The "bargaining" you mention is exactly what this is -- in a round about way. You say what you're willing to pay --- and if someone is willing to sell at that price -- then GREAT. If not - you can then choose to set a different price.

I would NEVER set a limit order above the current market price.... I always go below... if you get filled great -- if not -- you have time -- wait for another day.

I always buy on DOWN days... thus the lower limit price. At some point during the day -- someone comes in and hits my target. Of course it can always continue to fall... but that's a different issue.

So here's another strategy that I employ from time to time. Today I used it.


LuLuLemon (LULU) sold off big time today due to the CEO announcing she was stepping down. There was no reason given for her departure -- but the company just came out with blow out --- as in great --- numbers for the quarter. Sales were up huge - profits were good etc.

But the shares were at $81 -- and this morning are under $70....


I'm taking a giant leap of faith here and thinking that numbers (business) is good... and maybe the CEO is just simply leaving. Sometimes people actually make or have so much money - they just don't need or want to work anymore. :>)


So I owned 1000 shares @ 80ish. This stock pays NO DIVIDEND -- so I never invest much in just plain "growth" stocks. That's because of my own personal situation. I just don't really need the gamble of pure growth.... I like the income and some growth that dividend stocks give me. But I'm certainly not against growth stocks. I just own them in very small numbers rather than my usual 10 and 20 thousand shares per name -- I'll buy 500 or 1000 or maybe 2000 shares.

So with the shares almost $12 below my cost level -- I BOUGHT 3000 more shares. With this purchase -- I now own 4000 shares @ $72.75 -- and IF -- BIG IF -- the shares manage to get back to say $75ish -- I'll sell off half... get some cash back -- and end up (hopefully) with a lower cost basis going forward.


My "theory" in doing this is that while I might not have a gain -- I should be closer to where the market is currently. I would only do this in a name that I truly believe is a good well run company regardless of the "market" conditions.



++++++++++++++++++++++++



A CAVEAT here...... I once owned 8000 shares of a company that started to go down because interest rates were rising.... as it went down - I doubled up - to 16,000 - then again to 32,000 shares and so on. I finally threw in the towel when I owned 93,000 shares and it was "only" down a buck a share. So this theory doesn't always work. But 9 times out of 10 it has for me.

Hey Greg, search "lululemon bend over test" :action-smiley-027:

They had a rash of problems lately, and are the butt of a lot of jokes. A load of their pants slipped through the cracks in quality control, and the shear number appears to be larger than they once admitted to. I think the CEO was squeezed out.

Yes Steven I knew about the see thru pants.... And that may very well have cost the CEO her job.... Unless they announce that - I guess we'll never really know why she's "leaving".

I'm really more about the numbers -- and the numbers are/were great. My wife and Daughter shop there -- and the retail stores are always busy... and their quality is top notch (except the see thru pants -- and then I wish they'd have just kept selling them!! LOL).

This is another one of those backyard buys I do from time to time... I bought Apple at $85 after coming home from the mall... having seen a line of people trying to buy their stuff... That worked out pretty well.


We'll give it some time -- a quarter or two -- and see where the chips fall.

Oh Greg almighty! Have you taken a look at TSLA Tesla? I know it's had a huge run-up lately but it recently was rated the best car Consumer Reports has EVER tested. They are putting up their Supercharger centers quickly among other things. I'm fully hybrid trained and certified and all that, and thinking of trying to go to work for them, they don't even have service centers set-up in Phoenix yet.

I know it's speculative but thinking about putting a little play money (that I can afford to lose) in it and see what happens. Just wondering what the Investing 102 guru thinks? If their is going to be a big time electric car player it looks they they'll be in the running for sure.

A buddy just took delivery of his and absolutely LOVES it... last night a lawyer buddy was here for dinner and he's thinking he might buy one... dumping his MBZ S55...


So here's my take on it as an investment. If I was a young guy and had some play money - I'd be buying it. I'd also EXPECT it to be a bit of a wild ride... this is a new manufacturer - building a new technology - THERE WILL BE BUMPS IN THE ROAD. A battery recall - a new model that doesn't sell - etc... but I agree with you - they seem to have a good grip on what they're doing.

As a car guy -- we've all been talking about this company. The downside of this rather expensive car is either the lack of charging stations - the time it takes to re-charge - or the batteries capable of getting some range out of it.

Tony would like to drive it over to Sun Valley from Seattle - as we'll be over there... but can't figure out how it would work - because he'd need to make a two day trip out of what should be a one day drive. The reason - charging... but WHERE is he going to be able to charge....

He and my lawyer buddy just commute to downtown and home again for work -- and this car works flawlessly for that... the problem is doing almost anything else. And it's a chicken and an egg issue -- not enough cars to justify charging stations - not enough charging stations to justify buying a car... And NO STANDARD set for the type of plug in etc.

I think all this will be over come eventually.... and more people will want this technology. :welcome3:

In my opinion, another thing to think about possibly is what is your particular take on their direction, goals, product etc. Sure, we are here to make money with our investments but another aspect is what/who are you willing to support. There are companies I flat out will not support so I will not invest my money in them regardless of how good of an investment it is. Maybe that's naive or flat out dumb but I don't care. Meanwhile, there are others I invest in simply because I believe in what they are doing. Now that Tesla has paid back their loan and to me is showing they are serious about making a car versus get government loans, receive fat paychecks, and then declare bunkruptcy I may start looking into them, too. Could it pay off in the long run? I don't know. I do however believe in supporting real alternatives to energy and transportation. So, I think I'll put my money behind my beliefs to an extent of course. I'm certainly not going to bet the farm on this type of investment. Your opinion may vary.

Trey -- That's good thinking -- and there's nothing wrong with investing what you believe in and leaving other stuff alone. I'm more of a whore when it comes to that stuff -- thus my investments in Altria (MO) even though it's tobacco and booze... and I do neither of those! I just like it that others are willing to pay me to go have fun while they kill themselves! :lol: :lol: :lol:


That's been the drum beat of this entire thread -- just look around -- invest in what you see and know and understand --- it's not rocket science -- and in fact, people make mistakes and loose money when they stray from that line of investing.

Well the last couple days were a little wild... hope some of you were able to get in on the two day sale!


Bought more LULU down at $66.... but regardless of where it goes from here I've hit my share limit (5000) so we'll kick back now and see where that goes. You guys can watch me get sliced and diced or (hopefully) see this play out favorably. It will take MONTHS.... because nothing is going to happen until the search for a new CEO is finalized. Depending on who they hire -- (MY GUESS) -- will make or break this investment. I really invested in the company (my initial 1000 share purchase) because I like the company --- then the big event (CEO "quits").... and the shares tank. Stuff like this happens in investing. You have to learn to deal with it. It's why you NEVER put money into ANYTHING that you may need down the road. Remember the little guy on Wall Street knows everything -- and he knows you're gambling -- and he'll know you need the money -- and he's there to kill you!!:D :D

Anyone in the gold or silver market??? You're getting absolutely killed --- and gold and silver don't pay you to wait. That market is like playing oil futures - better left for the big boys.

How many of you are learning to only buy on down days.....???

If i had new money to put to work.. i would. LOL. But then again, it all depends on where the market is "headed" which, of course, is some what of a crap shoot.

For me, its more important with my smaller budget, and longer long term horizon to just "get it in" the market, than trying to time a good/bad day. As a "bad day" might be a while down the road and i'd miss the good days between now and then...

DING DING DING DING ---- right answer!! Good for you!

I love this thread. I am maxing out my company match program and there is nothing better than a rate of return of 16% right now and 3% of 9% of salary contributions in the account was free!

sure wish mine would re-instate our company match policy.... :( we lost it when the economy went sour and its yet to return.

So here's my "thinking" given new information today on Lululemon (LULU) ---- and as you all know -- I don't recommend stocks by name -- I use them for examples -- and for you all to kind of gain a small insight of how "I" think when I'm investing. The actual purchases etc are just used for thought process rather than "you need to own or sell this". Forget that! YOU buy or sell what you think fits YOUR criteria and needs!


Today - LuLu announced they plan to open MEN'S stores.... They already successfully sell men's and woman's in the same stores. I buy stuff there.

Now -- UnderArmor and NIKE already have the lions share of MEN'S workout business.... LuLu is considered a WOMAN'S like of workout clothes... I go there because my wife goes there and if I'm with her - I'll shop the 10 men's items and pick up a pair or two of shorts.... but I'm the lone man in the store! Not that I mind checking out the hardbodies inside! LOL


So my guess is that the CEO was against the BOARD on this decision to expand into MEN'S.... and quit over it. She's not going to say that - because you can bet she has a bunch of options on the shares - and has large personal hoard of shares as part of her pay package etc. She's still working there until they find a replacement.

BUT --- Here's the big butt --- and the reason for this post. This is a FUNDAMENTAL change in the company --- and perhaps it's a FUNDAMENTAL change in the reason you'd either buy more --- or sell. This of it as you own Home Depot (HD) and they announced they were going to expand into FOOD.... would that make you happy or would you think they're nuts.

Personally --- I think I'm about as average a guy as there is.... and therefore -- my thoughts are probably similar to others. I'm not smart. I'm not dumb. I'm average. I do average stuff. I wear blue jeans and t-shirts and tennis shoes. Usually with some kind of stain on them. In short - I don't give a sh!t about how I look as long as it's functional.

Would I go into a LuLu to buy without my wife dragging me along? Probably not.

Will I hold the stock and watch how it plays out. Yes. Their sales are stellar... their profits are stellar. I EXPECT that to grow... and that's why I bought in the first place. I don't agree with this decision -- and it's my guess they run some test stores and find out one way or the other before they just blindly open 1000 retail shops (think Microsoft - in their "ME TOO" stores to compete with Apple..... BALMER is an idiot and continues to prove it --- I've thought that since he was a nobody and we used to worked out together. He was dumb then and hasn't changed. The last 11 or 12 years of stock price proves this.)

I had written about the fact that I bailed (sold) on about 4MM in tax free muni's I had laddered out... and I brought that all over as cash to invest in stocks. Remember that I think (as do many) that interest rates are going to creep up... when that happens -- fixed income (i.e., bonds) would take a nice capital hit. I had nice long term capital gains in my bonds -- so thought I should capture that as well as the June payments...

I've been buying on these down days. I hope this is the "sell in May and go away" down that normally would have occurred earlier... and that we are in the typical summer swoon. I hope so because I don't have much dry powder going forward.

That might sound scary to you.... but to me -- I look at the balance sheet and see my income being built in stocks rather than bonds... and while I'll have a higher income tax bill... I'm fine with that part... What I'm investing in is that quarterly dividend ---- and then hoping I have capital gains as icing on the cake.

I know that I'll never buy at the lowest prices of the year - day - week - whatever. I'm okay with that knowledge. I'm buying good stuff... and I KNOW the market will/can/surely will - go lower AFTER I buy. So be it. Right now -- I have a lot of red... minor -- but red non-the-less.

Next Wednesday is a FED announcement... and maybe I could have waited on some of the buys until there was a little more "clarity" on which way they're headed on the QE (the big FED buying of bonds)... as this could be another big leg down... but if they say they're going to continue to be big bond buyers - then the market moves HIGHER and I miss my chance for some slightly lower prices.

I've added Caterpillar (CAT).... a low paying div stock for sure -- but if housing and the economy are getting better -- then I want to be in front of that as they will benefit from that... and if Europe and China get better - then again CAT will benefit. In the meantime I get paid to sit on my hands.

I added Wells Fargo (WFC)... because if interest rates rise -- their mortgage business will benefit with better loans and maybe a better spread. They also pay a minuscule dividend but I think they'll raise it as they can.

I added Ford (F).... again -- a better economy - more sales - more income... and a tiny dividend might gain some traction going forward.

I then put some money to work in Northern Tier Energy (NTI) a small refiner with direct retail stations in Minnesota (mini soda)... a HUGE dividend and the way I do things -- Ford - WFC - CAT dividends suck - so I'll offset that with an outsized dividend payer to bring up my "average".

I added Terra Nitrogen (TNH) because their price seems to have calmed down to around the $200 level... and they pay a sweet dividend. This is a fertilizer business but their really a natural gas play. It takes Nat Gas to make fertilizer -- if that price stays low -- then they make better spreads (is that a pun?)

I built Chevron (CVX) to 3000 shares.... buying on dips... it's a steady eddy and I have to own these for my own mental stability. They offset the NTI's and the TNH's in my portfolio. LOL

I'm now up to 40,000 shares of Annaly Capital (NLY)... which I've written about a zillion times -- I use it to park cash and make a nice dividend... so to me -- this is still a cash position rather than a long term investment... and I'm still in iShares High Yield (HYG) and Junk Bonds (JNK) ---- again these are cash positions in my mind. They pay really well.... I'm comfortable holding positions in these names because I'm on top of my game. I'm not a buy and forget and these aren't names you'd do that in.

I added much more to my Prudhoe Bay Trust (BPT) which is a royalty oil trust... it's also more of a cash parker --- and pays a really nice dividend. I hope they don't run out of oil while I'm sleeping one night. :>)


Again -- I'll caveat with Please don't take these as some recommendation to buy or sell. THEY ARE NOT. This is just a way of blogging/posting... what I'm doing and why and what I'm thinking. Remember that my goals are completely different than yours (whoever and IF anyone is reading this drivel)... as my goal is monthly income -- and I pay attention the market everyday all day. That in no way means I know more than someone else - or have some f'n crystal ball. :hitaxeonthehead:

So I found out something that's a little odd, to me anyway, but might be something the rest of you may come across as well. A little while ago I decided to gamble with a purchase into Mid Con Energy Partners, MCEP, which is a Master Limited Partnership. They are a dividend paying stock and a fairly new company. Apparently, I'm not allowed to reinvest my dividend immediately. I'm with Vanguard and that's what the brokerage service person just told me. He indicated it's up to a manager to decide this but that it's most likely because trading volume on the stock is low. I'm thinking it's because it's a small and fairly new company since after all, I have KMP as well which is also a MLP but I roll my dividend over immediately ever quarter.

It kind of sucks because it takes away that second compounding effect that we get investing in dividends but I'm still getting paid cash and pretty good cash at that, 0.51 a share. I wish I would have known this before I bought the stock but then again, it is nothing more than a gamble for me. I also imagine that if it's because the company is small and new that I shouldn't really have this issue occur with future acquisitions that will be into larger established companies, ie less of a gamble on my part.

Just thought I'd pass along what I learned.


As for Lululemons, unless they come up with a different more "manly" logo for their men's line, their name alone screams feminine. I think that would be a hindrance but that's just my opinion. Best of luck to them but honestly, until your first mention of them I had never heard of them at all.

We are reading and learning from your "drivel". I personally want to thank you, Greg and everyone else that has contributed to this thread. I have changed my way of thinking due to this information.

I have recently purchased a home and am working hard to get the rest of my outstanding debts paid so I can begin to work on some investing. I recently established a mock portfolio on Seeking Alpha with 1k each of about 15 companies that I am interested in. I have been following my pretend purchases and watching the news stories just as a way of becoming familliar with everything.

I know I have a long way to go but now I feel I am headed in the right direction, only wish I would have started sooner.

Thanks again

Awesome!!



Funny about wishing you'd have started "earlier". I only wish they'd begin this education in High School.... so that people would start to budget and save as soon as they start to earn. If they would -- people could retire earlier - with more - and generally have a better life. NOTHING -- and I mean NOTHING -- beats having some extra dough. Not to spend... but to save and invest... because the sense of SECURITY is unbeatable... and the sense of SATISFACTION only leads to better decisions and even more investing.

Congratulations on buying a house! Smart move. NOW --- Don't use it as your ATM like so many millions of Americans have done. The goal here is home OWNERSHIP ---- not making the bank your master! Ownership means YOU have the title. A very nice feeling after years of hard work -- not having to make a payment! The guy across the street might LOOK like he's living better -- but you can bend over and pick up your newspaper, smile a bit -- and know that you OWN your house.


Put extra money on that mortgage beginning the first time you have some extra.... and cut that 30 years of payments down to 20.... that $500 you toss at it now -- will save you THOUSANDS in interest later. The sooner you whittle away at that principal due - the better off you'll be when you're too old to earn.

CHEERS!!!

A good article -- in which I agree with 100% (sold my bond holdings "early" - while I still had a gain!).


Here's the takeaway for me ----- IF you have an adjustable rate mortgage -- GET OFF YOUR ASS AND REFI into a fixed rate NOW!


Rates are not going lower....


http://www.latimes.com/business/la-f...,7850511.story

So if you pay attention to the market -- and you've been watching this last couple days of 200 point selloffs... you might be saying OMG!! The sky is falling the sky is falling....

But - always a big butt - the DOW is still UP for the first six months of the year -- by about 13%. A GREAT YEAR would be if you managed to be up 10% for the entire YEAR... We're only halfway into the year.

Someone called me last night and was just about in a panic... as he said breathlessly - You (meaning me) must be just losing your ass!!

Uh - yeah - sure.... I said -- I was down around 100K today in the Schwab account (I only use one account to monitor how I'm doing) and I said - I'll probably be down another 100K plus tomorrow... BUT -- That account produces 58K PER MONTH in dividends. So big whoop. By the way - the caller had also completely forgotten how much capital gains have taken the account up... so if you're UP 15% and you go down 5%... SO WHAT! You're still up!

I'm just trying to put this day to day swing into some kind of perspective. That's the important thing in investing - you have to keep your perspective.

If a guy had a large apartment building and it's well financed and producing a positive cash flow... and suddenly the real estate market goes to hell.... SO WHAT -- he's collecting cash flow every month... what difference does it make if the building is worth slightly less -- or even slightly more from time to time. It's value is only important at the point he decides to sell. If he's not selling - it's not important.

The FED deciding to taper their bond buying -- is telling me that perhaps the economy IS finally getting better.... and when the economy does better - businesses do better... and that's a positive for me. Now -- down the road -- if interest rates climb WAY HIGHER than where they are right now -- that can have a drag on peoples balance sheets. But we're nowhere near that level.

That's my story and I'm stickin' to it!


:D

BTW -- I love to just check various things -- regardless of whether or not I'm invested in them. Oil prices are important - Gold prices are important - the price of BitCoin - not so much.


If you were a gold bug.... you've watched the price per ounce go from $1700 to under $1300. That my friends is a HUGE loss...

I never was interested in it -- and always questioned why anyone would be. To me - it was always just gambling - hoping that someone would pay you more than what you paid. No thanks. It generates ZERO income. Check! No thanks.

Ditto that whole Bitcoin "investment" -- the only game in town is hoping like hell that someone is willing to pay more. No thanks.

I got a check from Con Ed (ED) last week.... $4,950.00 THANK YOU...

:thumbsup:

Thanks for the insight as always, Greg. As your typical Investing 102 student, I often fall back into the trap of "what's my investment worth." It's good to be :smiley_smack: right now as a reminder that whether the market is up or down, the 102 strategy wins.


Also, I want to practice rental real estate and am looking for a good book that includes theory and worksheets that demonstrate how to get cash flow positive (and/or show a taxable loss). Any leads?

I have a bunch of these books Steven and you are welcome to borrow any or several of them next time you come by. Their principles never change either so they do not really become dated.

Great point Greg, except if you're like me and all that applies except you need a new loan by March and they are basically NOT lending, unless you can prove you don't need the money!! 2-3 times the borrowed amount in net worth is what I'm hearing.

On another note, you still high on NLY? I haven't checked but I heard on the radio yesterday that their yield has gone down around 12 or so?

Banks have come BACK TO -- everything is about the numbers... THAT was the way banks were all during my professional life. If your numbers don't make sense from a risk standpoint -- then they don't loan. That was the way it always was. Apartments? You need 40% EQUITY...


I like Annaly (NLY) only from a cash flow perspective... it is not a place for capital growth. And is very interest rate sensitive. THEY borrow to invest. If their costs of borrowing go up -- then the spread starts to go away. I own about 40,000 shares -- so not huge position (relative to my investments) but I like the dividend and it's been a good place to park cash. I have warned many many times -- that this is not a buy and forget stock... and I have warned many many times -- that we are in or approaching rapidly - a rising interest rate market. These kinds of stocks WILL suffer capital losses UNTIL the dividend rate is so compelling that it finds a base.

Year to date -- it's DOWN almost 11%.... so that's a result of rising interest rates. But as the share price goes down -- the dividend yield rises. At any point for any stock - that creates a floor for the price.

BTW -- The "EX date" for NLY is June 27th... and it pays .40 per quarter or 1.60 a year. I have about a 60K capital loss in the shares I own -- but -- Big Butt -- I pick up 16K PER QUARTER in dividend -- and the loss varies day to day... and I'm not selling so it's just paper at this point. I took a long term capital gain of around 40K earlier this year on the name... so between that and the dividend -- even with the current sucky position - I'm a winner (as of now). If it holds here -- I'm "even" by the end of the year on the current position. That's kind of the way I view this one.

As usual -- I start every day with coffee -- and CNBC....


The talking head is telling everyone that GOLD is at a 4 year low... and on pace for it's worst week and blah blah blah.


Here's my point... and I've said this about half a zillion times in past posts.

When everyone is talking about something - whatever that is - RUN AWAY.... For the last 3 or 4 years all I heard about was GOLD going up - and GOLD is going to 2000 and GOLD is this and GOLD is that.... WHICH IS WHY THE ONLY GOLD I OWN IS IN WATCHES TO WEAR... cause that's all it's good for in a retail investors mind. It's jewelry... buy a bauble for your wife.

NOW --- in a DOWN MARKET all you're going to hear from the talking heads is how bad it is -- and how low it's going to go.

They did the same thing during DOT BOMB days -- and the same thing during the housing boom and bust....

Don't get caught up in those traps. When the guy at work - that you know has nothing and knows nothing - is telling you about the latest "can't loose" investment --- RUN AWAY WITH YOUR HAIR ON FIRE.... cause you might make some on the way up -- but you'll never know when it's about to break - and they break faster on the way down than they do on the way up. When everyone is talking about "it" -- IT is just about done.

Okay -- So I'm a post whore this morning...


Here's your homework for Investing 102 for the day. We just had a couple of "not so nice" days... really == the first kind of not so nice days since this thread began.... so here's what I want you to do.

Go to Google Finance.

Pull up a chart on

KMB -- Kimberly Clark -- Don't wipe your butt.... just pull up the chart...

Now -- click on ALL.....

Now -- Look at the gain percentage....

Now -- Pull up a chart on JNJ - Johnson and Johnson and repeat the steps for ALL on the chart.


What I want you to SEE ---- Not the gains.... LOOK AT THE DIPS.... There are MANY!! Some of them quite dramatic. Scary even. OMG....

Now -- notice that in every case -- they are just that -- mere dips. Get over it. If you'd held JNJ for 20 years you're UP 16,000% -- and you're ONLY up 3700% on KMB....

I own neither of these -- I'm just using them here to show you a "proxy" for "the market".

my strategy is to do just that... and snipe them when the overall market is down... JNJ i was in @ ~60 for example

I was reading an article on MLPs - Master Limited Partnerships... Kinder Morgan (KMP) is one of these... which we've written about in the past. What was funny about the article was what the author tossed in near the end.


It has been my experience that it is not what you buy that matters - it is what you hold on to. When one has confidence that they know the key metrics, one tends to hold on to investments with superior performance metrics. When one buys based on borrowed opinions, both the confidence to pull the trigger on the right investments and the comfort to hold those right investments is lacking.



You've heard me say this a few zillion times now. INVESTING is about confidence. YOU ALL must invest in companies (stocks) that YOU have confidence owning - thru good times and BAD. In the long run that's how you make money. Not by trying to buy low and sell high week to week or this six months vs next year.

Very well put, both by the author and the way you explain it.

My brothers a very sucessful man, CFO of a large firm and great dad and husband, his quote that he uses to tell me and others is, "Its not timing the market, its time in the market"....

Had lunch with my dad last week, hes been trading his whole life, hes 66. Tells me last week he's "poor" (by his standards). I said what happened, he said i wasn't patient enough with my investments. He traded too much IMO, sad, same thing happened to his dad (although not with the stock market). But, and this is a big butt, he's still on this side of the soil, if ya know what i mean, In other words, its never too late....

Of course - nobody really fully grasps the reasons why markets do what they do... and there is endless blabber about what they're going to do. One guy is buying - one guy is selling.... THAT is what a market is all about at the end of the day.

So here's my take on the latest dips and hiccups.

Unless you've just bought shares recently -- you've enjoyed outsized gains. People are always looking to capture gains - and when you've made 10% in 6 months --- that's very tempting. So the big market players are no different than you and I. They just have more zeros behind their trades... and they move the market. Trust me - WE do not move anything.

Now -- hair trigger -- looking for any excuse to capture those nice juicy gains... the market sells...

Now -- What the hell do you do with the cash?? Cash is all about making money... not sitting on it. So where you going to put that cash?? Europe? China? Russia? Iran? <buzzer sounding> You going to buy 10 year treasuries that yield a whopping 2.5% PER YEAR after you just killed it with a 10% 6 month gain??

Nah.... it comes back into the stock market.


Think of a tree full of Doves.... Somebody shakes the tree -- all the doves fly up into the air -- circle a bit -- and land on the same tree on a different branch.

Greg
 

That was a brilliant last post. Spot on in my opinion...which is not worth much.

I love that analogy. lol

Trust me -- neither is mine. I just spend more time posting mine than most. My wife calls it "in the brain - out the mouth". Pretty much sums it up.

That may be true but you're correct about this. People don't suddenly stop investing. The doves analogy was a good way to explain the situation.

Actually --- the "RETAIL INVESTOR" which is what we are called in the industry - DO STOP investing in down markets.... Seems as a collective group we love to buy high and sell low.

This is what I've been trying to change in this thread. People need to see value in buying low if at all possible and NOT selling at every little hiccup.

I hope that most of you were able to do a little "gut check" when you saw the market down for a couple days here. You need to be able to handle -- and learn from -- your feelings when things aren't so rosy. That is what will save your bacon in the long run. Kind of a Fight or Fright training.

Buy and short on the down... .

all my long term investments are purchased on the down... take Apple.. it hit 398... it may go down further.. but with the buy back plan even with the forecasts hitting 460 its still a buy.. my cost average goes down every time I buy more... so investing.. in down times... its when i look for deals to buy..

Are they taking about institutional investors holding?

Institutional investors are the market movers... because they trade in extremely large blocks of shares so they set the prices. Mutual funds etc are the big holders.

I don't think anyone is talking about institutions.... they're professionals and know what they're doing (supposedly). It's the "little guy" --- that sells his/her 401K out because the market is soft or is in a down period. Of course that's just exactly the opposite of what they should do. They should have upped their participation buying more shares in the soft patch....

Retail investors are reactionary.... and they just don't understand the market or even how to pull up a google chart and look at stuff. Just look at how they reacted in the soft housing market -- buying and pushing up prices at the top --- only to bail the minute the market went soft..... and the smart money came in and buys up the inventory at rock bottom prices... holds it for a year or two and sells for a nice gain or holds on and watches their rental income increase AND the value rise.

OK so the "stop investing" is referring to the gamblers not the investors I guess...