Investing 102

[GregWeld]

If you own Apple stock you won't be happy tomorrow!! OUCH!

It goes back to my "priced to perfection" post. I just can't own stocks like that
For this very reason!

[Rybar]

Originally Posted by GregWeld

If you own Apple stock you won't be happy tomorrow!! OUCH!

It goes back to my "priced to perfection" post. I just can't own stocks like that
For this very reason!

Can you elaborate Greg? Since they announced a dividend?

[96z28ss]

They didn't make the number they thought they would.
I don't own the stock, however I do think it will actually go higher. They missed the expectations cause phone sales were down and they think its cause everone is waiting for the Iphone5 due in the fall.

[Rybar]

I see here: http://www.ft.com/cms/s/0/c81ff6a6-d...#axzz21aR6T6Iw

I wish I could buy Samsung anyways

[GregWeld]

Here's a kind of long article -- but it's a valid discussion to check the pulse of dividend stock investing -- something I've preached (harped on?) for this entire thread.

I like to read articles that might be contrary to my own beliefs - to see if there's something I can learn... and there's always something to be learned.


In the end - the article says we're on the right track.


http://seekingalpha.com/article/7370...g_income&ifp=0

[GregWeld]

Originally Posted by Rybar

Can you elaborate Greg? Since they announced a dividend?

A "numbers miss" ---

Having said that -- the miss is a miss of ESTIMATES... which has always driven me crazy. Some guys sit around and GUESS what kind of sales and profit a company is going to do.. and if the company DOESN'T (or does) make those numbers people get all crazy and sell etc.

For a company like this -- a big drop in the share price is probably a "gift" and will allow a nice entry point to a stock that should continue to do very well. They signaled nothing wrong.. sales are good... profit is good...the products are fabulous.

But this is a glimpse into the market when stocks are priced to perfection... if everything isn't PERFECT - they get a huge haircuts in a hurry.

If I had a million in cash today - I'd be a buyer. But since I just bought into another apartment complex... I'll just sit on my hands and watch.

[Tony_SS]

How's the renting business Greg? With new home sales dropping I bet it's fairly strong.

[ErikLS2]

Originally Posted by GregWeld

Here's a kind of long article -- but it's a valid discussion to check the pulse of dividend stock investing -- something I've preached (harped on?) for this entire thread.

I like to read articles that might be contrary to my own beliefs - to see if there's something I can learn... and there's always something to be learned.


In the end - the article says we're on the right track.


http://seekingalpha.com/article/7370...g_income&ifp=0

Great article Greg, I'm curious how much you pay attention to valuations of the dividend stocks you buy? Do you just look at the chart or do you get into P/E ratios and the other ways to determine value and if so what are your prefered tools to use to determine that value?

[GregWeld]

Originally Posted by Tony_SS

How's the renting business Greg? With new home sales dropping I bet it's fairly strong.

Well Tony... I'll have to answer this carefully - because the thread is not about "me" -- it's about investing. I use "me" examples because they're real life - and I know "me" and what I'm doing and why I'm doing first hand... rather than making statements about a guy I knew who knew a guy that did "X" once...

So that said...

I have no idea how the rental business is going here in the Great Pacific NorthWET. Seriously -- I have no idea. I'm not in the rental business. That, on the surface, sounds like a smart azz answer... but here's the Investing 102 part.

I'm an investor. As an investor I'm presented with opportunities, and as an investor - it's my "job" to diversify my investments - to make my capital base grow - and to extract a return on my investments. Commercial property - and the income that it can generate - is just one type of investment a guy can make which adds diversity.

So -- when an opportunity to invest in some solid commercial real estate presents itself - I take a look at it. The type I do are LLC's (Limited Liability Company). This particular one is an apartment building but I also have free standing commercial buildings. For the most part they're totally similar.

The way they work is that there is a "general partner"... the GP does all the work. He finds the investment. Ties it up with earnest money and all the other required agreements etc... then he puts out a prospectus to people he thinks might be interested etc. Typically they'll start with previous or current business partners -- so many times it almost becomes a "group" of people that have been investing with this GP over and over... Anyway... the prospectus spells out all the details -- the plan going forward -- how much will be financed - at what rate - and blah blah blah. If you're interested = you let the GP know and they'll offer the shares (this is all spelled out in the prospectus) based on how much you want to invest --- but also --- you have to fill out forms stating that you're an ACCREDITED INVESTOR... which is based on your net worth - your annual income - and your knowledge/experience in investments of this type.

So the long answer to your question -- is that I have no idea about managing rentals - or how the market is doing - or where it's headed etc. What I do know is that this GP has always made me money (going back over 20 years now) - the ROI (return on investment) has always been top notch and that he's into apartment complexes for the long haul. This particular one is 55 shares total (I asked for 12 shares but got only 9) -- with the 55 shares representing a down payment of 50% and a very favorable long term financing rate... It is PROJECTED to have a healthy cash flow (which flows back to the share holders)... THAT is what I'm looking at... because for me - it's just an investment.

I actually own 2/3rds of another apartment complex not far from where I live. I've owned it for maybe 8 or 9 years now. I've never seen the building. Don't care. What I do care about is that it's with a great management company - I get a check every 6 months - and eventually we'll decide to 1031 exchange it - or sell it - or whatever... but again... it's just an investment. Just because I might buy General Motors (I don't actually have any) stock doesn't mean I'm going to go check on their buildings or even buy their products... I own McDonalds and Coke - and I don't eat there or drink Coke but I know they're well run companies that pay a fair dividend... and generally their stock goes up more than it goes down!

[GregWeld]

Originally Posted by ErikLS2

Great article Greg, I'm curious how much you pay attention to valuations of the dividend stocks you buy? Do you just look at the chart or do you get into P/E ratios and the other ways to determine value and if so what are your prefered tools to use to determine that value?

Erik -- I really don't pay much attention to P/E's etc.... but that doesn't mean they're not important.

I have a rather loose version of how I invest. I look for best of breed companies that I know and understand what they do - I check their charts - I look for a balance of growth and dividend - I look to see if the dividend has increased over time - etc.

There's tons of info and criteria etc -- but I really don't get caught up in that stuff much... it can steer you into an investment based on numbers rather than investments you love to own... and I have to like the company FIRST and then the other stuff kinda takes care of itself.

Since I'm an investor rather than a trader... the stuff I own pretty much has normal P/E's etc. So I guess that's why I don't use that as a criteria. I just want to invest in stuff that has a HISTORY of going up in value over time - and that's going to give me income.

One of the things I've preached on here is to keep it simple. It really isn't rocket science although a guy can make it that way.