We also have to wonder, how much of the decline today is profit-taking by those that got shares at, or just above, the IPO price? I'm not defending the stock, couldn't care less about it, but that would be an explanation that could make today's movement "seem" like more of a buying opportunity than a sign of impending doom.

Edit: Upon further review...it looks like the banks issued more shares. So the decline is likely created by the dilution of the additional shares. Greg's point still holds true though, for whatever fundamental reason, how willing are you to stomach these day-to-day swings?

Totally agree Jeff.

Greg, speaking of this Alibaba stock.

Question #1, whats the difference with a foreign stock and a foreign market like say the Nikkei (did i spell that right?)

#2 so would Coke do a public stock overseas, like on the nikkei?

Or is it a global ipo and i'm not quite understanding the flow of money?


thanx, Mike

After reading this TWICE -- I still have no idea what you're asking.

It will be interesting to see the impact of war on the market.

Strategic portfolio adjustments in times of war?

Opportunities?

I've been following the Alibaba Group Holding Ltd IPO and have mixed feelings about it.

I want to see how things play out after the lockup. But, interesting about this specific IPO is that about 1/3 of the pre-shares were not "restricted" for lockup, weather or not this will create a stir... well that will have to be seen.

I've never been a fan of IPO hype, I want to see how things sit once the lockup is over and we see the stock hopefully mellow out. If earnings are going to move forward with what is predicted then investing after the lockup will still provide at least a few "baggers" if you are planning a long term hold on the stocks.

Greg, thoughts on the un-restricted shares of the lockup?

Jason

I guess the Dow, Nikkei, Nasdaq are all just measurement/averageing devices. My question was/is, How is the "Alibaba" traded? i guess the same goes for Sony, Toyota etc...I've nver really thought about it before.

Who handles the purchase of the actual stock? A bank?, if this is waaaay back in the thread, well, i guess i'll reread...

Sorry for not being clear, my brain's weird.

I agree on this. A few months back I bought shares for a company at $7.60 today they are hovering around at $6. I put $5k, for some it might no be much, but for me it is. Am I about to jump out the window because of it? Nope. I have learned to be patient at this "gambling" hobby.

Alibaba is traded on the New York Stock Exchange. It is traded just like any other stock listed on the New York Stock Exchange. The Nikkei is an index which is made up of top 225 Japanese Stocks on the Tokyo Stock Exchange.

The DOW -- is a "weighted average" of 30 stocks... each having a divisor assigned to it's stock that accounts for when stocks pay dividends or splits etc.

The Nikkei is the Japanese stock market - Actually called the Tokyo Stock Exchange - and is their "average" similar to our DOW.

The NASDAQ is ONE stock market here - the other is the NYSE aka: The New York Stock Exchange.

It used to be that the NASDAQ was electronically handled trades -- and the NYSE was actual people or "Designated Market Makers" and "Floor Brokers" that were on the floor handling trades... Now days there are fewer seats on the NYSE and many of the trades are done electronically - but there are still Market Makers... and Floor Brokers that represent the members on the floor. There are also what's known as Liquidity Providers that are members of the NYSE... and now you're getting complicated.

Your actual "trade" is handled by a "cleaning house" much the way a bank clears a check. The biggest I think is known as ICE (Intercontinental Exchange) - which owns the NYSE and the Euronext. You place your trade via a brokerage which is really much like a bank -- it has your money... the trade is either done electronically or via a market maker -- and then the actual paperwork behind the scenes is handled by a cleaning house.

NO MATTER WHAT though -- YOU own the share you buy. Even if the exchange was blown up (god forbid) or your brokerage went broke (hope that's not why they're called BROKErages). The shares are yours not anyone else's. The big boys are just facilitators.

You've answered my question wonderfully. Precisely the answer i was looking for even when not quite asked properly. Thanx

Good! Because I still have no F'n idea what you were asking!


LOL

I stole this directly from Motley Fool.... it states what I've tried to state here before... Predictions are a fools business. Ask Ballmer (the EX CEO of Microsoft) about what he thought and said about the iPhone. An Idiots statement.



Steve Ballmer QUOTE:
“Five hundred dollars? Fully subsidized? With a plan?” Ballmer chuckles in the way that only Ballmer chuckles. “That is the most expensive phone in the world. And it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine.”


You think he wishes his EX company sold anywhere near 10 million of something in a weekend??


Now for a better "quote"....


If we want to plan for the future, we must predict in some capacity. But, to extend a theme proffered in last month's introduction, how do we think about predictions in such a hard-to-predict world?

Partly, we can't: The simplest way — and, if our investing track record says anything, the most safely profitable way — is to seek stocks that require fewer predictions; companies whose pasts most tend to approximate their futures. No complicated series of contingencies needs to play out for most Income Investor stocks to succeed.

As a Microsoft shareholder I was seriously upset to hear of Steve's departure.






:lmao: :lmao: :lmao: :lmao: :lmao:


After all, in '99 I had 80 shares @ a $93 avg cost. Look what he did for me! :D

Thankfully a couple splits and buying 100 shares in '13 @ $27 got me back in the green. :sieg:

It's a little tricky with BABA shares, and a bit more risky. Don't ask me to explain it but they're called Variable Interest Entities (VIE). Copied this from wsj.com:

The bigger concern is that, because China's government restricts foreign ownership of Chinese assets, Alibaba shareholders won't actually own the company. Instead, through a so-called variable interest entity (VIE), they will only own shares in a shell company with a contractual claim on Alibaba's profits. Many Western-listed Chinese firms get around Beijing's foreign-ownership rules this way. But Beijing could close this loophole at any time, and it gives shareholders limited recourse against abuses by company founders.

VIE "contracts are only binding and enforceable if Chinese courts are willing to uphold them," warned Congress's U.S.-China Economic and Security Review Commission in June. "For U.S. investors, a major risk is that the Chinese shareholder . . . will steal the entity, ignoring the legal arrangements on which the system is based."

***
As it happens, the most notorious VIE controversy involves Alibaba and Mr. Ma, who in 2011 separated Alipay from the rest of the company without board approval. He said Chinese regulations required him to make the move, but it infuriated Alibaba's minority owners Yahoo YHOO +1.03% and Softbank. 9984.TO -4.24% While a settlement was negotiated, trust between the company and investors was damaged.

Alibaba is thus a microcosm of today's Chinese economy: Hundreds of millions of consumers and businesses are benefiting from rising opportunity, but the commanding heights remain opaque, politicized and shaky. Caveat investor.

Yes Erik --- Alibaba is COMPLETELY different. I think Mike *Glassman* was asking about stocks in general so I responded that way.


Alibaba "investors" (are they, or are they gambling) are really just investing in paper - they own nothing. That doesn't mean they can't make a ton of money over time if the SHARES (paper) continue to go up. I look at those things like this --- if I bought Ford (F) and it went to zero... I wouldn't have any chance of recovery - it would just turn into wallpaper. So I don't really get too caught up in the legal aspects. If you do - that might hold you back from making some money. A loss will be a loss... and a gain will be a gain.... regardless of the silliness of the investment.

On the opening day -- there was 25 BILLION dollars on that bet. WOW! Just WOW!

The ONLY reason it's green right now is because he was replaced. I believe pushed out... because of the repeat of another OS that is needing major revision and is managing to further piss customers (enterprise customers) off. He was a failure at phones - a failure in the tablet market - and produced a series of bad software (mistakes) as well as made a fool of himself (thus the company) repeatedly.... "the monkey dance".... "Screw Janet Reno"... the iPhone comments stated earlier.

The most interesting thing I can point a person to is to go to Google Finance and pull up a chart of MSFT -- click on ALL so it shows the history of the stock dating to 1986... (My wife started there in 1984) and see the PEAK in 1999. That was when Bill Gates announced Ballmer would be CEO. It then stumbled along until they announced his departure.

Having said all of the above -- had you bought the IPO.... You'd be up 46,000 PERCENT. Every dollar you invested would now be worth $46,000. $10 (ten dollars) would be worth half a million... $1,000 would be worth 4.6 MILLION.

That story is what pushes people into IPO's to this very day. Everyone wants to be in the next MSFT.

my peabrain cant even comprehend 46,000%. Wow. And that was just before the time Lynch wrote "one up on wallstreet" where he was sayin "you hit true pay dirt if your stock is up ten fold". But i guess that is "tech" stocks (*that i dont know) vs stocks i do know/see/recognize (oil, consumables, entertainment )

Great stuff the last few pages.

anyone been following "blockbuster video" lately... now (ELEKTRA*:Mexico)?

I started looking into it since Feb. Although Blockbuster crumbled here in the US the last 3 quarters in 2013 it posted 118M in profit from mexico operations while under the ownership of Dish.

Since the acquisition (ELEKTRA*:Mexico) has been rising lately... this could be a possible "bagger" in the works. The first few months after the acquisition the stock fumbled a little, but now it looks like they have figured out how to capitalize on the recently acquired brand and we may see some serious earnings in the near future. It will be interesting to see the earnings after the next quarter.

I know its a random curve ball but I have been taught to look everywhere haha.

I've been poking around trying to figure out where I need to put some money to work and get some yield... which triggered something in my pea brain that might want to be brought up for this thread.

That wouldn't be the above post about some failed stock that now trades in Mexico... LOL

I like to buy on "DIPS"... and today we have a dip. Is this the dip I'm waiting for to get me excited? Just NO.... While down 200 points on the DOW seems like a "WOW"... it just isn't. It was 10 years ago --- and the number seems "large" - but it's NOT on a percentage basis. Down 200 points on the DOW is barely over 1 PERCENT.

In money -- everything is about PERCENTAGES. Doesn't matter if you make 1 dollar -- as long as that was on a 10 dollar investment - you made 10%... HUGE.... 1 Percent... come on.... 10 cents on 10 dollars. Not enough to move the needle.

So ---- While I say I'm poking around.... and I have some serious cash to put to work... I'll wait. IF the market is heading for "correction" territory... then that's in that 10% vicinity. THAT get's me excited... because it raises my yield... and it CAN snap back and recover that 10% down move - making me seem really smart... If it stays down - so what? My yield is good... I didn't pay "UP" and then have to wait for it to recover... and if it goes down beyond the 10% -- I'm a lot closer to where it goes than I am had I paid "full price". Think of it as NORDSTROM'S just did the whole store at 10% off... you'd be happy as hell to go shopping. If the 10% didn't lure you into the store -- next month they might go to 15% off.... you should be happy once more - go grab that sweater you passed on at the last trip! Now you're glad you waited. If they didn't go to 15% off ----- and they go back to full price.... it's okay - you didn't need the sweater that badly anyway. There will be more sales in the future.

That doesn't mean you should be frozen in place. YOU ARE NEVER EVER GOING TO GET THE VERY BEST PRICE - on either the buy side OR the sell side... ain't going to happen. Get over it. Buy when you're ready - start collecting those dividends and 5 years from now you'll look like the smartest guy in the entire Universe.

my point was more about the unusual aspect of how markets work. What was in essence a failed stock is now posting increasing profits in a different market. If I were to say that Dish was going to take blockbuster to mexico and make over 100M in 3 quarters I'm sure you would have the same response (me too), but they did and it seems the platform is doing really well down there.

I just noticed it because it was unusual, something that failed here is growing and posting increases in revenue / profit. Only time will tell how long this can be sustained but the parent company knows the market very well along with several ideas on how to increase revenue / profit (because revenue is nothing without earnings).

I'm also not saying go and buy it now, simply pointing out that undervalued situations can pop up anywhere. Ill check it in a few months to see how things are going. It is very unusual that something can fail so bad here then come back so strong in a different market with a refined product offering.

If you read your post about this -- it sounds like a troll pump and dump. Not dissing you personally - and you make some decent points. But this is investing 102 --- which means people just getting started. There's no room for sophisticated research -- or gambling -- or foreign holdings..... this is SIMPLE investing -- dividends - some growth - safety - reliability - understanding the fundamentals. When people have 2 or 3 hundred thousand dollars in investments -- then that's a different thread... where people can stretch a bit or gamble a bit. At that level - they should be getting 10 or 15 or 20 thousand dollars a year in dividend income.... and the compounding starts to really take hold...

If you're playing with 10,000 total investable dollars -- why try to make it 2,000..... money is too hard to come by to gamble with it. That's not to say some people win the lottery.... that's not to say someone might gamble 10K and wind up with 100K... but more often than not -- that 10 becomes 2. I'm trying to get people to TRUST in the stock market and take baby steps - and get some solid rewards - and be able to live thru the ups and downs - without getting ulcers or bailing out.

Ok Greg, I've got a question and tried to look through here but this tread has gotten so big it's harder to find some of the info.

I've got some cash to start investing and I think I've i got a good idea from in here as what to do :newbie:

My question is what can I do to make my 401k work better and grow faster? I've done what their web site has told me todo but it really doesn't do much from a growth stand point, sure it grows from my and my company's matching contributions, but only a little (from what I can tell) from the investments?

If this has been covered already then maybe someone can show me the post?

Thanks Newbe invester!!!:newbie:

The reason for the 500 f'n pages is because people come and go - and ask the same questions repeatedly. So things get covered over and over... Which is perfectly fine as far as I'm concerned.

Okay -- your - and most peoples - 401K's are usually MUTUAL FUNDS... mutual funds are the pablum of investing. They're built on some basis such as one can label --- Growth Fund... or Income Fund... or Large Cap or Small Cap. The FUND then invests the money in the shares that meet that criteria. They are not allowed to invest in anything outside the preset criteria. So if you're into a fund that is "Small Cap" --- and small cap is out of favor this year.... and that fund sucks... and it will offset the growth of the other fund you may happen to own which is doing okay.

FUNDS --- Are generally loaded up with the "Top 10" names in their investing criteria... and then have maybe 90 or more names in the fund. The problem with this type of investing is that the top 10 might be the lead horses - but they're trying to drag along the 90 dead horses. They also have management fees - as they have salaries to pay to manage the 90 dead horses... and your company has costs associated with managing the plan etc. These all affect your return. Negatively not positively!

My deal here - which has been repeated a gazillion times is that all a guy has to do is to research what the top 10 are of the fund he's thinking about... and just buy the couple top ones in there -- and build your own mutual fund - that isn't dragging along 90 dead names with it.

Now -- there's more to it than that. Some company plans won't allow you to invest in individual stocks. Some will. Some make you ask the plan administrator to allow you to do this. Depending on the size of the company etc that can be a big hassle... or not.

My advice is that if you get a matching amount --- then depending on that information - put in the amount that gets matched --- and then open a ROTH IRA or an Individual IRA outside of the work plan and start to contribute to that as well as your company plan. This all depends on how much you have to work with - what your income level allows you to do (there are IRS limits) etc.

The brokerages - such as TD Ameritrade - or Schwab - or some other discount broker usually are pretty well versed in what you can and can't do and will help you setting up and getting started etc.

WHAT you invest in depends on your age - income - tolerance - goal - family. A single guy making 200K a year that's 30 years old can afford to toss some money in chasing the big score... Alibaba - or FaceBook - or GoPro of the world. A guy with half a million bucks invested already that has 3 kids approaching college age and he's 50 -- should be thinking more safety and compounding. Safety SHOULD NEVER be confused with DEAD MONEY. That's where people tend to screw themselves. We want to invest long term - for growth of our capital and as large of TOTAL RETURN as possible.

Remember that you might retire at 65 but you don't stop living then. You probably will live another 25 or 30 years....so if a guy is 50 now -- he's got 40 years of INVESTING ahead of him. People start to buy bonds and other stupid "SAFE" investments that don't grow and then they find themselves running out of money 5 years after they retire. F that!

We have INFLATION. We have property taxes that go up every year. We have medical costs that are out of control (thanks to the dickhead in charge). We have roofs that need to be replaced and houses that need to be painted. When I was in high school - gas cost .21 a gallon.... now I pay 20 times that!

Without some details of what you're already in to... it's hard to look at a more detailed explanation. Feel free to PM me or get my email <preferred> from a mutual friend here... and I'll show you how to look at your mutual funds in detail if you don't care to post them here. Nobody needs amounts -- just names or trading symbols.

Great summary Greg.

My company doesn't allow individual stocks in my 401k, so I printed up the details sheet on EVERY option we were allowed to choose from, then i went and reviewed their top 10 and based my choices on them, as well as some paid a dividend.

Beware the "GoPro Syndrome".... WTF is that?? You ask.

That's guys thinking that they "missed" making a huge fortune by NOT buying into GoPro (GPRO)... so the very next chance they get to buy an IPO they go double or triple what they "woulda / shoulda". That IPO then blows up and they get spanked.

Not saying to not go into whatever "it" is that you feel you want to invest in - I'm saying beware the syndrome that sucks you into trying to place catch up...

I'll say this as well. The "market" isn't regulated by the talking heads on TV. I've heard half a zillion discussions about "this is over priced" - "the valuation is too high" - "they'll have to grow into this share price". IN THE MEANTIME THE SHARES KEEP GOING HIGHER.

If you'd have never invested in Microsoft (MSFT) back in 1986/7/8/9 etc - because of those same "ideas"... then you missed one of the greatest investments in the history of the stock market.

The "MARKET" is about more people wanting to own than wanting to sell. PERIOD. All the other metrics are crap. But remember to go back and read the "priced for perfection" posts. The higher things go up - the faster they go up - if they "miss the whisper number" or "growth" is 500% but the market "expected" 525%... you can get hammered in a big hurry. Just play with money that's COMFORTABLE... That is all.

RE: GoPro (GPRO)


I'm not discussing whether or not to buy or sell this particular stock! It's just a great example for Investing 102.. that is "Current". I wish I'd have been smart enough to buy some - and flip it out up 100%... but I stay away from this stuff because of my own personal situation. EVERYONE needs to do what is RIGHT for THEMSELVES given their age - their guts - their situation.


I found this - which is WAY TOO COMPLICATED FOR INVESTING 102.... but what I'm using this for is to try to explain that there are many more things "behind the scenes" than we really need to know for our purposes here. WE HAVE NEVER DISCUSSED SHORTING a stock - because I don't think it's appropriate for INVESTING. Shorting is "trading".


Interesting......



As the current authors discovered, borrowing the stock proved to be extraordinarily expensive. Demand for shares to short was so great that security firms were charging a fee of 100% per year to borrow the stock. This fee essentially eliminates the possibility of pure arbitrage. Such massive fees are also further evidence that the market for the stock is not functioning properly.

The bottom line is that the option market is flashing warning lights that say investors should approach the stock with great caution. The combination of a sky high price relative to earnings and the dramatic rise in the cost of put options compared to put-call parity suggest that a sharp drop in the stock price is a distinct possibility.



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



A "PUT" is the ability to BUY A PUT --- or SELL a PUT --- which allows you to PUT your shares to whomever is on the other side of the trade...


Let's say you buy a put on GPRO:


You'd buy a "PUT" when you think the price of the stock is going DOWN... essentially betting that the FUTURE price at some date - is going to be lower than it is now... and you get to PUT that stock to the other side at that price that was stated in the put ----

So let's say you bought a put at a strike price of $100 that expires on Dec 1st... and the shares are at $90 today. Rather than sell at 90 today - you buy the put - which says you can get $100 for the shares on that future date as the buyer MUST take the shares regardless of the price -- even if the shares had fallen to $75. The PRICE or COST of the PUT is determined by the risk... or what people are willing to bet one way or the other.

The opposite of this market is called a CALL OPTION.... that's where you'd buy the right to BUY shares at "X" price in the future... betting that the shares are going up to "X" by X date (the strike price and the expiration date of the option).

A quicky example is that you might buy 100 share call option - betting that on Dec 1 they're going to be $100 -- and the right to be able to do that transaction is going to cost you $10 per share. You'd only have to pay $1000 for the "right" to be able to buy 100 shares at $100 ($10,000)... and if the shares are trading at $125 when your call is dated (the expiration date).....well you just paid $11,000 for a stock that's worth $12,500.... and you only "risked" the $1000.


It's of course much more complicated than all of this.... and it's a traders market -- and there is an "options" market that does nothing but trade these puts and calls -- it's completely different than the INVESTING we're talking about here.


My old boat was named "Options".... and I should have named the dingy "puts and calls".... as the dingy is often used for taking people to shore or picking them up.... HAHAHAHAHAHAHAHA




OPTIONS:







http://i919.photobucket.com/albums/a...oattrip003.jpg







The boat I should have named "Puts and Calls":






http://i919.photobucket.com/albums/a...Knotime012.jpg

Naming your boats that would have made for a great conversation starter, Greg.

The funny part is that the "O" in options was the original Microsoft "blibbet" (which only early MSFT people would recognize)... and the "Options" was for the MSFT options we had... and the boat gave us "options" other than sitting at home. Nobody got it - everyone thought I was an Options trader.

Continuing the boat theme .. When my brother retired as a fund manager he left with a bunch of what they called "Deferred compensation". Part of his plan was to establish primary residency in Fla.. which is free of state income tax... He did everything right but still ended up in court defending his freedom from state income which totaled approaching 6 figures in state tax.. He won... purchased and 32 foot Boston whaler outrage... Named it "Happy Returns" for the tax return he eventually got which was 100% of the money back...

No doubt the IRS tried to claim that he "earned it" (since it was deferred compensation) in the other state.... but since he didn't actually RECEIVE it until he moved to Florida -- he was correct. The IRS doesn't even understand it's own rules. Which is fine when you're arguing over $500 -- but not when your fighting over half a million or more. And since they're just "clerks" and it's not their money paying the attorney's - no common sense needs to be applied.

The IRS doesn't administer state tax returns or the collection of state income taxes. I think you meant the applicable state taxing authority.

Your dingy is bigger than my fishing boat lol

A little off topic....

Coming from a construction background, this is my favorite boat name....


"Original Contract" and "Change Order" :lol:

http://www.videouniversity.com/files...rderbetter.jpg


Randy

The IRS reference was just a "general name" for tax collectors.... Everyone reading this would understand the reference. Well..... maybe not everyone.

We - regrettably - sold all the marine toys (used that reference in case Mkelcy took umbrage at using the word yacht or boat) when the kids went off to college. When they came home from school - they wanted to spend time with their friends rather than go boating. We will buy another one in a few years, and have already started talking about what and where. We both love (and had hull #26 on order) the 55' Fleming.




Randy -- Love that combination! It's perfect.

Why would I or anyone else object to the use of an accurate term?

You may be a little thin skinned about what, in the overall scheme of things, was a small correction, made mostly for the purpose of letting folks know that the IRS doesn't make up or enforce the rules concerning in what state income is taxed.

Last time I checked no ocean in ID.

"We" do have an airport here in Hailey that will take us to the boat.... wherever it may be.

I'll be too damned old to drive that far....

The Kogo is sitting in front of one of my buildings on Lake Union, it's pretty nice.
It's 235' has a sauna and jacuzzi a heli pad and sleeps.....12, crew of 21! Haha! I couldn't check the going rate for rental....something about having a broker? Looks like a money pit anyhow:G-Dub: