Investing 102

[CRCRFT78]

Todd you've given us some info from books your reading. Do you mind sharing what's on your reading list with us.

[Vegas69]

Oh man, I've read a bunch of them on finances.

Total Money Makeover-Dave Ramsey
The Millionaire Next Door
Money, Master the Game- by Tony Robbins
Smart Investors Keep It Simple
Secrets of the Millionaire Mind-Reading now
Thou Shall Prosper-Reading Now
Rich Dad/Poor Dad
Cash Flow Quadrant
Who took my money

They have all impacted me in some way. Dave Ramsey motivated me to become debt free and to spend all your money on paper. Meaning, have a place for every penny you make. Robert Kiyosaki taught me young to leverage money and that did result in a good portion of my wealth in real estate. Tony Robbin's book gave me greater understanding of how the financial world works. He also lead me to some of the greatest investors in the world. The debt cycle info came from Ray Dalio. The Millionaire Next door cemented the fact that most live WELL below their means.

For me, money itself isn't a good long term motivator. I do like the art of business and doing well with integrity and serving the public. I also like the visions of how it can impact my families future. For instance, right now I'm saving to build our dream home. We own the land and plans already. I have learned to enjoy giving my money away to those in need. I believe it's important to help those that need it.

[GregWeld]

Oh man, I've read a bunch of them on finances.

Total Money Makeover-Dave Ramsey
The Millionaire Next Door
Money, Master the Game- by Tony Robbins
Smart Investors Keep It Simple
Secrets of the Millionaire Mind-Reading now
Thou Shall Prosper-Reading Now
Rich Dad/Poor Dad
Cash Flow Quadrant
Who took my money

They have all impacted me in some way. Dave Ramsey motivated me to become debt free and to spend all your money on paper. Meaning, have a place for every penny you make. Robert Kiyosaki taught me young to leverage money and that did result in a good portion of my wealth in real estate. Tony Robbin's book gave me greater understanding of how the financial world works. He also lead me to some of the greatest investors in the world. The debt cycle info came from Ray Dalio. The Millionaire Next door cemented the fact that most live WELL below their means.

For me, money itself isn't a good long term motivator. I do like the art of business and doing well with integrity and serving the public. I also like the visions of how it can impact my families future. For instance, right now I'm saving to build our dream home. We own the land and plans already. I have learned to enjoy giving my money away to those in need. I believe it's important to help those that need it.






Take it from me -- YOU DO NOT NEED MONEY to be, or to act, democratically. I do it daily. If you DON'T have money -- then volunteer your time. Share your knowledge with others, it will lift others up. Doing what's RIGHT doesn't have to cost a dime.

[Vegas69]

No doubt, that's where it started for me. Now I do both. :thumbsup: It's fun to see the lives you impact. Especially if they don't know it was you.

[DBasher]

Doing what's RIGHT doesn't have to cost a dime.

AMEN! And doing it even when nobody is looking is a great way to live life.
:cheers: :flag2:

[CRCRFT78]

Its been pretty quiet lately, anyone have any updates?

[GregWeld]

Its been pretty quiet lately, anyone have any updates?




It has been quiet -- I've been quiet..... and the MARKET has been absolutely ROARING..... just wow.

It's been such a WOW -- that it's making me nervous and I'm not the nervous type. I took my cash position back up to way over a million bucks today - from just a couple hundred thousand..... cleaned up some losses (sold 10,000 of the 35,000 shares I hold in ETP).... since the losses are far smaller, and with the stellar run the market has had - that's what allows you to do such things.

Now then --- we also know the rules of summer..... Sell in May and go away.... well ==== it's a proven fact that beginning about May people start to kind of forget about the market and prefer to go on vacation instead... and that usually creates a dip in the summer months. I wanted to be just ahead of any of that selling - given the recent run up of epic proportions (which means that maybe more people will be taking profits (selling) coming into the summer).... and Congress goes on summer vacation - so the Donald could run his mouth off a bit more than normal -- and the FED is hiking rates which will also cause some adjustments to folks portfolios. All good - because we actually NEED a big sell off. Markets don't go straight up.

NOW ----------- remember this! If you are talking about RETIREMENT accounts -- DON'T do anything.... let 'em ride..... and if you are happy with your current portfolio - DON'T do anything.... let 'em ride. I'm a fairly "active" money manager and have ginormous positions - so I have to adjust them regularly lest they get out of control.

How many of you market mavens have gotten so that you're not so itchy fingered anymore -- and actually have finally gotten a grip on buy and hold and collect the dividends???? Not nearly as scary as it used to be huh -- once you have some nice fat gains in your accounts. Now you'll see that when you have a 20 or 25 or 40% gain on your holdings -- you don't really care if the market goes down 10% --- but you will have had to have owned for a bit to get to this point. It's sweet once you do though!

[ErikLS2]

I bought some GM today, partly because I work for them now, and the 4% dividend. Didn't think about the ex date at the time but went back and checked today, just happened to buy it on the ex date exactly, kinda nice.

[GregWeld]

I bought some GM today, partly because I work for them now, and the 4% dividend. Didn't think about the ex date at the time but went back and checked today, just happened to buy it on the ex date exactly, kinda nice.



Just so you know -- YOU WILL NOT GET THE DIVIDEND. There is at least a 3 day "settlement date" so you don't actually own the shares the minute you buy them - you must allow for the settlement time. Sorry to spoil your party.

[ErikLS2]

Just so you know -- YOU WILL NOT GET THE DIVIDEND. There is at least a 3 day "settlement date" so you don't actually own the shares the minute you buy them - you must allow for the settlement time. Sorry to spoil your party.

Good to know, I never knew that. I didn't plan it that way anyway and we're only talking like $190, I don't buy in GW sized lots :lol:

[SSLance]

How many of you market mavens have gotten so that you're not so itchy fingered anymore -- and actually have finally gotten a grip on buy and hold and collect the dividends???? Not nearly as scary as it used to be huh -- once you have some nice fat gains in your accounts. Now you'll see that when you have a 20 or 25 or 40% gain on your holdings -- you don't really care if the market goes down 10% --- but you will have had to have owned for a bit to get to this point. It's sweet once you do though!


**raises hand**

I haven't made a trade in a long time other than just reinvesting dividends and I'm not worried or itchy about anything...not even the Target my wife owns that has taking a beating lately.

[GregWeld]

**raises hand**

I haven't made a trade in a long time other than just reinvesting dividends and I'm not worried or itchy about anything...not even the Target my wife owns that has taking a beating lately.




Oh we all have "those"....... but the way I look at things -- I see ALL of my net worth as a giant collection of "stuff". Some of the stuff works some of the time and some of the stuff sucks.... but in the end -- is my overall net worth rising or falling. I just have to hit about 5 or 6 out of 10 to cover my mistakes (most of the time).

[WILWAXU]

How many of you market mavens have gotten so that you're not so itchy fingered anymore -- and actually have finally gotten a grip on buy and hold and collect the dividends???? Not nearly as scary as it used to be huh -- once you have some nice fat gains in your accounts. Now you'll see that when you have a 20 or 25 or 40% gain on your holdings -- you don't really care if the market goes down 10% --- but you will have had to have owned for a bit to get to this point. It's sweet once you do though!

Investing 102 has done well for me. Not sure I had a "net" worth before this thread.. more like I was in the hole :D

Using Dave Ramsey's snowball principles, and the stuff discussed here, I now have a significant amount in retirement assets. Not to mention many other 'buckets' of money working for me :D Good stuff!

[WSSix]

Good job, John! Congrats. I'm glad you've been able to get something from this thread as well.

I've just been hanging out for the most part. I have decided to take a gamble on a few more potentially volatile stocks. Nothing major just something I hope pays off in the long run. I'm thinking of ditching one that I'm honestly not sure will ever rebound and picking up Visa. I see us moving more and more towards a cashless society. I'd like to believe Visa and Master Card are poised to take advantage of that situation.

[GregWeld]

Investing 102 has done well for me. Not sure I had a "net" worth before this thread.. more like I was in the hole :D

Using Dave Ramsey's snowball principles, and the stuff discussed here, I now have a significant amount in retirement assets. Not to mention many other 'buckets' of money working for me :D Good stuff!




So good to hear!!! OMG you have no idea how happy stuff like this makes me!





Good job, John! Congrats. I'm glad you've been able to get something from this thread as well.

I've just been hanging out for the most part. I have decided to take a gamble on a few more potentially volatile stocks. Nothing major just something I hope pays off in the long run. I'm thinking of ditching one that I'm honestly not sure will ever rebound and picking up Visa. I see us moving more and more towards a cashless society. I'd like to believe Visa and Master Card are poised to take advantage of that situation.





Good thinking!


RE: Picking up "flyers" --- I bought 5000 shares of GOOSE (GOOS) this morning. We'll see if it's IPO can hold on to the gains. Sometime you MUST buy these kinds of stocks because they can be spectacular --- or they can ruin your return.... LOL

[GregWeld]

RE: Picking up "flyers" --- I bought 5000 shares of GOOSE (GOOS) this morning. We'll see if it's IPO can hold on to the gains. Sometime you MUST buy these kinds of stocks because they can be spectacular --- or they can ruin your return.... LOL






I should have put in the "newbie" asterisk -- that taking fliers on IPO's is for idiots and gamblers..... NORMALLY I'd advise you to wait for 1 or 2 quarters of reporting earnings before I'd step in front of the train. But I can afford to take these teeny fliers once in awhile. Sometimes they work - most times they don't.

[im4u2nvss]

Sometimes they work - most times they don't.

So true. I picked up some SNAP last week at $19.10 then bailed out this morning. For some reason I don't feel very good on short term "risky" investments. I am going to stick to the Greg Weld dividend method moving forward.

[preston]

Quote:
Originally Posted by SSLance View Post
**raises hand**

I haven't made a trade in a long time other than just reinvesting dividends and I'm not worried or itchy about anything...not even the Target my wife owns that has taking a beating lately.



Oh we all have "those"....... but the way I look at things -- I see ALL of my net worth as a giant collection of "stuff". Some of the stuff works some of the time and some of the stuff sucks.... but in the end -- is my overall net worth rising or falling. I just have to hit about 5 or 6 out of 10 to cover my mistakes (most of the time).
__________________


There is a poster over on Seeking Alpha whose handle is "BuyAndHold". He claims to have never sold a stock. Of course he is not running around buying small caps either but doing due diligence and buying the same types of companies Weld approves of for 101. Said sure he's had a few stocks go to zero over the years but his winners always beat his losers. So many stories of people who sold only to see the stock go up later. They say the hardest decision isn't when to buy its when to sell. Well he has that one figured out I guess !
else.

[Vegas69]

Sold all my UP positions at a profit of 13.62% thanks to the wisdom of Mr. Greg Weld. I'm using the money to build my house. I kept the two down positions as I won't lose money if I can help it. They are both solid long term positions so I'll wait. :relax:

If it wasn't for the house, I would've stayed in long term. I hope to be in position to invest in the next cycle.

[AMSOILGUY]

Since we're on the topic of buying and selling has anybody been buying weed stocks? Weld you have mentioned to invest in what you are aware of. What companies were behind your treatment? I've been buying some, I'm not going to miss out on this if it continues which I think it will. I did a lot of research before buying and now I hope I'm right :G-Dub:

[AMSOILGUY]

Whether it's right or not I did the shotgun approach and bought 4 different companies. 1 in Canada.

[DBasher]

Since we're on the topic of buying and selling has anybody been buying weed stocks? Weld you have mentioned to invest in what you are aware of. What companies were behind your treatment? I've been buying some, I'm not going to miss out on this if it continues which I think it will. I did a lot of research before buying and now I hope I'm right :G-Dub:

I don't know about the long term with the industry, I think it's moving so quick it's hard to say how it's going to shake out. In the Seattle area, quick money opportunities are around. Short term loans-12/24 months at 10-15% are usually paid back within 6 months...the relationship is made and the deals continue on the next build. These loans are mainly on the mechanical systems for the grow side of things.

It's crazy, it seems they can't grow it fast enough!
:flag2:

[GregWeld]

Since we're on the topic of buying and selling has anybody been buying weed stocks? Weld you have mentioned to invest in what you are aware of. What companies were behind your treatment? I've been buying some, I'm not going to miss out on this if it continues which I think it will. I did a lot of research before buying and now I hope I'm right :G-Dub:



This is a fantastic question with so many answers and probably none of them right.

My personal take on it ----- some people are going to pick the right one ---- most people are going to lose their butts..... This entire field is so subject to the prevailing laws in a state - but the FEDS aren't so sure about all of it.... and then there's the whole "can't bank" issues.

My feeling was and has been this.... when we finally go all 50 states in - and the FED finally gives in and rolls with it ---- then do the big terbacky guys get in and steamroll everyone else? I have no idea - it's just a hypothetical question. They have the money - the marketing and the distribution... but do they want in and would people accept their products ----- or do people want the old "head shop" independents. I have NO IDEA. When I have no idea -- I don't put my money at risk. I just simply don't know where it's all going.

[sanddan]

This is a fantastic question with so many answers and probably none of them right.

My personal take on it ----- some people are going to pick the right one ---- most people are going to lose their butts..... This entire field is so subject to the prevailing laws in a state - but the FEDS aren't so sure about all of it.... and then there's the whole "can't bank" issues.

My feeling was and has been this.... when we finally go all 50 states in - and the FED finally gives in and rolls with it ---- then do the big terbacky guys get in and steamroll everyone else? I have no idea - it's just a hypothetical question. They have the money - the marketing and the distribution... but do they want in and would people accept their products ----- or do people want the old "head shop" independents. I have NO IDEA. When I have no idea -- I don't put my money at risk. I just simply don't know where it's all going.

I think you will see both, big tobacco selling dirt weed to the masses and micro grow operations selling to the upscale customers who can afford better. Think Hood River vodka compared to single malt scotch.

[GregWeld]

I think you will see both, big tobacco selling dirt weed to the masses and micro grow operations selling to the upscale customers who can afford better. Think Hood River vodka compared to single malt scotch.



Good thoughts!

I read today where CANADA is about to legalize recreational marijuana nation wide. Amazing where we've come since when I was in high school and you went to prison.

To be clear folks ---- I don't use marijuana recreationally (I don't smoke it) -- but am still dosing at night time for what now appears to be my "no longer cancer" issues..... : > ) But that's a completely different thread.

[captainofiron]

Hey guys,

question for you all, I have my work 401k maxed to what they will match (still have debts that we are trying to snowball) and I have my personal IRA which has all my roll overs from previous jobs.

I was thinking that when we pay off everything, except the house, I want to start contributing to my IRA, BUT since I am can only contribute post-tax I was thinking maybe a ROTH makes sense.

thoughts?

[GregWeld]

Hey guys,

question for you all, I have my work 401k maxed to what they will match (still have debts that we are trying to snowball) and I have my personal IRA which has all my roll overs from previous jobs.

I was thinking that when we pay off everything, except the house, I want to start contributing to my IRA, BUT since I am can only contribute post-tax I was thinking maybe a ROTH makes sense.

thoughts?


ROTH IRA is the best gift the government ever gave you. Use it to the max if you qualify.

After that -- and you're truly debt free -- start tossing an extra $200 a month at the mortgage (or more or less depending on what you can afford). The interest rate isn't as important as the amount of MONTHS which grow into YEARS that you'll cut off your mortgage payments. Retiring with money in the bank/invested - and no mortgage and no payments.... oh yeah buddy! That's the way to enjoy your new found freedom!

[GregWeld]

I doubt anyone reading this thread is in this situation -- but if they/you are.... they/you only have yourself to blame. Saving and investing is a discipline... if you have no discipline... Well.... good luck 'cause you're going to need it.




62% of Americans have less than $1,000 in a savings account. Even at higher income levels of between $100,000 and $149,999, 44% had less than $1,000.


66 million Americans have zero dollars saved in an emergency fund. 47% of Americans could not afford an emergency expense of $400.


43% of working-age families have no retirement savings at all. The median working-age couple has saved only $5,000 for retirement. 70% of couples have less than $50,000 saved.


65% of credit card users carry a balance (don’t pay off their bill every month), paying an average interest rate of over 15%. The average credit card debt for households that carry a balance is $16,048.

[AMSOILGUY]

I can say not to terribly long ago I fell into at least one of those categories. I sort of look at my brokerage account as a savings. It's available if I need it. I put in a little over 6k last year. :peepwall:

[WILWAXU]

Who bought TSLA? :G-Dub:

None here.. but it's looking like a rocketship.

[WILWAXU]

I doubt anyone reading this thread is in this situation -- but if they/you are.... they/you only have yourself to blame. Saving and investing is a discipline... if you have no discipline... Well.... good luck 'cause you're going to need it.




62% of Americans have less than $1,000 in a savings account. Even at higher income levels of between $100,000 and $149,999, 44% had less than $1,000.


66 million Americans have zero dollars saved in an emergency fund. 47% of Americans could not afford an emergency expense of $400.


43% of working-age families have no retirement savings at all. The median working-age couple has saved only $5,000 for retirement. 70% of couples have less than $50,000 saved.


65% of credit card users carry a balance (don’t pay off their bill every month), paying an average interest rate of over 15%. The average credit card debt for households that carry a balance is $16,048.
Yup, it's crazy. Glad I was able to work my way out of that mess. I do wish I would have started earlier :D .. but thankful everyday for where I am.

[GregWeld]

I can say not to terribly long ago I fell into at least one of those categories. I sort of look at my brokerage account as a savings. It's available if I need it. I put in a little over 6k last year. :peepwall:




AWESOME!!! You should be proud - you looked - you understood - and most importantly -- you took action. Words are just BS --- but actually DOING --- AWESOMENESS!

[mdprovee]

Greg, before this thread I was in that boat. But after several years of plucking away, we are turning the corner, rely less on credit, have a little savings, and paying more cash. We are getting there, and as always, thank you for your information.

[captainofiron]

ROTH IT IS!
haha

thanks.

As far as those figures, I read an article recently about the 8 money mistakes middle class people make. It had quite a few of those. I think I was only guilty of #8 (relatively big car payments)

http://www.businessinsider.com/8-money-mistakes-the-middle-class-keeps-making-2017-3

but some of that just blows my mind.

I had a coworker the same age as I was who did not put any money into his 401k, had virtually no savings, and had 3 cars on a lease. But then again he chose to live with his roommates (parents) and was in his 30s...

[GregWeld]

Greg, before this thread I was in that boat. But after several years of plucking away, we are turning the corner, rely less on credit, have a little savings, and paying more cash. We are getting there, and as always, thank you for your information.

Good to hear Mike!!


Hey == we're running Thunderhill this month = April 22/23rd

And then I rented Thill for May 18th for a private track day for a few buddies to run ====== the FIRST ANNUAL I AIN'T DEAD YET RACE..... Love to see ya!

[GregWeld]

ROTH IT IS!
haha

thanks.

As far as those figures, I read an article recently about the 8 money mistakes middle class people make. It had quite a few of those. I think I was only guilty of #8 (relatively big car payments)

http://www.businessinsider.com/8-money-mistakes-the-middle-class-keeps-making-2017-3

but some of that just blows my mind.

I had a coworker the same age as I was who did not put any money into his 401k, had virtually no savings, and had 3 cars on a lease. But then again he chose to live with his roommates (parents) and was in his 30s...



Good on the ROTH -- it's a true gift -- the younger you are the more the gift will be because taking all those gains and dividends TAX FREE == just WOW that can be so YUGE! LOL


It really makes me happy when I see and hear everyone here gaining some traction. And while it might seem paltry or "not much" now..... I know in my heart of hearts that the compounding will show people how great it can be with just a little bit of time.

Now -- if we can just avoid these financial calamities in the market (1999 dot.bomb bust = 2007 housing bust)..... but even WITH THOSE people would be so f'n far ahead!!

[SSLance]

And then I rented Thill for May 18th for a private track day for a few buddies to run ====== the FIRST ANNUAL I AIN'T DEAD YET RACE..... Love to see ya!

So hope I can make the second annual event!! I'll be much closer by this time next year!!!

[GregWeld]

So hope I can make the second annual event!! I'll be much closer by this time next year!!!

YOU WILL BE INCLUDED!!

[carbuff]

Good to hear Mike!!


Hey == we're running Thunderhill this month = April 22/23rd

And then I rented Thill for May 18th for a private track day for a few buddies to run ====== the FIRST ANNUAL I AIN'T DEAD YET RACE..... Love to see ya!

Love this! And a bit jealous! :thumbsup:

[GregWeld]

Love this! And a bit jealous! :thumbsup:



LOL ---- "things" (as you're all well aware) have changed a bit for me.... It might be hard for me to do - but I'm going to start having even more fun in my life going forward.


Too bad you're so far away. Although we took a vote -- if you'd arrive with The Salt Lick brisket and some ribs you may be considered! LOL

[carbuff]

LOL ---- "things" (as you're all well aware) have changed a bit for me.... It might be hard for me to do - but I'm going to start having even more fun in my life going forward.


Too bad you're so far away. Although we took a vote -- if you'd arrive with The Salt Lick brisket and some ribs you may be considered! LOL

And I'm very happy about that! :)

The new place down the street from me that is so good does vacuum packed briskets. I could send you one. ;)

[captainofiron]

And I'm very happy about that! :)

The new place down the street from me that is so good does vacuum packed briskets. I could send you one. ;)

I think Franklins is doing chilled vacuum packed briskets too now.

I pre-ordered some brisket and ribs for my birthday, it was funny just walking up past the giant line and getting my order, in and out in 10 minutes

[mdprovee]

Good to hear Mike!!


Hey == we're running Thunderhill this month = April 22/23rd

And then I rented Thill for May 18th for a private track day for a few buddies to run ====== the FIRST ANNUAL I AIN'T DEAD YET RACE..... Love to see ya!

I am taking my boys to a Robot thing on the 23rd. My oldest is getting into building robots at school. I am going to try and make the 18th.

[GregWeld]

Truer words were never spoken!! In a great market == doesn't matter -- but when shizzle hits the fan == and it ALWAYS does..... this counts. I've preached it here continuously.




If there is one thing that is universal in the investment world, it is that quality trumps all in the long-run.

[GregWeld]

There's so little to ADD to the last 500 pages ---- but I would say that these last couple days should show folks what happens when the market pops -- miss that VERY few big pop days that happen per year - and it will affect your overall returns. Being IN the market rather than on the sidelines -- you get the rewards..... watching from the sidelines "waiting" (on whatever the hell someone is waiting for) will have a negative affect on the overall performance.

I've said this many times in past posts. Hopefully - as this thread gets longer in the tooth - people begin to see the real life results.

[CornHusker4Life]

Just for fun. Does anyone else know of companies that are private that they wish were public so they could invest in them? My two are Hyvee and Menard's. I always spend at least $100 at Menards even though I went in to buy $20 worth of lumber.

[AMSOILGUY]

Chick fil A comes to mind. I've been getting hammered in the market. Dividends still coming in but stock prices have been going south. Wish i had more to continue to throw in. Investing is the best drug ive found yet. Wish i would have bought some RACE its been on a run.

[sd67]

Uber, Aibnb and Lyft come to mind. Would be interesting as public companies

[GregWeld]

Chick fil A comes to mind. I've been getting hammered in the market. Dividends still coming in but stock prices have been going south. Wish i had more to continue to throw in. Investing is the best drug ive found yet. Wish i would have bought some RACE its been on a run.



Now you begin to see how dividends help your mind and help you stay in the game even when everything sucks (like owning a paid for rental house).

"Time will help" --- unless you've picked some really bad names --- CPST comes to mind.

I own 500 shares of RACE..... "just because". So far it's been good/okay.

[GregWeld]

And I'm very happy about that! :)

The new place down the street from me that is so good does vacuum packed briskets. I could send you one. ;)



YOU need to eat at The Red Ash before Adrienne moves to her new joint.... get the 60 ounce Ribeye -- or maybe the Osso bucco... and a Caesar Salad.... and then the ice cream with espresso to dump over it.

I didn't have time to see anyone on this trip -- it was a surprise trip - surprised I made it!! LOL

Now that the '40 Ford is in Georgetown (Custom Hot Rods of Andice) -- And Adrienne is there - I'll fly down a little more often. We'll be there for Gwen's birthday for about 3 days in a couple weeks. I'd love to see if we have the time to all get together - Eric - you - Gerno - SW.....

[YAMATHUMP]

Top Golf

[GregWeld]

Top Golf




Winner!!! They're packed with people!

[CRCRFT78]

I've been listening to Dave Ramseys' podcast lately and I've been trying to look into mutual funds but I'm having a hard time looking some up. Any suggestions on research tools? I'm having a heck of a time trying to screen them through Schwab & Fidelity.

[AMSOILGUY]

Call Schwab. Best customer service i've ever gotten. Thier brokers have been top notch and I would be surprised if they couldnt help.

[YAMATHUMP]

Winner!!! They're packed with people!

Always packed, you will spend as much on food and drinks as the bay fee, nothing else like it, and every big city in the US will need one (or more).
I would love to see this go public.

[barrrf]

Just have to brag for a moment about investing in LECO last january. I only wish I wouldve put more in.

Thanks to Mr Weld for the advice on investing in dividend stocks or I wouldve never thought about it.

[Try2paz]

Always packed, you will spend as much on food and drinks as the bay fee, nothing else like it, and every big city in the US will need one (or more).
I would love to see this go public.


Id take a look at ELY (callaway) they seem to be the only golf manufacture making money and they have a significant investment in Top Golf.

[GregWeld]

Just saw CNBC discussing Bitcoin..... and if you remember -- I was dead set against people getting into this kind of "investment" back when it was "the hot thing". I'll stick with that....


It's gone up crazy this last year -- wonderful.... I'm very happy for those people with the LUCK to have gotten in to it a year ago. Good for them...


But let's step back and ask ourselves how many of you would have gotten in to it when it was a $1,000 and rode it to $300?? I remember the big news about some "X" tech twin brothers sinking 10 million or something like that -- near the top --- wonder if they held and watched their 10 million turn in to 3....


It's GAMBLING -- sometimes you get lucky -- sometimes the house takes all your money. I'll stick with dividends (even though I - and some of you - have the money to gamble on stuff like this - I still won't do it - it's too depressing when it goes south).

[GregWeld]

I've mentioned "FUNDAMENTAL CHANGE" in this thread about half a million times.... Today -- we see what that looks like.

McDonalds lost my vote a few years back -- which I also posted about ad infinitum.... the food was bad - the restaurants were dirty - the bathrooms were dirty.....

In comes fundamental change --- in 2015 they fire the CEO and move Steve Easterbrook to that position.... since then -- the stock has been on a tear. Up about 62% in two years...

I still do not own it - I missed the change and failed to believe one man could have such a dramatic effect. I guess that's my reason for the post. Part of STOCK PICKING is to be ahead of the curve - see the changes for what they can and could be -- some times they (stocks) continue to go down. Sometimes they turn the corner. Two I've missed --- McDonalds and Microsoft.

Now I wonder if the change at General Electric (GE) will make a difference? The stock was stellar under Jack Welch -- then fell under Jeff Immelt -- now he's going to retire and a new guy gets a chance. Will be interesting to watch. I won't be a buyer this time either -- because their dividend isn't high enough for me to take the risk... but let's watch it and see what happens.

[SSLance]

I also lost faith in MCD about the same time and have missed the runup after as well. You can't win them all I guess...

I've lost so much money on GE in the past I don't think I'd EVER be able to buy it once again...no matter who they put in charge or change. Its personal... :bigun2:

[GregWeld]

I also lost faith in MCD about the same time and have missed the runup after as well. You can't win them all I guess...

I've lost so much money on GE in the past I don't think I'd EVER be able to buy it once again...no matter who they put in charge or change. Its personal... :bigun2:



I do that as well Lance ---- I don't think I've owned GE since Jack Welch retired - I made money with him. Now -- I think GE is too "all over the map" business wise. They need to sell off some assets and be good at a couple things vs all the different businesses they're in.

[WSSix]

I had started thinking about dropping MCD but was in no hurry. They turned around right before I was going to sell so I figured I'd see where it went. I'm wishing I had more faith when they were down to put more money in them then.

Also on the discussion of timing, I missed AT&T's bounce. It's about time for me to make another purchase in general. I was taking my time again while deciding if I wanted to put this round into an existing holding or add V or SQ or both now. I should have just adding to T since it was down and called it a day. Oh well.

[SSLance]

I was thinking about bringing up T... Nice day today...

I was pondering if it was time to sell it a week or so ago, sure glad my buy and hold strategy kept me from doing so.

Now, if only the oil stocks would do the same... :D

[WSSix]

... and I missed VZ's bounce, too. :bang:

Choose good names and get in there or you won't make anything.

[ironworks]

Glad I bought a bunch of Caterpillar a while back.

[CRCRFT78]

How's everyone doing lately?

[GregWeld]

How's everyone doing lately?



Markets like this are TOUGH -- the right stocks win and what was a winner is struggling -- and stuff you thought would never go down falls like a rock.

Two things -- if you've been in a name for awhile -- you should have nice gains and a rising dividend percentage as companies raise their dividend payout....

And when the market is a mess - like it seems to be - this is when dividend investing begins to look better and better.

I've been "trading" Amazon a few times here --- when it drops $10 and goes up $15.... but even that begins to be real risky. Just when you think you got it down - that can bit you. A name like that though - when it doesn't work - I just hold as an "investment". LOL

Oil is still my personal lunch eater.... and I continue to average a couple big losers DOWN. I'm now holding 27,500 shares of ETP.... and I'm keeping my fingers crossed that the dividend is intact. If not -- I will lose big time.

Switched out KMI (at a sizable loss) --- waited awhile --- and replaced it with KMI-A (preferred shares paying an 11.7% yield

[WSSix]

Honestly, not great, but I'm not worried. I'm in solid companies and so far none are facing dividend payment challenges. Well, that depends on if you think Verizon is going to have issues. I've read both sides of the argument and am not convinced they have cash flow issues. Like Greg, oil is not being nice to me, but I'm in this for the long haul in general so I'll continue to ride it out patiently.

One thing I will mention is I was planning on selling Whole Foods, cutting my loses, and dumping the money into Visa. Then, the Amazon buy out was announced. Ultimately, I made very little money because my cost basis was high. All of the money I made was due to the dividend though. Glad they paid a dividend even though it was a small one.

A side affect I don't agree with but took advantage of is Costco took a big hit because of the Amazon buyout of Whole Foods. Fine by me. I got Costco at a discount as far as I'm concerned. Now if only I had remembered Altria was also on sale before I spent all my money....

[glassman]

Doing fair to partly.

only have 6, two are flat, two are losers thus far (Chevron being one, but i'm long and they haven't cut their divi "yet") And two are up (bought McD's, my wifey want'ed it, "because i love that place and i used to work there". So i bought 2500 worth (not shares though i wish) two years ago, so i've got that going for me lol....

Couple of my 401k's are up finally

and maximizing my corporate pension (tax differed)

Any body got any suggestions or input on decent REIT's?

Here in the Bay Area rentals are bank, was thinking of pulling 1/2 my money out and buying two fourplexes (I know real estate fairly well as i deal with housing and dont mind the whiny tenants, although i use the Dave Ramsey models, interview more than once, try to get a "character analysis.) Can REIT's be geographical, if so, how do i find? Google it like i do everything else ?lol

[GregWeld]

Words to live by --- from Warren Buffet:



Nonetheless, he (Warren Buffet) said long-term investing remains the way to go.

He noted that since Forbes created its first list of the 400 richest Americans in 1982—Buffett was worth just $250 million then—some 1,500 different people have been included.

All with one thing in common.

"You don't see any short sellers," he said, referring to people who bet stock prices will fall.

[GregWeld]

An interesting REAL LIFE story on a couple that retired early and their advice....



https://www.cnbc.com/2017/10/20/early-retiree-saving-money-doesnt-get-you-rich-but-investing-does.html?recirc=taboolainternal




I haven't posted here for quite awhile..... 500 pages pretty much has covered it all. Hope all are doing well and their investments have grown and their dividends are piling up!

Giddy up!!

[WSSix]

Overall, I'm doing fine. Today though, I'm getting kicked hard for owning AT&T.

[SSLance]

You and me both Trey... In fact been getting kicked hard for owning just about everything but thankfully I've had lots of other things on my mind to keep me from thinking about it.

Haven't made a holdings change in I'm not sure how long, just reinvesting divvys and going on with life for the summer.

[GregWeld]

Overall, I'm doing fine. Today though, I'm getting kicked hard for owning AT&T.



Funny --- not funny as in laughing -- but I have always had a bit of the Peter Lynch investing theory --- I owned 10,000 of Verizon and AT&T -- and sold the AT&T because their coverage got lousy -- and I switched all of our phones (6 of them) to Verizon...

Far superior coverage where I live and travel.... and so far - so good. VZ is up and T has sucked.

Lucky me!

[WSSix]

I've always thought Verizon had the better coverage. I liked both as investments and still do so I'll continue to hold them both. It's just going to take a little before T gets pretty again. I'm not worried at this point.

[glassman]

Funny --- not funny as in laughing -- but I have always had a bit of the Peter Lynch investing theory --- I owned 10,000 of Verizon and AT&T -- and sold the AT&T because their coverage got lousy -- and I switched all of our phones (6 of them) to Verizon...

Far superior coverage where I live and travel.... and so far - so good. VZ is up and T has sucked.

Lucky me!

forgot about that main point with Lynch regarding att vs verizon. i hate att and sprint, verizon is the only one that works for me for work. funny, i dont own it yet but its on the list.

Chipotle cant seem to make a come back either yet i love their product...

Also too, many a question for Greg, regarding the video, is 3-4% a usual number for draw on liveable wages base on your gross worth?

[GregWeld]

forgot about that main point with Lynch regarding att vs verizon. i hate att and sprint, verizon is the only one that works for me for work. funny, i dont own it yet but its on the list.

Chipotle cant seem to make a come back either yet i love their product...

Also too, many a question for Greg, regarding the video, is 3-4% a usual number for draw on liveable wages base on your gross worth?



I have zero idea for an answer for that question..... What I try to do is EARN 5% on my investments --- some pay more some pay less..... But my net worth/income far exceed "normal" --- and we have zero in fixed expenses.... our actual outflow is HUGE -- but it's just because of the way we live -- versus what we HAVE to pay to live. My only point being --- that I haven't had to experience that type draw down -- nor have I had to have that conversation with any of my financial people.

I think that people are living far longer than they used to ---- so many basic assumptions about finances are being tossed out the window. I don't think it's unusual for people to live 30 years in retirement..... Maybe not both but one or the other of a couple anyway.

Here's what I usually say to people..... to get them to think "correctly". If you're coming up to retirement - and you're struggling to live on $200,000 a year..... how much money do you think you're going to need to live retired!!!! I figure I make about $50,000 annually PER MILLION DOLLARS invested.... so that person is going to need $3+ million and be collecting maximum social security etc. Even if you think you'll only need $75,000 in retirement income -- you're going to have to have at least 1 1/2 million..... because the dividends are taxed -- so 20% taxes -- and you're earning 5% -- that's only going to NET $40K a year in spendable income.

However --- it you're drawing down your principal at 4% a year --- and then you have less and less each year to earn you income.... sounds like a real bad plan to me! Let's throw in a decade of crappy market growth -- or stalled out real estate prices.... and you're burning your capital?? Yeah -- just NO! You want to be really old and broke? I sure as hell don't want to be figuring like that.

I've found that expenses GROW.... they don't shrink. My insurance is way up -- our taxes go up -- cars are expensive -- trips are 10 X what I used to spend 20 years ago mostly because they're longer! WTF -- you don't have to get back to work on Monday! Clothing is expensive... and then there's always that pesky health issue and all of that associated out of pocket expense.

[glassman]

I have zero idea for an answer for that question..... What I try to do is EARN 5% on my investments --- some pay more some pay less..... But my net worth/income far exceed "normal" --- and we have zero in fixed expenses.... our actual outflow is HUGE -- but it's just because of the way we live -- versus what we HAVE to pay to live. My only point being --- that I haven't had to experience that type draw down -- nor have I had to have that conversation with any of my financial people.

I think that people are living far longer than they used to ---- so many basic assumptions about finances are being tossed out the window. I don't think it's unusual for people to live 30 years in retirement..... Maybe not both but one or the other of a couple anyway.

Here's what I usually say to people..... to get them to think "correctly". If you're coming up to retirement - and you're struggling to live on $200,000 a year..... how much money do you think you're going to need to live retired!!!! I figure I make about $50,000 annually PER MILLION DOLLARS invested.... so that person is going to need $3+ million and be collecting maximum social security etc. Even if you think you'll only need $75,000 in retirement income -- you're going to have to have at least 1 1/2 million..... because the dividends are taxed -- so 20% taxes -- and you're earning 5% -- that's only going to NET $40K a year in spendable income.

However --- it you're drawing down your principal at 4% a year --- and then you have less and less each year to earn you income.... sounds like a real bad plan to me! Let's throw in a decade of crappy market growth -- or stalled out real estate prices.... and you're burning your capital?? Yeah -- just NO! You want to be really old and broke? I sure as hell don't want to be figuring like that.

I've found that expenses GROW.... they don't shrink. My insurance is way up -- our taxes go up -- cars are expensive -- trips are 10 X what I used to spend 20 years ago mostly because they're longer! WTF -- you don't have to get back to work on Monday! Clothing is expensive... and then there's always that pesky health issue and all of that associated out of pocket expense.


Thanx Greg good info, 3 happens to be my “goal” number. But yeah, inflation is just an unknown variable, best to be prepared as possible

[Vegas69]

I certainly hope to leave my family in great financial shape when I'm gone, but I'll have no problem living off the money I spent my whole life accumulating if need be.

Personally, the older I get, the simpler I like to live. I like choices, not shackles. :lol: Living WELL below your means is a good place to start and a hell of a good way to grow wealth rapidly. I find it amazing how fast you can grow wealth when you live below your means and invest heavily every month. My wife and I have tripled our net worth in only 5 years carrying little to no debt and investing in real estate, IRA's, 403b's, and individual stocks.

We are certainly blessed and grateful that we made major changes around 35 to our spending habits and strategy. It's put us well ahead of where I dreamed I'd be at 40. I think it becomes harder as we age to change our ways and let's be honest, passion and energy can begin to wane. Those long hours get tougher to handle as you realize you'd rather be with your kids, racing, or taking a nap than pushing so damn hard all the time.

Dave Ramsey says: Live like no-one else now, so you can live like no-one else later.

I think you have to have a period in your life where you really hunker down and stock it away to set yourself up and take advantage of that great magician, compound interest. I still think it's important to save a large chunk of your income every month. We save 15% of our gross income, personally. You can only do that if you live well below your means or increase your income to offset your expenses. We've done both.

[GregWeld]

I hope everyone owns Amazon (AMZN) and Microsoft (MSFT) and Google - now under that asinine name of Alphabet - and with two different stock symbols Goog and GoogL (sorry -- so stupid and confusing).

I own a whopping 200 shares of AMZN.... zero of the other two.

If we were smart we would have bought Steve McQueen's Rolex years ago -- someone just paid 17.8 million for it at auction. (seriously are you kidding me!). His house here, with acreage (500), was struggling to find a buyer in the $7.4MM range.

[SSLance]

I think you have to have a period in your life where you really hunker down and stock it away to set yourself up and take advantage of that great magician, compound interest. I still think it's important to save a large chunk of your income every month. We save 15% of our gross income, personally. You can only do that if you live well below your means or increase your income to offset your expenses. We've done both.



I agree completely, and we have done much the same. Some of the things that have been said to me by friends during this move process have been interesting. One friend in particular has to have a brand new high end 3/4 ton 4x4 truck every few years...but said to me disparagingly "it must be nice to be able to retire and move West so young". He has spent more out of pocket money on just trucks the last 15 years than we did on the new house. BTW, I daily drive a 15 year old truck with 220,000 miles on it.

[Vegas69]

It's the little tweaks that result in a major difference over time. Owning a car outright and investing the payment is a solid place to start for anyone.

I leased brand new BMW's and Audi's for nearly a decade at over $900 a month. That's over $100,000 in payments, not to mention the high insurance and registration costs. We woke up and smelled the coffee over 5 years ago and won't ever have a car payment again. I drive a 2007 Tundra with 117k on it. My wife has a 2015 Acura we bought certified.

But you can write off the car payment for business. Would you spend a dollar to get .25-.33 cents(tax bracket)? I used to be that bad at math too.

[SSLance]

But you can write off the car payment for business. Would you spend a dollar to get .25-.33 cents(tax bracket)? I used to be that bad at math too.

Same with rental homes... "you can write off the depreciation and save a ton on taxes..." What they neglect to tell you is if you EVER sell the property, you reclaim all of said depreciation as regular income at whatever tax bracket you happen to be in at the time, and any extra gain is taxed as Capital Gains.

Everyone I know that got into the rental home racket has either claimed bankruptcy and lost them all or is still holding onto them and dealing with tenants daily because they can't afford to sell them.

This is where all of the accounting classes I took in school helped me to avoid certain investments...

[CJD Automotive]

Everyone I know that got into the rental home racket has either claimed bankruptcy and lost them all or is still holding onto them and dealing with tenants daily because they can't afford to sell them.

This is where all of the accounting classes I took in school helped me to avoid certain investments...

I have a few commercial and residential rentals/leases, and feel like they are solid investments. The trick is picking your target market. I will only buy 30-50K brick or block homes in "the not so good areas". Although I buy them outright, my strategy is they pay for themselves in 2.5-3 years. I invest very little in them for upkeep, pay little to nothing in taxes, and rent them through the section 8 program. I'm guaranteed my money, my tenants will never leave, and I get above average rent for the areas they are located.

[SSLance]

That strategy is different than the "owning rentals for the tax break" strategy that was all the rage years ago. You are using the smallish investment to create monthly income and as long as you buy properly and keep expenses in check, it works fine.

If you were financing these homes and relying on the depreciation fa for to make them cash flow, the results are vastly different.

[Vegas69]

I've had really good luck with real estate in Las Vegas and Phoenix, but there have been lucrative opportunities twice in 15 years.

While I'm building my new house, I'm living in home we rented for a few years to convert it to a primary residence. I will still need to pay taxes on the forced depreciation while it was rented, but I'll escape capital gains. My accountant said they probably wouldn't catch it, but I don't play games with the IRS. I pay what I owe them.

I do agree though, the forced depreciation really hurts if you hold long term. You get in a place where you are almost forced to 1031 exchange to avoid taxes. I wonder if the taxes must be paid on the depreciation when it's passed on to your estate?

[GregWeld]

I've had really good luck with real estate in Las Vegas and Phoenix, but there have been lucrative opportunities twice in 15 years.

While I'm building my new house, I'm living in home we rented for a few years to convert it to a primary residence. I will still need to pay taxes on the forced depreciation while it was rented, but I'll escape capital gains. My accountant said they probably wouldn't catch it, but I don't play games with the IRS. I pay what I owe them.

I do agree though, the forced depreciation really hurts if you hold long term. You get in a place where you are almost forced to 1031 exchange to avoid taxes. I wonder if the taxes must be paid on the depreciation when it's passed on to your estate?




#1 -- the estate tax laws have changed dramatically in the last few years..... In MOST cases there are no estate taxes (they start at 5 million). If you set up a proper will - with trusts etc - then you can give your spouse 5MM - and your kids 5MM each etc - with no taxes. Of course there are complications to any and all tax planning strategies..... and only a professional in the field can guide you on that.


#2 -- Securities (stocks) assets are passed thru at the STEP UP value. I.e., the day they exchange hands (from dead guy to living guy) - the cost basis for the living guy is the value on that day (the day they pass hands).

However --- PROPERTY passed thru via an inheritance is taxed at the original cost basis. So if "Dad" paid $100,000 for the rental house in 1965 -- and you inherit it and then sell it asap.... you're paying taxes on the difference in value from $100K to what you sell it for. In other words -- there's no going back and having to recapture or pay taxes on Dad's deductions etc.

[SSLance]

However --- PROPERTY passed thru via an inheritance is taxed at the original cost basis. So if "Dad" paid $100,000 for the rental house in 1965 -- and you inherit it and then sell it asap.... you're paying taxes on the difference in value from $100K to what you sell it for. In other words -- there's no going back and having to recapture or pay taxes on Dad's deductions etc.

I'm not sure that is 100% correct...probably based on how the "PROPERTY" is defined or classed before death.

I've always been taught that Death always accelerates basis if the transfer of property is direct. For example, if my Father owns a personal residence house and I am listed on the deed as TOD (Transfer on Death), when he passes away the property automatically becomes mine at current market value as a basis the day he passes away.

This is assuming my fathers entire estate is under the 5 mil cap as far as inheritance tax is concerned. If over that cap, pretty much everything changes.

Rental property that has been depreciated might have to be treated differently though. I wouldn't be shocked if either Capital Gains tax on the gain or Deprecation recapture income tax would need to be paid by the heirs if they ever sell the property.

I do know this, income producing property that has not been depreciated (ie: farmland with no equip or structures) passes thru to heirs at an accelerated basis.

[Vegas69]

I do recall that if the beneficiary of the estate holds onto real estate for a certain amount of time, (Maybe a year?) the tax situation can change for the worse.

[GregWeld]

RE: Inheriting depreciated rental property




You will not need to worry about past depreciation on your inherited property. You will just use your stepped up basis (FMV of property on date of inheritance) and this new basis will be used for depreciation. You will be able to depreciation these inherited assets in full over the property's useful life. For example, use the full 27.5 year, S/L for the rental house (less land) and the start date will be the date when the rental property was transferred to you.

For any prior capital improvements, these will be included in the stepped up basis on the inherited property so do not depreciate them separately.

For any appliances, since they are considered "new" to you, you will just use the new FMV of these items and depreciate them over the new useful life at the date the asset were transferred to you.

[Flash68]

While I'm building my new house, I'm living in home we rented for a few years to convert it to a primary residence.

Love this strategy!

One I often used to read about was 1031 exchanging up and up over the years into more valuable properties and then at the very you trade a large apartment complex (likely holding) into your dream mansion SFR, then rent it out for a year before moving in to then recapture that 2 of out of last 5 primary residence designation. I think it still holds true as a viable option but that was awhile ago.

[Vegas69]

Yep, I had similar thoughts at one time as well. While I have utilized a 1031 before, I bought this one with Camaro money.

You know how those custom projects go. They always cost more than you thought they would up front.:headspin: So I decided to utilize the primary strategy for 2 years while we build. It's worked out very well for our stage with Hugh and living simpler.

I have a very simple philosophy that has served me well so far. If a house doubles in value, I sell it. I'm glad I didn't utilize a 1031 on a number of them as I would of been forced to move up in value with poor markets on the horizon. It would've cost me far more than the 15% capital gains and I was only 2-5 years into the depreciation cycle. In fact, the 1031 I did utilize ended up costing me when I exited a market a bit late.

At this point my plan is to wait until the next recession and buy when the market is the most pessimistic. I don't mind moving in and out of markets as long term rentals mean bad tenants and major repairs at some point. Now, I only buy if the numbers make sense. I don't make the numbers work. If I get caught, I want the choice to hold long term. That's the real key to real estate investing. Can you wait until the timing is right worst case? If not, don't buy it. Unless you are a big risk taker and I'm not. I don't mind being the tortoise.

[SSLance]

RE: Inheriting depreciated rental property




You will not need to worry about past depreciation on your inherited property. You will just use your stepped up basis (FMV of property on date of inheritance) and this new basis will be used for depreciation. You will be able to depreciation these inherited assets in full over the property's useful life. For example, use the full 27.5 year, S/L for the rental house (less land) and the start date will be the date when the rental property was transferred to you.

For any prior capital improvements, these will be included in the stepped up basis on the inherited property so do not depreciate them separately.

For any appliances, since they are considered "new" to you, you will just use the new FMV of these items and depreciate them over the new useful life at the date the asset were transferred to you.

Yep, that's what I thought...death accelerates basis...

[GregWeld]

There are MANY ways to invest in rental real estate....

I, for one, have ZERO interest in managing a rental. I don't want to know about the water heater that quit working on Sunday afternoon.

I invest in LLC's that buy larger commercial apartment complexes - they do all the management.... I collect a check every 6 months for my shares. The last one I invested in ($900K) pays me $60K a year... I get the offsetting depreciation just as I would if I owned it personally.... and we recapture the depreciation upon the sale of the property (again, just like you would on any rental).

I got a statement with the last "dividend" check --- showing the value of my investment is over $1.9MM now. The rental market in the Seattle area has been ON FIRE.... and as such (after an extensive remodel of the property) they've been able to substantially increase the rents.

Just throwing this out there for those - that like me - have no interest in managing a rental. There are many firms in every area of the country that do this kind of income property management. You just have to ask your attorney or accountant.... They'll know someone.

Typically a share goes for somewhere between $50K and 100K per share. Sometimes they'll sell a half share. You do have to be an "accredited investor" to invest in this type of deal -- they're totally illiquid -- and you have zero control of when the property is sold.... so your money may be invested for a very long time (as in YEARS) and there's nothing you can do about it. So like any investment -- it should be a small percentage of your investable dollars. Remember the 5% rule!!

[GregWeld]

End of year reminder folks!


Don't forget to review your accounts


Before you decide to SELL ---- make sure you check to see if you're close to collecting a dividend? Do you have profits to take that the sale will offset (for taxes).


Do you have outsized gain(s) that you want to offset losses with? If so -- make sure you check - are they long term gains (one year and one day ownership) or short term etc.


This IS NOT a list of all of the thought process --- it's simply a reminder to look at your accounts -- think about TAXES -- and IF you are going to do some balancing -- there are things to think about!


In other words ---- don't just indiscriminately punch the Buy or Sell button without thinking it thru.

[Vegas69]

It doesn't appear that the Great Recession less than 10 years ago changed the behavior of many citizens. Housing debt is a little lower, but other debts/overall debts are actually higher than 2008. With interest rates still so low, you have to wonder how close we are to the end of the short term debt cycle.

When consumers run out of available income for credit, spending decreases. Remember, a majority of the money exchanged for homes, cars, college, etc. is with DEBT not cash. With interest rates near zero, that card has been played to spur spending since 2010ish. Will we see some inflation before things taper off?

I can tell you that $0 down loans and similar products to stated income are back in the housing market already. I've seen many around me take on new cars, boats, RV's, etc. over the last few years. All financed of course.

As usual, time will be the best teacher.

[Vegas69]

My search varied some, but up to 78% of Americans live paycheck to paycheck or damn close to it.

[WSSix]

I've been hearing people talk about us being in another bubble and that it's only a matter of time before it pops. I'm not surprised people are taking on more debt that they should. We're a very materialistic society. I won't get into that trap. I'm sure someone could show me how I can leverage the cheap lending situation to make more money for myself, but I'm not interested in putting myself at that much risk.

[GregWeld]

I've been hearing people talk about us being in another bubble and that it's only a matter of time before it pops. I'm not surprised people are taking on more debt that they should. We're a very materialistic society. I won't get into that trap. I'm sure someone could show me how I can leverage the cheap lending situation to make more money for myself, but I'm not interested in putting myself at that much risk.

This is what people don't understand about "leverage" (borrowing and having to pay back that borrowing) -- is the RISK they're assuming. The more stuff people own (the banks own - the people are making payments) the more risk they've taken on -- and when a recession hits - or the company downsizes - or is bought / acquired.... That risk multiplies in a HUGE hurry.

That is when the old saying "cash is king" comes into play! I've made the most money in the biggest downturns. You can get houses cheap - apartments cheap - stocks cheap.... LOL

[Vegas69]

I've been hearing people talk about us being in another bubble and that it's only a matter of time before it pops. I'm not surprised people are taking on more debt that they should. We're a very materialistic society. I won't get into that trap. I'm sure someone could show me how I can leverage the cheap lending situation to make more money for myself, but I'm not interested in putting myself at that much risk.

The value of anything is the life you must exchange for it.

I didn't think of debt or obligations this way until recently in my life. My good buddy had a truck that was paid for or close to it. It was serving him just fine. He went out and bought a brand new truck because he's 51 and just wants to LIVE. (He tends to be a paycheck to paycheck guy) My perspective is now he must work to pay for the truck every month. Debt is really the antithesis of freedom.

I've spent the last 5 years of my life going the opposite way. I've worked continually on putting more margin in my finances and obligations. I've done that by reducing my liabilities(Currently have zero debts) and increasing my income.(Over doubled) I've hired better staff that reduces my work load and figured out what's of greatest importance daily. I say NO more than I ever have.

Focus is the art of figuring out what to say NO to.

The most successful say NO to almost everything. -Warren Buffett

Wealth is a pretty simple formula. The distance between your liabilities and income need to grow. The farther you can live below your means, the faster you will obtain wealth. After all, you must have the capital to take advantage.

I agree with Greg. I used to look at a recession or downturn in a very negative light. Now, I would see it as another opportunity to take advantage of a Spring. BUT, you have to be prepared for a rainy period and that happens over time, not days.

The most money is made with the market is MOST PESSIMISTIC. When the news, your friends, and coworkers are talking about how bad it is, that's your key to start looking for opportunities. :lol:

Now, I do still believe in leveraging some real estate with debt. The numbers on an investment property just need to make sense for the long term after counting all the costs.

[GregWeld]

I have never been a fan of gambling with investment dollars. There's so many reasons for this I could write a book -- but #1 being - this (gambling vs investing) is the number one way to shake a newbie out of the game forever....

Is there money to be made taking on something like a Bitcoin? Oh sure there is! Is there money to be made shorting a stock you're sure is headed south? Heck yeah! But this is investing 102... it's about getting started and learning A strategy that will get you in the game and hopefully keep you in the game long term -- and with some success.

Ask yourself --- at what point you'd have put money in Bitcoin only to wake up to a 30 or 40% down move... and tell me straight up you wouldn't have panicked and blown out of the position with a startling loss... Check out this chart -- this is the THIRD time this year already for this stuff. Yeah - just no thanks for this cowboy.


http://lateral-g.net/forums/attachment.php4?attachmentid=63692&stc=1&d=1510581308

[AU Doc]

I'm trying to catch up with this thread, but with over 5,000 posts it's going to take a while. In the mean time, do you guys have any suggestions for investment opportunities outside the stock market? With the meteoric run we've had recently, I'm starting to consider other options to hedge my bets a bit.

I've considered buying some rental property, but when I look at the day-to-day time and cost investment I'm not sure it really makes sense. As mentioned a couple posts back, investing in an property management firm would be a great alternative I hadn't considered, but I'll have to do some research there to better understand just what is required and what the risks are.

Any other suggestions for ways to diversify my retirement package?

[GregWeld]

I'm trying to catch up with this thread, but with over 5,000 posts it's going to take a while. In the mean time, do you guys have any suggestions for investment opportunities outside the stock market? With the meteoric run we've had recently, I'm starting to consider other options to hedge my bets a bit.

I've considered buying some rental property, but when I look at the day-to-day time and cost investment I'm not sure it really makes sense. As mentioned a couple posts back, investing in an property management firm would be a great alternative I hadn't considered, but I'll have to do some research there to better understand just what is required and what the risks are.

Any other suggestions for ways to diversify my retirement package?





You'll find a lot of the posts are redundant --- because "new" people generally ask the same or similar questions --- so much of the info is repetitive.....


So here's an interesting thing --- and you'll see it in here repeatedly..... I love it when people cite the market is "high"..... Go to a charting site such as Google Finance.... Enter SPY - or QQQ (these are the symbols for the Dow and the Nasdaq tracking stocks).... and select the longest length of time the chart will allow (Googles is "ALL").... then come tell me when the market was too high.

I'm not trying to be a smart ass here -- my point is that while there are MANY ups and downs in the market ---- the point of this entire thread has been --- get in the market and STAY IN.... because OVER TIME -- the market (chart) is lower on the left and higher on the right.

You'll find this in housing and apartment investing as well.... you'll find it in Bond investing.... you'll find it in EVERY kind of investing. Things go up - things go down - but over time they'll be higher than where they are.

So with that in mind.... what you're really asking for people to do is to tell you where to invest that isn't going down from here. That, my friend, is impossible. You'll see me and others refer to the little man behind the curtain -- he knows when you've bought and he takes whatever you bought and takes it DOWN. LOL it's the way it works. It's a test to see if you're a real believer - or a trader - a weak hand or a strong hand.

I've found that over the last 30 years of my investing life --- when things go to hell -- EVERYTHING sucks. When the market is bad - so is the real estate market... etc. So to-date I've not found a way to be good when things suck. Rich people get richer buying from the weak hands when things suck. They have the ability to have cash on hand and take advantage of those that don't. Sorry to be blunt - but that is the way the world works. Now -- if you think -- well then..... I'll just sit on my cash and wait until the market goes south and then I'll strike. Mark my words -- it will never happen - because if you're afraid to invest now -- you'll be more so when the going gets bad. And in the meantime -- you'll have lost out on the rise in values while you wait.

Here's the way I look at it --- If I buy now - today - at some point I will be bleeding red.... #1 I'm not ever going to be "fully invested" -- I'm always going to have cash reserves.... and if I'm real lucky -- the market will go up from when I buy. Let's say what I bought appreciates 20% -- and then there's a vicious selloff and the market goes down huge - like 10%.... I'd be buying more - and I'd view that as lucky because I get to buy when something went on sale.

So I've just summed up the last 5000 pages for you. LOL

[AU Doc]

Haha! Thanks for the recap!

I started reading this backwards from the newest posts and saw mention of real-estate. It caught my interest because after researching rental properties a few times over the years I've always dismissed the idea as not fitting my investment style. Investing in a management company hadn't occurred to me before, so it's something new to consider.

After that, I went to the beginning of the thread and now I realize the predominant wisdom is more of a buy and hold stocks strategy. Interestingly, that fits pretty well with my investing philosophy. In the last 10 years or so I've probably sold about that many stocks, maybe double that (not counting rebalancing and the like). I still have positions in most of the stocks I've bought over the years. There are a few I should probably ditch, though.

That said, I like to hear what ideas other people have. There are without doubt diversification avenues I haven't considered.

[GregWeld]

Haha! Thanks for the recap!

I started reading this backwards from the newest posts and saw mention of real-estate. It caught my interest because after researching rental properties a few times over the years I've always dismissed the idea as not fitting my investment style. Investing in a management company hadn't occurred to me before, so it's something new to consider.

After that, I went to the beginning of the thread and now I realize the predominant wisdom is more of a buy and hold stocks strategy. Interestingly, that fits pretty well with my investing philosophy. In the last 10 years or so I've probably sold about that many stocks, maybe double that (not counting rebalancing and the like). I still have positions in most of the stocks I've bought over the years. There are a few I should probably ditch, though.

That said, I like to hear what ideas other people have. There are without doubt diversification avenues I haven't considered.





Check with your accountant and lawyer about whether or not they know people in the Real Estate LLC (Limited Liability Corp) business. That's how I got started in them many many (25+) years ago. They've been staggeringly good investments for me. Caveat here -- they are NOT suitable for retirement accounts such as IRA and 401's etc. Do not invest in them with that money!

The other couple of great investments I use - again - via my accountant (their customers) or my law firm etc is mortgage investments - where I hold the mortgage secured, of course, by the Deed of trust.... These typically pay above market (the stock market - which I look for an average of 5% dividend) rates and after the people pay me monthly for years and years -- they still owe me most all of the principal. LOL

Caveat -- real estate is THE WORST EVER investment for liquidity. If you can't hold thru a 10 year bear market or longer.... don't bother.

By the way ----- you missed one extremely important investing strategy that is 100% important here --- not just investment in stocks -- but DIVIDEND PAYING STOCKS WITH GROWTH. You'll read more about why this is critically important along the way.

[LuxurySportCoupe]

From posts in the past, it seems like not too many people in this thread own GE, but at least as a newbie, I found this article very interesting. GE is cutting their dividend in half, and it sounds like they're trying to cut costs elsewhere. On the positive side, this kind of makes me wonder if this is signaling a turnaround in company culture that they need? Therefore, pick this stock up while it's down and hopefully the dividend rises over time as well. Or, on the negative side, is this just evidence that GE is in trouble, and staying away is the best choice? Food for thought.

https://www.washingtonpost.com/news/get-there/wp/2017/11/13/general-electric-stock-swoons-after-company-halves-its-dividend-announces-plans-to-exit-the-light-bulb-business/?utm_term=.560b20882041

[AU Doc]

I've been heavily invested in growth stocks, which has worked well for me, but I'm beginning to want something more conservative. Dividend stocks are another avenue I've been considering.

Wat do you consider a good dividend yield? 4%, 5%? I know it depends on how the stock price is moving, but in general I'm wondering where you set the lower bar.

[GregWeld]

From posts in the past, it seems like not too many people in this thread own GE, but at least as a newbie, I found this article very interesting. GE is cutting their dividend in half, and it sounds like they're trying to cut costs elsewhere. On the positive side, this kind of makes me wonder if this is signaling a turnaround in company culture that they need? Therefore, pick this stock up while it's down and hopefully the dividend rises over time as well. Or, on the negative side, is this just evidence that GE is in trouble, and staying away is the best choice? Food for thought.

https://www.washingtonpost.com/news/get-there/wp/2017/11/13/general-electric-stock-swoons-after-company-halves-its-dividend-announces-plans-to-exit-the-light-bulb-business/?utm_term=.560b20882041





It's best to not be early...... or in Wall Street parlance --- Don't try to catch a falling knife.


Let it play out -- and wait for them to begin to post a couple quarters of improved earnings and cash flow etc. You're only going to pick up a few pennies if you're lucky and catch it on the lowest day of trading.

Remember that there are LOTS AND LOTS of people holding this stock that are looking for any excuse to SELL it now with the low dividend and poor growth prospects.... Think about a Microsoft for 10 + years of going nowhere.... and then they finally get a new CEO and off she goes.

This is also known as "dead money" --- money that sits for years without a decent return in dividend, since it's a KNOWN % and you could have invested in something else with double or triple the dividend %)...

[GregWeld]

I've been heavily invested in growth stocks, which has worked well for me, but I'm beginning to want something more conservative. Dividend stocks are another avenue I've been considering.

Wat do you consider a good dividend yield? 4%, 5%? I know it depends on how the stock price is moving, but in general I'm wondering where you set the lower bar.



When you finally find the time to read this thread --- you'll see a common theme discussed.

If you're going to accept a lower dividend - then there has to be growth with it - and you can take a higher dividend % - without as much growth. It's called TOTAL RETURN.... which is what is most important in investing. The total return you get on your money. Many times that's some combination of dividend and growth. I ALWAYS ALWAYS ALWAYS check the total return on a stock for a number of years (backwards) before investing. I'm looking for a 100% total return in something under 10 years and preferably in 5...


I want a blended return in cash flow (dividend) of at least 5%..... the growth is on top of that. Sometimes that growth is slower - or backwards or awesome -- but I count on the DIVIDEND to carry the investments when the market has gone south.

[AU Doc]

5% is the number that came to mind for me. Though it's likely because it's something I've read somewhere in the past. I doubt I'm clever enough to come up with that myself :) It does make sense for the return to be at least high enough to account for inflation, which is less than 3% currently if my Google search is to be believed.

So all in you're looking for a return in the range of 7% to 14%. I guess the gold standard is to do better than the market, which will depend on the time frame you're looking at. I think historically that's going to be around 12%, or doubling your money about every 7 years. I could certainly live with that!

[Stuart Adams]

Greg,

Thanks for all you do in contributing to the site. This thread has been awesome.
Your broad knowledge and experience is awesome. :patriot:

[AU Doc]

Greg,

Thanks for all you do in contributing to the site. This thread has been awesome.
Your broad knowledge and experience is awesome. :patriot:

Agreed! This is a fun thread with a lot of high value information. I appreciate all the effort that has gone into it.

[GregWeld]

5% is the number that came to mind for me. Though it's likely because it's something I've read somewhere in the past. I doubt I'm clever enough to come up with that myself :) It does make sense for the return to be at least high enough to account for inflation, which is less than 3% currently if my Google search is to be believed.

So all in you're looking for a return in the range of 7% to 14%. I guess the gold standard is to do better than the market, which will depend on the time frame you're looking at. I think historically that's going to be around 12%, or doubling your money about every 7 years. I could certainly live with that!



I don't know that I ever held myself to any particular standard..... seriously. What I'm trying to do is to create enough cash flow to more than cover living expenses and taxes.... and not dip in to the capital.

Generally there is capital appreciation over time (time is variable) with "most" investments (NOT BONDS)... and that is gravy in my eyes.

For most people - they're not yet taking the dividend to live on - and that's where the growth really gets accelerated. Taking the cash - and the growth, combined - is where the magic can really start. At some point then - you're retired (I've been for 24 years or something like that) and want to live on the cash created - which is where the accumulated pile needs to be sufficient.

If you figure (as I do) to average 5% dividend - and factor a 20% tax rate - then you're net cash is about $40,000 PER MILLION. Scary when you think about it really..... that if you're earning $150K a year now - you'll need 3 million invested to replace that spending.

This is why -- when you come to retirement - you don't want 20 years left on your mortgage....

[GregWeld]

Greg,

Thanks for all you do in contributing to the site. This thread has been awesome.
Your broad knowledge and experience is awesome. :patriot:

Agreed! This is a fun thread with a lot of high value information. I appreciate all the effort that has gone into it.




Thank you..... it's been fun for me as well. The thrill I get when I receive communication from someone that retires comfortably - or suddenly has some real savings/investments and is doing well on them - or someone that paid off their house early.... whatever.... that's a real high for me.

Retirement SHOULD BE the best time of peoples lives.... worry and hassle free... and should be the payback period for everything they've done in the past to get there. Having some money does, in deed, buy happiness.

[dhutton]

How do you deal with shrinking dividends as a percentage when stock prices rise? I started out with stocks that pay high dividends but the dividend percentage has shrunken over time. Do you sell them to buy stocks with higher dividends or do you hold them and live with a smaller percent on a higher value portfolio?

Hope this makes sense.

Thanks,
Don

[AU Doc]

..........
If you figure (as I do) to average 5% dividend - and factor a 20% tax rate - then you're net cash is about $40,000 PER MILLION. Scary when you think about it really..... that if you're earning $150K a year now - you'll need 3 million invested to replace that spending.........

Here's a question I've been chewing on for a while, if I put all of my retirement savings in an IRA, if I decide I can retire before 59-1/2 am I going to have to pay an additional 10% penalty every year until that 59-1/2 mark? If so, that's going to HURT!

EDIT: It looks like there is a way to make early withdrawals, but it carries some risk. There is the 72(t) Substantially Equal Periodic Payments (SEPP) option. It would require some planning to get it right, though.

[GregWeld]

How do you deal with shrinking dividends as a percentage when stock prices rise? I started out with stocks that pay high dividends but the dividend percentage has shrunken over time. Do you sell them to buy stocks with higher dividends or do you hold them and live with a smaller percent on a higher value portfolio?

Hope this makes sense.

Thanks,
Don



I think you're doing the math incorrectly!! Or at least I hope you are!


The dividend should only be calculated on YOUR COST basis. To do this --- divide the ANNUAL dividend paid - by your cost per share....

DON'T look at what it's paying currently on the price it's trading at today. What should really be happening is that your dividend PERCENTAGE should increase as they raise the payout - and your cost stays the same (unless you're adding to the shares at which time you need to calculate your new cost basis).

Does this make sense?

[GregWeld]

Here's a question I've been chewing on for a while, if I put all of my retirement savings in an IRA, if I decide I can retire before 59-1/2 am I going to have to pay an additional 10% penalty every year until that 59-1/2 mark? If so, that's going to HURT!

EDIT: It looks like there is a way to make early withdrawals, but it carries some risk. There is the 72(t) Substantially Equal Periodic Payments (SEPP) option. It would require some planning to get it right, though.



I have no idea and would only discuss questions like that with a tax professional.

I'm 64 now and don't withdraw from our IRA... nor do I add to it either - but I do have it entirely invested in high risk growth stuff. We don't need it - so why not try to have it grow until they force me to take it (70). My wife is only 60 and is also retired.... I want her to hurry up and get her Social Security. LOL ---- Seriously not really but I rib her all the time about it.

[AU Doc]

I think you're doing the math incorrectly!! Or at least I hope you are!


The dividend should only be calculated on YOUR COST basis. To do this --- divide the ANNUAL dividend paid - by your cost per share....

DON'T look at what it's paying currently on the price it's trading at today. What should really be happening is that your dividend PERCENTAGE should increase as they raise the payout - and your cost stays the same (unless you're adding to the shares at which time you need to calculate your new cost basis).

Does this make sense?


Now that is something I hadn't considered. Assuming even a moderate increase in the share price and a static dividend, the dividend calculated at your cost basis could be quite high! I suppose the company could reduce their dividend to compensate and keep the payout flat.

With that in mind, I guess the screening tactic is to look for a stock with an increasing price and either a static or increasing dividend.

[dhutton]

I think you're doing the math incorrectly!! Or at least I hope you are!


The dividend should only be calculated on YOUR COST basis. To do this --- divide the ANNUAL dividend paid - by your cost per share....

DON'T look at what it's paying currently on the price it's trading at today. What should really be happening is that your dividend PERCENTAGE should increase as they raise the payout - and your cost stays the same (unless you're adding to the shares at which time you need to calculate your new cost basis).

Does this make sense?

That’s entirely possible. I understand what you are saying. But here’s the way I was looking at it. Suppose I’m retired and my portfolio that cost me $1000000 is now worth $2000000 thanks to your awesome advice. The 5% dividends on the $1000000 cost basis is now yielding 2.5% on the current value of the portfolio. But because I am retired I would really like to see 5% on the current $2000000 value. :) So would it make sense to move into stocks that are paying 5% on their current value today, assuming I could find any that I understand and trust?

Hope this makes sense.

Thanks,
Don

[Flash68]

Having some money does, in deed, buy happiness.

I see what you did there.... even if inadvertently, I like it. I like deeds. :D

[SSLance]

Here's a question I've been chewing on for a while, if I put all of my retirement savings in an IRA, if I decide I can retire before 59-1/2 am I going to have to pay an additional 10% penalty every year until that 59-1/2 mark? If so, that's going to HURT!

EDIT: It looks like there is a way to make early withdrawals, but it carries some risk. There is the 72(t) Substantially Equal Periodic Payments (SEPP) option. It would require some planning to get it right, though.

I'm living this quandary for real...we have always been very aggressive with our IRA and 401k contributions (to take tax and matching advantages) and currently sit with about half of our Net Worth in Pre-tax accounts. I'm 50 and the wife is 55 years old.

We are rearranging the post tax assets to try to make them cover living expenses until we can access the pre-tax money without penalty.

But hey, at least we have the pre-tax money there...just in case we do need it.

[GregWeld]

That’s entirely possible. I understand what you are saying. But here’s the way I was looking at it. Suppose I’m retired and my portfolio that cost me $1000000 is now worth $2000000 thanks to your awesome advice. The 5% dividends on the $1000000 cost basis is now yielding 2.5% on the current value of the portfolio. But because I am retired I would really like to see 5% on the current $2000000 value. :) So would it make sense to move into stocks that are paying 5% on their current value today, assuming I could find any that I understand and trust?

Hope this makes sense.

Thanks,
Don



AH HA!! Yes that's a better question --- but hopefully you've also made certain that you know the real dividend percentage based on your cost.... Many (not always) dividend paying stock appreciate in lockstep with the dividend payout.... but I also totally get what you're asking about. I'm having this very issue with the last apartment complex I invested in!! It was a million dollar investment paying 7%..... so now the apartment is valued at almost double - so my capital appreciated but my payout is static.... thus - if I use your method it's paying me about half what I could try to make if we sold and took the capital gain.

Okay -- gets complicated and try not to trip yourself up!


Example --- you bought Altria (MO) 6 years ago and it's now doubled in value. Let's say you sell half - and create a LONG TERM capital gain. That gain is going to be taxed at 20%.... so you'll have "less than double" than you think you were going to have (can't forget about the tax man).... now let's use 10 grand as an example -- so now you really have 8 grand to re-invest.... and you want to earn that 5% on those "new money" investments.

Let's not forget to calc the current dividend on the actual cost basis.... you might find yourself making 8 or 9% on that holding -- and therefore you're really not going backwards - or earning half what you thought! Don't trip yourself up here! Do the math! Now -- if your investment has doubled in value and you're getting 9% on the actual cost - you're really getting about 4.5% on the current value.

Generally companies that are good investments INCREASE the dividend as they go along.... Just look at some of your current dividend payers and look at the 5 year chart and see if they haven't had nice increased payouts along the way. Those SHOULD continue....

Warren Buffet gets more in annual dividend today than his original investment in COKE (KO)..... think about that -- he gets back the entire investment every single year. Not a bad return....

Should you decide to sell that WINNER --- you're going to find yourself in the below dilemma....


YES YOU SHOULD BE DOING THIS generally as a matter of course..... I always TRIM investments and scoop the cash when they are in that 75 / 80 / 90 or more % growth in capital! That does two things -- it helps you further diversify - and it locks in a gain rather than riding it down at some point. Now - you may ride the new investment down or you may pick another winner and they BOTH double again and if the market goes down - they'll both go down -- but we're trying to be smart about it and get that money working and paying you. This is where investing gets hard!

The other day I sold a large chunk of NetFlex (NFLX) because I was up 107%.... it doesn't pay a dividend - it was a pure speculative growth play.... TAKE SOME GAIN!!! Nobody ever went broke taking gains!! If it still continues to steam ahead -- what's left will ride that train.... will I be sorry I didn't leave it all to ride? That's an individual choice. I like to take outsized gains and live to play another day. I scooped 80 grand.... I'll invest that in something and hope I picked correctly and it will still grow or better yet - I'll get 5% on the 60 grand I'll net. I look at it as FREE MONEY. The stock did exactly what I'd hoped it would do (grow like crazy) - it did - and therefore I should be happy.

I'm writing a book here...... but what I'm really saying is -- "it depends" -- depends on the situation.... if you're living off the dividends now -- and you have great capital gains -- and you've done the math - then SPEAK TO YOUR TAX MAN FIRST -- and make sure you're not doing something stupid tax wise..... then by all means take that gain and reinvest it in another cash cow.

Now --- I've been putting money in AMAZON (AMZN) -- it pays zero dividend... but the growth in capital has been stellar! Way more and way faster than a dividend payer. I have a few of those... this is, again, an individual situation. I earn way more than I spend - so I can "afford" to take a few fliers like that (Netflex - Amazon - Alibaba (just sold all of it) - Google etc)..... If a guy is young - so are these companies - to me they are the IBM and COKES and CHEVRONS of yesteryear..... is the market hot for them -- yes - will they sell off big time at some point? I'd assume so... there is RISK... but I'm not using them to live off of - now - or in the future.... I'm just playing and trying to make my money grow....

[dhutton]

AH HA!! Yes that's a better question --- but hopefully you've also made certain that you know the real dividend percentage based on your cost.... Many (not always) dividend paying stock appreciate in lockstep with the dividend payout.... but I also totally get what you're asking about. I'm having this very issue with the last apartment complex I invested in!! It was a million dollar investment paying 7%..... so now the apartment is valued at almost double - so my capital appreciated but my payout is static.... thus - if I use your method it's paying me about half what I could try to make if we sold and took the capital gain.

Okay -- gets complicated and try not to trip yourself up!


Example --- you bought Altria (MO) 6 years ago and it's now doubled in value. Let's say you sell half - and create a LONG TERM capital gain. That gain is going to be taxed at 20%.... so you'll have "less than double" than you think you were going to have (can't forget about the tax man).... now let's use 10 grand as an example -- so now you really have 8 grand to re-invest.... and you want to earn that 5% on those "new money" investments.

Let's not forget to calc the current dividend on the actual cost basis.... you might find yourself making 8 or 9% on that holding -- and therefore you're really not going backwards - or earning half what you thought! Don't trip yourself up here! Do the math! Now -- if your investment has doubled in value and you're getting 9% on the actual cost - you're really getting about 4.5% on the current value.

Generally companies that are good investments INCREASE the dividend as they go along.... Just look at some of your current dividend payers and look at the 5 year chart and see if they haven't had nice increased payouts along the way. Those SHOULD continue....

Warren Buffet gets more in annual dividend today than his original investment in COKE (KO)..... think about that -- he gets back the entire investment every single year. Not a bad return....

Should you decide to sell that WINNER --- you're going to find yourself in the below dilemma....


YES YOU SHOULD BE DOING THIS generally as a matter of course..... I always TRIM investments and scoop the cash when they are in that 75 / 80 / 90 or more % growth in capital! That does two things -- it helps you further diversify - and it locks in a gain rather than riding it down at some point. Now - you may ride the new investment down or you may pick another winner and they BOTH double again and if the market goes down - they'll both go down -- but we're trying to be smart about it and get that money working and paying you. This is where investing gets hard!

The other day I sold a large chunk of NetFlex (NFLX) because I was up 107%.... it doesn't pay a dividend - it was a pure speculative growth play.... TAKE SOME GAIN!!! Nobody ever went broke taking gains!! If it still continues to steam ahead -- what's left will ride that train.... will I be sorry I didn't leave it all to ride? That's an individual choice. I like to take outsized gains and live to play another day. I scooped 80 grand.... I'll invest that in something and hope I picked correctly and it will still grow or better yet - I'll get 5% on the 60 grand I'll net. I look at it as FREE MONEY. The stock did exactly what I'd hoped it would do (grow like crazy) - it did - and therefore I should be happy.

I'm writing a book here...... but what I'm really saying is -- "it depends" -- depends on the situation.... if you're living off the dividends now -- and you have great capital gains -- and you've done the math - then SPEAK TO YOUR TAX MAN FIRST -- and make sure you're not doing something stupid tax wise..... then by all means take that gain and reinvest it in another cash cow.

Now --- I've been putting money in AMAZON (AMZN) -- it pays zero dividend... but the growth in capital has been stellar! Way more and way faster than a dividend payer. I have a few of those... this is, again, an individual situation. I earn way more than I spend - so I can "afford" to take a few fliers like that (Netflex - Amazon - Alibaba (just sold all of it) - Google etc)..... If a guy is young - so are these companies - to me they are the IBM and COKES and CHEVRONS of yesteryear..... is the market hot for them -- yes - will they sell off big time at some point? I'd assume so... there is RISK... but I'm not using them to live off of - now - or in the future.... I'm just playing and trying to make my money grow....

Thanks for the excellent detailed response Greg. The stocks are in my IRA so no tax implications when I sell. Most of the stocks I purchased when I started following this thread have more than doubled in value. I’m currently not making any withdrawals and hope not to for another 5 years when I’m 65.

Thanks again, this thread is pure win. It has literally been life changing for my wife and I.

Don

[GregWeld]

Thanks for the excellent detailed response Greg. The stocks are in my IRA so no tax implications when I sell. Most of the stocks I purchased when I started following this thread have more than doubled in value. I’m currently not making any withdrawals and hope not to for another 5 years when I’m 65.

Thanks again, this thread is pure win. It has literally been life changing for my wife and I.

Don



Ah --- yeah --- I forgot to discuss/mention IRA's and ROTH IRA's -- DEFFERED TAXES on the IRA/401K's and ZERO taxes for those lucky enough to qualify for the ROTH IRA....


Huge gains my friend! And good for you!! Damn I love when I see someone having a little success! I just wish we'd have had this discussion going when I first joined Lat G..... OMG! There'd be some pretty good gains to have seen there! Lot of guys would be retiring "early" and building cars with all the spare cash!! LOL


It really does get a little tricky when it comes to gains and earnings power etc.... because if you hold long enough - and the gains keep coming.... and the dividends keep increasing..... pretty soon (years) -- you're looking pretty dang smart with a simple buy and hold strategy..... BUT being somewhat "active" as in MANAGING your money.... you can be even a bigger winner.... but so much of it depends on how good of a manager you are and what you've learned along the way. I've seen it go both ways.

Example --- a long term best friend would ONLY invest in bonds.... dumb bunny was in bonds even though that cash was tied up in tax free munis while the stock market was roaring.... I finally got him to take 100,000 and put it in Microsoft and Intel and Cisco and Dell etc.... back when the stuff was doubling every 6 months.... in less than a year -- he had (with my active involvement) over 300,000 in the market. Sadly - he could never pull the trigger on the SELL SIDE!! But he had learned he could make way better return in the stock market than he could in bonds.... so that was a major milestone for me. Now --- what he also did ---- WRONGLY --- was when he found something he wanted to buy - he'd buy it in his trading (taxable) account -- and he'd buy it in his IRA!! His problem was - he could stretch or reach out and trust himself to be a decent stock picker (the reason he was in bonds - because that's pretty much a no failure pick). So when he put 100K in Ginny Mae (can't remember the symbol now) and they went to ZERO during the housing bust - he lost all of it (the 100K in that investment). Now ---- it didn't hurt him - because he was already a millionaire and his house and everything else he owned was paid for years ago..... but those are tough lessons. He'd forgotten the 5% rule!! And he'd forgotten the DIVERSIFY rule! He chased YIELD and got greedy when it was going well.... but he forgot all about RISK. Capital preservation is every bit as important as all the rest of it.

I do appreciate his thanks every once in awhile - and he's told me many times that it was my pushing him that made a huge difference in his retirement. These days he has a brand new pickup and hauls a large 5th wheel around and spends his winters in warmer climates.... with not a worry in the world. That is the way to retire!

"Active" management does not mean trading.... what it means is vigilance - and not being afraid to take a loss when you know the pick sucks.... it means taking profits when they're "outsized".... it means asking the good questions just exactly like what was asked here.... it means trying to control risk but not being afraid or frozen like a deer in the headlights. It's recognizing that if you have a 40% gain and the stock market goes south 15% -- that YOU still have a sweet gain and those dividends are going to keep paying! Active is just a term for DON'T FORGET all the rules.... 5% per any investment (okay they grow and creep up to 7% - but don't let them be 15 or 20% - that means you forgot to take some of the gain!!).

WOW --- another book written! LOL

[NAPA 68]

You take a very complicated topic and boil it down, so it's not so intimidating. Great advice and thank you Greg!

Tim

[GregWeld]

Let's use ALTRIA (MO) as a perfect example for what we've been discussing.... i.e., when do you trim gains and reinvest in something else so your dividend PERCENTAGE stays up with your "needs"....



On December 21st, 2012 -- MO traded at 33.16 per share - it paid .44 cents per quarter a share then. So it paid 5.3% dividend


.44 X 4 = $1.76 ANNUALLY ---- divide the 1.76 by the price per share (33.16) and you'll see .053075995 Move the decimal point and you have 5.3%

Today MO trades at $65.26 a share -- BUT -- it's now paying .66 cents per quarter.


.66 X 4 = 2.64 ANNUALLY --- but your cost stayed at 33.16 per share! So what's it paying YOU? 7.96% on your cost basis not today's quoted rate of 4.05% which is based on today's price per share.


Now -- let's say this has been a pretty good investment -- you have almost a double in 5 years (2012 to 2017) and you're getting almost 8% dividend on YOUR cost basis. Not a bad "ho hummer huh?" LOL

But you now have twice the money you invested to begin with.... so if you sold HALF - you'd still be making the 8% on those shares remaining --- and you could reinvest in something else and, say, you found something that's paying 5%. You're net cash income would go up and that is what DHUTTON was asking about.


Hope that makes sense to everyone.

[glassman]

The value of anything is the life you must exchange for it.

I didn't think of debt or obligations this way until recently in my life. My good buddy had a truck that was paid for or close to it. It was serving him just fine. He went out and bought a brand new truck because he's 51 and just wants to LIVE. (He tends to be a paycheck to paycheck guy) My perspective is now he must work to pay for the truck every month. Debt is really the antithesis of freedom.

I've spent the last 5 years of my life going the opposite way. I've worked continually on putting more margin in my finances and obligations. I've done that by reducing my liabilities(Currently have zero debts) and increasing my income.(Over doubled) I've hired better staff that reduces my work load and figured out what's of greatest importance daily. I say NO more than I ever have.

Focus is the art of figuring out what to say NO to.

The most successful say NO to almost everything. -Warren Buffett

Wealth is a pretty simple formula. The distance between your liabilities and income need to grow. The farther you can live below your means, the faster you will obtain wealth. After all, you must have the capital to take advantage.

I agree with Greg. I used to look at a recession or downturn in a very negative light. Now, I would see it as another opportunity to take advantage of a Spring. BUT, you have to be prepared for a rainy period and that happens over time, not days.

The most money is made with the market is MOST PESSIMISTIC. When the news, your friends, and coworkers are talking about how bad it is, that's your key to start looking for opportunities. :lol:

Now, I do still believe in leveraging some real estate with debt. The numbers on an investment property just need to make sense for the long term after counting all the costs.

Man i Love this Todd. SOOOO true, although, i must admit, i do fall from it from time to time. But def ain't living paycheck to paycheck.

I've got two great things i've learned here over the last few years: How divi's really work (absolutely never even heard of that before) AND in a down turn things "are on sale", I can seriously thank Greg for that, maybe even both.

Working on paying off the house (which is worth 1.1 at the moment, but i think its a 400k house at best lol). But hey, i have three places to leave a sh_t (you don't take one, you leave one) and running water. Perspective.

cheers, mike

[glassman]

I have never been a fan of gambling with investment dollars. There's so many reasons for this I could write a book -- but #1 being - this (gambling vs investing) is the number one way to shake a newbie out of the game forever....

Is there money to be made taking on something like a Bitcoin? Oh sure there is! Is there money to be made shorting a stock you're sure is headed south? Heck yeah! But this is investing 102... it's about getting started and learning A strategy that will get you in the game and hopefully keep you in the game long term -- and with some success.

Ask yourself --- at what point you'd have put money in Bitcoin only to wake up to a 30 or 40% down move... and tell me straight up you wouldn't have panicked and blown out of the position with a startling loss... Check out this chart -- this is the THIRD time this year already for this stuff. Yeah - just no thanks for this cowboy.


http://lateral-g.net/forums/attachment.php4?attachmentid=63692&stc=1&d=1510581308

Is what you meant by "cowboy", riding the bull? up and down and thrown off...

[GregWeld]

You take a very complicated topic and boil it down, so it's not so intimidating. Great advice and thank you Greg!

Tim



That's my sole goal..... just making it all make sense. Thanks!

[Vegas69]

Man i Love this Todd. SOOOO true, although, i must admit, i do fall from it from time to time. But def ain't living paycheck to paycheck.

I've got two great things i've learned here over the last few years: How divi's really work (absolutely never even heard of that before) AND in a down turn things "are on sale", I can seriously thank Greg for that, maybe even both.

Working on paying off the house (which is worth 1.1 at the moment, but i think its a 400k house at best lol). But hey, i have three places to leave a sh_t (you don't take one, you leave one) and running water. Perspective.

cheers, mike

You're human like the rest of us....

You live in a whole different country over there. People always tell me they can't wait to get out, but I've seen many become wealthy from business and real estate over there and cash out to a different economy. 1.1 gets you a nice spread over here. That's over 4 times the median price of a house in Southern Nevada.

[SSLance]

You talked me into it once again Greg... Thanks!!

I had some free time this afternoon so I finally made a spreadsheet up tracking all of my initial buys, divvies received, growth and earnings %s.

I had always tracked my investments inside Quicken, but it adds each dividend reinvestment to the initial cost basis which really skews the numbers. By figuring the earnings back against the initial investment, it gives a MUCH clearer picture of the results...and lets one make more intelligent trading decisions. With everything else going on in my life, I've let this stuff just sit and ride and while that hasn't really hurt me (thanks to Dividend Growth Investing strategy) it can be optimized which I'll be doing shortly.

[AU Doc]

I'd be interested to hear a few details to everyone's approach to screening stocks. Over the past few days I've taken a few minutes here and there to play with the stock screener provided by my online brokerage house. My criteria were as follows:

Dividend > 4%
Stock Price > $5 (just to weed out the penny stocks)
growth > or = to the S&P 500 (I'm not entirely sure how the screener is applying this)

It narrows things down to 200-300 stocks, which is a pretty good chunk. Out of those remaining, I only see a handful that I recognize, and none that look to consistently beat the S&P over the past several years. So Even with a 4%-5% dividend, I would be better off with an index fund that's returning 12% or so.

It's likely I'm overlooking something, or didn't setup my charts to show what I think they're showing. I didn't have more than a few minutes to play around with it.

Is there something obvious that I'm missing? I'm looking for the first pass to get things down to a reasonable number of stocks to look through to find good candidates.

[GregWeld]

I'd be interested to hear a few details to everyone's approach to screening stocks. Over the past few days I've taken a few minutes here and there to play with the stock screener provided by my online brokerage house. My criteria were as follows:

Dividend > 4%
Stock Price > $5 (just to weed out the penny stocks)
growth > or = to the S&P 500 (I'm not entirely sure how the screener is applying this)

It narrows things down to 200-300 stocks, which is a pretty good chunk. Out of those remaining, I only see a handful that I recognize, and none that look to consistently beat the S&P over the past several years. So Even with a 4%-5% dividend, I would be better off with an index fund that's returning 12% or so.

It's likely I'm overlooking something, or didn't setup my charts to show what I think they're showing. I didn't have more than a few minutes to play around with it.

Is there something obvious that I'm missing? I'm looking for the first pass to get things down to a reasonable number of stocks to look through to find good candidates.




Do some more reading here..... otherwise I'm just repeating and repeating everything that's been asked - exactly what you're asking - has been discussed a zillion times.

In a nutshell though --- the 5% rule is going to have you invested in 20 names TOPS - if you have 100K to invest -- if you have 10K to invest - I'd go with less than 10 names.

Rather than look at every stock in the market - most of which you'd have ZERO clue who they are or what they do.... ask yourself a few questions - where do you shop -- where do you buy gas - where do you bank - where do you buy building materials etc. IN OTHER WORDS ---- BUSINESSES YOU FREQUENT.

Then start comparing them against their competitors. i.e., Do you shop at Home Depot or Lowes - compare them.... Cost basis - dividend - growth - total return.... and go with what you feel or not.

Use a cell phone? Your provider is? Compare them against the others?

Who's your power provider?

Then once you gather a few names ---- names of businesses you know and trust and frequent..... start to diversify them by their category.... "financial" - "energy" - "retail" - etc.... so you don't end up with 5 names in the retail space etc.

Investing is NOT about when things are going great and everything is going up -- investing is about making money when things aren't going well in the markets -- and being able to ADD to your holdings when they're "on sale" -- so the only way most people are comfortable doing that is by starting out with businesses they know and understand and frequent.... Don't forget that you become a part owner in those businesses. Best to actually like them to begin with.

Now --- nobody can tell you who to invest in - and we don't do that in this thread -- this is about teaching you to fish - not catching you a fish.... everyone is different - everyone's finances are different - everyone's age is different.... So it's up to you to figure out how much TIME you have -- how much risk you're willing to accept - and what you're guts are going to feel like when your account is DOWN 20%.... because at some point it will be. Like about a week after you make your first buys... LOL

[GregWeld]

You talked me into it once again Greg... Thanks!!

I had some free time this afternoon so I finally made a spreadsheet up tracking all of my initial buys, divvies received, growth and earnings %s.

I had always tracked my investments inside Quicken, but it adds each dividend reinvestment to the initial cost basis which really skews the numbers. By figuring the earnings back against the initial investment, it gives a MUCH clearer picture of the results...and lets one make more intelligent trading decisions. With everything else going on in my life, I've let this stuff just sit and ride and while that hasn't really hurt me (thanks to Dividend Growth Investing strategy) it can be optimized which I'll be doing shortly.



GOOD!!! This is not a sit on your hands game -- you (not YOU but everyone is you) need to pay attention - reassess where you're at - plan your next moves... plan what you're going to do and how you stack up WHEN the market takes a dump.... it's too late to start raising cash AFTER the market sucks - so if you're going to want to have some cash - best to do that when the market is hot not when it's not!

LOL

[AU Doc]

Thanks for taking the time to reply to everyone’s questions. I know the same questions get asked over and over.

That said, I’m through the first hundred or so pages and haven’t run across my particular question. At least not that I recognized, anyway.

Let me try again. It looks like the average dividend yield across the market is between 2% and 3%. Take Home Depot for example. It’s current dividend yield is 2.13%, which isn’t enough to warrant a buy on the dividend alone. It is however benefiting from the current housing growth and the stock price has been on a steady climb.

Another example is Ford. It pays a dividend of almost 5%, but the stock price has been on a decline since 2014. So again, it doesn’t fit the criteria.

Verizon has a nearly 6% dividend, but the stock has been mostly flat for the past five years. So it’s beating inflation, but still well behind the market.

I suppose what I’m saying is so far the intersection of stocks with a 5% dividend and a flat to increasing share price has been a bit like finding a unicorn for me :) Based on my difficulties so far, I’m wondering if I’m misunderstanding some of the terminology, or if these stocks are just difficult to find.

Thanks again! Just trying to put all the pieces together here :)

[GregWeld]

Thanks for taking the time to reply to everyone’s questions. I know the same questions get asked over and over.

That said, I’m through the first hundred or so pages and haven’t run across my particular question. At least not that I recognized, anyway.

Let me try again. It looks like the average dividend yield across the market is between 2% and 3%. Take Home Depot for example. It’s current dividend yield is 2.13%, which isn’t enough to warrant a buy on the dividend alone. It is however benefiting from the current housing growth and the stock price has been on a steady climb.

Another example is Ford. It pays a dividend of almost 5%, but the stock price has been on a decline since 2014. So again, it doesn’t fit the criteria.

Verizon has a nearly 6% dividend, but the stock has been mostly flat for the past five years. So it’s beating inflation, but still well behind the market.

I suppose what I’m saying is so far the intersection of stocks with a 5% dividend and a flat to increasing share price has been a bit like finding a unicorn for me :) Based on my difficulties so far, I’m wondering if I’m misunderstanding some of the terminology, or if these stocks are just difficult to find.

Thanks again! Just trying to put all the pieces together here :)






Keep reading.....


The entire thread is only about things to think about - ways to look at things - it's not about what to do or what you should or shouldn't invest in. It isn't math class -- it's more about critical thinking. That's the problem with investing / investments.... if you understand the basics - then you can begin to look at them with your own criteria and understanding. That's all this thread is about.

You asked about narrowing down the choices you found using your search criteria -- I responded with some ways to think about how to begin to help narrow the choices down. There's no magic bullet for selection. There ARE guidelines to help - such as don't put too much in one basket - diversify - know and understand the business you're investing in etc. Investing isn't just about numbers - it's much more about understanding WHY you invested in what you did -- perhaps applying what and how you feel about that particular investment going forward... at some point - you can only trust your own judgement because it's YOUR money.

My suggestion was to just simply look around you - where you live - what you do for a living - start to look up companies you personally do business with.... sometimes just thinking and starting with that - will lead you to look at competitors and start doing comparisons - and one thing leads to another.... and triggers your brain to look at some other company that popped into your brain.... start making lists of the things you've looked up - the more you poke around the more you'll learn, the more questions you'll ask yourself....

This is investing 102 - beginners investing... you can pull up all manor of "criteria" -- and tape the list on the wall - close your eyes and throw a dart - and put money in whatever the dart landed on..... OR you can start with businesses you actually know their names - might do business with.... places that you might actually want to be a partner with. Do you want a rental house in a neighborhood you've never driven thru and know nothing about? Or would you sleep better at night with a rental in a place you kind of are familiar with and you've known the neighborhood since you were 10?

[GregWeld]

Here's something --- I've just been checking certain stocks this morning and thought of this -- or "found" this and thought it useful..... it's something that would never come up in any "criteria" search.... and as my favorite saying is -- Better LUCKY than smart....


Cisco (CSCO) in July 2011 began paying a dividend -- it paid .06 a share per quarter.... PALTRY by any standard (.35%)... but here we are 6 years later -- and it now pays .29 cents per quarter.

Had you been lucky enough to have bought it - and held it - your cost would be $15.74 a share.... you'd be UP 126% and you'd be earning 7.36% dividend on your original investment.

OH BUDDY --- yeah that's what TIME and a little bit of luck gets you.

[Woody]

Thanks for taking the time to reply to everyone’s questions. I know the same questions get asked over and over.

That said, I’m through the first hundred or so pages and haven’t run across my particular question. At least not that I recognized, anyway.

Let me try again. It looks like the average dividend yield across the market is between 2% and 3%. Take Home Depot for example. It’s current dividend yield is 2.13%, which isn’t enough to warrant a buy on the dividend alone. It is however benefiting from the current housing growth and the stock price has been on a steady climb.

Another example is Ford. It pays a dividend of almost 5%, but the stock price has been on a decline since 2014. So again, it doesn’t fit the criteria.

Verizon has a nearly 6% dividend, but the stock has been mostly flat for the past five years. So it’s beating inflation, but still well behind the market.

I suppose what I’m saying is so far the intersection of stocks with a 5% dividend and a flat to increasing share price has been a bit like finding a unicorn for me :) Based on my difficulties so far, I’m wondering if I’m misunderstanding some of the terminology, or if these stocks are just difficult to find.

Thanks again! Just trying to put all the pieces together here :)

What you are describing is normal. In most cases, the stocks that pay the higher dividends have slower stock price appreciation. It is going to be difficult to find a stock with a 5.0% dividend that is a "growth" stock. There is usually a trade off between the dividend rate and growth or appreciation rate of a stock.

What is best (high dividend vs. high growth) is very dependent on your particular situation. If you are not retired and don't need the dividends to live on, I believe total return is the most important thing to concentrate on.
If on the other hand you are retired and need the dividend income, finding the stocks with higher dividend rates may be more important.

Another thing to consider is the dividend growth rate of a stock. For example, AT&T (T) pays a current yield of 5.65%. Over the last ten years, it has had an average dividend increase of 3.8% per year and more recently has been closer to 2.5%. Johnson and Johnson (JNJ) pays a current yield of 2.42%, but its dividend has increased an average of 8.0% over the last ten years. JNJ currently pays a much lower dividend than T, but it has grown its dividend at a much faster pace. Additionally JNJ stock appreciation has been much greater than T's stock price appreciation.

Total return for T over the last 10 years was 7.93% per year, while total return for JNJ was 13.2% per year. As you can see T's current yield is much higher than JNJ, but its total return has been much lower.

If you are a young investor trying to grow your money at the fastest rate possible, I believe a stock like JNJ would be a better choice. If you are retired and needed to live off of your dividends, a stock like T would probably make more sense.

The stocks I selected are just real life examples and are not recommendations, but you should be able to research stocks that interest you and make similar comparisons.

[AU Doc]

@Woody, that’s exactly what I’m getting at. The market averages about a 12% return. So I tend to use that as a quick check for various investment opportunities. In this case, I would want my stocks to provide a 12% return whether that be through straight growth or a combination of growth and dividend yield.

[toy71camaro]

I ran across this article a day or two ago, and it's talking about exactly what you're asking. And its something that we've discussed here on the thread too. So I felt it warranted me sharing it. :P

Anyhow, this may also help answer your question(s) about %, total return, etc.

https://www.kiplinger.com/article/investing/T018-C032-S014-this-will-make-you-rethink-your-dividend-strategy.html

It won't make ME rething my strategy because its the strategy that our good friend Greg here has taught me already. ;)

PS Hey guys - long time to see. hope you all are doing well!

[toy71camaro]

You talked me into it once again Greg... Thanks!!

I had some free time this afternoon so I finally made a spreadsheet up tracking all of my initial buys, divvies received, growth and earnings %s.

I had always tracked my investments inside Quicken, but it adds each dividend reinvestment to the initial cost basis which really skews the numbers. By figuring the earnings back against the initial investment, it gives a MUCH clearer picture of the results...and lets one make more intelligent trading decisions. With everything else going on in my life, I've let this stuff just sit and ride and while that hasn't really hurt me (thanks to Dividend Growth Investing strategy) it can be optimized which I'll be doing shortly.

I'm not sure if this helps or not, but you mentioned spreadsheets.. this is an example of the spreadsheet I made to track my stuff... not sure if it would help anyone here or not, but it certainly helps me!

Link: https://docs.google.com/spreadsheets/d/1iCbAI2aNh9JA7WSvYLii4mis1OC3w-zFCFkfEIvxCf4/edit?usp=sharing

let me know if you have any questions or comments - or if its useful enough to want a copy of it!

Essentially, i track my purchases and dividend payments on the ticker tab, and that reports back to the summary tab and auto calc's total returns, yield on cost, etc.

[SSLance]

Wow!! That is WAY more elaborate than mine!! Thanks for sharing... I might have to sleep on that for a bit to see if I want that much detail or not. Very nice though...



So...I have a holding that has been beaten up a bit in share price (down 47.99%) but still pays a great dividend. I just ran the calcs and the net asset value of those shares in that particular holding now represent just 4% of my total holdings, but the dividend represents 15% of my total annual dividend.

This is where I struggle with this type of investing. If I decide I can't stomach this company any longer, I'm not sure I can replace the dividend dollars that this stock currently pays. One is going to have to hope the replacement stock I pick has enough growth in it to make some of that 48% loss back to supplement the lower dividend it'll most likely pay.

Is this a good metric to use (% of total dividend earned vs % of total net asset value)? Or should it be more about Growth and Dividend %s not necessarily about dividend dollars? This is all in my retirement accounts so no tax implications and I do not expect to be pulling money from these accounts any time soon.

[Woody]

Wow!! That is WAY more elaborate than mine!! Thanks for sharing... I might have to sleep on that for a bit to see if I want that much detail or not. Very nice though...



So...I have a holding that has been beaten up a bit in share price (down 47.99%) but still pays a great dividend. I just ran the calcs and the net asset value of those shares in that particular holding now represent just 4% of my total holdings, but the dividend represents 15% of my total annual dividend.

This is where I struggle with this type of investing. If I decide I can't stomach this company any longer, I'm not sure I can replace the dividend dollars that this stock currently pays. One is going to have to hope the replacement stock I pick has enough growth in it to make some of that 48% loss back to supplement the lower dividend it'll most likely pay.

Is this a good metric to use (% of total dividend earned vs % of total net asset value)? Or should it be more about Growth and Dividend %s not necessarily about dividend dollars? This is all in my retirement accounts so no tax implications and I do not expect to be pulling money from these accounts any time soon.

In my opinion if you are trying to grow your account and are not living off of the dividends, I think you should be looking for stocks that will produce the highest total return, not the highest current dividends. Once you are retired and living off of the dividends you would probably change your priorities to concentrate more on dividends.

I think the earlier referenced Klipinger article explains it pretty well that the highest dividend rate paying stocks tend to have the lowest dividend growth rates. They also tend to have the lowest stock price appreciation. In the stocks that I have looked at AT&T is a good example of a stock with a high dividend, low dividend growth rate and low stock price appreciation. You can find many examples of stocks with a 2.0% to 3.0% dividend that have much higher dividend growth rates, and stock price appreciation. Use a spreadsheet and you can figure out how long it will take the dividend for a stock with a 3.0% dividend rate and a 7.0% dividend growth rate to surpass the dividend of a stock with a 5.5% dividend and a 2.5% dividend growth rate. If your time in the market is long enough, the dividend paid on the stock with the current lower yield will be higher and stock price appreciation will also be higher. The combination of which produces the higher total return.

[GregWeld]

I've never understood why people advise CHANGING what has gotten them to the pot of gold....

It doesn't matter what the strategy is.... The key is that it works for the individuals needs and tastes and how he sleeps best at night.... but I don't know why - if you had a good enough portfolio to get you to retirement - that you'd suddenly dump that and go in to something else.

I've been retired damn near 25 years now... and I'm only going to be 65 this summer. I've been investing the same way for all these years and manage to do pretty damn well at making a living off it.

Dividend investing is for one reason and one reason only ---- it's so you have income to either reinvest - or income to live off of... NOT while the market is good --- but for when it SUCKS! Don't ever confuse this issue. It's the one thing that will KEEP YOU FROM LIQUIDATING your assets when everything is going to hell in a handbasket.

What you're BLENDED return looks like -- growth - dividends - stocks - real estate all has to be considered for one goal --- growth, that over time, beats inflation - and that it creates enough cash flow for you to live on. End of story.

Some investments pay 2% but have growth -- some are steady eddies and they just plod along -- they don't go up much - they also tend to not go down much either.... some are rocket ships to the moon and you just hope they don't blow up in your face.... The key is diversity in all of your investments -- not just diversity in the stock market -- and the real key is TIME --- and TOTAL RETURN..... all else is mumbo jumbo big stuff wannabe talk.

[XLexusTech]

Several of the young guys I work with have been into Bitcoin and a few other currencies

One is up 800k yeah that’s not a typo they tell me it’s going to hit 10 k then level off at 6 for a while... so tempting but I know nothing about it Anyone have any insight?

I have some money that I definitely could afford to gamble with

[AU Doc]

It’s definitely a gamble. I’d say it’s reasonable to believe it will be around for a long time to come. It’s probably the most main stream way to pay for something if you don’t want It tracked, which is of course why it’s used for some shady transactions. That said, it’s anyone’s guess as to what the price will do.

The underlying technology (blockchain) has some potential outside of Bitcoin as well, but it’s so young it’s still a guess as to who will make a profitable venture of it.

[toy71camaro]

Wow!! That is WAY more elaborate than mine!! Thanks for sharing... I might have to sleep on that for a bit to see if I want that much detail or not. Very nice though...



So...I have a holding that has been beaten up a bit in share price (down 47.99%) but still pays a great dividend. I just ran the calcs and the net asset value of those shares in that particular holding now represent just 4% of my total holdings, but the dividend represents 15% of my total annual dividend.

This is where I struggle with this type of investing. If I decide I can't stomach this company any longer, I'm not sure I can replace the dividend dollars that this stock currently pays. One is going to have to hope the replacement stock I pick has enough growth in it to make some of that 48% loss back to supplement the lower dividend it'll most likely pay.

Is this a good metric to use (% of total dividend earned vs % of total net asset value)? Or should it be more about Growth and Dividend %s not necessarily about dividend dollars? This is all in my retirement accounts so no tax implications and I do not expect to be pulling money from these accounts any time soon.All I really update is dividend payouts an any buy/sells. Then I can just pop it open, and see within a few seconds my total return, real gains, yield on cost, etc. it's not perfect, but it tells me the info that most sites I've seen don't.

Sent from my Moto G (5) Plus using Tapatalk

[GregWeld]

Lance ---


Your question is legitimate and real --- and I suffer from this in a couple investments (oils) as well....

There will never be a "right" answer to the dilemma. Here's the metric (mental masturbation) I use.... "how long will it take me in income - to cover the loss" and does it have any chance of closing that gap during that particular time span?

So let's say I have a 50K paper loss (remember - it's never a loss until you make it a loss!).... but the shares pay me 22K dividend.... so figure 2+ years of income to get even. Will the shares have ANY chance of recovery --- or is the company so broken it hasn't a chance.

Who knows? It's just a risk you take.... and what you REALLY HOPE -- is that they don't cut the dividend --- and THERE IS WHERE YOU HAVE TO LOOK AT THE PARTICULARS OF THEIR BUSINESS. Are they hemorrhaging cash - top line and bottom line suck? Or are they doing okay in a bad industry?

There are VALUE TRAPS -- where the relative dividend looks very appealing -- but the reason the dividend % is "high" is because the stock has sunk.... What we need to understand is WHY the stock is in the tank.

So ---- many times I'll cut my shares by 25% at a time (my is all taxable - so I offset gains (sales) with losses...) and that gives me time to wait and see what's happening. In the meantime I'm still collecting the dividend --- but I'm also cutting my "odds" of getting killed even more (no different than taking a huge gain!).

This is where I say ----- it's easy when everything is going up, up, up..... This is when it pays to look a lot deeper in to the holding.... What's the dividend payout as a percentage (ratio) to earnings.... What is the company saying about it's future going forward (they're obligated to say if they suck!).... is it a secular decline (oil) or is it bad operations (GE)....

[SSLance]

Thanks Greg, nice to know others are dealing with this as well.

Usually an up economy is good for the oil industry, the rules as changed with fracking though it appears so who knows now. It's not a huge part of my portfolio and my biggest fear is a dividend cut...which would be bad, real bad...

So I'll probably start trimming away and most likely just add to my holdings that I feel a lot better about. I'm at 12 now anyway and should pull it back to 10 or less.

[GregWeld]

I figure some of you are interested or perhaps IN Bitcoin or similar....

Here's my take.... the higher this thing goes -- the more hackers are going to want to figure out a way to steal it.

Another story this morning about another hack attack... and most of you are unfamiliar with the Mt Gox theft and subsequent closure a couple years back...

This mornings article.

I don't care if you're in to it -- not my money - not my job to say yeah or nay... just a "buyer beware". To me - it reminds me of the tulip bulb.... LOL


https://www.bloomberg.com/gadfly/articles/2017-11-21/hackers-have-lots-of-ways-to-ruin-a-bitcoin-trader-s-day

[GregWeld]

Here's what $1,000 invested in 2007 ---- a lousy 10 years ago ---- would be worth today.



LOL ---- Oh yeah..... dream on! Woulda, shoulda, coulda comes to mind.




http://lateral-g.net/forums/attachment.php4?attachmentid=63796&stc=1&d=1511969691

[Vegas69]

I have a new book that lays out all the stock market crashes. I just finished the 2008 segment. This 30 year old kid had his horse blinders on and should've been investing MORE. Of course the real estate market sucked and I had too many shiny new parts to buy for an old beater. The Dow got down to 7 or 8k just 10 years ago. WOW

What led to that crash:

In 1981, Option Arms were approved by the government. That meant a homeowner could pay less than the minimum and add to the mortgage balance EVERY MONTH vs. paying it down.

In the early 90's, lending became much more flexible with little to NO down payments which led to ever increasing subprime loans. This was to help BROKE people buy houses. How could that go wrong?

About this time, banks figured out a way to keep less assets on the shelf buying insurance against losses letting them lend more. GREED AIG was the biggest insurer.

Next, banks started assembling caches of mortgages and selling them to big investment companies like Lehman and Bear Sterns and creating stock funds. Most of them subprime with a high likelihood of default. Nobody thought houses would go down in value.

Pension funds had stayed away from risky investments until banks found a way to rate these caches of mortgages favorably. Then the pensions bought these toxic assets.

Lastly, Greenspan kept the interest rates low for way to long as he didn't see much inflation in the market. He missed the HUGE INFLATION in the housing market.

[WILWAXU]

Here's what $1,000 invested in 2007 ---- a lousy 10 years ago ---- would be worth today.



LOL ---- Oh yeah..... dream on! Woulda, shoulda, coulda comes to mind.




http://lateral-g.net/forums/attachment.php4?attachmentid=63796&stc=1&d=1511969691Nice, I'm in two of those.. the Ex-Date is tomorrow for one of them :D

I just looked again.. looks like this does not include dividends.

[XLexusTech]

Several of the young guys I work with have been into Bitcoin and a few other currencies

One is up 800k yeah that’s not a typo they tell me it’s going to hit 10 k then level off at 6 for a while... so tempting but I know nothing about it Anyone have any insight?

I have some money that I definitely could afford to gamble with

7600 the day I wrote this post.. over 11K now... :drowninga:

[GregWeld]

7600 the day I wrote this post.. over 11K now... :drowninga:

Bitcoin is a phenomenon for certain --- Personally --- I can't afford the losses that will come with the meteoric rise. Sure.... it might run some more - and maybe it never crashes.... but when "everyone" is talking about something - and the money they've made - and you start to hear the grocery store clerk telling you about it.... It's time to run as fast as you can. Like the housing market -- like the Dot.com -- like flippers -- like in the 80's the apartment investments for tax shelters....

I HOPE it doesn't and that I'm the only idiot that missed making a fortune....

For me - Amazon (AMZN) and NetFlix (NFLX) and a couple others of their ilk are risky enough and they're actual real businesses. I think Bitcoin has turned in to nothing but speculation. It went from being a currency (one I never did understand) to now just going up because it's going up. I read today that one exchange opened 100,000 new accounts for trading it in one day.... that tells me there are 100,000 people that probably don't have a f'n clue about investing - or even what Bitcoin is... To me -- that's scary.

And to those that got in early -- and have taken their gains and recovered the money they initially put in - lucky you! I'm happy as hell for ya!

[GregWeld]

I have a new book that lays out all the stock market crashes. I just finished the 2008 segment. This 30 year old kid had his horse blinders on and should've been investing MORE. Of course the real estate market sucked and I had too many shiny new parts to buy for an old beater. The Dow got down to 7 or 8k just 10 years ago. WOW

What led to that crash:

In 1981, Option Arms were approved by the government. That meant a homeowner could pay less than the minimum and add to the mortgage balance EVERY MONTH vs. paying it down.

In the early 90's, lending became much more flexible with little to NO down payments which led to ever increasing subprime loans. This was to help BROKE people buy houses. How could that go wrong?

About this time, banks figured out a way to keep less assets on the shelf buying insurance against losses letting them lend more. GREED AIG was the biggest insurer.

Next, banks started assembling caches of mortgages and selling them to big investment companies like Lehman and Bear Sterns and creating stock funds. Most of them subprime with a high likelihood of default. Nobody thought houses would go down in value.

Pension funds had stayed away from risky investments until banks found a way to rate these caches of mortgages favorably. Then the pensions bought these toxic assets.

Lastly, Greenspan kept the interest rates low for way to long as he didn't see much inflation in the market. He missed the HUGE INFLATION in the housing market.



I made a small fortune buying apartments in Scottsdale right after the Savings and Loan crash.... you could buy them for 50 cents on the dollar. It was instant equity.

For the people that lost money on the house flipping craziness -- there's a ton of people that have made a killing buying those losses and holding them. One side was a fad driven by cheap money and non-existent credit scores -- the other side is brilliance.

Personally -- I think the FED has completely missed the inflation rate once again. I hope it doesn't end badly. I was in business in the late 70's and early 80's when interest rates rose to 15 and 18%.... and you couldn't print a price list fast enough to keep ahead. It was ugly.

I used to make huge money almost daily flipping Microsoft - Cisco - Intel - Dell.... and the only thing that saved my bacon (day trading 3 million dollars) was that I decided to pay all cash for a new house (2 million) and then gut and remodel it (600K). Right when we were in the midst of the remodel -- the DOT.COM bust happened --- and I'd stopped flipping stocks because I was too busy with the house remodel. My favorite saying --- Better lucky, than smart.


Check the PRICE and TAX history section for that house! Lucky me!


https://www.zillow.com/homes/for_sale/Yarrow-Point-WA/pmf,pf_pt/49005918_zpid/28049_rid/globalrelevanceex_sort/47.65193,-122.215586,47.649802,-122.219159_rect/17_zm/


Having been an investor thru most of what you describe in the crash scenarios is what led me to believe in the dividend stocks. I've lived thru or been involved in many of those episodes you describe in the book. Making CASH is KING.... and when others are wringing their hands or frozen out --- it's the cash that allows you to take advantage of their mistakes.

[XLexusTech]

Exact same boat..




Bitcoin is a phenomenon for certain --- Personally --- I can't afford the losses that will come with the meteoric rise. Sure.... it might run some more - and maybe it never crashes.... but when "everyone" is talking about something - and the money they've made - and you start to hear the grocery store clerk telling you about it.... It's time to run as fast as you can. Like the housing market -- like the Dot.com -- like flippers -- like in the 80's the apartment investments for tax shelters....

I HOPE it doesn't and that I'm the only idiot that missed making a fortune....

For me - Amazon (AMZN) and NetFlix (NFLX) and a couple others of their ilk are risky enough and they're actual real businesses. I think Bitcoin has turned in to nothing but speculation. It went from being a currency (one I never did understand) to now just going up because it's going up. I read today that one exchange opened 100,000 new accounts for trading it in one day.... that tells me there are 100,000 people that probably don't have a f'n clue about investing - or even what Bitcoin is... To me -- that's scary.

And to those that got in early -- and have taken their gains and recovered the money they initially put in - lucky you! I'm happy as hell for ya!

[Vegas69]

I made a small fortune buying apartments in Scottsdale right after the Savings and Loan crash.... you could buy them for 50 cents on the dollar. It was instant equity.

For the people that lost money on the house flipping craziness -- there's a ton of people that have made a killing buying those losses and holding them. One side was a fad driven by cheap money and non-existent credit scores -- the other side is brilliance.

Personally -- I think the FED has completely missed the inflation rate once again. I hope it doesn't end badly. I was in business in the late 70's and early 80's when interest rates rose to 15 and 18%.... and you couldn't print a price list fast enough to keep ahead. It was ugly.

I used to make huge money almost daily flipping Microsoft - Cisco - Intel - Dell.... and the only thing that saved my bacon (day trading 3 million dollars) was that I decided to pay all cash for a new house (2 million) and then gut and remodel it (600K). Right when we were in the midst of the remodel -- the DOT.COM bust happened --- and I'd stopped flipping stocks because I was too busy with the house remodel. My favorite saying --- Better lucky, than smart.


Check the PRICE and TAX history section for that house! Lucky me!


https://www.zillow.com/homes/for_sale/Yarrow-Point-WA/pmf,pf_pt/49005918_zpid/28049_rid/globalrelevanceex_sort/47.65193,-122.215586,47.649802,-122.219159_rect/17_zm/


Having been an investor thru most of what you describe in the crash scenarios is what led me to believe in the dividend stocks. I've lived thru or been involved in many of those episodes you describe in the book. Making CASH is KING.... and when others are wringing their hands or frozen out --- it's the cash that allows you to take advantage of their mistakes.

I got lucky along the way myself. While it sucked selling real estate in 2008-2012, I did take advantage on the real estate investing side and certainly in the rising market twice in the last decade in my real estate business. The recession forced me to be a much better business man and those skills will serve me for life.

Next time the stock market looks BAD, I"m in. :D

[GregWeld]

I figure some of you are interested or perhaps IN Bitcoin or similar....

Here's my take.... the higher this thing goes -- the more hackers are going to want to figure out a way to steal it.

Another story this morning about another hack attack... and most of you are unfamiliar with the Mt Gox theft and subsequent closure a couple years back...

This mornings article.

I don't care if you're in to it -- not my money - not my job to say yeah or nay... just a "buyer beware". To me - it reminds me of the tulip bulb.... LOL


https://www.bloomberg.com/gadfly/articles/2017-11-21/hackers-have-lots-of-ways-to-ruin-a-bitcoin-trader-s-day







Was reading some more about BitCoin this morning and found this in a "pro" article about how to buy them etc...... It's like - to me - "are you kidding!?!?!"








If you leave your money on deposit with the exchange, the risk is that the exchange itself will lose your bitcoins due to hacking, mismanagement, or fraud. In 2014, the then-biggest Bitcoin exchange, called Mt. Gox, declared bankruptcy after millions of dollars in bitcoins were stolen by hackers. Other early Bitcoin services simply disappeared from the web, taking customers' bitcoins with them The Bitcoin economy doesn't have anything resembling FDIC insurance, so if your exchange loses your bitcoins or goes bankrupt, you might be out of luck.

On the other hand, exchanges have matured significantly since 2014, and holding bitcoins yourself is risky, too. If your hard drive crashes and you don't have backups, your bitcoins could be lost forever. If you print out your bitcoins and then lose the paper, your bitcoins will be gone forever. If you put the bitcoins in a Web wallet and forget the password, your bitcoins will be lost forever. If someone puts bitcoin-stealing malware on your computer, you could lose your bitcoin regardless of how you store them.

In short, there's no completely safe way to hold on to bitcoins, and technical newbies are at particular risk. Investors in Bitcoin are at much greater risk of losing their investments to accidents or thefts than investors in conventional assets like stocks and bonds.


Here's where I copy and pasted the above info:


https://arstechnica.com/tech-policy/2017/12/bitcoin-a-beginners-guide/

[SSLance]

My favorite saying --- Better lucky, than smart.



Our small company had a Defined Benefit Pension Plan for the 3 of us back in the late 90s. We were very aggressive in the early years with the contributions and investments in it and had done VERY well...so well in fact that our actuary that took care of the plan explained to us that if we earned ANY more money in the plan, the Government would take the extra in taxes. So we sold everything and put 100% in treasuries. The Dot com bust happened about 3 months later. :D

The distribution from that Plan after it's 10 year life was the seed money for my current retirement plan. #Lucky

[Try2paz]

Another big bitcoin hack.

https://www.theguardian.com/technology/2017/dec/07/bitcoin-64m-cryptocurrency-stolen-hack-attack-marketplace-nicehash-passwords

Whats interesting is seeing the rise in the bot trading for bitcoin.

www.Cryptotrader.org

Essentially you're paying someone a percentage who wrote a script to buy/sell/short/hedge etc.

I've got a few friends heavily into it and I've been tempted a few times but looking over how everything is shaking out seems like more and more risk everyday.

[AU Doc]

I think Bitcoin prices are going to come down. Whether that is soon or after another 10%, 100%, 1000% run is anybody’s guess. Sooner or later governments are going to decide they need a piece of the pie and they’re going to start regulating it (I don’t know how, but I’m sure they’ll figure it out). That will put a damper on things for sure.

Now if you’re an optimist, you might consider that the total value of bitcoin at the moment is only around $200 billion US. That’s what you’d be worth if you owned ALL of the Bitcoins currently available. Companies like Apple and Amazon are worth two, three, four times that. So if you think Bitcoin is intended to be a currency to replace whatever currency your country uses, then its WAY undervalued.

[SSLance]

I have another question about tracking investments...

Once you sell a holding, do you track the gains or losses of the holding and continue to track it's performance?

Or are you a sell and don't look back investor?

I realize sells have to be recorded for income tax purposes but I'm mainly just referring to investor research with this question.

[GregWeld]

I have another question about tracking investments...

Once you sell a holding, do you track the gains or losses of the holding and continue to track it's performance?

Or are you a sell and don't look back investor?

I realize sells have to be recorded for income tax purposes but I'm mainly just referring to investor research with this question.



I personally like to continue to look at some of them -- not all.... but it's mostly to see if I was "right" on the sale. Sales are like buying -- you just don't get them all right -- it's okay - we just need to get about 50% right.

[AU Doc]

I keep an eye on them to see if the price does something that makes them attractive again. The stocks I own, I bought for the company behind them. I only sell them when I feel like they become overvalued (e.g., they suddenly become trendy), or the business takes a turn I don't like. If I see what looks like an overcorrection I might reinvest in those companies if I still like them.

I don't track any of that in a spreadsheet or anything formal like that, though.

[GregWeld]

I keep an eye on them to see if the price does something that makes them attractive again. The stocks I own, I bought for the company behind them. I only sell them when I feel like they become overvalued (e.g., they suddenly become trendy), or the business takes a turn I don't like. If I see what looks like an overcorrection I might reinvest in those companies if I still like them.

I don't track any of that in a spreadsheet or anything formal like that, though.



DITTO

[SSLance]

This last little uptick has been good to help me rid myself of some stragglers...A few more to go before I start deciding where to reinvest now.

Most likely I'll just add to my holdings I already have and like, even though it'll be at higher prices than current cost basis.

[GregWeld]

This last little uptick has been good to help me rid myself of some stragglers...A few more to go before I start deciding where to reinvest now.

Most likely I'll just add to my holdings I already have and like, even though it'll be at higher prices than current cost basis.




It is NOT a bad thing that you have to raise your cost basis! Far better than when you have to lower your cost basis! LOL

I've never understood the problem people have when their stocks GO UP! LOL


Keep in mind ------ the FED is raising rates -- therefore when looking for DIVIDEND payers - you might want to raise the bar - and always keep in mind that TOTAL RETURN. Right now - we're in growth mode so the growth stocks are in favor -- it's easy to fall in line and then if things don't go perfectly as planned - you end up sitting on losers that don't pay you to hold them. So in periods like this -- I try to be a LOT more on top of what's going on. I don't want to be complacent. If I start to sprinkle in some of the growers - I do so with more or a "temporary and be prepared to take some gains" kind of thought process.

So ---- I buy a 1000 shares of "X" growth stock - pays 0 dividend - but I have a 10% gain (I want to hold for a year plus 1 day - to make it long term - but this doesn't matter so much if they're in retirement accounts)..... a 10% gain would be a terrific dividend wouldn't it! So I might sell off 100 shares and think of that as my "dividend". IF they run more than that --- I take a larger % off the top and so on.

[GregWeld]

And another exchange bites the dust.... leaving it's wealthy Bitcoin holders in the tank.....




On Monday, a Youbit spokeswoman told Reuters the company had not been targeted by North Korean hackers, and on Tuesday the company announced it had suffered another cyber attack that cost it 17 percent of its assets, forcing the exchange to halt operations and file for bankruptcy.

[ADY]

Buffett's quote "Never invest in a business you cannot understand" is definitely something to consider if anyone is considering 'investing' in BitCoin....

[GregWeld]

Buffett's quote "Never invest in a business you cannot understand" is definitely something to consider if anyone is considering 'investing' in BitCoin....



The only "investment" here -- is you hope there's a larger fool out there when you want to sell..... because otherwise there is absolutely ZERO behind any of this except that someone will pay more for whatever "it" is. It's not backed a a single thing - it apparently is up for grabs from hackers... and there's nothing behind the exchanges either apparently.

I like to make money -- but I also LOVE to actually try to be somewhat intelligent about it.

[GregWeld]

I just read that UPS has placed an order for 125 Tesla electric trucks..... Not sure how many they've sold or have orders for now - but it has to be quiet a few now.... WalMart order some... Pepsi.... Anheuser-Busch.... Sysco.... J B Hunt... DHL....


These folks aren't stupid....


Maybe I better pay more attention to this floundering company. My take is that Musk is trying to build too many money losing businesses at once... a battery company - a solar energy company - a space flight company - and a car company that can't make a profit and can't deliver cars on order... but WTH.... he's selling stuff! And investors keep buying the debt.

[ironworks]

I just read that UPS has placed an order for 125 Tesla electric trucks..... Not sure how many they've sold or have orders for now - but it has to be quiet a few now.... WalMart order some... Pepsi.... Anheuser-Busch.... Sysco.... J B Hunt... DHL....


These folks aren't stupid....


Maybe I better pay more attention to this floundering company. My take is that Musk is trying to build too many money losing businesses at once... a battery company - a solar energy company - a space flight company - and a car company that can't make a profit and can't deliver cars on order... but WTH.... he's selling stuff! And investors keep buying the debt.

One of my customers is looking to start running electric trucks in his oil transport business. Oh the Irony.

But its going to a real thing in California with all our regulations. And the overall scope of the oil business is already changing in a huge way to get the oil companies out of California while still pumping the oil.

[GregWeld]

Bitcoin is looking pretty smart.......



LOL



OMG.......

[Vegas69]

DOH :getout:

[glassman]

40% in a week. Doesn't sound like investing, sounds more like roulette, wait, thats not fair to roulette

[GregWeld]

Just some "for the way you think" about investing -- or when you're shopping for places to put your money.......

REMEMBER PLEASE!!! I'm not saying buy this or buy that -- I'm using this as an EXAMPLE --- a way to think... it can apply to almost every investment. You can buy Apple -- if you think their business is good - or you can buy one of their suppliers?


Let's pick on Amazon for an "instance"

Amazon is hugely pricey.... dang near $1200 per share (I personally wish they'd split 4 for 1).... and this simple fact closes many investors out. They think - WTF - I can only buy 2 shares with my $2500 deposit this quarter. And they're right!!


But --- start to think about the beneficiaries or ancillary businesses that benefit from THEM....


Box sellars?? Amazon buys a lot of boxes --- way more than retail stores do - they buy bags... Everything Amazon sells gets shipped in a box....

UPS ??


FED-ED??


Oh yeah...... As Amazon grows -- won't these two favored shippers get their fare share?


I just read this:

"Good news for FedEx and UPS: People just opened $90 billion in unwanted gifts".


UNQUOTE: Somebody is paying to ship those back aren't they? UPS and FED-EX get it going both ways? And how much of those returns generate another purchase.... another box.... another shipment....

Think of it like car companies having good sales --- every car/truck comes with 4 tires.... LOL



Merry Xmas you Deplorables

[Vegas69]

Building these cars benefits those guys big time as well. I rarely ship anything out these days, but every time I go to UPS and the fleece me for $20 to ship nothing nowhere, I recall all the money I pissed down the drain shipping car parts. Had to be over 5k just building a car from start to finish. And like you said, all the returns where they get you going and leaving.

[SSLance]

Those free returns are not a good thing for any of the parties concerned..except the entity getting the return back themselves. UPS, Fedex and any party involved in getting those returns back into the shipping system ALL loose money on them.

Amazon and the likes hold a gun to Fedex and UPS's head when negotiating new contracts\discounts...include returns for free or next to it or don't get the contract.

[DBasher]

Amazon and the likes hold a gun to Fedex and UPS's head when negotiating new contracts\discounts...include returns for free or next to it or don't get the contract.

Amazon is the devil and are doing more harm than WalMart did to small town mom and pop businesses. The difference is they’re hurting more than just small business.
I’d rather spend more and wait an extra day or two than give a dollar to that machine. **** Amazon.

[Vegas69]

It's free enterprise and it's an entrepreneurs job to figure out how to add more value to the consumer than the competition. Amazon nailed it as they are filling two huge needs:

1. American's buy junk, more junk, and even more junk. Many times with money they don't have. Amazon is like an all you can eat buffet.
2. American's are extremely impatient and they want it NOW.

I don't personally shop on Amazon like I used to. I like to touch many things and support local businesses when I can like you do.

[GregWeld]

Those free returns are not a good thing for any of the parties concerned..except the entity getting the return back themselves. UPS, Fedex and any party involved in getting those returns back into the shipping system ALL loose money on them.

Amazon and the likes hold a gun to Fedex and UPS's head when negotiating new contracts\discounts...include returns for free or next to it or don't get the contract.




WOW!! GOOD INFO Lance!!

[SSLance]

Fedex and UPS used to hold a gun to my head and make me accept the free return drop offs at my store as a way to get them into the system. 75% of the foot traffic thru my retail store came in with pre-paid labels and never left a dime on my counter. I used to pay UPS $20 a week to stop by my store every day and pickup drop off packages with prepaid labels on them...and I very rarely EVER shipped any UPS packages on my own account.

It's a messed up system top to bottom.

I've been smiling every day since I closed that store down back in Sept 2015. :)

[Flash68]

No one guarantees my business survives any given year, competitor attack, or economic shift, etc. We must adapt and persevere. We all do if we own a business of any kind.

I despise Jeff Bezos but I love the business of Amazon and the disruptor role they play. Why should I feel sorry for FedEx or UPS or anyone else? I don't (not saying any of you do, I'm just saying).

Just like Uber.... do any of you feel sorry for the traditional mafia taxi cab companies?

LOL

I do feel sorry for the mom and pop main street type businesses though that are hurting in small towns like I grew up in. My mom still scolds me for using Amazon as much as I do. Sorry Mom.

[GregWeld]

No one guarantees my business survives any given year, competitor attack, or economic shift, etc. We must adapt and persevere. We all do if we own a business of any kind.

I despise Jeff Bezos but I love the business of Amazon and the disruptor role they play. Why should I feel sorry for FedEx or UPS or anyone else? I don't (not saying any of you do, I'm just saying).

Just like Uber.... do any of you feel sorry for the traditional mafia taxi cab companies?

LOL

I do feel sorry for the mom and pop main street type businesses though that are hurting in small towns like I grew up in. My mom still scolds me for using Amazon as much as I do. Sorry Mom.





A buddy here is CEO of a high tech import company ---- what they did was to set up a division that sells via Amazon..... said they were just killing it -- and that while it's harder to gain some traction -- Amazon offers training and all manor of "aid" to get you up and running....MOM AND POP Kettle are capable of doubling or tripling their business if they'd get on the wagon instead of slowly wasting away.

[WSSix]

A buddy here is CEO of a high tech import company ---- what they did was to set up a division that sells via Amazon..... said they were just killing it -- and that while it's harder to gain some traction -- Amazon offers training and all manor of "aid" to get you up and running....MOM AND POP Kettle are capable of doubling or tripling their business if they'd get on the wagon instead of slowly wasting away.

This.

New technologies and advancements must be met and adapted to. Look at telephones. AT&T adapted instead of begged to survive as a land line only company. This is why I'm not worried about companies like Disney who a lot of people say is not doing well because ESPN is sucking. I believe Disney will adapt to the new way of watching TV via streaming or online content. Will Comcast and other ISPs work on trying to become content providers and not just carriers? Or, will another Hulu, Netflix, or Prime show up to fill in the void before ABC, CBS, or NBC move to online only/streaming content? Will Coke survive the attitude change towards healthier products? Altria?

I don't have the answers. I'm not that smart. But, I do look for companies that have adapted to the changing tides in order to stay relevant and alive. Look to the future because its ever changing and will be here before you know it. You don't have to be at the forefront but you can't ignore the obvious changes.

[GregWeld]

This.

New technologies and advancements must be met and adapted to. Look at telephones. AT&T adapted instead of begged to survive as a land line only company. This is why I'm not worried about companies like Disney who a lot of people say is not doing well because ESPN is sucking. I believe Disney will adapt to the new way of watching TV via streaming or online content. Will Comcast and other ISPs work on trying to become content providers and not just carriers? Or, will another Hulu, Netflix, or Prime show up to fill in the void before ABC, CBS, or NBC move to online only/streaming content? Will Coke survive the attitude change towards healthier products? Altria?

I don't have the answers. I'm not that smart. But, I do look for companies that have adapted to the changing tides in order to stay relevant and alive. Look to the future because its ever changing and will be here before you know it. You don't have to be at the forefront but you can't ignore the obvious changes.




Egg sack lee!

Sears?

Postal Service?

Kodak?

Blockbuster?

[WSSix]

I remember we've discussed Marijuana stocks etc with the legalization movement growing. What happened today with our rat looking AG is exactly why I won't go near them for some time to come. I'd love to invest in that industry as I believe it has value, but not until it's truly free and legally safe.

[DBasher]

The mechanical company I used to work for was investing in the grow industry pretty heavy. It’s all cash based around here with banks not willing to loan, yet. The company would finance the mechanical equipment and installation for the operation with a higher % rate than normal, 35-40%. These were short term loans, typically 12-18 months and were often paid back ahead of schedule. With permitting and ordering the equipment often the loan was paid as the start-up/commissioning mechanic was leaving the building.

I have two friends that are well out of the city and they’ve put up pole buildings on their property that are rented to growers. One is a commercial nursery and you’d never know what’s going on in the buildings out back, hardly any daily traffic. The other dude has his lil hot rod shop and a couple “storage” buildings on what looks like farmland, last I checked his income was only the rent off the two buildings.

Money to be made if you have the money to front.
:flag2: :G-Dub:

[AMSOILGUY]

Have you guys been following the weed stocks? They are risky but easiest 300% return I've ever made. Thanks Greg for opening my eyes!

[AU Doc]

Have you guys been following the weed stocks? They are risky but easiest 300% return I've ever made. Thanks Greg for opening my eyes!

Cedar Rapids! I worked there for a while. Unfortunately, I only got to see it during the winter and dear lord that was the coldest winter I've ever seen. It was -25 in the morning for a week.

Outside of this thread I've looked into investment opportunities here, but all I've found with my little bit of research is penny stocks. Is there anything more developed than that yet?

[AU Doc]

This is a fantastic question with so many answers and probably none of them right.

My personal take on it ----- some people are going to pick the right one ---- most people are going to lose their butts..... This entire field is so subject to the prevailing laws in a state - but the FEDS aren't so sure about all of it.... and then there's the whole "can't bank" issues.

My feeling was and has been this.... when we finally go all 50 states in - and the FED finally gives in and rolls with it ---- then do the big terbacky guys get in and steamroll everyone else? I have no idea - it's just a hypothetical question. They have the money - the marketing and the distribution... but do they want in and would people accept their products ----- or do people want the old "head shop" independents. I have NO IDEA. When I have no idea -- I don't put my money at risk. I just simply don't know where it's all going.

Here's the post that I remembered reading when I started looking into these stocks. It matched what I was seeing when looking at the options at the time.

Aside from direct investments, investing in the infrastructure required to get an operation up and running and/or keep it going seemed to be the safest approach at the time, but then you're back into agriculture investments (for the most part).

[GregWeld]

Have you guys been following the weed stocks? They are risky but easiest 300% return I've ever made. Thanks Greg for opening my eyes!



Good (lucky!) for you!

If I was going to invest in this "industry" - which it is - I'd pick a Weed ETF and let them do the homework.

I toured a grow op in Phoenix last time I was down (4 months ago) and the amount of A/C and lighting they had going was incredible.... and this was a 200,000 square foot indoor operation. Still, there's not enough of these big operations going to make a dent in lighting and HVAC.

There are infrastructure plays for the build outs -- HVAC -- Lighting etc but my view is that even if build outs tripled.... it probably wouldn't move the needle on the big publicly traded players. They would be moved up and down with home and commercial building and that's already going full tilt boogie.

AU DOC -- investing in penny stocks is the equivalent to craps in Las Vegas. If you'd have bought 10 good names when you first posted - you'd already be up 10% and have collected a couple dividends.

[AU Doc]

......

AU DOC -- investing in penny stocks is the equivalent to craps in Las Vegas. If you'd have bought 10 good names when you first posted - you'd already be up 10% and have collected a couple dividends.


Haha! Yeah, no question there. Like 10% since Jan 1 :), but that's just a short term blip. I have my money in what I consider stable investments, but I like to keep an eye out for the next industry. I'm not opposed to the occasional gamble, but it's never with any significant amount of money, and only with money I would have wasted on something else I didn't need. My retirement funds don't go into anything as risky as a penny stock. There's always some risk with investing, but it doesn't need to be like a trip to Vegas risky.

All that to say, if this industry is ever legalized at the federal level, it's going to be big. I have no doubt about that. It may take a few more presidents, but I think it will happen eventually. So I don't think it's a bad idea to keep an eye on it, and look for legitimate investment opportunities (not penny stocks).

[GregWeld]

Haha! Yeah, no question there. Like 10% since Jan 1 :), but that's just a short term blip. I have my money in what I consider stable investments, but I like to keep an eye out for the next industry. I'm not opposed to the occasional gamble, but it's never with any significant amount of money, and only with money I would have wasted on something else I didn't need. My retirement funds don't go into anything as risky as a penny stock. There's always some risk with investing, but it doesn't need to be like a trip to Vegas risky.

All that to say, if this industry is ever legalized at the federal level, it's going to be big. I have no doubt about that. It may take a few more presidents, but I think it will happen eventually. So I don't think it's a bad idea to keep an eye on it, and look for legitimate investment opportunities (not penny stocks).




Completely agree! On all points.

[GregWeld]

Here's a really well done piece on how important this industry has become - vis-a-vis the political outcry about Jeff Sessions latest idiot move.




https://www.politico.com/magazine/story/2018/01/06/jeff-sessions-marijuana-legalization-congress-216251

[WSSix]

Here's a really well done piece on how important this industry has become - vis-a-vis the political outcry about Jeff Sessions latest idiot move.




https://www.politico.com/magazine/story/2018/01/06/jeff-sessions-marijuana-legalization-congress-216251

I didn't want to get into politics even though I did call him a rat. Seriously, he looks like one, and I need to stop before I go off on a rant. My long term hope is that congress does start passing laws to stop this executive branch wishy washy **** that changes every time the executive does. You can't continue to have the greatest economy in the world if what's legal changes every 4 or 8 years due to the whims of the asshole who holds the title of "leader" at the time.

[GregWeld]

Interesting..... and how I personally feel as well. It’s always about EARNINGS in the end despite all the background noise.



https://finance.yahoo.com/news/goldman-sachs-telling-millionaire-clients-stock-market-123353880.html

[MX145]

Thanks for keeping this thread alive guys! I haven’t been active on forums much the past few years but this is one thread I pay attention to.

[GregWeld]

Thanks for keeping this thread alive guys! I haven’t been active on forums much the past few years but this is one thread I pay attention to.


It's gotten "hard" for me to add new info --- and still trying to keep it in the 102 vein....

Glad / hope it's been helpful !!

[WSSix]

Glad to know people are still taking interest in it all these years later.

[kbclamper]

i have read almost this entire thread in the last 3 months and have used information from. i appreciate it.

will there be an investing 103?

[GregWeld]

Glad to know people are still taking interest in it all these years later.


Amazing what you started Trey!!!





i have read almost this entire thread in the last 3 months and have used information from. i appreciate it.

will there be an investing 103?




You are probably on to something there -- maybe a condensed version of 102.... LOL

I know it's a lot of reading now - because of the length of time since Trey started the thread --- but I actually think --- if people start from the beginning like you've done -- and take some time and read it all -- they'll actually get good information for all of the discussions. There's lots of little gems of info in there from many sources.

What's really amazing --- is if you pull of a chart of "the market" from the day Trey started the thread - to today..... if a guy just started with basic investments - he's looking pretty damn smart right now. And that was always my goal. To just get people to start.

[WSSix]

i have read almost this entire thread in the last 3 months and have used information from. i appreciate it.

will there be an investing 103?

I doubt it. In my mind 103 would be too specific to the desires and goals of the individual. Be it investing strictly in certain segments or styles of investing/trading. I'd think people would have to seek out that information on their own.


Amazing what you started Trey!!!



From such a simple request for information, too. I never thought it would get this much attention or help this many people.

It's a fact that people get wealthy/financially secure from taking small, simple steps and planning long term. You don't wake up one day with lots of money in the bank typically. I just wanted to make sure I was on the right path.

Thanks for all you've contributed Greg and to everyone else for making this thread great.

[gearheads78]

Job and income chance a few years ago I have been out of the loop treading water. Getting ready to start investing again and just caught up on the last 2.5 years of this thread. It was kind of funny seeing the conversations of what is going to happen while already knowing what did happen. Still very greatfull for this thread and even though I have not need been able to add more my retirement account has grown and DRIP has increased my positions.

[redfire69]

I finished reading this entire thread almost a year ago to the day, and opened my own "102" account. Investing extra income over the last year I've seen a 14% increase between growth and drip. Yeah, the market's been good, but I attribute most of this to those "gems of wisdom" I've gotten from this thread. Thanks to Trey and Greg, and everyone else who's contributed!

Ron

[GregWeld]

I finished reading this entire thread almost a year ago to the day, and opened my own "102" account. Investing extra income over the last year I've seen a 14% increase between growth and drip. Yeah, the market's been good, but I attribute most of this to those "gems of wisdom" I've gotten from this thread. Thanks to Trey and Greg, and everyone else who's contributed!

Ron



Awesome!!!

[GregWeld]

And just another in a series of "OOPS" we lost your money -- oh well......




One of Japan’s biggest cryptocurrency exchanges said that about $400 million in NEM tokens were lost after the coins were sent “illicitly” outside the venue, spooking investors in a country that’s still wary of digital-token exchanges four years after the collapse of Mt. Gox.

[WSSix]

I'm really glad to hear this thread if continuing to help people. Congrats to you guys on reading, learning, and acting on your new found knowledge.

[WILWAXU]

And just another in a series of "OOPS" we lost your money -- oh well......




One of Japan’s biggest cryptocurrency exchanges said that about $400 million in NEM tokens were lost after the coins were sent “illicitly” outside the venue, spooking investors in a country that’s still wary of digital-token exchanges four years after the collapse of Mt. Gox.
That's wild.. they still haven't fully embraced credit cards in parts of Japan.

[GregWeld]

I've said it in here a million times...... just as "things to watch out for" in investing. There are always correlations of money chasing a return. Bonds have sucked as an investment vehicle for years now (in my mind - forever) with low yields (interest), and no growth (a very basic statement). A decent common stock dividend has paid double or more. But the market has always reacted to "bond yields". Money chases money....

So -- what am I saying?? I'm saying that as yields on bonds rise -- money will seek out the return rate that is equal to (factor taxes in here) safe returns in stocks.

Now -- make no mistake -- the long term historical return on stocks far exceeds bond returns... but there is a huge amount of investor capital that loves bonds "safe" predictable yield.

What's that look like?? As bond yields seek a normal level --- rising --- you'll see sellers in the market raising cash - taking their gains (huge gains) -- and running to bonds. For me -- these inevitable selloffs are buying opportunities. Just don't go all in every purchase. Pick your names - make a list - and buy some as opportunity allows.

The lowest paying dividend yields will get hit as money moves out of them and into higher yielding names or in to tax free bond yields.

REMEMBER TO ALWAYS CALCULATE YOUR YIELD AT YOUR COST BASIS!! Don't look at what the yield is at today's closing price!! Your yield might be double, or better, than what the current price/yield is. So don't get tricked making this common mistake!

The math for this ----- your cost per share divided in to the annual (not quarterly) dividend in dollars and cents. Move the decimal point in the answer.


div is $1 (.25 every quarter X's 4)

your cost is $12 per share

1 divided by 12 = .08333333

Move the decimal point 2 places ---- it's paying you 8.33%

The fact that it's now selling for $24 a share and showing a 4.16% dividend is correct if you bought it today - but you were so smart and bought it 3 years ago !! LOL

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


We've discussed LLC's and "commercial real estate" investments - such as multi family (apartments) etc. I've invested in this type of opportunity for almost 30 years now. I was reminded of something that just happened to one of my investments when I wrote the part above about calculating your yield on your cost basis.


5+ years ago I invested in an apartment complex in Seattle. Seattle has been one of the hottest real estate markets for quite awhile now. The yield on this investment is 7%. That's great income - and income from this type of investment is offset by the depreciation come tax time.... so these work great for guys like me. Eventually you have to "recapture" all of that when you sell etc - but for the typical hold period of 10 to 15 years -- you're collecting that payment "tax deferred".

Now -------- every 6 months we get a state of the investment (LOL) letter along with our check. They've been very "rosy" and have shown a massive increase in the value of the property.

When it crossed the line exceeding 100% of original purchase price (couple years ago) --- I wrote to management that it should be discussed whether it was time to capture that gain... because the CURRENT ROI (return on investment) is half what it could be if we sold and reinvested in something else. This is not exactly true if you calculate it all out - taxes have to be paid etc -- but basically -- think of it this way.... I invested over 1MM in this deal -- I get 70+K annually -- but now my 1MM is worth 2+MM - and even if I paid 40% taxes I'd get 1.6MM net.... if I invested 1.6MM in something that paid 6% ---- I'd get more cash (ROI). Plus -- nobody ever went broke taking a profit.

Now ---- that does not mean that you should be doing this with STOCKS. Stocks are LIQUID --- real estate is not! Your cost basis stays where it is -- and the growth in capital is your paper gain and the ROI should INCREASE over time as they raise the dividend rate -------- these real estate investments DO NOT do that -- they're like bonds -- as long as you hold them they're going to pay the agreed to rate. They're tax plays along with capital growth over time.

I'm mentioning all of this as an INVESTING 102 "lesson" ------- pay attention to your ROI --- know how to calculate it --- all investments are NOT equal!! Each type has its own parameters. Make sure you understand those and don't get caught selling a sure fired winner because you miscalculated your real return etc. Or don't get caught holding a low rate of return when you could have sold and moved it to a higher rate etc.

[SSLance]

Good advice Greg. Curious if you've sold that apartment complex yet or not? The only problem I see with doing what you talk about in Real Estate is you generally have to pay more for what you are replacing it with. Unless of course you are in the fixing up segment of the market and if so, then by all means...

Unrelated but I thought this was a good read, some of you may as well.

http://creativeplanning.com/news-article/the-waiting/

[GregWeld]

Good advice Greg. Curious if you've sold that apartment complex yet or not? The only problem I see with doing what you talk about in Real Estate is you generally have to pay more for what you are replacing it with. Unless of course you are in the fixing up segment of the market and if so, then by all means...

Unrelated but I thought this was a good read, some of you may as well.

http://creativeplanning.com/news-article/the-waiting/



Good question Lance.

The info was just fed to me with the final payment of the Partner Distribution made a week ago.

Here's some interesting details to help people understand these.

Typical holding period on these kinds of properties is 10 to 15 YEARS.

Only the Managing Partner decides to sell or hold etc.... The investors are along for the ride. Therefore these are completely illiquid !!

The market is so hot in Seattle -- that this property will be placed for sale on a bid basis - with no stated sales price. Bids have to be in by a specified date and due diligence and close by dates are specified.

Offers are then reviewed and accepted.

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


This property was purchased for $7.4MM -- and will sell for 16.5 to 17MM

So along with the "decent" Partner Distribution of 7% annually -- we'll all see a return in excess of 100%

Not a bad investment for 5.4 years


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


A direct answer to the question of reinvestment:

Sometimes these are done on a 1031 exchange.....

Sometimes they're sold outright (the case here)

I've invested with this particular group for almost 30 years. I turn 65 in August --- and while the hold period was fine when I was 40 or 50 years old --- 10 to 15 years is too long for me to hold now. So as these cash out -- I'll simply put the money in to investments where I (or my heirs) have control, and have liquidity.


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


5.4 years ago -- a 7% distribution was stellar. Todays buyer is going to get sub 5% (this depends on the final price and financing and rental rates).

In a rising rate market - that we're in now - I would not accept a sub 5% distribution. My guess is FED bonds (10 year bond) will exceed that soon enough, and they'll be tax free.... Many stocks pay in excess of that (even factoring in taxes) and they're liquid.

Remember that we're talking about a particular market (Seattle). Cap Rates vary greatly depending on the market....

[GregWeld]

I like this statement from Janet Yellen...... 'tiz fact.



The current U.S. economic expansion is now approaching nine years and is the third longest in duration since 1945, according to the National Bureau of Economic Research. Yellen said the economy can continue to grow. “Yes, it can keep going,” she said. “Recoveries don’t die of old age.”

[glassman]

that is a great quote.

Greg, on the reit. This may not be a proper question but here goes. Did you know the number of units (at the apartment/condo/highrise etc etc) there were and the average sq ft of each unit? in other words, i'm curious to see what these boil down to on a cost per sq ft basis. I know in the custom and track home building business's this matters, was wondering if the same applies to a reit.

thanx

[GregWeld]

that is a great quote.

Greg, on the reit. This may not be a proper question but here goes. Did you know the number of units (at the apartment/condo/highrise etc etc) there were and the average sq ft of each unit? in other words, i'm curious to see what these boil down to on a cost per sq ft basis. I know in the custom and track home building business's this matters, was wondering if the same applies to a reit.

thanx


Okay -- it's semantics -- but these are NOT REITS (Real Estate Investment Trusts) -- these are private LLC's....

Yes --- Price per square foot matters.... and the condition of the property relative to its neighbors/neighborhood.... and it matters what it's competition is getting in rental rates ------ if you plan to buy a beat up property and improve it.... can you then raise the current rate to market.

The guys I've invested with have several key investment strategies that I personally am drawn to:

HUGE down payments --- 40% ish or more

Large cash reserves

Cash to improve the property immediately (meaning part of the cash raise from investors includes the updates)

Improve the property to raise the rental rate.... even if it means no return to investors for a year or two. What happens here is a lack of rental income while you're remodeling several units at a time.

Buy properties that have been owned by someone that has not brought them up to current rates because they've not improved them. This includes interior and exterior and landscaping etc. While this is costly up front -- the return is a higher/above market rental rate. Rental rates control cap rates - cap rates control the selling price.

[GregWeld]

I hope everyone is ready with a little cash for the big sale that's on!

No question the market has been a little "hot" --- I've not bought anything of note for awhile now... and was sitting on quite a bit of cash....

I put in some limit orders today that got filled.

I put SOME money to work -- I did not rush in.... and I had predicted early this morning that the selling would accelerate at the end of the day. The market is subject to program trading -- and MARGIN CALLS which come at the end of the day.... Oh yeah buddy -- you trading out on margin -- it's going to be real painful as these folks are forced to sell at any price. I've watched this a zillion times..... I NEVER am on margin. You're just asking to get hammered.

REMEMBER ----- you'll never buy at the bottom --- it just won't happen because nobody knows what the bottom is and when to finally put your orders in. Just be selective -- use your best judgement - and if the price is higher than when the dust finally settles -- so what....

My advice is usually --- WAIT --- wait until the market stops going down and begins to flatten out or turn up. You're not going to get the rock bottom price anyway -- so waiting and paying up a little doesn't hurt the long term investor. I bought some stuff today more for flipping than for "investment" - but I bought stuff I'd buy anyway..... and I have my eye on a few more names that I'll just kick back and watch a bit.... and nibble at.

The stuff that's been the hottest - is most likely going to be the stuff falling the hardest on the way down..... Think about it -- some stuff is up 50% in a year or less.... lots of people are going to want to try to capture that gain.... and ALSO REMEMBER that for every seller --- there's someone buying... the stuff doesn't just fall in to a black hole. The market was down 1600 points and came back to close down 1175..... so money came in to scoop up those stocks.

[NOVA]

So here is a question that is a bit unique.
My company was bought out by a large company, we are now switching over to the new companies Insurance, 401k etc.
So my old 401K was through Vanguard, the new company uses Fidelity.

I look into my Vanguard tonight and see the monies are no longer there, I go to Fidelity to see that they are not there yet either.

So did I get ironically "lucky" with my money not being in the market with the last couple of days of sell off ? anyone here ever had a similar situation ?

[GregWeld]

So here is a question that is a bit unique.
My company was bought out by a large company, we are now switching over to the new companies Insurance, 401k etc.
So my old 401K was through Vanguard, the new company uses Fidelity.

I look into my Vanguard tonight and see the monies are no longer there, I go to Fidelity to see that they are not there yet either.

So did I get ironically "lucky" with my money not being in the market with the last couple of days of sell off ? anyone here ever had a similar situation ?



It can take several days to complete these transfers.....


So did you see CASH in the accounts ---- or did you just find nothing??

[NOVA]

It can take several days to complete these transfers.....


So did you see CASH in the accounts ---- or did you just find nothing??

No,did not cash in, just found nothing, they are transfering from one to the other, they show nothing in either, they told us there would be like a black out for a few days which is happening, I am just wondering when it comes back online, how can there be a loss if the funds were not in the market ?
I am sure this is not the first time something like this has happened.

[GregWeld]

No,did not cash in, just found nothing, they are transfering from one to the other, they show nothing in either, they told us there would be like a black out for a few days which is happening, I am just wondering when it comes back online, how can there be a loss if the funds were not in the market ?
I am sure this is not the first time something like this has happened.



You are invested in whatever you had before -- the transfer has NOTHING to do with what you owned -- this is simply a paperwork transfer from one brokerage to the other. Trust me - when you open your account when they finally post your holdings -- you'll either be up or down depending on what the market has done. You did not escape the carnage -- nor would you have dodged the UP market if that happened instead.

The good news is -- you're in a blackout period -- so it probably will save you from following all the lemmings that are selling instead of buying. Retail investors always buy at the top - and sell lower.... LOL It's why the rich get richer and the average guy loses money. They never quite figure out you buy low and sell high.


There are instances where one brokerage can't or doesn't have a product that the other one has - in those instances the shares are sold and the cash is transferred to the new account. You would have been told and would have had to agree to that happening.

[NOVA]

The good news is -- you're in a blackout period -- so it probably will save you from following all the lemmings that are selling instead of buying. Retail investors always buy at the top - and sell lower.... LOL It's why the rich get richer and the average guy loses money. They never quite figure out you buy low and sell high.

There are instances where one brokerage can't or doesn't have a product that the other one has - in those instances the shares are sold and the cash is transferred to the new account. You would have been told and would have had to agree to that happening.


This is for sure true, when it does finally get there it will go into a single fund (they picked) and then after that I can change my selection to a different choice if I chose, there 25 different funds and I believe there is only one that was the same/similar in both Vanguard and Fidelity, everything else is different.

Thank you Greg!

[AU Doc]

I don't know about everyone else, but right now it feels a little like Black Friday shopping! I feel good about my investments at last weeks prices, so seeing them take a hit over the past two days just feels like a great opportunity to add to my positions.

It's fun to watch your market value go up-up-up, but I enjoy these pull-backs because it gives me an opportunity for some bargains.

[GregWeld]

I don't know about everyone else, but right now it feels a little like Black Friday shopping! I feel good about my investments at last weeks prices, so seeing them take a hit over the past two days just feels like a great opportunity to add to my positions.

It's fun to watch your market value go up-up-up, but I enjoy these pull-backs because it gives me an opportunity for some bargains.



I had raised cash (selling in to strength) to a tad over 2MM ----- and yesterday and today wrote several limit orders to buy. Some got executed and some are open.... and I've bought some stuff at market just because I wanted to add to my holdings and the prices were "fine".

So I bought - over two days - 1MM -- and then sold a tiny bit of a winner and raised my cash back up to 1.44MM -- Because this isn't over.... I prefer to always be ready to seize on an opportunity when presented.

Some of my holdings are SO OLD (20 years - or 10 years - or 5 years) that I've been averaging UP nibbling here and there.... but I have NOT been buying at the top of the market for months now. I was happy with this bit of a blow off to put some dough to work. Interesting market -- but I don't think the selling is done.

[87SS]

Any thoughts on ETP.......keep buying below $20?

[GregWeld]

Any thoughts on ETP.......keep buying below $20?



Very hard to discuss individual stocks and what to do or not. It's not what this thread is about. Just sayin'

Personally I hold this in two different accounts --- I'm way ahead in one account and way down in the other (10,000 shares in one -- 5,000 in the other).... I have averaged the one holding down a couple times in an effort to get it closer to where it's trading.

I would not try to game KMI or ETP. If you own it - I'd hold - it pays a great dividend.... and about all a guy can do is hope and pray they don't cut it (would be the kiss of death for the company and stock).

[clill]

on the lighter side...
https://youtu.be/lQegMA_kY9Y

[GregWeld]

Thanks Charley - because this video is absolutely PERFECT!!




lQegMA_kY9Y&feature

[im4u2nvss]

Thanks Charley - because this video is absolutely PERFECT!!




lQegMA_kY9Y&feature

Thanks for the laugh Greg. I feel 1% or less of portfolio is ok.

[GregWeld]

This market has become so interesting..... half the time people are betting the market is going up and buying the dips -- half the time they're selling....

I sit here and laugh at the whole silly mess -- why? Because the market is UP UP UP ---- and when it goes down 5% everyone freaks out. Really?? Pick a name - check where it was at the beginning of last year -- and where it is / was at this years LOW....


Okay --------------- but here's one thing -- AS A BUSINESS -- I would be concerned about.

INTEREST RATES.

Why?? Because people are just people. Look at your own personal situation. Do you have ANY interest rate sensitivity? Buying a car? A house? Is your old loan at 3% ?? You think that payment is "okay"? What happens if your payment is based on 5% ?? Is your home loan on a 7/1 at 3.5%.... and you're 4 years in to that.... How much will your payment go up if you refinanced today to a 30 year??

Inflation is here -- it's been here for awhile.... it's been a coiled spring waiting for the worst opportunity to pop. Rates have been artificially low for years now... they too are a coiled spring. The FED thinks it controls rates.... but they're now a SELLER... and it's a BUYERS market. What's the mean?? That means that people buying debt -- control the rate they want -- this is controlled by what they will pay for bonds - and the government has a LOT OF THEM to sell... right when they're planning to add more debt to the pile.

Here's why it's important -------- going forward ----- will people be able to buy a house at the new rates? Cars? Or will they sit on their hands and stage a buyers strike.... When/if that happens we'll start with the layoffs in the housing market.... which hits suppliers (Caterpillar and Cummins and Deere etc).... and there's a chain reaction that doesn't end well.


OR


Do people realize it's still "cheap" and they'd better get busy buying stuff (most buy on time)...


SO ---- look at your own situation for some guide. Have you loaded up with debt? Has your business loaded up with debt? Or did you pay down debt - put money in the bank - and are sitting pretty?


IT'S THE REAL REASON YOU'RE SEEING THIS MARKET GO CRAZY ---- nobody knows where we're going and we're kind of at a bit of a crossroads. Will we be in trouble as a nation with higher rates -- or will we be fine and keep going? I have no idea. I'm not saying that I do.... I'm asking you to keep your ear to the ground and watch where you live and work. What do you hear from your friends and business associates.... are they working overtime or are things coming back to normal? Is biz great or has it changed etc?

[slow4dr]

Always interesting to read your posts Greg.

I have been thinking a bunch about the local housing market (SoCal) lately. I am in no position to buy right now so it seems like the best time to watch from a safe distance. Prices in my area are above 2006/7 levels with a decent amount of inventory for single family homes. I've had a couple friends recently purchase houses and a few have popped up in my neighborhood over the last year. One of which sat empty for 9 months before being sold. Sell price was within 5% of original asking.

I can't for the life of me imagine buying a house right now at these prices. Even IF I was in a position to buy. For you guys in the real estate business what are you seeing personally? First time buyers on the rise? Mostly investors with cash deals? Are prices trending up or down in your area?

What prompted this post is someone close to me that has a few rental properties is looking to buy right now. I fully respect him and most previous financial endeavors which made me wonder, "What does he know that I don't?". Maybe he's just more of a risk taker than I am. His History of such things would beg to differ. He's always been on the conservative side of things so it seems out of left field from my perspective.

He's looking at $300K condos that will likely produce $1500 in rents. That alone should be enough information to make a "NO" decision.

[Vegas69]

Comparing the real estate market from 2006 to 2018 is tough to do because they are not that alike. First, financing isn't anywhere close to that loose and most homes are bought with considerable documentation and scratch in the game these days. Don't discount inflation either. The cost over everything is up since 2006 so the same median price isn't relative.

With all that being said, I think a cool down is coming soon. It's been a really good run in most markets for quite some time. I'm not saying it's a bad time to buy if it makes financial sense. I wouldn't buy because you think you will hit a home run. That was in 2010-2014 in most markets.

The key is and always will be, buy real estate only if the numbers make sense personally long term and you can afford to wait to sell until the market is right again. If either of these don't equate, don't buy.

[GregWeld]

Always interesting to read your posts Greg.

I have been thinking a bunch about the local housing market (SoCal) lately. I am in no position to buy right now so it seems like the best time to watch from a safe distance. Prices in my area are above 2006/7 levels with a decent amount of inventory for single family homes. I've had a couple friends recently purchase houses and a few have popped up in my neighborhood over the last year. One of which sat empty for 9 months before being sold. Sell price was within 5% of original asking.

I can't for the life of me imagine buying a house right now at these prices. Even IF I was in a position to buy. For you guys in the real estate business what are you seeing personally? First time buyers on the rise? Mostly investors with cash deals? Are prices trending up or down in your area?

What prompted this post is someone close to me that has a few rental properties is looking to buy right now. I fully respect him and most previous financial endeavors which made me wonder, "What does he know that I don't?". Maybe he's just more of a risk taker than I am. His History of such things would beg to differ. He's always been on the conservative side of things so it seems out of left field from my perspective.

He's looking at $300K condos that will likely produce $1500 in rents. That alone should be enough information to make a "NO" decision.

Comparing the real estate market from 2006 to 2018 is tough to do because they are not that alike. First, financing isn't anywhere close to that loose and most homes are bought with considerable documentation and scratch in the game these days. Don't discount inflation either. The cost over everything is up since 2006 so the same median price isn't relative.

With all that being said, I think a cool down is coming soon. It's been a really good run in most markets for quite some time. I'm not saying it's a bad time to buy if it makes financial sense. I wouldn't buy because you think you will hit a home run. That was in 2010-2014 in most markets.

The key is and always will be, buy real estate only if the numbers make sense personally long term and you can afford to wait to sell until the market is right again. If either of these don't equate, don't buy.





Both good posts.......

Personally --- I'm so happy we're selling the apartment complex RIGHT NOW..... We've made a great return. Time will tell if we were stupid. In my head the old adage -- pigs get fat and hogs get slaughtered comes to mind.

In rental real estate it's all in the numbers.... they work or they don't. Long term - they can work on the SALE side of things. In ALL of my business dealings -- I work with the adage "the money is made on the buy, not the sale". In other words - I like to buy LOW and sell high.

My post was really about --- looking forward --- in an Investing 102 way.... a "heads up" --- pay attention - don't be complacent and think the market goes straight up for years and years -- houses don't go up forever and always.... and I'm not saying to sell -- or not buy -- Rates are still historically low... The stock market and housing market CAN and DO go up even in a rising rate environment.... We could be in a space like the 50's and 60's when employment was good - and steady - houses sold steadily - the market was steady.... and there's nothing wrong with "steady". I just hope the FED doesn't get it wrong and we have to be MINDFUL of where we're headed --- not where we've been.

[AU Doc]

Debt is an interesting topic for me at the moment. I'm pushing 40, and I see a lot of people my age and younger that are working furiously to get out of debt (myself included). A lot of people older than me have already made it there. I don't know if I see more of it because it's my mindset, or if there are more people who look at debt differently than we did 20 years ago, or differently than their parents did. I've never liked debt, but there have been times in my life that I thought it was a necessity.

I've also talked to a lot of people in the their mid-twenties that seem to be a lot smarter about debt than I remember people being on average 10-15 years ago. Most of these kids are actively saving, buying used cars and driving them longer, buying reasonable homes, etc., etc.

I say all that to say that I've been having some of the same thoughts that Greg mentioned, though not nearly as coherent or well formed :), but in my little bubble, there are fewer and fewer people taking on debt. Even companies are buying with cash. At least equipment valued in the vehicle range down. That's despite money being so "cheap" these days.

The housing market is another oddity here. There aren't enough contractors to keep up with the demand for new home construction, and the "contractors" have come out of the woodwork. It's at the housing bubble pace here with no signs of letting up. I think people are just buying less house with the new mortgaging rules.

[GregWeld]

Debt is an interesting topic for me at the moment. I'm pushing 40, and I see a lot of people my age and younger that are working furiously to get out of debt (myself included). A lot of people older than me have already made it there. I don't know if I see more of it because it's my mindset, or if there are more people who look at debt differently than we did 20 years ago, or differently than their parents did. I've never liked debt, but there have been times in my life that I thought it was a necessity.

I've also talked to a lot of people in the their mid-twenties that seem to be a lot smarter about debt than I remember people being on average 10-15 years ago. Most of these kids are actively saving, buying used cars and driving them longer, buying reasonable homes, etc., etc.

I say all that to say that I've been having some of the same thoughts that Greg mentioned, though not nearly as coherent or well formed :), but in my little bubble, there are fewer and fewer people taking on debt. Even companies are buying with cash. At least equipment valued in the vehicle range down. That's despite money being so "cheap" these days.

The housing market is another oddity here. There aren't enough contractors to keep up with the demand for new home construction, and the "contractors" have come out of the woodwork. It's at the housing bubble pace here with no signs of letting up. I think people are just buying less house with the new mortgaging rules.




The "new" mortgage rules are onerous.... I have several friends that are real estate agents. I hear stories all the time about the perfectly good credit people have and perfectly good down payment - and the fighting they have to go thru to get their mortgage approved.

Debt -- AKA "leverage" isn't bad in and of itself... but most times it's used and abused. People use debt to raise their standard of living.... to buy things on time they really can't afford ---- and the worst example is --- use expensive debt to buy DEPRECIATING assets. Debt to buy a home - that's okay - debt to start a business - that's okay. Debt to buy a fancy car.... STUPID. Debt for a vacation - DUMB.

That's where people just simply lack discipline. Discipline would have them driving their current car 3 more years - all the while putting what would be the payment, in the bank.... and then paying cash for a car (the version they can pay cash for) and driving it and once again - putting the payment in the bank/market..... Ditto the vacation. If you know you have 2 weeks of vacation and you're going to Hawaii --- and you can't manage your money well enough to be able to put some away to cover that (you have a YEAR!!).... then the last thing you should do is put that on your credit card @ 22% interest rate. OMG....

Personal debt is more about a discussion of "living within your means". You don't buy furniture when you have to make payments on it. #1 that furniture is overpriced junk - and it's not worth tossing it on the curb and you still owe money on it. LOL

[AU Doc]

The "new" mortgage rules are onerous.... I have several friends that are real estate agents. I hear stories all the time about the perfectly good credit people have and perfectly good down payment - and the fighting they have to go thru to get their mortgage approved.

Debt -- AKA "leverage" isn't bad in and of itself... but most times it's used and abused. People use debt to raise their standard of living.... to buy things on time they really can't afford ---- and the worst example is --- use expensive debt to buy DEPRECIATING assets. Debt to buy a home - that's okay - debt to start a business - that's okay. Debt to buy a fancy car.... STUPID. Debt for a vacation - DUMB.

That's where people just simply lack discipline. Discipline would have them driving their current car 3 more years - all the while putting what would be the payment, in the bank.... and then paying cash for a car (the version they can pay cash for) and driving it and once again - putting the payment in the bank/market..... Ditto the vacation. If you know you have 2 weeks of vacation and you're going to Hawaii --- and you can't manage your money well enough to be able to put some away to cover that (you have a YEAR!!).... then the last thing you should do is put that on your credit card @ 22% interest rate. OMG....

Personal debt is more about a discussion of "living within your means". You don't buy furniture when you have to make payments on it. #1 that furniture is overpriced junk - and it's not worth tossing it on the curb and you still owe money on it. LOL

Agree on all points. The only things I might change would be to put more stuff in bold :)

About the only thing I see requiring debt these days is a house on the personal finance side. Then there's startup costs or large capital purchases (depending on your business structure) on the business side. I'm sure there are some circumstances outside the norm that make it necessary, but it's a quick way to get in trouble if you're not careful.

There were several generations that learned to buy it (and that's whatever "it" you want right then) on credit and pay it off when/if you can. Then several generations got to see how that worked out, and I see more and more that are willing to wait a little while and buy it without the debt.

[Vegas69]

The recent stats I’ve seen show Americans burying themselves in personal debt not dissimilar to 12 years ago. Student loans being the biggest difference. Kids have giant loan balances to enslave them for a loooooooong time. That’s exactly what all debt is, slavery. You are forced to work to pay it off. It reduces your options and flexibility.

The only debt that may not enslave you is investment debt. Real estate or business, but you can get caught with your pants around your ankles. It best be very optimistic calculated risk.

[GregWeld]

Ah yes Todd..... Student debt. In many cases it shows the same brilliant "investment" strategies as many of their other life choices. What do I mean?

Why would someone take out debt to the tune of $100,000 or $200,000 for a job that pays $35,000 a year. Can they not do basic math and realize the burden this is going to be? I don't care what the interest rate is...

[out2kayak]

Ah yes Todd..... Student debt. In many cases it shows the same brilliant "investment" strategies as many of their other life choices. What do I mean?

Why would someone take out debt to the tune of $100,000 or $200,000 for a job that pays $35,000 a year. Can they not do basic math and realize the burden this is going to be? I don't care what the interest rate is...

I heard an interesting podcast on this. For your perusal:

bpk_u_VmPD4

Not that I agree with everything that he says, but it poses some interesting questions.

I think that government involvement in education is part of why costs for university have significantly escalated and why there are degree programs that are, from a society perspective, useless. These programs produce people with degrees that can only work at low wage / skills jobs.

:cheers:

[AU Doc]

The recent stats I’ve seen show Americans burying themselves in personal debt not dissimilar to 12 years ago. Student loans being the biggest difference. Kids have giant loan balances to enslave them for a loooooooong time. That’s exactly what all debt is, slavery. You are forced to work to pay it off. It reduces your options and flexibility.

The only debt that may not enslave you is investment debt. Real estate or business, but you can get caught with your pants around your ankles. It best be very optimistic calculated risk.

Ah yes Todd..... Student debt. In many cases it shows the same brilliant "investment" strategies as many of their other life choices. What do I mean?

Why would someone take out debt to the tune of $100,000 or $200,000 for a job that pays $35,000 a year. Can they not do basic math and realize the burden this is going to be? I don't care what the interest rate is...

That's a good point. The levels of student debt that kids are apparently leaving school with is one of those things that doesn't make sense on such a basic level that I have a hard time believing it's real. I've heard of Music or History majors leaving school with the same sort of debt that some MDs are leaving school with. One of those makes sense to some degree..... The other two not so much.

To be clear, I don't have a problem with studying Music, History, the arts, etc., but I think we are doing students a serious disservice by encouraging them pursue an academic path that will put them in debt for the majority of their adult lives. Further, many of those career paths are extremely difficult to find a job once they leave school.

Colleges pushing these sorts of academic paths reminds me a lot of predatory lending. "Sure, we'll loan you the money even though we know you'll never be able to make the payments." Sounds a lot like, "Sure, we'll prepare you for a career in a market that we know is saturated and never provide the income necessary to pay for that education."

[GregWeld]

So here's a good sign to watch for regarding "the future" and what happens with rising interest rates.....


Mortgage applications ----- DOWN 6.5%

Why? The reason given was "rising rates make homes less affordable". DOH!!

What happens if mortgage rates continue to rise and sales slow? You got it -- prices come down.... and??

You got it -- Builders start laying people off....

Let's hope the FED doesn't screw this up.

[Vegas69]

I'm definitely starting to see people priced out of the market here. Not severely, but for a majority of the last 7-8 years that didn't happen very often. I personally think the real estate market needs to become more neutral. This coming from a real estate agent. In nearly 18 years of wheeling and dealing in real estate, I've seen a neutral market for a very small sliver. I'm talking months as the transitions from buyer's to seller's to buyer's to seller's markets have been abrupt. I don't mind the idea of a listing sitting around for 30-90 days. I actually have a chance to sell it myself and convert some buyers into clients. I also don't have to juggle 10 offers on one listing. The amount of incoming agent calls can be pretty atrocious. It's also super competitive for our buyers. It's not uncommon for a buyer to lose out on a couple houses. I'll naturally carry more listing inventory in a neutral to buyer's market and I like that.

As with everything, you find the silver lining and make the best of the cards you're are dealt. There are always opportunities in every market if you don't put the blinders on. I just gave my real estate team a pep talk on this yesterday. ha

[WSSix]

I bought my house 3 days after it hit the market because it was what I wanted and I had to. The houses were moving very fast in this area. I'm in one of the very few areas that's still affordable for it's location.

I'm convinced the areas around Atlanta that I was looking are too hot to sustain. I got lucky I was able to get in where I am.

Housing prices and trends in general have me concerned on many levels. Maybe it's the area I'm near and travel through, but good houses going for 500k+ only to be torn down and replaced with mansions that are squeezed onto the lot is too common for me to thing it's "normal" or sustainable. There're no starter homes or middle class homes in many of these areas. It's mansions or low end. I fear we'll end up like San Fran and other areas where housing is stupid expensive. Sure, as a home owner, I may reap the benefits of this, but the larger implications have me concerned.

[GregWeld]

I love what Warren Buffett said on CNBC this morning about selling stocks when they're down....


"If you bought your house for $20,000 and someone came along and said, I'll buy your house for $15,000..... you wouldn't sell would you".

Implying that you know/think/historically your house value is going to go UP over time.....

He's talking about being an INVESTOR for long term and investing in the value of the underlying company -- versus investing in the PRICE of the stock. Think about that..... it's a typical great Buffett / Investing philosophy.

[WSSix]

He also called out people who try to treat the market like a casino. He's got some great advice about investing.

[GregWeld]

I'd posted about "HEADS UP!!" earlier......


Make no mistake -- Interest rates are extremely important to SALES.... Sales of ALL KINDS - not just houses -- but houses and cars lead the way.

The other night - I attended a party which was mostly all "the trades" - I was sitting with 3 excavator company owners all discussing their business (it's a very small valley where I live - they're all friends). #1 was about how busy they were last year and how busy this year seems to be starting out ---- and #2 ---- they all wanted to buy new equipment and hire more people.... PEOPLE to hire "don't exist"....and they're upset about interest rate change........ They've been buying with ZERO down and ZERO interest - and they've been finding out - those deals are going away.... Their unanimous response - they won't buy then! These machines are $80 and 100 and 250 grand!

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



New home sales down 7.8% in January
22 Hours Ago | 01:40




Sales of newly built homes are falling, and the culprit is clear. Homebuyers increasingly can't afford what they want. Higher mortgage rates, combined with the loss of homeowner tax breaks in some of the nation's most expensive markets, are taking away buying power.

Sales fell in December, when the new tax law was signed, and then again in January, when mortgage rates moved higher. Sales are now at their lowest level since August of last year.

The government's measure of new home sales is based on signed contracts during the month, reflecting the people who are out shopping and signing deals with builders. It is therefore a strong read on current reactions to home affordability. Mortgage rates moved a full quarter of a percentage point higher during January, from below 4 percent to about 4.25 percent. It then took off further from there.

"It seems that the jump in mortgage rates in January had an immediate impact on contract signings," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. "You can't get more interest rate sensitive when it comes to homes and cars with the associated cost to finance."

[rustomatic]

Just because I'm bored and partly because I was lucky enough to get a good place at the right time, I check the real estate market around me once in a while. It's still ridiculous. A quarter of a percent increase in mortgage rates deters no one.

Overpriced dumps in Sacramento (CA) sell in a maximum of six days, with multiple offers on the table frequently pushing values up as much as ten percent--this is like bidding war on sub-$300k stuff. We're talking 800-1200 foot places; in areas that didn't used to be so great, but are considered swell and quaint now, $500k will get you an old piece of junk (new paint + carpet with 50 year old windows no better than cellophane) with maybe 1500 feet of "living" space. The (local) job market (pay) does not remotely coordinate with what this stuff costs.

New places ("single family homes") starting at $500-600k down the street from me have been selling with literally no inventory, i.e., faster than they can be built (in December!). There is a waiting list for stuff that does not exist on the tiniest of lots. This looks just like 12 years ago, but some of the prices will undoubtedly hold better than others. Some will not . . .

Let's not even talk about the Bay Area (San Mateo?), where a small, yet newish 2-bedroom condo will ask at 900k, or you can pay $3000.00/mo for a crappy 2-bedroom apartment (Mountain View?). Someone mentioned San Francisco, which really isn't even mentionable anymore, since it was determined that you need to make at least two million a year to buy anything fixed on dirt in the city/county.

It's tough all over, but some have had good timing. For some places, though, it's like waiting until Beverly Hills becomes affordable. Just head east, really, really far.:welcome3:

[GregWeld]

I got a good laugh from an article this morning --- the point was -- "the next time someone tries to scare you with their prediction.... look at this chart".

This is so true it's hysterical.... the "sky is falling" - "the world is flat"....




http://lateral-g.net/forums/attachment.php?attachmentid=64721&stc=1&d=1519826414

[Vegas69]

I'd posted about "HEADS UP!!" earlier......


Make no mistake -- Interest rates are extremely important to SALES.... Sales of ALL KINDS - not just houses -- but houses and cars lead the way.

The other night - I attended a party which was mostly all "the trades" - I was sitting with 3 excavator company owners all discussing their business (it's a very small valley where I live - they're all friends). #1 was about how busy they were last year and how busy this year seems to be starting out ---- and #2 ---- they all wanted to buy new equipment and hire more people.... PEOPLE to hire "don't exist"....and they're upset about interest rate change........ They've been buying with ZERO down and ZERO interest - and they've been finding out - those deals are going away.... Their unanimous response - they won't buy then! These machines are $80 and 100 and 250 grand!

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



New home sales down 7.8% in January
22 Hours Ago | 01:40




Sales of newly built homes are falling, and the culprit is clear. Homebuyers increasingly can't afford what they want. Higher mortgage rates, combined with the loss of homeowner tax breaks in some of the nation's most expensive markets, are taking away buying power.

Sales fell in December, when the new tax law was signed, and then again in January, when mortgage rates moved higher. Sales are now at their lowest level since August of last year.

The government's measure of new home sales is based on signed contracts during the month, reflecting the people who are out shopping and signing deals with builders. It is therefore a strong read on current reactions to home affordability. Mortgage rates moved a full quarter of a percentage point higher during January, from below 4 percent to about 4.25 percent. It then took off further from there.

"It seems that the jump in mortgage rates in January had an immediate impact on contract signings," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. "You can't get more interest rate sensitive when it comes to homes and cars with the associated cost to finance."

I've followed monthly stats for over a decade here in the Las Vegas valley and sales always lag in December and January. There really is a seasonal adjustment. Even worse in markets with bad weather. They should be comparing numbers to other years in the same months. I'm not discounting that the market is changing, but as we all know, it depends on how the data is used.