Investing 102

[ErikLS2]

Greg, are those LLC's you invest in or LLP's since they have a General Partner? If you want to get out of it can you only sell your share of the partnership or do all the LP's and GP have to agree to sell the property? If you can only sell your share, how hard is it to sell and find buyers for? As you may recall, I'm in apartments too and seem to have a knack for identifying good opportunities more than I have the cash to acquire them. The manager of mine and I have talked about getting into something like this is why I'm asking. Thanks for all your input.

[GregWeld]

Originally Posted by ErikLS2

Greg, are those LLC's you invest in or LLP's since they have a General Partner? If you want to get out of it can you only sell your share of the partnership or do all the LP's and GP have to agree to sell the property? If you can only sell your share, how hard is it to sell and find buyers for? As you may recall, I'm in apartments too and seem to have a knack for identifying good opportunities more than I have the cash to acquire them. The manager of mine and I have talked about getting into something like this is why I'm asking. Thanks for all your input.

The reason you must be an accredited investor is the complete lack of liquidity of these types of investments. There is no market for the shares and I can not just sell to someone else. The GP must approve any transfer of the ownership of the shares. The group votes on any proposal to deal with the property i.e., sell vs 1031 exchange. You go along with the group and it's really the GP that makes the decisions - the investors are passive.

I would be referred to as an Investor or Member in the LLC.

This is one of the reasons I like to be a larger shareholder in the group... because then you will be heard by the GP should you wish to have some discussion about "something".


I also mistakenly referred to the paperwork as a PROSPECTUS --- it's really a PRIVATE PLACEMENT MEMORANDUM. I think a Prospectus is for a public company but they're the same for practical purposes.

[GregWeld]

Today's "market" is why I buy on DOWN days... because all of a sudden the market goes crazy UP.

There's a statistic - and I'll get it completely wrong -- but for an EXAMPLE only -- the statistic says that the market moves UP 10% of it's total for the year on only 2 or 3 individual days. If you miss those days - you've missed a big percentage of the year.

So those numbers are completely wrong but the point is that if you're not "IN" already - then you've missed the move - and the moves come and you're never going to know when that is.

Generally the market will move DOWN 15 minutes after you buy...

NOW -- THE CAVEAT.... AKA "Warning"

The major difference for me as an INVESTOR has been the mindset rather than the numbers. As an INVESTOR I EXPECT the market to go down - I totally understand that there will be periods when I'm getting my azz handed to me... regardless of how smart I think I might be. These periods might be weeks - or maybe 3 or 4 years! I'm totally prepared for that MENTALLY and CASH FLOW wise.

My point is -- you don't invest money that you are / might - going to need... so that you're not forced to sell in a down period. You need to be able to hold during the down periods in order to get the gains.

I used to freak out when the market went down 200 points -- or most of my investments were RED... and as soon as I'd trim some (sell) the very next day the market would move HUGE and I'd be kicking myself. There was never a "signal" that the market was going to move like that...

Now -- I've learned to keep plenty of cash for living on... and I invest the rest - I get paid those pesky dividends which just seem to keep on coming - and I've learned to buy when stuff goes down. When I do that... I look really smart on the few big UP days of the year.

[GregWeld]

As long as I'm being long winded this morning ---

Note that you'll look at your account after the close some time today (or maybe even tomorrow) and you should see your Annaly Capital Management (NLY) dividend in there...


But I would also note that on a very nice UP day that APPLE (AAPL) is down - albeit a buck or so -- that to me is a troubling sign for THAT STOCK... and I don't mean troubling in the sense that it's going down or whatever... but it just tells me that there's more SELLERS than there are BUYERS and that's a bit of a sea change. A year ago if we had a big up day - APPL would have been up $50! But now it's going against the grain and is flat to down on a day when Kimberly Clark is UP 2%!

When I see that kind of stuff -- I stay away. While a guy could "gamble" that it's a buying opportunity and get in front of the iPhone 5 release... My thought is that "what if it's a ho-hum" in the market place or just not the block buster people THINK it's going to be. Then it's a stampede for the exits and you get crushed.

I'm writing this as an INVESTING 102 piece only -- I'm not trying to predict what is or isn't going to happen... I'm just using this as an example of what I've lived to see many many times... It comes back to that "priced for perfection" post... and something else that people forget about is that many people have HUGE GAINS in a name like this... and when that happens... you start to think about trimming and locking in some of those gains. If you start to see some of that gain dripping away - you rush to lock them in... which causes the market to go down - which causes more people to want to lock in a gain - so the oldest rule in any market comes into play ---- MORE SELLERS than BUYERS... and even if the company is doing fine -- it's the stock market that dictates the stock price.

[Tony_SS]

Thanks for the insight and perspective on your rental situation Greg.

[toy71camaro]

Woot! good day in the market today.. making up for the last couple down days.

[Rybar]

Originally Posted by Sieg

S $1261 (I bought 1K of Sprint at $2.19 just because it was too cheap for the brand)

Sieg, have you checked your Sprint stock today? Well done.

[ErikLS2]

Originally Posted by GregWeld

There's a statistic - and I'll get it completely wrong -- but for an EXAMPLE only -- the statistic says that the market moves UP 10% of it's total for the year on only 2 or 3 individual days. If you miss those days - you've missed a big percentage of the year.

I love this statistic Greg, found a good chart that explains it, check out page 2:

https://content.putnam.com/literature/pdf/II508.pdf

[WSSix]

That's a good chart. Makes it rather easy to see what people talk about. I'm glad I'm in for the long run.

[Sieg]

Originally Posted by Rybar

Sieg, have you checked your Sprint stock today? Well done.

KO showed me some green too!