Investing 102

[toy71camaro]

Ah... Bummer on the ole faceybook... but I'm not all that surprised after reading a handful of articles on SA about them the past two weeks.... But the media made it into a frenzy and got everyone excited for a bursting bubble. heh.

Anyhow... I saved my $ from twofacedbook and set my order for $1k of T, $500 of CVX (while its on sale for ~10% off) and $500 for KO.

Now trying to debate whether or not to take a $150 loss on the last couple of ETF's i have, so I can get the 3rd item on my "buy" list.. which was $1k KMB.

$150 loss at the low dollar values I'm doing, is quite a hit. LOL.

I already got your ED. It's up ~1% for me. lol

[GregWeld]

Originally Posted by toy71camaro

Ah... Bummer on the ole faceybook... but I'm not all that surprised after reading a handful of articles on SA about them the past two weeks.... But the media made it into a frenzy and got everyone excited for a bursting bubble. heh.

Anyhow... I saved my $ from twofacedbook and set my order for $1k of T, $500 of CVX (while its on sale for ~10% off) and $500 for KO.

Now trying to debate whether or not to take a $150 loss on the last couple of ETF's i have, so I can get the 3rd item on my "buy" list.. which was $1k KMB.

$150 loss at the low dollar values I'm doing, is quite a hit. LOL.

I already got your ED. It's up ~1% for me. lol

Loss sales are always a struggle. The minute you sell - the shares will go up.

The way I TRY to look at it is whether or not the NEW investment will more than make up for the loss in a short amount of time - either in dividend - or growth or both. Then it doesn't feel so bad.

That's just employee retraining. Sometimes it costs money to train then.

[toy71camaro]

Originally Posted by GregWeld

Loss sales are always a struggle. The minute you sell - the shares will go up.

The way I TRY to look at it is whether or not the NEW investment will more than make up for the loss in a short amount of time - either in dividend - or growth or both. Then it doesn't feel so bad.

That's just employee retraining. Sometimes it costs money to train then.

yeah.. they are all 3 up today a litle over 1%, but down ~10 overall.. i think i'll just can em, and get what i WANT. lol


EDIT: Sold the 3.. and picked up just enough to make the 3 full purchases i wanted:

$1k KMB
$1k KO
$1k T
and then $550 left over to add to my CVX while its on sale. (originally bought $1k of that too, a couple months back).

[Bucketlist2012]

Originally Posted by GregWeld

Yeah --- I wasn't interested in the damn thing to start with... but when the broker called and offered IPO price I thought - sure... WTF why not. Dumb of me = I know better than that.

Today I spent dead presidents on adding a 1000 shares of Con Ed (ED) - and 1000 Kimberly Clark (KMB) - and a tranche (50K) of GM Convertible Preferred paying 6.25%

Much more my speed....

Greg

1. You said Face Plant was gambling

2. You did not recommend it.

3. You got it at a Deal that most people could not get.

So no worries there..

It is the "crowd" or frenzy buyer that got hammered, as they should have..

Today is a great day on what I have going, but one day does not make Investing..

So it should be Interesting the next several months, that is for sure...

A lot of people that do face book were asking me, why wasn't I buying any of it..When I asked them why, they did not have any answer other than a lot of people use face book...I said, a lot of people eat Mc Donalds, and buy Gasoline, and Smoke cigarettes and drink alcohol...Now that I understand...

[GregWeld]

Originally Posted by Bucketlist2012

Greg

1. You said Face Plant was gambling

2. You did not recommend it.

3. You got it at a Deal that most people could not get.

So no worries there..

It is the "crowd" or frenzy buyer that got hammered, as they should have..

Today is a great day on what I have going, but one day does not make Investing..

So it should be Interesting the next several months, that is for sure...

A lot of people that do face book were asking me, why wasn't I buying any of it..When I asked them why, they did not have any answer other than a lot of people use face book...I said, a lot of people eat Mc Donalds, and buy Gasoline, and Smoke cigarettes and drink alcohol...Now that I understand...

ALL TRUE!



Gambling = put your money on the table and HOPE you win.... but there is no underlying reason why you should win other than you just want to.

[96z28ss]

I have a few shares of CHKR, Its my biggest loss so far. Its up today. However it may not get back to where I bought it. I was thinking of selling it and getting some Kimberly Clark KMB.

[GregWeld]

Originally Posted by 96z28ss

I have a few shares of CHKR, Its my biggest loss so far. Its up today. However it may not get back to where I bought it. I was thinking of selling it and getting some Kimberly Clark KMB.

No.... hold it. They pay a huge dividend which will help you catch up... and once they get past the CEO debacle it should snap back.

[BC69]

Greg - I respect everything you got going on with this thread, but the FB and Gambling thing is unfair! What is really is, is investing 106 at work.

Since it doesn't pay a dividend and seems to be falling like the rock I thought it might be. I'm out. I'm headed to a nice trip and don't want to return to see this thing in the teens.

Facebook is a GREAT company! But the valuation is why the stock is moving down. If you applied the same peer multiples of earnings, operating income, or revenue to Apple, Apple would be a trillion dollar company. So it didn't take much analysis at all to realize it was over valued. But it also doesn't have another company remotely like to compare too. Myspace at its prime in 2005 was bough by News Corp for $500MM, so if thats the one marker, its not a good sign. The smart money (and you did it too!) was in and out the same day. The really smart money was in pre-IPO and out at IPO (The venture capital, the underwriters, Goldman, Microsoft, management). The mom's and pop's are now just going to have to enjoy the ride.

Second: Growth stocks do not pay dividends and should not. When a company pays a dividend it is a signal to the market that the yield the investor will get from the dividend is higher than what the company thinks they can get by reinvesting it into the business. FB profit grows at 100% a year, so clearly they can use the money better than an investor can. Apple, while still growing had $100bn in cash and no smart acquisition targets so it decided to give that back. A sign that the company is maturing.

I know this is 102, but if we are being fair - picking a dividend stock is just as much of a gamble as picking a growth stock. (I know! I know! I am going to get flack for that!) When this gets to 103,104,105,106 and beyond if when you can learn some basics to help figure out the best move.

Also, I say all of this, and come off defensive because for young people just starting out it is very commonly advised to have growth stocks as the largest portion of your portfolio. You have time on your side and can afford the risk. Its for older investors that the shift to dividends and bonds becomes heavier. So I don't only the word of the dividend being preached haha!

[Bucketlist2012]

For me I just don't see face book as a great company...

Zuckerburg is a brilliant entrepenuer, and programmer, but he has never run a company..

Some of his buys lately have been on a whim.. And other than users, where is it's real value..

It is an information seller.. If it weren't for the underwriters, Morgan Stanley,etc.., it would be at 15 dollars..

But again, people have the free will to buy and sell what they want to..

I see no value in this company at this price, and at this time..

Dividend stocks are about products...They are only a part of the mix, but they sell TANGIBLE goods..And some that people cannot live without...

I don't see that as gambling due to the fact that people MUST buy toliet paper, soaps, Food, gasoline, and they will ALWAYS buy cigarettes, and alcohol, ect...

But then again, that is why we post, to share ideas, not to shoot each other down...I am just giving My opinion.

P.S. I am 52 and living off my Portfolio/Income, so my view is from that angle...Not from a younger Investor...Even though 52 is young....well youngish...haha

[WSSix]

So it's time for a little update. Yeah, it's not been very long since I bought my first shares of Coke(KO), Southern Company(SO), Whole Foods(WFM), and Occidental Petroleum(OXY) but I just bought some Kinder Morgan(KMP) so I figured I'd update. I decided to go ahead and transfer another chunk of money out of the mutual fund into a specific stock. I chose KMP for every reason Greg mentioned, that's it. I now have 38 shares of that company.

As for how the rest have been doing, well, not terrible, lol. I've already gotten a dividend payment from Coke and Whole Foods. About $36 between the two and it was of course reinvested. Coke, Whole Foods, and Southern Company have all gone up since I purchased them. Oxy has tanked. I'm down 20% from purchase price. I haven't a clue why. Maybe I bought at a historical high or something. All I know is they're busy as hell up here and the wells I'm blowing holes in have the good stuff flowing back to the surface. So hopefully they will rebound. I'm in this for the long run and not worried but Oxy alone has me in the red overall. I'll see how things are doing in another year and go from there. Or maybe I'll buy even more as the price comes down. Not really sure at this point.

I realize I now have two oil and gas companies out of five total in my portfolio even though they are in different areas entirely within the oil and gas industry. KMP is simply too good to pass up. I had to add them. I will not be buying another O&G unless I sell one first.

My thoughts are that I should add more companies instead of more money to the existing companies I already own. Spread my eggs around if you will. I should have more money to buy stocks with by the end of summer. Maybe during the August lull. I was thinking I would add Johnson and Johnson or P&G to the portfolio. How does that sound? Or should I see what my current stocks are doing then and maybe put the money into one of them instead? I'm leaning towards adding another company at this point.

Well, there's my little update. I said I'd post my results and there you have them.