Investing 102

[GregWeld]

Dave (Flash for those that don't know),


BRILLIANT!



If someone IS NOT taking advantage of the greatest "gift" in the last 100 years, i.e., LOW relative cost and historically low interest rates.... I feel sorry for them.

[WSSix]

Well, then add me to that list. I'm simply not in a position to buy a house right now. That's a big part of the reason I'm trying to get out of the oil industry and back to GA with a more steady hours wise job. I simply can't make any long term plans beyond saving and money management. I'm tired of renting.



I sure do wish I hadn't looked at my stocks today, lol. Should have waited to get into the stock game til today. Would have been some good sale prices.

[JKnight]

Even though I am invested for the very long term 30+ years, I'm starting to think that going to cash through the end of the year might be worth the sell trade commissions.

Edit: I won't do it, but I have to say it's crossed my mind.

[GregWeld]

Originally Posted by WSSix

I sure do wish I hadn't looked at my stocks today, lol. Should have waited to get into the stock game til today. Would have been some good sale prices.

It NEVER works that way. The longer you wait - you just miss out. And when the market takes a dump -- then you wouldn't buy because you'd be afraid to pull the trigger.... then the market goes UP 500 points and then you jump in so you'd have missed the "sale". Trust me.... you're thinking way too short term. Buy - get the dividends - they keep coming regardless of the price you paid... and 3+ years from now - you'll look back and wish you'd have bought more when you did.

[WSSix]

Oh no, I'm not trying to time anything or looking short term. It's just one of those days when you go damn! when you look at the value of your assets. That's all. I'm sure it will come back up and I do like the dividends

[GregWeld]

Originally Posted by WSSix

Oh no, I'm not trying to time anything or looking short term. It's just one of those days when you go damn! when you look at the value of your assets. That's all. I'm sure it will come back up and I do like the dividends

Remember --- When I say something to YOU --- I'm also trying to say something to EVERYONE that reads this thread....


I feel your pain -- just multiply it by "X" amount (pick a large number) 'cause nobody is immune to this rout!

Ask me how the 2000 shares of Apple worked out.... No... don't.... I don't want to start weeping in my keyboard.

[GregWeld]

Here's one more reason I shy away from the "hot" IPO's (Initial Public Offerings).... because usually THEY SUCK!


It's GAMBLING not investing.... when you buy an unknown earnings stream (or in most of these cases NO earnings!).



Cut and pasted this little "gem"....



Groupon was already the worst-performing major stock in America in 2012 and the third-quarter debacle will only add to the stock carnage. In after-hours trading immediately following the earnings release, the stock fell by 15.8% to $3.30. Groupon’s IPO priced one year ago at $20. Groupon was arguably already the worst of this era’s three big tech IPO’s, which included Zynga and Facebook.

[Rybar]

Originally Posted by GregWeld

Ask me how the 2000 shares of Apple worked out.... No... don't.... I don't want to start weeping in my keyboard.

Man, Apple has been dropping I have been thinking about your post. I wonder if this is one of the reasons why:

http://thenextweb.com/mobile/2012/11...n=social+media

[GregWeld]

Originally Posted by Rybar

Man, Apple has been dropping I have been thinking about your post. I wonder if this is one of the reasons why:

http://thenextweb.com/mobile/2012/11...n=social+media

Well -- you never really know... but my guess is based on age old money management. i.e., People tend to sell the stocks with the biggest GAINS first. So given Apples (AAPL) outsized gains... if a guy wants to lock in his 15% Long Term Capital Gains tax... he'd want to sell some of this stock. As more and more people do that - it starts a cascading of selling... because as the stock drops - more people rush to lock in these huge gains.

While there is always a "basic" or fundamental reason to own a stock (or buy a stock)... human nature is hard to factor out. When shares are going nuts on the upside - everyone piles in - and drives the prices even higher which attracts even more buying. It works the same way on the way down.

If you want a prime example of this - just look at the housing bubble. EVERYONE wanted to buy a house - or buy a house and flip it... on the way UP.... when the prices stopped going up and started to tip over the edge - the rush to sell exacerbated the decline in prices. Then you had a period when NOBODY wanted to buy a house - at any price. Even though my brain would tell me that is when you want to buy. Buy low... is how you make money not buying at the top.

That is what I think we're seeing in the market right now. There's a ton of gain in the market in general over the last couple of years. We're coming into year end. There is uncertainty over the tax treatment and possible negative changes... so why not lock in what you have and wait to see what happens.

For long term INVESTORS that doesn't work out well.... you'll sell at the wrong time and buy at the wrong time. It's better to just add to what you have at lower prices when you get the opportunity. Go back and check out the long term charts and see (be re-enforced) that these "blips" happen in the market. So for IRAs/ROTHs etc -- steady is the course.

For me - or people like me - that actually live off their investments... we have to do things a little differently. I try to get liquid if I think a buying opportunity is in the works. Lock in some gains and then sit and wait. Remember - as prices drop - the yield RISES.... Living off that yield, I like 5% over 3.5% so I'm always HOPING stocks have a melt down and I can buy and raise my yield/return.

My guess is Apple, in particular, comes out with earnings and sales numbers that just crush everyone else - and it will be off to the races again. But in the meantime people will lock in those gains.

But I've been wrong before so this is just another "investing 102" discussion of what may (or may not) be what we're seeing.

[mdprovee]

Yes Apple is killing me...I want to pul out, but am patiently waiting for it to come back. We will see if that is the right decision.