Investing 102

[96z28ss]

Who can live to see an investment 80 years? isn't that too long of a period to compare?? shouldn't a 50 year span be a better comparison?

[Vortech404]

I have a question?

Trying to figure out what is better. I understand buy in company's you
like and shop at buy lets use this as an example.

Lets use a $6000 dollar figure and you like all 3 but can only pick 1.

60 shares of MCD vs 150 shares of Coke vs 77 shares of HD .
The yearly dividends of MCD $194, KO $168 and $120 for HD.

Looks like the Coke would win out because of the more shares? cheaper so the dividends buy more shares.But HD
killed them on total return? How do you choose?

What is the biggest factor in narrowing down a stock?

Thanks John

[GregWeld]

Originally Posted by Vortech404

I have a question?

Trying to figure out what is better. I understand buy in company's you
like and shop at buy lets use this as an example.

Lets use a $6000 dollar figure and you like all 3 but can only pick 1.

60 shares of MCD vs 150 shares of Coke vs 77 shares of HD .
The yearly dividends of MCD $194, KO $168 and $120 for HD.

Looks like the Coke would win out because of the more shares? cheaper so the dividends buy more shares.But HD
killed them on total return? How do you choose?

What is the biggest factor in narrowing down a stock?

Thanks John

Good questions John.... and here's my question for you. Why would you only have to buy ONE company? All three are great long term investments so why wouldn't you just buy $2000 of each one?


And here's the answer to your question.... Nobody can tell you which one you should buy. Which one (if you can't do all three) would you like to own?

That is also why you DIVERSIFY.... you want to own a bunch of different companies... in different sectors... i.e. industrial - financial - retail - etc.

[GregWeld]

Originally Posted by 96z28ss

Who can live to see an investment 80 years? isn't that too long of a period to compare?? shouldn't a 50 year span be a better comparison?

Agree.... 80 years is a pretty long time. But if you started to invest like you should have -- at 21 --- and you retired at 65 -- and you lived until you're 90... that's 69 years... so we'll split the difference between 50 and 80 year terms and stick to 69 year terms from now on.

[Vortech404]

haha Greg I knew you were going to say that.

My other stocks are PG,MO,PFE,NU,VZ and UPS. So if I do MCD,KO and HD
I hit almost all sectors. It just fells better mentally to see 150 stares of a stock vs 20, 50, 25 lol I just got to get over that.

This is in a 401k so I'm in these for the long haul.

Thanks again

[GregWeld]

Originally Posted by Vortech404

haha Greg I knew you were going to say that.

My other stocks are PG,MO,PFE,NU,VZ and UPS. So if I do MCD,KO and HD
I hit almost all sectors. It just fells better mentally to see 150 stares of a stock vs 20, 50, 25 lol I just got to get over that.

This is in a 401k so I'm in these for the long haul.

Thanks again

Oh I totally get it.... I like stocks in big numbers and I tend to concentrate... but I'm not building a portfolio... I've already got it! HA!!

Okay - split the difference and buy TWO... 3K each name.

Nice portfolio by the way. You're doing really nice job.

My thoughts then on Home Depot (HD). I heard the CEO say they would only build 3 stores in the US this year --- the days of adding 500 stores is over. So this is a mature company that will do well if building is good and home sales are good.


McDonalds (MCD) -- stable -- asian growth... a history of raising the dividend payout. Did I mention stable? That's why I own it. It pays a paltry dividend - so I offset that with higher payers - but you guys shouldn't be trying to do this YET.... so just get your portfolios balanced and you'll be fine. I'd buy MCD on the dips -- it's range bound between low 90's -- and high 90's... buy when it's down 94 or so.


Coke (KO) -- The WORLD drinks Coke.... Warren Buffet gets a dividend from Coke annually that equals his original investment! Wouldn't we all like to be in that position?? Coke for me is like MikeyD's.... it's stable... and makes me sleep well at night... and I know my money is going to "be there". I like that.


Thus ---- the real question? How could you go wrong regardless of picking one - two or all three of these great companies? And if you don't buy one of them this year - buy it next year or the year after!