames - and then fit them to your portfolio. I don't like to use 3 year -- because of the great "recession" killed EVERYONE... so the five year gives me the stocks ability to REBOUND... and then you go out 10 year for "track record" -- I want to see that they were climbing prior to the big dipper! The ability to rebound is it's "resilience" and I like a stock like that. It means that it was a classic case of "toss the baby out with the bath water" rather than poor management or poor product line etc.

[68 stang]

Thank you for all of the great information Greg. I took your advice and then applied it. I invested some money about three weeks ago and now it is up 4% overall and they have not paid me dividends yet, can't wait for that.

[GregWeld]

Good to hear!!!

I love a dividend check (actually just a deposit into your brokerage account) it's like getting FREE money.... :yes:

[MoparCar]

Again what a great thread! Thanks to the OP and Mr. Greg Weld!!!

Regarding online discount brokerage firms, what are everyone's favorites?

I know Greg and a lot of you use Schwab. I would like to, but it appears you need to do 35 trades per year to be an "active" trader and thus have access to all the nice features of their site. How about the standard platform (not an active trader) how does it look? While 35 trades doesn't seem like many, if we are just diversifying into say 5-10 stocks and holding them for a long term investment (at least a year and a day for tax purposes) will I every get to 35 trades just doing some initial investing? The minimum funds are not a problem. How about using a MAC instead of PC---any issues?

Scottrade looks great and gets great reviews, but they do not offer a DRIP program (dividend reinvestment program). I would probably use them if they offered this since they have offices very close to me, no unreasonable fees for the first time traders, etc.---But no automatic reinvestment of dividends....

E-Trade also looks good, but some of the reviews state a lot of hidden fees for inactivity, etc. Plus their trades are a bit higher in price.

How about the others-TD, Tradeking, OptionHouse, Fidelity, etc? They mostly all have low fees, good platforms, etc. but no local office to speak of.

Also, how about funding the account. Any experience with good/bad of each regarding transfers, wires, etc.?

Opinions, experience? I gotta get this going and my money working for me soon!

Thanks for all the great advice on this topic!

[CRCRFT78]

My IRA retirement accounts are with Fidelity and they have been very easy to use. I also have a Schwab brokerage/investment checking account that I use for investing outside of retirement purposes. Both have been great to use, very easy and I haven't noticed any unusual/hidden fees. I've visited the Fidelity branch one time and felt they were useless once I left. I do everything online so the lack of an actual branch located to you shouldn't be an issue. If there is something I need I just call.

[GregWeld]

Again what a great thread! Thanks to the OP and Mr. Greg Weld!!!

Regarding online discount brokerage firms, what are everyone's favorites?

I know Greg and a lot of you use Schwab. I would like to, but it appears you need to do 35 trades per year to be an "active" trader and thus have access to all the nice features of their site. How about the standard platform (not an active trader) how does it look? While 35 trades doesn't seem like many, if we are just diversifying into say 5-10 stocks and holding them for a long term investment (at least a year and a day for tax purposes) will I every get to 35 trades just doing some initial investing? The minimum funds are not a problem. How about using a MAC instead of PC---any issues?

Scottrade looks great and gets great reviews, but they do not offer a DRIP program (dividend reinvestment program). I would probably use them if they offered this since they have offices very close to me, no unreasonable fees for the first time traders, etc.---But no automatic reinvestment of dividends....

E-Trade also looks good, but some of the reviews state a lot of hidden fees for inactivity, etc. Plus their trades are a bit higher in price.

How about the others-TD, Tradeking, OptionHouse, Fidelity, etc? They mostly all have low fees, good platforms, etc. but no local office to speak of.

Also, how about funding the account. Any experience with good/bad of each regarding transfers, wires, etc.?

Opinions, experience? I gotta get this going and my money working for me soon!

Thanks for all the great advice on this topic!



Nobody can really answer all this for you -- you need to make a list of questions you want to have answers to - and discuss them with EACH BROKERAGE. Or visit their websites and see if you can easily find the answers your looking for.

Each brokerage has plusses and minuses.... and only you will be able to decide what fits for you.

I don't pay any fees at any brokerage... :unibrow: Not even for wire transfers etc....

[GregWeld]

Let me correct - so there is no misunderstanding --- that I pay TRADING FEES -- i.e., the $8.95 per trade -- but when I say "no fees" -- I mean I pay nothing other than the per trade fees all brokerages charge.

[MoparCar]

Greg,
Gotcha. I previously made the list of questions you mention for that reason also.

The websites do answer much of these questions although it's always helpful to hear from first hand accounts. The good, the bad and the ugly.

I don't think i'll have the fees waived the same as you LOL! (at least not yet...positive thinking-big gains:) )

Thanks

[GregWeld]

Greg,
Gotcha. I previously made the list of questions you mention for that reason also.

The websites do answer much of these questions although it's always helpful to hear from first hand accounts. The good, the bad and the ugly.

I don't think i'll have the fees waived the same as you LOL! (at least not yet...positive thinking-big gains:) )

Thanks


And I hope you get there next week!!!


Really though -- none of us is probably going to have much experience with so many different brokerages -- there's just too many of them. I use Schwab for some stuff -- Fidelity for other stuff - Wells Fargo for IRA -- McAdams Wright Ragen for bonds -- etc... Some brokerages can handle certain things for you - others can't... (such as a branch of Wells Fargo that handles some "private paper" investments for me)....

What's probably going to be a "consideration" for many is What's the minimum size of account - the activity fees - Who has an easy to use Web presence... etc. It's all so subjective.

I'm not a "trader" so the brokerages that offer all manor of trading software etc - just doesn't tickle my fancy - so those "features" aren't important to me - but they may be to someone else....

My personal perspective would be quite different than most -- I get my ass kissed at all of them -- and get what I want/need with a simple phone call or email... and that's why I've always just said "any of the discount brokerages"... then ya gotta just find one that fits.

FEES are deductible by the way.... the fees should be included in your COST BASIS...


Another "by the way" -- I make ALL the brokerages send me PAPER statements.... I never want to be in a position of not having another form of "proof" 5 years from now - about some trade or cost or sale price etc.... this laptop will be long gone most likely -- and if I need to look something up from the IRS -- I want to have it at my fingertips...

[GregWeld]

This week is a good "insight" into what we might be heading for.... good bad or indifferent... with these titans reporting Monday and Tuesday.

I don't buy or sell on this kind of "info".... but EARNINGS is what the stock market is all about --- and it's not so much about what they earned as it is about WHAT THEY SAY ABOUT GOING FORWARD. That is the take away you need to pay attention to. What does business look like NEXT Quarter and for the year.


Monday will start one of the two most hectic weeks of the earnings season. Marquee names due to report earnings on Monday include Texas Instruments Inc and Halliburton Co, followed by Apple Inc, DuPont, Johnson & Johnson, McDonald's Corp, Verizon Communications, and Yahoo! Inc — all on Tuesday.
BoeinG, ConocoPhillips and United Technologies are set to release results on Wednesday. Thursday's earnings line-up includes 3M Co, AT&T Inc, Starbucks and Time Warner Cable Inc. On Friday, earnings are expected from Chevron Corp, Honeywell International and Procter & Gamble Co.

[CRCRFT78]

Out of curiosity, would it be wise to buy into a stock thats reporting earnings on tuesday on monday or has the train already left the station.

[GregWeld]

Out of curiosity, would it be wise to buy into a stock thats reporting earnings on tuesday on monday or has the train already left the station.

That's a GAMBLING question... how much do you know about the company -- are you willing to BET that the earnings report is going to be good?? Because if it isn't - you might get your butt crushed.

Anyone that bough GOOGLE before earnings -- just took a $50+ haircut...

So what you really need to ask yourself is ------ If the earnings are good -- and their forward comments are good -- am I INVESTING -- or am I trying to get the first .50 by gambling on an unknown?

Sometimes I'll buy AFTER earnings a day or two when I see which way the wind is blowing... 'cause I'm in it more for a couple years than just today. :cheers: :woot:

[GregWeld]

Out of curiosity, would it be wise to buy into a stock thats reporting earnings on tuesday on monday or has the train already left the station.

Good question by the way!

[WSSix]

Well, Halliburton has been hiring like crazy and I stay busy as crap most of the time, so we better report good earnings or else I'm going to want to know whose been spending all the money I bring in from the jobs I do, lol.

[billscamaros]

Earnings are announced every quarter, right? Are the earnings announced this week of greater significance than those announced throughout the rest of the year?

And the earnings that are announced this week set the tone for the dividends that are paid at the end of this quarter?

[GregWeld]

Earnings are every quarter -- but not all companies run on a calendar year... so really - there's an earnings report just about every day from "somebody"...

What earnings do is give you a peek into how things are going - in the company - and in the SECTOR as well.... You might own FORD stock - and pay attention to GM earnings... because they may say things that are indicative of how things are going overall for sales etc...

This is a broad based generalization of course - but if several big companies come out and report good sales and profits and have good things to say about going forward - then this can lift the market overall... and of course the reverse can happen.

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

Dividends are set per quarter... and are indicative of how the company is doing. Doing really well and feel good about the future of their earnings they may choose to increase the dividend. That is a really good indicator because they are saying that their income is growing enough to support that payout.

COMPANIES are loathe to reduce the dividend....because it says "we're not doing so hot"...

It's really not much different than a persons personal situation.... nobody wants to be in a Ferrari and then have to trade down to a Yugo... and the reverse is true as well -- IF a person feels good about their future earnings - they're likely to buy a better car (pay a higher dividend).

[GregWeld]

Well, Halliburton has been hiring like crazy and I stay busy as crap most of the time, so we better report good earnings or else I'm going to want to know whose been spending all the money I bring in from the jobs I do, lol.

Keep up the good work! Halliburton reported good numbers and I was looking for a quote from you in there somewhere...

[GregWeld]

So here's what I was saying about "THE FUTURE" as it pertains to a companies quarterly reports.... and these are - to me - far more important than what they did "this quarter". Because I'm an INVESTOR I want to have a feel for how my dividend is going to be paid going forward... that's what I'm buying - that dividend (earnings) stream...

So HALIBURTON comes out and says this quarter was good - they beat by a penny -- but then say - but going forward we may be impacted because of blah blah blah... Some of that talk is CYA - but some of it is right on the money because they are seeing something they don't like - so expect HAL to open down today and maybe trend down going forward


Here's a cut and paste...


Halliburton Co, the world's second-largest oilfield services company, posted a higher-than-expected quarterly profit and said its revenues would grow faster than oil and gas companies would drill this year.

Still, the company said its costs were rising, and that the industry shift away from dry gas and toward oil and natural gas liquids resources would hit its first-quarter earnings.

"We believe that reduced productivity and increased costs resulting from this relocation will be a short-term disruption for us and that the impact we saw in the fourth quarter will continue into 2012," Chairman and Chief Executive Dave Lesar said in a statement.

[Sieg]

HAL down 3.95% in the first five minutes.........

[GregWeld]

So let's just continue the "102" version of this thread....

Here's why EARNINGS are important -- but those FORWARD looking statements are even MORE IMPORTANT....

Let's continue to use Halliburton as todays example....

They beat on the earnings number - but made that caveat that going forward earnings might be impacted negatively...

When you couple this with a 1.02% dividend... so you don't have that nice "pay me while I wait for things to turn around"... "support level"... suddenly there's more sellers than buyers and the stock price declines.

IF --- it paid a 5% dividend - my guess is the stock would have hardly budged... They didn't say the business stunk - they just said it may have some impact yet they still managed to beat the earnings estimate - so it couldn't be "that bad"... But this is a stock that NEEDS that stock price GROWTH component - and if that's not there to offset that low dividend - then you get what you're seeing today... a decline.

Now -- if you're listening to the talking heads -- then you'll hear the words "it'll need some kind of CATALYST going forward". What they're saying is in layman's terms -- it will need a big business turnaround - or some big new oil field discovery or similar to get it going UP again. There will have to be some big news that will point to some event to get the GROWTH back in the stock price.

[GregWeld]

Since we're in "earnings season" --- I thought I might go out on a limb here and try to keep this thread interesting and make it a little "FUN" for you guys (at my expense - of course).


We own 160,000+ shares of EMC..... Okay - get off your calculators - and I don't own it at ZERO - so no - the math is not going to give you much indication of my profit or loss... for all you know - I have a loss in the stock (the good news is I DO NOT) :lol:

EMC reports earnings BEFORE the bell tomorrow (23rd).... let's see what happens to me but let's also use this example for a little "lesson". The lesson is the "law of large numbers".

What happens when you have positions like this -- regardless of the size -- size is relative - and it is why you need to be DIVERSIFIED... THIS IS THE "the law of large numbers". The number of shares multiplied by the share gain or loss - turns into "a large number".

So for INVESTING 102 --- I preach buying DOLLAR AMOUNTS rather than share amounts... because it is easier for you to see and keep track of - it's apparent when $1000 goes to $1250 or down to $900... But what happens is, if you have 500 shares of one stock and only 50 of another - that 500 shares becomes YOUR law of large numbers... a .50 swing gets multiplied by the 500 and becomes a real gorilla (up or down) So you need to be AWARE of that.

Because of prices (share cost) it's almost impossible to balance out an account in the number of shares... and maintain that 5% rule and have diversity. One stock costs $10 so a $500 investment gets you a bunch another stock is $50 a share will get you far less for the same $500 --- but a MOVE in the $10 shares can have MORE EFFECT on your account!

I hope this makes sense.


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

WARNING HERE -- I am not allowed to trade EMC because we are considered "INSIDERS" -- as such I have no knowledge to share with ANYONE whether it will be good bad or indifferent...

[GregWeld]

BTW --- I think this thread holds interest because it's like our car builds -- we all get to live AND LEARN vicariously watching these cars go together step by step. It's so much more fun than just going to a car show and seeing a completed car. SO it is in that light that I've shared way too much personal info -- but I think it will HELP people more - and they'll be more interested and learn more when done this way. This is why I've shared my thought process more than just Do this don't do that. It's the thought process that is what you need to "get into". It's like fab work on a car - no two are alike - and it takes seeing someone come up with a solution that might kick up a solution for your own build... something "similar" but twisted to meet your needs.

Hope that makes sense.... :cheers:

[Bucketlist2012]

BTW --- I think this thread holds interest because it's like our car builds -- we all get to live AND LEARN vicariously watching these cars go together step by step. It's so much more fun than just going to a car show and seeing a completed car. SO it is in that light that I've shared way too much personal info -- but I think it will HELP people more - and they'll be more interested and learn more when done this way. This is why I've shared my thought process more than just Do this don't do that. It's the thought process that is what you need to "get into". It's like fab work on a car - no two are alike - and it takes seeing someone come up with a solution that might kick up a solution for your own build... something "similar" but twisted to meet your needs.

Hope that makes sense.... :cheers:

Greg, Keep it up.. Many more people should be in charge of their future's and Present..

Making Money and keeping it, and growing it, are not just going to happen unless you work at it...

The wolf is always at the door...Wall Street...The Government, Heck, envious family..

So keep it up.. Again I am still figuring it out, But I know a few things.

I am for sure in the game because no ticket, no laundry, so you got to be doing something..

And Dividends are always coming in...One of my wife's favorite words.. Dividends..

Also We talk about money on the good days, and the bad days we know will pass, so we don't sweat them..

I am way longer term that the daily Noise..:lateral: :cheers: :woot:

[LS1-IROC]

More great info Greg...thanks for doing what your doing. I'm sure there are many guys reading this and learning, not necessarily posting.

I just read an interesting article on the long term outlook on TGT. Any thought there? Seems like it fits our requirements...Not great growth over the last 10 years but they have been increasing their dividend along the way.

[camcojb]

My daughter was given a single share of Disney when she was born (1988). It has split twice (4 to 1 and later 3 to 1) so she now has 12 shares worth about $470. Getting dividends yearly, but very low (1.5% or so). However, that stock was $4.67 when we got it, and is now 12 stocks at $39.31 each. That's a lot of growth I think for 24 years.

Trying to get her interested in investing a portion of her income. My son will for sure, and he's starting a new job when he graduates college that will pay him enough to really invest.

[ErikLS2]

I've always been a tad skeptical of these earnings reports that come out. Now, they do have to follow a set of rules being public companies and all but they are still afforded some flexibility in how they account for various things. So, in my opinion these reports don't tell the WHOLE story many times.

I do think it's wise to watch the earnings reports for companies you are invested in but Greg makes a key point in paying attention to any dividend they pay out. If they aren't bringing the money in, they sure can't be paying it out. It's a lot harder in my opnion to fudge anything here.

Still, I don't think I would pay that much attention to a low earnings report if the company is in a growing or strong industry and there are many other reasons to like them. If anything, I would use a weak period to buy more, as has been said already.

I'm thinking about gambling a little on Bank of America (BAC). It's been very low for a while and like Buffet says, there's no way to know WHEN a stock will rebound, but I can't see them going away totally. Plus, when everyone is fearful of something is the best time to buy it.

[Bucketlist2012]

I've always been a tad skeptical of these earnings reports that come out. Now, they do have to follow a set of rules being public companies and all but they are still afforded some flexibility in how they account for various things. So, in my opinion these reports don't tell the WHOLE story many times.

I do think it's wise to watch the earnings reports for companies you are invested in but Greg makes a key point in paying attention to any dividend they pay out. If they aren't bringing the money in, they sure can't be paying it out. It's a lot harder in my opnion to fudge anything here.

Still, I don't think I would pay that much attention to a low earnings report if the company is in a growing or strong industry and there are many other reasons to like them. If anything, I would use a weak period to buy more, as has been said already.

I'm thinking about gambling a little on Bank of America (BAC). It's been very low for a while and like Buffet says, there's no way to know WHEN a stock will rebound, but I can't see them going away totally. Plus, when everyone is fearful of something is the best time to buy it.

We all know you can never time the bottom, and sometimes when you buy into something you know will turn around, you take a hit at first as it bounces, but in the end, most of mine have gone up to where I thought they would go. It just takes the courage to buy at those times..

A few of my good performers fell more when i got into them, but they all did go back up.. The first few days were not good.. but great since then..:lateral: :cheers: :woot:

[GregWeld]

I'm thinking about gambling a little on Bank of America (BAC). It's been very low for a while and like Buffet says, there's no way to know WHEN a stock will rebound, but I can't see them going away totally. Plus, when everyone is fearful of something is the best time to buy it.


If you can afford to buy and hold... I agree with you. I think we can agree that the likelihood of BAC going away is pretty much NADA.... and it's certainly LOW (historically).

Those that bought FORD @ $2 or $3 a share certainly have been rewarded!

But also don't forget that if you were a GM shareholder -- you got ZIP -- So size and the "they've been around forever" statement has been shown to not hold up so well...:lol: I mean - Who'd a thunk it!?!?

Just make sure when you put in SPECULATIVE $$$ -- that that is exactly what that money is for... because regardless of how low a stock has gone - it can always go lower! So you'll have to be patient and it should only be money you can truly afford to loose. Everyone should have a fund for buys like this.... provided they account for all the above and already have good safe money - and cash that they can get should they need some. That way you don't get frightened and sell out..... 'cause the little wall street dude will double it a week after you sell.

Did I ever mention how much I hate that little guy?? :yes:

[GregWeld]

More great info Greg...thanks for doing what your doing. I'm sure there are many guys reading this and learning, not necessarily posting.

I just read an interesting article on the long term outlook on TGT. Any thought there? Seems like it fits our requirements...Not great growth over the last 10 years but they have been increasing their dividend along the way.

There's only one way to do this -- and that's a bit of homework. Remember we want to own BEST OF BREED.... and to find that - - we need to have some comparative basis. So I like to look at Good chart - growth - dividend - Total return - and I use a 5 year comparison period just for ease of "what they're doing now". I don't want to be recommending or not recommending individual stocks --- I want YOU GUYS to be able to do this homework -- and my job is to give you what I look for (neither right or wrong - just my way).... but let's look at this stock and compare it to it's peers. It's a BIG BOX RETAILER (Consumer discretionary) so let's see how it stacks up:

Target (TGT) - 5 yr grwth DWN 18.18% - Div 2.39% - T/R 5 yr - DWN 13.2%

Sears (SHLD) - 5 yr DWN 73% - Div 0% - T/R 5 yr - DWN 71%

Macys (M) - 5 yr DWN 15.65% - Div 2.26% - T/R 5 yr DWN 4.2%

JC Pennys (JCP) - 5 yr DWN 57% - Div 2.28% - T/R 5 yr DWN 52%

Let's toss in another couple of big box stores - but they really don't sell clothing and pots and pans etc

Home Depot (HD) - 5 yr UP 10% - Div 2.61% - T/R 5 yr UP 28.5%

Best Buy (BBY) - 5 yr DWN 49% - Div 2.56 - T/R 5 yr DWN 45%

Lowes (LOW) - 5 yr DWN 22% - Div 2.11% - T/R 5 yr DWN 14.7%



So -- DUDE <Spicoli style> IF you can find one of those that you want to own... go for it.... but I'm going to wait for better signs that the economy is turning the corner - THEN while I might not buy at the very bottom - I'll catch some gains on the way up... but the DIVIDEND doesn't support my criteria of buying and holding waiting for things to get better... because there's no growth in this group/sector.

NOW ++++++ I didn't go compare every big box consumer discretionary stock! I just took these 'cause everyone knows them and it was an easy comparison for our purposes.

[GregWeld]

I forgot a couple big box stores that could have been included in the comps:

Costco (COST) - 5 yr grwth 44.96% - Div 1.18% - T/R 5yr 52.1%


Wal Mart (WMT) - 5 yr grwth 29% - Div 2.4% - T/R 5 yr 40.7%


I think - after looking at these numbers -- COSTCO would be the one I'd pick as Best of Breed... but that 1.18% dividend is pretty sad - but it is countered by a pretty decent growth rate.

[GregWeld]

So just FYI --- While I hold a sizable stake in McDonalds -- I added a 1000 shares today on the sell off.... and here's why --- and this is the "investing 102" part not about "ME" -- I like a company that is growing top line and same store sales #'s. While it's only down a couple bucks that's a "let me in" opening if you want to add to a position. Doesn't mean I'm right... but I like the shares long term so I don't mind if it's down temporarily.

This is the "averaging" or "scaling" in... my costs are far lower than where it's trading - so even if I pay up here - it barely nudges my total holdings cost basis.

So lets say you held 50 shares at $80 and you bought 10 more at $100 -- your overall cost is $83 a share...

Many people get caught up in EACH stock having to be a performer -- and like the above example -- I want my OVERALL account to be positive - there's always going to be some outsized gains - some mediocre - and some losers but overall I want to be up or even (in a bad market)...

[CRCRFT78]

Forgive me for asking but how do you figure out the cost in your McDonalds example when you said those extra shares actually cost you $83 instead of $100.

[pw2006]

Forgive me for asking but how do you figure out the cost in your McDonalds example when you said those extra shares actually cost you $83 instead of $100.

$80x50 shares=$4000
$100x10 shares= $1000
$5000 total investment / 60 shares = $83.33 average purchase price per share

[CRCRFT78]

Got it. I knew it would be a simple formula for some reason I just kept making it more complicated than necessary over thinking it.

[sik68]

I had really taken note of what you said, Greg about mutual funds and why you don't see them as a good choice over simply choosing the "best of breed" stocks.

So I looked at the mutual funds that I was in...funds that Schwab recommended as "diversified portfolio quick picks" a couple years ago. I had 8 funds, and when I plot them on a 10 year comparison vs. the Dow, you can see that all of them were within a few % of each other of the long term. :willy: Some are slightly up, some are slightly down, but I can see that with these large funds, you can never break away from what the Dow is doing for you...not putting my money to work the way it could be.

I'm starting to be a believer that mutual funds can really hold back growth potential. Like Greg is saying, funds have the best of breed stocks in them...and that's what you see sprinkled among the Top 10 or 25 holdings; but those funds are bloated with hundreds of other companies that drag it down, averaging out the gains.

I used to think of investing mutual funds as less risky than buying individual stocks....now I think a good argument can be made for greater risk in mutual funds over simply going with fifteen or twenty of these "steady eddies." It is pretty easy to see that the "best of breed" stocks will beat the Dow over the long haul.

To walk the walk, I sold much of the diversity of my funds and consolidated down to a couple of funds that I liked. And I used the money to double down on my "best of breed" stocks; the Lateral-G mutual fund, if you will. (As a thank you, the G can stand for Greg :) ).

Throwing this out there, I have some money into clothing retail: Guess (GES) and Ralph Lauren (RL). RL has done a lot better then GES for me so far, but I am seeing that with the momentum behind the rising standards of living in China and India, that they will be commanding more luxury goods, among these are clothes. I have some into Starbucks (SBUX) for the same reason.

[GregWeld]

Got it. I knew it would be a simple formula for some reason I just kept making it more complicated than necessary over thinking it.


In that case Jose -- you're trying to be a broker or analyst.... they always try to make it complicated. Keeping you confused or in the dark is how they make YOU think THEY are smart or something. They're not.
:rofl:


Whether or not you average "IN" or "OUT" it always usually (note that caveat) pays to do the math to see what you're really doing and how it will affect your portfolio. Most of the time you'll see that buying in as a stock RISES - doesn't really raise your cost basis all that much.

Schwab allow you to check a choice when you SELL -- You must check these options BEFORE you sell -- and I went over this before in the thread -- that allows you to SELL the most expensive shares FIRST -- or in other words the best tax managed sales - in order to keep your capital gains as low as possible. Many people don't know this little fact....

So let's say you did that McDonalds trade -- you have the 60 total shares - but the last 10 cost you $100 a share -- and now they're trading at $120.... and you want to balance your account out.... you want to sell the $100 shares FIRST and only have a $20 per share taxable event --- you don't want to sell the $80 shares and have a $40 per share taxable event. Particularly if you plan to hold "some" shares in the name.

We're not trading -- and I'm assuming that magic ONE YEAR AND A DAY holding period for Long Term Capital Gains... but it pays to manage your GAINS and reduce your taxes. What the heck -- why pay 15% on 40 when you can pay 15% on 20!

We are - after all -- TRYING to manage our money!! Right?

:cheers:

[sik68]

That's a very good tip, pw. Thanks! Impressive that BKE is all of those names. I don't wear any of those brands, but if you go to the clubs in S.F. it looks like a BKE convention. :lol: