Investing 102

[GregWeld]

Originally Posted by pw2006

Thanks Greg! I have played around with most of the tabs, but never the change button. My 401k is with Schwab, and I like reviewing my Personal Rate of Return, but never found it for my other Schwab accounts. Very cool and thanks again!

BTW- I have way too much sitting in cash (20%) and fixed income (45%) right now due to a big sale in November. I have been adding to my holdings every Monday since Nov. Kinda hoping for a pullback so I can back up the truck and put these guys to work.

You never have to rush to put money to work. The stock market as well as other markets are open rather frequently.

Waiting for some "event" though - is generally not a very good long term strategy. For whatever reason - the market will run to the moon while you're waiting -- and then too - let's remember our time frames. If the market runs up 8% while you're waiting -- and then goes backward 10% -- do the math and we're not talking about a very large amount of money.

I had to laugh to myself - because some of you "think" like you're playing with millions of dollars and that 50 cents per share is going to make or break whether or not you have a profit/gain.... I had this same conversation with my trainer the other day. He asked "what should I be buying" because he had 10K ready to add to his account.... After a couple suggestions his next statement was that he'd watch the market and jump in on a pullback... So I grabbed pencil and paper and did some math for him. My basic premise - which was to rub his nose in his statement (since he kicks my sorry ass all the time) - was to make him realize the nonsensical point of his waiting. We're talking about someone who is going to scale in - and be buying 100 shares of something... a 1 or 2 dollar pullback was hardly worth the "wait". If he thought that a buck or two was important in the scheme of things.

Now --- a big pullback --- 10% or more... IF === HUGE IF === you're LUCKY and can catch that. Fantastic! But my guess is - when the market pulls back 10% -- you'll wait for 15%.... and so on.

Just saying.... that even myself - for an example - where I'm buying 10,000 shares or more at a time... I'm not waiting. Having said that - this next week with the sequester thing coming up - MIGHT BE - MIGHT BE - worth a wait. But we all know what can happen. The idiots do some kind of a "fix" and the market runs instead of falls back. Thus the age old problem of timing. It rarely works the way you thought. I hate that little man on Wall Street!

[GregWeld]

I read all articles like this with a bit of "jaundice".... because most writers have an axe to grind or an agenda of some kind. But if you read stuff like this and figure that some of it is actually CORRECT... it's just generally beneficial and particularly if you're NEW TO INVESTING. Because you haven't had the TIME to actually live through the ups and downs of a market -- and you may begin your investing life with many pre-concieved notions.

We have talked about rising interest rates and there direct correlation to the stock market. The generally accepted rule is that when rates rise - money comes out of the market - and goes in to interest bearing investments.

The problem with that is that it doesn't GROW your money... yeah you get the interest - but you lose the growth... and high rates are also when we generally have high INFLATION... so while 10% looks good on paper... it actually isn't.

Anyway -- Here's a "myth busting" article that has facts. Remember please -- the market rarely ever does what you think it will/should.... and all we can really do is ATTEMPT to have a better understanding of "things".


http://seekingalpha.com/article/1223...g_income&ifp=0

[96z28ss]

A few weeks ago I bought a few shares of Sturm, Ruger (RGR) they have a 2.8% yield, so I scalled in a bit. then it took a nice dip when all the teachers unions started to divest out of weapons and ammo. I bought some more on the dip. Today they reported there 4th quarter earnings.
They basically blew past analysts expectations. The stock has had a nice bump up today and its up even more in after hours trading. Oh and they also raised its dividend.

http://buzz.money.cnn.com/2013/02/27...ce=yahoo_quote

http://www.reuters.com/article/2013/...etsNews&rpc=43

[GregWeld]

Too bad you missed the SPECIAL DIVIDEND ($4.50 per share) paid back in December. You don't see that very often!!


Nice purchase by the way!

[GregWeld]

Be careful of this though, with Sturm Ruger (RGR).... this is a VARIABLE dividend. I'm only bringing it up here because of the investing 102 aspect for knowledge....

The Company also announced today that its Board of Directors declared a dividend of 40.4¢ per share for the fourth quarter, for shareholders of record as of March 8, 2013, payable on March 22, 2013. This dividend varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. This dividend is approximately 40% of net income.



You could be a big winner -- ala the special dividend paid back in December -- or the idiots in Washington DC decide to do something stupid regarding guns and it puts a big crimp in sales for a couple quarters. However... this appears to be a well run company - has a great quality product... and appears to be very shareholder friendly. Those are all good qualities to have in any company!

[96z28ss]

Originally Posted by GregWeld

Too bad you missed the SPECIAL DIVIDEND ($4.50 per share) paid back in December. You don't see that very often!!


Nice purchase by the way!

Yeah I saw that, can't win them all.

There is also only two ammo manufacturers that pay a dividend, I was thinking about jumping in some of that also.
Here is why

[GregWeld]

Just be certain you are well diversified!


The gun and ammo industry is under attack - to put it mildly... the wild sales of the last quarter prove that... What we don't know is what the whack jobs will cook up for the future. My guess / gut feeling is - little change in the long run... and in the meantime it's record sales for the industry.

[96z28ss]

Originally Posted by GregWeld

Just be certain you are well diversified!


The gun and ammo industry is under attack - to put it mildly... the wild sales of the last quarter prove that... What we don't know is what the whack jobs will cook up for the future. My guess / gut feeling is - little change in the long run... and in the meantime it's record sales for the industry.

Here is an article, it mentions one of the dividend paying companies ATK.
Basically its going to supply the department of homeland securities for the next 4 years. 450 million rounds. The article brings up another point why is the DHS buying BILLIONS of rounds of ammo.

http://www.infowars.com/dhs-purchase...-of-ammunition

I think i'm starting to get diversified.
F auto
FB social
CHD sex and cleaners
RGR guns
thinking about adding some OLN or ATK

[GregWeld]

Oh yeah -- the perfect portfolio Bob! Sex - guns - ammo - drugs.... and alcohol and cigarettes! All of the basic needs!


HAHAHAHAHAHAHAHAHAHA



Just kidding of course.

[GregWeld]

A good article that makes some very valid points. The only one I'd take issue with is the statement about the writers personal investing where he says he only buys stocks he thinks are undervalued (that generally means out of favor - or that nobody else likes them enough to lift the price). I don't personally like to think in those terms. Why go out of your way to find stocks that nobody else likes? Buy stocks in companies that you THINK have a chance to make you some money. That means more buyers than sellers.

Regardless of that point - it's worth a read if only for re-inforcement of basic principals.

Remember that - no different from my own "blogging" here -- these are just one persons opinion. They should all be taken with a grain of salt -- and are just "things to think about".


http://seekingalpha.com/article/1235...g_income&ifp=0