In the stock analyst community they call this doing a "channel check", and it's intended to serve the exact purpose you're describing. They can get a feeling for how foot traffic might be trending or whether the shelves are looking picked over or barely touched. They can see if the clearance racks make up 1/2 of the sales floor, or just one rack way in the back. They can also tell if the food quality is suffering or if people are going crazy for the new high-margin offerings.

(GW and others that may read analyst reports probably know all this, just throwing it out there for education purposes so that you know what it is when you run across it in an article)

I much prefer my own judgement over that of 28 year old stock analysts. Largely because I don't know their ability to see the business through the eyes of the average target consumer. As a result, I would prefer to do my own "Channel Checks" and derive my own conclusions, just like Greg is describing.

People for the most part could care less about the food they eat. They want cheap and fast. MacDonalds isn't going anywhere. It should also be mentioned that they are a franchise and service likely varies greatly. My opinion is that an owner would have to completely mislead and manage a MacDonalds to fail in modern society.

My last experience with McDonalds food was not too good either, which had me questioning my stock ownership. However, one great thing about McDonalds that many people overlook is their real estate holdings. Most of their locations are prime retail locations that have significant value and most of the real estate is owned by the corporation.

BitCoin -- again....
 

Here we go with BitCoin again.....


http://www.washingtonpost.com/busine...523_story.html

This is exactly why I posted my post.... This thread is about learning -- and I wanted people to see what a "down side" learn might look like. They need to learn to trust their own judgement -- both UP and DOWN.... and perhaps learn to follow their own gut instincts some times.

Thanks for the input!


I always wonder if anyone reads the crap I post up.... :lol:

I'd say there's some hyperbole in that piece. The market is hardly in "disarray". It was steady a $127 and it dropped to $111.

The failure is solely that of Silk Road's admin, not Bitcoin itself.

I'm still a big fan of the peer to peer payment system. It's not perfect, but is pretty amazing.

I like this statement -- by a guy that has just LOST 500 MILLION dollars in a short on Herbalife stock...


“I have learned that the key to long-term investing is to balance confidence with the humility to recognize when the facts are no longer consistent with one’s original investment thesis”


There's a LOT to be learned in that simple statement.

It doesn't make any difference WHAT THE CAUSE IS.... when investing.... if someone has LOSSES regardless of the facts. The facts of this article is that there was at one point a 20% LOSS -- which later in the day ONLY resulted in a 10% (that's absolutely HUGE) loss.

A loss is a loss.

My point on BitCoin has been, and continues to be -- that it is NOT investing. It is GAMBLING based on the simple premise that you want to buy at one price and HOPE LIKE HELL that someone will pay you more than you paid. There is no product - there is no underlying value - other than you're hoping the price goes higher than what you paid. People aren't buying Bitcoins so they can go buy something with them. If that was the case the price would be very stable. Why would someone pay $127 for a bitcoin - to go buy something that costs $127? To top that off it's a very "thin" marketplace of people/businesses that will actually "accept" BitCoins for purchasing anything.

The "vehicle" has become nothing more than a trading platform of trying to buy low and sell high without the underlying paper trail for taxes/accountability etc.

Im really not concerned with MCD or KO.
When the economy went down, they kept growing. Not many stocks that can claim that and pay a good dividend.

Where else can you get a burger and coke for $1 each.

I agree Bitcoin is NOT an investment...so any losses in that regard are moot. (BTW it's back up to $117 now) so no "disarray". One clown running a shoddy website into the ground is not going to drag down and spook out BTC users.

Its a medium of exchange and has its place, and obvious value for the service. Maybe not to you, but to a large pool of other people.

Tesla Motors
 

I saw the reports this morning about the Tesla vehicle battery fire and the reaction the market had against it. Didn't watch the whole news report but does anyone have an opinion on this and how it may or may not affect your future investment decisions. How some may handle this negatively or positively and the influence it may have on your buy/sell decisions.

I DO NOT hold a position in Tesla but based on the little bit of information I have heard about this, I may look at it as a buying opportunity if I did hold position in their company.

Any opinions?

I read that it was a result of the car hitting a large piece of road debris that ruptured the battery compartment which started the fire.

As a long investor I believe it should not affect it much. Note, I mainly look towards dividen stock but did purchase Tesla stock a few weeks after its IPO. If you have money sitting around buy in if it's drops under $130.

TESLA (TSLA) is a "priced for perfection" stock.... it's run way ahead of the actual fundamentals --- i.e., it's P/E ratio (price to earnings) is a big "DASH" -- because it has no earnings..... it might in the future - but as of this writing = it does not. It currently is valued at HALF the market value of General Motors (GM)... which has a P/E of 12.66 (so P/E Ration is the stock trades at 12.66 TIMES the current earnings).....

When a stock is priced for perfection -- a small "hiccup" can have a LARGE inversely disproportionate effect on the stock. People tend to be lemmings and they panic 'enmasse'.... They really don't "invest" in the shares as much as they gamble in the price appreciation and the first time they have an "event" -- people run for hills.


I personally don't own Tesla --- and frankly --- I'm not really sure what to make of it as a STOCK --- which is completely different than it as a company!
I like the company -- but thought their first car was an overpriced "cult" car that had relatively poor quality - and was pretty much useless.... the "S" on the other hand is very high quality -- is really a neat car -- and is selling like hot cakes.


BUT --- here's my issue with the STOCK --- is it gambling with it's pretty meteoric run up in price.... and will I get crushed if they have earnings misses or come out with a new model that doesn't sell quite like everyone "expected". OR --- Do I really believe they know what they're doing and it's all uphill from here.... So then my choice is to buy FORD which was cheap - and collect a dividend...

NOBODY KNOWS WHAT THE FUTURE IS..... your guess is every bit as good as mine -- or anyone else's that THINKS they know.

If I was younger --- and had some spare dough --- I think I'd be a buyer on the dip. I wouldn't buy much (it's ALL RELATIVE)... for me -- that might mean I'd put 100K (or maybe I'd just buy 500 shares -- something like that) into it.... someone needs to make those calls based on how much they have to invest and how much they can afford to gamble.

If you invest in a stock like this -- you're just gambling -- it's a new company -- it's new technology (the batteries) and you just don't have a crystal ball.... but you might be buying a company that just turns out to be a leader and grows like crazy and has big earnings --- and who the hell knows. Sometimes it's just FUN to own stuff like this. WTF. Nothing wrong with that. Just don't put your kids college funds into it.

BTW --- Tesla (TSLA) is UP 411% Year to date.... on big volume - but if you look at the volume as the price has risen -- the volume traded is going down (not huge but trending down) as the price has gotten up there. There could be a couple reasons for that --- over 100 a share lots of people are "priced out" of betting or trading the shares --- or that as the price has risen -- people just aren't as confident of turning a buck in the name.


I would NOT let the big run up turn me off.... LOTS of stock have lots bigger runs than that -- and do so for a number of years.... Microsoft -- Dell -- Cisco -- Apple - Oracle....

I would instead -- concentrate on how much you have to "play with" --- and go with that and just think of it as playing black jack or roulette.... you'll kick yourself if you didn't get in on the fun when you hear all the people screaming EEEEEEEHHHHHHAAAAAAA..... and you'll learn a good lesson about who you are and what kind of investor you are if you loose your ass. And maybe somewhere along the line - it doesn't go as far - but doesn't tank - and therefore you'll live to gamble again. Does that make sense?

I'd like to put my "train of thought" out there on WD-40 (WDFC) to show the conclusion I came to for myself.

My first instinct is that it's cool WD-40 is on the exchange, it is a gearhead stock. So emotionally I'm attached to it already, which is not always a good thing when objectively looking at investments. So to detach myself, I pretend that it's something more boring, like air freshener. That helps me remove the rose-colored glasses

Share Price
**5-year chart, it looks pretty darn impressive since '09, return of 278%.
**10-year, it looks pretty flat since '03 but is a spitting image of KO, which is one of my "standard" comparison stocks. So that's a good sign.
**20-year, it looks pretty good and solid, until you compare it head-to-head with our large cap "steady eddies". You can see that the share price is only up ~300% over 20 years...which honestly is unimpressive.

Dividends
Current dividend is 2%. However, the dividend payouts fluctuate throughout the years and used to be up over 4%. So it doesn't quite have the impressiveness of a company that has been increasing is dividend forever.

Company
Given the recent 5 year price surge, what has the company been doing in the last 5 years that it wasn't doing in the other 30+ years? This article seems to provide a pretty good summary of what the air freshener company is doing now. They have several subsidiary brands that are expanding into more household-consumer products, and are focusing more internationally. What I like about this is that the WD-40 brand name resonates VERY well in the male demographic. Given that men do more of the household shopping and cleaning these days, I can see that guys would like to load up on more "masculine" products for the household and under-the-sink.

Conclusion
It looks like the company has recently been going in a new direction. The new direction seems to have some love on wall street. Perhaps the 5 year gains are only the beginning for this small-cap stock to become a huge global brand. I don't know that, but there are signs that WD-40 is leveraging its existing strengths and using them to grow.

I think I will dig a little deeper on WD-40. I want to know more specifics about what has changed in the last 5 years. New management? How much brand recognition they have globally?

I'll give myself a week more to learn, then pull the trigger (or not).



I'm all ears on what others see!

All good thinking Steven....


EXCEPT.



Yeah -- except that you have to remember why we invest. We invest to MAKE MONEY... We invest for TOTAL RETURN.

With an under 2% dividend -- then you're going to need some capital appreciation.. and that's been lagging in this name -- and really the "growth" is a spurt from 2009 til now. So the last 3 or 4 years accounts for most of their growth ----- and that's what you've said so good for you for recognizing that. Now what you have to get your head around is --- what's fundamentally changed -- or is that just market forces.


Personally -- I'm going backwards with a 2% dividend... because inflation is always that much.... so without the growth in share price... then ya have to ask yourself what ELSE could you invest in and do better. Remember - we always have choices.

For fun - 'cause we're car guys I compared SNAP-ON (SNA) to WD-40 (WDFC) and they were basically neck and neck... I could see no reason to own either (even though I'm a diehard Snap-On guy!).

I wish I had something to add in a constructive way --- but I will tell you all -- THIS is a more NORMAL market.

When this tread started -- and during most of it... it reminded me of the late 90's when every day there was a new IPO that tripled it's first day of trading - and or there was a split 2 for 1 and then that doubled by the next week. It was like having a money tree in the back yard.

A normal market is all about AVERAGES --- so when the market goes crazy for awhile --- then it must go flat or down for awhile to "average out". There just isn't a straight line UP. Given the fact that the market was up like 15% in the first 6 months of this year -- it was only a matter of time before we went sideways or down 5% or so. That's where we're at right now.

The good news about learning about dividends --- THOSE JUST KEEP COMING.... I got one again today - so my account has $4500 more CASH today than it had yesterday (HYG). And that my friends --- is how I go racin' and buy parts - and pay the mortgage.

End of story.

I appreciate this thread, my retirement account is going up monthly without me adding to it, and now we are concentrating on paying things off. Then we can start saving more for life later. I am learning.

HYG is commission free for Fidelity so it makes a nice parking lot for my biweekly contribution. In fact, Fidelity offers like 65 iShares ETF's commission free. When I get some more time I may look at some of them a bit closer.

Good because when you get much older I want Laura to be able to have enough money to be able to hire someone to change your diapers.

Walk-off homerun to deep centerfield.........ouch!

Kenny Rogers song.....:lol: :lol: :lol:





Little boy starts home with his bat and ball.
Says, "I am the greatest, that is a fact,
But even I didn't know I could pitch like that!"
Says, "I am the greatest, that is understood,
But even I didn't know I could pitch that good!"

OH NO!! She gets to wipe my drool....my boys get to change my diaper. I did theirs, now its their turn.

HA! Good luck with that!


Best just to plan on hiring it done --- and with Investing 102, you'll be able to!


Cost me half a million bucks out of pocket expenses for the last 4 years my Mom was alive.... OMG! You have no idea what it takes when they get old.

This article is good example and reinforcement of the fundamentals of investing 102.........IMO.


------------------

Sometimes when choosing dividend stocks to invest in, the supposedly "boring" big blue-chip companies can actually be the most exciting and lucrative way to go. For example, an investment in Exxon Mobil (XOM) made three decades ago has appreciated by more than 3000%, assuming all dividends were reinvested. One of the world's most recognizable brands, Coca-Cola (KO), is a perfect example of this. Despite a relatively modest 3% annual yield and low volatility, Coca-Cola can produce massive gains over the long run due to steady performance, reinvestment of and raises to the dividend that can rival pretty much any other strategy.

Coca-Cola in 2013

Most people know Coca-Cola for its soft drinks, but most people who don't follow the company aren't aware of just how diverse its product line has become. In addition to the Coke, Diet Coke, Sprite, and other soft drinks, the company's product portfolio also contains such brands as Powerade, Full Throttle, Dasani water, and Minute Maid juices, just to name a few.

The company also has a tremendous international presence that still has some room for growth, particularly in the emerging markets around the world. Currently, North American beverage sales account for about 45% of the company's revenue, with Europe, Asia, and Latin America each accounting for about 10% of total revenues or about $5 billion annually from each region. A relatively small presence in Africa (6% of revenues) and the company's investments in bottling operations make up the rest.

Trends in the industry have been somewhat away from the carbonated soft drinks, at least in the U.S., and Coca-Cola has taken steps to strengthen its other brands, particularly Powerade, Minute Maid and Dasani. The company has made several smaller but effective acquisitions over the past several years, including Glaceau (Vitamin Water), Great Plains (Honest Tea), and several other overseas brands of juices and teas that aren't well-known to U.S. consumers.

Historical trends, and will they continue?

Since its founding, Coca-Cola has established one of the best track records in the market of steady performance and dividend increases. While shares have just about quadrupled over the past two decades, the real story is Coca-Cola's dividend, which has risen by over 500% from 4.3 cents per share quarterly to today's 28 cent quarterly payments. Even more impressive than the overall increase is the consistency with which it occurred over time:

http://static.cdn-seekingalpha.com/u...ew-Frankel.png

So, throughout the past two decades, Coca-Cola raised its dividend by an average of 10% per year on an extremely consistent basis, even during the height of two recessions. Since the company's dividend represents a payout ratio of just over 50%, there should be no issue continuing raises for the foreseeable future.

Let's examine what a hypothetical investment in the company would do over a 30-year time period. It is a pretty fair assumption that the dividend raises will continue. It is also fair and reasonable to assume that the share price will continue to increase by 6.4% annually, which is the company's historical average. Assuming that all dividends are reinvested, this means that a $10,000 investment in Coca-Cola today would grow to $267,821 after a 30-year period. Not so boring anymore, is it?

Summary

Regardless of whether you employ the above strategy in your own portfolio, Coca-Cola is an excellent investment for your future. That 3% annual yield will look a lot better in a few decades after being raised each year, and you can bet that the company will continue to add shareholder value by increasing revenues and completing share buybacks. When it comes to income investing, steady and predictable wins the race, and this is an excellent addition to a portfolio with those goals in mind.

The safety and predictability of Coca-Cola, not to mention the consistent performance of the company, make it a far better alternative for the low-risk parts of your portfolio (like your retirement holdings) than trying to pick the "next big thing." Sometimes the "old" big things are just what you need!

Matthew Frankel - posted on Seeking Alpha

Good article Sieg.....



Ask "rich people" what they're invested in --- they'll start naming Coke - McDonalds - Chevron - AT&T



Ask "normal people" what they're invested in.... They say "mutual funds" or "my work IRA"...


Ask a "newb investor" what they're invested in... it's "I'm waiting for Twitter to IPO" or "I'm waiting for FaceBook to split".



On the surface a guy might think "oh sure - he's got plenty of money ---- but I've got to make mine!" Nooooooooooooo....... "the rich guy" knows that not losing money is every bit as important - if not MORE important - to creating "wealth".

Another great day to be in the market!

Sitting at almost +2% average over all my investing 102 stocks. Woot!

These are great LEARNING DAYS ---- because a couple weeks or a month ago -- everyone is bleeding - dying the death of a 1000 cuts... market acting tired and weak.... and that's when "new" people get discouraged and sell... and then BAM! A big ass gain and then they're out and can't get that back.


Remember me telling you to please remember the good times back a few months?!?!?!? That was to give you all courage to hang in there when the days get short and dark and dreary....


Today was a perfect example of why you stick with INVESTING... buying on the darkest dreariest days if have can muster the guts....


In a "normal" market (yeah? What's that mean? I'd like to see one....) your gains are made on very few days in the year.... very few -- like 8 or 10 days out of the entire year! If you're OUT on them and trying to be cute and game the market.... then in the long run you lose.

The next few days and weeks will be interesting.

I sold my shares of Dell today that I bought in '99 and have one more dog IPO of the same era to eliminate that's a negative 70% gain to dump. Also added to my position in PFE this morning.

Portfolio is at 40.5% gain........if I would have learned these tricks 20 years ago GW would be my pit assistant. :rofl:

I did -- and I need a pit assistant!
LOL



I have three race cars in this trailer! You know how much work it is to load and unload all this crap!?!?!

Ready Sir! :captain1:

Just when I was ready to pull my money out of the market. :D

I'm going to have to beat you!!!

Ha Ha A patient man will always be wealthier than an impatient man for the simple fact that he can afford to wait.

Another good read IMO:

Disclosure: I am long KO. (More...)

Warren Buffett's affection for Coca-Cola (KO) is no secret. From his reported 5 Cherry Cokes a day consumption habit to Berkshire Hathaway's (BRK.A) 400 million share stake - the pair just seems natural. And of course the reasoning is relatively straightforward. Coca-Cola is the quintessential example of what Warren would call a "wonderful" company with a sizable "economic moat." In turn, the underlying business of selling beverages has been an exceptionally rewarding one for shareholders and fans of happiness alike.

I have a similar fondness for Coca-Cola. I could go on and on about the wonders of a half century dividend increase streak or the tangible return on equity figures; however I believe a simple story from Buffett will do the trick:

Coca-Cola went public in 1919. The stock sold for $40 a share. One year later it's selling for $19. It had gone down 50% in one year. And you might think that's some kind of disaster. And you might think that sugar prices increased and the bottlers were rebellious and a whole bunch of other things, you can always find a few reasons why that wasn't the ideal moment to buy it. Years later you would have seen the great depression and you'd see World War 2, and you'd see sugar rationing, and you'd see thermal nuclear weapons, the whole thing. There's always a reason, but in the end if you'd bought 1 share for 40 bucks and reinvested the dividends it'd be worth about $5 million now ... And that factor so over rides anything else. I mean if you're right about the business, you'll make a lot of money. The timing part of it is a very tricky thing. So I don't worry about any given event if I've got a wonderful business ... You can figure out what will happen, you can't figure out when it will happen. You don't want to focus too much on when; you want to focus on what. If you're right about what, you don't have to worry about when very much.

Now admittedly I have before used this precise story here and here when describing lasting investment philosophies. It's a fantastic reminder of what partnering with excellent companies for the long-term can yield. Yet it occurred to me that as great as this sounds in theory, in actuality no individual would be able to accomplish this feat. No one would have invested $40 in 1919, diligently reinvested the dividends for nearly a century and then woke up one day to $5 million.

Obviously it's the ideology that's important, but for the literal crowd out there I thought it might be fun to examine a KO investment over a more practical timeframe. For illustrative purposes let's take your average 65-year old retiree today and rewind the clock back to 1970, 43 years ago. Just entering the workforce, what would have happened if that younger version had the presence of mind to invest in a share of Coca-Cola? Well that's a great question, and I'm glad you asked.

If you use the historical price lookup feature on the Coca-Cola website for January 2nd, 1970 you would find a closing price of $0.86 a share with a split adjustment factor of 96. In other words, a single share of KO would have cost just over $82 in 1970 and would give you claim to 96 shares in 2013. With today's pricing around $38 a share that represents a total investment value of about $3,600 or roughly 45 times what you initially paid. Said differently, every dollar that was invested in KO at the beginning of 1970 would have seen annual capital appreciation of about 9%.

But of course - as the infomercial goes - there's more. We haven't yet included dividends in this wonderful business mix. A quick check to Coca-Cola's dividends page and one finds a pleasantly coincidental dividend history dating back to 1970. During this time KO not only paid but also increased its dividend every single year. In addition, the company split its shares on 6 separate occasions. The starting dividend yield in 1970 - based on a $1.44 annual payout and an $82 share price - would have been an unimpressive 1.75%. Yet what happens in the next 42 years is exceedingly remarkable.

A single share of Coca-Cola stock bought in 1970 for $82 would have netted that partial owner $1,190 in dividends over the years. Think about that: forget capital appreciation, with the dividends alone an investor could have generated nearly 15 times their initial investment without thinking about selling a share. On a cumulative basis, one's initial investment would have been repaid in about 19 years. In total, the dividend compounded by about 17% a year.

If you add the nearly $1,200 in dividend income to the $3,600 in paper worth, that equates to about 58 times ones initial 1970's investment. Put in a different light, that's a very solid - yet certainly not overwhelming - 10% annual compounded gain. There's something to be said for owning a wonderful business that utilizes the "magic" of compounding over the very long-term.

Finally, one could manually go about calculating the total return based on reinvested dividends. Luckily, Yahoo Finance offers a reasonable approximation of this figure by providing Coca-Cola's "adjusted close." On January 2nd of 1970, KO had an adjusted close price of just $0.26 a share. Compare this with today's price around $38 and you find a total yearly compounded return of about 12%. Expressed differently, this represents about 145 times one's money or a roughly $12,000 ending value on that original $82 purchase. And of course the numbers get really interesting once you start investing in multiple shares.

So here's the point of going through all that information: in 1970 Coca-Cola had been a public company for 51 years. In addition, KO had been paying a dividend since 1920 and had increased this payout for nearly a decade. In other words, it wasn't exactly a new concept. Yet an investor still could have found fantastic results. Adding in Buffett's story, and we're talking about practically a century worth of solid returns. And of course the company is much more powerful today than it was back then. Presently you might say that Coca-Cola is still a good company, but it's a bit expensive. You'd like to see it come down a few dollars where it would have a better valuation. And that might very well be true:

http://static.cdn-seekingalpha.com/u...Eli-Inkrot.jpg

We have no way of knowing if Coca-Cola will be able to provide the same solid results for the next investing career as it did for the previous. But I believe this example still carries weight. It alludes to the fact that you don't have to find the next obscure microcap stock to find solid return results. Some of the best investments are profitable companies that are sitting right in front of you. There's a reason why companies continuously make money. Meanwhile, quibbling over a percent or two here or there - while prudent in theory - might force you to miss out of some of the best companies in the world.

If I were to update Buffett's Coca-Cola story, it would go something like this:

By 1970 Coca-Cola had been paying dividends for half a century and was selling for $82 a share. And you might have thought that price was a couple of dollars too high, or the dividend yield was too low or that it had a good run, but it's time to shine in the beverage world was over. You can always find a few reasons why it's not the ideal reason to buy. Years later you would have seen presidential scandals, an oil crisis, double digit inflation, various wars, terrorist attacks and a global financial crisis, the whole thing. There's always a reason, but in the end if you bought 1 share for $82 and reinvested the dividends it'd be worth about $12,000 now. And that factor so overrides everything else. Considering the companies that you want to own for the very long-term is often just as essential as thinking about the valuations that the market is offering.

Link to article and author: http://seekingalpha.com/article/1722...dispatch&ifp=0

Sieg,

Thank's for posting that. Makes me feels good about owning KO. !!



John

You're welcome John,

KO's track record and fundamentals make for a good benchmark to compare future purchases against.

More often than not, like women, the best ones to enter into a long-term relationship with aren't always the flashiest. :thumbsup:

So I'm getting ready to make my 2nd buy. My oil and pharmaceutical stocks have done well, retail ok, and phone company not so much. Do I invest in my two performers or diversify? Do you sell the underperformers in and reinvest in another pony?

My initial thought is to invest in my top two performers on a low day and let the other two ride. If I was to sell, it would be the number 4 performer but I think it's to soon to consider it a trend.

We all have opinion's right!


I would hold the course on what you have --- and add more names...


In all the years I've been doing this -- I've never --- let me repeat that -- NEVER had all cylinders firing at the same time... the loser today become a breakeven -- the winner becomes a ho hum - and some other stock is just killin' it.... wait 4 months and the same horses are all running in different directions.

AFTER you have at least 10 names --- then go back and build bigger positions....

Todd, try to diversify the sectors you're in so you have some balance. Perform a historical sector analysis and see what catches your eye and compliments your current holdings.