Investing 102

[Vegas69]

Originally Posted by XLexusTech

Thanks for that.. it was a really good motivator for me..

You're welcome..... Remember, motivation only gets the motor running. Discipline keeps it going. If I was managing my own money, I'd start by reading a good book, watching the market everyday at the same time, and listening to somebody way more successful than me(This Thread). Those are three great disciplines to start with.

You can only be great at so many things at once. I'm man enough to admit that I don't know enough about stocks or the market to manage my own money. It seems to me with something as important as your portfolio, you better be all in or all out. Learning all you can and gaining experience. Otherwise, you may do yourself more harm than good.

[GregWeld]

I think this article is worthy of a quick read.... and it's not for his personal portfolio --- but rather --- I think his way of THINKING is great! This is a kid that actually uses his brain to get a large picture about "sectors" and their possible issues.... I like that! He has a very good way to think about diversification --- that you don't need to be in EVERY sector - and in fact, there are sectors to avoid.

Remember that OTHER PEOPLES way of doing things may not have 100% merit... but there's usually a nugget here and there that should be considered and I think this writer has a couple of them. It's not so much the details -- but the "thought process".



http://seekingalpha.com/article/1280...g_income&ifp=0

[WSSix]

That was a good article. I agree with him about the tech and banking stocks. I don't care to follow or know enough about the sectors to get involved. Way too risky in my mind. Plenty of other sectors out there to choose from and still be diversified.

I've decided to take a gamble on a stock. It's only a small gamble and won't hurt me really if it fails but all indications are that it will be ok even if it's not a huge return. Considering I'm not trying to get rich quick with any of this, I figure why not try. It could work out well and I think I'm being conservative enough with my other selections so as not to be in risky territory. The company is Mid Continent Energy Partners(MCEP). They are a new company but are being run by experienced people. I'm interested in them for a few reasons. They are run by experienced people gives me piece of mind, they have a $0.50 per share dividend, the share price is low so I get more buying power with the dividend payment, they've increased their dividend twice already, and they are bringing in the petroleum like they predicted. They are a partnership like KMP so I did this under my Roth IRA to shield my tax liability. So we'll see what happens. Maybe it'll be a barn burner and I can retire after a few more years because of it Yeah, right. Regardless, I think it'll turn out alright.

[GregWeld]

Good for you Trey!


It's perfectly okay to take some risk.... you just need to be prudent about it... and you need to be in the head space that says - Oops it went to zero... okay... no biggie - maybe next time. Rewards don't come without risks. They key is to not "gamble" with money that is crucial - or money that you have other plans for "shortly"... where you put yourself into a "must sell at a loss" situation.


Several years ago -- I invested in a start up company. The shares cost me .53 cents each... I bought a bunch of them... the company then went public about 2 years later and it opened at $18 and went to $28.... RIGHT BEFORE IT WENT TO $1.70... I never sold any of it.... I used to tell myself "hey! at a buck seventy I still have a triple in it"! MY POINT IS --- I didn't have to sell, I wasn't worried about the investment because it was money that I could do without. It was a very small percentage of what I have (had) to invest.

Eventually we sold it all, in an all cash offer from EMC @ $34


Was it risky? Hell yeah! Was it rewarding? Uh... just a little.

[out2kayak]

Originally Posted by GregWeld

Several years ago -- I invested in a start up company. The shares cost me .53 cents each... I bought a bunch of them... the company then went public about 2 years later and it opened at $18 and went to $28.... RIGHT BEFORE IT WENT TO $1.70... I never sold any of it.... I used to tell myself "hey! at a buck seventy I still have a triple in it"! MY POINT IS --- I didn't have to sell, I wasn't worried about the investment because it was money that I could do without. It was a very small percentage of what I have (had) to invest.

Out of curiosity, how did you learn of the startup?

[GregWeld]

Originally Posted by out2kayak

Out of curiosity, how did you learn of the startup?

My wife spent 20 years in hi tech and we know everybody who's anybody in that industry in our town. Remember the old "better lucky than smart"... and it's not always what you know but who you know.

Want me to make a list of how many of those I LOST BIG MONEY in??

[68ZClone]

The question of whether or not to time the market has come up several times during the course of this thread. The following article takes a look at investing now versus holding and investing in one year. The outcomes might surprise you.

http://seekingalpha.com/article/1278...s?source=yahoo

No doubt, in a longer view than 5 years, buying lower would eventually recoup and surpass the "buy it now" scenario. But, as the author points out, does anyone really know what the stock price is going to do? Is the 40% upside risk worth the 60% downside risk the article describes?