Investing 102

[Bucketlist2012]

Originally Posted by GregWeld

Man ---- You guys are some serious INVESTORS!!


Okay --- Oil Royalty Trusts -- of which there are many -- and really "land leases" -- where the trust owns the mineral rights -- and they generate cash and spin that off to the "investors" in the trust. They are GIANT CASH COWS when oil prices are high!!

Now here's the tricky part. Nobody really knows how much oil is there - and how long it will be flowing - and at what rate - and at what cost to lift - and what the market price will be.

BPT is an OLDER trust - pumping some 20 years.... So ask yourself -- do they have 100 years of oil left? Do they run dry next week? RISKY -- you bet. Remember what you get with RISK?? Higher "rewards" thus the high dividend - because all the stars are aligned! I own a similar trust -- Chesapeake Granite Wash Trust (CHKR)....

Like all of these things we discuss --- Each person needs to do their research --- and understand all of what they're getting into. Asking here for input is okay --- and should be done -- but remember! They're just OPINIONS... and what is appropriate for me to invest in - may not be suitable for someone with 10,000 or (name an amount). These things all depend on age - $$ - use... and blah blah blah.

Greg,Thanks.

Oh ya, I am as serious as can be when it comes to Investing. That is what I live on.

And I just have a passion for it...Did I mention that I made my new KDW's as sticky as can be today ?

One quick thing.. I am starting a shift from being the lender, bonds/fixed income, and going to being the owner,stocks, not by much, but I see a shift and do I want to be the lender, that they promise to pay me back, aka europe, ect.., or do iIwant to own more, and be an owner/dividends ??? I think the owner... I feel that the promise to pay me back is getting thin all over the world...

People think fixed income and bonds are safe...hmmmm.....maybe they are not..

And again, I am riskier in PM's, and Oil, so although I share with you, I don't recommend it to the masses. I do it with my money.

But thanks for the kudo's...I will be trying to research and step up my Game with my posts..

Took me a long time to start chiming in..

Last thing..I don't really look at my total balance..it may go up and down due to some of my plays..

I am concerned with income stream, and the dividends..A certain asset i own may go down in balance, but it pays 6 to 14%. depending on the asset, but the point i guess, is that the dividend gets paid, and the income stream is there..

Also I am spread out , and some of these plays are very small in the mix..

I do believe that we are going to be spending in 2012..NO president ever gets re elected in a complete meltdown, and and we will be falsely propped up with government spending, because re election at all costs..and the dollar will continue to suffer..But that is only my opinion...

And my 2012 strategy...kinda the same as 2011, but with the bonds to stock shift of maybe 15 to 20 percent of the total blend...

[GregWeld]

Originally Posted by solarguy09

Last thing..I don't really look at my total balance..it may go up and down due to some of my plays..

I am concerned with income stream, and the dividends..A certain asset i own may go down in balance, but it pays 6 to 14%. depending on the asset, but the point i guess, is that the dividend gets paid, and the income stream is there..

Also I am spread out , and some of these plays are very small in the mix..

See --- that's where you and I are exactly the same kind of investor I look at the investment -- it goes up - it goes down... but what I look at is the dividend stream. If you invest $200,000 and it's paying you 5% per year in dividends - it's spinning off $10,000 a year in income... do I care if it's "down" $5,000 or even $20,000 temporarily? NOPE.... Own it over a 3 or 5 year period -- it's going to be UP and it will be kicking out that cash!

What I'm trying to get others to think about is that cash that you and I live on NOW -- is the same cash that will BUILD UP and buy more shares and snowball for everyone else. Either way - it's a win win.

[Bucketlist2012]

Originally Posted by GregWeld

See --- that's where you and I are exactly the same kind of investor I look at the investment -- it goes up - it goes down... but what I look at is the dividend stream. If you invest $200,000 and it's paying you 5% per year in dividends - it's spinning off $10,000 a year in income... do I care if it's "down" $5,000 or even $20,000 temporarily? NOPE.... Own it over a 3 or 5 year period -- it's going to be UP and it will be kicking out that cash!

What I'm trying to get others to think about is that cash that you and I live on NOW -- is the same cash that will BUILD UP and buy more shares and snowball for everyone else. Either way - it's a win win.

True.. Especially for those not needing the money for years...Why watch the balance ?? If you did the research, and bought the right stuff, over time...bingo...

So your point of research, buying, holding, not buying into the volatility, and the media noise.. Are all good to recap

Because if you and I are not worried about the fluctuations, others should not.. their money is going to work for a long time before they take an income stream..

Those 400 and 500 point swings in 2011 , would swing the balance so much that I cannot mention the amounts..

But in the end, my mix held strong, and I lived off the dividends.

I truly believe 2012 will be as volatile, and I reserve comment for 2013 until later..

But When the time is right, a recap for all the listeners please...

I love to hear opinion of those with money at work... I will never know enough..

[Tyler E]

After a few years of watching builds, a few weeks of reading this thread, Ive gotta say I'm a little nervous for my first post to be in investing. An area I, up until reading this thread, knew nothing about.

Anyway, is there an online calculator, or formula that would allow me to figure out:

If I invested $10,000 in say Kinder Morgan (KMP) 10 years ago, and reinvested the dividends, where would my money be sitting today, and if this steady eddie were to continue on its path, where would my money be in 10 years, 20 years? Roughly speaking.

Also, I want to thank everyone who has contributed. This thread is an eye opener. Your honesty and openess is very much appreciated.

[GregWeld]

Originally Posted by Tyler E

After a few years of watching builds, a few weeks of reading this thread, Ive gotta say I'm a little nervous for my first post to be in investing. An area I, up until reading this thread, knew nothing about.

Anyway, is there an online calculator, or formula that would allow me to figure out:

If I invested $10,000 in say Kinder Morgan (KMP) 10 years ago, and reinvested the dividends, where would my money be sitting today, and if this steady eddie were to continue on its path, where would my money be in 10 years, 20 years? Roughly speaking.

Also, I want to thank everyone who has contributed. This thread is an eye opener. Your honesty and openess is very much appreciated.

Glad to hear you're getting something out of all this typing!!


I can't find a 10 year TOTAL RETURN figure -- but it was easy to do a 5 year -
so your 10 grand FIVE years ago -- would now be 16 grand. I'm thinking that the 10 grand 10 years ago would be 25,000+ easy.

That's where the TIME comes into play in investing... 10 becomes 20 becomes 40 becomes 80 becomes 160... so if you put the 10 grand away that you got from graduation instead of blowing it and going to Italy for a month by the time you're 60 years old that 10,000 is $160,000 Now at 60 you'd appreciate Italy even more and you could go for a couple months!

Now imagine if you would - that you were clever enough to save $10,000 at 20 years old and then added 5,000 a year every year until you were 40....

[GregWeld]

Alright Tyler E ---- Just for you I did a little work..... and found via Morningstar a 10 year total return calculator/chart thingy.

I was a bit off on my "guess" of what 10K in KMP 10 year ago would be today -- I guessed 25,000+

So drum roll...........


According to Morningstar -- it would be 62,000 today


Go to this link --- and then just above the "chart" hit the EXPAND tab.

http://performance.morningstar.com/s...&culture=en-us

[Bucketlist2012]

So Greg.

with the decision of the federal reserve to keep interest rates low for a year or more, and therefore continuing the crushing of the dollar by the government buying up treasuries, it seems like my commodity play of 2011, is going to be a win in 2012 due to their policies..

i see the government artificially inflating the economy and the markets, rather than to take the bitter pill now, or years ago.. especially in the election year.

The problem is, to buy now is even riskier than buying three years ago.. but there is money to be made in 2012..

we will take the pill someday ala 2008 type event , if we don't take our medicine now..

But the feds have given me the green light again, and i will take it..

just an observation

[GregWeld]

Originally Posted by solarguy09

So Greg.

with the decision of the federal reserve to keep interest rates low for a year or more, and therefore continuing the crushing of the dollar by the government buying up treasuries, it seems like my commodity play of 2011, is going to be a win in 2012 due to their policies..

i see the government artificially inflating the economy and the markets, rather than to take the bitter pill now, or years ago.. especially in the election year.

The problem is, to buy now is even riskier than buying three years ago.. but there is money to be made in 2012..

we will take the pill someday ala 2008 type event , if we don't take our medicine now..

But the feds have given me the green light again, and i will take it..

just an observation

I'm only going to comment on this as a general response to how "I" think... as it fits into this thread.

I'm not smart enough to be able to factor in exogenous events - and particularly - what may or may not happen in the future. Who is President of the U.S.A.... what China might do with their Yuan... Whether or not Canada builds a pipeline or sends their oil to China etc.

So that's why I just focus on companies I know - with great 5 or 10 year charts - with great TOTAL RETURNS - and as much dividend as I can get out of a sector using all of these historic factors. What that does for me is allows me to just invest - sit back and let the company management figure out the details and what THEY need to do for the best outcome for their company. IF they continue to do what they've been doing - I should come out okay.

So let's use this recent news about the big pipeline from Canada to somewhere in the US.... and now there's issues about sensitive land that it would have to cross etc. and blah blah blah.

I own two pipeline companies -- Kinder Morgan Partners (KMP) and Enbridge Energy Partners (EEP). I am going to have to ASSume that they are very on top of this whole thing - and most likely were knowledgable about it 10 years ago when it was first talked about... and how it affects their businesses going forward etc. This is THEIR business. I gotta trust that they're all over it.

Me? I have important things to worry about -- like where the next car show is going to be - and which car I'm going to take - and whether or not I got the dates right and made hotel reservations.

My PARTNERS (since - when you buy stocks - you own a piece of the company) will worry about that pipeline thingy. I trust them - that's why I put my money in their company.

What I will pay attention to is whether they continue to be the good managers that I thought they were. If the whole stock market is going down and the stock goes down with it - doesn't make them dumb. When the market turns around - and everything is going back up - their stock will go back up too. My job was to buy more of it when it was "on sale" (think Nordstroms half yearly sale).

[Bucketlist2012]

Originally Posted by GregWeld

Alright Tyler E ---- Just for you I did a little work..... and found via Morningstar a 10 year total return calculator/chart thingy.

I was a bit off on my "guess" of what 10K in KMP 10 year ago would be today -- I guessed 25,000+

So drum roll...........


According to Morningstar -- it would be 62,000 today


Go to this link --- and then just above the "chart" hit the EXPAND tab.

http://performance.morningstar.com/s...&culture=en-us

Sometimes people think that they missed out on an opportunity because it has already gone up..

Some of my investments if you look back 10 years 10k would be 121k...but that did not stop me three years ago from buying them..

I knew that, or I believed they would continue to rise, so rather than wait or say i missed out, i got in, and let it build up...

I did not get the 10 year rise, but the three year is pretty good too..

[Tyler E]

$62,000 !!!!! Well, if that doesn't put a sh!t eating grin on your face.......

Solarguy, the passion has just went up, tenfold.

I would have never guessed that compounding would have increased my initial to that extent in such a short time.

My mutual fund guy told me I should be happy that I didnt lose money this year because of the market. I think his back end is going to meet the front end of my workboot!

I picked up, and am half way through, Peter Lynch's book "One up on Wall Street". Greg, are you friends with Lynch, because it appears you two think the same.

Again, THANK YOU Gregweld for spearheading this discussion.

For the Canucks on here, which discount investment house are you using? Its time to get rolling!