What does a 10% drop really mean? To me it means If I were to sell today I would only get just over 100% increase in share price on my FB stock... I wish things got "hammered" like tat more often :-)

AWESOME!! And that's the thing the talking heads do over and over.... they harp on the minute by minute action... and talk about "big drops" (that are 1 or 2% in reality).... and nobody ever does the calculations that if the market is UP 30% - so what if you drop 5 or 10% !!


But it is what we live with.

Buying LOW is fantastic! It's when people come in at the much higher prices and then take a hit... then they throw in the towel. The minute they do - the stock goes up and recovers the drop and adds some! LOL


BTW --- Have to add --- This is a good time to go look at a long term chart of FaceBook (FB) even the one year chart looks RIGHT -- low on the left and climbing to the right. Choppy sure... but the trend is your friend! LOL

Just a quick share, not pitching this stock. I've been a mechanic for far too long so I've long known that Snap On makes the best tools, period, and you pay accordingly. Anyway, I decided to look at the stock because it's something, like Greg says, "I know" (even heard Jim Cramer prasising it). I can talk to my tool guy each week and I will know right away if something with the company is sliding. Bought some on this recent dip, but look at this chart over 5 years, or even 10.

http://finance.yahoo.com/echarts?s=S...22linear%22%7D

See how easy this is? Brilliant! You simply invested in something you actually know - and trust - the chart is right - it pays a dividend... and you're right there to see if you start to notice anything going sideways.

It's when people try to get "cute" when things go badly. Buying stuff they know nothing about - because they heard some dipwad on TV saying it's a "buy". Or buying what they think they can put $500 in to and be a millionaire by the end of the week...

I've looked at Snap-On many times - each time it's the low dividend that's kept me out of this fantastic name. I'm a customer. I love their stuff... maybe I'll buy some today.

Done! I bought 500 Snap-On (SNA) with a limit order @ $130.25

A very small buy for me because of the terrible dividend. But now when the big truck rolls up to the shop - I'll feel better being an owner! LOL


Funny about that truck -- and my dealer is a good guy -- I always tell the guy - "just let me look - I don't NEED anything..." But I can never get out of there without buying stuff!

Looks like GoPro (GPRO) owners will wake up very happy tomorrow.... They SMASHED earnings numbers.


That's what a stock MUST do when they're priced for perfection... they can't just equal... they certainly can't even hint that business was only just great... This one smashed the expectations.

Can someone explain to me looking at these 3 stocks why one would be a better choice over the other? I enjoy all 3 companies drinks and wouldn't have a problem owning any of them. KO, PEP, DPS.

KO=Div/yield .31/2.95 and cost 41.40

DPS=Div/yield .41/2.38 and cost 68.94

PEP=Div/yield .65/2.74 and cost 95.65



All 3 looking at the 5yr start lower on the left and get higher on the right. Are you better off purchasing more of one stock and earning multiple Div or purchasing less stock and earning a higher Div? I'm sure the name of the game is to try and figure out which one is going to do better long term and thats what you should base you choice off of. But lets just say for discussion sake that they are going to continue to perform equally.



Or am I trying to make it to simple?

When I'm faced with the decision between multiple good choices, this is what I typically default to. I'm in a growth mode with some choices and simply steady eddy with others though. Because dividend payments are based on the number of shares owned, I go for as many shares as I can for a set dollar amount on any stock I'm looking for growth in. I did this when comparing Altria and Phillip Morris. I could get many more shares with the price of Altria at the time. This in turn allowed me to receive many more shares with each dividend payment.

Everyone is going to be different and have different priorities, tolerances, and goals. A good, general rule though is to invest in quality names so that over the long haul, you are comfortable with your choice and make money. With that said, I don't think you'd be making a bad choice investing in any of those choices. You may want to dig a little more into Pepsi though as they do have a large snack food component to them versus purely beverages like Coke and Dr Pepper/Snapple. That may or may not matter to you. I just mention it as it is a differentiator that I doubt most people would know about the company when it's mentioned.

You failed to add to the thought process the TOTAL RETURN of the 3 --- go back and check those numbers out then come back. I'd do it for you but I won't. Ya gotta do the work on your own. See if the TR helps you make the choice.

Trey....


Good thought process. The only "correction" I would do for you (and others) is that dividends are paid in dollar amounts.... but the MATH is PERCENTAGES. 3% dividend is 3% dividend regardless of the number of shares owned. So - If you were comparing two stocks and they both paid the same PERCENTAGE dividend but ones share price is TWICE AS HIGH.... it's still earning the same percentage dividend on your dollars invested (given that you'd have the same exact dollars to invest).


10K invested in one company buys you 100 shares ---- and in the other company only 50 shares --- but the PERCENTAGE of return (dividend) would still be the exact same.

I got what you were saying.... but mathematically it doesn't work out the way you were saying.


HERE is what I would rather see people thinking about..... THE FUTURE as in 10 or 20 years from now. What is the BRAND they like and buy. Don't get trapped in the past. Do you no longer buy the product even though if you did - you'd buy "X"? OR ---- is there another company that might be in the SAME CONSUMER STAPLES SPACE that has better growth and a higher dividend.... So don't get locked into just comparing Coke vs Pepsi.... expand that to look at other "food/grocery/retail/consumer" products for comparison. Are their names that you love even better? That have better growth? That are just as stable?

Not saying there is ---- I'm saying open yourselves up to expanding your research. It will make you a better investor - it will give you ideas for future money - it will make you more rounded in your knowledge so that when you do make a choice -- you KNOW that's the right one for you!

Correct me if I am wrong Greg but to calculate total return the equation is below:

(Ending stock price minus Initial stock price) plus Dividends
divided by the initial stock price.

Maybe I am wrong

That is correct.


I just go to Schwab when I'm researching a name (symbol) and click on the RESEARCH tab - enter a symbol - and then click on Total Return.

I'm generally doing comparisons when I'm researching and I can do this all from the comfort of my laptop sitting on my ass. Actual calculations take me too long. But for figuring your total return since you actually bought something is done the way you posted.

If we are assuming they are going to perform equally, it would not matter which stock you choose.

Depending on your situation you may prefer a stock that pays a higher dividend which could help you narrow your selection. You may also want to compare earnings and revenue growth, as well as the dividend growth rate. I will tell you this about the three stocks you have selected. You will pay a premium for KO for its brand strength, long term history, etc. That is not necessarily a bad thing, because sometimes it does make sense to own the best. It may be the more conservative choice, for which you get a slightly lower return (risk/reward).

Just to add to the thought process... of which to pick.


I've always only gone on two factors... How I PERSONALLY feel about the company... and if most things are equal -- then the historical TOTAL RETURN. I might love one company - but when I compare the TR -- and the "other" company is higher by a good margin.. I'm buying that company. The reason for this is that a large part of TR is the GROWTH in the share price.... and that's where I must turn into a lemming by following the collective herd. "They" have pushed the share price higher... (more buyers than sellers) and I have to respect that market force.


Just using your three stocks mentioned


KO is 1 year 9% - 3 year is 32% - 5 year is 78%

PEP is 1 year 18% - 3 year is 66% - 5 year is 79%

DPS is 1 year 48% - 3 year is 83% - 5 year is 180%

Now ---- I'm going to go look to see WHY did DPS have such a huge TR --- was there a merger? Acquisition? Big change that skewed the numbers.... or was there a fundamental shift to the products they carry vs the other two? I like to be able to explain any anomaly! So I'll research to see what's up and if I can find something to explain the huge difference. If I can't -- then I might choose the DPS over the others because you can't fight history and momentum. Quadrupling your money is better than only doubling your money. 5K turns into 20K vs only 10K. Big difference.

I own KO for the record. It's a steady eddie for me.

And here's where you dig a little and expand your investing knowledge...


Why not also take a look at MONSTER (MNST)?? OR similar brands. I don't like the stuff - don't like what it stands for (getting jacked up) and personally I wouldn't buy it because of that.... but if I was a younger guy and used this product and understood the market for it (all my friends were buying it over KO or PEP) then I MUST pay attention to that kind of info/intel.

It's 1 year TR - 70% - 3 year 112% - 5 year 422%


This is what I was saying earlier --- I want you guys to go out and use the info you learn here - but apply it to your own situations and age and incomes etc. Don't buy stuff or limit yourselves to just the EXAMPLES used in this thread! Put your own thinking cap on and learn and make your own decisions!

Hey Greg,

I own KO too, but lately there has been alot of articles on KO because they are seeming to stagnate. Is this noise in your opinion or something we should be watching?

To me it seems more like noise becasue its a large company that has been around forever, and I doubt their board will allow it to stagnate and are probably working to continue its growth. BUT I dont have a fraction of your experience

Coke (KO) is an "institutional" brand... and they own many more products than just soft drinks. Soft drinks have a LOT of competition in the last 5 years or so... I don't even try to keep up with what everyone is drinking these days. The beverage aisles at the grocery store are loaded with brands of stuff... many of which are just subsidiaries of the big boys. But what you have with Coke - is power... and global... and cash flow... and Warren Buffet... and I sleep just fine owning it. And theres's NOTHING in the rule books of investing that says if you own KO you can't also own a Monster (MNST) or own Pepsi AND Coke. I used to own Verizon AND AT&T... and I slept just fine knowing the dividend would be paid on time and that I wasn't suddenly going to wake up to a DOWN 25% investment.

A lot of the time the "noise" or discussion is the very same discussions that are going on at the board level. These people aren't idiots. They know what's going on. They have feedback from the customer. Their customers are HUGE. They have the clout to buy or invest in anything they see that will aid them going forward. They're not "nimble" and they might not always get it right and they might even have let a competitor get the jump on them... but they're NOT going away.

There has been a fundamental shift away from carbonated drinks. I don't think I have single can in my house. But the big guys own more than just carbonated drinks. Coke (KO) doesn't just own Coke - they own Dasani water - Minute Maid - Schweppes - Powerade - Vitamin Water... They're invested partners in Green Mountain Coffee... There are SEVENTEEN brands that are BILLION DOLLAR BRANDS on their own...

In other words - it's not the greatest make you millionaire next week investment... but owning it gives you the confidence you need to hang in there when the market sucks... and allows you to dabble in the "millionaire of the week" hot investment going forward when you're ready.

captain, I've got Coke as well for many of the reasons Greg mentioned. Plus, I'm in the south. Pepsi tastes terrible. Don't bring that crap around here, lol. I've been doing some reading on KO though because like you, I'm hearing a lot of potentially worrisome information. I bought it as a steady eddy so I'm not trying to get rich off of it. However, I don't want to lose my money on it either. Since I'm long term on Coke, I have no intentions of selling at this point. I fully expect there will be times when it goes down. I fully expect there to be big changes over the course of years for all soft drink companies because people are changing their habits and preferences. In 10 or 20 years, I expect to be able to say I've made plenty of money on my investment in KO. To me, everything we're hearing now will be looked upon as noise in a few years when looking back.

Good post Trey! Even "steady eddies" need to be monitored for fundamental changes... Sears would have been a steady eddy just a few short years ago.. There are several names I could come up with that barely or don't even exist today! Every stock you own deserves to be looked at with a critical unemotional eye.

So using the Oct 30th cost and the equation given with the Oct 31st close date I get the decimal given. So what does that number mean to me. I'm thinking you multiple that number by the cost of the stock to get a $ amount you earned?

What is the time frame you should use?

Sorry guys this is the first I have really ever paid any attention to this stuff. I will say that I had my son figure out the decimal listed so he is learning also. I wish somebody would have taken the time to try and teach me this at 11.

Also, what is the Div/Yield? Is it Daily/ What time frame?

KO=Div/yield .31/2.95 and cost 41.40
Oct 31st Cost 41.88 =.018863419
DPS=Div/yield .41/2.38 and cost 68.94
Oct 31st Cost 69.25 = .010493864
PEP=Div/yield .65/2.74 and cost 95.65
Oct 31st 96.17=.012232096

First off -- understand that the dividend is paid as a DOLLAR amount... but the PERCENTAGE of dividend YOU receive is based on your cost. The Dividend is paid as a set amount... your stock cost is fixed... as the Dividend payout grows -- you're getting a higher and higher percentage on your cost basis.

DIVIDENDS are paid every QUARTER. You'll therefore get 4 payouts per year.

Don't forget to multiply the quarterly dividend by FOUR to get the annual dividend payout.


KO - pays .31 per quarter (X's 4 = 1.24 per year) - based on Fridays close that is 2.91%

Mathematically expressed as --- Dividend (annual) divided by the cost basis = a decimal answer. In this case 1.24 / 41.88 = .029608

Move the decimal 2 places.... 2.96%


Your cost of 41.40 makes the dividend 2.995%


You're calculation ANNUAL percentage dividend yield.


Total RETURN --- is the stock price appreciation (if any) with dividends reinvested - over a period of time. Total return - imho - is the most critical thing you can go for with your investments. It's the real return on the money you've invested. If you were lucky enough to see 100% total return in 3 years and then manage to keep that percentage of return going for every three year period --- you can only imagine the growth of your money. Good luck with the kind of return... LOL But it does happen!!!

Yep, either have to find something in the right stage of development or a real bargain. For example, I am planning on off-loading INTC tomorrow, it no longer meets my requirements of a bargain stock. I bought 230 shares @21.47 in Nov 2012, and another 220 shares @ 20.97 in April 2013. So my total cost was $9560 and change. Between reinvesting dividends and the current price above $34 I will sell for more than $16,600. When I bought the stock the dividend was close to 4%. Now it pays 2.6% and no longer fits the profile of the stocks I want. The way I look at it is that it was a bargain @ $21 and a good company, and it was undervalued based on the high dividend. Now that the ratio of dividend to price has dropped it is now closer to the correct value. Time for me to sell and find another stock that has an artificially depressed value.

Now do not get me wrong, Intel is a great company, and I will keep an eye on them in the future.

Michael ---

Those are good thoughts and good points.... except that I'd have to correct the misinformation that the stock now pays a smaller percentage dividend. YES --- Based on todays price the dividend is a smaller percentage of yield....


BUT ---- Always the big butt....


The percentage of dividend you have been collecting has been on YOUR lower cost - so you were still collecting a 4% dividend on your cost basis! The dividend didn't go DOWN... the share price simply has appreciated.

And --- if these are taxable accounts - you've now created a taxable event by selling. Long term capital gains with a low percentage of tax for sure... but taxed non-the-less!

NOW don't get me wrong --- there's nothing with taking a nice capital gain and feeling that you can do better somewhere else. Nothing wrong with that at all. I just didn't want to CONFUSE THE NEWBS by saying the percentage was no longer in your favor. It was still paying YOU a decent percentage dividend on your cost.


I like your thinking though!! I might have sold HALF the shares -- choosing the best tax lot... and let the other ride. But that's just me. The TOTAL RETURN on INTEL (INTC) hasn't been all that "hot" at 55% for 3 years -- 110% for 5 years...



HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!!

Yes - I understand the math, cost basis and all. But now that the stock price has appreciated I can take the profit and buy something that pays 3.5% to 4% on the current dollar amount. Still INTC is a good company, hard to make that jump, maybe I will do the 1/2 thing you were suggesting.

Good points - this is inside a 401k, so no taxes. I did run into something annoying in that respect recently. I was taxed on a dividend inside my 401k on a foreign owned company. That is dirty pool!

Wow - thanks for the reminder, guess I will wait until the 6th! (Maybe 7th to be safe)

HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!![/QUOTE]


What is the EX you speak of?

Great! Thanks for clearing that up.

Haha, yea I know what you mean. Im in Texas and there are few meals that I can think of when I wouldnt have a bottle/can of Coke next to me

Ex-Dividend date.

Declare date: 9/12/2014 - this is the date Intel "declared" they were paying a $0.225 per share dividend on 12/1/2014.

Ex-dividend date: 11/5/2014 - If you own the stock before this date you receive the dividend, if you acquire it this day or after you do not. If I sell you my stock on or after 11/5/2014 you buy it "Ex-dividend", without the dividend.

Record date: date the company records the owners for the purpose of the dividend. A few business days after the Ex date.

Pay date: when the dividend pays out.

So, since I will own this stock tomorrow, I will get the dividend on 12/1 even if I sell it before 12/1.

Once a stock goes EX-Dividend does that mean it will never pay a dividend again as long as it is traded? Can the company later on down the road say we are going to pay a dividend again on a later date?

amsoilguy
You would just miss that dividend payment for that quarter only.

John

AHHH ok!:EmoteClueless:

Thanks John


Now doing research over the last week I have noticed something. The majority of the stocks I have looked at are all up. Is the market overall up and it would be hard to choose something stable that isn't going to be up? Just because it is up does that mean its not a good time to get in? I have mainly been focusing my efforts on dividend paying stocks and ones that I feel are products my family uses. Along with the TR that was brought to my attention

I'm going to follow your advice Greg and split the 1500 over 3 stocks. He actually has 1600 to start with so the extra were going to put in FB which actually is the less exspensive of the 3 I am leaning towards.

I like the mention of FB everybody I know and all businesses have a Facebook page. That is going to be the higher risk and the only one that doesn't pay a dividend.

I'll throw the other two stocks out there that I'm leaning towards and if anybody has information to add I'll take it. I would love to get started today but the up market worries me some.

JNJ
PG

Thoughts anybody?

Regarding buying when the market is up. As long as you plan on holding for the long term, I think most people will tell you to just buy when you are ready and not try to time the market. I actually have a hard time following that advice and tend to wait for pullbacks in price to make my purchases. Sometimes I get the pullback I am waiting for and get a good buying opportunity. Sometimes, I completely miss buying the stock because I am waiting for a pullback and it never comes. The stock keeps going up and up and I kick myself for not having bought it. The other downside in waiting to purchase is that you are not collecting the dividend you could be collecting while waiting for the stock to go down.

You may want to do some research on "dollar cost averaging", if you are going to consistently put money in the market.

As mentioned above, timing the market is too risky. Especially with that amount of money. a 1% swing either way isn't going to make much difference. And what happens when that stock you bought today, goes up again tomorrow? Now you missed on the gain, and now your paying even more.

I dont worry about timing the market. I'm only buying in small chunks in general. Which you are hitting in chunks of $500, so that's really small. Now if I were buying $500k worth shares, I'd be a little more conscious of the up/down swing, as now that translates to a couple grand difference.

But either way, if they're long term holds, then it doesn't really make any sense. You'll miss the good days waiting for trying to time the one bad one.

You can say what you want about Jim Cramer on CNBC, I like to listen to him but don't really invest with him. Sometimes he'll praise something I'm familiar with that's right under my nose, such as Snap on (SNA) which I recently bought some of. I do like that he puts his neck out there on a recommendation and owns up to it if he's wrong. He gives a lot of good tips, often, but not always, in line with what Greg's been saying here. I especially like his tip for using the PEG ratio (PE Ratio:Earnings Growth) to determine valuation of a company.

Anyway, his show this past Friday, Halloween, was right up Investing 102's alley and full of valuable tips. You can view it (for a limited time I think) here:

http://www.cnbc.com/id/15838459

They are both in the same business.

About 5% of my total is in JNJ. JNJ makes a lot of household products that will always be in demand. Big, stable company. They have a 51 year record of increasing their dividend, and pay every quarter. They pay out close to half their earnings to the stockholders. Buy in the next few days if you want the dividend. If your account has the option (I think all do, I could be wrong) make sure to check the option for re-investing the dividends. This way the dividend pays you in company stock instead of cash.
http://www.dividend.com/dividend-sto...n-and-johnson/

About 2% of my total is in PG. PG is pretty much the same as JNJ. They have a 57 year record of increasing their dividend, and pay every quarter. You are already past the Ex date on PG, so you will not get the 11/17 payout if you buy now. Their dividend is slightly higher than JNJ at the moment and they pay out a slightly higher ratio to the stockholder.
http://www.dividend.com/dividend-sto...er-and-gamble/

If you are buying three not sure I would do two in the same group, but these two are rock solid so no surprises either way. Thoughts Mr. Weld?

A stock that declares the dividend - and they declare a dividend EVERY quarter... also declares the EX DATE and the PAY DAY... the EX DATE is the date by which you must have LEGALLY OWNED the shares in order to receive that dividend. The fact that you put is a buy order and see the shares in your account - does NOT MEAN that you are the legal owner. Typically you have to figure in the settlement date which is when the money is cleared from your account and blah blah blah... This is normally at least 3 BUSINESS DAYS...

So given that information --- if the company declares the dividend - and stated the EX DATE is NOVEMBER 30th -- then you need to have bought the shares by the 24th... to give yourself some breathing room if you wan to be sure to "capture" that dividend.

Conversely --- you could SELL the shares on December 1st (the next BUSINESS DAY) and you'd get paid the dividend even though you no longer own them.

EX dates have NOTHING to do with "never getting a dividend again" etc per your post. They're simply the date declared by which you must have been the legal owner to get THAT QUARTERS declared dividend.

WHAT HE SAID!!


Even I don't wait for something to come down... to me that's just stupid! If I thought it wasn't a good company and that maybe I'd save a 1.00 per share if I "waited"....why would I invest in it in the first place!!

Now --- I don't buy on UP days.. but there's plenty of days (not weeks and months) of little ups and downs... so since I usually have money on the side I'll buy on a big blowup day... Why not? The stocks I like just went on sale... but I'm not waiting and waiting and waiting for another .10 drop. I buy when I'm ready on the first down tick I see. Don't be penny wise and pound foolish.

Jim Cramer sometimes provides some good information, but he contradicts himself all the time on his recommendations. I think you are right that he provides some good information on general topics, but I would never listen to his specific stock recommendations. Did you ever see the John Stewart videos on Cramer. Here is one of them. Watch them all if you want a really good laugh.


https://www.youtube.com/watch?v=NkytKDzCEeU

I said when I started this thread that I'd keep people updated on my progress or lack there of. So today I point to Whole Foods. I've had it for a couple years now, and I'm long on it. If you look at the chart for just this year you can see it took a huge dive. I said it a few pages back that I considered it noise because nothing at WFM had changed to cause the drop. All that happened was the traders, people trying to get rich, didn't like that WFM didn't make as much money as they projected they would. So WFM revised it's projections for the rest of the year and promised to meet those numbers. They beat their projections for the quarter and now have posted a 10% gain as I type this and they are raising the dividend another penny. I'm back to the break even point I believe. I'll see when I get home and access my account.

My point is that you have to be patient and ignore the noise if you're trying to invest. I had no problems leaving my money in WFM and riding the slump out, or selling it if it some how appeared to not recover which is something I was not at all worried about. Hell, if I had this outside of my Roth I would have bought more shares but I max that out at the beginning of each year. So just be patient, invest in quality names that you trust, and ignore the traders.

Just got my first 2 dividend payments this week.

Feels pretty good.

Thanks everybody!

Woot! Congrats Captain!