Investing 102

[AMSOILGUY]

Proud to say I just sealed the envelope and put the stamp on my son's custodial account application for Schwab. He has 1600 bucks to start with. Its been in a CD up until this point. Now we wait. Hes excited, I'm excited, sort of like the blind leading the blind here! I'll be rereading this thread again over the next week until the funds hit his account. Hes 11 so he is getting started 20 years before his old man did.

Thanks for the motivation!

[GregWeld]

Originally Posted by AMSOILGUY

Proud to say I just sealed the envelope and put the stamp on my son's custodial account application for Schwab. He has 1600 bucks to start with. Its been in a CD up until this point. Now we wait. Hes excited, I'm excited, sort of like the blind leading the blind here! I'll be rereading this thread again over the next week until the funds hit his account. Hes 11 so he is getting started 20 years before his old man did.

Thanks for the motivation!

Buy him $500 worth of three different stocks... Toss one in like FaceBook -- or Alibaba -- something like that. He's young and has to take a little risk on at his age.

[GregWeld]

Here's another one of those hot IPO's that are going to blow up right before your very eyes.... Twitter (TWTR). I actually had bought some of these shares early on -- they ran up FAST - and I cut and ran and pocketed a nice profit. Here's why I did that rather than INVEST in it. I found the service very helpful during the big Sun Valley fires last year... but after the fires were out... I couldn't find anything that was of interest to me -- and I certainly don't do anything that's tweetable! LOL

So here's where the Peter Lynch style of investing I've mentioned before comes in to play for INVESTING. I'm pretty damn comfortable knowing I'm mister Joe Average.... and If I stop eating at McDonalds -- and I can't find a reason to Tweet... then maybe others are feeling the same way. Guess what... Twitter reported less usage. SEE!! My guts and my head were telling me early on to listen to what I was thinking and I was thinking this is nothing but kind of a Fad that really doesn't serve a big purpose for me. Dumped the stock. Made some money.

My point isn't that I'm smart - I'm lucky as hell and I know it... my point is that you need to continue to be aware of your own senses... How you feel about a store - a product - the advertising - whatever! Invest in stuff you feel good about using... and if you stop using something and own the company.. DUDE! Time to sell!


For those that don't recognize the Peter Lynch reference -- he was the head of Magellan and grew that into the largest Mutual Fund in existence at the time... He's written many books on investing and you should all read them. One of his early "themes" was to invest in stuff where he was a shopper or was familiar with the products etc. I preach that method here because it works -- and it's easy to pay attention to your own habits and activities. The problem becomes on the sell side --- when you don't listen to yourself and recognize when you're no longer happy with "X". Say if you switched to shopping at Lowe's when you own stock in Home Depot etc. Or you're going to Chipotle and not going to McDonalds -- or you quit drinking Starbucks... or Budweiser...

[sebtarta]

Greg where do you read most of your information? I usually look at the news ticker next to the stock on google, but sometimes it takes you to these sites that make you question how true to their word they are.

[GregWeld]

Originally Posted by sebtarta

Greg where do you read most of your information? I usually look at the news ticker next to the stock on google, but sometimes it takes you to these sites that make you question how true to their word they are.

I pay for a lot of the information I read... and I have multiple investment accounts at various institutions. As such - I have direct contact with people at those institutions. So the answer is -- I have a bunch of different ways I get
info.

Here's something that I get to do that most wouldn't have available to them. Let's say I'm having lunch with one "banker"... and he's telling me about blah blah blah. I shake my head and listen etc. But when I get in the car - I'm on the phone to my other guy... and I'll say "Hey... I was thinking about blah blah blah...." And I'll get another perspective.

The problem with "news" is that it's just that. News. It can be very factual - and it could leave out some pertinent facts. Example. The news headline reads "Obama raises tax rate on dividends to 39.6%"..... Catchy - factual.. but missing some serious details... like the fact that you'd have to have 400+ grand in adjusted income in order for that to take affect. So I never trust one source. Keep digging and see if there's something more you should know. The initial information should only whet your appetite.

By the way --- I have little or no life.... and I've been doing this stuff for 30 years... "Investing" funds everything else I do in life - so it's job one.

[GregWeld]

So here's a couple more of those "priced for perfection" stocks -- which in my opinion has little to do with the actual performance of a growth company...


Yelp! Reports it has 256% growth from the previous quarter -- the stock get hammered! Down 12% in 5 days...

FaceBook -- Huge growth in almost every metric - but not good enough - BAM! Drops like a rock after hours - it's down 10%

What do we learn from this kind of action?? Seriously? What's the take away... the companies have HUGE growth -- they're making money...

You learn that the STOCK PRICE isn't always connected to the actual facts.. and when that price is connected to huge expectations... even if the company does really really well.... YOU GET HAMMERED in the price.

Are these stocks good to buy on the dips? If I was a young man looking for some long term growth -- I'd be a buyer of FaceBook on the pull back. Not much but I'd dip a toe in. THEN WAIT! Wait for them to report another quarter... Never go jumping into the deep end without knowing the depth of the pool! Check it out first...

[96z28ss]

Why do they have pre market and after hours buying and selling?
Doesn't seem fair that they allow this. it should be open or closed.

[XLexusTech]

Originally Posted by GregWeld

So here's a couple more of those "priced for perfection" stocks -- which in my opinion has little to do with the actual performance of a growth company...


Yelp! Reports it has 256% growth from the previous quarter -- the stock get hammered! Down 12% in 5 days...

FaceBook -- Huge growth in almost every metric - but not good enough - BAM! Drops like a rock after hours - it's down 10%

What do we learn from this kind of action?? Seriously? What's the take away... the companies have HUGE growth -- they're making money...

You learn that the STOCK PRICE isn't always connected to the actual facts.. and when that price is connected to huge expectations... even if the company does really really well.... YOU GET HAMMERED in the price.

Are these stocks good to buy on the dips? If I was a young man looking for some long term growth -- I'd be a buyer of FaceBook on the pull back. Not much but I'd dip a toe in. THEN WAIT! Wait for them to report another quarter... Never go jumping into the deep end without knowing the depth of the pool! Check it out first...

What does a 10% drop really mean? To me it means If I were to sell today I would only get just over 100% increase in share price on my FB stock... I wish things got "hammered" like tat more often :-)