Stay thirsty my friend.....



:lol: :thumbsup:

Your thanks is enough === really! I love this stuff... and I love that a few people might be better off down the road. The gift that keeps on giving.

Your philosophy is sound... you have a good grip on what to look for... and it really is pretty dang simple.

Just remember - the road winds around - it's not a drag strip... There will be periods of time you'll ask yourself what the heck? When that happens - you remember a couple thoughts.... when the stock price is lower - you're buying more shares with the dividends... So really what you'd like to see is for the stock to go down by about half - but keep paying a growing dividend - and then suddenly be worth double the year you retire. :lol: Of course that would only be in our dreams... but you know what I'm saying.

So, on MONDAY -- it's the start of what's known as "earnings season" - which always kicks off by ALCOA (aluminum) AFTER the close of the trading session (1:00 PM on the "best coast").

I mention this because EARNINGS are what drives the market higher or lower... and this will be the beginning of a glimpse, perhaps, of where we're headed. If earnings start to become UPSIDE surprises - then Katie bar the door... a rising tide floats all boats... BUT -- (I really hate the big butt!) -- if company after company starts to report sales or profit declines, or woes over european sales etc... then we'll sink like a rock.

So what's the Investing 102 reason for the post?

If you're NOT in the market -- you don't get the kick if things are going better than expected -- and if you are IN the market and things are worse than expected - then you're going to loose (on paper only) value. The PROBLEM IS -- nobody knows BEFOREHAND... and it's IMPOSSIBLE to "TIME" the market correctly. Trying to do so - puts you in an always "behind the curve position". You have to take a longer look at the market. It's like a YoYo... it goes up and down - daily - weekly - and from year to year... but the GENERAL DIRECTION has been - and continues to be - upward and onward. So if your view is next week.... good luck. But if your view is "I'll be retiring in 2020 and I'm going to die in 2050..... then forget all the gyrations and just get in.

Here's what I'd do if I'm putting "new" money to work... (which is really what you're doing - you're making your MONEY go to work!)... ALCOA has ceased to be the bellwether stock that it used to be.. but it can and does "move" the market. Remember that YOU are INVESTING - but you're playing in a market that can move with TRADERS... IF ALCOA reports decent numbers that spells good news for automotive and manufacturing (think car blocks - heads - trim - and window frames in houses etc... and all manor of stuff that uses aluminum) And it's an international player (think China)... If they report poopie numbers -- I'm going to be a BUYER! I want to buy when things go on sale... I don't want to pay high prices! I want to buy when everyone else is selling. Will I buy at the bottom ..... never (I'm not that lucky).... the minute I buy - "they" take it down some more... but I'll scale in (buy a little) kick back and wait to see what happens... and make another trade (I'll buy a little more, whether its up or down).

Remember -- if the dividend stays the same - and the price goes DOWN - the dividend PERCENTAGE rises.... so I'm getting paid MORE to hold the shares -- and they're shares I want to own long term anyway. I just got them cheaper (perhaps) - but the opposite is true if the shares RISE.. then the dividend percentage decreases... so pay attention to that! If the market is rising - then I should offset the smaller dividend with more capital growth - so really -- either way - it's almost a non issue.

If the market is off to the races.... I'll buy a bigger initial position...because when the earnings season settles down a bit - there will be days that will "let me in" (down days). If the market looks to be headed lower -- I'll buy in smaller steps so I'm not "ahead" of a falling market... the more it falls the more I buy but I'll wait until I'm seeing the next earnings season.

This might be a bit too much info... but I'm trying to just explain some stuff as we go along here. I don't know which way the market is going to go. Nobody does. We're all just guessing. SO what I'm saying here is my STRATEGY for buying "in general"... because I'm never going to get it exactly right. Those people that freak out and sell every time the market goes down are LOSERS... because their attitude is all wrong...

Much of the new money I've made lately - was money put to work in 07 and 08 when things were BLEAK... and while everyone else was selling -- I was buying a little here and a little there... This last month (December) I rebalanced some great growth positions (I sold 1000 APPLE up HUGE and kept 250 on) - spread out a bit more - kept my LTCG's down by offsetting with some sales of losses (Goldman Sachs has tanked and I owned a big position so I can sell some of that and offset the big gain (and I have more gain than I have loss so overall I'm ahead) while still holding some GS long term). That's just TAX PLANNING for me - because my money is not IRA/401K stuff.

BTW ----- I'm not buying ALCOA ---- I'm just talking about the 'market' in general.

Great post Greg! I love this stuff! I sold part of my ISRG investment (sold 300 and kept 200) last week and will be putting that money back to work soon.

I already have some Alcoa..Lol

:hail: :hail: Amen to that.. Most of my money was made during the Crash of 2008. i was lucky enough to have the balls during the opportunity of a lifetime..

But now it is mostly dividend payers in different sectors that fuel my income.. But i have to say, i am still hungry for more and the thread, and Greg's input on how he is doing things, is worth reading...Twice..:cheers:

Well Tracy -- I'm real sorry to hear that buddy... 'cause as an investment goes - it sucks bilge water. I'm a member of AA and that's their trading symbol... but I still wouldn't buy it!

Good to hear! I'm not a "contrarian" - but I do tend to buy when the other guys are running for their lives.... This same "habit" served me well with buying class A apartment complexes in Scottsdale, AriDzona during the savings and loan crisis days... We could buy them from the RTC or the lenders... for 50 cents on the dollar. Those where the days buddy -- Cash was king (still is)... and there were deals to be had if you had the cojones!

Great stock! Doesn't pay a dividend so I'm not buying it, but man that's been a good ride!

Intuitive Surgical (ISRG) -- 5 year growth 389%

Buddy -- ya only need to hit these every once in awhile to really explode your savings to the upside... the problem is finding them and getting in BEFORE the big growth hits. Lucky you! :thumbsup:

Thats why I'm a regular reader of this thread...And still working like a dog every day. (Its going to be sold)

Not to turn this thread into the "stock pick of the day" kind of thread....

There have been a couple of "picks" by readers that are "gambles" or at least that's what they are in my opinion....

So this is outside Investing 102 --- but a stock I might purchase if I want to stick with my usual - when they're selling, I'm buying - mode of operation...

I'm looking at Banco Santander (STD) which I used to own - but it's now down around $7 a share (terrible PRICE performance) - but at this depressed level - it's paying a 12+% dividend.

This wouldn't be for the faint of wallet/heart - because this bank is squarely in the eurozone fight for it's life...

I remember those days, but I was too stupid to have money.

Again, i was very fortunate to wake up at the right time in life, my 40's and around 2005.. You could see what was coming, and i was lucky enough to be patient, and to put lots of money out there in 2009...:woot:

I am still a novice, and have a lot to learn. my Wife doesn't think so because her Life is cushy sweet, But I know better... At 52, i am just getting started..2008/2009 was the opportunity of a Lifetime..Like a dream..

Ah Greg, the old days...Cash would just sit there and make double digits in the bank.. But I was too stupid then..Spending faster than I made it..Leverage....Not good..

But again, in between a kitchen remodel, my car being pampered at East bay Muscle cars, and all the other fires I have lit, i will be following your Tips, and advise...

I think while we get dividends for our money, things will be volatile for a while with the Euro, and sabre rattling all over the world.. the printing and spending. The Left vs. the Right.

And I am with you, a big Dip would just be a buy op for my dry powder..I had more powder, but I budgeted some cash for my car because ...well, I just had to..

Thanks for the thread, and advise..:cheers:

We all -- always have to have cash for car projects... Hell -- I've spent more money on cars and shops and tools and stuff than anyone I know but Charley...

BUT -- the ever present big butt -- I did that AFTER I could afford to. Like I always tell the kids -- "you can't spend your way to wealth". So I'm all for crazy car stuff... but it's my savings and investing that allows me to be able to do that. Another thing I tell my kids (they don't listen) is -- if you get $1000 for a bonus -- save HALF -- and blow the other half... but it's the saving half that will pay off in the end.

Had a buddy - he was budgeting $85K for a 3 year car build... and we got to discussing that. He had no money in the bank - but was willing to spend $85K building a car (that was going to cost him $125K.... like we all know!). He was YOUNG at 30 years old.... All I could do in my head was run the numbers that if he had the ABILITY to spend $85K in three years -- what he could SAVE and how much car he could build when he was 50 and pay cash and not bat an eye. But he started building the car anyway - then the overtime went away - then the house - and the car.... :rolleyes: :faint:

I know.. Simple money management first..

I roll debt free except a small 4% fixed mortgage. no other debt.. Keep the emergency fund of dead presidents in a different account.. .5%, but it is my sleep at night cash knowing I have it.. I have an account with Schwab, no day Trading.. Keep an eye on my NET worth, rather than the amount of assets. you and I both know that what looks like a Rich life, may be someone Hocked up to their eyeballs , and they own nothing.. If people could understand that first, then they probably could invest, because they would have money.

i have watched this thread and waited to comment because i am still newish to investing. Sure I own McDonalds, and Kinder Morgan, and i rode the commodity train from 2008 to now, just like the Big Banks did..Holy crap, they made 55% on their money in the first quarter of last year, in commodities, with our money !! I just tagged along for the ride. :woot:

But you have skills brother...I can see that, and I thank you for sharing..:cheers:

Thanks Solar.... I really don't have any special knowledge or skills... what I'm trying to bring to the table is blue jeans and t-shirt common sense...

Haha..that is the skill...:thumbsup:

Taking some of the mumbo jumbo they try to feed us, and to break it down to common sense, and also adding in the yield numbers, and other knowledge about certain investments.. Sure they are accessable to everyone, but hearing it another way is refreshing.

I don't expect the answer to it all, but success leaves clues...And I am constantly hungry for knowledge..

Oh, and Solar used to be my Career until 2008 came along..

Medical issues, and the golden opportunity , changed all that, for the better...

Just wanted to say thanks to Trey for starting this thread and Greg (and others) for taking the time to post here and get me going. I sold my Firebird a few months back and I've taken that money and opened a Schwab account. I picked 12 stocks (aka Don's Dirty Dozen :lol: ), a few have done well, a few are possibly shaping up to be turkeys but overall the advice here has gotten me on a good start.

Thanks again,
Don

Two days to finish getting through this thread. :thumbsup: Thanks to all who have contributed, and a special thanks to Greg.

I have been planing on sitting down with my daughters ( 18 and 19 ) to talk finances. This thread lit a fire under my rump, I am excited as they are young enough were it can make an enormous difference.

As far as I go, I'm getting ready to move my Roth over to the brokerage account. The credit union is only paying .750% :wow: I want control of it.

Scottrade account:

Own Ford

Played with AMR recently ouch!!


Added:

Verizon
Merck
Altria
Kinder Morgan


I'm one that has never been diversified and always made the wrong choice.

I own SNWT not sure why just a click of the keyboard, Duh! look if you dare. reverse split to 5000 shares worth $12 now started with $1500

I'm liking the steady less risky approach to well known names.




....

Don't let the ticker symbol scare you :D , this one looks very interesting. Lots of bad news has driven this stock down and they have been selling assets to increase their capital requirement. Despite the Euromess and selling some of their assets, they have stated that their intention is to maintain the dividend. They compare very favorably to their peers on many of the financial ratios (PE, price to book, net profit margin, etc), and they have a HUGE dividend. Like Greg said, this is not for the faint of heart as it will take a while for Europe to dig their way out of the current mess, but with a 12%+ yield, you are getting paid pretty good to wait.

Here's a question, I refinanced to a 15 year fixed 3.375% loan. I'm paying extra principle to cut the loan to 9 years according to one online calculator an investment with a 6% return suggested go with investing vs buy down. Thoughts?

Easist way to look at this is the extra money you're paying is effectively earning you that 3.375%. The general consensus is if you can earn more than that elsewhere then do that. You're already in the best mortgage position you can be in with that term and interest rate.

I am not positive, but I think that if you subtract inflation, you are paying even less for the money that you borrowed..Also the deductions..

For me, i have a 4% loan i could pay off, but my Investments pay way more.

Some people need a paid off house. But if the rate is that low, i personally won't pay it off..

If California does away with the mortgage deduction, i will have to re-crunch the numbers.

i think you have the sweetest of loans, and I would not put more on the principal..But that is such a personal decision.. Not my call... But IMHO

I'm leaning that way, then start dumping it into my roth. That way its accessible in a dire emergency but earmarked for retirement.

Although I'm only 2 payments in, with interest being front loaded are there benefits to paying down the mortgage in the beginning for a set time frame?

Good questions and it's one of those "it depends" answers again.

Personally if I had a fixed rate - LOW - mortgage there's no way I'd pay it off or make extra payments.

The interest is tax deductible so your real cost of money is even lower than the "rate" you're paying.

Saving for IRA/401K is "tax deferred" growth and income. Even better if you get company matching participation!

ROTH is TAX FREE GROWTH AND INCOME

Your payment is fixed... so with inflation - your costs are going DOWN...

Time with dividend reinvestment and TOTAL RETURN is on your side to double or triple or quadruple your investments... and without the time on your side you'll never get that kind of return.

The "key" to homeownership WAS (note that key word - WAS) supposed to have growth of the home value... and when you calculate that return on the actual money invested (down payment and payments) you're getting the growth of the home price without having much of an investment.... etc. If it's paid for - and the value only goes up the average 4% a year -- then that's all you're making on your money and you can't spend it.

Weld, Erik, Solar...the three wise men. Keep up the questions guys, The answers are getting good. I check this first anymore before the other sections

Tracy...Now that was funny...Those damn cartridges!!

Hey, thanks for including me, in the Wise men...I am trying my best to be one...

Mike V..:cheers:

This took me awhile to upload - etc - AND TO SEE THE CHARTS YOU'LL HAVE TO CLICK THE PDF LINK - But what I wanted to show was the relationship -- or the NON relationship between the P/E Ratio (price to earnings) and the RETURN on any particular stock. Back a few posts - someone asked whether or not I paid attention to the P/E's and I said - No... because they're really not relevant and it's too much information for me to keep track of - and I again referred to the "I" look at good charts / history / dividend / best of breed - over all these other technical "numbers.

What this chart is showing is the 3 MO - 1 YR - 5 YR Cumulative Return - and if you keep moving to the right - it shows the PRICE/EARNING RATIO.

What you'll see is really NO relationship of the 5 YR return vs the high or low P/E ratio. If I'd have chosen to NOT select a stock due to a "high" P/E ratio - I'd have LOST OUT on some very nice RETURNS.... So I just can't pay attention to too much data. Most of the time (like a political candidate?) they just don't tell the whole story.





Attachment 33497

[QUOTE=GregWeld;388919]This took me awhile to upload - etc - AND TO SEE THE CHARTS YOU'LL HAVE TO CLICK THE PDF LINK - But what I wanted to show was the relationship -- or the NON relationship between the P/E Ratio (price to earnings) and the RETURN on any particular stock. Back a few posts - someone asked whether or not I paid attention to the P/E's and I said - No... because they're really not relevant and it's too much information for me to keep track of - and I again referred to the "I" look at good charts / history / dividend / best of breed - over all these other technical "numbers.

What this chart is showing is the 3 MO - 1 YR - 5 YR Cumulative Return - and if you keep moving to the right - it shows the PRICE/EARNING RATIO.

What you'll see is really NO relationship of the 5 YR return vs the high or low P/E ratio. If I'd have chosen to NOT select a stock due to a "high" P/E ratio - I'd have LOST OUT on some very nice RETURNS.... So I just can't pay attention to too much data. Most of the time (like a political candidate?) they just don't tell the whole story.


Thanks. although I have the money management part together, and I have a lot of investments, I appreciate you taking the time to upload the information.
I still consider myself a Novice, and any info is appreciated.

I plan on both keeping my game plan going the way it is, and also adding to it. So now I have more food for thought.

One of the best threads:lateral: :cheers:

One caution with using P/E as an evaluation tool is that it's only a fair(ish) comparison metric within a common industry. I don't use it much (if at all) either because the ratio is often completely out to lunch in the oil and gas exploration sector as different companies try to assess value for different, sometimes intangible assets and the ratios can get completely blown out of proportion.

Exactly James!

That's why I keep pounding the table - just buy good stuff - stuff you know and understand - the dividend really helps... and just keep life simple. No need to get all confused and caught up in what the talking heads are hyping this week on TV... 'cause "next week" for a time horizon isn't really important...

My old partner had a saying he used all the time... Figures lie - and liars figure.

All these numbers are "interesting" perhaps - but they don't tell you what you REALLY need to know to buy a stock, i.e., IS THIS SOMETHING YOU WANT TO OWN AND WHY.

My Wife and I were just talking about why we own what we own. She is amazed that we can both build the wealth and draw monthly income, at the same time.

We Buy what we use, and what is busy.. Mc Donalds, Energy Transmission, Medical, ect...

Her family spends money that they don't have and then Envy those that do.
I have stopped helping because they won't listen..

Going to Europe twice, BMW, and lost the house, and no retirement...WTF.

And they keep asking for advise ???:willy:

My Wife asked how we are making money in this economy. I explained about the Yield's and being owner's and getting paid, ect...

After what has been a long term test, she gets it now.. i told her to just wait...

I am just getting started.:lateral:

Thoughts on Anheuser Busch?
 

Let me start off by thanking everyone that has posted on this thread. I don't know how many times I have looked at starting an online account only to not do it because I was afraid of I would mess it up. I have saw this thread on here before but did not bother to check it out till yesterday.

(What do car guys know about investing?):wow:

Could I ask your thoughts on:

Anheuser-Busch InBev NV (ADR)
61.14 +0.26 (0.43%)
Range 61.00 - 61.72
52 week 49.05 - 64.53
Open 61.62
Vol / Avg. 1.06M/1.03M
Mkt cap 97.47B
P/E 20.22
Div/yield 1.18/1.93
EPS 3.02
Shares 1.59B
Beta -
Inst. own 4%

The dividend is at 1.18 which seems high compared to all other company's that are mentioned on this thread. They also seem to have been steady in growth except for at the end of 2008. I think that spike and dip was cause by there sale to Inbev.

Any feedback would be great just to make sure I am reading the charts right and have not missed anything.

Thank you
Nathan

Nathan -- Glad you're checking in!

The dividend on this stock is 1.93% which is L O W compared to the companies we've been discussing (most of which are 3% or above).... So unless the TOTAL RETURN is better than say (just to pick one or two) - Coke - or Pepsi - or one of the other beverage companies why settle for a 1.93% dividend? Unfortunately they only have a one year "history" for total return - and it's under 6% which is "okay" but is HALF of what Coke (KO) is... and over time - half is a big difference... so I wouldn't buy given other better comparisons out there. Just my opinion on the WAY I think... no other "opinion" than that. A simple comparison where the charts and dividend point to better (perhaps) opportunities.

Like drug addicts, they too have to fund their addiction, this is a legal way to do it. :unibrow:

The great American way..... SPENDING their way to wealth!


:faint: :faint: :wow: :willy:

Yes, but we know it did not work out well for them..

That doesn't have a happy ending for anyone!

Can you imagine waking up one day -- and it comes QUICKLY as us older guys know -- and being forced to retire at 65ish / or getting laid off at that age -- and you OWE everybody for everything and you have ZERO savings etc. OMG! I can't imagine the feeling in the pit of your stomach that could come from that.

You'd look back at your life and think of all the Louis V... purses... and the lease payments for cars you never owned... and the 25 years you still owe on the last refi of your house (that should be paid for by now!)..... Would all of that "lifestyle" put a smile on your face... or would you think "man, if only I "woulda when I "coulda" when I "shoulda".... :woot: :rofl:

Whats your thoughts on Reynolds American, Inc. (RAI)?

Range 40.93 - 41.63
52 week 31.54 - 42.18
Open 40.93
Vol / Avg. 2.28M/2.31M
Mkt cap 23.99B
P/E 18.08
Div/yield 0.56/5.44
EPS 2.28
Shares 582.91M
Beta 0.62
Inst. own 46%

I was comparing this with Altria Group & Philip Morris and ended up going with Altria Group just based on the amount of shares I could purchase at the time with the amount of money I had. I do like all three but felt like the quantity of shares along with the dividend/percentage was a better choice.

Thanks for setting me straight Greg. I can now see what to look for more clearly.:hail:

Well -- the simple answer is -- any of the "terbacky" stocks work really really well... I own PM and MO in a big way. Love 'em. Hate the product don't use it - but ya gotta put your money to work - and these work real hard.

Phillip Morse (PM) has no 5 year "total return" numbers because this is a spilt off of Altria (MO)... but BOTH have fantastic T/R numbers and great dividends... these stocks - and you can include Reynolds American (RAI) and Lorillard (LO) are all just big fat cash cows.... and while the USA has all manor of anti smoking legislation - other countries DON'T....

What will derail these "hate 'em" stocks is a worldwide ban on smoking/terbacky products... but that will be well telegraphed - so I'm not worried about waking up one morning and having my hat handed to me.

The number of shares won't really affect the TRUE NUMBERS that you have to worry about because true numbers that count are PERCENTAGES -- you can have one share at $100 and have a 50% T/R and therefore have $150 or you can have 10 shares at $10 and have the same T/R and you'd still have $150.... The dividends are paid PER SHARE -- but they're still (for our purposes) a % number. And 5% is 5% if you follow what I'm saying. The TOTAL RETURN (T/R) is what you're after in the long run -- growth AND dividend... and when you do these comparisons in % terms -- there's a huge difference between one company that has 5 year T/R of 113% vs 65%! So if at all possible -- I tend to blend these "trade offs" -- if all things are rather equal. For me -- I can own several stocks in a sector... so even then I'll tend to take middle of the road to high end with consideration for the blended dividend % (since I live off mine rather than re-invest it).

This is a great question by the way - because this is one sector that has several really good choices in it... so it's kinda hard to say this one, over that one. They're all pretty dang good! It's like that old Coke vs Pepsi argument. Same sector - similar dividend - similar T/R (when looking at T/R - I don't think about one being 50% and one is 63% -- what I don't want here is one at 12% and one at 63% - then I'm taking the 63%!)... so these almost become throwing a dart at the board. As long as you hit the board - you're pretty good.

Same can be said with Verizon vs AT&T - same sector - similar dividend % - so I own both! :woot: :lol: