Investing 102

[GregWeld]

Originally Posted by avewhtboy

Maybe so but I am firm believer in being an active investor, meaning follow your investments diligently, which can lead to daytrading...

No. Sorry, it doesn't. If that's what you think is investing then you just don't know anything about investing.

[GregWeld]

I loved Art Cashen's statement this morning about INFLATION:

He says that banks have enormous balance sheets because they aren't lending... and if they aren't lending people and businesses aren't spending if people and businesses aren't spending then that's why we don't have any inflation!


When you think about your house going sky high a few years ago - it was why? Because the easy money let everybody buy a house -- and they went thru the roof price wise... there was no value there - it was just pure inflationary pressures.

Individuals REPAIR their own balance sheets by NOT spending, saving more, investing... growing their top line (income) and trimming expenses. While it might not "FEEL" as good as the paper gain of their house going up 100K a year.. in the long run it's far more healthy. Saving and investing is REAL cash -- paper is just that -- paper.

[avewhtboy]

Originally Posted by GregWeld

No. Sorry, it doesn't. If that's what you think is investing then you just don't know anything about investing.

Full time daytrader for 10 years, so I may know something, not everything...

[GregWeld]

Interesting data (evidence?) that there was some money sitting on the sidelines waiting to be invested.

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Equity funds have this week seen the strongest inflows for more than five years as global shares surged and a compromise deal on the US fiscal cliff boosted investor confidence.

Net inflows into equity funds monitored by data provider EPFR hit $22.2 billion in the week to January 9th – the highest since September 2007 and the second highest since comparable data began in 1996. Emerging market and world funds, which had record inflows, drove much of the expansion.



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We've discussed before -- that like anything - in order to go UP we have to have more buyers than sellers... and when new money floods the market - they're buying. We'll see how long and how much...

[Bucketlist2012]

Originally Posted by GregWeld

I just sent an email to my bond broker and instructed to sell my entire muni bond portfolio. I think we are going to start to see interest rates rise. Houses are selling. Employment seems to be improving. And in order to make money you must be AHEAD of the game many months. If I wait to be certain it can make a giant difference. As low as rates are right now, a very small move up would mean a huge drop in bond values. Since I have a nice capital gain now. I'd prefer to lock that in. And if I'm right I want to have even more money in equities.

Greg, I did something just like that...Due to the conditions , I am decreasing my Bond exposure and increasing my Dividend Stock exposure.

Also I am selling off some of my "Insurance",Precious Metals, and going into Dividend Stocks.

I feel the Interest rates are going to rise and hammer Bonds, and i feel that I have got all the gains I can out of my Precious Metals.

Normal Investing would say own more Bonds the older you get, and it seems counter intuitive to go heavier Stocks, but with the present conditions and Politics, I am decreasing my Bonds and Precious Metals and increasing my Dividend stocks...

Mike

[GregWeld]

Smart move. If the economy is going to come around - which I think it is.... and houses are selling again... rates are going to rise from here.

Now for those that don't understand BONDS. People buy BONDS because you get 100% of their capital back upon maturity. That is - if you buy a 5 year bond - you'd get semi annual interest payments (NOT dividends!) each year and then at maturity you'll get all your cash back.

Okay - so big deal!? Right!? Well.... the catch is that if bond yields (interest rates) RISE -- then the VALUE of your bond declines until it's STATED yield meets what someone could get by buying a new bond at current rates. Not a big deal IF -- BIG IF -- You're holding until maturity... but then let's say you have a 5 year bond @ 4% -- FIVE YEARS is a long time.... and it's ONLY going to pay 4%. Period. If I want to earn more money for the next 4 years... I have to sell that bond at a loss of face value... or I have to accept a sub par interest rate.

Right now -- I owned bonds that paid above market rates -- therefore they were worth MORE than face value... so if you think rates are going to go up -- then not only would I lose the CAPITAL GAIN from the sale by holding to maturity -- I'd have below rate interest rate income as well and if I wanted to change that anytime before maturity I'd take a loss. So why not sell now - capture the capital gain --- and invest in something that is a little better going forward. Perhaps.

I hope that makes some sense.

[GregWeld]

Now here's a TREND we need to see more of!!


http://www.foxbusiness.com/news/2013...hire-veterans/

[Sieg]

Originally Posted by GregWeld

Now here's a TREND we need to see more of!!


http://www.foxbusiness.com/news/2013...hire-veterans/

It will be interesting to see how this plays out.

Wonder it there are enough "qualified" candidates to form a nationwide school security program?

[toy71camaro]

Originally Posted by GregWeld

Now here's a TREND we need to see more of!!


http://www.foxbusiness.com/news/2013...hire-veterans/

Thats a great trend for the US economy on two fronts (more US sales, and more US jobs)... but how does that relate to the WMT stock holder?

My initial thoughts is that it would/could bring down some of their profit margin (made in the US = more expensive) and more jobs = less bottom line.

Although, its great publicity. lol. How would you play this? I certainly dont think its a game changer on either front (buy/sell), and neither have anything to do with investing 102 (long term hold). But just curious.

**I do not own any positions in WMT and do not plan to within the next 72 hours.** heheh

[GregWeld]

Originally Posted by toy71camaro

Thats a great trend for the US economy on two fronts (more US sales, and more US jobs)... but how does that relate to the WMT stock holder?

My initial thoughts is that it would/could bring down some of their profit margin (made in the US = more expensive) and more jobs = less bottom line.

Although, its great publicity. lol. How would you play this? I certainly dont think its a game changer on either front (buy/sell), and neither have anything to do with investing 102 (long term hold). But just curious.

**I do not own any positions in WMT and do not plan to within the next 72 hours.** heheh

Nice caveat there!


I personally HATE Wal Mart (WMT) --- I wouldn't shop there if the crap was free... IMHO they represent all that is wrong in America. They killed good factory jobs in the USA many years ago by shopping their inventory offshore... and the very people they sold that cheap crap too were the ones they were putting out of work. The more they bought - the more factories closed. Remember when you bought a toaster made in the US? That was made by low skilled under educated US middle america....

So now that's how I feel about Wal Mart ----- I don't really like their retail model -- high volume low margin. I'd buy COSTCO over Wal Mart if I wanted that retail exposure.... And I don't think this "move" will do anything -- near term -- but long term -- it can help AMERICAN jobs -- and if they're successful with the products and price points OTHERS will copy ---- and then that's not really a Wal Mart share booster -- but it's a booster for all of America. And that's ALWAYS good for the stock market.