Shoulda cashed out. :stirthepot:

Great question John!

You never "want" to be in a stock that cuts it's dividend.... things have gone from bad to worse in that case - as companies never want to cut their dividend. They only do so to stop the hemorrhaging. Having said that.... Chevron (CVX) would most likely cut their dividend or their stock buy back or both well before Conoco Philips (COP). Chevron would / does have a classic double edge sword going in that they're a driller/explorer (UPSTREAM) and a refiner and retailer (DOWNSTREAM). The margins on refining/retailing can't hold up to the losses of the crude decline (cash machine). They also have huge DEBT service. Their return on average assets has taken a substantial decline... and their margin is only 1.65% as of last "report".... compare that to COP who's balance sheet is actually "worse" -- but they're primarily a crude production / oil field operator. The management there has already come out and made public statements about protecting the dividend. That's a good thing!

Selling is about taking GAINS -- or protecting gains.... once you have LOSSES -- then you either wait it out - or buy more to average down. This is why we invoke the 5% rule. No single holding - even if it went to zero - should hurt you too badly. Either way -- I wouldn't worry about HOLDING CVX or COP. That's the other golden rule -- buy GREAT companies - so you're not worried about them for the long haul.

I appreciate the responses. For clarification, I invested heavily in the first three positions I opened which were AT&T, Shell, and Southern Co., so I am a bit out of balance. I do have an IRA which is a mutual fund, but this is my first time purchasing individual stocks.

Greg, I hope you enjoyed your rafting trip. I'm in my early forties, so not as young as I'd like to be.:lol:

For today I bought a bit of IBM. I'm patient, and will watch for something I consider a bargain, though not sure what that would be. Three years is pretty short term in my mind, it's the + that worries me!

Thanks again for the insight, and have a great weekend.

Hey! I turn 62 this month! Going for Social Security.... LOL



Bargains are RELATIVE! Earnings are what counts - and the forward looking statements companies state in their earnings releases. Higher P/E companies need to have great momentum going forward to show the market they can grow into their high P/E's.

Consumer sentiment turns on a dime -- but the "retail" consumer in the stock market isn't what counts. We're just along for the ride. The big "Institutional" investors are who run the markets. They have deeper insights and connections and have a far better feel for what's going on.

Here's what I always try to remember when the shizzle hits the fan.... for every guy that put his shares up for sale --- somebody else is buying them.

What "WE" have to do is to take a back seat - have a good time horizon - which means five years not five minutes - collect our dividends... and try not to get all schizoid over the latest news or market value. Because after doing this for many years (and I retired 24 years ago) the one thing I've learned is - the market takes a different turn just about the time you're convinced of the direction it's going. You could wake up Tuesday and the market is UP 400 points (by the way - that's not a big percentage number!).

The guy that makes all the money - is the guy that's the OWNER of shares when the market turns UP again - and it will... The weak hand holder that sells at the bottom - he's the loser as the ship blows right on past him. It's like driving a race car -- look where you want to BE not where you are.

For those that haven't been in the market for long, today (8/21/15) was a seriously "bad" day. But as we've talked about, this may not something to be worried about when you have a long time horizon. For those with decades left until retirement, you really can look at this in a more positive light. I'd rather have my periodic investments buy in at a lower price.

Greg, since you mentioned it, what does a guy in your position think about taking social security at 62 vs. waiting until 65 or later? (I know this is one of those questions where everyone should evaluate their own situation, just thought it might be a good discussion topic)

Unless you need it to put food on the table or have been told by your doctor that you have ten years left to live, waiting to claim Social Security is an incredibly good "investment."

#1 --- There are lots of "BAD DAYS" --- when you want reinforcement of what you're doing --- Take a chart of the stocks you own out to 10 years or "since inception" if possible (depends on who's charting service you're using) --- and you'll see LOWER ON THE LEFT AND HIGHER ON THE RIGHT --- with MANY MANY MANY ups and downs in between! Look at the larger picture!



#2 --- I don't want to get into a political discussion so let's leave this right here.

Social Security should be "means tested" --- Millionaires don't need Social Security. Don't care that I've paid in to it. It was designed as a social safety net. I should not be allowed to "collect" unless I was down to a preset level of net worth or income and net worth or whatever.

I'm a Republican.... but I have very Democratic views on many social issues. I'd far prefer to raise the level of SS for those that really depend on it -- at my expense (since I don't need it at all)... and raise their standard of living.

I'd also amend the tax law to eliminate the SS "cap". There shouldn't be a cap on when you quit paying into the system. Well-to-do people can afford to support the SS system.


#3 --- To respond to your question about when to start taking SS. I don't think anyone should ever have to take it. You shouldn't be dependent on it at all. That's what this thread is all about. To me - it's like Welfare... it should only be there for the truly needy. It should not be about raising your standard of living nor absolve a person of being self sufficient and providing for themselves in retirement. Having said that.... I would opt for taking the least amount over what I would HOPE to be the longest period of time. Should I decide to file for it.... mine would be donated to the causes of my choice.


#4 --- If you "have to work" until you're 65 or 70..... or beyond.... it's an epic failure of personal responsibility.

Ouch that will be a stinger for some folks.

From what I learned this drop just means things are on sale!

For my generation, I hope that the uncertainty surrounding Social Security, justified or not, will compell them to do as Greg said. Nobody of decent means should count on it to fund their retirement. As fiscally conservative as I am, I would agree with an upper bound for eligibility to take social security. Not sure it would fix the program, but it's the right thing to do.

If it spurs on ONE person to kick themselves into a different gear - then it was worth the "statement".

I can't tell you - all of you - how friggin' fast I've "grown old" (at 62).... and while I've been far luckier than most... Most people just don't do what they KNOW they should be doing as far as the "nest egg". My Mother in Law just turned 90 yesterday... that's 25 years past the retirement "age"... Her house is and was then - paid for - she had a few hundred thousand to live on. Live very modestly... and she's just about out of money. SS does NOT keep up with the cost of living.... and she chose ultra safety and tax free over growth and income. With the money she had - I could have made her a millionaire with the growth over the last 25 years and she'd be making 50 grand a year in income...

People fail to realize how fast the years go by and how long they're going to live in retirement.

I'm retiring next week on my 58th birthday thanks to this thread and a real estate investment I made 16 years ago. Thanks Greg, you have at least one more success story under your belt! It would not have been possible with the track I was on before I read this thread. :thankyou:

Don

Thats awesome Don!!! I'm ten years behind ya and hope to be getting out (full time) about the same time. I dont plan on ever retiring from what i do, i'm an expert at it and still love the technical and customer side, hate the business side (well, people who dont pay their bills, vendors that lie, customers with unrealistic expectations etc...)

But key for alot of us is, WANTING to work vs. HAVING to work...

I'm hoping this thread goes on for 15-20 years and see what happens and how many lives its touching in a positive fiscal way and hear more stories like Dons....just wish i had a crystal ball lol...

Okay -- That's just about the coolest thing ever! And that's exactly why I've poured my soul into this thread. I'm truly honored! Amazed! Kudos to you sir!

I'm a relatively early riser -- and I NEVER stop reading and listening to what's happening in the world. I knew today was going down hard - last night - when I checked what Asia was doing in their markets.

I gather KNOWLEDGE - I DO NOT stew about it. I didn't go to sleep last night with churning guts about the "money" I was going to lose in what I know is going to be a sea of red today. Rather - I went to bed thinking about which stocks I would start to pick away at with BUY orders. Perhaps a little more Apple under $100.... Altria (MO) which just raised it's dividends another 9%.... Seems people smoke no matter what (have to laugh at that sad as it is).

Here's the deal. If you own the very best of the best companies... they're still alive and well (maybe not big oil... which could catch a cold that could grow to pneumonia)...

With Altria's (MO) latest raise --- and THIS IS THE INVESTING 102 reason for posting today --- my yield on COST is 5.5% (cost is $41.33 divided into the current ANNUAL divided of $2.26... result is .05468 ..... move the decimal and that's 5.468%). THE ONLY REASON IT'S THAT HIGH ON MY COST??? BECAUSE I'M NOT SELLING AT EVERY LITTLE DIP IN THE MARKET. It's a LONG TERM hold... The company is good (all the companies I invest in are good!). I'm not in and out of the market - I'm NOT a trader - I'm an INVESTOR! When the market puts things on sale --- I try to take advantage of that. I "IMPROVE" my position when possible. There are companies I like that are on sale that I don't own.

My mindset is that no matter what I buy... it will go lower. I'm okay with that. It's like buying a rental house in a bad market -- you buy it - if you don't someone else will... and then you fix it up - rent it out - and EVENTUALLY you'll collect nice rents and the market will come back and you'll be the smartest guy in your office. : > )

I know most of you don't sit around with a pile of cash just waiting for a market correction. I get it. I'm trying to set you up for when you might some day. You need to have spent some TIME in the market - live thru it - LEARN FROM IT - and get your head wrapped around "it".... so when you CAN strike - you'll know what to do.

This thread is not your ultimate guide of buy this - sell that - move here... I'm trying to hand you THOUGHT PROCESSES... Ways to calculate things - ways to LOOK at things.

I like the part in bold. I've been bitten before by the mentality that I can be my own day trader, and I'm lucky I didn't get completely hosed in the process. I've been quietly reading this thread ever since I've joined. It really is a treasure trove of information (especially for a 30 y/o like myself), and I thank you for that.

There is definitely opportunity to be had today for those with the cash, haha.

I'm going shopping today as well...

I couldn't log into my WELLS FARGO account that I use for examples on this thread (trust me - I don't tell you Aholes EVERYTHING).... So I texted my team at the bank... which resulted in an immediate phone call from them.

I put just over 1MM "to work" (I always maintain a pretty sizable cash horde). By the time I tried to log into the account -- and the manual buy order was placed - -ALTRIA (MO) moved from $49.97 to $50.24 (my fill).... on a 5000 share order -- that's a big move (a cost to me!!). I had to switch from LIMIT orders to MARKET orders because the market was moving to the upside so fast. I could write a book about that "strategy" -- you have to move and make decisions in a fast moving market - that you WOULD NOT do in a "normal" moving market. If you're buying 100 or 10 shares - this isn't going to make or break you - and if you WANT the shares... and you should have decided that weeks or months before the actual action...

I bought AAPL -- NFLX -- MO -- T -- KMI

An hour later - I still don't have order confirmations.

Congrats Don! Best of luck to you in your retirement.

I had some extra bonus money I decided to dump into my brokerage account instead of savings. I'm looking at making some purchases today.

I don't want to be a sooth sayer trying to say what I THINK the market will do.... but there are some dynamics that will come into play.

#1 --- this thread is about INVESTING. There is so much more to a market... but we're trying to build long term - cash creating investments.

So --- Here's some dynamics in a wild ass market like this. Many people are SHORT the market waiting for an opportunity to cover. What does this mean?? It means that a SHORT SELLER can sell a stock he doesn't own.... collect the cash from the sell -- and hopefully wait to buy the shares at lower prices than he sold at --- because he OWES the brokerage the shares he sold. If I was a short seller -- I'd have been covering all my shorts this morning... and making very nice gains on the spreads.

A short in NFLX --- just a "scenario".... guy sells 1000 shares short at $122..... and covers the short today at $99.... he makes 23K on that trade (minus interest expense etc).


#3 --- In my old days of trading.... Anything I bought this morning I'd be flipping out this afternoon (and then go play a round of golf!). Let's take a normal name ---- Altria (MO) --- was down under $50 early this morning. If you'd have bought 5000 shares at $50.50 ---- and it's back to $52 this afternoon ---- that's a buck fifty times 5000 shares -- or a quick $7,500 "gain".


SHORT TERM TRADES (GAINS) INCUR MAX TAX RATE!! So we're talking GROSS gains here.

What I've been doing with my money these last few years is saving through the year to be able to dump the max I can into my Roth on January 1 each year. I also keep adding extra instead of spending it.

I started looking at everything I have going on in my life and where I am with my different accounts, too. I already have my rainy day fund and house down payment fund. I also have general spending in there for the car. So I thought to myself, why should I put this bonus money into a 1% savings account when I already have my Roth covered for the next year? I could just as easily put it into AT&T and with no capital gains in the stock price make 5% on the money. AT&T could go down 3% and I'd still make more than if I had it in savings.

So that's what I did. Only I looked at the long term charts and picked Hasbro and General Mills over AT&T. Lower dividend payments but the long term charts for both kill AT&T by a huge margin. I got lucky that I had put this extra money into the account only recently so I wasn't waiting around for this to occur. I'll take a simple 2-3% drop in price and feel like I've won the lottery any day. :D I just wish I could add more money to my Roth because I have some good companies in there, JNJ and MO for example, that I would have liked to be able to add to but oh well.

Thanks Trey. And thanks for starting this thread. It has really made a difference. Looking forward to reading of many more retirements and success stories.

Don

Glad you are enjoying the thread!

Day trading is the fastest way to lose money I can think of. That's about the purest form of gambling. Then at the end of the year you owe the IRS taxes... and it raises your ordinary income (if done in a taxable account). Many people don't understand the tax rules of "wash sales" etc. The only way to do this is really have a great base of normal savings and investments... and then just take your "extra" money and either go to Vegas or day trade. LOL

Quickly -- a WASH SALE is where you trade the same stock -- within 30 days and have a gain -- then a loss -- The loss doesn't cancel out the gain - so you owe taxes on the gain even though you had a loss. It's a nasty rule that bites many people in a arse. That's a real basic explanation BTW.

Pretty much how my Dad lost his buttocks in the market. Sad, but true. My bro and i now "help" him out....

My old house in the news
 

So this fits "investing 102" only because it's a way people lose money in "private placement" deals....

This hit the news today - and is the guy that bought our house last May.... which is mentioned by address in the article.

Lobsang is married to Andre Agassi's SISTER.... LOL


http://www.seattletimes.com/business...a-fundraising/

Holey Crap Greg!! You are famous!!!

What a scam it sounds like...or should I say "ill advised program" that leaves itself wide open for scam artists to capitalize on.

I'm not posting this to suggest what's going to happen or what to do. I just find this kind of thing interesting is all. This is the ^VIX index, the volatility in the S&P 500, against the S&P 500 overall market. There's a clear correlation between a sharp spike in the VIX and a drop in the market. Again, this is just for entertainment purposes, your guess is as good as mine if it means anything.

http://finance.yahoo.com/echarts?s=%...tacking":true}

Whole program is ripe for abusing foreign nationals and bilking them. I applaud the SEC for policing stuff like this.

Nice shop, the house is OK too:
http://www.zillow.com/homedetails/25...48684391_zpid/

Some thoughts..

A while ago I took an educated risk with Peer to peer lending... insulated from this turbulence in China and +12% in real $ out profit this year..

Using that cash to buy while the iron is hot..... I know everyone says you lose when you try to time the market.... But.. I am part of team "Buy low" :sarcasm_smiley:

1,154 stocks made new 52 week lows today. That is actually a much higher number than what happened in 2008-2009 and during that low, as well as others, the number of stocks making new 52 week lows has to be for othe most part dwindling before things start going up again. What do I know but I'm betting that even though the economy is better now than it was then (of course we don't know what we don't know) we still have a ways to go down and Sept is often a bad month.

Figured I'd just pop in and say Hi. Still monitoring, but just don't have much to add. LOL.

Keeping a close eye on the market. I haven't funded my ROTH yet, so it may be some time to make a few buys here soon. :)

What I'm "HEARING" in here is very short sighted "investing".

It should be FUN and EXCITING to be able to get a chance to buy shares "on sale" --- but look at these prices on a longer term view both backward and forward. The fact that something is lower than it was last week... is really extremely short sighted. The fact that the market dropped --- TEMPORARILY ---- 1000 points... after it's run some 8000 points since early 2009.... come on. Put that into perspective!

If your house went up DOUBLE in 6 years -- and then went down 25% -- you're still WAY AHEAD.

Go pull up a chart of the DOW --- go to ALL --- look at that line. '08 and '09 was basically a "Great depression" with the complete collapse of the housing and financial markets --- jobs followed.... but this was a financial collapse because of the GAMBLING that was taking place with mortgages and debt and margin by the largest institutions in this country. 1999 was another "recession" for stocks - which wiped out the complete EXCESS in the IPO and tech market...

You must teach yourselves to look at the market with PERSPECTIVE and RELATIVITY... Years ago a 50 point day was a moon shot.... today it takes a 500 point move... I couldn't buy fast enough when the market was down 1000 points --- not because I was getting such good deals --- I paid MORE than my basis of cost in the names I bought two years ago! I RAISED my cost basis with the buys. But they were just lower than they had been LATELY (thus the relativity).

I agree 100%... everything I buy to keep, everything I am buying has a long standing track record.. (see Dave Fish) Hint hint... everything I am buying lowers my dollar cost average.... nothing I am doing now is "short sighted"

I think you're mainly talking to me Greg and you should be, I agree with you. I shared what I did because I'm fascinated with the psychology of the market short term and get a kick out of seeing these changes, which often scare beginners out of the market at the exact wrong time. I never use them on their own to put money to work really. The last time I bought anything was last Oct. when this sort of drop happened, although not as bad. It's not even a year later and nothing I bought then, SNA, UA and LUV went below what I paid for it over these past few days (well except maybe for a few minutes Monday morning). In fact, collectively on those 3 names I'm STILL up 20% as of market close today. Makes quite an argument for buying on the dips. I ended up being a day or two late then and I may be a day late this time but I'm going shopping tonight!!

+1 on that... added to positions today... and will likely add to more every day this week....

Erik --- My comments are RARELY if ever to someone. Everyone is entitled to their thoughts and opinions - here - and everywhere! And are welcome!

What happens for me is that a post evokes thoughts... and I try to post - in a manor that evokes thoughts for anyone reading ALL of the posts collectively. I don't know who's reading - or what they're thinking - or what they're about to do (or not do). I'm mostly trying to be in an Investing 102 mode.... giving folks a base for consideration - calming newbs nerves when they might be asking themselves WTF am I doing - putting things into layman's terms - using my years of experience for a view or a different perspective.

During big moves up and down -- people get all worked up, and often do the exact opposite of what they should be doing, if they're truly investors.

Think about what the idiots feel like that sold down 1000 points --- all freaked out -- bailing out at any price.... and now today we're up 600 points... and they're freaking out trying to buy back what they just sold. They're the LOSERS -- and the folks that bought - are the WINNERS.... and the FOLKS THAT DID NOTHING are the winners... Thus my "take a longer view" post. And if you bought -- don't get too worked up about that either -- because in 5 more days we may have another "dip".... Buy when you can... if you can take advantage of a dip - awesome! If not - buy when you're ready - buy the best - collect the dividend - and years down the road the price you paid will look "cheap" - and they'll still be talking about the "market" being overpriced or overbought or oversold... I've been listening to that same BS every day for 30 F'n' years.

I couldn't agree more. I have had fun listening to CNBC most of the day these last few, boy can they get some mileage out of some swings in the market. Even Jim Cramer, who I like a lot, changes with the market and only briefly slows down enough to say long term dividend growth investing is where you need to be (which most people miss I think) and mostly what he talks about is playing with "mad money" or "the houses money".

Greg, do you regularly listen to conference calls of companies you own shares in or do you just read the earnings reports? I do both but these CEO's and CFO's always seem to put on as positive a spin as possible during these calls.

I do when the market is turbulent -- or when I think I should perk my ears up to a particular name I own. For me - it's easier to scan the quarterly in a PDF format. However, I'm very much "in the game" daily. If you wait for the quarterly to come and don't have a good sense for what to expect - you can get hammered before you have time to sell... and you'll most likely be behind the curve if it's going to run up. For most of the companies I hold - I just don't have to care much. They chug along happily humming a tune - and rise or fall in lock step with the market in general.

In "the old days" I used to worry and wring my hands - and I'd sell just before the report... and then, of course, they'd report a stellar quarter and the stock would run a buck and a half - and I'd be chasing it up... having missed the move.

We should go back and reiterate the information that's been posted here a few times early on. There's a proven fact that most of a stocks GAIN happens on only a very few days in a given year. I'd have to look up the info again - but basically - if you're NOT in the market those couple days - you've missed all of the gain for the year. What I've found is that those days often are either in advance of or just after the quarterly report.

Funny thing this week. I was complaining to Ron Sutton (who comes to the track and manages ME and the race cars) that I was struggling with a particular turn at Sonoma... and that this struggle had me "off" on the series of turns after it (T7 at Sonoma sets up T8/9 esses). He tells me "you're behind the track".... which is EXACTLY what was happening! I modified T7 and 8 and 9 became much faster and easier.

The reason I mention this - is because this week - a guy could easily find himself "behind" the market. Just missing the big down day -- and then trying to catch the market as it zooms off leaving him behind. LOL But these events are for "trader" mentality. Do I love them? Oh hell yeah! Was I waiting for an event like this? Oh hell yeah! But is it important to the average guy?? NO! Is it FUN? You bet! Does it give us bragging rights at the office when we can say we caught the dip? Oh hell yeah! But in the LONGER SCHEME of investing... it's hardly important to your overall net worth.

For me - and this thread - it's more about LEARNING from watching... it's like being in class. If you're not invested - it's a meaningless lesson. If you are invested - then it really wakes your ass up and you pay attention. How'd ya feel? Were you "right" about your hunch on what the market was going to do? What made you "feel" you knew "something"? Did you loose sleep or were you more sanguine and comfortable with your holdings?

I will tell you right now -- that just about the time you're really comfortable with "buying the dips" -- the market will dip - and dip - and drip - and for a period of YEARS (2 or 3) we'll die the death of a 1000 cuts... where the market just leaks red. That's when you'll find out if you're an investor.

I didn't get my full shopping list sorted until after the market closed last night, too busy at my day job...

I executed the trades this morning even with the big bump... Little ticked that I missed yesterday's prices but still overall very happy to add to the portfolio at sale pricing.

I struggled adding any to my oil stocks even though they looked very attractive on the sheets. I added to them on the last dip and felt overweighted this go around. Only one I added to this time was KMI.

The old saying "buy when there's blood in the streets" - while is easy to say - is hard to do. When I bought shares on Monday - none of it was oil... I own enough - they're mostly bleeders - and while they are compelling on a price basis relative to where they were.... other than the pipes... the dividends aren't really covering the possible continued downside risk. Risk needs to carry a comparative reward. My "feeling" in this space is that it's not going to be a sudden snap back where if you didn't get in you're going to miss out. This is a very large commodity and the prices inch up and drip down... A prudent investor - if he's already in - is probably better off watching and waiting. IF a guy is not already in - it's probably better to wait until there's real confirmation that oil is up and heading higher. The counter statement to "buy when there's blood in the streets" is "don't try to catch a falling knife" -- both are true enough - why not wait until the knife hits the floor.

Agree completely Greg, the dividend yield on ETP is VERY tempting right now, but it's already my second largest holding even at today's prices... I still might add some to it...gradually.