Excellent reference!!


:thumbsup:

You know the old saying about "never gamble with money you can't afford to lose!"....

At this point you might be better off just holding and seeing if they can get their chit together in a couple quarters. I remember back in the day when I had options on a bunch of Microsoft (MSFT) and for a year or longer it was underwater.... but then -- it was off to the races.... So ya never know!

You're still grounded for like the whole weekend!


:D

Hey Sieg! How's that Coke (KO) working for ya now??



EEEEEEEEEEHHHHHHHHHHHHHHAAAAAAAAAAAA



Here's what I love about these little blue haired old ladies...... KO is UP 16% since the first of the year.... AND it pays a dividend..... AND it's splitting 2 for 1


I don't know about you guys -- but that's how you make money honey!


:cheers: :woot:

The last few days with KO and S ain't been to bad.

http://s3.amazonaws.com/advrider/rilla.gif

This market is whacked..... I like it... but it's whacked.

Normally -- I'd EXPECT to be down in the summer.... the market is normally slow and drips down... the old "sell in May and go away" is usually spot on. But not this year.

I'm off to run the Mustang at Sonoma Raceway.... The Shelby Mini Nats! Should be good this year since it's the 50th anniversary. I've vowed to not get a black flag for the entire weekend... :D

Good luck down there, wave when you roll by on I-5. :thumbsup:

Have fun Greg, i would come by and say hi again, but I have a wedding to go to.

Greg,

I would swing by too, but it is my Wedding Anniversary...:cheers:

I know , bring the Wife....She isn't much for the racetrack or loud muscle cars...:mad:

Thank God she looks good...:thumbsup:

Well -- Left Seattle at 10 AM and rolled into my home away from home at Willows at 11:45 PM.... Big fire on Mt Shasta and they had I-5 shut down.... You wouldn't believe the double parked line of trucks headed Northbound! OMG... stretched for miles!

So my Better lucky than smart saying still holds true! Pulled off at Weed to fill up -- and maybe grab a hotel since the detour was adding at least 3 to 4 hours to the trip... by the time I fueled and checked one hotel (no vacancy) I flipped on the Caltrans radio station and they JUST opened it back up! Jumped back on and it was like me and two other trucks the whole way! 5 minutes earlier I'd have detoured on Hiway 89 --- and would have been committed then! Wow! So darn lucky!

The smoke was choking thick and you could actually see big azz flames right on the road... so little wonder it was closed!

Well -- due to not getting to the hotel until midnight - I just now am checking my stocks and see it's not a happy morning in the market.... BUT... I go to "HISTORY" to see any transactions in the account (mostly because I made a deposit) and bingo! AT&T (T) has paid a dividend and so has my Blackrock Duration (BLW).... so while the face value of my holdings are having a bit of a red face day... there is CASH FLOW in a very positive way which will put race gas in the track car! :lol: :thumbsup:

It's days like today -- that I really LOVE dividend payers...

Seems everyone has fallen asleep in this thread... Not much interaction - so maybe it's turned into a blog? If that's the case I'll quit posting to it?


I generate more cash than I can spend... laughing at this thought... but it's what I've been trying to get everyone here to try to do.

I used to use GE or MSFT (years ago) to park cash. No point in letting it sit in a Money Market sweep account that pays .01% (joking - but it's not far off). Now I use ETF's -- High Yield (HYG) or JUNK (JNK)... both of which pay real decent dividends.

The reason for todays BLOG post :lol: -- is that I want you to look at the DETAILS of the dividend before you just park cash. To use HYG as an example.... it just paid the dividend so won't be paying a dividend for another 3 months. Not much point in parking money you're going to invest next week or next month in this name today... All it takes is a simple look at the details to see when the next "EX" date is. Remember that you only have to own it until after the "EX" date to collect the dividend! Since this is a larger holding in my Schwab account - I choose to put the cash here today... but it's money that I'm not planning to spend - or invest - and if I do want to pull it out - I will check to see if I'm close to the "EX" date before making that decision. If I only have to wait a couple weeks or maybe even a month - to pick up that dividend I'll leave it alone and wait to get paid. Why not? It's CASH.... (.50 per share - on the 5000 shares I just bought is real money).

Now -- if I need to or wanted to use some cash beforehand - I'd just dip into the margin side of my account. I can write a check or buy stocks using MARGIN (about 50%) of my account total. There is a very very small % rate for doing this and it's far less than the 7% yield on HYG... so if I suddenly needed to buy a stock (really? Nothing I do is that "quick"... so I'm just using this as an example) or Charley was selling another car I just had to have.. I have this available to me. I do not -- and please please please -- do not use the MARGIN as an ATM! The minute you do - the market will dump and they'll sell your account out to cover the MARGIN CALL!

I actually had a friend that had a 33 MILLION dollar margin call. Understand that this meant he had to have had AT LEAST 66 Million in his account - in order to get 33 Million in margin! I asked him point blank -- DUDE! How f'n greedy do you need to be that you have to go to margin to try to generate a little more "return". He was using the margin to GAMBLE with - by buying more stocks etc trying to make a gain on his borrowed money. Guess what happened to his return when they called him and asked him to cover his margin (which means you have to bring them more money to cover) - and when he couldn't - they did it for him (they just sell stuff in your account to lower your margin back to the 50% level)... at a LARGE LOSS by the way! You literally only have about an hour or maybe half the trading day to "cover". IDIOT.

What up Greg..

Sorry I missed you at Infineon.

My .02 cents is that people need to be invested and not scared.. So much gloom and doom in the news has people on the sidelines..

When the market dropped a few months ago, I had friends selling( at the bottom), and shifting things around. I just left my money on the plan that I have set and rode it out.

So what benefit did I get for riding it out ? I am paying cash for my 2008 Sierra with 21K miles on it with my profit from the last few months. Had I sold, I would have lost all that upswing...So my balance is still great, and I pick up my truck tomorrow..

So, long term, Investing is king, even though some months suck. in the end, it is better to own stocks, etc..., than to sit on the sidelines.

Well --- someone must be reading this poopie thread! The page view count jumped a 100 points since I posted this morning...
And I got a good question from a new reader about how to calculate Total Return.. He's mid 20's and is already a saver and investor! Don't some of you wish you'd saved and invested 25 or 30 years ago?!?!?! Then you could be a lazy azz bum like me and goof off all day! :rofl:


Truth be told I never saved a dang dime -- We just got lucky and went from zero to hero in one fell swoop... but it's been a good 25+ years of reinvesting and making that initial windfall grow. So I guess I've managed to not be as big a bum as I think I am... :lol: :woot:

Interesting, what was your initial windfall story Greg?

Which one? We've had several! :D


I was a millionaire at 26 years old. I was the VP and partner in a multimillion dollar wholesale importing business in NYC... sold that business in 1983...

Gwen went to work at Microsoft in 1984... and was the Director of HR Worldwide and spent 19 years there...

The latest is a pre IPO investment we made in Isilon Systems which was sold to EMC for 2.25 Billion in 2010 (we owned 1% of all the outstanding shares which I'll save you the Googling and figuring was 660,000 shares sold for all cash @ $33.85)....

Gwen is also the main character in this horrible book....

http://www.amazon.com/Force-12-James...ords=Gwen+Weld

Good for you guys, I'm hoping to be hit in the head with an opportunity like that some day :lol:

And yes, I haven't been "here" for a week. I have been in "alohaville" spending time with family (emphasis on spending lol). No cell phone, no computer, no workie. Took our oldest and his fiance for there college graduation, and my youngest for her high school graduation. And met my sister and brother and their families there for our birthday's (Aug 2, Aug 5, Aug 2). Seventeen of us. Great time.

Kinda off subject, but not really...any of you read the E-Myth? A business book. I have owned my company now for 15 years and probably have another 15 in me( i am 45 and like what i do, just the dealing with the "slow payers" and cry babys i dont like, but isnt that just life?) so i'm begining to draw my "exit strategy". The business may be a source of income or sold and considered "found monies" in my overall financial plan. Any thoughts from any of you that have sold companies and reinvested?

Not everyone will become an Investor, but if just a few get the bug and start to take control of their future, then this thread is a success..

I have helped maybe three people, and to me, that is a good feeling...

Keep it up Mr.Weld.. We are still here..And with 100 people looking , and only a few posts, we have people reading, and maybe they will Invest wisely too.:thumbsup:

I wasted years, but i caught up quickly with much study and a few great moves..Also i was on the right side of 2008...Better to be lucky, and a little smart..Than really smart and unlucky..:cheers:

Read daily and holding on to my hat... if I had one question it would be... will FB ever get near 40 again? I have a good chunk and it drags down my portfolio.

Well --- so far you're only down about 50%.... my guess is that you could go lower.


This kind of stock is pure speculation - it's not really "investing".... it's just a pure gamble on an unknown. I sold the shares I had the minute it didn't do what I expected it to. Cut and run on that kind of stuff 'cause bad can easily go to worse.

Having said that -- it's a good lesson that people have to learn for themselves. You set a price - you set your expectations - and if that goes against you - then you MUST be prepared to take the loss and move on.

People have been waiting for 12 years for Microsoft to rebound.... think about that -- a DECADE of dead money.

from the amazon editorial review.... "WorldQuest VP Gwen Weld, the womanizing Rex's current sex kitten"

:woot: :D

Sound advice... i have a sell in @ about 25 ish.. hopefully i can level out..

It sucks but it is what it is... It is also the reason people always sign that caveat -- Don't gamble with money you can't afford to loose... The problem is - NOBODY thinks they're going to loose! I've bought real companies with real profits and good histories and have lost - and lost big... so just because this is Faceybook doesn't make it any better or any worse. I wish I could say -- oh - just hold it 'cause it will come back. Well - yes it can... but you're still just gambling then -- now you're gambling that it will come back...

You do realize that the week after you sell it - it will gain 10 points.... :D

I'm sorry - really am - there's just not much help anyone can offer - because regardless of the advice - it'll be wrong. Hold it and it goes no where - sell it and it'll go up - sell half and hold half -- and maybe you have dead money AND a loss... there's just no crystal ball.

So - the author is local... and a brother of parents that our kids went to school with. Kids went to a CatLick school... and anyone that's ever been around CatLick schools knows about the all important "auction"... The author had donated a "your name mentioned in my next book" for the "silent auction". Being good Catlick parents -- Gwen maxes the bid and wins the item. MONTHS later he calls to discuss the book - and to ask if it's okay to use her as a main character and to use her FULL name... Being an officer of a public company - her name is already easily Googled etc - so she says "sure... what the heck".

The book sucks according to her.

She has done a book club for about 20+ years -- several "girls" -- and they've all stuck with it all this time - in fact, she's there tonight! But none of them knew about the book -- so it was her turn to recommend their next read - and shows up with books for all of them but never mentions the inclusion... HA! Got lots of milage out of that I can tell ya!

Yeah -- let your imagination run wild buddy! We've been together since she was 14 and I was 18.... that would be 41 years now... I do remember the "sex kitten" days... yes I do... so long ago.... Uh... what were we talking about? :D

I have learned a lot on this thread and hope it continues.
I'd like to share that since this thread started, I have seen my investment grow.

I took Greg's advice and took money out of a previous employer 401k and transfer it into an self directed IRA. It only allowed mutual funds and they were just underperforming.
Since April 17th till today, taking Gregs advice from this thread, Im in the GREEN 5.30%. This all in a stock market that is up and down constantly. Still I collect on dividends.

The sad part about this is I have virtually the same amount of money in my current employers 401k plan (again mutual funds). During the same time period with me contributing money every 2 weeks to it. It was down $800.
I may have to switch jobs so I can move the 401k money into my IRA.

:bow: :bow: :bow: :bow: :bow: :bow:

^^^^^^^^^^^^^^^:lol: :lol:



Thus my favorite saying --- BETTER LUCKY THAN SMART!! Cause that 'bout sums it up.

AMEN... I am luckier than I am smart.. Not Greg Weld lucky, but hey, I will take the luck that I can get..

I also believe that we put ourselves in positions to get lucky sometimes...Those that never try, won't ever get lucky..

Those of us who try and try and try, only need to get lucky a few times to make it...

I still read the thread often. I haven't really participated because I'm just watching my investments at this point. This thread has been fantastic. I'm really glad a lot of people are getting good info from it.

I'm still reading , Greg + all....thank you for continuing to keep the wheels turning in my head!

Thanks to "the dividend method" I have grown my IRA by 2.0% in dividend earnings ALONE in 9 months! Awesome! You are supporting the next generation of investors here, Greg! :thumbsup: :thumbsup:

Okay -- thanks for chiming in guys....

When there's no comments - or questions - etc I start to question if I'm posting to a vacuum. Not that this thread is about "me"... I'm just trying to use my experiences to help - no different than we do on our projects.

I guess - in the real world - that's the problem with "finances".... lots of people have experience (good and bad) but we don't share them. I don't get it - but it is what it is.

We've been pretty lucky throughout this thread with the market pretty much going our way. It remains to be seen if all of you "newbs" (anyone that is just now paying attention to their investments as well as those just starting out) can gut it out when things turn south for awhile. Nobody can tell you when that's going to happen - or for how long - or whether or not you can take it mentally... but I will tell you this (the reason for this post this AM).... I've always made MORE MONEY in a down market than I have in an up market.

The key is to try to buy LOW and sell HIGH... or if you don't sell high - you at least have nice paper gains (a feel good sort of drug). You need to LEARN this trait. You need to train your brain that the stock market (investing in general regardless of stocks or houses etc) is no different than anything else you buy.... People are trained to buy cars when they're on sale -- they're trained to buy clothing when it's on sale -- Your Mother only bought sheets and towels during the annual "white sale".... Here's the big glitch in our brains with STOCKS and HOUSES --- the average RETAIL investor only buys during the peaks of the market. WTF is with that? Why would we be running out to pay top prices for something? Would you offer a guy full price for his car? Hell no! Would you feel better if you bought it below what he was asking? Oh yeah!

Remember this little info when things go south (look at it as going on sale!)... that is the time to buy like a pig. Don't be like most retail investors and STOP investing when everything is on sale or sell when you bought high. Look at this as a GIFT.... you can now average down by adding to your position... or you can get in at lower prices (thus better dividend yields!).


EXAMPLE:

I can think of several but this one is easy to see because it's pretty fresh.

McDonalds (MCD)... it was at $100... now it's at $87 and the yield is rising as the share price drops... where will it drop to? I don't know... nobody knows. But if you AVERAGE IN.... over time... you will be rewarded (not recommending this stock - just using it because it's a perfect example). There is nothing wrong with the company... there is weakness in the markets they're in... there is a temporary mismatch perhaps of the cost of product and the price they can charge. Whatever the "issue" is -- regardless of the company you're talking about - you must make sure that there isn't a fundamental change in THEIR business (think JC Penny - or NetFlix -- where they're struggling and losing market share - no thank you!) That is this quarter - or this half - or maybe this year... but that isn't the larger story and you want to be a little longer term investor than 'this week'.

The biggest returns happen when you average in over a long period of time - that's why you want to re-invest the dividend - it automatically buys on a regular basis regardless of the price. You'll buy less shares at high prices and more shares at lower prices... more shares pay more dividends so those buys get more and more shares. Then you look at that long term chart and it's way lower on the left than it is on the right and you're the winner! :woot:

Just poking around... and I thought of something else I wanted to add to my post above.

Again - please do not use my EXAMPLES as a reason to invest in that particular company. I have to use something as an example... so just picking on this one.

When you blow up McDonalds (MCD) 5 year chart on Google Finanace.... notice something that I think is VERY IMPORTANT for ALL STOCKS....

In 2008 this company paid a .38 share quarterly dividend.... in 2011 they were paying a .70 share per quarter. That is almost a double in the dividend.

That's just HUGE! Had you paid the highest price for the shares in '08 - $65 - and held - you'd be getting $2.80 a year per share in CASH...

Annual dividend divided by the share price.... 2.80 / 65. = 4.30%

Forget the 43% growth in your investment! I'll take a 4.30% dividend on a steady Eddy any day!

So again -- this is just an example of some things to think about and look for when you're investing.

OH --- And BTW --- Had you paid $65 a share in September of '08 -- you'd be real unhappy when the shares dipped to $52 in May of '09...... that is -- unless you viewed this as a buying opportunity and added to your position! Because that $52 a share "investment" is paying you 5.38% and you're gain is even larger!

I'll repeat -- don't just look at this stock -- I'm explaining how to THINK about any of the stocks you own already -- or stocks you're planning to buy. This is about teaching you to fish - not catching you a fish.

Well said as usual Greg.

I really believe in the averaging in no matter what the market is doing.

For some, they will never open up a personal account, and they will rely on their 401K plan.. Not the best way, but at least they are Investing.

I do recommend putting 15% of your pay into a self directed plan, and taking advantage of any company match that is offered. First you are getting free money from the company, and second, as long as the plan is and investments are directed by the individual, they are continuing to Invest , even in the down markets.

People say how can I Invest 15% ? Well you don't even miss it. Since it comes off the top, you find a way to budget the rest of your money. It is just a way to kind of force people to Invest and dollar cost average.

Now i will say that I personally like a Personal Investment Plan, and only 10% of my money is in a 401K, only because I have the attitude to Invest the other 90% into a personal Investment plan, which i so much prefer over 401K's.

But for those that just won't open an account, at least take advantage of Taking the paycheck money before you get it, and Invest with a company match...Then you will be buying at all times, and every two weeks, no matter what.

But If you have the right attitude, only invest up to the company match and then Invest more into a personal account. But life gets in the way, and bills pop up, and you want car parts,and the Wife and the kids need this or that, so after taxes, your paycheck may get swallowed up..You need to force yourself to Invest no matter what.. Time and Compound interest will reward you..

Good info as always Greg. You're correct in that it will be tough when the market goes down again for most people to just sit there and ride it out. I'm not looking forward to that point but I think I'll be ok. Not only have I chosen mainly steady eddys but I make plenty of money to live on at this point in my life so I am by no means stretching myself to save or invest. In the mean time, I'm saving the rest in a general savings account that I can easily access and use to buy stocks when the market goes down or I simply have money to lock away. I also use that savings account to store my money until the beginning of the next year when I can max out my Roth. I have no idea if it helps or has any effect positive or negative but I like to max out my Roth for the year during January. I figure the sooner I can get it in there, the sooner it can be earning tax free. Sounds logical to me and I hope that it works out that way.

RIGHT ON! Good planning -- and good thinking!!:cheers: :woot:

Gwen and I use a personal trainer... we're lazy and don't want to go to a gym... so he comes to our house and kicks our sorry azzes... Today he tells me he's making an extra 10+ GRAND a month with his network of trainers selling a product.

My advice to him... SAVE EVERY STINKING PENNY OF IT! You're already making good money and are comfortable.... Take that money and save every dime for the next 3 years! In three years you'd have 300 GRAND -- at his age -- in 14 years he'd have ONE MILLION DOLLARS at mid 40 years old! At 1MM he could make 40 or 50 grand per year in dividends AND he should also have growth... and that's if he only saved for 3 lousy years and never added to it.

The plan --- SAVE NOW - to live better later!

Earlier this year I started looking for an investment property, rates were low and when I started, there was still a solid inventory including lots of foreclosures.

I did a lot of reading and research so that I could know what to look for. Many people look at it in a simplistic way of, Mortgage Payment + Insurance + Taxes (PITI) is the total cost per month, and simply subtract that from the rent, and that's how much you make.

That's true to an extent, which is to say that as soon as you have to replace the roof of the house, or some other repair, that is an expense and unless you want a long term break even or loss situation, you need to factor that in.

I read a lot of people operating off of two numbers, 50% and 2%. The 50% is an estimate of the percentage of expenses over the long term. Expenses include the taxes, insurance, maintenance, advertising and if you choose to use them, property management. While each situation is different, a lot of people report 50% is their average so it's a good number to use when initially evaluating something but I figured if I managed it, and since I can do most repairs myself my expenses would be slightly lower, so I'm targetting 45%.

The 2% comes from how much the rent is relative to the purchase price. Many investors look for places that rent for 2% of the purchase price, so say you purchased a house for 50k, they'd want 1k a month in rent. Your mileage will vary depending on where you live and how hard you want to look but around where I live, this is not feasible. Doing research I figured that while it would be nice to reach this, even at 1%, you can make double digit returns, and 1% is not that hard to find.

Initially in my search I looked for duplexes+, because this can lessen the blow of vacancies. I actually got one under contract but an inspection found significant issues so I backed out.

After the market around here shifted, inventory of decent things was starting to drop significantly I started looking at short sales. Pretty quickly in march I got one under contract, a house that sold in 2006 for 260k, listed for 145k, we settled on 134k + 2k closing costs. I agreed to pay for a short sale negotiator at a cost of 2.5k, assuming it got approved.

I arranged financing, and through normal means you'll have to have 20% at least, 25% ideally which is what I came in with.

There were two loans we had to negotiate, both with Chase and finally in early July they approved, and gave us around 3 weeks to close.

I got a loan for 100,500$ @ 4.125% and I expect it to rent for 1300-1350 per month (pretty much 1%). My various spreadsheets project an annual cash flow of around 3,000$ - 3,600$. Certainly not Greg money but it's basically a monthly 300$ dividend payment,

As a cash return 1% deals will probably net you high single digit returns, I figure 8-10%, but when you factor in the equity you get as people pay your mortgage for you, and any appreciation (your mileage will definitely vary), you can easily see 12-15%.

The main reason why I think I like this way of investing is I have far more control over the results. In the stock market, you get to choose where you invest but unless you're crazy rich that's the end of it, even good news can cost you money (see apple recently). I was the person in charge of everything, finding houses, running numbers, negotiating, the work involved to get it ready, renting it out and keeping tabs on it afterwards. Certainly more work but who better to look out for my interests than me?

Don't think we aren't reading this, cause we aren't posting. Most of us are in this Long Term.

ABSOLUTELY BRILLIANT!



Several take-a-ways from this:

#1 -- You are INVESTING

#2 -- YOU did your research

#3 -- You are doing something you know and understand

#4 -- YOU are able to do repairs etc -- which is full circle to #3