This "trade" has just gone green.... with KMI trading at $32.52


This is where you learn whether or not you're "greedy" -- meaning that the trade worked as you wanted it to - but now - rather than stick to your plan and sell the original shares etc as explained in the thread...... instead you decide it's worked so well - and you want even more gain - so change to holding it for an even bigger gain.

OR........

You stick to "the plan" - acknowledge that you were lucky this time - beat the street... and you breathe a sigh of relief. Pull the trigger and sell the higher cost shares. And carry on. And use the new cash to go back to your "adding to existing holdings".

Remember that this trade works SOMETIMES --- and the greedy dudes end up holding the far larger % (the 5% rule) and then it can go SOUTH real quickly and destroys your plan and your account. That's where the saying "pigs get fat and hogs get slaughtered" comes from. :lostmarbles:

So just to expand on your further plan B option. I'm in KMI originally at 41 dollars ( we have a little ways to go ) I only have 21.5 shares. I picked up a 1/2 share in the 10 months I have had it. But the P/E rating is really high from the numbers you guys say to be around 20. It is at 40. SO does that indicate it might be a while before some thing happens to put me in the green.

So if I'm in this for 20 plus years should I let it sit hope to make it green some day? Or double down and move that number down? Or take the number out into some thing else that might be more profitable sooner then waiting on the green.

My shop has done personal 401k for a year for Shannon and I and we started offering it to the employees this year so we could do more of it ourselves ( we have 2 plans - The standard and another called the SIMPLE ). The first one is limited to 6k per year and the 2nd has a pretty big limit - maybe 12k per year, more then I can fully fun for both of us, but we contribute and the company matches the contribution. But I get smaller payments every month so we only get to buy a handful of shares at a time. I doubled down on Shannon's BPT last week and did well on it this week. But the BPT is still way under water from what it was 18 months ago.

Just looking for the ideas on the little guy strategy.

Would it be wrong to hold onto the original shares due to my time frame before retirement (22 years if I can retire at 60) because it is a long-term investment? Or should I just be excited that I learned something new, got lucky THIS TIME and sell anyway?

Don't get greedy --- this worked for right now. That's considered being LUCKY.... MAKE IT WORK by sticking to the plan of unloading the original higher cost shares.

The dividend on the new lower cost shares is a huge "gift" that will pay you back for years.

You're better off now taking advantage of some other "on sale" shares that are also paying a higher than normal dividend due to the share price haircut everything has gotten lately.

I'd go back now to your original plan and pick up some AT&T (T) and Caterpillar (CAT)... again - it's hard to own CAT here... but over the long term you'll be happy.

Anything in the oil patch is awful... and could stay awful. What you have to ask yourself is - 5 years from now will this still be awful?

The market has given many people a gift of lower temporary prices coupled with higher dividend percentage - in many areas not just oil... Personally - I always take that gift and run with it. MOST of the time it works out really well if your time horizon is longer than a cup of coffee.

Not all, OB1.

When KMP turned into KMI the shares I held long-term became short-term, although this is a retirement account is this something I should be concerned about when I sell the original shares? Or should I just sell anyway because the tax implications won't affect me?

Seeing all of the green on my sheets the last week or so has me thinking...might have been the time to put a few more dollars in.

Hopefully your sheets are looking better the past few days as well.

Don't concern yourself with taxes inside of an IRA/401... and this is such a small amount and would be a LOSS sale anyway so no taxes will apply.

These accounts are "tax deferred"... you won't have any issues until you've actually taken the gains etc.... and for the most part - these would be spread over numerous years - and the plan is - to be in a lower tax bracket when you're retired in the first place. That's the entire reasoning behind them.

I prefer a ROTH IRA -- which has ZERO taxes - EVER. If you qualify - look into opening a ROTH and funding that over a standard IRA/401

First post here as I mostly lurked enjoying all the builds I can't afford from afar. Never registered because I don't have a Pro Touring car yet ( but maybe this thread will help with that in the future )

Anyways, I was looking on google since I've finally found a long term career as I was :EmoteClueless: and I'm getting to an age where I need to think about my financial future. I have to say the knowledge in this thread is very awesome and it also explains things in a manner pretty much anyone can comprehend. I've even forwarded it to many friends.

Who would've thought a Stocks/Investing thread would finally be the thing to get me to sign up to this site.

Once again thank you OP for making this thread. Also thank you Greg, PW2006, and others for continuing to post in this thread. I'm only 34 pages deep but I went out and bought a notebook to take notes.

I hope to have enough money saved up in the next 6 months to start diving into Investing. I was apprehensive as I didn't know where to start but this thread has really helped me! :thumbsup: :flag2: :G-Dub:

It will be the best thing you ever did for financial stability in your life when you look back years from now. Welcome aboard too!

Thank you and you're absolutely right. I have a 2000 Camaro Z28 and a 2005 GTO.

I hope to have a Pro Touring C10 Square soon

Welcome to the site! Glad to know you're finding this thread informative. Did it really show up during a google search?

I need to get me one of those high rod jelly beans, too. Love those cars other than the green radio screen.

It did lol surprised me then I couldn't stop reading. Aftermarket stereo FTW :thumbsup:

Wow, ok. Never figured a thread I started would end up in a Google search. Funny how the internet works.

You all should remember our discussions about FUNDAMENTAL CHANGE regarding stocks...


There has been a fundamental change at McDonalds (MCD) with a change in the CEO and so far it seems wall street is rewarding the changes being made there. These are the kinds of things (big moves in top management) that you should always be aware of in your holdings.

I recently had dealings with two companies that are both under the Berkshire Hathaway umbrella and both companies completely impressed me as a consumer...something that is the exception more than the rule it seems like these days.

A shares of BRK are out of the question for me to own and B shares don't pay a dividend, so they don't fall into my normal portfolio strategy.

That said, I am contemplating buying some for a growth return play. Curious if anyone else reading this has looked into or owned any BRK:B shares?

Without digging further (I'm still learning) I looked at the last 10 years and there is definitely growth from left to right. What confuses me is the P/E ratio is 0.01, Inst. Owned 0% and no dividend. How do you evaluate a stock like this for purchase? Would you look at the financial reports and check the profits/losses, debt balance, asset holdings, etc.

I won't own either - because they don't pay a dividend -- but more importantly - one day you will wake to the news that Warren Buffett has passed away - and you're shares have been cut in half. No thanks. Those shares are ALL about Warren and his fame.

Yeah, that's a pretty good point...

For those of you that own Altria (MO) or Philip Morris (PM).... or both (as I do) do you now understand why you own stocks like this? This is a rhetorical question... but what I'm asking is whether or not you understand - now - owning stocks that hold up in poopie or scary markets... Sometimes the stuff you think is boring as all get out... can be your best investment.

Just sayin'

x2 My MO, CLX, and KMB have done well for me. JNJ has dropped but it still pays a nice dividend, and I know it will come back up eventually. I like boring when it comes to money typically.

VERY happy MO holder over here. :)

It's always funny to me that everyone wants to own the "hot stock" -- obviously -- this thread has always been about investing and growing your money over time - it's about not being worried every day about what your shares are doing... it's about peace of mind and capital growth (as well as preservation in troubled times). It has never been about stock recommendations or what to buy - it's been about how to buy and what are some simple things to think about. Altria (MO) is just an example of one stock used in this thread... and it fits the bill for most of the things we discuss time and again - so it's a good example.

Here's another good look at WHY we use these as examples....



Altria (MO) has a Year-to-date gain of 20% - a One year gain of 29.79% and a 5 year gain of 138%

Pretty impressive for a stock that's never in the news - and nobody ever talks about owing it.

Let's compare it to the ones everyone talks about and that are in the news daily.

Yahoo (YHOO) - YTD DOWN 33.5% - One year Down 12.6% - Five year UP 106%

Let's look at that -- so if you were in 5 years ago - even if the stock were DOWN this year - you're still way ahead... but man what a scary ride along the way -- and zero dividend....

Twitter (TWTR) - YTD down 13.5% - One year down 36% - Five year down 25.5%

It WAS THE HOT STOCK that was going to make everyone rich!

GoPro (GPRO) - YTD down 54% - One year down 61% - Five year (wasn't around) but the chart shows down 19% since it's IPO

This was the OTHER "get rich quick stock"

Not sure about you guys -- but I'd prefer to own boring old MO... over GoPro. LOL

I bought 10 shares of GoPro early on and watched it jump up to $90+. I knew it wouldn't continue to climb but I surely didn't expect it to nosedive either. Lucky for me its in a Schwab account with money I can afford to gamble with. I will just continue to hold on for the ride and see what happens.

I've bought and sold all of these - sometimes making some money and sometimes losing some. There's nothing wrong with buying these kinds of names ----- PROVIDED ---- you understand what you're doing and you have a good base of normal investments etc.

That is why I bought it with money I could afford to lose. If I gain something, GREAT, if not, no big deal. I wouldn't have added it to my retirement account. On another note, I did add T (AT&T) to the retirement portfolio.

I'm a fan of MO as it's one of my best. I can't stand AT&T. They have lied to me way to many times. The leadership is horrible. I own some stock but it would be the first to go if I was selling.

McDonalds
 

So once again we're back to "fundamental changes" in a business.... Here comes McDonalds (MCD) which had been just dripping down and down and reporting sales disappointments quarter after quarter... They changed the CEO... Made a big change to "breakfast all day" and BAM! Finally a big quarterly turnaround and the stock jumps $7

This is the thing when big companies make big changes... you just won't know which way that's going to play out.

So using the Mcdonalds idea. How does a guy look at this stock now?

Obviously the best position would have been to believe in the new CEO and buy when the stock was at its lowest or some where near there.

Seems to me like a band wagon move to get on board now. But a 3% dividend is decent.

I think MCD is big enough they will change there game to make money. But in tens years the Big Mac might be outlawed or totally changed. I don't think MCD will go under and I'm glad to see they try some big changes, which Jack in the Box did years ago.

Just wondering you mindset looking at this situation to use in others.

Good questions --- And I wasn't using McDonalds (MCD) for anything other than an example of "fundamental change" and how it can have a dramatic affect on a company - good or bad. The key is IF you owned MCD -- that you should always be paying attention!!!

All stocks are "bets" -- I don't care how big or small.... Things CHANGE. IF you're lucky - they go your way.... and if you're not - they turn against you (take OIL for example). We all have to make a judgement call at some point - do you LIKE and agree with the changes made -- or do you feel they suck? Sometimes we can't possibly know.... and we're just along for the ride.

My personal opinion is that FAST FOOD in general is in for long term changes... and there will be winners and losers. I personally think MCD is a longer term loser because I don't think people are eating that way as much anymore. None of my friends go to McDonalds - for anything - and we're the generation that grew up on this stuff. I will choose a higher quality - healthier meal whenever possible.... and I know where to get a GOOD burger and fries when I want one. But that's my personal feelings - and I sold MCD 2 or more years ago - when I realized that it didn't fit my personal stock picking guide -- which is - DO I LIKE THE PLACE - DO I SHOP THERE - DO I LIKE THE PRODUCTS. The answer to all three is no. Sold.

Everyone has to make that judgement for themselves. Nobody should blindly follow someone else's picks. That's when you get into trouble because you don't personally know anything about your holding or why. Fine if it's going up - but the doubts creep in when it's bleeding.

Right now, today, if I was thinking of getting on board with MCD, I'd be kicking myself for not going in yesterday. Otherwise, I'd say to myself, good deal MCD but let's see what happens in a few weeks or maybe next quarter before I put some money into it. I think there are a lot of people trying to get into MCD right now while they are hot and hoping it will go a little hotter so they can bail and make a quick profit. The bandwagon affect you mentioned.

Admittedly, I agree with Greg to a large extent about MCD though. I'm not sure they are positioned correctly to capitalize on people's changing attitudes towards food. At the same time though, I'm not ready to pull the plug yet. Maybe I'm being more cautious or simply not as confident as Greg but I'm being patient for right now while also considering other options. My biggest problem which has caused me to be more patient with my MCD shares is I don't know who else I would want to invest my money with. I've got to decide that before I decide to sell off my shares. We'll see what tomorrow brings.

why sell? why not just hold if the divi hasn't changed.

I'm trying to sort through some of the though process on the next stocks to pic. My daughter loves Chicken nuggets from MCD and they just built another one right by our house. But If I have a choice I would do Carls or Jack in the Box. So I'm not sure I see fast food going by the weigh side ( HAHAHA ). but Now that they post the calories on the menu by law I think. People are more aware of what they are ordering. Fast food is usually convenient or price not for taste and as you get older you eat better.

But like with some oil stocks going up and some not lately, you have to decide when to hang the risk out there and when to wait. CVX has gone up alot and the BPT is bounces around. KMI is still tanking.

Ideally you buy when everyone is selling and sell when everyone is buying. And hope everytime you open the Schwab account its all green.

That's one of the reasons I've held on, too.

If I owned MCD I'd hold it. If the new CEO (Easterbrook) is as good as he's been for the stock - there's more good to come. I don't think I'd chase a stock - and certainly not for it's dividend... which as a percentage - goes lower as the price goes higher.

The CEO seems to recognize the company needs some updating and changes to the offerings. That's a good first step.

Don't bail on a stock the market just rewarded for going the right way.

McDonalds is suffering from a stigma they deserve. All good things come to an end, in their case, selling poor quality food at the cheapest price. The blinders have come off for many Americans that don't have their head in the sand. Hell, I didn't eat the crap before I really decided to get healthy.

I'd compare it to Cadillac and their old fart stigma. They can run all the commercials they want with young people, but I still can't see myself in a Cadillac.

They can recover and adapt, but it's going to take some serious time and marketing dollars to drown out the past and regain market share to places like Chipotle.

I'd rather invest in a company with a positive vibe and some momentum. No company is to big to fail. I recently read Good to Great. One of the elite companies that made the grade was Circuit City. They are gone... Look at block buster, etc... This is food so it's a bit different. I will say that McDonalds has 50 times the competition it had 25 years ago.

Remember that MCD isn't a middle class and up staple. For a single parent or homeless person it maybe the only warm meal they eat in a week. In my opinion they are "too big to fail" and should be able to sustain itself if they can reinvent itself every few years. Long term I think its safe to stay. I don't own any stock or eat there....much. If I had owned it and have 100+ shares, i'd hold.

Like 90 people (bout four) have told me to read that book. Its on my "oh, sh_t, i forgot" list lol

I agree, I just don't think that demographic solely can support a flourishing business. They are franchises so the strong will likely survive with diminishing volume. I doubt they fail either, but nothing is out of play.
It was a decent read. It came down to the culture the great companies created. That was the factor from good to great. There, I saved you 250 pages. :lol: