Investing 102

[GregWeld]

Originally Posted by XLexusTech

I am still faithful it will pan out. I have 150 shares @ 38. Long on FB. would be happy to make a few bucks and at least feel like i learned something.

One other basic investing strategy is to look for tax advantages. Do you have any thoughts on how to leverage tax exempt investments? I look for tax free Munis but that all i know about.

Be careful with tax frees -- there are many more "rules" than meet the eye... so be sure to check to see if they are both Federal and STATE / CITY etc tax free - and this will depend on your own tax laws where you live.

There is not much reason to invest in tax frees unless you are in the income bracket that "needs" that. There are calculations that need to be made to to see what rate you need to return tax free vs the rates for taxable etc... so this is something that needs a bit more than just a casual 'dabble' in info.

[ErikLS2]

FB has a forward looking P/E ratio of around 53. For newbies that means the current share price is 53 times the forward looking earnings per share. For comparison, Apple's forward looking P/E is around 11 and Google's is about 13. This means Apple and Google stock are much cheaper than FB. FB stock would have to sell in the $6 range to have the same ratio as Apple and the $7 range to match Google. Just thought this was interesting but these are just numbers, doesn't take into account the psychology of the market.

[XLexusTech]

Watched the market all week.. yesterday was a 52 week low I believe... anyone buying? thinking thier may be some bargains around..?

[GregWeld]

Originally Posted by XLexusTech

Watched the market all week.. yesterday was a 52 week low I believe... anyone buying? thinking thier may be some bargains around..?

I'd tend to wait a bit -- the market ALWAYS goes down in the summer months.... and even worse now maybe with the Euro issues.

You never have to rush to catch a falling knife.

Many times it pays to wait just a bit more.... until you have some clarity.

If you do decide to buy - nibble.


Ciao!

[XLexusTech]

Originally Posted by GregWeld

I'd tend to wait a bit -- the market ALWAYS goes down in the summer months.... and even worse now maybe with the Euro issues.

You never have to rush to catch a falling knife.

Many times it pays to wait just a bit more.... until you have some clarity.

If you do decide to buy - nibble.


Ciao!

Awesome advice as usual

[glassman]

"you never have to rush to catch a falling knife", now thats great quote, the first time i've heard that, but won't be the last!

[Woody]

Originally Posted by XLexusTech

Watched the market all week.. yesterday was a 52 week low I believe... anyone buying? thinking thier may be some bargains around..?

I have been buying some small new posiions and making small additions to the positions i aready had. I try to keep adding to my positions when there are corrections like this. i usually look back a year later and say I wish I bought more. i had set prices that i wanted to buy at and several stocks hit those prices recently. I have new prices now for those stocks and will buy more if those prices are hit.

[67pro-street]

Little update since i last posted on here. I got a little busy with life and work and just now had a chance to buy some stocks. I started off with 5k which i felt comfortable investing right now and bought:

STD (Banco Santander): they pay great dividends and the price is very low right now. Plus since i am only 26 i can ride this out longterm to see where it takes me. I have a feeling that overtime as European contries work out their debt crisis this stock will rebound...hopefully! i tried to have dividends reinvested but they said i cant for this stock. I will just have to reinvest manually...

KMP (Kinder Morgan Partners): Since i work for bp up here in washington i am very familiar with this company and their operating philosophy and so i feel comfortable keeping this company as my long-term investment, with dividends reinvested.

PM (Philips Morse): not a smoker but its a strong well established company and i agree with Greg's take on it...

BREW (Craft Brewing Alliance): Small cap company that has shown great growth over the past 3 years or so. This is a long term gamble (if there is such a thing??). I guess i am looking at this through rose colored glasses hoping it will follow suit with Samuel Adams...That and i remember this smart investor on this site who said to invest in companies you trust and buy products from. And i must say i do love my Red Hook

Long term i plan to put another 5k in by the end of the year and buy 4-6 different stocks. This is a brokerage account. I already have a 401k through the company and at the end of the year when tax time comes and i can determine what the max amount i can put into a Roth IRA is, i will open one of those accounts and put the max amount for the 2012 year (again i will invest in different companies from what i currently have to diversify).

Thoughts/suggestions/critiques are always welcome.

[GregWeld]

All good buys Aman!


Banco Santander (STD) could turn out to be the buy of the decade if europe can get their act together. This is a world class bank and is finding itself in the "baby and the bathwater" with all european banks getting hammered.

Keep up the good work!

[GregWeld]

Just a reminder to "newbs" --- like today when everything opens "green" --- and then you see you have "A" stock that is red.... Why? What is wrong?

Remember to check to see if the stock is going "ex-dividend"... meaning that as of today it pays a dividend out so typically will trade down around par to the dividend payment (per share).

Kimberly Clark (KMB) is one of those today (I own so saw this "red" number on a green day) thus the reminder... and just to use this example because newbs might forget about checking this kind of thing. I always use the oddities in a market to look into "why" so that I'm not blindsided by some news that I might have missed.