Investing 102

[Rybar]

Good for you guys, I'm hoping to be hit in the head with an opportunity like that some day

[glassman]

And yes, I haven't been "here" for a week. I have been in "alohaville" spending time with family (emphasis on spending lol). No cell phone, no computer, no workie. Took our oldest and his fiance for there college graduation, and my youngest for her high school graduation. And met my sister and brother and their families there for our birthday's (Aug 2, Aug 5, Aug 2). Seventeen of us. Great time.

Kinda off subject, but not really...any of you read the E-Myth? A business book. I have owned my company now for 15 years and probably have another 15 in me( i am 45 and like what i do, just the dealing with the "slow payers" and cry babys i dont like, but isnt that just life?) so i'm begining to draw my "exit strategy". The business may be a source of income or sold and considered "found monies" in my overall financial plan. Any thoughts from any of you that have sold companies and reinvested?

[Bucketlist2012]

Not everyone will become an Investor, but if just a few get the bug and start to take control of their future, then this thread is a success..

I have helped maybe three people, and to me, that is a good feeling...

Keep it up Mr.Weld.. We are still here..And with 100 people looking , and only a few posts, we have people reading, and maybe they will Invest wisely too.

I wasted years, but i caught up quickly with much study and a few great moves..Also i was on the right side of 2008...Better to be lucky, and a little smart..Than really smart and unlucky..

[XLexusTech]

Read daily and holding on to my hat... if I had one question it would be... will FB ever get near 40 again? I have a good chunk and it drags down my portfolio.

[GregWeld]

Originally Posted by XLexusTech

Read daily and holding on to my hat... if I had one question it would be... will FB ever get near 40 again? I have a good chunk and it drags down my portfolio.

Well --- so far you're only down about 50%.... my guess is that you could go lower.


This kind of stock is pure speculation - it's not really "investing".... it's just a pure gamble on an unknown. I sold the shares I had the minute it didn't do what I expected it to. Cut and run on that kind of stuff 'cause bad can easily go to worse.

Having said that -- it's a good lesson that people have to learn for themselves. You set a price - you set your expectations - and if that goes against you - then you MUST be prepared to take the loss and move on.

People have been waiting for 12 years for Microsoft to rebound.... think about that -- a DECADE of dead money.

[XLexusTech]

Originally Posted by GregWeld

Well --- so far you're only down about 50%.... my guess is that you could go lower.


This kind of stock is pure speculation - it's not really "investing".... it's just a pure gamble on an unknown. I sold the shares I had the minute it didn't do what I expected it to. Cut and run on that kind of stuff 'cause bad can easily go to worse.

Having said that -- it's a good lesson that people have to learn for themselves. You set a price - you set your expectations - and if that goes against you - then you MUST be prepared to take the loss and move on.

People have been waiting for 12 years for Microsoft to rebound.... think about that -- a DECADE of dead money.

Sound advice... i have a sell in @ about 25 ish.. hopefully i can level out..

[GregWeld]

Originally Posted by XLexusTech

Sound advice... i have a sell in @ about 25 ish.. hopefully i can level out..

It sucks but it is what it is... It is also the reason people always sign that caveat -- Don't gamble with money you can't afford to loose... The problem is - NOBODY thinks they're going to loose! I've bought real companies with real profits and good histories and have lost - and lost big... so just because this is Faceybook doesn't make it any better or any worse. I wish I could say -- oh - just hold it 'cause it will come back. Well - yes it can... but you're still just gambling then -- now you're gambling that it will come back...

You do realize that the week after you sell it - it will gain 10 points....

I'm sorry - really am - there's just not much help anyone can offer - because regardless of the advice - it'll be wrong. Hold it and it goes no where - sell it and it'll go up - sell half and hold half -- and maybe you have dead money AND a loss... there's just no crystal ball.

[96z28ss]

I have learned a lot on this thread and hope it continues.
I'd like to share that since this thread started, I have seen my investment grow.

I took Greg's advice and took money out of a previous employer 401k and transfer it into an self directed IRA. It only allowed mutual funds and they were just underperforming.
Since April 17th till today, taking Gregs advice from this thread, Im in the GREEN 5.30%. This all in a stock market that is up and down constantly. Still I collect on dividends.

The sad part about this is I have virtually the same amount of money in my current employers 401k plan (again mutual funds). During the same time period with me contributing money every 2 weeks to it. It was down $800.
I may have to switch jobs so I can move the 401k money into my IRA.

[sik68]

I'm still reading , Greg + all....thank you for continuing to keep the wheels turning in my head!

Thanks to "the dividend method" I have grown my IRA by 2.0% in dividend earnings ALONE in 9 months! Awesome! You are supporting the next generation of investors here, Greg!

[GregWeld]

Okay -- thanks for chiming in guys....

When there's no comments - or questions - etc I start to question if I'm posting to a vacuum. Not that this thread is about "me"... I'm just trying to use my experiences to help - no different than we do on our projects.

I guess - in the real world - that's the problem with "finances".... lots of people have experience (good and bad) but we don't share them. I don't get it - but it is what it is.

We've been pretty lucky throughout this thread with the market pretty much going our way. It remains to be seen if all of you "newbs" (anyone that is just now paying attention to their investments as well as those just starting out) can gut it out when things turn south for awhile. Nobody can tell you when that's going to happen - or for how long - or whether or not you can take it mentally... but I will tell you this (the reason for this post this AM).... I've always made MORE MONEY in a down market than I have in an up market.

The key is to try to buy LOW and sell HIGH... or if you don't sell high - you at least have nice paper gains (a feel good sort of drug). You need to LEARN this trait. You need to train your brain that the stock market (investing in general regardless of stocks or houses etc) is no different than anything else you buy.... People are trained to buy cars when they're on sale -- they're trained to buy clothing when it's on sale -- Your Mother only bought sheets and towels during the annual "white sale".... Here's the big glitch in our brains with STOCKS and HOUSES --- the average RETAIL investor only buys during the peaks of the market. WTF is with that? Why would we be running out to pay top prices for something? Would you offer a guy full price for his car? Hell no! Would you feel better if you bought it below what he was asking? Oh yeah!

Remember this little info when things go south (look at it as going on sale!)... that is the time to buy like a pig. Don't be like most retail investors and STOP investing when everything is on sale or sell when you bought high. Look at this as a GIFT.... you can now average down by adding to your position... or you can get in at lower prices (thus better dividend yields!).


EXAMPLE:

I can think of several but this one is easy to see because it's pretty fresh.

McDonalds (MCD)... it was at $100... now it's at $87 and the yield is rising as the share price drops... where will it drop to? I don't know... nobody knows. But if you AVERAGE IN.... over time... you will be rewarded (not recommending this stock - just using it because it's a perfect example). There is nothing wrong with the company... there is weakness in the markets they're in... there is a temporary mismatch perhaps of the cost of product and the price they can charge. Whatever the "issue" is -- regardless of the company you're talking about - you must make sure that there isn't a fundamental change in THEIR business (think JC Penny - or NetFlix -- where they're struggling and losing market share - no thank you!) That is this quarter - or this half - or maybe this year... but that isn't the larger story and you want to be a little longer term investor than 'this week'.

The biggest returns happen when you average in over a long period of time - that's why you want to re-invest the dividend - it automatically buys on a regular basis regardless of the price. You'll buy less shares at high prices and more shares at lower prices... more shares pay more dividends so those buys get more and more shares. Then you look at that long term chart and it's way lower on the left than it is on the right and you're the winner!