Another CLASSIC example of "fundamental change" this morning!!

Microsoft (MSFT)

They (The Board of Directors) dumped Ballmer (the CEO since 2000) and installed Nadella.... and the shares and company are responding positively.

When you look at the MSFT chart -- you'll see great things happened until a sharp peak at the end of 1999.... and then a basic MOUNTAIN top shape downward from there. They announced Ballmer would be CEO in 1999 and he began his term in January 2000.... for the next several years the stock languished. The brains of the company (many are/were friends) bailed like rats leaving a sinking ship. So many big (HUGE) mistakes were made under Ballmer's term - the company spent BILLIONS on failed acquisitions and the linchpin product (Windows) lost market share to Apple (AAPL). Windows 8 was Ballmer's undoing.... OUT!

Enter Nadella... The market cheered... he immediately said they'd fix Windows 8.... and the stock takes off.... Now only a couple quarters and his (Nadella) hands are showing and the market loves it.

That is the essence of fundamental change.

Anyone else considering adding to or starting a KMI position today? :y0!:

KMI is he proverbial "throwing the baby out with the bathwater".... NOBODY wants to have anything to do with oil / oil related businesses.

They just raised their dividend... and the "problem" was their forward looking statement which stated they may "only" be able to grow the dividend 6 to 10% instead of the absolute statement of 10%.

Really?? You're only going to grow the dividend? LOL Amazing what the market fails to see sometimes. The herd mentality.

I already own 25,000 shares of KMI so probably won't add to this position just yet but will if it stays down here.

Was talking with someone that has been in the Natural Gas business for a long time last night and he says anything regarding the transportation of Liquid Natural Gas overseas is the next big thing. Other countries are setting up their infrastructure to operate off of Natural Gas and they need supply once ready.

It seems a lot of people are missing this portion of what KMI does.

as do with many oil/fuel companies. revenues steady?

I did yesterday. Their funding secrecy has the talking heads speculating.....and me in the dark. :sieg:

For the day KMI is down 1.71% right now and MSFT is up 11.18% with the DOW up 1.06%........

Global Central Banking industry is being credited with the market gains.

I had idle cash on hand and wanted to average down my KMI position so we'll see if I get bit.......rolled the dice vs sitting on my hands.

Apple (AAPL)
 

Apple (AAPL) is due to report earnings this week.... I do not own any of the shares - but love the products and operating system. Once again I will say that I'm not using this name for anything other than an Investing 102 "way to think" - so it's not about this particular stock.

I was reading an article about Microsoft (MSFT) opening a huge NYC retail store (My wife was a Senior Director there (@MSFT) for 19 years). I'm always interested in this company just due to the long connection with them - even though I quit using any of their products long ago.

We have discussed numerous times about beginning investing and trying to own shares in companies that you have exposure to - where you shop - industries you understand or work in etc. It helps you have some "insight" and connection to the shares you choose... I remember buying Apple (AAPL) shares years ago after seeing long lines at their store in the mall I was shopping at. It was the only store in the mall (one of the most successful malls in the country - Bellevue Square). Since I no longer live in a city with any malls - nor an Apple store - I personally have lost my ability to have any insight to this names retail outlets.... while I WAS NOT surprised by what I found in this article! I still said WOW!


<Quote>


According to a March report, Apple’s stores generate a staggering $4,798.82 in sales per square foot on annualized basis—by far the most of any retailer in the nation.

What Apple has been able to do as a brand is amazing to me.

Considering that they'd have gone out of business a few years ago had it not been for a loan from.......... Microsoft! LOL


http://www.bloomberg.com/bw/articles...ple-investment

Think Billy G is wishing he'd not made that loan now?? Oh man... I'm kidding of course because he's not that kind of guy - and everyone knows that keen competition is what keeps us all humming...

I remember this loan well -- and I was thinking - NFW I'd loan them money they're all but OOB!

I'm actually glad that many of you are seeing a whacked out market - many of you for the first time since you've become investors.

I'll be darned if I can figure out what's going to work and what's not.... but in the meantime the dividends continue to pay me to go race my cars. LOL

The account I used for examples here etc is down about half a million bucks - all due to the oil patch investments (KMI - ETP - APU) These are down and down hard. I've been buying more of them. I can take the pain and I love the increasing dividend percentage. In the meantime - they're the death of an account on paper....

Here's what I DON'T like about this market -- an earnings hiccup -- and the shares are down in what I think is a way over reactive manor... and an earnings beat is rewarded too much. Shares of Amazon (AMZN) are trading at 886 P/E ratio. Really? OMG! To me - there's too much money trying to find a home - as it's coming out of "non working" names - and trying to find a home in what appears to be "working". It's chasing anything and driving names too quickly too much. I don't like that.

Typically what happens is those names that run up fast and large... the fast money comes out of there the minute something else begins to work. That never ends well.

What we have to remember is the country had to climb out of a big hole... when the market all but collapsed. We had a housing melt down and a financial crisis... so for the last several years - we really were in the proverbial "there's nowhere to go but up" kind of market. Now it seems we're more on a plateau.... Or what's called a "sideways" market - where things just bump along. It's always hard to feel good about being an investor in a sideways market. Many times you feel you're being left behind - then in an effort to catch up - you stretch your rules and start to chase the names that have gains. Be very wary of doing that. Think more about your money long term - earning a good dividend - buying more shares at lower prices (lower prices does NOT mean you are lucky enough to buy the very bottom!).

Kevin O'Leary is on CNBC.... says he ONLY buys companies that "return capital" i.e., pay a dividend.


71% of all accrued market gains are due to the dividend.

I have a question for you Greg, reading quite a few pages back (I can't remember the page number) you discussed what I believe was called a "wash sale." Given that I bought KMI while down to average down my cost per share basis and sold my long-term shares to achieve that, would adding to my position now while the shares are down negate the tax benefit IF I was doing this in an account not slated for retirement?

This activity is in a retirement account but am curious if it applies differently in a regular investment account. Can I buy new shares, sell the old shares and buy new shares again or must you sell all of your shares, clear the position and then buy again to avoid a tax hit. I'm sure I am overthinking this again but does the manner in which your transactions take place make a difference?

A wash sale applies -- and crosses accounts.... so you can't use a different account say to sell and take a loss - and then turn around in another account and buy....


A "wash sale" is ------- you sell at a LOSS..... you can not buy the same exact stock within 31 days. Or you lose the ability to take the loss.

Sell at a loss -- mark your calendar - make damn certain there's 31 or more days between transactions... and then do your buying.


It IS NOT a wash sale -- if you sell (example) Conoco (COP) at a loss - and within seconds BUY Exxon (XON).... they're in the same business but they're not the same stock!

You might want to read some of the articles on Seeking Alpha about KMI. There is quite a wide range of opinion about KMI. The most concerning thing about KMI to me is their debt issue. This http://seekingalpha.com/article/3609...tory-of-icarus is a pretty good article if you want to read about some of the reasons to be cautious of KMI. There are plenty of positive articles as well. I don't know which side is right, but due to some of the issues brought up in the negative articles, I think that KMI has quite a bit of risk. It could be a great time to buy, but it could also continue to slide downward.

Thanks...and yes, I've been reading all them.

I by no means bet the farm on KMI, but I like the model and think I have an understanding on the direction Richard is trying to steer the company. If he's able to pull it off, it should pay off big time. Meanwhile, I'll sit back and collect the dividends.

I view those articles like this...for the most part. Whenever someone is trying to "sell" me on something, I look at what they are saying very critically and I try to figure out why they are trying to sell me. If I can find ANY ounce of potential gain to them in regard to what they are trying to sell me, I hugely discount the advice.

That is somewhat difficult to do when reading the articles posted on SA, but after a while you get used to reading those written by people that think like yourself and you listen more to them that others that...might have an alternative agenda let's just say.

I agree you do have to read multiple viewpoints and consider the motivations of an author/seller. I've got KMI simply because I owned KMP. I would prefer to be getting into KMI now since I'm/it's down so much. Regardless, I think KMI is a good example of having to know the segment/market the company is in since its numbers will look different. I tend to agree with the people that bring that up repeatedly because it's brought up repeatedly that their numbers are "bad" when looking at them as if they were a normal retail company. KMI's business is very debt heavy because it's a long term model. I personally am not worried at all about them. Though, admittedly, I would prefer to see movement towards the positive sooner than later.

For a funny look at responses to an article, find the MCD article from the guy saying MCD was a poor choice on the very day that MCD jumped due to earnings beat. Read his article and then read the comments. I think too many people dismiss a contrarian view too easily and for very weak reasons.

What "makes a market" is some sellers and some buyers.... every single transaction big or small - involves a seller and a buyer. Obviously both have opposing views.

It pays to keep an open mind and listen to both sides.... and then make up your own mind. We all are guessing that we're right when we buy and we're guessing we're right when we sell. In the meantime - you have to sleep well at night with your decisions... whichever side you're on.

I was just looking up stocks of stores I frequent and wow was I surprised.
Take a look at O'Reilly's auto parts stock, not a dividend stock but wow what a 5 year growth (ORLY).

Wow look at the growth is right, ORLY would've been a great growth stock. Holy sh** did you look at AutoZone (AZO)?

Classic examples of -- buy things you know - where you shop - what you can keep track of.... no different than comparing a Home Depot or Lowe's etc

We've discussed strategies for "averaging down" positions... we've talked about NOT trying to "catch a falling knife"... and about how just continuing to buy additional shares in companies you already own - but are down from your original purchase - eventually can work out quite nicely.

Oil investments a year ago looked smokin' hot.... today - anything with the mere mention of oil has tanked. This happens from time to time. Banks and financial institutions were the last ones to tank back in '08 and '09 during the great financial melt down. Some still haven't recovered fully (AIG etc). Autos such as Ford and GM were taken to the woodshed...

When you think about it -- Oil - Banks - Autos - these were safe investments. These are some of the biggest companies in America! My point? It's why we DIVERSIFY! You just never know what's coming down or when or why.

NOW ------ "Big Pharma" is in the hot seat.... and I got a little chuckle to myself when I read that Bill Ackman has taken a 2 BILLION dollar loss (so far) in Valeant (VRX).... and even more laughter from me when he did a classic "I'll take a stand" and bought 2 MILLION more shares when it got hit hard. Now -- here's where we can use this example for Investing 102....

Valeant was already one of the hedge funds largest holdings..... a "short seller" comes out with a very negative report about the company and the shares tank... BLINDLY Ackman takes a stand and loads up on more shares.... only to have the shares continue to tank even harder. What did his stand net him?? An absolutely massive loss.

Don't do this! Ever! Never feel like you absolutely know there's a buying opportunity to be had on this "dip". Stand back -- let the events play out.... if you already have a loss.... don't add to it by buying more shares! Just wait! Make sure you know where the company involved is going - get the facts - wait it out. If the news gets worse - you might decide to go ahead and take your lumps. Move on and invest in something else. If the news gets better... then time might make you whole... and if the news is better - THEN you can add to your position to bring your average down.

This scenario is DIFFERENT than when an entire sector is in the dumper.... There are many fantastic buys in the oils/oils related - the troubles are not company specific... there isn't "fraud" or "mis-doings" going on. The Banks got in trouble as a group... and there were some really good buys to be had during that period.... Bank of America (BAC) or Wells Fargo (WFC)... that long term will be fine.

I'm thinking back to our discussion of whether or not to buy Volkswagon (VLKAY) over the diesel emissions "wrong doing". I think it might be a buying opportunity --- but there was no reason to buy the day the news broke.... They stock is down - probably will stay down for awhile -- so why rush? Wait until there is better news... the fines have been levied... a fix is figured out and the management sorted out. THEN maybe it'll be an opportunity. My point is -- don't try to be a hero... THAT is gambling. :G-Dub:

Per the above post --- it will be interesting to see what happens with Chipotle Mexican Grill (CMG) tomorrow --- after the news of E.Coli in it's Washington and Oregon locations.

Here's why it will be interesting --- this stock is one of those "priced for perfection" stocks we talk about.... and the stock is volatile to begin with. So watch to see if this is a fantastic opportunity to get a great growth story at a nice discount -- or if the stock sells off and stays down for a couple quarters... because events like this can change peoples "habits" and the consumer is very fickle! We won't know that until it plays out. The chain may have a supply chain problem -- or it's efforts to be organic don't work well in a fast food chain like this.... We just don't know. Either way - it's of interest to learn from and you should GUESS what you'd do --- then see if it goes your way.

That was one of the IPO's I had passed on. Co-worker is heavy on IPO's and sub penny stock. He said, gotta jump on Chipotle. I said "Who?" LOL

He's 41 and pretty much retired. Last I heard he was travelling by motor cycle in Europe.

I don't like trendy stock cause these new stock guys are not very loyal. Little wake in the water and they jump.

With the markets just bouncing around -- up one day down the next -- so sectors decidedly in the red ----- I would urge you to go back to basics when you're "concerned" about your holdings.... in other words -- pull up those longer term charts and look at them. There's MANY ups and downs - big and small.... but do you see the line that generally is going up over time. That's the line that's important! In the meantime - if you're collecting dividends... then stop worrying. Remember when I reminded everyone to remember when their stocks were going up every day? Now's when you need to remember that.

If you were in real estate 10 years ago you couldn't believe how much your stuff was going up! Then '08 hits and your holdings were worth half what they were... 5 years later - they've doubled or more.... Don't you wish you'd have bought some stuff when it was HALF what it is today?? Yeah ---- that's what I thought..... LOL

HaHa, thanks for reminding me of selling at the peak time in 2006 and then foolishly thinking I HAD to do a 1031 (because the worst thing is paying taxes) making a huge mistake for the wrong reason. I've now learned, if I'm paying taxes, then I must at least be making money.

Here's why I like DIVIDEND INVESTING.... and once again I'll remind everyone that this is simply ONE example. It is not a recommendation to buy or sell or anything else. It's just that things jump out at me (typically in the morning) and I think it's worth posting....


Altria (MO) paid .38 (thirty eight cents) quarterly dividend 5 years ago --- today --- they pay .56 (fifty six cents) per share per quarter.

If you'd purchased 5 years ago - you'd have paid somewhere around $24.... So using that cost basis -- you're now collecting $2.24 per share per year.... quick math would show you are collecting almost 10% per year on your cost basis. Not bad when compared to the .25% you might get at the bank.

As we approach the end of the year the talk about an interest rate hike from the FED is growing louder and louder. That remains to be seen. All I know is - I wouldn't want to be one of the folks at the table that must make that call. Personally -- I don't get any sense that the economy in the US is good, great, or just plugging along. Generally you get a sense for how things are going from the earnings reports. What I've seen (and I watch this daily) is one guy is going great and the next one isn't. Amazon is killing it - Macy's is getting killed. Which one is the "meter"? I don't know.

Here's what I DO think... and this is just my thoughts. When the FED raises rates - while I don't expect much of a raise - that's basically a giant redistribution of wealth. What do I mean by that? It means that EVERYTHING that is interest rate sensitive will be raised - which means that everyone will pay more for everything. Housing - Autos - Communities that float a bond to fix streets or build a library - EVERYTHING. That means money flows out of peoples pockets and goes somewhere else.

The question is -- is that a deal breaker? If you weren't offered near zero rates on your car purchase - would it affect whether or not you did a deal and bought a car? Or a house? Or? Good question to ask yourself. How tight is your budget? If your house payment jumps $200 a month.... is that a shock?

I just bought a new snow blower for the new house. I have a HUGE driveway due to the Fire Department requirements... that's neither here nor there... except that I live in the mountains.... where it snows.. it can snow daily or it can snow deep. You wake up and there's 12" dumped overnight. I don't want to wait until mid-day to have a guy come plow me out... and I'm a do-it-yourselfer kind of guy. My best friend owns an excavation company and they switch from digging dirt to plowing in the winter. He talked me into buying a Bobcat with a 62" wide snow blower mounted on it. Why am I telling this story?? Because I was offered either 36 months at 0% -- or $1,000 off to pay cash. I'm a cash buyer and took the discount.... but many might take the 0% rate - essentially then - you'd be paying $1,000 worth of interest but people never do that calculation do they? LOL Now.... if you're like me - I've become quite used to seeing these zero rates offered on a variety of things. Will we balk at the purchase when these go away? Will we bargain harder for a larger discount as compensation? Will we not be simply "spurred on" to buy at all? Or will we not buy because suddenly everything we already own is costing us more out of pocket monthly?

In the end -- rising rates will mostly hurt those that can afford it the least - the middle class... They're also the ones that - because of the law of large numbers - buy the most "stuff". So what will that do to the economy?? So far they've (we all) have gotten a nice refund due to the low cost of energy.... (it's killing my energy investments)... but what happens when that cost starts creeping back to normal ($3 gas?) and your house payment takes a jump - and then your car needs replacement... and that is now 4% rate instead of zero....

I think our next debacle will be INFLATION. We'll need to really be keeping a keen eye on what - if any - affect that will have on the shares we own. I'm not saying you start selling - or buying or do anything. I'm just talking out loud and saying my ears are perked up - my radar is on.... I want to be proactive. If I'm looking to add to positions or buy new ones - should I be taking this into account going forward? In other words - would rising rates hurt housing - which hurts Home Depot (HD)?? I don't know - but I want to pay attention.

So as i've been keeping an eye on the inflation from a wholesale perspective, my cogs have gone up 34% in a year!!!!! WTF you might say, #1 there are people much smarter than me up top figuring out the increases, #2 rates of glass (in my industry) have fluctuated up and down since the 80's, but haven't moved a whole lot up (till now) #3 demand for our "sheet" product is through the roof ( i'm suspecting solar photovoltaic, but nobody's saying)....so yeah, inflation.

so we as the little guy are getting squeezed, taxes are up, labor costs and benefits are up, but so is volume (waaay up for us). So i'm focusing on volume but it will be the first to take a hit if the economy takes another hit (hence diversifying my product base)....

Good stuff guys....keeping this thread interesting....

Inflation isn't such a bad thing, if there's wage inflation to go along with it. My concern is that many companies have gotten away with no real raises for so long that I think a lot of people are used to it now.

Personally I think they're going to raise, and then watch. They've been artificially low so long I think it's ultimately hurt everything more than helped. Stock market at basically all time highs at more or less reasonable valuations and interest rates still at 0%? What if there's another crisis, they don't have any tools left to deploy really, we could really be in trouble then.

Oh man I have stories....losing $300K to avoid a $95K tax hit. Yeah, I was still scratching my head. And that is only one I have witnessed. Better to put it aside or make it work.

In a discussion with anyone - the minute they start telling me about selling at a loss so they can offset their huge income tax bill..... I know I'm talking to an idiot.

Isn't that the truth. The only thing I could cling to was despite my big profit in 2006, I had to do something with it, either real estate or stocks, all of which went south in the coming 2-3 years.

I can definitely say though that it's my mistakes in investing, and life for that matter, that have taught me the most, not my successes.

That's the truth for most all of us Erik... "Experience..... is the name we give our mistakes".

if you are observant enough you can learn from other's experiences.

It's almost like cheating isn't it?:lol:

I like to think of it as team work, personally.

Speaking of mistakes:

http://www.marketwatch.com/story/hel...556-2015-11-19

:lol:

Don

Many many times I have WANTED to go short --- just before the Financial Crisis -- and I wanted to short the home builders before the housing collapse.... But I NEVER short anything.... because the minute you do - something you have no idea about pokes your eyes out! No thanks!!


Good story ---- but I don't feel sorry for the guy one little bit. He wouldn't be whining now had his short worked. He got blown up -- and suddenly it's BOO HOO....

What I don't understand is how after hours trading occurs and it's affect on a price. That's why I don't do anything overnight.

You younger guys may want to look at NIKE (NKE).... They just raised their dividend 14% -- split the stock 2 for 1 -- and announced they'd buy back 12 BILLION dollars worth of their own stock.

I don't own it - and have never done any research on it - and this isn't really a recommendation since that's not what this thread is about.... but some of you are looking for "growth" stocks vs dividend payers.... and a company like this has some of both. It certainly fits the criteria of "best of breed" and "things you know".

LOL