I already own BP....

As I sit here listening to CNBC, and the talking heads are all discussing which company has blown up due to earnings - and what company they expect to take over some other company.... It makes me think how in the world anyone could keep up with all of this information. I make it my routine. No kids left at home... I'm an early riser... I've been following, and investing, in the market for 30 plus years... So I open up my account (as is the norm) just to see what's up... and here's what I accidentally notice this morning.

Altria (MO) is a base holding for me... I own 10,000 shares. It's not a huge dividend payer but on my cost basis it pays a larger percentage than if you bought it at today's prices. But here's the reason for today's post...

My 10,000 shares are UP $131,030.00 in VALUE. It pays me $20,800.00 on an annual basis. That's not "huge" as far as dividends go... but what I like about it (the stock)... I never go to sleep or wake up fearing what it's going to do. Yet here it is... UP (over time!) $13 a share (my cost basis is $41.63). And it's paid me 20 grand a year on top of that.

I ask you ---- you see anything wrong with that?? LOL

That's the kind of BASE you need to build... 10 great steady eddies that just silently march ahead. Once you have that base - then you can step up and play with GoPro and Twitter and whatever comes along the talking heads are talking about on todays show. :disgusted:

I've been back in the market about a year and a half steadily following the Dividend Growth strategy. As of today, MO is my biggest gainer, showing up net 39.2 %. Next closest is a Utility...ES at 9.34%.

I use Quicken to track my investments and it adds my dividend reinvestments to my initial cost basis and calculates returns off of the total, so it doesn't give me a true return on investment if you want to look at just the initial investments and total return. Someday I plan on setting up a spreadsheet to do just that.

Meanwhile, I'm sitting back...watching my investments grow even in trying times and my only concerns are if I should add more in and if so, where.

It's like getting your car set up -- once it's set up -- you just concentrate on the driving - not what the car is doing (or not doing). LOL


The biggest thing I think I've tried to get people to understand in this whole thread --- the market goes UP and the market goes DOWN.... Get over it! Get some investments that grow over the long haul - pay you dividends - and you'll be set!

Always great stuff from you GW!

I have a recently switched to focusing on this type of investing over the 401K plan I have been using since I got out of school 10yrs ago, so I appreciate the guidance.

I understand how to calculate my cost basis mathematically, but it just gets messy with auto div reinvestment over a dozen different stocks each month/quarter. I am doing as others have with keeping a running total with averages in excel. How do you keep track of your investments to know your cost basis is $41.63 per share?
Thanks

I know you asked Greg, but here is how I do it. I have a number of shares column, a price per share column and a total dollar amount column in a spreadsheet. The number of shares and total dollar amount columns are input manually. The price per share column has a formula which divides the total dollar amount by the number of shares. Every time I get a dividend or make a new purchase, I edit the number of shares and/or total dollar amount columns and the new cost basis per share is calculated.

You could also keep a running total by adding a new row for each new dividend or purchase and use a summation formula in the number of share and total dollar amount columns. Your price per share column would have an averaging formula.

Greg doesn't have to complicate cost basis with dividends
Reinvested. Because he spends the dividends on hotrods.


John

For that particular holding - which is at Wells Fargo Brokerage - that Brokerage tracks it for me. Some brokerages do this, and some don't. I also don't re-invest any dividends since I'm retired -- and live off these dividend payments (as well as other income from other types of investments) - so figuring my cost basis is pretty simple.

Like John said -- I just waste my dividends on "whatever". LOL

Pretty true actually. I'm beyond needing to "save" or build a nest egg.

Can anybody here give us "spreadsheet illiterate's" a quick example of one?

I know thats the best way too track it, but thats where i'm having a hard time..

Lance, how do you use quicken? i use quick books pro at work, its way above my head. My accountant and our data entry people and general ledger manager (wifey) use it.

I have an idea, and i'm the bottom line kinda guy, but i'd be interested in how u use it with quicken. I do know that Pam(wifey) often transfers my reports from quickbooks pro into spreadsheet form and there pretty easy to read (she used to teach Excel in the 80's and early 90's when she was in her early twenties) but her and i just "never" get it done(spreadsheet), which is why i handle the personal investments....

thanx all, good discussion as usual...

Qui
 

I use Quickbooks for my company's books and Quicken for my personal bookkeeping. Quicken is much more user friendly than Quickbooks. I describe it this way, Quickbooks is more two entry accounting style whereas Quicken is more single entry accounting.

If you purchase a copy of Quicken, make sure you get the upgraded version that tracks investments (think mine is 2014 Home and Business). Setup is pretty simple and you can use it for as much or as little as you want. I download all transactions straight into it from my banking and investing institutions with one click, review and accept them. Once you get all of your regular transactions memorized inside, transaction entry goes pretty quickly.

I track every banking transaction...want to know how much I spent on gas in 2004...takes me about 30 seconds to run the report. You don't have to go to that detail, but it's good to know you can if you want too.

If you mean an example on how to set up a spreadsheet. I can try to show you an example below.

A B C D
1 Stock Name No. of Shares Price per share $Amount
2 Apple 100 +D2/B2 $10,000

The columns are labeled at the top of the spreadsheet as A, B, C, D.....
The rows are labeled vertically along the left side 1,2,3, .....

Say you buy 100 shares of apple for $10,000. Enter 100 in cell B2 and $10,000 in cell D2. Enter the formula "+D2/B2" in cell C2 which will calculate the price per share for you at $100.00. The formula will take the value you entered in cell D2 ($10,000) and divide it by the value you entered in cell B2(100).

Just note that in cell C2 the actual figure of $100.00 will be shown and the formula will only be shown in the formula window.

Say you buy 50 more shares of apple at $7,000. You have added 50 shares to your portfolio, so enter 150 in cell B2. Your total cost is now $17,000, so enter $17,000 in cell D2. C2 will automatically recalculate your average cost per share at $113.33 (17,000/150). Your spreadsheet should now look like this:
A B C D
1 Stock Name No. of Shares Price per share $Amount
2 Apple 150 +D2/B2 $17,000


If you get a dividend of 1.5 shares,You have added 1.5 shares to your portfolio, so enter 151.5 in cell B2. Your total cost has not changed. C2 will automatically recalculate your average cost per share at $112.21 (17,000/151.50). Your spreadsheet should now look like this:
A B C D
1 Stock Name No. of Shares Price per share $Amount
2 Apple 151.50 +D2/B2 $17,000

Hopefully, I have not oversimplified this, but I am assuming you don't have much experience with spreadsheets. If you have any questions let me know.


Edit: the formatting did not show up as I had hoped. I had spaced out the columns so it was much easier to identify what was in each column. If my example is too difficult to make sense of maybe I can attach an actual spreadsheet. Let me know.

I've written about watching for "FUNDAMENTAL CHANGES" in the stocks you own. While minor ups and downs and rolling with the punches - is what a business NEEDS to do... Often if not done well/correctly - you'll see a change in leadership... which can be a "fundamental change" (Let's use the example of when Steve Jobs came back to Apple! Or when Microsoft gave Ballmer the boot) Sometimes it's just age and personal issues. Here's the point... (There's a couple actually)

I NEED to pay attention to the companies I invest in. This is one of the reasons I generally urge people not to get spread too thin in an effort to "diversify". You can't keep your eye on that many balls (no pun intended). 20 or so companies is A LOT....

I own Conoco-Phillips (COP). It's a small holding (5000 shares) - bought more recently in an effort to position myself for decent dividends while HOPING that oil stabilizes and makes a come back in the future. I don't know what's going to happen in the future - so when making "bets" like this... I "dabble". I buy a little - if it works - I may buy a little more... etc. Right now I'm 50 grand down in this holding. I'm patient. I can afford to be down and I've been doing it long enough to have gained some confidence in my reasoning. When I buy - I EXPECT my pick to go down. I generally never chase the big front runners (The Allibaba's and GoPro's etc)... I like to pick good companies that might be down due to circumstances that are not of their own making. This is harder for newbies to do - sometimes doesn't work well - and it's not what I'm suggesting for you all to do. It's scary and cause's ulcers. I'm in a much different space than "most" and can tolerate investments like this.

Here's where the "Fundamental change" comes into the discussion. COP reported earnings this morning. I pay attention to such things. I try to find the "nuggets" which may or may not make my thinking change. Sometimes the nugget of info is a ho hum - sometimes it's an OMG REALLY? I'm selling - and sometimes it's an "okay then - that seems like a smart move to me" and I'll add to a position. Sometimes it pays to just be a holder and do nothing and see how it plays out. But KNOWING what's going on is important! And you need to be minimally aware of what's going on with your holdings!

Here's what I liked about the COP "change" today... And I'm not saying anyone should buy or sell -- I'm just using this as an example of what I mean by FUNDAMENTAL changes.


Copy and pasted....

Selling Assets
Lance has reshaped the one-time energy conglomerate, selling more than $14 billion in assets to tap prospects in North America. He is staking the company’s future on U.S. and Canadian oil and gas plays, betting they will generate cash at low prices and allow the company to ramp up or halt output quickly.
ConocoPhillips has said it’s continuing layoffs while it strives to slash $1 billion in spending over two years. The company has cut close to 1,500 jobs since the downturn began in June 2014, according to Graves & Co., a Houston-based adviser that has closely tracked the cutbacks.



Me again....


I would expect the oils to be having a hard time with "earnings" - the collapse in oil prices was sudden and unexpected. It's really a price war between producers trying to price each other out of the market. I get it. It's a battle and there will be blood spilled. There'll be cuts and layoffs and earnings will suffer. MAYBE there's a dividend cut coming down the road... I don't know. And that is why I'll tip toe instead of betting the farm. At some point they won't be able to cut "enough" and will look to save cash expenses.. but most boards are reluctant to cut the dividend - it's usually the sacred cow... but you never know. I'm betting that oil recovers enough to save the dividend - and in the meantime the smart companies will adjust the business and will be better off for it when things turn around.



McDonalds (MCD) has a fundamental issue with having the wrong kind of food for today's consumer... that's THEIR problem. The "industry" is doing fine. Chipotle is growing - Panera is growing etc. With OIL - Everybody sucks... there's just too much production and not enough demand. The trick will be to bring costs in line with the price at which they can sell and make a profit. That is easier to TRY to fix than "nobody wants what you have".

thanx Lance i think thats what were goin to do on a personal note as my wife is a quickbooks pro guru...

and thanx Woody, i get it, just haven a hard time actually doing it....

If your wife is adept at QBs, Quicken will be a breeze to setup. I'm not saying it's the end all and great at everything as it does do some things in regard to investments that aggravate me, but it's pretty good and is very easy to setup and use.

What Woody is describing above is one of those things, when reinvesting dividends, Quicken adds the cost of the shares the reinvested dividend buys to the overall cost basis of the stock. I guess for income tax reasons this is the proper way to do it, but for performance results calculations it skews the numbers.

Your total cost basis in the stock keeps going up even though you aren't putting any more money into it.

Thanks guys; you've motivated me to set up this spreadsheet for myself finally.

And GW, that's good advice on how to view the oil industry right now. I've taken a pounding in CVX lately, but I know we're going to be drinking earth's milkshake for a long time.

Realising this is not good form for this thread... but also knowing that you make money when you buy low... If you are a DRIP investor not looking at XOM right now might be missing out on a good opportunity..

"Here's what I liked about the COP "change" today... And I'm not saying anyone should buy or sell -- I'm just using this as an example of what I mean by FUNDAMENTAL changes."

COP is transitioning from doing business like an integrated Upstream and downstream company to a real Independent Exploration and production company. I see the changes they're making and areas their cutting are required to suit the business, and be sustainable for when the prices crawl back up. I think its a bargain for the long term too.

Booah --- I've tried to keep the thread about LEARNING how to think about stocks/companies etc -- so people can "catch their own fish" - rather than recommendations of what to buy - when to sell etc.

The use of COP as an example of what I mean by "fundamental changes" just managed to present itself in their quarterly report. Companies that institute large scale changes can fail at them, just as easily be successful. As an investor - people need to do a minimal amount of "work" to understand the investments they make - and what can help or hurt their investments.

People that blindly "invest".... only to wake up one morning to find they've lost their ass and they don't understand "why"... That's just dumb and lazy. I don't care if we're talking about buying investment property or stocks. You'll stand a far greater chance of success if you understand what you're getting in to.

The other thing I urge people to do is to understand "the market". Sometimes - when we're looking at a large scale fundamental change - such as this dramatic dip in crude oil - that is taking everyone DOWN... and we really don't know what's going to happen in the future. It can pay to just stay on the sidelines - be watchful - be aware - and wait for a bottom - and not buy until things begin to meaningfully turn up. Nobody has to guess the bottom - or the top... and you don't have to buy at the absolute bottom in order to have meaningful gains. You also don't have to buy on the way down and suffer thru the angst of the unknown. This is investing 102 - beginners investing. It's more about learning and being able to stay in the game and be comfortable with "the market".

What is "XOM?"

Oh, my bad, i thought when you referenced DRIP investing XOM was another type of investing i haven't heard of. So, didn't know it was a company...

Cpst

We should have a celebration! You finally made 2000 posts!! EEEEEEHHHHHHHAAAAAAAAA


:king: :king: :king:

I thought about it this morning...


If you want to see a dramatic chart of "Fundamental change" -- pull up Microsoft (MSFT) and go to "ALL" to see the chart since they started being a public company (1986),

In December 1999 - Bill Gates announced Steve Ballmer was going to be CEO beginning 2000 ---- SEE THE PEAK?? From then on the stock languished (flat lined) -- Until they made the announcement in 2013 that Ballmer would be replaced by Satya Nadella.

Now --- having said all of that --- I'M USING GOOGLE FINANCE WEBSITE CHARTS --- I want you to add to this chart -- Apple (AAPL) stock. Hopefully you know how to do that - there's a small box top left of the chart labeled "compare" -- just type in AAPL and click ADD....

Bet you never saw that one coming!!! LOL

I'll let the responses speak for themselves rather than me spoiling what you're going to see.

Thanks Clill, not too often I can afford a 'leveraged' position.

Charlie can afford to be in "penny stocks". LOL

Totally didn't see that one coming.....wow.

How about the philosophy from someone that is tall AND rich. :D

I can fill this in for ya Todd.....


C's philosophy in a nut shell..... Whatever you buy - make sure you buy low and sell higher.

You can't buy CPST much lower than it is. They have yet to make a profit but are building cool turbine generators. 1 moving part that floats on air bearings and swamped with orders. Now they just have to figure out how to make money.
http://www.capstoneturbine.com/

It's the only thing I have any stock in because I am not a high roller like Weld.

Remember when Motorola used to be "the name" in cell phones....

I'm guessing massive debt due to technology is squashing any profits at this time.

Sucks to be you buying it above $2 and all.

:captain1:

Charlie doesn't need "stocks" to make money! HellFire won Best Street Cruiser at The Atlantis (Hot August Nights) and he picked up $400 !!





http://i919.photobucket.com/albums/a.../IMG_8043.jpeg

Talk about ROI!

..........and CPST is up 19.1% today. The dude is rolling in it.

It's definitely not Investing 102, but I made a couple bones on the CPST earnings announcement. #gambling

Agreed, at least with CPST it's like playing nickel slots. :D

Anyone on here monitoring the decline of BITCOIN besides me?

Funny how NOBODY even mentions this now - and by nobody I mean the "media". When it was on the news daily the price went thru the roof.... of course... this is also when "most people" bought in because they start to pay attention to something like this and believe themselves to have "missed" the
thing that is going to make them a millionaire! Then BAM! The knockout punch after a few jabs... as the "FAD" fades.


That's the difference between gambling and investing.