Investing 102

[GregWeld]

Originally Posted by bdahlg68

I don't feel like I'm playing with chump change, just no where near your league. But, only 32 1/2 years old so you've given me a goal and a path - and for that I'm extremely appreciative.

Well - unlike the cars posted on Lat G -- this is really a very uncompetitive thread! I know how fortunate I am and have been.... thus part of the reason for trying to spread the word and help others have some of that same luck if at all possible!

I wasn't born with a silver spoon - I worked my butt off - as has my darling bride. We've just been a heck of a lot luckier than most - and many that I'm positive have worked longer and harder.

Keep at it - and when you're my age - you'll be coaching others to follow what you've done!

[GregWeld]

I woke this morning -- and the market is "down" -- let's not forget this is a PERCENTAGE game.... down a hundred points is a real ho hummer anymore... as is UP a hundred.


I immediately began to worry that you all would go back and read my "on sale - put your thinking caps on" post a couple posts ago... and think "oh hell - I'm not ready and I'm going to miss out... such and such is down 50 cents!"


NO! That is not the kind of preparation and thinking I was trying to portray.


I'm talking BIG on sale.... of real stuff.... on stocks you may already own or are on your list. We're not day trading here. We're investing.

Do your thinking in percentages.... AAPL off $5 is hardly a screaming buy...

We're talking long term investing -- and just how to think about what you're doing over that long term. SO lets say it takes you a year to save $2500 for your stock purchases... and during that year you've watched the market sinking... and here you are - ready to buy - and the market is poopie... and you're getting cold feet. This is when you have to say to yourself -- "X" company is still a good company - they're still paying "X" dividend -- there is not company specific horrible news... the market is down and so are they. Period. That is when you need to buy not turn away. Put your money in -- you just got a great opportunity. Go look at a long term chart and look at how many times things were down -- stair stepped -- a "swale" in the chart... but more importantly look at where it went AFTER that... had you been LUCKY ENOUGH to have bought then - where would you be now?

I'm NOT saying that the minute McDonalds drops $2 you should run out and hawk the house and back the truck up and fill it with MCD shares. And you certainly wouldn't buy a stock that is DOWN 10% in an up market -- unless you're doing a bunch of work to figure out WHY it's down when everything else is up! Or thinking that because Faceybook is down 50% it must be "on sale" therefore a great stock to buy "because it's going to come back". NO! Please -- that's not what I meant!

[GregWeld]

We don't want to be discussing individual recommendations to buy or sell companies -- we want to keep this thread about investments in general... and use various real life companies for discussion purposes and examples...

SO with this "view" in mind....


I've updated my Apple (AAPL) iPhone to the new iOS6.... the one you may have heard about with the messed up Map app. I shrugged this map debacle off.... but it is something that I use ALL THE TIME....


Adrienne (daughter) was in Chandler yesterday trying to find where the new rig is -- it's at a well known address -- it's Freightliner of Chandler - it's right on the I-10 freeway... but is a weird set of streets to get there.... HER iPhone can not find the place so she's calling me.... Mine won't find it either and I had actually put the street address in!! OMG are you kidding me!

Okay -- so this isn't really a big deal right? Well --- it could be as far as the STOCK is concerned... because this is making all the news headlines and it's all you hear about from the talking heads etc on TV.... So why would it be important to the stock? Again just using this as a POSSIBLE EXAMPLE....

Apples stock has been on a tear -- it's really been meteoric.... and it's "priced for perfection"... which means any little hiccup in sales or gross revenue or by any other "metric" it has to OUTPERFORM the expectations.

Now -- they've only shipped a few million of these - into an installed base of a half a gazillion or whatever number it is... but and here's the big BUTT -- what if this gives consumers "pause" -- maybe just a pause on buying a $600 phone waiting for the company to come out with a fix - or perhaps they - after having had several versions of the iPhone - decide to actually take a look at the Android versions -- or whatever.... Maybe just 5% of people do this and Apple's sales numbers miss the "expectations". BAM! Ya get hammered. And you get hammered over night... and sometimes then, this causes a great run to finally "break" because people with HUGE profits decide to start selling to lock in a profit... they get "nervous"... their selling causes more selling...

Remember that to make an UP market -- you need MORE buyers than sellers... and when you have more sellers than buyers - things go DOWN not up.

You want to see this in real life -- pull up an "ALL" chart of Microsoft (MSFT).... the peak is December 1999 (the actual month they announced Steve bonehead Ballmer was going to be the new President) -- this chart looks like a MOUNTAIN -- a long slope up -- a nice (huge) peak -- and a long slope down.... More SELLERS than BUYERS.

What I'm really talking about here is what you hear all the time - IS THERE A "FUNDAMENTAL CHANGE" in the business? Is there a "consumer sentiment" change?

I'm not saying there is - or is going to be - or anything like that --- What I'm saying is ----- Lets watch and see 'cause it might be a great learning experience. For the market, I hope this doesn't happen... but I'm keeping my eyes and ears open, and if my friends start talking about maybe looking at a different phone "this time" --- or if they're saying they're "fine with the phone I have".... DUDE! I'm paying attention to that!

All of you are very intelligent -- and now what you need to LEARN is how to use what you know - put that into an understanding of how to be "ahead" of the market - or how to "spot a trend".... without even thinking about it - you may have done this in the past. Now start to think about how it could possibly affect your investments.

I'm not talking about being SPECULATORS here -- I talking about just good old fashioned basics.

When you go to Home Depot - are they busy? Or have you begun to see empty stores...

Are your friends all buying new cars and trucks? Or not....

Are you being asked to work overtime? Are they hiring or laying off...

Is the restaurant you go to all the time packed? Or are you going there less and nobody talks about the place anymore...

Put your eyes in and your thinking cap on and start to look at this "basic info"
and how you could be ahead of the market - or maybe not buy that sector in the market - or is there some investable play here?

[hifi875]

after 200 + pages, this is still the best thread on the net.

[toy71camaro]

Excellent point.. on the apple crap they just released.

Iphone 4 user here.. and just what you said, is happening to me. I love my iPhone. But i have to jailbreak it to really love it. I'm not that impressed with the iPhone 5 specs/differences. Its not cutting edge. iOS 6 has some pretty bad flaws (albiet fixable, eventually). I'm due for an upgrade, but I'm debating on checking out an Android (Galaxy S3, or something that comes out in the near future).. or weight my options if I really want to upgrade to an iPhone 5, just to get a hair larger screen.

I dont dare update my iOS however. iOS 6 isnt jailbroke yet. And a few of the VERY USEFUL apps on there I use, Apple wont approve, so they can only be installed via a Jailbroke phone. So, here i wait...

and here i sit.. debating this.. but, i missed the "big picture".. I missed how my thoughts may not be alone, and my thoughts affect my apple stock (all 0.5 shares of it. LOL).

[96z28ss]

I think Apple could go way down in the next few years with this new CEO.
Cook and Jobs have two totally different mentalities.

He released the phone knowing there were issues with the maps. He should of kept Google maps till the next iphone 5S. The metal backing is causing alot of issues, metal easily dents, Iphones scratches new out of the box.

I'm keeping my iphone 4S best phone I ever had. I just wish I hadn't dowloaded the new ios 6. I already used the maps and i'm not liking it. Although I do like the panaramic picture taking. It will be usefull when on vacations.

[Rybar]

Interesting take on Apple, I own some of thier stuff but read about the lawsuit they just won over Google and Samsung. My brother tells me Samsung manufactures parts I think the screen and processors for the Iphone, and the Iphone 5s apparently does not have google apps anymore like the maps and I think youtube. So I would be really weary about Apple stock right now as the Iphone is certainly not the be all end all of phones, it does have a huge following but I think the Samsung/Android/Google phones will cut into that market big time if they have not already done so. I'd be careful buying apple unless they come out with some new breakthrough products again.

I'm not a techie guy, so anyone else please elaborate on this.

[GregWeld]

Apple is certainly a good discussion.... but I think you guys missed my point.

It's not about 'apple' --- it's about LEARNING from SOMETHING LIKE THIS and how it pertains to the STOCK of a company.... substitute ANY company.


Because -- if I've learned anything in the last 30 years -- it's that NOBODY can tell me in advance - what's going to happen and how things are going to react. And since we're not trying to "game" the market a possible hiccup shouldn't matter.

The thing is - nobody knows - it's all just "blah blah blah".... and here's why I've learned not to bet my hunches.... because the minute you're absolutely, positively, certain, that APPLE is going to sell off.... and you take a million dollar short position ---- you'll get up in the morning and they'll have announced a "fix" for the issue and the stock rises 50 points.

I was really trying to get everyone to look at "the market" in a different way -- and to try to see and feel --- and pay attention to --- the inputs that already affect you -- to think about them and to try to use this 'input' to help you sort out your investments. So let's say you're ready to plunk down another $2500 in the market --- and you're trying to diversify --- and you have nothing in the industrial space.... so you're a car guy and you're thinking about FORD or GM... Stop and check your own senses for how you see "the market" -- everyone buying a new Ford pickup truck? Or is Toyota Tundra replacing all those Ford F150's....maybe that "view" is worth exploring and you do some homework and now start to compare Ford - GM - AND Toyota.

I bought Chipotle Mexican Grill (CMG) because every time I went there - the joint was absolutely jammed with people and a line out the door.... I went home -- and started checking them out... at the time it was trading at $54 a share...

I'd bought Apple (AAPL) for the very same reason -- every time I went by one of their stores there was a line of people buying stuff... at the time - the shares traded for $85 a share...

But I also want you to pay attention to what you see on an ongoing basis! That same "sense" for something that was just beginning.... can be used to help you SELL as well as buy. Sometimes knowing when to sell is every bit as important as knowing when to buy. So keep your eyes peeled for changes -- what your friends are saying -- what are YOU thinking about "X" product line or company.

What trends are all the kids CHANGING to -- from "Nintendo" to Xbox?? From McDonalds to Chipotle? From Nike to New Balance or Sperry Top siders?
And more importantly -- do you have investments where this "trend" might be your friend..... OR NOT....

Here's an old one.... I remember all the kids could talk about was MY SPACE... it took about a year --- and I never heard MY SPACE again -- it was all FACEYBOOK... There was a clear trend there! But sadly that stock trade didn't work out --- but the signs were very clear!