Investing 102

[GregWeld]

So once again we're back to "fundamental changes" in a business.... Here comes McDonalds (MCD) which had been just dripping down and down and reporting sales disappointments quarter after quarter... They changed the CEO... Made a big change to "breakfast all day" and BAM! Finally a big quarterly turnaround and the stock jumps $7

This is the thing when big companies make big changes... you just won't know which way that's going to play out.

[ironworks]

Originally Posted by GregWeld

So once again we're back to "fundamental changes" in a business.... Here comes McDonalds (MCD) which had been just dripping down and down and reporting sales disappointments quarter after quarter... They changed the CEO... Made a big change to "breakfast all day" and BAM! Finally a big quarterly turnaround and the stock jumps $7

This is the thing when big companies make big changes... you just won't know which way that's going to play out.

So using the Mcdonalds idea. How does a guy look at this stock now?

Obviously the best position would have been to believe in the new CEO and buy when the stock was at its lowest or some where near there.

Seems to me like a band wagon move to get on board now. But a 3% dividend is decent.

I think MCD is big enough they will change there game to make money. But in tens years the Big Mac might be outlawed or totally changed. I don't think MCD will go under and I'm glad to see they try some big changes, which Jack in the Box did years ago.

Just wondering you mindset looking at this situation to use in others.

[GregWeld]

Originally Posted by ironworks

So using the Mcdonalds idea. How does a guy look at this stock now?

Obviously the best position would have been to believe in the new CEO and buy when the stock was at its lowest or some where near there.

Seems to me like a band wagon move to get on board now. But a 3% dividend is decent.

I think MCD is big enough they will change there game to make money. But in tens years the Big Mac might be outlawed or totally changed. I don't think MCD will go under and I'm glad to see they try some big changes, which Jack in the Box did years ago.

Just wondering you mindset looking at this situation to use in others.

Good questions --- And I wasn't using McDonalds (MCD) for anything other than an example of "fundamental change" and how it can have a dramatic affect on a company - good or bad. The key is IF you owned MCD -- that you should always be paying attention!!!

All stocks are "bets" -- I don't care how big or small.... Things CHANGE. IF you're lucky - they go your way.... and if you're not - they turn against you (take OIL for example). We all have to make a judgement call at some point - do you LIKE and agree with the changes made -- or do you feel they suck? Sometimes we can't possibly know.... and we're just along for the ride.

My personal opinion is that FAST FOOD in general is in for long term changes... and there will be winners and losers. I personally think MCD is a longer term loser because I don't think people are eating that way as much anymore. None of my friends go to McDonalds - for anything - and we're the generation that grew up on this stuff. I will choose a higher quality - healthier meal whenever possible.... and I know where to get a GOOD burger and fries when I want one. But that's my personal feelings - and I sold MCD 2 or more years ago - when I realized that it didn't fit my personal stock picking guide -- which is - DO I LIKE THE PLACE - DO I SHOP THERE - DO I LIKE THE PRODUCTS. The answer to all three is no. Sold.

Everyone has to make that judgement for themselves. Nobody should blindly follow someone else's picks. That's when you get into trouble because you don't personally know anything about your holding or why. Fine if it's going up - but the doubts creep in when it's bleeding.

[WSSix]

Right now, today, if I was thinking of getting on board with MCD, I'd be kicking myself for not going in yesterday. Otherwise, I'd say to myself, good deal MCD but let's see what happens in a few weeks or maybe next quarter before I put some money into it. I think there are a lot of people trying to get into MCD right now while they are hot and hoping it will go a little hotter so they can bail and make a quick profit. The bandwagon affect you mentioned.

Admittedly, I agree with Greg to a large extent about MCD though. I'm not sure they are positioned correctly to capitalize on people's changing attitudes towards food. At the same time though, I'm not ready to pull the plug yet. Maybe I'm being more cautious or simply not as confident as Greg but I'm being patient for right now while also considering other options. My biggest problem which has caused me to be more patient with my MCD shares is I don't know who else I would want to invest my money with. I've got to decide that before I decide to sell off my shares. We'll see what tomorrow brings.

[Vince@Meanstreets]

Originally Posted by WSSix

Right now, today, if I was thinking of getting on board with MCD, I'd be kicking myself for not going in yesterday. Otherwise, I'd say to myself, good deal MCD but let's see what happens in a few weeks or maybe next quarter before I put some money into it. I think there are a lot of people trying to get into MCD right now while they are hot and hoping it will go a little hotter so they can bail and make a quick profit. The bandwagon affect you mentioned.

Admittedly, I agree with Greg to a large extent about MCD though. I'm not sure they are positioned correctly to capitalize on people's changing attitudes towards food. At the same time though, I'm not ready to pull the plug yet. Maybe I'm being more cautious or simply not as confident as Greg but I'm being patient for right now while also considering other options. My biggest problem which has caused me to be more patient with my MCD shares is I don't know who else I would want to invest my money with. I've got to decide that before I decide to sell off my shares. We'll see what tomorrow brings.

why sell? why not just hold if the divi hasn't changed.

[WSSix]

Originally Posted by Vince@MSperfab

why sell? why not just hold if the divi hasn't changed.

That's one of the reasons I've held on, too.

[GregWeld]

If I owned MCD I'd hold it. If the new CEO (Easterbrook) is as good as he's been for the stock - there's more good to come. I don't think I'd chase a stock - and certainly not for it's dividend... which as a percentage - goes lower as the price goes higher.

The CEO seems to recognize the company needs some updating and changes to the offerings. That's a good first step.

Don't bail on a stock the market just rewarded for going the right way.

[ironworks]

I'm trying to sort through some of the though process on the next stocks to pic. My daughter loves Chicken nuggets from MCD and they just built another one right by our house. But If I have a choice I would do Carls or Jack in the Box. So I'm not sure I see fast food going by the weigh side ( HAHAHA ). but Now that they post the calories on the menu by law I think. People are more aware of what they are ordering. Fast food is usually convenient or price not for taste and as you get older you eat better.

But like with some oil stocks going up and some not lately, you have to decide when to hang the risk out there and when to wait. CVX has gone up alot and the BPT is bounces around. KMI is still tanking.

Ideally you buy when everyone is selling and sell when everyone is buying. And hope everytime you open the Schwab account its all green.