Investing 102

[96z28ss]

Originally Posted by GregWeld

I'm going to post a link to this article -- not because he's pushing McDonalds stock -- but because of the first paragraph.... which you'll have to read to find out. But it's a mirror of what I tell people all the time... and it's appropriate today given the interest in FaceyBook etc.


http://seekingalpha.com/article/5845...g_income&ifp=0

Guy shows a good example of what just $5k will do in MCD. I of course bought high, and have been in the red the whole time on this but I'm holding it long term 30+ years.

[GregWeld]

Originally Posted by 96z28ss

Guy shows a good example of what just $5k will do in MCD. I of course bought high, and have been in the red the whole time on this but I'm holding it long term 30+ years.

EXACTLY -- because if you go back and look at the chart -- it's low on the left and climbs steadily to the right... and there's no reason to believe that it's somehow - after you bought it - going to start a long term decline. In the meantime - they send you money every quarter as a reward. WTF is not to like about that?


I'm down 60 GRAND in Banco Santander.... what do I do? Buy more... increase my dividend "reward" and kick back. I have 20+ "green ones" that more than cover the 2 or 3 in the red ones... and every one of them sends me checks.

[MoparCar]

Greg,
Again this is all very good reading and education. I tried the search function for "stop loss" but as you can imagine on a car site that comes up with a lot of hits! Anyway as an investor, do you use either fixed stops (periodically adjusting with gains/losses) or trailing stops on your investments for the catastrophic market collapse. I know if "trading" and not investing the rule of thumb is 3% below the 30d moving average (or other similar rules) but as a long term "investor" what is your policy? When the markets tumbled last fall when the US rating was lowered did you stop out on anything or let it ride knowing the 5-10 year chart is bullish? How about in 2008? Do you try to anticipate earnings reports for the unexpected after hours plummet?

Thanks for all the insight-
Wes

[GregWeld]

Originally Posted by MoparCar

Greg,
Again this is all very good reading and education. I tried the search function for "stop loss" but as you can imagine on a car site that comes up with a lot of hits! Anyway as an investor, do you use either fixed stops (periodically adjusting with gains/losses) or trailing stops on your investments for the catastrophic market collapse. I know if "trading" and not investing the rule of thumb is 3% below the 30d moving average (or other similar rules) but as a long term "investor" what is your policy? When the markets tumbled last fall when the US rating was lowered did you stop out on anything or let it ride knowing the 5-10 year chart is bullish? How about in 2008? Do you try to anticipate earnings reports for the unexpected after hours plummet?

Thanks for all the insight-
Wes

Good questions --- simple answer. NO.

I own nothing that I want to be arbitrarily sold out of. I'm not afraid of the ups and downs of the market... Remember -- they pay me to sit on my hands. So I don't have to wring them trying to figure out the markets next move. AND --- if you've owned your stocks over time -- other than a wild market aberration like '08... (which if you sold into - you lost your ass)... and if you held into - you made all your money back plus some -- and if you reinvested the dividends - it was the greatest gift EVER....

That's the difference between investor - and trader - and buying for pure growth over growth with INCOME.

[MoparCar]

Thanks-I had assumed that was your take but wondered. I need to train myself to look way out in time and forget the noise as you've mentioned. The media tries its best to magnify every up and down in the market.

Investing......

Wes

[GregWeld]

Originally Posted by MoparCar

Thanks-I had assumed that was your take but wondered. I need to train myself to look way out in time and forget the noise as you've mentioned. The media tries its best to magnify every up and down in the market.

Investing......

Wes

Investing isn't gambling.... Yeah - market goes up - market goes down.... but if you look at those long term charts... then you learn to ignore the noise because that's all just a distraction.

Look at it like you bought a large class A apartment complex... it's paying you good cash flow... You don't trade that just because the market is off this year, it's still paying you to own it.

This is why I say "buy best of breed" stuff that you don't have to follow the market value every day - or even every month. While I look - listen and learn - and keep my eye on the ball --- It's more just to occupy my time than looking to see that I'm down $2.00 on a $100.00 stock "today". The day after I sell at $98 -- it'll jump to $101. In the meantime - it's paying me $5.00 a year just to own it. After 10 years I've taken $50 out of the stock -- and after 10 years it's most likely worth $175....

People that want to get rich quick are always in the poorhouse.

[GregWeld]

In checking some names this morning - that I own.... I noticed only a couple were trading in the green... One of which is Kimberly Clark (KMB). With all the excitement around Facebook etc which is "fun".... and KMB has to rank right up there in the super boring range. BUT -- Always a big BUT -- Year to date Kimberly Clark is UP 8.16% --- AND it pays 3.72% dividend!

That is how - over time - you get ahead.

Not recommending the name -- I am just using it as another example of this theory of getting paid to watch and wait - and getting growth etc out of great, best of breed names, and sleeping well at night too. Boring? Yeah - pretty much... but FUN too when you're making money on your money.

[Bucketlist2012]

Morning Guys.

The Noise is going to get LOUDER and Scary...

Short term, which I am not a short term Investor, will be Bearish and Volatile..

These are the Times I go off and do other things..My health won't let me go crazy yet, but I am not worrying, and I am not taking any big risks right now..

Also I am not following things closely , because it is not worth it..If you have set a course, and you are looking down the road, I think it will all work itself out.

Plenty of stuff to keep me busy, and I am waiting on the opportunity to pick up more stocks, not sell.. I know people have been buying lately, and that is fine, but I am waiting because i think I will get a better deal.

Too many of my friends never listen to me and sell low,in a panic mode..

I am never a seller, unless I want to..The noise and the crazy market do not dictate when i sell..I do..

So plan your course, and keep the Bow into the wind...

That is why having Dead Presidents, Cash , is so important...It makes you not have to sell low, and it makes you have the funds to buy more when the time is right..

Otherwise cash is only for food and daily needs and Butt wipe..