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

The beauty of the dividend.


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


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


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

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



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

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


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

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

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

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

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

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

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

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

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








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


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


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


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

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







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

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

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

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

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

Duly noted.

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

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

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

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

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

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


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

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


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


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

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

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

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

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

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

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



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


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

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

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

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

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

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





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

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

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

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

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

Here is a relevant article posted on Forbes: Buffett's Bad Advice

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

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

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

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


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


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


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

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

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

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

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

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

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

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

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


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


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

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


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

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

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


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

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

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


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

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

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

My thoughts are around these stocks:

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

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

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

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

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

Two thoughts:


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



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


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

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

Total Return info :

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

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


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


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

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

:)

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

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

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

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

Be like Warren Buffett......



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



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


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

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

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

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

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

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

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

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


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

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

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


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

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

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

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

I now look forward to the dividend pay dates!

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

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

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

John

Thought this was a good read.

http://seekingalpha.com/article/2189...-being-patient

John

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

Thats awesome!!! woohoo!!

:king:

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


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


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


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



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


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

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

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


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

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

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