I want to share with you guys (and gals) WHY I don't believe in the FaceyBooks of the world as far as INVESTING goes.... It's because after having lived investments for some 30 odd years... it's been proven to me time after time - that it's just not necessary to 'gamble' when I can just invest... and while my investments might seem mundane... they seem to get the job done. I'm not bragging here -- to the contrary -- I'm trying to get the 'newbs' to understand and be able to separate the "exciting get rich" stuff from the just boring standard investments that DO make you rich over time. To have faith in INVESTING over gambling...
Let's look at one of my personal holdings, Philip Morse (PM).
For the Schwab account I use here (since it was "new money") it's the easiest to use for examples etc...
I bought 2500 shares of PM on 02/03/2011 @ $57.80
I added (remember to scale in and out!) 2000 more on 10/24/2011 @ $70.119
I bought 2000 more on 02/10/2012 (ONE WHOLE YEAR AFTER THE INTIAL INVESTMENT) @ $80.399
A month later -- I looked at my GAINS (paper) and decided I should lock some of that gain in -- because frankly -- NOBODY EVER WENT BROKE TAKING A GAIN.... (I laugh at this because it usually costs me money in the long run - as you sell stock that just keeps going up!)... So on 03/28/2012 I SOLD 1000 shares @ $86.671.... If you do the math - that was "free money". LOL
NOW THEN --- I'm still "chasing" yield -- and this is a good core holding and has a good yield...
So on 4/30/2012 I buy 500 shares @ $89.289
Then it drops a bit - and I buy 1000 shares on 05/21/2012 @ $84.144
You all will no doubt grab your calculators to see how I came out -- but that is not the reason for this post...
Here's the other factor -- I live off my dividends and interest... and while I locked in some LTCG -- (then promptly put it back in at higher prices!) -- the key here is to look at the ONE YEAR+ GROWTH OF MY ORIGINAL INVESTMENT @ $57.80 and TODAY it traded at $89.00 !!!!
I took a REALIZED GAIN of $57,803.58 (Long Term Capital Gain)
And my dividends of $13,595.00
Totals $71,398.58 (not bad for 15 months!)
All of this took ONE YEAR AND 3 MONTHS.... AND I STILL have a paper "GAIN" of $106,432.58 in the stock as I type this!
I ask you.... is this boring investing or is it gambling... and with this kind of growth of capital and getting paid to do that on top of the gain... does a guy really need to gamble?
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