Investing 102

[WSSix]

What Apple has been able to do as a brand is amazing to me.

[GregWeld]

Originally Posted by WSSix

What Apple has been able to do as a brand is amazing to me.

Considering that they'd have gone out of business a few years ago had it not been for a loan from.......... Microsoft! LOL


http://www.bloomberg.com/bw/articles...ple-investment

Think Billy G is wishing he'd not made that loan now?? Oh man... I'm kidding of course because he's not that kind of guy - and everyone knows that keen competition is what keeps us all humming...

I remember this loan well -- and I was thinking - NFW I'd loan them money they're all but OOB!

[GregWeld]

I'm actually glad that many of you are seeing a whacked out market - many of you for the first time since you've become investors.

I'll be darned if I can figure out what's going to work and what's not.... but in the meantime the dividends continue to pay me to go race my cars. LOL

The account I used for examples here etc is down about half a million bucks - all due to the oil patch investments (KMI - ETP - APU) These are down and down hard. I've been buying more of them. I can take the pain and I love the increasing dividend percentage. In the meantime - they're the death of an account on paper....

Here's what I DON'T like about this market -- an earnings hiccup -- and the shares are down in what I think is a way over reactive manor... and an earnings beat is rewarded too much. Shares of Amazon (AMZN) are trading at 886 P/E ratio. Really? OMG! To me - there's too much money trying to find a home - as it's coming out of "non working" names - and trying to find a home in what appears to be "working". It's chasing anything and driving names too quickly too much. I don't like that.

Typically what happens is those names that run up fast and large... the fast money comes out of there the minute something else begins to work. That never ends well.

What we have to remember is the country had to climb out of a big hole... when the market all but collapsed. We had a housing melt down and a financial crisis... so for the last several years - we really were in the proverbial "there's nowhere to go but up" kind of market. Now it seems we're more on a plateau.... Or what's called a "sideways" market - where things just bump along. It's always hard to feel good about being an investor in a sideways market. Many times you feel you're being left behind - then in an effort to catch up - you stretch your rules and start to chase the names that have gains. Be very wary of doing that. Think more about your money long term - earning a good dividend - buying more shares at lower prices (lower prices does NOT mean you are lucky enough to buy the very bottom!).

[GregWeld]

Kevin O'Leary is on CNBC.... says he ONLY buys companies that "return capital" i.e., pay a dividend.


71% of all accrued market gains are due to the dividend.

[CRCRFT78]

I have a question for you Greg, reading quite a few pages back (I can't remember the page number) you discussed what I believe was called a "wash sale." Given that I bought KMI while down to average down my cost per share basis and sold my long-term shares to achieve that, would adding to my position now while the shares are down negate the tax benefit IF I was doing this in an account not slated for retirement?

This activity is in a retirement account but am curious if it applies differently in a regular investment account. Can I buy new shares, sell the old shares and buy new shares again or must you sell all of your shares, clear the position and then buy again to avoid a tax hit. I'm sure I am overthinking this again but does the manner in which your transactions take place make a difference?

[GregWeld]

Originally Posted by CRCRFT78

I have a question for you Greg, reading quite a few pages back (I can't remember the page number) you discussed what I believe was called a "wash sale." Given that I bought KMI while down to average down my cost per share basis and sold my long-term shares to achieve that, would adding to my position now while the shares are down negate the tax benefit IF I was doing this in an account not slated for retirement?

This activity is in a retirement account but am curious if it applies differently in a regular investment account. Can I buy new shares, sell the old shares and buy new shares again or must you sell all of your shares, clear the position and then buy again to avoid a tax hit. I'm sure I am overthinking this again but does the manner in which your transactions take place make a difference?

A wash sale applies -- and crosses accounts.... so you can't use a different account say to sell and take a loss - and then turn around in another account and buy....


A "wash sale" is ------- you sell at a LOSS..... you can not buy the same exact stock within 31 days. Or you lose the ability to take the loss.

Sell at a loss -- mark your calendar - make damn certain there's 31 or more days between transactions... and then do your buying.


It IS NOT a wash sale -- if you sell (example) Conoco (COP) at a loss - and within seconds BUY Exxon (XON).... they're in the same business but they're not the same stock!