Investing 102

[Bucketlist2012]

Originally Posted by GregWeld

Here's an interesting article on the affects of OBAMACARE on your income...


I don't want to get into a political discussion... or even a healthcare discussion... but I will be voting for a change. I'm just not for socialized "anything". We only have europe to look to if we want to see what all this "free" stuff does for an economy.


http://online.wsj.com/article/SB1000...p_mostpop_read

Great article Greg...Another way to punish us, to fund other projects.

[GregWeld]

Originally Posted by Bucketlist2012

Great article Greg...Another way to punish us, to fund other projects.

We all have our "political beliefs".... and there is no right or wrong IMHO.... so political discussions can go on and on and end up with no answer. But --- one only has to drive thru California to see what happens when a government entity is forced (chooses?) to spend it's income on "entitlements" rather than infrastructure (roads and bridges etc), education, police and fire... which to me - is what government SHOULD be doing for the public. There are places in California that I just drove through - where I was certain I was in a third world country. The roads were crumbling.... and the houses and businesses along those roads were in even worse shape. To me this is a very strong statement that whatever they're doing - isn't working. Once someone goes on entitlements they don't go off and they're lives don't get better - they get worse... there is no income or productivity from that person - therefore the government collects less.... and spends more... and has less to spend on things that truly benefit the masses such as decent highways and keeping those clean and trimmed... etc etc.

WE -- three couples -- actually discussed where else we would go on our next trip to AVOID California. Next trip will take us thru Arizona and Utah. We'll be able to trailer at highway speeds and NOT beat the stuffing out of our equipment... and frankly.. we're hoping it's less depressing.

[GregWeld]

I want to share with you guys (and gals) WHY I don't believe in the FaceyBooks of the world as far as INVESTING goes.... It's because after having lived investments for some 30 odd years... it's been proven to me time after time - that it's just not necessary to 'gamble' when I can just invest... and while my investments might seem mundane... they seem to get the job done. I'm not bragging here -- to the contrary -- I'm trying to get the 'newbs' to understand and be able to separate the "exciting get rich" stuff from the just boring standard investments that DO make you rich over time. To have faith in INVESTING over gambling...

Let's look at one of my personal holdings, Philip Morse (PM).

For the Schwab account I use here (since it was "new money") it's the easiest to use for examples etc...

I bought 2500 shares of PM on 02/03/2011 @ $57.80

I added (remember to scale in and out!) 2000 more on 10/24/2011 @ $70.119

I bought 2000 more on 02/10/2012 (ONE WHOLE YEAR AFTER THE INTIAL INVESTMENT) @ $80.399

A month later -- I looked at my GAINS (paper) and decided I should lock some of that gain in -- because frankly -- NOBODY EVER WENT BROKE TAKING A GAIN.... (I laugh at this because it usually costs me money in the long run - as you sell stock that just keeps going up!)... So on 03/28/2012 I SOLD 1000 shares @ $86.671.... If you do the math - that was "free money". LOL

NOW THEN --- I'm still "chasing" yield -- and this is a good core holding and has a good yield...

So on 4/30/2012 I buy 500 shares @ $89.289

Then it drops a bit - and I buy 1000 shares on 05/21/2012 @ $84.144

You all will no doubt grab your calculators to see how I came out -- but that is not the reason for this post...

Here's the other factor -- I live off my dividends and interest... and while I locked in some LTCG -- (then promptly put it back in at higher prices!) -- the key here is to look at the ONE YEAR+ GROWTH OF MY ORIGINAL INVESTMENT @ $57.80 and TODAY it traded at $89.00 !!!!


I took a REALIZED GAIN of $57,803.58 (Long Term Capital Gain)

And my dividends of $13,595.00

Totals $71,398.58 (not bad for 15 months!)

All of this took ONE YEAR AND 3 MONTHS.... AND I STILL have a paper "GAIN" of $106,432.58 in the stock as I type this!

I ask you.... is this boring investing or is it gambling... and with this kind of growth of capital and getting paid to do that on top of the gain... does a guy really need to gamble?

[GregWeld]

Okay -- without all the details -- here's another BORING stock... AT&T...

By the way -- I'm not RECOMMENDING any of these names to anyone -- but in order to have a "discussion" you have to talk about something... so I'm once again using names that I own.


The thing about RETIREMENT is that you're going to have to plan on living a while AFTER you retire... hopefully 25 or 30 years. Think about that for a minute.... 25 years. Nobody ever does the actual math... but if you retire at 65 and want to live 'til you're 90... that's 25 years! Now days - people live that long easily! And think about the medical advances we've enjoyed in the last 25 years that have helped people live longer! 25 years ago - you had a heart attach - you died! Now - no biggie...

Okay -- so you have 15 years before you retire -- and you're going to live for 25 years AFTER you retire -- that's 40 YEARS! That's 40 years of INFLATION...


Had you bought/invested in boring old AT&T in 1986 (ONLY 26 years ago) -- you'd have 600+ % GROWTH in your CAPITAL -- and you'd have gotten a dividend to live on all this time. For 15 years it would have been reinvested buying more shares - then it would send you a check every quarter...

How boring is that? 605% growth.... That will keep you AHEAD of inflation... and keep you in a new fishing boat so you can actually enjoy your retirement!

[toy71camaro]

well i sure hope they continue on that growth pattern... LOL.

they're up 6% for me since I bought $1k worth last month.

[GregWeld]

Originally Posted by toy71camaro

well i sure hope they continue on that growth pattern... LOL.

they're up 6% for me since I bought $1k worth last month.

I buy and hold AT&T (T) for a "steady eddy" and because it pays a larger dividend than many stocks. Ditto this with Verizon (VZ) which I don't own but have from time to time (use these to park money if you're not sure where you want to put it - they don't go down much and don't go up much either).

AT&T etc are the kinds of stocks that you hold really long term because over time they will save your butt when things go south -- and you can count on 'em to not rattle your cage. Stocks like this aren't very exciting when things are going WELL... but they are very nice to own when things aren't and we will all go thru periods when the steady eddies are the only thing "working".

[96z28ss]

Originally Posted by toy71camaro

well i sure hope they continue on that growth pattern... LOL.

they're up 6% for me since I bought $1k worth last month.

They are up 18% for me and that was just 3 months ago when I took my 401k and put it into a self directed IRA

[toy71camaro]

Originally Posted by 96z28ss

They are up 18% for me and that was just 3 months ago when I took my 401k and put it into a self directed IRA

damn!! nice!!

Im trying to get my work to allow us to do self directed 401ks, instead of mutual funds... we'll see.. its an "option" according to the 401k company, but my work has to sign up for it or something like that.