Investing 102

[toy71camaro]

Originally Posted by hifi875

I was checking my home made mutual fund that i started creating on 2/1/12.
Started with a paltry 4k, not much i know, but as of today its up $625 with a 16.5% return. Not bad to me for not doing anything. I just need more money now.
With thanks to Greg for getting us thinking and DOING something instead of just thinking about it.

Wow! nice!! much better picking than what I did when i started early march. lol

[Bow Tie 67]

Originally Posted by toy71camaro

Wow! nice!! much better picking than what I did when i started early march. lol

I'm down less than 1% total, with some real " go getters " vs some laggards. But the important thing is I believe in the companies I own. Greg was oh so wise when he told us to research and get to know the company.

[GregWeld]

Originally Posted by Bow Tie 67

I'm down less than 1% total, with some real " go getters " vs some laggards. But the important thing is I believe in the companies I own. Greg was oh so wise when he told us to research and get to know the company.

Thanks Matt!


I started investing in the mid seventies.... so there is some "experience" in my bag. Over the years I've done a little bit of everything investment wise... and the biggest thing I've learned is the human psyche plays a key role in investing. Knowing what you own is critical when things aren't going so well. An investor can do his portfolio a lot more damage during bad times than he can make during good times... That happens when we sell LOW. When the weak hands get blown out.

2007/'08 and the recovery since then - is a perfect example. Those that blew out - lost money. Those that held - are back and making money.

[toy71camaro]

I'm generally hovering between +1% and -1% each day... but, not worried. I know they'll go up over the next 30 years. lol

plus, i'll sit and collect my dividend even while their "not moving" much.

[GregWeld]

The Schwab portion of my portfolio (the only one I use for info here) is

UP 4.44% Year to Date

UP 4.17% 3 months

UP 12.52% One year


NOTE:
I DO NOT re-invest the dividends or the performance would be higher. I don't re-invest because I'm retired and live off my dividends and interest.

[GregWeld]

Here's another good article on DRIP - Or Dividend Reinvestment...

I particularly love the "disclaimer" at the end...



http://seekingalpha.com/article/5066...ividend-growth

[96z28ss]

Yeah, some day in the future I'll be in the green. my timing sucked. I wish I had made some gains before everything started heading down. I'm long term so I won't worry about it, let it ride!

[GregWeld]

Well don't feel bad Bob! Go back and review the 5 year chart of the companies you've bought and ask yourself "when would have been a good time to get in"?

Of course the bottom of the market - in '08 maybe... but then we'd be thinking you're an investing god!


Okay -- so along that line.....

I've now built (scaling in) a 60,000 share position in Banco Santander (STD).

I'm going to use this for investing 102.

This stock pays a very nice dividend even with the tax issues it has (Spanish withholding of 21%) and I like it as an international 'banking recovery' - just as we're now seeing here with U.S. Banks. I like to be ahead of the curve - because if you can be "early" you can catch a nice 20%+ upside on top of getting the dividend.

Well....... in this case I've been WAY TO EARLY -- and now I'm trying to catch a falling knife. Not a good/smart strategy. BUT -- BIG BUT -- I have enough dough that SOMETIMES I can buy my way out of trouble... by bringing my average cost down WITH the market for the stock. I started this position in FEBRUARY --- 5000 @ $8.54 -- then 5000 more later in the month at a lower cost -- then 5000 more in March @ 7.88 and so on. What I didn't do was to wait LONG ENOUGH between buys - on a stock that was obviously falling (the falling knife) thinking that I wanted a dollar amount in the position - and that the stock is "cheap" and it pays a higher than normal yield..... so I was okay with that.

Well -- the position - and chasing it down ended with 40,000 shares at an average of $7.65

So today -- in order to actually move my average cost down a bit - I bought 20,000 more shares at $6.28

So to have any impact on your per share cost average - you have to buy more and more shares to bring that cost down. And what I'm trying to do is to get my average cost "CLOSER" to where it's trading. That way IF -- BIG IF -- it comes back -- it has to come back LESS than it would if I just stayed put. It can also just make my loss larger. The position is still not where I will take it DOLLAR wise...

I once chased a stock to a position of 93,000 shares. When I finally pulled the plug I ONLY lost $1.00 per share (a narrower loss than I would have had PER SHARE) but the "law of large numbers" still cost me a fortune! So this strategy is not "smart" nor does it always work. I'm just using it as an example of what "averaging down" is. I've made this strategy work more times than not - but you have to have stones of steel and CASH to work with.

[Bucketlist2012]

Don't feel bad Bob...

We all have stories of "I should of"..."I could of"...

I could have been one of those investing God's Greg talks about..

Sure I bought property in Late 2008/early 2009, But I KNEW to start adding big to my positions in early 2009...IF I would have ? Triple gains on six figures...

BUT, I just dollar cost averaged more in....Sure that worked out good, But since I thought I had Big balls back then, but I wish I had listened to my research and my little voice...I did , but not as much as I " Should have"..." could have"...

I would have a quarter million more in my Portfolio..But I don't.....So, we all have those regrets...If you don't have any, you haven't been investing long..

We just hope we win more than we lose...

[toy71camaro]

U a brave man, Greg. heheh

When u mentioned that stock a month or so ago, i've "eyed" it on occasion and noticed it dropping.