Investing 102

[GregWeld]

Oh..... FYI -- I held 4000 shares this morning when I BOUGHT another 1000 shares for a total of 5000.....

And when it splits I'll own 10,000

I consider this a small position ($ wise) and would load the boat if it paid a bigger dividend. But the way I invest - for every small paying dividend - I own a corresponding higher risk / higher paying dividend play. So it's about balance. I don't want too much 2.6% stuff -- because then I have to buy more 7% stuff... (which I just did but it's another apartment complex LLC that will pay 7.69% pre-tax)


This is one of those stocks that you own for "account protection" - so we'll now call this a "protector" instead of a steady eddy. It will give you peace of mind and protection on the downside when everything has gone to hell in a hand basket and will pay a "decent" dividend while you wait for things to turn around. At these prices it only pays 2.6%... but that's almost DOUBLE the rate of the 10year government bond - and probably safer! :willy: :woot:

[Sieg]

I just placed an order for 50 shares so when it splits I'll have 100 which is a 200% position gain so there! :rofl: :woot:

[GregWeld]

I looked at this one and should have said "near" historic.
http://chart.finance.yahoo.com/z?s=KO&t=my&q=&l=&z=l&a=v&p=s&lang=en-US&region=US

Entry anytime between '62 and '95 or in '03 or '05 which is where it will be 7/27 :D

Buy it now check back in 5 years is my rational with this one. I doubt Coke will go the way of Kodak.


Exactly my point...

Yeah there may have been a couple best / perfect entry points - but tell me in the future when those are going to be?

These stocks -- and for LONG TERM INVESTING -- you buy and start to collect the dividend. The earlier you buy - the more dividends you collect.

Either way - the day or week - or month after you buy - the stock will suck... and then you look at it and the SOB is up and you've gotten paid the whole time.

This is why I own MCD - KO - ED - JNJ - KMB. They're not sexy... but they keep me sleeping well and they pay me - and I check on them and damn if they're not gainers too (most of the time).

[GregWeld]

I just placed an order for 50 shares so when it splits I'll have 100 which is a 200% position gain so there! :rofl: :woot:

HAHAHAHAHA --- GOOD MAN!

Taking a page right out of your buddy Warren Buffets play book.

Somewhere it's in this thread where in the next couple years - his dividend is equal to his original investment... Boy, that would suck wouldn't it?

Call him and ask him when the right time to buy was... :rofl:

[Bow Tie 67]

Just dumped a couple of loosers for a 115 share boost to my small KO position. :D .......... Executed the trade while drinking a coke!!! love the stuff. :thumbsup:

Not sure if I mentioned this but my 18 year old daughter opened a Roth and seeded it with MCD. She's funny and been watching it, she is a total health nut, and I said everytime you see your step-sister with a mickey D bag thank her. Of course all in good fun they love being smart-alecs.

[96z28ss]

I got a letter in the mail, to vote for or against the stock split. Greg do you usually mail those things in? I didn't fill it out or vote.

I look forward to the split and more splits in the future. I own 81.5 shares of KO.

[Sieg]

Call him and ask him when the right time to buy was... :rofl: That old fart probably would have told me '62. :D

[GregWeld]

I got a letter in the mail, to vote for or against the stock split. Greg do you usually mail those things in? I didn't fill it out or vote.

I look forward to the split and more splits in the future. I own 81.5 shares of KO.



I never vote or bother to send in any of that stuff. Frankly -- the big institutions vote and control everything. If Warren Buffett votes for something - it matters - MY VOTE - Not so much.

[GregWeld]

Just dumped a couple of loosers for a 115 share boost to my small KO position. :D .......... Executed the trade while drinking a coke!!! love the stuff. :thumbsup:

Not sure if I mentioned this but my 18 year old daughter opened a Roth and seeded it with MCD. She's funny and been watching it, she is a total health nut, and I said everytime you see your step-sister with a mickey D bag thank her. Of course all in good fun they love being smart-alecs.



That's funny!

The whole time I was in europe -- where EVERYBODY SMOKES -- and it was pissing my wife off (the smell etc)... I kept telling her... NO DEAR! that's the smell of MONEY! I'm hoping they're all smoking 3 packs a day because that's what's paying for our trip!

Took her awhile but she finally got it. :thumbsup:

[WSSix]

Sweet! I own KO. That definitely makes up for my choice of OXY over Conoco Phillips when I missed out on that division.



The whole time I was in europe -- where EVERYBODY SMOKES -- and it was pissing my wife off (the smell etc)... I kept telling her... NO DEAR! that's the smell of MONEY! I'm hoping they're all smoking 3 packs a day because that's what's paying for our trip!



I had a well I was doing some work on a couple months ago. I told the company man his well smelled like dog $hit because it really did small that way. He laughed, breathed in deeply, and said it smells like money to him.

[GregWeld]

Sweet! I own KO. That definitely makes up for my choice of OXY over Conoco Phillips when I missed out on that division.




I had a well I was doing some work on a couple months ago. I told the company man his well smelled like dog $hit because it really did small that way. He laughed, breathed in deeply, and said it smells like money to him.



If you pick 10 stocks -- 3 will carry the entire account -- 3 will be "okay" -- and 3 will suck... it's just the law of the jungle. There's no way you're right 100 or even 50% of the time.

[WSSix]

Yeah, I'm not worried at all. Conoco was just a doh! moment since I was deciding between them or OXY. It'll all work out in the end I'm sure.

[Vegas69]

This is the biggest pitfall of real estate investing, cash flow is not a function of rent - PITI, because what happens when you have to replace a water heater, or a roof etc?

In reality a property like that will over a longer period of time cash flow probably 150-200$ a month. Now as you mention you get the benefit of principle and possible appreciation so it can definitely be double digit returns.

Most of the hard core RE investors, like say from biggerpockets.com, would advocate rent be 2% of the purchase & rehab price, so 1k rent on 50k house but that would mean investing out of state (the south mostly) for many of us, and then paying a property management place (thus taking 8-12%)

I found that when looking at the numbers that anything less than 1% is not worth it to consider, and you have to assume that expenses will be about 40-50% over the long term, and that does not include PITI.

Again though, the deal you mention would not be terrible, I don't have my spreadsheets at work but I'm closing a somewhat similar ratio deal in 3 weeks, a 132,500 house that I figure will rent for 1300+ quickly. I projected making about 250$ a month, with PITI of around 690$.

You are absolutely right. I'm not counting on pocketing $400 per month. I've already owned 5 single family rentals in my days. I really shouldn't have said it's all cash flow but it is a nice margin on a property that will offset the costs. I have a spread sheet set up factoring in a one month vacancy factor, repairs, home warranty yearly, hoa fee, etc.....

I am factoring in the principal reduction and will depreciate the properties as Greg said with the thought of a 1031 down the road into a more lucrative investment or residual income when I have the deed.

[Flash68]

#1 Todd -- talk with someone qualified to answer your question -- I'm almost positive that PROPERTY is not allowed in a SEP/IRA/401 investment vehicle.



It is allowed but it is complex. I was more familiar in the past with it when I was seriously considering doing it with my IRA, but the restrictions and red tape kept me from doing so.

Here's a quick overview I found on that subject.

http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2012/05/11/3-ways-to-own-real-estate-in-your-ira

[GregWeld]

It is allowed but it is complex. I was more familiar in the past with it when I was seriously considering doing it with my IRA, but the restrictions and red tape kept me from doing so.

Here's a quick overview I found on that subject.

http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2012/05/11/3-ways-to-own-real-estate-in-your-ira



Yep -- READ POST #1732


NOT WORTH IT! Not one bit...

[Sieg]

Today should prove to be opportunistic for those of you considering KO since Greg and I both bought yesterday you should be able to buy in at $77 or less today. :thumbsup: :D

[GregWeld]

I just read an article "dissing" the future of owning dividend paying stocks. The argument was proffered that WHEN (not IF) the current 15% tax rate on QUALIFIED DIVIDENDS (there's a difference between Qualified and Ordinary) is changed back to the pre Bush era tax rates ---- that it will kill the market for these stocks.

Yeah -- there's some argument to be made... that there's a huge difference between a 15% rate and a top rate of 39% and blah blah blah.

I've been doing this for awhile now... I've seen the ups and downs of the market and lived through some boom and bust cycles.

I will state this - as I have to my accountant (doing this same argument but over the difference of long term vs short term capital gains)....

IF I MAKE ONE DOLLAR --- and I OWE 40 cents to the government -- I still get to keep 60 cents. Isn't it better to make 60 cents than it is to worry about paying a percentage to the government? My point to him was that it's better to make a huge pile of money.... and who cares about paying some of it out. TO ME -- I'd rather owe the government a fortune... because that means I made out HUGE (I kept 60 cents of every dollar!).

My personal income tax bill for 2011 was 1.7MM --- ask me how sad I was to have to pay that... :woot:

[GregWeld]

Today should prove to be opportunistic for those of you considering KO since Greg and I both bought yesterday you should be able to buy in at $77 or less today. :thumbsup: :D



Thanks for buying! I added another 1000 shares this morning.


:cheers: :D

[GregWeld]

All you "terbacky" share owners --- PM and MO --- you got your nice MO dividend today -- and tomorrow you'll get the PM dividend.

God bless America!


And thank you Europeans and Asians, for being large consumers of this nasty product! I'll spend it in good health!:D

[toy71camaro]

All you "terbacky" share owners --- PM and MO --- you got your nice MO dividend today -- and tomorrow you'll get the PM dividend.

God bless America!


And thank you Europeans and Asians, for being large consumers of this nasty product! I'll spend it in good health!:D

:woot: Got my $13.75 dividend payment from MO yesterday. :thumbsup:

[GregWeld]

:woot: Got my $13.75 dividend payment from MO yesterday. :thumbsup:




Multiply this times 4 quarters --- and it's like FREE MONEY! :unibrow:

Let's not forget about the TOTAL RETURN -- so growth in capital PLUS the FREE MONEY....


EEEEEEEEEEEHHHHHHHHHHAAAAAAAAA
:woot:

[Sieg]

Thanks for buying! I added another 1000 shares this morning.


:cheers: :D

Do I get a 1 share tip for the lead? :rofl:

[CRCRFT78]

Am I missing something here? A lot of you are adding more Coke shares to your portfolios and I'm assuming some of it is due to the news of a split. But wouldn't you be getting the same amount if you purchased after the split? If they are splitting at a 2-1 ratio, isn't the share price also going to split 2-1? I know this has been discussed before I'm just curious as to the benefit of purchasing all these shares prior when the price will adjust accordingly afterwards.

BTW if I had some spare change I would be purchasing more shares myself. This isn't intended on being a negative post, just curious about the benefit of purchase prior to the split. Other than share price being driven up by demand because of a new lower share price, am I missing something?

[toy71camaro]

Multiply this times 4 quarters --- and it's like FREE MONEY! :unibrow:

Let's not forget about the TOTAL RETURN -- so growth in capital PLUS the FREE MONEY....


EEEEEEEEEEEHHHHHHHHHHAAAAAAAAA
:woot:

Exactly... they are the highest up of everything i have.. 16% and counting!

[toy71camaro]

Am I missing something here? A lot of you are adding more Coke shares to your portfolios and I'm assuming some of it is due to the news of a split. But wouldn't you be getting the same amount if you purchased after the split? If they are splitting at a 2-1 ratio, isn't the share price also going to split 2-1? I know this has been discussed before I'm just curious as to the benefit of purchasing all these shares prior when the price will adjust accordingly afterwards.

BTW if I had some spare change I would be purchasing more shares myself. This isn't intended on being a negative post, just curious about the benefit of purchase prior to the split. Other than share price being driven up by demand because of a new lower share price, am I missing something?

Your right. you arent really gaining anything special. Gregg touched on this on the previous page i think. It was more of a "mental" thing than anything. But its a buy and hold stock that isnt going anywhere for a long time (negativity wise). Think parking lot. ;)

[96z28ss]

Am I missing something here? A lot of you are adding more Coke shares to your portfolios and I'm assuming some of it is due to the news of a split. But wouldn't you be getting the same amount if you purchased after the split? If they are splitting at a 2-1 ratio, isn't the share price also going to split 2-1? I know this has been discussed before I'm just curious as to the benefit of purchasing all these shares prior when the price will adjust accordingly afterwards.

BTW if I had some spare change I would be purchasing more shares myself. This isn't intended on being a negative post, just curious about the benefit of purchase prior to the split. Other than share price being driven up by demand because of a new lower share price, am I missing something?

Historically especially in KO case look at what happens after the split the stock just goes up. Get in before the split, and you are in at the lowest price to ride it up.
Other than that there is really no benefit.

[Bucketlist2012]

I knew I would see you on NastyZ Albert..

I am pretty sure we will see Ace on here soon...That guy is smart and motivated..

I don't know him, but I wanted to help him out and steer him in the right direction..

Thanks for your two cents. that should get someone reading this thread..

I felt when you came here, that I had done something to help someone.Now you and I are helping someone else start to Invest.

Stacie/Ace , will be a great addition to this site...His econ, math and business skills will be good to see..

When you get to this post Ace, welcome...:lateral: :cheers:

[96z28ss]

All you "terbacky" share owners --- PM and MO --- you got your nice MO dividend today -- and tomorrow you'll get the PM dividend.

God bless America!


And thank you Europeans and Asians, for being large consumers of this nasty product! I'll spend it in good health!:D

Lets not forget MO isn't only tobacco. MO also owns Chateau Ste. Michelle Winery which was one of the reasons I added it to my holdings. Wine doesn't last long in this house hold.

[toy71camaro]

I knew I would see you on NastyZ Albert..

I am pretty sure we will see Ace on here soon...That guy is smart and motivated..

I don't know him, but I wanted to help him out and steer him in the right direction..

Thanks for your two cents. that should get someone reading this thread..

I felt when you came here, that I had done something to help someone.Now you and I are helping someone else start to Invest.

Stacie/Ace , will be a great addition to this site...His econ, math and business skills will be good to see..

When you get to this post Ace, welcome...:lateral: :cheers:


Yup.. I check this thread and NastyZ all throughout the day. (and now the health 101 thread, lol).

Ace will stir up some good stuff i'm sure (in a good way). I hope he makes it this far! Its a lot of reading to do, but WELL worth it.

[GregWeld]

Historically especially in KO case look at what happens after the split the stock just goes up. Get in before the split, and you are in at the lowest price to ride it up.
Other than that there is really no benefit.




EXACTLY....


No other reason -- and NO GUARANTEE -- that it will go up before, or after the split... but lots of times news like this get a stock "moving".

I added more to my position because I was light to begin with.

[XLexusTech]

Anyone have a replacement for XOM? getting nowhere with it...

[GregWeld]

Look at BPT -- it's a bit different than just straight "oil and gas" -- this is a lease which spins off a stellar dividend.

[Bucketlist2012]

Look at BPT -- it's a bit different than just straight "oil and gas" -- this is a lease which spins off a stellar dividend.

I have owned that for years... Royalty trust..

I don't do much recommending but BPT has been great for me. 17% 1 year, 137% 3 year , and 163% 5 year.

[mdprovee]

Picked up my 100 shares of KO today.. let the money start rolling.

[GregWeld]

Picked up my 100 shares of KO today.. let the money start rolling.



There ya go Mike!!

Too bad you didn't buy 100 shares of McDonalds this morning too! They jumped up over a couple bucks this morning! Maybe they're serving more COKE!

[96z28ss]

So I had a thought today. You always hear that sex sells right. Well what about sex stocks?

Greg what do you think?

CHD they are the company behind trojan condoms and vibrators, First responce pregnancy test, and Nair hair remover, and a few other things.
Their chart shocked the hell out of me. Talk about recession proof. 2008 was just a small dip. They pay a small dividend. But I think its a great place to park money, and enjoy the growth (pun intended). I may add this to my positions.

LTD the company behind victoria secret. the chart just goes up. Might be a good place to invest also.

Not sure of any other sex sells type stocks that pay dividend.

[GregWeld]

So I had a thought today. You always hear that sex sells right. Well what about sex stocks?

Greg what do you think?

CHD they are the company behind trojan condoms and vibrators, First responce pregnancy test, and Nair hair remover, and a few other things.
Their chart shocked the hell out of me. Talk about recession proof. 2008 was just a small dip. They pay a small dividend. But I think its a great place to park money, and enjoy the growth (pun intended). I may add this to my positions.

LTD the company behind victoria secret. the chart just goes up. Might be a good place to invest also.

Not sure of any other sex sells type stocks that pay dividend.


The ultimate sin stocks!:thumbsup: :unibrow:

I like it!

Never have looked into those - for no particular reason than it just never occurred to me.

[RECOVERY ROOM]

Never thought of those:lol:

[Bucketlist2012]

Never thought of those:lol:

Me neither...And i have been doing this a long time..

Diageo, Phillip Morris, I understand those, but i never thought of Sex Stocks..

Would that make us Investment Pimps ?

Do I need to get a "Huggy Bear" outfit from the Starsky and Hutch Days ?

[ErikLS2]

Can you buy LTD stock at Victoria's Secret? Could always use another reason to go in there. :rofl: And who makes those yoga pants all the girls at the gym wear now?

[96z28ss]

Can you buy LTD stock at Victoria's Secret? Could always use another reason to go in there. :rofl: And who makes those yoga pants all the girls at the gym wear now?

yoga pants would be LULU and UA, doesn't pay a dividend though. the charts do show growth.

[WSSix]

mmmmmmmm yoga pants :drool:

[Bucketlist2012]

Anyone have a replacement for XOM? getting nowhere with it...

Along with BPT, I have SDRL.

Offshore Oil. It has been killing it.. 1 year 10%, 5 year 37%.

So, I have Kinder Morgan for Distribution, BPT for Royalty trusts, and SDRL for offshore Oil.

I have more, but they pay well, but are not charting well right now, so I won't mention those...YET...

I hate to recommend anything...Right when you guys buy it, it will go down..

[Bucketlist2012]

yoga pants would be LULU and UA, doesn't pay a dividend though. the charts do show growth.

By charts , do you mean my Pants ?:rofl:

[GregWeld]

By charts , do you mean my Pants ?:rofl:



OMG!! Hysterical! Good one Mike! You must be on the mend.... :cheers:

[Bucketlist2012]

OMG!! Hysterical! Good one Mike! You must be on the mend.... :cheers:

Greg, Todd smacked me around and I have been exercising again..

Also working on the crap that I eat..I swear that it is going to get me back on track, literally back on the track.

Oh and the nice pop in the market today doesn't hurt..

Off to exercise the first time today before it gets hot..Back in a bit..

Funny how you mentioned BPT...I have had it for years..I had PBT too, but got out at the top. BPT is a hold..:lateral:

[GregWeld]

My "Greg Weld Tidbit" for the day....

I'm sitting here watching the market jump -- and what comes to my mind is all the questions about "should I wait - or buy today - or...."

To which I always reply -- just get in... because long term it doesn't matter.


Today and days like this - always confirm why I say that. If you waited - you missed todays move. True you may have a day next week or next month which may allow you to get in but if you bought yesterday = you wake up this morning to a nice gain.

I buy shares in the 1000's --- most folks buy in the 10's or 100's.... A 50 cent a share move is a nice number when you've just bought 5000 shares of something. I don't wait.... I don't buy on up days - I buy on down days. But once I've made up my mind to buy - the very next down day is the day I buy. I never know what's going to happen next week - next month - next year. If I sat on my hands "waiting" for something.... where would that get me? I'm in for 5 years -- not 5 minutes.

The bigger picture is that 5 and 10 year chart -- low on the left - higher on the right - the TOTAL RETURN - and the dividend. What difference would waiting make if all those things are telling me it's okay to INVEST in a company.:cheers:

[Sieg]

Great! I'm only down $50.95 on KO now. :willy:

:rofl:

[GregWeld]

Great! I'm only down $50.95 on KO now. :willy:

:rofl:

The little man knew you bought! I heard him yelling -- "Sieg is in - take 'er down! Make him think he's an idiot! Beat him down like a dog... and when he sells -- take it higher!"

[Sieg]

The little man knew you bought! I heard him yelling -- "Sieg is in - take 'er down! Make him think he's an idiot! Beat him down like a dog... and when he sells -- take it higher!"
:rofl: :rofl: :rofl:
:thumbsup:

[GregWeld]

When you have a stream of these - they quickly soothe your soul...



07/02/2012
as of
07/01/2012 KO COCA COLA COMPANY
type: QUALIFIED DIV
$2,040.00
04/02/2012
as of
04/01/2012 KO COCA COLA COMPANY
type: QUALIFIED DIV
$1,530.00
12/15/2011 KO COCA COLA COMPANY
type: QUALIFIED DIV
$940.00
10/03/2011
as of
10/01/2011 KO COCA COLA COMPANY
type: QUALIFIED DIV
$940.00
07/01/2011 KO COCA COLA COMPANY
type: QUALIFIED DIV
$940.00
04/01/2011 KO COCA COLA COMPANY
type: QUALIFIED DIV
$940.00

[Bucketlist2012]

DAMN YOU GUYS !!!

I mention BPT and it goes down today...

Which one of you bought some ??? Yes you ...


All is OK, my SDRL, SeaDrill, made up for any loss that BPT had today...

It pays to have more than one Energy stock...I have a few...

The little man knew you bought some and took it down today...:rofl:

[XLexusTech]

DAMN YOU GUYS !!!

I mention BPT and it goes down today...

Which one of you bought some ??? Yes you ...


All is OK, my SDRL, SeaDrill, made up for any loss that BPT had today...

It pays to have more than one Energy stock...I have a few...

The little man knew you bought some and took it down today...:rofl:

Guilty

[Bucketlist2012]

Guilty

:rofl: :rofl:

All is Good Brother...

It has been good to me for years..

Over time it should do good for you..

:thumbsup: :thumbsup: :cheers:

[GregWeld]

Guilty

:drama::clap: :dance:

[Bucketlist2012]

:drama::clap: :dance:

Laugh my A$$ off..:lol: :rofl:

He asked, so we shared...:thumbsup:

I am afraid to say my PWE, and my SDRL were WAY up today..:_paranoid

Someone will buy and I will lose on Monday...:cheers:

[GregWeld]

While watching - as I do every morning - CNBC... and seeing that the market is DOWN 82 points... I wonder how my Schwab account is doing. I use this account because it's the newest (as far as newest purchases of shares) so has the highest average cost etc. AH HA! It is UP.... so what the heck - the DOW is down and I'm up, what's with that?

I say this - to stir what YOU might be thinking when you see something similar in your accounts. True - I'm well invested and diversified - while - if you 're just starting out you might not be (YET)... but it got me to thinking that many "newbs" (new to the stock market) might not really know what the Dow and the S&P are, and or, more importantly, how they (DJIA) get their numbers.

Many people don't realize that the stocks are "price weighted" within the DJIA (Dow Jones Industrial Average)... i.e., that their stock price move is multiplied and is based on the stocks price. The higher the price - the more "important" it is and carries more weight within the average. So a 1 point move in IBM might be a 8 point move in the DOW!!

So - just using these numbers as an EXAMPLE (they're not real numbers) - IBM is weighted in the DOW and makes up 6.9% of the average... 3M makes up 7.2% of the average - while CAT makes up only 3.5%. You can see then that a move in CAT won't have nearly as much influence as a move in 3M.

So what happens is IBM might blow it's quarterly number (or might make a really nice quarter - so either way) and the DOW blows up... but on further inspection it's really IBM that is the big mover of the DOW.

The DOW is made up of the 30 largest companies - as calculated by their MARKET VALUE.. so share price X's the number of shares issued. And is heavily weighted with INDUSTRIAL companies... it's light on "tech" and many other segments of the market. It IS NOT an actual mirror on the market and your individual performance. Thus the reason for my post today.

For the last 7 of 8 days the market (the DOW) has been down... while my Schwab account has had an amazing run UP...

I like my average better than theirs! :lol: :thumbsup: :woot:

[Bucketlist2012]

Mr.Weld..

I must agree with you. I am up nicely this morning.:cheers:

[toy71camaro]

+1 up almost .2% today.

Also re-asked my work about the personal brokerage account link to be able to pick individual stocks (read: investing 102 stocks) in my 401k. They said they were going to follow up on it today and see whats up. <crosses fingers>

[GregWeld]

Funny about how all this works -- which is what I'm trying to share with everyone.... It's really just an experience thing -- not a "I know the market is going to do X tomorrow..." I'm going to tell you -- I have no friggin' idea what the market is going to do. If I knew that - I'd be rich!

What I do know -- is that when I look at this Schwab account -- which is roughly 2 years old (it was new money at the beginning of 2011 but I sat on it for 6 months before doing anything) is that I'm up 10+% in value -- and I'm getting about 5% average dividend payout on top of that...

Comparing this to the CD's - Mutual Funds - Treasury bills - My own Muni Bond account.... I'm killin' 'em. Will it last? I have no idea.... but I know I'll continue to collect cash every quarter from the dividends -- AND THAT is what I invested in... the 10% (if it holds) is just gravy.

:cheers: :woot:

[Sieg]

One thing I know...........the healthy dividend stocks I've bought since GW started this are some of the best in my portfolio with respect to current unrealized gains:
MO $705
NLY $77
PFE $358
T $586
VZ $774
XLS $54

KO -$85 (can't win them all) :lol:

S $1261 (I bought 1K of Sprint at $2.19 just because it was too cheap for the brand)

:thumbsup:

[GregWeld]

Coke (KO) reports TUESDAY.... we'll either be okay or we'll get our arses handed to us... but again -- I buy and hold this kind of company and they come and they go. My problem is the law of large numbers here - and 6000 shares down .80 is a "number"... but then again - that same number HELPS on the way up --- so ya just got to go with the flow.

That's the thing about splits too -- a lot of people will lighten up before or after a split because of the number of shares they'll have - so there's some rebalancing done. For me -- I love a good split... 'cause in the LONG RUN they USUALLY work out just fine.

[GregWeld]

Coke (KO) looks to have a very nice up day today....:theresa: :fluffy: :dance:


If you're not in... you never buy on a day like today... never buy stocks on up days unless we're in a major bull market. We are not (IMHO) in a major bull market.

Lots of times stocks move on "news" only to settle in a few days later. Sometimes they move up and never look back and when that happens you just have to grit your teeth and either buy in or move on and buy something else. With the stock market... you're never going to know in advance - and you'll never buy at the bottom and sell at the top. You just try to do the best you can with what you have to work with.

Seriously -- when you do the MATH -- If you're buying 100 or 200 shares of something... it really doesn't matter if you bought at $35 or $35.40... It just FEELS better when you bought a $35 stock at $34.80 and it moves up to $35.50 but 2 or 3 or 4 years from now - it doesn't really affect your pocket book that much. :cheers:

[XLexusTech]

[QUOTE=GregWeld;425190]Coke (KO) looks to have a very nice up day today....:theresa: :fluffy: :dance:


If you're not in... you never buy on a day like today... never buy stocks on up days unless we're in a major bull market. We are not (IMHO) in a major bull market.

Lots of times stocks move on "news" only to settle in a few days later. Sometimes they move up and never look back and when that happens you just have to grit your teeth and either buy in or move on and buy something else. With the stock market... you're never going to know in advance - and you'll never buy at the bottom and sell at the top. You just try to do the best you can with what you have to work with.

Seriously -- when you do the MATH -- If you're buying 100 or 200 shares of something... it really doesn't matter if you bought at $35 or $35.40... It just FEELS better when you bought a $35 stock at $34.80 and it moves up to $35.50 but 2 or 3 or 4 years from now - it doesn't really affect your pocket book that much. :cheers:[/QUOTE

NEW YORK (MarketWatch) -- U.S. stocks reclaimed Tuesday gains after Federal Reserve Chairman Ben Bernanke spoke and Wall Street's gaze returned to solid results from Goldman Sachs Group Inc. and Coca-Cola Co.

"We had good reports from Goldman Sachs (GS, Trade ) and Coca-Cola Co. (KO, Trade ), not only did they beat expectations, but they did so by a pretty wide margin," said Andrew Fitzpatrick, director of investments at Hinsdale Associates Inc. "

[GregWeld]

One thing I know...........the healthy dividend stocks I've bought since GW started this are some of the best in my portfolio with respect to current unrealized gains:
MO $705
NLY $77
PFE $358
T $586
VZ $774
XLS $54

KO -$85 (can't win them all) :lol:

S $1261 (I bought 1K of Sprint at $2.19 just because it was too cheap for the brand)

:thumbsup:



I want an updated report!!!

[mdprovee]

My dividends added up to $150 at the beginning of July. All reinvested.

[GregWeld]

My dividends added up to $150 at the beginning of July. All reinvested.

NOW WE'RE TALKING!

Think about this -- if you're saving $150 a month - and then you get a free extra $150... every year you're saving an extra $600... and more importantly when re-invested in shares that $600 becomes $700 and then $800 and you end up 20 years down the road being like Warren Buffett - where your dividend is equal to your original investment!

While it doesn't seem like "much" now -- after 20 years... and you have an extra grand or $1500 a month to retire with... you'll be so glad you made the effort... because it might be the difference between eating tuna every night - or having steak once in awhile and paying the light bill on time.:D


EEEEEEEEEEEEEHHHHHHHHHHHHAAAAAAAAAAA

[GregWeld]

Only because we've all talked about this stock so much -- and I think some of you are in it... McDonalds (MCD) will report earnings on MONDAY (23rd)..... and here's the only point of this post...

If you look at the 6 month chart - MCD is DOWN 8%... but if you look at the 1 Year chart its UP 7.7%...and the 5 year is UP 77%

Here's the way I invest.... if the quarter is down and there's a sell off.. I'll be buying like a pig. If the quarter is as expected - fine - I have a good position and I won't change anything... if the quarter is better than expected... fine... I still wouldn't add since my position is built and I'm happy with where it's at.

The big difference is that if it sells off a buck or two - or 3 - I'll take advantage of that. In the long term - I'm going to look at that 5 year chart of up 77% not the quarter where europe or china something l like that made a temporary hiccup.

[Sieg]

I want an updated report!!!

MO $705 / $726
NLY $77 / $79
PFE $358 / $462
T $586 / $659
VZ $774 / $865
XLS $54 / $37

KO -$85 / -$53
S $1261 / $1471


:D

[GregWeld]

MO $705 / $726
NLY $77 / $79
PFE $358 / $462
T $586 / $659
VZ $774 / $865
XLS $54 / $37

KO -$85 / -$53
S $1261 / $1471


:D



Darn! I was hoping you'd gone positive on the KO



:rolleyes:

[Sieg]

Darn! I was hoping you'd gone positive on the KO



:rolleyes:

Thanks. I (we) will, it's just a matter of time. :thumbsup:

[Bucketlist2012]

Thanks. I (we) will, it's just a matter of time. :thumbsup:

Same with BPT...People bought and the little man took it down...

Have faith. Long term it is great..

Damn that little man on Wall Street.

[GregWeld]

Thanks. I (we) will, it's just a matter of time. :thumbsup:



See that's the thing -- I started buying it (KO) at $62.... even though my last was at $77+ --- I still only have an average cost of $72

That's the old "look at that chart" thing --- at some point in the PAST it was lower! What you hope is that the chart continues on it's march... and if history holds - we'll be just fine.


:cheers:

[takid455]

take on SIRI? Had it for years and while in recent times it has done well, it is up and down a lot which is not too exciting. Has a current rally. Thinking about canning it while its hot and going with some of the one mentioned here.

[GregWeld]

take on SIRI? Had it for years and while in recent times it has done well, it is up and down a lot which is not too exciting. Has a current rally. Thinking about canning it while its hot and going with some of the one mentioned here.

We really haven't been discussing individual stocks except to use them as examples...

Everyone has a different opinion - different goals - different finances - different ages etc... So what might be great for one person wouldn't be appropriate for another.

The thread has really been more about THINKING about investing -- some things to look for, such as growth and dividends etc... and more about how to think about investing in general.

[GregWeld]

Don't know if any of you have this -- but this is another GOOD thing to look for in dividend paying stocks -- when they actually INCREASE their dividend! It's like getting a pay raise and while it doesn't seem like much -- how many of you got a 7% pay raise this year??




Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today increased its quarterly cash distribution per common unit to $1.23 ($4.92 annualized) payable on Aug. 14, 2012, to unitholders of record as of July 31, 2012. This represents a 7 percent increase over the second quarter 2011 cash distribution per unit of $1.15 ($4.60 annualized) and is up from $1.20 per unit ($4.80 annualized) for the first quarter of 2012. KMP has increased the distribution 44 times since current management took over in February 1997.

[toy71camaro]

My Roth wont let me in on KMP :rolleyes:

[Bucketlist2012]

Don't know if any of you have this -- but this is another GOOD thing to look for in dividend paying stocks -- when they actually INCREASE their dividend! It's like getting a pay raise and while it doesn't seem like much -- how many of you got a 7% pay raise this year??




Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today increased its quarterly cash distribution per common unit to $1.23 ($4.92 annualized) payable on Aug. 14, 2012, to unitholders of record as of July 31, 2012. This represents a 7 percent increase over the second quarter 2011 cash distribution per unit of $1.15 ($4.60 annualized) and is up from $1.20 per unit ($4.80 annualized) for the first quarter of 2012. KMP has increased the distribution 44 times since current management took over in February 1997.

:woot: I sure do have that one...That and BPT, and SDRL, and PWE...Those are my energy assets...Today was a good day...I am Long on all of those..Hell, I am long on all my Investments, haha..:cheers: :lateral:

[GregWeld]

This morning created an opportunity to actually SEE what they mean when the talking heads on TV discuss a stock that is "priced for perfection".... in other words -- the company better continue to execute everything perfectly because their stock price is priced that way.

Chipotle Mexican Grill (CMG) slightly missed the earnings estimates (they are - after all - just estimates... but) and they are down 90+ points as I type this. This is where the P/E matters... the "price to earnings" ratio. The P/E on CMG was up in the 40's... where as a normal P/E might be closer to 15. I don't use the P/E much -- but this IS when it matters... because they have to grow into the large P/E and if that growth stumbles - then that P/E ratio is going to have to come down... which means the stock price is going to have to come down.

Their growth is still on fire - they earned far more than estimated BUT the sales estimate was 707MM and they "only" hit 690MM...

This is why I don't invest in these kinds of companies.... I love watching the stocks climb -- maybe even love the company -- but when they're "priced to perfection" you can get absolutely hammered in a nanosecond! To me - they're not worth the risk.

[CRCRFT78]

I'm just a small fish in a BIG pond but I did add 42 shares of Coke today.

[Bucketlist2012]

I'm just a small fish in a BIG pond but I did add 42 shares of Coke today.

We all started out small fish...I am an only slightly larger guppy.

We may never get to be big Fish, over a long period of time, we can grow into a comfortable retirement..

I too am a small fish in the big Pond...But we are smarter than some of the other guppies that are not investing,

Keep it up...One day you will look back and be so happy you invested,,

And Greg, no chipotle for me...I do not like the food or the stock..

[toy71camaro]

I'm nearing my next 1k purchase for my Roth in the next month... time to figure out what to do.. do I continue to purchase new stock in a different sectory/diversify, or start adding to existing portions...

Here's where i sit:

CVX: 15%
MO: 11.7%
ED: 10.7%
KMB: 10.4%
NLY: 10.4%
T: 10.1%
KO: 10%
MCD: 6.7%
NVS: 3.1%
PFE: 2.1%
LMT: 2%

Sectors (% rounded):
Consumer Staples: 32%
Utilities: 21%
Oil/Energy: 15%
Finance: 10%
Comp/Tech: 6%
Medical: 5%
Aerospace: 2%

Any particular sector(s) i should look to get into to better diversify?

[GregWeld]

How many of you knew Kimberly Clark (KMB) is "into" welding equipment?? I got my new Jackson (brand) welding helmet today and was surprised to find it was a division of Kimberly Clark! I own the stock -- so now I like the company even more! :lol:


http://i919.photobucket.com/albums/ad33/gregweld/Shop%20Pix/1c814111.jpg




Nice easy adjustability! And the helmet is more comfortable than my first love - Optrel Satellite!



http://i919.photobucket.com/albums/ad33/gregweld/Shop%20Pix/c15aec6a.jpg

[GregWeld]

Albert ---

I'd add to your big pharma/medical sector..... remember the aging population means more drugs and medical treatments etc....


Which company - I have no recommendations as we're really not into that part for this thread as you know. But you're pretty heavily weighted in CONSUMER so I'd try to get some more balance.

[Stuart Adams]

Trick helmet

[GregWeld]

Trick helmet



Has my name on it! Gotta be nice, right?



:D

[GregWeld]

Just for fun -- here's a link to the company website page -- and if you weren't looking you might never notice the Logo "Kimberly Clark Professional" on the top right hand side....

http://www.jacksonsafety.com/linkcheck.cfm?SubCatID=11



This is actually a good "lesson" ------ it's kinda fun to go to a companies website and snoop around and see if you really know much about ALL of the products they have...

I remember Bob (69z28ss) posted awhile back about the "terbacky" stock ALTRIA (MO) was also into wine and spirits via St Michele brand via what they label "Altria Ventures"....


So get out there and poke around - it's kinda fun and a little eye opening!

[toy71camaro]

Albert ---

I'd add to your big pharma/medical sector..... remember the aging population means more drugs and medical treatments etc....


Which company - I have no recommendations as we're really not into that part for this thread as you know. But you're pretty heavily weighted in CONSUMER so I'd try to get some more balance.

Good point. I knew i was heavy on consumer, thats why i asked. :cheers:

I got a touch into pharma/medical with a little bit of PFE and NVS, i didnt know which to pick at the time, so i did a little of each. lol. I'll need to revisit that sector and see what else is available at the top of it (best of breed. ;) )

Thanks!!!:lateral:

BTW, Killer helmet.

[Rybar]

I love this thread, thanks guys. Greg thanks for the KMP update. I yesterday added MO to my portfolio. The Sin stocks look to be kicking some ass I'm going to add more soon.

[Bucketlist2012]

I read a good one today..

A temporary loss of value becomes a permanent loss of capital if you sell..

That is why so many lost in 2008...They panicked and sold...So the temporary loss became permanent.:cheers:

Also if you are positioned well, a 1% drop in the market only translated to a .1% drop for me..I plan more to lose less when the market goes down, than I plan to make it big when the market goes up.

[GregWeld]

To take a play on the "sold at a loss" theme that Mike just showed up in the previous post... Let's use McDonalds (MCD) as an example.

Here is a chart on Google Finance...

http://www.google.com/finance?q=NYSE:MCD


If you click on the "ALL" choice for the chart -- you'll see many "peaks" -- and also many "valleys". If you'd bought at one of the peaks --- pick any one of the MANY -- but in particular lets say you bought your first batch in 1999 and and sold in early 2003....

It is the lack of long term confidence that would have 'cause you to sell... and now look at how big of a mistake that would have been!

Not all stocks have a chart like this... but that is why you need to have real conviction in your choices TO START WITH... this is why you DO NOT buy some recommendation from the clerk at the grocery store when he gives you his "hot stock tip of the day". That will cost you money every time! Why? Because if it so much as hiccups -- you'll blow out of there at the very first chance and then you'll have taken a real loss.

If -- big IF -- you buy stocks in companies that you like - know - understand - are best of breed... then you'll buy MORE of them as the share price comes down and you'll lower your average cost and you'll sleep well at night with the understanding that in the long run - you'll come out a winner.

Investing -- that's the key term here -- takes time -- it takes commitment -- and most of all it takes some research and confidence that what you've bought is "good stuff".

Another example of this might be housing.

The people that bought houses at the peak -- then bailed or failed... they have a real loss... the guys buying them now... they might suffer for awhile.. they might even question why the hell did they do this... but you've got to believe that the prices will come back. When? Who knows? I have no clue. But I gotta believe that this is "temporary" - it's the scale of temporary vs. the longer term. We won't know what temporary was until we have a longer view, and that view needs time to develop. In the meantime - like a dividend paying stock - the renter of the house will pay towards the mortgage - and eventually you'll have a nice investment even if the price never recovers fully.

[glassman]

Housing is strange. Their building by my office (Dublin, ca) 700 to800k but just over the hill (20 miles away) the community of Mountainhouse continues to take it in the shorts (mid 150's)....(talking residentual)

The ability to collect proper rent is in the simple of supply and demand. I just dont see the jobs in the area to substansiate postive cash flow.

I used to like the idea of property (its how my dad made is money in the 80's), but i'm liking stocks more and more.....

Thank you for the education i am continuing to learn reading this thread...

[GregWeld]

Rentals - whether it's single family or multi - all have one investment strategy in common... someone else is paying your mortgage. In the long run - you should end up with very positive cash flow... even if, in the meantime, you had to replace the roof... paint... and carpet.. and fixtures. At that point - you had a bad tenant - it took you 6 months to evict - and he damaged the place... you're not very happy with that investment. BUT -- If you know that in the long run someone is going to pay off your mortgage and you're going to end up with positive cash flow... You'll fix the dump up - re-rent it - and keep on going. And that's my real point - and Mikes point... You must have a basic belief that you're on the right track and be willing to suffer sometimes for the bigger picture (the paid off mortgage or that trust in the long term chart!).

Stocks are very similar...


If you have one - and it goes south -- you're not very happy... but if you have 10 and some are doing fine - while others are sitting, but are okay - and one of them goes sideways... it's no biggie. There is no loss of capital unless you sell below your cost... so for the time being it's really only a mental challenge to trust your judgement as to why you bought in the first place.

I remind people time and again - when in doubt - go back and research your reasoning. Would you buy the stock again? Do you still think "X" is a leading brand - is it a good company - is the chart good - is the dividend good... Look at the details of the chart and see how many times it's gone UP and DOWN... Right now - you might be in one of those little down squiggles... If everything else is okay (no accounting issues - no legal issues etc) then instead of thinking about selling - maybe you should think about ADDING to your position and take advantage of the dummies that are selling! :woot:

[Flash68]

To take a play on the "sold at a loss" theme that Mike just showed up in the previous post... Let's use McDonalds (MCD) as an example.

Here is a chart on Google Finance...

http://www.google.com/finance?q=NYSE:MCD


If you click on the "ALL" choice for the chart -- you'll see many "peaks" -- and also many "valleys". If you'd bought at one of the peaks --- pick any one of the MANY -- but in particular lets say you bought your first batch in 1999 and and sold in early 2003....

It is the lack of long term confidence that would have 'cause you to sell... and now look at how big of a mistake that would have been!

Not all stocks have a chart like this... but that is why you need to have real conviction in your choices TO START WITH... this is why you DO NOT buy some recommendation from the clerk at the grocery store when he gives you his "hot stock tip of the day". That will cost you money every time! Why? Because if it so much as hiccups -- you'll blow out of there at the very first chance and then you'll have taken a real loss.

If -- big IF -- you buy stocks in companies that you like - know - understand - are best of breed... then you'll buy MORE of them as the share price comes down and you'll lower your average cost and you'll sleep well at night with the understanding that in the long run - you'll come out a winner.

Investing -- that's the key term here -- takes time -- it takes commitment -- and most of all it takes some research and confidence that what you've bought is "good stuff".

Another example of this might be housing.

The people that bought houses at the peak -- then bailed or failed... they have a real loss... the guys buying them now... they might suffer for awhile.. they might even question why the hell did they do this... but you've got to believe that the prices will come back. When? Who knows? I have no clue. But I gotta believe that this is "temporary" - it's the scale of temporary vs. the longer term. We won't know what temporary was until we have a longer view, and that view needs time to develop. In the meantime - like a dividend paying stock - the renter of the house will pay towards the mortgage - and eventually you'll have a nice investment even if the price never recovers fully.

Good no-nonsense stuff as usually Greggers. Like I like to say... "the longer your holding period on something, the less perfect you have to be on the timing at acquisition." Applies to houses and stocks and most/all asset classes.

Housing is strange. Their building by my office (Dublin, ca) 700 to800k but just over the hill (20 miles away) the community of Mountainhouse continues to take it in the shorts (mid 150's)....(talking residentual)

The ability to collect proper rent is in the simple of supply and demand. I just dont see the jobs in the area to substansiate postive cash flow.

I used to like the idea of property (its how my dad made is money in the 80's), but i'm liking stocks more and more.....

Thank you for the education i am continuing to learn reading this thread...

Those 20 miles from Dublin to Mtnhouse are WORLDS apart, as you likely know.

The bay area RE like most metro areas follow a basic value principle of concentric circles... the further away you get from the center (say, San Francisco in this instance) the less value you will see.

Don't give up on property just because of whatever the current situation is. The fundamentals have been the same since the beginning of time. Thorough analysis, good timing and discipline are your friends.

Right now the biggest problem is a lack of inventory in RE, and add the low interest rates and rising rents, and you have a perfect storm and a temporary seller's market around here. Crazy stuff.

[GregWeld]

Today will be one of those UGLY days... It's days like today that I look to ADD to my positions.... just nibble... Because a lot of the market will be looking to see what Apple says tomorrow (mostly about europe and china sales).

Here's an issue that people don't factor in --- McDonalds reports slightly lowered profit - why? A STRONG DOLLAR.... Is this a factor in their control? No.. but it will affect their bottom line. Do I worry about this kind of "miss"? No - it's a buying opportunity...

What will happen today is that everyone will look around and look to see what other companies trade overseas -- and start to assume (rightly?) that the strong dollar will be affecting the bottom lines of those companies... that and europe seems to be slipping ever farther down the slippery slope - which will also affect sales.

What do I do on days like this? I watch - buy a little - depending on whether I figure it might go down more etc.. (and it usually does after I buy).. or I just go out to "the shed" and work on some car stuff.

[GregWeld]

I forgot to finish my "thoughts" on the Ugly Day post.


Remember that as prices (share prices) come down - the YIELD (dividend) rises!


What I want to do is to make money on my money... and that's calculated as a PERCENTAGE -- so if a companies stock is $100 and pays a $10 dividend - that's 10% -- but if their stock falls to $90 then that same $10 dividend is 11.11%


The actual share price per hour - or per day - or this week... really is not as important to me -- AS LONG AS -- I think it will be higher than I paid some time in the future.


Averaging DOWN is when you own 100 shares of something at $50 and you buy 50 more at $45... it brings your average price per share down... This strategy works over time - if you're buying good stuff like we've discussed this last 180+ pages.

[GregWeld]

So here's what I did today ---

This is NOT a recommendation --- I'm just sharing what I did... don't read into it anything more than that.


I own 4000 McDonalds....

I bought 500 more this morning at $89.25

Then the price kept falling so I put in an order to buy 500 more at $88.25 (a full buck less than I'd just paid... that would bring my average down .50 per share)...

The price started to go back up so I changed my order to $88.50 and got the 500 shares at that price.

I'm just using this as an example of what I do... I actually EXPECT McDonalds to trade lower than this at some point... but since I don't know that - I'll just peck away since I think that these trades will be profitable on a capital basis at some point down the road.

My average cost on this trade is now $88.875

The 4000 I already owned have an average cost of $88.59...so I'll now have an average cost of $88.647

[Bucketlist2012]

Wake up to the shake up..

On days like this I just do other things.

I personally may not add anything, but I sure won't panic.

I will just fill my Day with other stuff to do...:cheers:

[GregWeld]

Would be nice if the idiots in Europe could get their chit together.... What a bunch of moroons (pronounced mor roons)...

Let's have high taxes - free everything - early retirement - high debt.... and see how that works out. Oh..... wait.... The USA is trying to copy that very same failed strategy!

[Tony_SS]

McD's will do fine in the long run... they are one of the choosen ones.. bailed out by the Fed and given a waiver from Obamacare mandates.. I think you're safe with that one. :thumbsup:

[GregWeld]

If you own Apple stock you won't be happy tomorrow!! OUCH!

It goes back to my "priced to perfection" post. I just can't own stocks like that
For this very reason!

[Rybar]

If you own Apple stock you won't be happy tomorrow!! OUCH!

It goes back to my "priced to perfection" post. I just can't own stocks like that
For this very reason!

Can you elaborate Greg? Since they announced a dividend?

[96z28ss]

They didn't make the number they thought they would.
I don't own the stock, however I do think it will actually go higher. They missed the expectations cause phone sales were down and they think its cause everone is waiting for the Iphone5 due in the fall.

[Rybar]

I see here: http://www.ft.com/cms/s/0/c81ff6a6-d5d0-11e1-a5f3-00144feabdc0.html#axzz21aR6T6Iw

I wish I could buy Samsung anyways

[GregWeld]

Here's a kind of long article -- but it's a valid discussion to check the pulse of dividend stock investing -- something I've preached (harped on?) for this entire thread.

I like to read articles that might be contrary to my own beliefs - to see if there's something I can learn... and there's always something to be learned.


In the end - the article says we're on the right track.


http://seekingalpha.com/article/737081-are-dividend-growth-stocks-in-a-bubble?source=email_investing_income&ifp=0

[GregWeld]

Can you elaborate Greg? Since they announced a dividend?

A "numbers miss" ---

Having said that -- the miss is a miss of ESTIMATES... which has always driven me crazy. Some guys sit around and GUESS what kind of sales and profit a company is going to do.. and if the company DOESN'T (or does) make those numbers people get all crazy and sell etc.

For a company like this -- a big drop in the share price is probably a "gift" and will allow a nice entry point to a stock that should continue to do very well. They signaled nothing wrong.. sales are good... profit is good...the products are fabulous.

But this is a glimpse into the market when stocks are priced to perfection... if everything isn't PERFECT - they get a huge haircuts in a hurry.

If I had a million in cash today - I'd be a buyer. But since I just bought into another apartment complex... I'll just sit on my hands and watch. :woot:

[Tony_SS]

How's the renting business Greg? With new home sales dropping I bet it's fairly strong.

[ErikLS2]

Here's a kind of long article -- but it's a valid discussion to check the pulse of dividend stock investing -- something I've preached (harped on?) for this entire thread.

I like to read articles that might be contrary to my own beliefs - to see if there's something I can learn... and there's always something to be learned.


In the end - the article says we're on the right track.


http://seekingalpha.com/article/737081-are-dividend-growth-stocks-in-a-bubble?source=email_investing_income&ifp=0

Great article Greg, I'm curious how much you pay attention to valuations of the dividend stocks you buy? Do you just look at the chart or do you get into P/E ratios and the other ways to determine value and if so what are your prefered tools to use to determine that value?

[GregWeld]

How's the renting business Greg? With new home sales dropping I bet it's fairly strong.



Well Tony... I'll have to answer this carefully - because the thread is not about "me" -- it's about investing. I use "me" examples because they're real life - and I know "me" and what I'm doing and why I'm doing first hand... rather than making statements about a guy I knew who knew a guy that did "X" once...

So that said...

I have no idea how the rental business is going here in the Great Pacific NorthWET. Seriously -- I have no idea. I'm not in the rental business. That, on the surface, sounds like a smart azz answer... but here's the Investing 102 part.

I'm an investor. As an investor I'm presented with opportunities, and as an investor - it's my "job" to diversify my investments - to make my capital base grow - and to extract a return on my investments. Commercial property - and the income that it can generate - is just one type of investment a guy can make which adds diversity.

So -- when an opportunity to invest in some solid commercial real estate presents itself - I take a look at it. The type I do are LLC's (Limited Liability Company). This particular one is an apartment building but I also have free standing commercial buildings. For the most part they're totally similar.

The way they work is that there is a "general partner"... the GP does all the work. He finds the investment. Ties it up with earnest money and all the other required agreements etc... then he puts out a prospectus to people he thinks might be interested etc. Typically they'll start with previous or current business partners -- so many times it almost becomes a "group" of people that have been investing with this GP over and over... Anyway... the prospectus spells out all the details -- the plan going forward -- how much will be financed - at what rate - and blah blah blah. If you're interested = you let the GP know and they'll offer the shares (this is all spelled out in the prospectus) based on how much you want to invest --- but also --- you have to fill out forms stating that you're an ACCREDITED INVESTOR... which is based on your net worth - your annual income - and your knowledge/experience in investments of this type.

So the long answer to your question -- is that I have no idea about managing rentals - or how the market is doing - or where it's headed etc. What I do know is that this GP has always made me money (going back over 20 years now) - the ROI (return on investment) has always been top notch and that he's into apartment complexes for the long haul. This particular one is 55 shares total (I asked for 12 shares but got only 9) -- with the 55 shares representing a down payment of 50% and a very favorable long term financing rate... It is PROJECTED to have a healthy cash flow (which flows back to the share holders)... THAT is what I'm looking at... because for me - it's just an investment.

I actually own 2/3rds of another apartment complex not far from where I live. I've owned it for maybe 8 or 9 years now. I've never seen the building. Don't care. What I do care about is that it's with a great management company - I get a check every 6 months - and eventually we'll decide to 1031 exchange it - or sell it - or whatever... but again... it's just an investment. :D Just because I might buy General Motors (I don't actually have any) stock doesn't mean I'm going to go check on their buildings or even buy their products... :D I own McDonalds and Coke - and I don't eat there or drink Coke but I know they're well run companies that pay a fair dividend... and generally their stock goes up more than it goes down!

[GregWeld]

Great article Greg, I'm curious how much you pay attention to valuations of the dividend stocks you buy? Do you just look at the chart or do you get into P/E ratios and the other ways to determine value and if so what are your prefered tools to use to determine that value?

Erik -- I really don't pay much attention to P/E's etc.... but that doesn't mean they're not important.

I have a rather loose version of how I invest. I look for best of breed companies that I know and understand what they do - I check their charts - I look for a balance of growth and dividend - I look to see if the dividend has increased over time - etc.

There's tons of info and criteria etc -- but I really don't get caught up in that stuff much... it can steer you into an investment based on numbers rather than investments you love to own... and I have to like the company FIRST and then the other stuff kinda takes care of itself.

Since I'm an investor rather than a trader... the stuff I own pretty much has normal P/E's etc. So I guess that's why I don't use that as a criteria. I just want to invest in stuff that has a HISTORY of going up in value over time - and that's going to give me income. :cheers:

One of the things I've preached on here is to keep it simple. It really isn't rocket science although a guy can make it that way.

[ErikLS2]

Greg, are those LLC's you invest in or LLP's since they have a General Partner? If you want to get out of it can you only sell your share of the partnership or do all the LP's and GP have to agree to sell the property? If you can only sell your share, how hard is it to sell and find buyers for? As you may recall, I'm in apartments too and seem to have a knack for identifying good opportunities more than I have the cash to acquire them. The manager of mine and I have talked about getting into something like this is why I'm asking. Thanks for all your input.

[GregWeld]

Greg, are those LLC's you invest in or LLP's since they have a General Partner? If you want to get out of it can you only sell your share of the partnership or do all the LP's and GP have to agree to sell the property? If you can only sell your share, how hard is it to sell and find buyers for? As you may recall, I'm in apartments too and seem to have a knack for identifying good opportunities more than I have the cash to acquire them. The manager of mine and I have talked about getting into something like this is why I'm asking. Thanks for all your input.

The reason you must be an accredited investor is the complete lack of liquidity of these types of investments. There is no market for the shares and I can not just sell to someone else. The GP must approve any transfer of the ownership of the shares. The group votes on any proposal to deal with the property i.e., sell vs 1031 exchange. You go along with the group and it's really the GP that makes the decisions - the investors are passive.

I would be referred to as an Investor or Member in the LLC.

This is one of the reasons I like to be a larger shareholder in the group... because then you will be heard by the GP should you wish to have some discussion about "something". :unibrow:


I also mistakenly referred to the paperwork as a PROSPECTUS --- it's really a PRIVATE PLACEMENT MEMORANDUM. I think a Prospectus is for a public company but they're the same for practical purposes.

[GregWeld]

Today's "market" is why I buy on DOWN days... because all of a sudden the market goes crazy UP.

There's a statistic - and I'll get it completely wrong -- but for an EXAMPLE only -- the statistic says that the market moves UP 10% of it's total for the year on only 2 or 3 individual days. If you miss those days - you've missed a big percentage of the year.

So those numbers are completely wrong but the point is that if you're not "IN" already - then you've missed the move - and the moves come and you're never going to know when that is.

Generally the market will move DOWN 15 minutes after you buy... :lol:

NOW -- THE CAVEAT.... AKA "Warning"

The major difference for me as an INVESTOR has been the mindset rather than the numbers. As an INVESTOR I EXPECT the market to go down - I totally understand that there will be periods when I'm getting my azz handed to me... regardless of how smart I think I might be. These periods might be weeks - or maybe 3 or 4 years! I'm totally prepared for that MENTALLY and CASH FLOW wise.

My point is -- you don't invest money that you are / might - going to need... so that you're not forced to sell in a down period. You need to be able to hold during the down periods in order to get the gains.

I used to freak out when the market went down 200 points -- or most of my investments were RED... and as soon as I'd trim some (sell) the very next day the market would move HUGE and I'd be kicking myself. There was never a "signal" that the market was going to move like that...

Now -- I've learned to keep plenty of cash for living on... and I invest the rest - I get paid those pesky dividends which just seem to keep on coming - and I've learned to buy when stuff goes down. When I do that... I look really smart on the few big UP days of the year.

[GregWeld]

As long as I'm being long winded this morning ---

Note that you'll look at your account after the close some time today (or maybe even tomorrow) and you should see your Annaly Capital Management (NLY) dividend in there...


But I would also note that on a very nice UP day that APPLE (AAPL) is down - albeit a buck or so -- that to me is a troubling sign for THAT STOCK... and I don't mean troubling in the sense that it's going down or whatever... but it just tells me that there's more SELLERS than there are BUYERS and that's a bit of a sea change. A year ago if we had a big up day - APPL would have been up $50! But now it's going against the grain and is flat to down on a day when Kimberly Clark is UP 2%!

When I see that kind of stuff -- I stay away. While a guy could "gamble" that it's a buying opportunity and get in front of the iPhone 5 release... My thought is that "what if it's a ho-hum" in the market place or just not the block buster people THINK it's going to be. Then it's a stampede for the exits and you get crushed.

I'm writing this as an INVESTING 102 piece only -- I'm not trying to predict what is or isn't going to happen... I'm just using this as an example of what I've lived to see many many times... It comes back to that "priced for perfection" post... and something else that people forget about is that many people have HUGE GAINS in a name like this... and when that happens... you start to think about trimming and locking in some of those gains. If you start to see some of that gain dripping away - you rush to lock them in... which causes the market to go down - which causes more people to want to lock in a gain - so the oldest rule in any market comes into play ---- MORE SELLERS than BUYERS... and even if the company is doing fine -- it's the stock market that dictates the stock price.

[Tony_SS]

Thanks for the insight and perspective on your rental situation Greg.

[toy71camaro]

Woot! good day in the market today.. making up for the last couple down days.

[Rybar]

S $1261 (I bought 1K of Sprint at $2.19 just because it was too cheap for the brand)

:thumbsup:

Sieg, have you checked your Sprint stock today? :thumbsup: Well done.

[ErikLS2]

There's a statistic - and I'll get it completely wrong -- but for an EXAMPLE only -- the statistic says that the market moves UP 10% of it's total for the year on only 2 or 3 individual days. If you miss those days - you've missed a big percentage of the year.

I love this statistic Greg, found a good chart that explains it, check out page 2:

https://content.putnam.com/literature/pdf/II508.pdf

[WSSix]

That's a good chart. Makes it rather easy to see what people talk about. I'm glad I'm in for the long run.

[Sieg]

Sieg, have you checked your Sprint stock today? :thumbsup: Well done.

:unibrow:

KO showed me some green too! :thumbsup:

[glassman]

Like my brother said, "Its not timing the market, its time in the market"

[GregWeld]

I love this statistic Greg, found a good chart that explains it, check out page 2:

https://content.putnam.com/literature/pdf/II508.pdf




Thanks Erik --- It's page two of that chart (as you pointed out) that shows what I was trying to say! :cheers:

I had a busy morning and didn't want to spend the time researching to find "proof" for what I was stating - so thanks for bailing me out!

[GregWeld]

Are there any Facebook (FB) believers still out there?? If so... I'm sorry. Truly.

So I'm not here to make fun of anyones "loss" - But I would like to use this as an investing 102 "comparison" / "look" at boring old stuff vs. hot new - everyone is going to get rich stuff.

************SINCE IT'S DEBUT means SINCE FB DEBUT so same date to date*****************


Since it's debut - FB is DOWN.... almost 40%

Since it's debut - MO is UP.... 13% PLUS it's paid a dividend

Since it's debut - KMP is UP... 3% PLUS it's paid a dividend

Since it's debut - KO is UP.... 5.67% PLUS it's paid a dividend

Since it's debut - NLY is UP.... 6.37% PLUS it's paid a dividend

Since it's debut - MCD is DOWN.... (ZERO POINT TWO EIGHT) 0.28% PLUS it's paid a dividend

Since it's debut - KMB is UP... 9.48% PLUS it's paid a dividend


I bought into FB on the IPO -- only because I was offered it at IPO price ($38) and when it didn't make everyone a millionaire on it's first day of trading - promptly sold it. It didn't "feel good" then and it doesn't feel good now. Maybe down the road it will prove us all wrong. I hope so for the holders of the shares...but in the meantime I'll continue to collect a dividend and choose to invest in stuff that doesn't churn my stomach on a daily basis.

[Sieg]

Some my find this dividend investing article educational: http://seekingalpha.com/article/752641-important-metrics-for-dividend-growth-investors?source=email_investing_income&ifp=0

[toy71camaro]

Some my find this dividend investing article educational: http://seekingalpha.com/article/752641-important-metrics-for-dividend-growth-investors?source=email_investing_income&ifp=0


GREAT article! thats perfect for Investing 102. *bookmarked*

[Sieg]

Thanks Greg. :thumbsup:

07/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD INC DIV REINV.
$85.28

:hail:

[sik68]

When FB was IPOing, I thought I'd have a little fun and sell my terribly-performing Sprint stock back in may. Sold S@$2.35 and bought FB@$38. Now S@$4.27 and FB@$23.47 ....HAHA the legend of the little man on wall st is true!

Don't worry Greg, we're only talking ~$500 in money I have allocated to play... but I sure learned a good lesson a lot more cheaply than a lot of people on Wall St!

[hifi875]

Man, starbucks tanked today. Its down $13 from not too long ago. Maybe its a opportunity to buy more? What do you think?

[ErikLS2]

I had a busy morning and didn't want to spend the time researching to find "proof" for what I was stating - so thanks for bailing me out!

I'm pretty sure you da man on this thread. We're beyond you needing proof to back-up what you say.

[GregWeld]

I'm pretty sure you da man on this thread. We're beyond you needing proof to back-up what you say.

Well --- <bowing> --- I thank you very much.... but I still like to be FACTUAL...

BTW --- Being "da man" is EASY when the market is going your way... it makes you look brilliant. What I'm trying to impart though -- is what and how to think when it IS NOT going your way. That is when the rubber meets the road... that is when you invest MORE if possible.... that is when the old sayings come into play -- like "I sleep well at night" etc. Life is great when we're looking at a sea of green numbers....

Just remember to go back and read the thread when the sea turns to red and you're doubting everything you ever thought/bought....

[GregWeld]

Some my find this dividend investing article educational: http://seekingalpha.com/article/752641-important-metrics-for-dividend-growth-investors?source=email_investing_income&ifp=0



Excellent reference!!


:thumbsup:

[GregWeld]

When FB was IPOing, I thought I'd have a little fun and sell my terribly-performing Sprint stock back in may. Sold S@$2.35 and bought FB@$38. Now S@$4.27 and FB@$23.47 ....HAHA the legend of the little man on wall st is true!

Don't worry Greg, we're only talking ~$500 in money I have allocated to play... but I sure learned a good lesson a lot more cheaply than a lot of people on Wall St!



You know the old saying about "never gamble with money you can't afford to lose!"....

At this point you might be better off just holding and seeing if they can get their chit together in a couple quarters. I remember back in the day when I had options on a bunch of Microsoft (MSFT) and for a year or longer it was underwater.... but then -- it was off to the races.... So ya never know!

You're still grounded for like the whole weekend!


:D

[GregWeld]

Hey Sieg! How's that Coke (KO) working for ya now??



EEEEEEEEEEHHHHHHHHHHHHHHAAAAAAAAAAAA



Here's what I love about these little blue haired old ladies...... KO is UP 16% since the first of the year.... AND it pays a dividend..... AND it's splitting 2 for 1


I don't know about you guys -- but that's how you make money honey!


:cheers: :woot:

[Sieg]

Hey Sieg! How's that Coke (KO) working for ya now??



EEEEEEEEEEHHHHHHHHHHHHHHAAAAAAAAAAAA



Here's what I love about these little blue haired old ladies...... KO is UP 16% since the first of the year.... AND it pays a dividend..... AND it's splitting 2 for 1


I don't know about you guys -- but that's how you make money honey!


:cheers: :woot:

The last few days with KO and S ain't been to bad.

http://s3.amazonaws.com/advrider/rilla.gif

[GregWeld]

This market is whacked..... I like it... but it's whacked.

Normally -- I'd EXPECT to be down in the summer.... the market is normally slow and drips down... the old "sell in May and go away" is usually spot on. But not this year.

I'm off to run the Mustang at Sonoma Raceway.... The Shelby Mini Nats! Should be good this year since it's the 50th anniversary. I've vowed to not get a black flag for the entire weekend... :D

[Sieg]

Good luck down there, wave when you roll by on I-5. :thumbsup:

[mdprovee]

Have fun Greg, i would come by and say hi again, but I have a wedding to go to.

[Bucketlist2012]

Greg,

I would swing by too, but it is my Wedding Anniversary...:cheers:

I know , bring the Wife....She isn't much for the racetrack or loud muscle cars...:mad:

Thank God she looks good...:thumbsup:

[GregWeld]

Well -- Left Seattle at 10 AM and rolled into my home away from home at Willows at 11:45 PM.... Big fire on Mt Shasta and they had I-5 shut down.... You wouldn't believe the double parked line of trucks headed Northbound! OMG... stretched for miles!

So my Better lucky than smart saying still holds true! Pulled off at Weed to fill up -- and maybe grab a hotel since the detour was adding at least 3 to 4 hours to the trip... by the time I fueled and checked one hotel (no vacancy) I flipped on the Caltrans radio station and they JUST opened it back up! Jumped back on and it was like me and two other trucks the whole way! 5 minutes earlier I'd have detoured on Hiway 89 --- and would have been committed then! Wow! So darn lucky!

The smoke was choking thick and you could actually see big azz flames right on the road... so little wonder it was closed!

[GregWeld]

Well -- due to not getting to the hotel until midnight - I just now am checking my stocks and see it's not a happy morning in the market.... BUT... I go to "HISTORY" to see any transactions in the account (mostly because I made a deposit) and bingo! AT&T (T) has paid a dividend and so has my Blackrock Duration (BLW).... so while the face value of my holdings are having a bit of a red face day... there is CASH FLOW in a very positive way which will put race gas in the track car! :lol: :thumbsup:

It's days like today -- that I really LOVE dividend payers...

[GregWeld]

Seems everyone has fallen asleep in this thread... Not much interaction - so maybe it's turned into a blog? If that's the case I'll quit posting to it?


I generate more cash than I can spend... laughing at this thought... but it's what I've been trying to get everyone here to try to do.

I used to use GE or MSFT (years ago) to park cash. No point in letting it sit in a Money Market sweep account that pays .01% (joking - but it's not far off). Now I use ETF's -- High Yield (HYG) or JUNK (JNK)... both of which pay real decent dividends.

The reason for todays BLOG post :lol: -- is that I want you to look at the DETAILS of the dividend before you just park cash. To use HYG as an example.... it just paid the dividend so won't be paying a dividend for another 3 months. Not much point in parking money you're going to invest next week or next month in this name today... All it takes is a simple look at the details to see when the next "EX" date is. Remember that you only have to own it until after the "EX" date to collect the dividend! Since this is a larger holding in my Schwab account - I choose to put the cash here today... but it's money that I'm not planning to spend - or invest - and if I do want to pull it out - I will check to see if I'm close to the "EX" date before making that decision. If I only have to wait a couple weeks or maybe even a month - to pick up that dividend I'll leave it alone and wait to get paid. Why not? It's CASH.... (.50 per share - on the 5000 shares I just bought is real money).

Now -- if I need to or wanted to use some cash beforehand - I'd just dip into the margin side of my account. I can write a check or buy stocks using MARGIN (about 50%) of my account total. There is a very very small % rate for doing this and it's far less than the 7% yield on HYG... so if I suddenly needed to buy a stock (really? Nothing I do is that "quick"... so I'm just using this as an example) or Charley was selling another car I just had to have.. I have this available to me. I do not -- and please please please -- do not use the MARGIN as an ATM! The minute you do - the market will dump and they'll sell your account out to cover the MARGIN CALL!

I actually had a friend that had a 33 MILLION dollar margin call. Understand that this meant he had to have had AT LEAST 66 Million in his account - in order to get 33 Million in margin! I asked him point blank -- DUDE! How f'n greedy do you need to be that you have to go to margin to try to generate a little more "return". He was using the margin to GAMBLE with - by buying more stocks etc trying to make a gain on his borrowed money. Guess what happened to his return when they called him and asked him to cover his margin (which means you have to bring them more money to cover) - and when he couldn't - they did it for him (they just sell stuff in your account to lower your margin back to the 50% level)... at a LARGE LOSS by the way! You literally only have about an hour or maybe half the trading day to "cover". IDIOT.

[Bucketlist2012]

What up Greg..

Sorry I missed you at Infineon.

My .02 cents is that people need to be invested and not scared.. So much gloom and doom in the news has people on the sidelines..

When the market dropped a few months ago, I had friends selling( at the bottom), and shifting things around. I just left my money on the plan that I have set and rode it out.

So what benefit did I get for riding it out ? I am paying cash for my 2008 Sierra with 21K miles on it with my profit from the last few months. Had I sold, I would have lost all that upswing...So my balance is still great, and I pick up my truck tomorrow..

So, long term, Investing is king, even though some months suck. in the end, it is better to own stocks, etc..., than to sit on the sidelines.

[GregWeld]

Well --- someone must be reading this poopie thread! The page view count jumped a 100 points since I posted this morning...
And I got a good question from a new reader about how to calculate Total Return.. He's mid 20's and is already a saver and investor! Don't some of you wish you'd saved and invested 25 or 30 years ago?!?!?! Then you could be a lazy azz bum like me and goof off all day! :rofl:


Truth be told I never saved a dang dime -- We just got lucky and went from zero to hero in one fell swoop... but it's been a good 25+ years of reinvesting and making that initial windfall grow. So I guess I've managed to not be as big a bum as I think I am... :lol: :woot:

[Rybar]

Interesting, what was your initial windfall story Greg?

[GregWeld]

Interesting, what was your initial windfall story Greg?

Which one? We've had several! :D


I was a millionaire at 26 years old. I was the VP and partner in a multimillion dollar wholesale importing business in NYC... sold that business in 1983...

Gwen went to work at Microsoft in 1984... and was the Director of HR Worldwide and spent 19 years there...

The latest is a pre IPO investment we made in Isilon Systems which was sold to EMC for 2.25 Billion in 2010 (we owned 1% of all the outstanding shares which I'll save you the Googling and figuring was 660,000 shares sold for all cash @ $33.85)....

Gwen is also the main character in this horrible book....

http://www.amazon.com/Force-12-James-Thayer/dp/0684862859/ref=sr_1_1?s=books&ie=UTF8&qid=1344546954&sr=1-1&keywords=Gwen+Weld

[Rybar]

Good for you guys, I'm hoping to be hit in the head with an opportunity like that some day :lol:

[glassman]

And yes, I haven't been "here" for a week. I have been in "alohaville" spending time with family (emphasis on spending lol). No cell phone, no computer, no workie. Took our oldest and his fiance for there college graduation, and my youngest for her high school graduation. And met my sister and brother and their families there for our birthday's (Aug 2, Aug 5, Aug 2). Seventeen of us. Great time.

Kinda off subject, but not really...any of you read the E-Myth? A business book. I have owned my company now for 15 years and probably have another 15 in me( i am 45 and like what i do, just the dealing with the "slow payers" and cry babys i dont like, but isnt that just life?) so i'm begining to draw my "exit strategy". The business may be a source of income or sold and considered "found monies" in my overall financial plan. Any thoughts from any of you that have sold companies and reinvested?

[Bucketlist2012]

Not everyone will become an Investor, but if just a few get the bug and start to take control of their future, then this thread is a success..

I have helped maybe three people, and to me, that is a good feeling...

Keep it up Mr.Weld.. We are still here..And with 100 people looking , and only a few posts, we have people reading, and maybe they will Invest wisely too.:thumbsup:

I wasted years, but i caught up quickly with much study and a few great moves..Also i was on the right side of 2008...Better to be lucky, and a little smart..Than really smart and unlucky..:cheers:

[XLexusTech]

Read daily and holding on to my hat... if I had one question it would be... will FB ever get near 40 again? I have a good chunk and it drags down my portfolio.

[GregWeld]

Read daily and holding on to my hat... if I had one question it would be... will FB ever get near 40 again? I have a good chunk and it drags down my portfolio.

Well --- so far you're only down about 50%.... my guess is that you could go lower.


This kind of stock is pure speculation - it's not really "investing".... it's just a pure gamble on an unknown. I sold the shares I had the minute it didn't do what I expected it to. Cut and run on that kind of stuff 'cause bad can easily go to worse.

Having said that -- it's a good lesson that people have to learn for themselves. You set a price - you set your expectations - and if that goes against you - then you MUST be prepared to take the loss and move on.

People have been waiting for 12 years for Microsoft to rebound.... think about that -- a DECADE of dead money.

[Flash68]

Gwen is also the main character in this horrible book....

http://www.amazon.com/Force-12-James-Thayer/dp/0684862859/ref=sr_1_1?s=books&ie=UTF8&qid=1344546954&sr=1-1&keywords=Gwen+Weld

from the amazon editorial review.... "WorldQuest VP Gwen Weld, the womanizing Rex's current sex kitten"

:woot: :D

[XLexusTech]

Well --- so far you're only down about 50%.... my guess is that you could go lower.


This kind of stock is pure speculation - it's not really "investing".... it's just a pure gamble on an unknown. I sold the shares I had the minute it didn't do what I expected it to. Cut and run on that kind of stuff 'cause bad can easily go to worse.

Having said that -- it's a good lesson that people have to learn for themselves. You set a price - you set your expectations - and if that goes against you - then you MUST be prepared to take the loss and move on.

People have been waiting for 12 years for Microsoft to rebound.... think about that -- a DECADE of dead money.

Sound advice... i have a sell in @ about 25 ish.. hopefully i can level out..

[GregWeld]

Sound advice... i have a sell in @ about 25 ish.. hopefully i can level out..

It sucks but it is what it is... It is also the reason people always sign that caveat -- Don't gamble with money you can't afford to loose... The problem is - NOBODY thinks they're going to loose! I've bought real companies with real profits and good histories and have lost - and lost big... so just because this is Faceybook doesn't make it any better or any worse. I wish I could say -- oh - just hold it 'cause it will come back. Well - yes it can... but you're still just gambling then -- now you're gambling that it will come back...

You do realize that the week after you sell it - it will gain 10 points.... :D

I'm sorry - really am - there's just not much help anyone can offer - because regardless of the advice - it'll be wrong. Hold it and it goes no where - sell it and it'll go up - sell half and hold half -- and maybe you have dead money AND a loss... there's just no crystal ball.

[GregWeld]

from the amazon editorial review.... "WorldQuest VP Gwen Weld, the womanizing Rex's current sex kitten"

:woot: :D



So - the author is local... and a brother of parents that our kids went to school with. Kids went to a CatLick school... and anyone that's ever been around CatLick schools knows about the all important "auction"... The author had donated a "your name mentioned in my next book" for the "silent auction". Being good Catlick parents -- Gwen maxes the bid and wins the item. MONTHS later he calls to discuss the book - and to ask if it's okay to use her as a main character and to use her FULL name... Being an officer of a public company - her name is already easily Googled etc - so she says "sure... what the heck".

The book sucks according to her.

She has done a book club for about 20+ years -- several "girls" -- and they've all stuck with it all this time - in fact, she's there tonight! But none of them knew about the book -- so it was her turn to recommend their next read - and shows up with books for all of them but never mentions the inclusion... HA! Got lots of milage out of that I can tell ya!

[GregWeld]

from the amazon editorial review.... "WorldQuest VP Gwen Weld, the womanizing Rex's current sex kitten"

:woot: :D



Yeah -- let your imagination run wild buddy! We've been together since she was 14 and I was 18.... that would be 41 years now... I do remember the "sex kitten" days... yes I do... so long ago.... Uh... what were we talking about? :D

[96z28ss]

I have learned a lot on this thread and hope it continues.
I'd like to share that since this thread started, I have seen my investment grow.

I took Greg's advice and took money out of a previous employer 401k and transfer it into an self directed IRA. It only allowed mutual funds and they were just underperforming.
Since April 17th till today, taking Gregs advice from this thread, Im in the GREEN 5.30%. This all in a stock market that is up and down constantly. Still I collect on dividends.

The sad part about this is I have virtually the same amount of money in my current employers 401k plan (again mutual funds). During the same time period with me contributing money every 2 weeks to it. It was down $800.
I may have to switch jobs so I can move the 401k money into my IRA.

[John510]

Which one? We've had several! :D


I was a millionaire at 26 years old. I was the VP and partner in a multimillion dollar wholesale importing business in NYC... sold that business in 1983...

Gwen went to work at Microsoft in 1984... and was the Director of HR Worldwide and spent 19 years there...

The latest is a pre IPO investment we made in Isilon Systems which was sold to EMC for 2.25 Billion in 2010 (we owned 1% of all the outstanding shares which I'll save you the Googling and figuring was 660,000 shares sold for all cash @ $33.85)....

Gwen is also the main character in this horrible book....

http://www.amazon.com/Force-12-James-Thayer/dp/0684862859/ref=sr_1_1?s=books&ie=UTF8&qid=1344546954&sr=1-1&keywords=Gwen+Weld


:bow: :bow: :bow: :bow: :bow: :bow:

[GregWeld]

^^^^^^^^^^^^^^^:lol: :lol:



Thus my favorite saying --- BETTER LUCKY THAN SMART!! Cause that 'bout sums it up.

[Bucketlist2012]

^^^^^^^^^^^^^^^:lol: :lol:



Thus my favorite saying --- BETTER LUCKY THAN SMART!! Cause that 'bout sums it up.


AMEN... I am luckier than I am smart.. Not Greg Weld lucky, but hey, I will take the luck that I can get..

I also believe that we put ourselves in positions to get lucky sometimes...Those that never try, won't ever get lucky..

Those of us who try and try and try, only need to get lucky a few times to make it...

[WSSix]

I still read the thread often. I haven't really participated because I'm just watching my investments at this point. This thread has been fantastic. I'm really glad a lot of people are getting good info from it.

[sik68]

I'm still reading , Greg + all....thank you for continuing to keep the wheels turning in my head!

Thanks to "the dividend method" I have grown my IRA by 2.0% in dividend earnings ALONE in 9 months! Awesome! You are supporting the next generation of investors here, Greg! :thumbsup: :thumbsup:

[GregWeld]

Okay -- thanks for chiming in guys....

When there's no comments - or questions - etc I start to question if I'm posting to a vacuum. Not that this thread is about "me"... I'm just trying to use my experiences to help - no different than we do on our projects.

I guess - in the real world - that's the problem with "finances".... lots of people have experience (good and bad) but we don't share them. I don't get it - but it is what it is.

We've been pretty lucky throughout this thread with the market pretty much going our way. It remains to be seen if all of you "newbs" (anyone that is just now paying attention to their investments as well as those just starting out) can gut it out when things turn south for awhile. Nobody can tell you when that's going to happen - or for how long - or whether or not you can take it mentally... but I will tell you this (the reason for this post this AM).... I've always made MORE MONEY in a down market than I have in an up market.

The key is to try to buy LOW and sell HIGH... or if you don't sell high - you at least have nice paper gains (a feel good sort of drug). You need to LEARN this trait. You need to train your brain that the stock market (investing in general regardless of stocks or houses etc) is no different than anything else you buy.... People are trained to buy cars when they're on sale -- they're trained to buy clothing when it's on sale -- Your Mother only bought sheets and towels during the annual "white sale".... Here's the big glitch in our brains with STOCKS and HOUSES --- the average RETAIL investor only buys during the peaks of the market. WTF is with that? Why would we be running out to pay top prices for something? Would you offer a guy full price for his car? Hell no! Would you feel better if you bought it below what he was asking? Oh yeah!

Remember this little info when things go south (look at it as going on sale!)... that is the time to buy like a pig. Don't be like most retail investors and STOP investing when everything is on sale or sell when you bought high. Look at this as a GIFT.... you can now average down by adding to your position... or you can get in at lower prices (thus better dividend yields!).


EXAMPLE:

I can think of several but this one is easy to see because it's pretty fresh.

McDonalds (MCD)... it was at $100... now it's at $87 and the yield is rising as the share price drops... where will it drop to? I don't know... nobody knows. But if you AVERAGE IN.... over time... you will be rewarded (not recommending this stock - just using it because it's a perfect example). There is nothing wrong with the company... there is weakness in the markets they're in... there is a temporary mismatch perhaps of the cost of product and the price they can charge. Whatever the "issue" is -- regardless of the company you're talking about - you must make sure that there isn't a fundamental change in THEIR business (think JC Penny - or NetFlix -- where they're struggling and losing market share - no thank you!) That is this quarter - or this half - or maybe this year... but that isn't the larger story and you want to be a little longer term investor than 'this week'.

The biggest returns happen when you average in over a long period of time - that's why you want to re-invest the dividend - it automatically buys on a regular basis regardless of the price. You'll buy less shares at high prices and more shares at lower prices... more shares pay more dividends so those buys get more and more shares. Then you look at that long term chart and it's way lower on the left than it is on the right and you're the winner! :woot:

[GregWeld]

Just poking around... and I thought of something else I wanted to add to my post above.

Again - please do not use my EXAMPLES as a reason to invest in that particular company. I have to use something as an example... so just picking on this one.

When you blow up McDonalds (MCD) 5 year chart on Google Finanace.... notice something that I think is VERY IMPORTANT for ALL STOCKS....

In 2008 this company paid a .38 share quarterly dividend.... in 2011 they were paying a .70 share per quarter. That is almost a double in the dividend.

That's just HUGE! Had you paid the highest price for the shares in '08 - $65 - and held - you'd be getting $2.80 a year per share in CASH...

Annual dividend divided by the share price.... 2.80 / 65. = 4.30%

Forget the 43% growth in your investment! I'll take a 4.30% dividend on a steady Eddy any day!

So again -- this is just an example of some things to think about and look for when you're investing.

OH --- And BTW --- Had you paid $65 a share in September of '08 -- you'd be real unhappy when the shares dipped to $52 in May of '09...... that is -- unless you viewed this as a buying opportunity and added to your position! Because that $52 a share "investment" is paying you 5.38% and you're gain is even larger!

I'll repeat -- don't just look at this stock -- I'm explaining how to THINK about any of the stocks you own already -- or stocks you're planning to buy. This is about teaching you to fish - not catching you a fish.

[Bucketlist2012]

Well said as usual Greg.

I really believe in the averaging in no matter what the market is doing.

For some, they will never open up a personal account, and they will rely on their 401K plan.. Not the best way, but at least they are Investing.

I do recommend putting 15% of your pay into a self directed plan, and taking advantage of any company match that is offered. First you are getting free money from the company, and second, as long as the plan is and investments are directed by the individual, they are continuing to Invest , even in the down markets.

People say how can I Invest 15% ? Well you don't even miss it. Since it comes off the top, you find a way to budget the rest of your money. It is just a way to kind of force people to Invest and dollar cost average.

Now i will say that I personally like a Personal Investment Plan, and only 10% of my money is in a 401K, only because I have the attitude to Invest the other 90% into a personal Investment plan, which i so much prefer over 401K's.

But for those that just won't open an account, at least take advantage of Taking the paycheck money before you get it, and Invest with a company match...Then you will be buying at all times, and every two weeks, no matter what.

But If you have the right attitude, only invest up to the company match and then Invest more into a personal account. But life gets in the way, and bills pop up, and you want car parts,and the Wife and the kids need this or that, so after taxes, your paycheck may get swallowed up..You need to force yourself to Invest no matter what.. Time and Compound interest will reward you..

[WSSix]

Good info as always Greg. You're correct in that it will be tough when the market goes down again for most people to just sit there and ride it out. I'm not looking forward to that point but I think I'll be ok. Not only have I chosen mainly steady eddys but I make plenty of money to live on at this point in my life so I am by no means stretching myself to save or invest. In the mean time, I'm saving the rest in a general savings account that I can easily access and use to buy stocks when the market goes down or I simply have money to lock away. I also use that savings account to store my money until the beginning of the next year when I can max out my Roth. I have no idea if it helps or has any effect positive or negative but I like to max out my Roth for the year during January. I figure the sooner I can get it in there, the sooner it can be earning tax free. Sounds logical to me and I hope that it works out that way.

[GregWeld]

Good info as always Greg. You're correct in that it will be tough when the market goes down again for most people to just sit there and ride it out. I'm not looking forward to that point but I think I'll be ok. Not only have I chosen mainly steady eddys but I make plenty of money to live on at this point in my life so I am by no means stretching myself to save or invest. In the mean time, I'm saving the rest in a general savings account that I can easily access and use to buy stocks when the market goes down or I simply have money to lock away. I also use that savings account to store my money until the beginning of the next year when I can max out my Roth. I have no idea if it helps or has any effect positive or negative but I like to max out my Roth for the year during January. I figure the sooner I can get it in there, the sooner it can be earning tax free. Sounds logical to me and I hope that it works out that way.


RIGHT ON! Good planning -- and good thinking!!:cheers: :woot:

[GregWeld]

Gwen and I use a personal trainer... we're lazy and don't want to go to a gym... so he comes to our house and kicks our sorry azzes... Today he tells me he's making an extra 10+ GRAND a month with his network of trainers selling a product.

My advice to him... SAVE EVERY STINKING PENNY OF IT! You're already making good money and are comfortable.... Take that money and save every dime for the next 3 years! In three years you'd have 300 GRAND -- at his age -- in 14 years he'd have ONE MILLION DOLLARS at mid 40 years old! At 1MM he could make 40 or 50 grand per year in dividends AND he should also have growth... and that's if he only saved for 3 lousy years and never added to it.

The plan --- SAVE NOW - to live better later!

[realcoray]

Earlier this year I started looking for an investment property, rates were low and when I started, there was still a solid inventory including lots of foreclosures.

I did a lot of reading and research so that I could know what to look for. Many people look at it in a simplistic way of, Mortgage Payment + Insurance + Taxes (PITI) is the total cost per month, and simply subtract that from the rent, and that's how much you make.

That's true to an extent, which is to say that as soon as you have to replace the roof of the house, or some other repair, that is an expense and unless you want a long term break even or loss situation, you need to factor that in.

I read a lot of people operating off of two numbers, 50% and 2%. The 50% is an estimate of the percentage of expenses over the long term. Expenses include the taxes, insurance, maintenance, advertising and if you choose to use them, property management. While each situation is different, a lot of people report 50% is their average so it's a good number to use when initially evaluating something but I figured if I managed it, and since I can do most repairs myself my expenses would be slightly lower, so I'm targetting 45%.

The 2% comes from how much the rent is relative to the purchase price. Many investors look for places that rent for 2% of the purchase price, so say you purchased a house for 50k, they'd want 1k a month in rent. Your mileage will vary depending on where you live and how hard you want to look but around where I live, this is not feasible. Doing research I figured that while it would be nice to reach this, even at 1%, you can make double digit returns, and 1% is not that hard to find.

Initially in my search I looked for duplexes+, because this can lessen the blow of vacancies. I actually got one under contract but an inspection found significant issues so I backed out.

After the market around here shifted, inventory of decent things was starting to drop significantly I started looking at short sales. Pretty quickly in march I got one under contract, a house that sold in 2006 for 260k, listed for 145k, we settled on 134k + 2k closing costs. I agreed to pay for a short sale negotiator at a cost of 2.5k, assuming it got approved.

I arranged financing, and through normal means you'll have to have 20% at least, 25% ideally which is what I came in with.

There were two loans we had to negotiate, both with Chase and finally in early July they approved, and gave us around 3 weeks to close.

I got a loan for 100,500$ @ 4.125% and I expect it to rent for 1300-1350 per month (pretty much 1%). My various spreadsheets project an annual cash flow of around 3,000$ - 3,600$. Certainly not Greg money but it's basically a monthly 300$ dividend payment,

As a cash return 1% deals will probably net you high single digit returns, I figure 8-10%, but when you factor in the equity you get as people pay your mortgage for you, and any appreciation (your mileage will definitely vary), you can easily see 12-15%.

The main reason why I think I like this way of investing is I have far more control over the results. In the stock market, you get to choose where you invest but unless you're crazy rich that's the end of it, even good news can cost you money (see apple recently). I was the person in charge of everything, finding houses, running numbers, negotiating, the work involved to get it ready, renting it out and keeping tabs on it afterwards. Certainly more work but who better to look out for my interests than me?

[96z28ss]

Okay -- thanks for chiming in guys....

When there's no comments - or questions - etc I start to question if I'm posting to a vacuum. Not that this thread is about "me"... I'm just trying to use my experiences to help - no different than we do on our projects.


Don't think we aren't reading this, cause we aren't posting. Most of us are in this Long Term.

[GregWeld]

ABSOLUTELY BRILLIANT!



Several take-a-ways from this:

#1 -- You are INVESTING

#2 -- YOU did your research

#3 -- You are doing something you know and understand

#4 -- YOU are able to do repairs etc -- which is full circle to #3



Earlier this year I started looking for an investment property, rates were low and when I started, there was still a solid inventory including lots of foreclosures.

I did a lot of reading and research so that I could know what to look for. Many people look at it in a simplistic way of, Mortgage Payment + Insurance + Taxes (PITI) is the total cost per month, and simply subtract that from the rent, and that's how much you make.

That's true to an extent, which is to say that as soon as you have to replace the roof of the house, or some other repair, that is an expense and unless you want a long term break even or loss situation, you need to factor that in.

I read a lot of people operating off of two numbers, 50% and 2%. The 50% is an estimate of the percentage of expenses over the long term. Expenses include the taxes, insurance, maintenance, advertising and if you choose to use them, property management. While each situation is different, a lot of people report 50% is their average so it's a good number to use when initially evaluating something but I figured if I managed it, and since I can do most repairs myself my expenses would be slightly lower, so I'm targetting 45%.

The 2% comes from how much the rent is relative to the purchase price. Many investors look for places that rent for 2% of the purchase price, so say you purchased a house for 50k, they'd want 1k a month in rent. Your mileage will vary depending on where you live and how hard you want to look but around where I live, this is not feasible. Doing research I figured that while it would be nice to reach this, even at 1%, you can make double digit returns, and 1% is not that hard to find.

Initially in my search I looked for duplexes+, because this can lessen the blow of vacancies. I actually got one under contract but an inspection found significant issues so I backed out.

After the market around here shifted, inventory of decent things was starting to drop significantly I started looking at short sales. Pretty quickly in march I got one under contract, a house that sold in 2006 for 260k, listed for 145k, we settled on 134k + 2k closing costs. I agreed to pay for a short sale negotiator at a cost of 2.5k, assuming it got approved.

I arranged financing, and through normal means you'll have to have 20% at least, 25% ideally which is what I came in with.

There were two loans we had to negotiate, both with Chase and finally in early July they approved, and gave us around 3 weeks to close.

I got a loan for 100,500$ @ 4.125% and I expect it to rent for 1300-1350 per month (pretty much 1%). My various spreadsheets project an annual cash flow of around 3,000$ - 3,600$. Certainly not Greg money but it's basically a monthly 300$ dividend payment,

As a cash return 1% deals will probably net you high single digit returns, I figure 8-10%, but when you factor in the equity you get as people pay your mortgage for you, and any appreciation (your mileage will definitely vary), you can easily see 12-15%.

The main reason why I think I like this way of investing is I have far more control over the results. In the stock market, you get to choose where you invest but unless you're crazy rich that's the end of it, even good news can cost you money (see apple recently). I was the person in charge of everything, finding houses, running numbers, negotiating, the work involved to get it ready, renting it out and keeping tabs on it afterwards. Certainly more work but who better to look out for my interests than me?

[GregWeld]

I would add to this strategy of investing that there are a couple very nice perks to owning/managing rental real-estate!

Depreciation

Expenses that can be offset onto the property... I shouldn't have to say anything more here. :D

[Rybar]

Don't forget the value of the property your purchasing should increase over time if you are buying at a low point in the market. As long as you can hold for say 10 years it should increase for sure. Where I am things are sky high so it's tough to get get a good return on your investment. Rent basically covers expenses if that. But prices have been appreciating like mad over the last 10 years. (Basically more than doubled, I'd say 250% growth realistic)

The one main difference between property and stocks is property is illiquid, meaning you cant sell it quickly and get your equity out, stocks are liquid so you hit the sell button and they are gone the next day.

Maybe take Greg's advice and diversify. Have some income property and some stocks in your portfolio is a good idea if you can.

[realcoray]

Don't forget the value of the property your purchasing should increase over time if you are buying at a low point in the market. As long as you can hold for say 10 years it should increase for sure. Where I am things are sky high so it's tough to get get a good return on your investment. Rent basically covers expenses if that. But prices have been appreciating like mad over the last 10 years. (Basically more than doubled, I'd say 250% growth realistic)

The one main difference between property and stocks is property is illiquid, meaning you cant sell it quickly and get your equity out, stocks are liquid so you hit the sell button and they are gone the next day.

Maybe take Greg's advice and diversify. Have some income property and some stocks in your portfolio is a good idea if you can.

Yeah, appreciation can vary (and you can be bit by it as I'm sure some were during the downturn), and while you can probably anticipate it to increase by about inflation (3%), I just consider it a bonus. I effectively bought equity as a house immediately next door sold for 190k, and a week after I closed a house right across the street sold for 220k. I seriously considered turning and flipping the house for an instant profit.

Good point about the liqudity of property. Another subtle distinction is that if you have an investment account and are re-investing your dividents (which you should be if that's your thing), it's all automatic. I may be getting 10% returns but the real power of investing is in the re-investing your profit. When I get 300$ in a month, I can't do anything real estate related with that money itself, so it's a good spot where the ideal would probably be to have it in some sort of higher yielding liquid account.

That being said the money will probably just go into finishing my car or building a shop, but I do save a lot of what I make in order to pursue things like this.

[ErikLS2]

Ok, I'm not going to dump all kinds of money in this but I stumbled on this just looking around. Seems like an interesting way to invest in gold which I'm leary of but I think a lot of inflation is a given in the future.

http://finance.yahoo.com/echarts?s=FNV.TO+Interactive#symbol=fnv.to;range=5 y;compare=;indicator=volume;charttype=area;crossha ir=on;ohlcvalues=0;logscale=off;source=undefined;

[Rybar]

Yeah, appreciation can vary (and you can be bit by it as I'm sure some were during the downturn), and while you can probably anticipate it to increase by about inflation (3%), I just consider it a bonus. I effectively bought equity as a house immediately next door sold for 190k, and a week after I closed a house right across the street sold for 220k. I seriously considered turning and flipping the house for an instant profit.

Good point about the liqudity of property. Another subtle distinction is that if you have an investment account and are re-investing your dividents (which you should be if that's your thing), it's all automatic. I may be getting 10% returns but the real power of investing is in the re-investing your profit. When I get 300$ in a month, I can't do anything real estate related with that money itself, so it's a good spot where the ideal would probably be to have it in some sort of higher yielding liquid account.

That being said the money will probably just go into finishing my car or building a shop, but I do save a lot of what I make in order to pursue things like this.

2 Ways to re-invest that rent money:

#1 use it to pay down your principal faster, in turn saving you interest. The sooner that house is paid off the sooner you can collect 100% of the rent as income.

#2 use to renovate the house (if needed) this increases the value of the home and/or makes it easier to sell.

Personally that's what I'd do with the rent money, and the use the greater rent profit later on for cars etc like Greg mentioned.

[Flash68]

But prices have been appreciating like mad over the last 10 years. (Basically more than doubled, I'd say 250% growth realistic)



150% growth = more than doubled

250% growth = more than tripled

Just sayin... :cheers:

[realcoray]

2 Ways to re-invest that rent money:

#1 use it to pay down your principal faster, in turn saving you interest. The sooner that house is paid off the sooner you can collect 100% of the rent as income.

#2 use to renovate the house (if needed) this increases the value of the home and/or makes it easier to sell.

Personally that's what I'd do with the rent money, and the use the greater rent profit later on for cars etc like Greg mentioned.

I'm in a good spot where I don't need the money now to pay for my car stuff, but I do intend to pay down the house faster even though on paper it's a terrible investment move. I am risk adverse so less debt feels better for me and I think everyone has their own risk/reward point that affects what they feel comfortable doing.

If I was trying to maximize my return, what I would do is leverage the house I just bought, cashing out my down payment and the equity, netting probably 65k, and buying two more similar houses. The current house would be completely break even with the higher payment, but I would double my cash flow and returns from the other two.

[Bucketlist2012]

I'm in a good spot where I don't need the money now to pay for my car stuff, but I do intend to pay down the house faster even though on paper it's a terrible investment move. I am risk adverse so less debt feels better for me and I think everyone has their own risk/reward point that affects what they feel comfortable doing.

If I was trying to maximize my return, what I would do is leverage the house I just bought, cashing out my down payment and the equity, netting probably 65k, and buying two more similar houses. The current house would be completely break even with the higher payment, but I would double my cash flow and returns from the other two.

We have discussed the Paid off House vs. Investing, and you are right. It is a personal choice for peace of mind..All the math and pencil and paper saying it may be better to invest the money with today's mortgage rates, means nothing if it doesn't feel comfortable.. What ever you do, it will be the right thing for you..:cheers:

[Flash68]

We have discussed the Paid off House vs. Investing, and you are right. It is a personal choice for peace of mind..All the math and pencil and paper saying it may be better to invest the money with today's mortgage rates, means nothing if it doesn't feel comfortable.. What ever you do, it will be the right thing for you..:cheers:

Right on. I go back and forth with this decision based on cash reserves and my confidence in a variety of things.... the economy in general, business projections, Camaro needs... :lol:

[Bucketlist2012]

Right on. I go back and forth with this decision based on cash reserves and my confidence in a variety of things.... the economy in general, business projections, Camaro needs... :lol:

Yes Dave, I am 52, and about to re-finance another 30 year loan at 3.5%. I own approx 50% of my home, but I am a guy that doesn't need to own my Home..A good chunk, yes, but 100%, nope, not me.

I don't see property going up very much for years, and I know I will do better Investing, for sure, even if/when , we take another nose dive in the Market, long term, it's where I plan to keep my money.

As far as "Camaro needs", that is my only "Money Pit". With interior, and HP needs, and then 28 years old paint, I will never be done, and I will never get out what I put in..

You would think I would know better, but the need for my car is just too strong, and my Investment Brain gets cloudy.:cheers:

[GregWeld]

A paid off house when rates are at 7 to 15% is smart.... but when they're under 4%... that would be just plain dumb.

We're at HISTORIC low mortgage rates.... and the rates of return on our investments should far out pace a FIXED mortgage. Think about this over a 10 / 15 / 30 year time frame.... surely our interest rates won't go down much from here... but they certainly could RISE from here.... So put yourself in a position to pay 4 and earn 8....

[GregWeld]

As far as "Camaro needs", that is my only "Money Pit". With interior, and HP needs, and then 28 years old paint, I will never be done, and I will never get out what I put in..

You would think I would know better, but the need for my car is just too strong, and my Investment Brain gets cloudy.:cheers:



There is absolutely NOTHING WRONG with having some money for fun stuff...

It's just that many (most?) have too much fun and not enough savings/investments... The more you have invested and earning money - the more fun stuff you can afford!

[Rybar]

A paid off house when rates are at 7 to 15% is smart.... but when they're under 4%... that would be just plain dumb.

We're at HISTORIC low mortgage rates.... and the rates of return on our investments should far out pace a FIXED mortgage. Think about this over a 10 / 15 / 30 year time frame.... surely our interest rates won't go down much from here... but they certainly could RISE from here.... So put yourself in a position to pay 4 and earn 8....

Just to compare, in Canada you can't really write off interest on your personal home only a portion of it if you use for home office etc. It's different tax wise than the US. I'd have to check specifics but it's a less common thing up here.

Edit I just looked it up:

Canadian federal income tax does not allow a deduction from taxable income for interest on loans secured by the taxpayer's personal residence. But homes used in businesses as a landlord who owns a rental residential property can deduct interest as any other reasonable business expense. The difference being the deduction is allowed only when the property is not used for the taxpayer's personal use but is used as in any other type of business. However, there may be additional exclusions for passive activity losses.

The home ownership rate in Canada was about the same as in the United States in 2008, but Canadians have about 70% equity in their homes on average (i.e., 30% mortgage debt), compared to only 45% average home equity in the United States.

[Bucketlist2012]

A paid off house when rates are at 7 to 15% is smart.... but when they're under 4%... that would be just plain dumb.

We're at HISTORIC low mortgage rates.... and the rates of return on our investments should far out pace a FIXED mortgage. Think about this over a 10 / 15 / 30 year time frame.... surely our interest rates won't go down much from here... but they certainly could RISE from here.... So put yourself in a position to pay 4 and earn 8....

Greg, that is my plan, and I am sticking to it. Some people would say , why would I take a 30 year loan, when I am 52 years old ? At 3.5%, why not ?

I can beat that long term easily. It took years for my Wife to get that, but she understands now. She wanted to throw more at the principal until I showed her the numbers.

[GregWeld]

So here's why it's DUMB DUMB DUMB to have a paid for house....


I just went and looked at the Schwab account I always reference here... (I hold back because I never really want you boneheads to know how much money I really have! :D )

That account spins off over 400,000 in dividends per year ----- AND ----- has a 10.34% capital gain (paper gain). There's over 7MM in that account... and it's on pace to return 1MM in cash and gain this year if things just hold where they are.

Now -- I realize that I have an "out sized" argument going here -- but the point is that no matter how much have invested or how much you owe -- if you manage your money correctly... you should have a gain on your house - a gain in your account - and you should be taking a tax deduction on your house which effectively reduces your percentage rate you're paying by the effective tax rate (4% mortgage - 30% tax bracket - your real rate is closer to 3%).... so if you're paying 3% effective rate -- and you're getting a 4% dividend and 7% growth on your investments.... you can see very quickly that there's nothing gained by paying off a mortgage.


:cheers:

[WSSix]

You sir, need to buy a Ferrari or the new Lambo. To quote yourself, "There is absolutely NOTHING WRONG with having some money for fun stuff... " :D



Doooooo it!

[GregWeld]

You sir, need to buy a Ferrari or the new Lambo. To quote yourself, "There is absolutely NOTHING WRONG with having some money for fun stuff... " :D



Doooooo it!



Well let's see.... I already own:

Audi R8 Sypder
MB S63 AMG
Porsche Cayenne Turbo
'32 Ford Roadster
'37 Ford Roadster
'56 Nomad
'65 Mustang R Code clone track car


Is that not enough fun for one guy?

In May I was in Europe at the Monaco Grand Prix - in June I took the '32 Roadster to LA Roadsters show - I just got back from the Shelby Mini Nats @ Sonoma raceway...

How much fun can a guy have? I'm OLD... I need some rest.... :cheers: :D

[Rybar]

Did the KO stock split just happen? I see my share price now shows as $19.70 instead of $78.79 is this a 4 way split or something meaning your # of shares is multiplied by 4 as the previous share value seems like it was divided by 4???

[bdahlg68]

Did the KO stock split just happen? I see my share price now shows as $19.70 instead of $78.79 is this a 4 way split or something meaning your # of shares is multiplied by 4 as the previous share value seems like it was divided by 4???

Yup it split. 2 for 1 though. Things may not look right until Monday.

[CRCRFT78]

I noticed KO has split just in case some of you are wondering about it being in the red this morning.

[GregWeld]

Yes -- Coke (KO) split TWO for ONE --- so the share price drops to half what it was --- and also the dividend is now cut in half (from where it was) so is now .255 per share per quarter.... BUT of course - you have twice as many shares.


Con Ed (ED) went EX dividend today... so it will most likely trade down.... but of course.... it also is sending you .605 per share dividend. Note that this name is highly "defensive" and is a "blue haired old lady stock" IMHO... Utilities are like that... cause even if you're broke ya gotta pay your electricity bill! This stock is UP 55% in the last 3 years -- most likely because people have flocked to the "safety" of names like this. I'd expect a "rotation" out of this name - if the economy heads UP...

ROTATION is a very important factor in the stock market. Remember that while we want to pick great names.... NOBODY can fight market trends. The HERD mentality can and does affect your holdings. Make no mistake about this. A market is up when more people want to buy what you have than sell it.. and the reverse is also true! So if the HERD (big money) starts to think they can make a better return in TECH over "steady eddy" Con Ed... then they'll sell ED and buy "X" tech company. You can substitute various names here but that is what a market is.

There never seems to be more money = the money just rotates. Most people need to sell something to buy something else whether it's houses - cars - or stocks. So IF the economy is seen as turning around --- then we'll see a ROTATION out of steady eddy dividend payers to "cyclicals" - and the "industrials" and "tech" etc.

Here's the way I think about this... so let's just use Con Ed (ED) as an example.

Every quarter these guys send me .60 cents per share... ($2.40 per year). If the share price goes down $5.00 I don't really care (right now) because I own it for that check they're sending me. I really only care about the share price when I'm ready to SELL it. If I'm nowhere near selling it... then it's just a placeholder. That placeholder still owes me money though! And pays right on time. If I'm holding it for 10 years... then they've sent me $24.00.... and my guess is 10 years from now - the price per share should be higher than what I paid for it AND I've gotten $24.00 in cash on top of that. (dividends in IRAs should be re-invested but either way - you got the money).

[Sieg]

I noticed KO has split just in case some of you are wondering about it being in the red this morning.

:woot: Now climb that ladder!

[GregWeld]

I noticed KO has split just in case some of you are wondering about it being it in the red this morning.



Yeah buddy... got to love a good split!

Just FYI -- I had 6,000 shares -- that went to 12,000... and I bought 3,000 more this morning for a total of 15,000

The dividend isn't great at 2.8%... but generally Coke ads stability to an account and has pretty decent growth (21% one year - 74% three year - 66% five year total return).

[Bucketlist2012]

If you look at pictures of the poorest countries on Earth..

Some you have never even heard of. What are they drinking and what do they have in their hands ?......

A Coke.

[Sieg]

Just FYI -- I had 6,000 shares -- that went to 12,000... and I bought 3,000 more this morning for a total of 15,000
Thanks, that should drive the price down. :thumbsup:

[toy71camaro]

Just got back from Vacation.. first day back at work (Reno's Hot August Nights last week. Woot!).

Anywho, just caught back up, and yes, I still check this thread multiple times a day, (when not on vacation, lol). Even tho I'm not posting, I'm still reading, learning.

:woot:

[GregWeld]

Just got back from Vacation.. first day back at work (Reno's Hot August Nights last week. Woot!).

Anywho, just caught back up, and yes, I still check this thread multiple times a day, (when not on vacation, lol). Even tho I'm not posting, I'm still reading, learning.

:woot:



Fair enough! Just want to make sure people are still interested.

As long as this thread is, it's harder for me to find "points of interest" to use for educational purposes. I can only hammer Best of Breed - and dividend investing about 10,000 times before that's boring.

So I'm trying to find things that peak my interest -- and then I have to remember to use them as a post.


Hot August Nights is a hoot... went there every year for about 15+ years! My grandparents lived in Carson City - so it was a good excuse to visit! Then I got bored with it and elected my sister to figure out where else we could go within a 1200 mile radius of Seattle/Portland. Frankly - I got tired of getting ripped off by the hotels that are $49.99 a night the week before -- that are $499 the weekend of HAN. So we've been to Wheels and Waves in Santa Barbara - Cruise to Yellowstone - L A Roadsters Show - Cruise to the Coos (Oregon) etc and have been having a blast going "anywhere else than Reno". :unibrow:

[toy71camaro]

Fair enough! Just want to make sure people are still interested.

As long as this thread is, it's harder for me to find "points of interest" to use for educational purposes. I can only hammer Best of Breed - and dividend investing about 10,000 times before that's boring.

So I'm trying to find things that peak my interest -- and then I have to remember to use them as a post.

Yeah.. I hear ya. But your doing a great job. Keep filling us in on the highs and lows of it all. So hopefully everyone is prepared for when the $h!t hits the fan, we are smart enough to go on a buying spree. ;)


Hot August Nights is a hoot... went there every year for about 15+ years! My grandparents lived in Carson City - so it was a good excuse to visit! Then I got bored with it and elected my sister to figure out where else we could go within a 1200 mile radius of Seattle/Portland. Frankly - I got tired of getting ripped off by the hotels that are $49.99 a night the week before -- that are $499 the weekend of HAN. So we've been to Wheels and Waves in Santa Barbara - Cruise to Yellowstone - L A Roadsters Show - Cruise to the Coos (Oregon) etc and have been having a blast going "anywhere else than Reno". :unibrow:

We've been going a number of years too. But only the last couple we've put a car in it (always drove my dads car up there, but wasn't entered in it). We've been lucky enough to get rooms for $30-40 a night at Circus Circus, as long as you book way in advance, but this year, it was crazy cheap. Around new years day they emailed some special out (I always check their email specials). They had Mon-Thurs for $20/night, and Fri and Sat nights for $49. CRAZY cheap. So we booked then. That's around the time I normally find good deals for them, but never that cheap. Normally Thurs its $49 and fri its a bit more (like $79), We don't normally stay Sat night. We like Circus Circus cuz its cheap (see above ;) ) and they block off a floor (or more) dedicated to classic cars, and have security in/out of that floor for parking, and then also security riding around those floors on bikes just to keep an eye on things.

Would love to check out those other venues... This vacation is one I take my Son (6.5 yrs old) and go with my parents. We cruise "Grandpa's hot rod" (65 Chevelle Malibu). Hopefully I'll get some pics up soon of the vacation.

Back on to Investing 102... Finally still a tad in the 'green" overall on my ROTH, I've finally overcome the "flop" of a purchase from a few years ago of SCEUF (Storm Cat Energy) that tanked and went bankrupt right after i bought it. :wow: :rolleyes: What did i fail to do? Research. Now the company. And I took a "friends advice" that's "been a good stock for many years".. Then BOOM. tanked. LOL. That was my "live and learn"... I didnt touch anything with stocks much again til Last year, when i started back into it and found "dividend investing".. Then early this year I was shown the light of this thread (thanks Mike!) and now on my slow road to a decent retirement (I hope!).

[Bucketlist2012]

Albert...You are welcome..

You are one of the few that I have helped get started on their future.

Maybe Ace/Stace, will read this thread too.

But most just don't do anything about investing and hope for the best..

I do not understand those people...They do not plan for the future...

You are on your way. Good Job...:thumbsup:

[GregWeld]

So today was a real mixed bag -- and while the market was a total "ho hum" -- when I looked at my Schwab account it was way mo better than ho hum! So what gives?

I call it the law of large numbers - and I've written about it before... but here's where it starts to affect YOUR accounts... BALANCE. And I don't mean your account balance - but the balance of the shares you have in your accounts -- and also the diversity.

Since I have outsized positions in this account by NUMBER OF SHARES in certain names -- they can really affect your day - either GOOD or BAD... and that's why I mention the balance of number of shares....

I have (again - just using my own real life as an example here) 20,000 shares of Altria (MO).... so when it moves a whopping .23 a share (like today) the LAW OF LARGE NUMBERS takes hold.... 20,000 X .23 = $4,600 BUCKS! A nice days work if you could get it! BUT -- Dang that big butt in the room -- it works on the way DOWN as well....

This balancing act is far harder to achieve for "newbs" or smaller accounts - let's say "smaller is anything under 100K". It's just almost impossible to own 500 shares of everything in your account because of the share price differences.... So you end up with 500 shares of something at $20 a share -- and only 125 of something at $125 a share.... Obviously the 500 shares have a larger affect on your account when they're up or down because of that pesky "law of large numbers". So this brings me to the more important way to look at money. Money is about PERCENTAGES.... and when you open your account and see it's down $500 for the day and you swallow hard --- but if you have 50 Grand in the account -- that's not a very large PERCENTAGE... ditto, of course if it's going up.

A better gauge is how your account is doing OVERALL.... and how it's doing RELATIVE to "the market". There is no way on god's green earth that you can own 15 or 20 stocks and have GREEN in every one of them all the time. And they're never up evenly. So better to look at how your account is doing OVERALL AS A PERCENTAGE rather than a number (10% vs $1000 dollars) and make that percentage be your goal - then the numbers will take care of themselves.

To get back to balance --- when you have a good day or a bad one --- look not just at the dollar amount -- but which stock affected your account the most -- and is it down/up big? Or is it the law of large numbers that made it look "outsized". The biggest number of shares in your account might have only been down a dime... but the multiplier is what makes it look bad/good rather than the percentage of move.

Not much you can do to change that - cause you'll never achieve a perfect balance. It's just another point of THOUGHT when you're looking at your account and brings a little better perspective when you sort out the details. :cheers:

[XLexusTech]

So today was a real mixed bag -- and while the market was a total "ho hum" -- when I looked at my Schwab account it was way mo better than ho hum! So what gives?

I call it the law of large numbers - and I've written about it before... but here's where it starts to affect YOUR accounts... BALANCE. And I don't mean your account balance - but the balance of the shares you have in your accounts -- and also the diversity.

Since I have outsized positions in this account by NUMBER OF SHARES in certain names -- they can really affect your day - either GOOD or BAD... and that's why I mention the balance of number of shares....

I have (again - just using my own real life as an example here) 20,000 shares of Altria (MO).... so when it moves a whopping .23 a share (like today) the LAW OF LARGE NUMBERS takes hold.... 20,000 X .23 = $4,600 BUCKS! A nice days work if you could get it! BUT -- Dang that big butt in the room -- it works on the way DOWN as well....

This balancing act is far harder to achieve for "newbs" or smaller accounts - let's say "smaller is anything under 100K". It's just almost impossible to own 500 shares of everything in your account because of the share price differences.... So you end up with 500 shares of something at $20 a share -- and only 125 of something at $125 a share.... Obviously the 500 shares have a larger affect on your account when they're up or down because of that pesky "law of large numbers". So this brings me to the more important way to look at money. Money is about PERCENTAGES.... and when you open your account and see it's down $500 for the day and you swallow hard --- but if you have 50 Grand in the account -- that's not a very large PERCENTAGE... ditto, of course if it's going up.

A better gauge is how your account is doing OVERALL.... and how it's doing RELATIVE to "the market". There is no way on god's green earth that you can own 15 or 20 stocks and have GREEN in every one of them all the time. And they're never up evenly. So better to look at how your account is doing OVERALL AS A PERCENTAGE rather than a number (10% vs $1000 dollars) and make that percentage be your goal - then the numbers will take care of themselves.

To get back to balance --- when you have a good day or a bad one --- look not just at the dollar amount -- but which stock affected your account the most -- and is it down/up big? Or is it the law of large numbers that made it look "outsized". The biggest number of shares in your account might have only been down a dime... but the multiplier is what makes it look bad/good rather than the percentage of move.

Not much you can do to change that - cause you'll never achieve a perfect balance. It's just another point of THOUGHT when you're looking at your account and brings a little better perspective when you sort out the details. :cheers:
My goal is to beat VFINX every year.... it may seem like a silly goal but I have to start somewhere..

[GregWeld]

My goal is to beat VFINX every year.... it may seem like a silly goal but I have to start somewhere..



That's a good gauge....


So far that account (Schwab) has a 10.48% "gain" vs the VFINX's 12.04%


VFINX is heavily weighted in "tech" with some 20% of their holdings in that space and no doubt Apple being their top holding has certainly boosted that performance.

Since it's always fun to "explore" what someone else is doing here's a link to Morningstar showing their YTD returns on the companies they invest in. Note that Apple (AAPL) has a 54% YTD return -- and AT&T (T) is second best with 27%

http://quicktake.morningstar.com/syndication/holdings.aspx?cn=GLG117&symbol=VFINX

[GregWeld]

I had an EPIC FAIL and forgot to include the link to Morningstar as stated in the previous post... so edited it and added -- but here it is again.


http://quicktake.morningstar.com/syndication/holdings.aspx?cn=GLG117&symbol=VFINX

[GregWeld]

One of the oldest sayings on Wall Street --- is "when interest rates rise the stock market dies"...

Now of course... nothing is ever a zero sum game... and old sayings have longevity are are "generally" very accurate.

Interest rates have risen NOTICEABLY on the 10 and 30 year T bill.... and also on mortgages. While both are still really low historically --- the take-away is --- to pay attention to this "trend" if it is one.

Interest rates rising are a good thing! And a bad thing! How can they be both?

Interest rises as there is more demand for BORROWING.... more people borrow when they feel like they can pay the loan back... so rising interest rates signal that the economy is/might be getting better.... AND THAT IS A GOOD THING....

BUT... that dang big butt!

As the yields on interest bearing stuff (like T bills) rise - people sell stocks and move to "safe" interest bearing accounts.... so the stock market usually begins to suffer as money flows OUT....

BUT... dang that big butt!

The stock market could also benefit - because if the economy is better - then the companies should have better sales and better bottom lines!

Okay --- I know --- it's all crazy and if someone could figure it out and it was easy then everyone would be rich right?

My take is -- the companies that pay the lowest yields will get pressure (selling) first... so many of the steady eddys that we love -- that pay lower dividends as a percentage -- would be the ones that people would sell first. But as the price comes down on the shares -- the yield goes up! (IF you pay the new lower prices).

I guess the only real point of this for Investing 102 -- is to stay somewhat heads up to the interest rate market. It signals lots of stuff... a rising economy -- better business -- and frankly -- we actually need to see that! We're not there yet - but you need to stay vigilant to what the market is telling you and the "market" is always ahead ---- by months --- but it doesn't always get it right.

[Sieg]

Thanks for the last post Greg, very enjoyable and wisdomatic read. :thumbsup:

[GregWeld]

Thanks for the last post Greg, very enjoyable and wisdomatic read. :thumbsup:

Welcome...

Sometimes I can ramble -- but there is a point in there somewhere! :D

Interest rates are CRITICAL... ignore their importance at your own peril. I guess that was the point. Doesn't mean to ACT -- it means to pay attention!

[Sieg]

Totally understood, again very good read. The older I get all those cliche's I chuckled at as humor as a kid now hit very close to home.

[GregWeld]

Here's something else I've said more than once in this thread.... IMHO I only think a guy can follow just so many names... too many and you just get confused -- too few and you're not diversified. My 'goal' for someone asking is that when they get to 100K invested - they should have about 20 names...
When you get to a million -- there's really not much need to have 100 names - - when 20 good ones will serve you just fine...


So here's a guy that follows my thinking perfectly!


As of 06/30/2012, Kynikos Associates LP owns 22 long stocks with a total value of $257 million. He is said to manage more than $6 billion. Jim Chanos has been called the Warren Buffett of short selling.

[GregWeld]

Along the lines of the "what ifs" such as the POSSIBLE rising interest rate scenario... I think the FAR BIGGER DEAL that will affect the stock market is the election in November.

While the PRESIDENTIAL race is very important for "investors" (and the general public) the CONGRESSIONAL races are far MORE IMPORTANT.... A democratic SENATE and HOUSE of REPRESENTATIVES will and I should underline WILL..... raise the tax rates on anything and everything they see as their personal piggy bank (your wallet). THAT will affect what people invest in etc.

Dividends - that now enjoy a 15% tax rate are highly competitive with other investments because of that rate. Raise that rate to ordinary tax rates and that competitive edge just gets blown away. People like me - with LARGE incomes from dividends WILL find other homes for their money. Muni bond rates are LOW right now precisely because of the advantage dividends enjoy. A 3% TAX FREE rate of return is not so hot when a guy can buy a 5.5% (or higher) dividend and pay ONLY a 15% tax.

THE TAKEAWAY FOR INVESTING 102:

What AMERICANS forget is that the PRESIDENT DOES NOT MAKE LAW -- CONGRESS and the HOUSE DO! So in my book -- those selections are far more important when it comes to who I vote for as my Senators and Representatives (Dem or Rep) because it's those jackazzs (BOTH PARTIES IMHO) that rule the roost... NOT the President. While he's the leader and the big voice -- he doesn't make the rules -- those 535 OTHER GUYS do!

Right now -- the main reason we have INACTION on almost anything - is because of the REPUBLICAN House -- vs -- the DEMOCRATIC Senate. The house is voting one way and the senate the opposite - therefore NOTHING gets done.

I AM NOT DISCUSSING POLITICS HERE.... this is not "I'm voting for Obama or I'm voting for Romney" discussion. Let's not go there because it is a bottomless pit of one guy against the other....

I AM SAYING -- PAY ATTENTION to what changes and who you vote for in these (IMHO) far more important races because the outcome WILL - (underline WILL) affect you!

If you want real change (one way or the other - I'm not saying which way YOU should vote here) then it's the change in the make up of these two legislative bodies that will make the big difference. :faint:

[bdahlg68]

I decided earlier to add some risk to my portfolio and picked up a small position in CYOU before the dividend. So far so good. I picked the shares up for $24.73 and they paid a $3.76 special dividend. Up about 11% after the dividend is paid. Still a risky affair as this is a China stock (always the fear of fakes) and the Chinese economy has been cooling. Therefore this is a small position more for fun and to see where they go with dividends.

I'm also now green on SAN! Took a lot of patience, and a good average down when the stock was around $5. I've now trimmed back that position so it is inline with the total value of many other stocks in my portfolio. I got a little heavier than I'd like to have been in SAN, but it worked out. But, this is not always the case.

Pretty happy overall with unrealized gains YTD - nearly 14%. Hoping for continued success rest of year and beyond.

[GregWeld]

I decided earlier to add some risk to my portfolio and picked up a small position in CYOU before the dividend. So far so good. I picked the shares up for $24.73 and they paid a $3.76 special dividend. Up about 11% after the dividend is paid. Still a risky affair as this is a China stock (always the fear of fakes) and the Chinese economy has been cooling. Therefore this is a small position more for fun and to see where they go with dividends.

I'm also now green on SAN! Took a lot of patience, and a good average down when the stock was around $5. I've now trimmed back that position so it is inline with the total value of many other stocks in my portfolio. I got a little heavier than I'd like to have been in SAN, but it worked out. But, this is not always the case.

Pretty happy overall with unrealized gains YTD - nearly 14%. Hoping for continued success rest of year and beyond.


Averaging down is a very good way to work out of a "problem" stock.... IF -- it's a stock you don't mind owning for awhile. I've done this zillions of times and most of the time it's worked out real well.

One time I averaged into a 93,000 share position that eventually cost me a $1.00 per share loss.... I was trying to save an $8,000 (total) paper loss in the position. That was extreme -- but was worth the loss for the education it provided! :lol:

[bdahlg68]

Averaging down is a very good way to work out of a "problem" stock.... IF -- it's a stock you don't mind owning for awhile. I've done this zillions of times and most of the time it's worked out real well.

One time I averaged into a 93,000 share position that eventually cost me a $1.00 per share loss.... I was trying to save an $8,000 (total) paper loss in the position. That was extreme -- but was worth the loss for the education it provided! :lol:

Yes, it does normally work but it's important that the size of the position stays in check to the rest of your portfolio. SAN was starting to "stand out" i guess you could say as a percent of my portfolio. That is where I started to get nervous - as even though I don't mind holding on to it for the next 25 years, I don't want to lock up that much of my portfolio for that long. At one point it was almost 15% of my portfolio! :brix: So I've since averaged out of the position and parked that money elsewhere for other opportunities....

[GregWeld]

Just a "thought" as long as I'm blabbing here....

I'm NOT anti taxes... I DO use the tax laws to my advantage... and I DO have people that know where we should be invested in order to minimize my tax bill and get the best returns... Having said that - my tax bill for 2011 was 1.7MM so I'm pretty comfortable in my skin knowing that I paid my "fair share". 1.7MM and I still only get ONE vote...

What I am AGAINST is WASTE.... and it's my personal belief that the government can waste more money than anyone in the history of man.

I also believe that people always spend more than they earn... and the government is no different. Give them more money and they'll spend it and some more.

I am also firmly against the 'them vs us' pitch that's being used to generate dissension and division in America. America has always been only about US - together - and about how we fix OUR problems.

I watched a discussion on CNBC this morning about the "Americas Cup" sailing race -- and the BILLIONAIRES BOATS.... The takeaway was that spending zillions on these racing boats was GOOD for everyone because of the solutions they bring to issues etc - that - (think Carbon Fiber in race cars - that was super exotic only a few years ago!) eventually make their way down to "us". Without this excessive spending -- things tend NOT to advance. We've all benefited from the Carbon Fiber parts "invented" at some great expense to someone that went before us. So I'm all for it.

Chevy spent a fortune racing aluminum blocks in order to eventually give us the LS engine series... Well... IMHO I'm glad they did! :cheers:

[Tony_SS]

Agree with ya Greg. I think part of the problem that divides us is intentional by the media and politicians. We are all the same and have more in common, but anytime you hear something from the media or politicians, it's always a matter of sex, race, class or religion. Anyway...

I'm no expert in this field, but what do you all make of Soros dumping his stocking and buying over a million worth of gold stock?

[GregWeld]

Agree with ya Greg. I think part of the problem that divides us is intentional by the media and politicians. We are all the same and have more in common, but anytime you hear something from the media or politicians, it's always a matter of sex, race, class or religion. Anyway...

I'm no expert in this field, but what do you all make of Soros dumping his stocking and buying over a million worth of gold stock?


One million to George Soros is like $1 to you and I....

It was pointed out the other day on CNBC that Soros doesn't run his own money anymore - he's 80 some years old - quit his hedge fund and returned all the client money - and now has the lions share of his personal money run by several different firms.

I'd need more facts -- or to see where this info is coming from to be able to have any opinion one way or the other.

[Tony_SS]

One million to George Soros is like $1 to you and I....

It was pointed out the other day on CNBC that Soros doesn't run his own money anymore - he's 80 some years old - quit his hedge fund and returned all the client money - and now has the lions share of his personal money run by several different firms.

I'd need more facts -- or to see where this info is coming from to be able to have any opinion one way or the other.

Yes, and I'd need more facts to firmly believe what CNBC is saying as well.... at 80yrs old would you let 'others' handle your affairs after you've been doing it all your life? I find that hard to believe, but this is a good point that 1 million isn't much to him.

[GregWeld]

Yes, and I'd need more facts to firmly believe what CNBC is saying as well.... at 80yrs old would you let 'others' handle your affairs after you've been doing it all your life? I find that hard to believe, but this is a good point that 1 million isn't much to him.


They interview him all the time -- so that info is from "him" via CNBC.


He's marrying some super young chick.... so he's maybe playing with her more than his money. He's got plenty!

[glassman]

Greg, I haven't been in front of my personal pc since Wed eve. Just checked in this morning and In those two days you've provided me with more info than i've learned in my 46 years on this planet. BIG thank you for continuing sharing your experience with us. IT IS MUCH APPRECIATED!!!!

My brother is a CFO of a large law firm here in the Bay area and is helping coach me. My whole family is in "managing numbers" to some degree. My dad has been telling me to get started early. Well, When your 27 (1993), have three kids, wifey staying home with them, net 515 a week, own your own "townhome", NO debt other than the town home, theres not a whole lot left over to "invest" when survival is the name of the game. We bought our company when i was 30, it was bankrupt and def a "fixer upper". So I started investing 1100 a month at 32 (now 46) and while we have something, its not impresive. So I am getting a little more aggresive NOW.

Once again, thank you, Mike

[Bucketlist2012]

I like Greg's point of owning only so many assets...I own 17. I don't ever see me owning more than 20.. It is not the quantity , but the quality.

As Far as Gold, and Greg's point about the election and who is the Leader.

I use the Nation's politics in some of what I do..I always keep 5% in Precious Metals as an Insurance. Since 2008, I rose that to 15% plus...I am using the cues from the Federal Reserve and the Administration as my guide. Is it a long term play ? No, but is has gone up 125%..

So although it is not long term, it is part of what I am doing...If things change in the Administration in November, I will dial back to 5%. If nothing changes and the Congress and House and Leadership stay the same, I see more stimulus, which will devalue the dollar..

I always have other plays other than steady eddy's...:cheers:

[Bucketlist2012]

Also with Precious Metals, I am not one to keep large amounts in physical metal in my safe for armageddon..

Sure i have some, but most is in ETF's around the globe.Australia, Canada, and the U.S.

If I see a shift in the Market with the Federal Reserve, I can sell it without loading it up and running to the store, haha.. I can put in the order to sell it, if the Market for commodities goes sideways on me...

[GregWeld]

Per my usual morning... I'm watching CNBC and a guy comes on that had some interesting things to say about APPLE (AAPL). And as per usual - I (many times) will look up the guy just to see his background etc. It's standard for me to "check someone out" because what they have to say can be discounted or re-enforced IMHO depending on their credentials etc.

While poking around their website -- I found this interesting little tidbit and thought it "relevant" for Investing 102 education.



Historical studies show that dividends contribute one-third to one-half of the total return in the stock market over longer-term holding periods.

[WSSix]

I like that!

[Sieg]

Agency Mortgage REITs Likely To Benefit From Treasury's Modifying Fannie, Freddie Backing Terms

http://seekingalpha.com/article/815741-agency-mortgage-reits-likely-to-benefit-from-treasury-s-modifying-fannie-freddie-backing-terms?source=email_investing_income&ifp=0

Mr. Weld - What's your take?

[sik68]

Historical studies show that dividends contribute one-third to one-half of the total return in the stock market over longer-term holding periods.

Wow that is a telling statistic! I interpret this as a non-dividend portfolio growth would have to outperform by 66% to 100% just to 'keep up' with a dividend-based portfolio, correct?

If you're not investing in stable, dividend yielding stocks, there better be a darn good reason.

[GregWeld]

Agency Mortgage REITs Likely To Benefit From Treasury's Modifying Fannie, Freddie Backing Terms

http://seekingalpha.com/article/815741-agency-mortgage-reits-likely-to-benefit-from-treasury-s-modifying-fannie-freddie-backing-terms?source=email_investing_income&ifp=0

Mr. Weld - What's your take?



Yeah -- I'd read that article. I hold 35,000 Annaly Capital (NLY) shares so I follow any news like this.

My take is that we're still in the "undecided" camp on the economy and "rates" in general. It's a delicate balancing act of being ahead of the "curve" - in layman's terms - getting OUT of shares like this BEFORE you get killed -- and still holding - because of the outsized returns (dividend/interest) the name pays.

So - let's put that into an Investing 102 "thought process"..... using my holdings for an example.

35,000 shares @ todays price (17.04) = $596,400

Dividend payout currently = $19,250 PER QUARTER = $77,000 annually


My cost per share is $16.76 -- so right now I have a $9,600 "paper gain".

I don't buy shares like this for the "gain" -- I buy them to bring up my average % of "income". Remember that we're always dealing in money with PERCENTAGES -- and something like Annaly that pays almost 13% -- really helps bring up that average. If you had $600K in Coke and $600K in Annaly - you'd have some safety with a pretty decent "average" dividend. So this is how I "balance" my accounts out.

Now ------------ Let's say this cut the dividend payout by HALF --- so dropped from 13% down to 6%.... That would give a stock like this a BIG haircut! This is where we try to use some historical data to help up make a call on whether to buy or sell.

In 2006 NLY paid .26 a share dividend - and their share price was $16.00.... So that dividend rate was HALF where it is today -- but the share price was only $1 less... and over a 5 year period - their dividend rate has been all over the place! They've paid .75 a share - and they've paid .32... but even when their shares were at the low of the period (2008) at $9 - they were paying .55 a share.

Their range is about $2 a share for the last couple years -- somewhere between $16 and $18 bucks a share.... and the REASON for that is because of the "high" dividend payout.

So the conundrum is -- if they continue to pay me $77K per year -- is that more important than the CAPITAL AMOUNT I have invested. If their shares went down by 50% - I'd have a paper loss of $300K.... but if I get $77K per year - in 4 years I've gotten my money back... and who knows where the share price will be then.

My big worry would be if they cut the dividend in half SUDDENLY --- and the shares dropped by half. But when you look at the historic relationship of the share price and the dividend - they don't seem to do things SUDDENLY... AND if I pay attention to the MORTGAGE RATES I should have a good telegraph of what is going to happen in the future and therefore be "forewarned".

OKAY SO I'M BEING LONG WINDED.... but I'm trying to use this as some kind of "learning" experience for this thread....

The long and short of my take is -- it "depends" -- it depends on your GOAL for your investments. My goal is different and my horizon is different. My goal is CURRENT INCOME.... I already have the capital. I can sit and hold and collect that wonderful dividend/interest. I'm not freaked out by $1 or $2 capital "change". What I'm also going to say is ---- that people NEED TO UNDERSTAND WHAT THE COMPANY DOES AND HOW SMART THEY ARE.... because in the end --- that is what you're investing in! You need to trust the management to be way smarter about what they're doing than you are!

So go here and just read some of this....

http://www.annaly.com/site/marketcommentary.aspx#Asset

And you'll see that RMBS (Residential Mortgage Backed Securities) is just "some" of what they do...


BTW -- THE MARKET will tell us what they think - and THE MARKET is fickle... and if they sense that NLY won't be able to make a ton of money and pay that huge dividend -- we'll see that reflected in the share price. And since the price doesn't move all that much -- if you're at all concerned about what the upcoming elections have in store.... and how that will affect our taxes etc... then it never hurts to get out of the way of a train coming down the track...NLY only moves a little - so if you get out - you can get back in - it's not like they're going to jump $5 a share like APPLE....

ME? I'm holding and collecting that dividend. It's just too hard to find CURRENT high rate relatively safe places to put money to work.

I'd written before about BONDS - and that this years bonds were coming due and to roll them into the next 5 year due dates - I'd be taking a cut in return (they're paying 2%!) so I built up the cash and bought into an apartment LLC instead. Remember that we always have CHOICES where to put our money!

[Sieg]

OKAY SO I'M BEING LONG WINDED.... but I'm trying to use this as some kind of "learning" experience for this thread....


Thank you, I like it when you think out loud. :thumbsup:

[glassman]

Me too, thanx Greg.

[legend]

This site is a bit wild in predicting the end of the world, but they seem to have some interesting info on when/if another financial crisis is on the way

http://truththeory.com/2012/08/18/startling-evidence-that-central-banks-and-wall-street-insiders-are-rapidly-preparing-for-something-big/

and that the govenment is getting ready for the resulting protests/unrest

http://truththeory.com/2012/08/16/the-u-s-governments-coming-war-with-the-american-people-insane-quantities-of-govt-ammo-purchases-point-to-only-one-purpose/

what do you guys think?

[Bucketlist2012]

Which one of you guys bought BPT ?

Come on now, who was it ? It got hammered today for the first time in years...

[Rybar]

:_paranoid

[realcoray]

what do you guys think?

Obviously buy ammo mfgs. Sorry but that website is hilarious.

[Bucketlist2012]

Sin stocks are the way to go...

People will be smoking and drinking..More so in a down economy...

Armageddon ? Not too worried about it...Life is too short , and I will stay invested and enjoy everyday...

No hiding in a Silo for me...:thumbsup:

[realcoray]

Sin stocks are the way to go...

People will be smoking and drinking..More so in a down economy...

Armageddon ? Not too worried about it...Life is too short , and I will stay invested and enjoy everyday...

No hiding in a Silo for me...:thumbsup:

Yeah, assuming you think the economy will contract at all again, I'd suggest looking at areas that benefit from that. In 2008ish I was looking at Ross, assuming that with everyone pinching pennies, people that might otherwise shop somewhere more upscale would go there. I was so paranoid about more drops that I ended up pulling what I had out..

The chart tells the tale: 11$ in November 2008, 70$ today.

[GregWeld]

Yeah, assuming you think the economy will contract at all again, I'd suggest looking at areas that benefit from that. In 2008ish I was looking at Ross, assuming that with everyone pinching pennies, people that might otherwise shop somewhere more upscale would go there. I was so paranoid about more drops that I ended up pulling what I had out..

The chart tells the tale: 11$ in November 2008, 70$ today.



So what you just said ---- is EXACTLY what the average (not disparaging you in any way) person does...

They're happy as clams putting money IN when the market is high or flying... and as soon as it turns they start thinking about pulling out... MORE MONEY is pulled out at the BOTTOM of the market.

Ya know what that is?? Buy HIGH and sell LOW... and the smart money knows that to make money you have to buy low and sell high...

Look at this recent housing market for a CLASSIC EXAMPLE... people couldn't buy houses fast enough at the peak... then the minute the spigot turned off they all tried to sell which only exacerbates the downturn. The big money is buying houses NOW and buying apartments that are distressed etc... and buildings etc.

People need to recondition their thinking to be able to take advantage of things handed to them on a silver platter. A weak economy or a recession is when it's time to buy like a pig... Back the truck up and fill it up!

The people that have HUGE gains in the stock market NOW - are the ones that invested in 2008 and 2009... they're sitting on 100+% gains.

Apple shares were $82 in November of 2008.... MO was $22.... CVX was $57...


You have to start thinking "on sale" -- like the food store does and the clothing store does - and that big screen you want -- you wait til stuff goes on sale... then you pounce!

[Vince@Meanstreets]

Sin stocks are the way to go...

People will be smoking and drinking..More so in a down economy...

Armageddon ? Not too worried about it...Life is too short , and I will stay invested and enjoy everyday...

No hiding in a Silo for me...:thumbsup:

exactly, I didn't buy all this ammo for nothing.

[Vince@Meanstreets]

This site is a bit wild in predicting the end of the world, but they seem to have some interesting info on when/if another financial crisis is on the way

http://truththeory.com/2012/08/18/startling-evidence-that-central-banks-and-wall-street-insiders-are-rapidly-preparing-for-something-big/

and that the govenment is getting ready for the resulting protests/unrest

http://truththeory.com/2012/08/16/the-u-s-governments-coming-war-with-the-american-people-insane-quantities-of-govt-ammo-purchases-point-to-only-one-purpose/

what do you guys think?

don't buy into the fear, if enough people cry the sky is falling, someone will make it happen. Buy 500 shares of AIG and call me in the morning. :thumbsup:

[GregWeld]

Sorry -- But I won't even bother to click on sites like that... it's just like reading the headlines at the grocery store check out line... UFO's invade China... Big Foot really killed JFK...


:willy: :rofl:

[GregWeld]

Here's a very well written article on Dividend Investing -- and the possible "bubble" that people speculate about.

There's a lot of really good info in it's entirety -- but you only need to LEARN from the very last paragraph. THIS IS SO TRUE IT HURTS! When everyone was talking about dot coms -- it broke -- when everyone was flipping houses - that broke - when everyone was into gold - it peaked...

What I truly feel is different about dividend investing is that people are FINALLY learning that it makes sense to GET PAID to invest your money. So until prices just get stupid (which would drive down the yields) --- or we get into the age old war of rising interest rates competing for capital.... we're safe. But read the article when you have time because it's (IMHO) good stuff.


http://seekingalpha.com/article/826111-is-dividend-growth-investing-enthusiasm-inflating-a-bubble?source=email_investing_income&ifp=0

[Sieg]

But the smoking bubble is sustaining itself well:
http://finance.yahoo.com/news/altria-group-boosts-dividend-7-151915822.html

:woot:

[bdahlg68]

Dividend investing is somewhat self controlling as most people watch %-yield. If lots of people buy in, share price goes up and yield goes down. Suddenly it's a bit less attractive and people stop buying. Share prices may settle back down or the dividend may increase - yield goes back up and it again becomes more attractive. All related to risk of a certain stock, but %-yield is what really keeps things in check. Most people won't buy an Altria (MO) at 0.5% yield, or Annaly (NLY) at 1% yield. These types of things really make it dividend investing a good long term strategy and somewhat immune to bubbles - only heating up and cooling off.

[Sieg]

Put the helmet on and cinch down the belts.........http://finance.yahoo.com/blogs/daily-ticker/election-2012-determined-next-3-weeks-jim-bianco-152145014.html

:question:

[GregWeld]

Just as soon as someone has it all figured out... it'll take a left turn... or not...


If I've learned ANYTHING with 30 years of investing... it's that I know nothing and NOBODY can predict anything.


So -- I buy things that PAY ME to own them. That may be real estate... it might be stocks... it might be corporate bonds... or muni bonds.... But regardless of what all the talking heads talk about ------- #1 rule is that my investments pay me to own them.

Remember that rule and you'll do well. :thumbsup:

[Bucketlist2012]

Also don't read anything on yahoo...

Think for yourself, and stay the course.

Also always be ready for a dip...We have run up for a while now..good times..

But we are due for a dip. And that will be the time to add and buy...

And as Greg said, get paid to own something..14 of my 17 are dividend payers..3 are monetary policy plays...

[Sieg]

I should have put a smilie there also. No panick, I'm comfortable with my positions and it will be interesting to watch how the market reacts to all the noise in the next month or two.

[GregWeld]

I have multiple brokerage accounts --- and I get more friggin' memos and newsletters and "insider" info than I can even manage to read... but here's my take on most all of it.

ZIP


It's all just "info" and 100% of the time -- one brokerage's info will say "stay clear of X" and the next day I get a buy recommendation from the other one..
and two days later I'll get a hold recommendation from another. NONE OF THEM HAVE A CLUE.

So here's what I like....


I have 30,000 shares of JNK - pays me MONTHLY .23 or so per share... YEAH BUDDY... do I care that it goes up and down 50 cents. NOPE.

I have 11,500 shares of HYG - pays me MONTHLY .50 or so per share... ditto above.

Both of these can get slammed if INTEREST RATES suddenly go askew... but If I'm paying attention -- then I should be able to get a heads up.

I use the above to PARK CASH... not as a long term investment buy and forget it type deal.

My point is --- they pay me to own 'em! Period. If not - I'm not in it. Someone else can buy the Faceybooks of the world...


:rofl: :unibrow:

[GregWeld]

Just for fun this AM -- I checked out Facebook (FB) chart and technicals....


OH MY is about all I could come up with. WOW! Here's a real learning experience for newbs to investing. When you are absolutely CONVINCED that you just couldn't loose on some investment.... just go look at this bad boy.

Stretch the chart out to "ALL" and you'll see why I always reference these charts. This is a true "fell off a cliff" chart vs the low on the left and higher on the right that I preach. THEN I looked at a couple other metrics... and it gets worse! The P/E (price to earnings multiple) is 106! That means that the CURRENT price of their shares - even at these lower prices (only lower relative to the ridiculous valuation of the IPO).... that the share price is 106 times HIGHER than they EARN. Let's compare that to APPLES (AAPL) who's share price SEEMS ridiculous -- but their P/E is only 15.8!

I'm not a P/E guy but it does "matter". It matters when the P/E is HIGH --- because the company will have to GROW INTO the P/E... so they're going to have to have some stellar earnings GROWTH in order to get that ratio back to some normal point (whatever that is). It also matters when the P/E is low because that signals a complete lack of interest in the company by "the market" or that expectations for the company are for it (earnings) to SHRINK - and that's certainly no way to invest! It's why you can't just choose one metric to hang your hat on.

Here's the other big reminder. When they say "only invest money you can afford to loose"... it's because they're RIGHT. Because just when you think you've found the next Microsoft or Apple.... it might just bite you in the arse.

If I was a Facebook "fan boi" --- which I'm not because my kids have already moved on from it, and that spells death watch to me --- the play was to buy it -- and since it didn't 'work' right out of the box --- sell it --- and sit on the sidelines and watch and learn... then if you still were a fan -- buy it back at the lower prices and only buy the number of shares you had - not the amount of money you'd invested. SO you'd have bought at 40 - sold at 35 - and then bought back in at 19 or lower... and sitting on 500 shares at 19 is way better than 500 at 40 BUT that still might not work so you come back to that "don't invest money you can't afford to loose".

Look at Kodak... :lol:

[toy71camaro]

All great points.

I didn't want anything to do with it for multiple reasons:
1. I didn't have 'the money to lose". I HATE losing money.
2. I didn't think it would "do anything". What I mean is I've been a FB user for quite a few years now. I've seen it go from a "everybody HAS to have it" to "yeah, some people got it, but those that do, are generally disliking MUCH of what they keep changing". So, eventually, their gonna piss off enough people and everyone's going to jump ship to the next fad. Google+? heh

#2 goes back to what Greg said way way back in this thread. Own something you have an "inside" track to. Own the Home Depot because you shop there cuz your a contractor 4 times a week. When YOU notice its "going sour" in the store, best think about your shares, and if you think the company as a whole is sinking. That's what I "seen" with FB. It was going downhill already. Not jumping on a sinking ship here!

Honestly, they shoulda done something back in 2008-2009. THAT'S when it was at its peak. They were a couple years late. And still, I don't see the "business" model to make $$ over at FB.

[GregWeld]

I wasn't really just dumping on FaceBook -- just using it as an example of what can go south -- and just how quick it can go that way. It's real easy to stand to the side and examine the carnage.

Obviously -- had their IPO gone to the moon -- everyone would wish they'd gotten in.

BUT... That is the gambling lesson to be learned. And it's a hard lesson to learn! The excitement - the hype. It's like buying a lottery ticket when the prize is 300 million. Everyone is buying into it. But that's 20 bucks not 2000 or 20,000. So in my mind - 20 or 40 is fine to lose. But if you loose a grand when you've got 10 grand invested - that's 10% - and that's an ENTIRE YEARS performance down the tube.

[96z28ss]

So what is a good rule of thumb for some profit taking?

[GregWeld]

Good question. I'm not sure there's a quick or easy answer...

Let's examine a couple things.

Let's say a stock has doubled... okay... why? Great growth - new products - killer earnings...

Are you willing to take a double or take some off the table.... but what if it goes up 300% or 1000%...

I think it's up to each individual - their risk tolerance - their gut feelings etc. Personally I have several instances of multi hundred % gainers.... and I'd be a lot richer if I'd let 'em all ride instead of selling along the way...


BUT - there's always a big butt!


Nobody ever went broke taking a profit.

I'd say if you're not fully comfortable with your diversification... or your not comfortable having an outsized gain... then do what makes you feel good.

I'm never one to sell "all" unless something has fundamentally changed and I just don't want anything to do with the company. Scale in - scale out... so take 25% off the table or 15%...

The other big butt....

This question also depends on your tax situation - and don't overlook this detail. Is the gain long term or short term -- HUGE tax hits on short term.... AND is it in a tax account or an IRA/ROTH where taxes are deferred so have less impact.