Investing 102

[GregWeld]

In the recent market environment, Buffett has aggressively been adding to stakes in key sectors of the economy. Energy is one of those. One of Buffett’s more famous proverbs is to “be greedy when others are fearful.” He did just that at the depths of the financial crisis, buying bank stocks. And recently he’s been taking advantage of the beaten down energy sector to load up on premium stocks at distressed valuations. Another great observation from Buffett, that should give everyone perspective when stocks are in periods of decline and people are hand wringing about a variety of risks, he says: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”



The key is -- WHICH stock. Warren does his research... he's not just buying anything and everything.

[GregWeld]

Don’t be short on cash when you need it most: "We will never become dependent on the kindness of strangers… We will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity." (2010)




Don’t wager against the U.S. and its economic potential: “Who has ever benefited during the past 238 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder… We will regularly grumble about our government. But, most assuredly, America’s best days lie ahead.” (2015)

[GregWeld]

There's not much more to cover in this thread that hasn't already been discussed add-infinitum.... but just to use a SHORT SALE issue that I just heard them discussing on CNBC

SEADRILL (SDRL)


The shorts were HEAVY in this name ---- and just when they thought they'd killed it - the Billionaire that controls a lot of the company - announced that he'd raised half a billion in cash by selling his other assets in order to prepare for a big deal involving SDRL.... BAM!! Up 109% in the last FIVE DAYS... UP 60% just today!


That my friends - is how you get KILLED.

[WSSix]

Yep! I won't ever short anything, lol.

It's been fun watching oil stocks bounce all over. I've got two names that have jumped 50 and 70% recently. Wish I could say I'm rolling in the dough. All they did was go from $1 to $1.70 Still, a gains a gain.

[GregWeld]

Originally Posted by WSSix

Yep! I won't ever short anything, lol.

It's been fun watching oil stocks bounce all over. I've got two names that have jumped 50 and 70% recently. Wish I could say I'm rolling in the dough. All they did was go from $1 to $1.70 Still, a gains a gain.

It's a HUGE gain -- and just think if you had 50 or 100 grand in them!! Then it really isn't small potatoes at all!!!


And yes -- Investing - in anything - should be all about the PERCENTAGE of gain. 5% is 5% and 70% is -- 70% !! Regardless if it's measured in pennies or 1,000 dollar bills.

[87SS]

Short Squeeze!....................not Fun!

[ErikLS2]

Originally Posted by GregWeld

There's not much more to cover in this thread that hasn't already been discussed add-infinitum.... but just to use a SHORT SALE issue that I just heard them discussing on CNBC

SEADRILL (SDRL)


The shorts were HEAVY in this name ---- and just when they thought they'd killed it - the Billionaire that controls a lot of the company - announced that he'd raised half a billion in cash by selling his other assets in order to prepare for a big deal involving SDRL.... BAM!! Up 109% in the last FIVE DAYS... UP 60% just today!


That my friends - is how you get KILLED.

Luckily SDRL doesn't pay a hefty dividend. If it did and those shorts held shares on the ex-date then they would also have to pay those dividends to whoever they sold the shares to.

[GregWeld]

I sure hope many of you were buying some shares of your favorite picks a few weeks ago. Even better is if you have your dividends automatically reinvested. Then it takes your fear and loathing (of buying stocks when they're down) out of the equation.

Once again - if you've been paying ANY attention to "the market" - these last few weeks have been a great test of your resolve. I hope you've all made personal "note" of how you felt about seeing your gains erased - and the green turn to red. Buying when everything is all green is so easy. Buying when it's red or putting more money to work in things you show a loss in... that's hard. It's also the way you'll make the most money. STAYING in the game is how you win.

[GregWeld]

Seems to me that there's a decided lack of interest in "investing 102" since the market turned a bit south for a few months... I seem to be the only one posting - and then not getting much - if any - responses.

Funny though - that the lessons discussed over the time this thread started, have played out. The teachings pro-offered here - "buy when the market is down" - Buy best of the best - don't gamble - buy dividend payers.... should have helped everyone weather the downturn - and hopefully helped you all STAY in the market when the sun turned to darkness.

Just look at AT&T (T) and Verizon (VZ) -- up HUGE and here they are thought of as boring blue haired old lady stocks. Ditto Philip Morris (PM) and Altria (MO)... I'm not going to bother to post all the stats. If you're interested enough, it's easy enough to look at them. Again - I'm not recommending these - I'm just using them a prime examples of why being in certain types of stocks pays off big time vs being in the high beta names that everyone THINKS are the places to be.

[SSLance]

I've just been sitting back and smiling Greg...nothing really to talk about.

BTW, my account balances hit an all time high Monday and I haven't added funds to them in many years. And I'm still only about 50% invested. I know I know, I should have bought some more while they were on sale...but I'm sleeping well at night and did all the way through this last dip.