Investing 102

[GregWeld]

Originally Posted by sik68

Investors, here's an excerpt from The Intelligent Investor that really slaps you upside the head when we think to deviate from the rules in Investing 101...



Although it speaks about the un-sustainability of over-concentrating, it also shows that wealth is not about striking it rich, but is really about having the intelligence to grow money over time. I suppose that's the point GW keeps making regarding luck. Luck is certainly a part of the equation to get rich "quickly" and "easily"... but it's only the kindling. Turning riches into wealth takes intelligence and time.

Stay the course!


GW, I'm rooting for you on the 400 list!

Good points made here! Very good points.


You know - really - there are so many OLD sayings that actually MEAN SOMETHING if you care to listen.

Diversify
Pigs get fat - HOGS get slaughtered
Don't put all your eggs in one basket
Nobody ever went broke taking a profit
COMPOUNDING


I've said it a 100 times -- none of this is complicated. WE try to make it complicated.... because WE think we're smarter or WE think we can't loose... or WE think this is the sure thing...

<<<<< BUZZER >>>>>


Just buy good stuff -- best of breed names -- keep adding to the pile.... re-invest the dividends -- don't hawk your house -- strive to get debt free by retirement....


Then you dudes could come skiing with me in Sun Valley... go racin' with Charlie... and just generally mess around!

EEEEEEEEHHHHHHHHHHAAAAAAAAAA


BTW --- I'm a long long long ways from making ANY lists except my wife's S**T list.

[Vegas69]

I know I have my own thread on philosophy but what the hell.

The fundamentals of life and business never change. What happens is people forget what got them there in the first place. All good things come from labor and persistence. Get fat and lazy, you become broke and start blaming the democrats.

Greg is rich because he found an opportunity, took advantage of the opportunity, worked at growing his wealth, continues to work at growing his wealth, and will always work at growing his wealth.

My mentor Jim Rohn says, "Success is the refined study of the obvious." I can't think of a more opportune time to use it.

Back to my own thread.....

[XLexusTech]

Originally Posted by Vegas69

I know I have my own thread on philosophy but what the hell.

The fundamentals of life and business never change. What happens is people forget what got them there in the first place. All good things come from labor and persistence. Get fat and lazy, you become broke and start blaming the democrats.

Greg is rich because he found an opportunity, took advantage of the opportunity, worked at growing his wealth, continues to work at growing his wealth, and will always work at growing his wealth.

My mentor Jim Rohn says, "Success is the refined study of the obvious." I can't think of a more opportune time to use it.

Back to my own thread.....

Thanks for that.. it was a really good motivator for me..

[GregWeld]

Thanks Todd!


So here's the way I look at this -- I'm just not very eloquent about it....



Let's go back to my "employees"..... Where each dollar represents one employee. I like to think of them this way because you always must manage your employees. That takes some work. And if you ask most business owners - they'll tell you that THEY take less vacation and less time off than their employees do. It's their work ethic that is why they're the boss and not the employee.


The thread is not about ME.... The thread is about how YOU can be a successful investor using some of the simplest concepts that anyone can do. BUT -- always that dang big butt -- YOU DO HAVE TO WORK AT IT.

What we've already seen here is that many were lazy in their investing - and even though they had some dough stuck away - that dough was asleep or on vacation. The "company" 401K etc lulls people into thinking that they've done all they can by simply "participating". <<<<< BUZZER>>>>> Some have literally wasted 10 or more years of precious time languishing in these "plans".

My goal has been to be like Dorothy and show you the yellow brick road. That with just a little bit of work --- it can and does make a HUGE difference. But -- like what Todd just posted -- you can't think you're work is done. The outcome is far too important to allow yourself to go back into that mode of "I participated" therefore I'm done. You've got to make this a hobby - get into it just like we do our cars. We're always reading or participating with our cars... we never grow tired of it.

Health - Wealth - Cars/Hobbies... You need the first one otherwise the second one is useless to you... and the third one takes the first two if you really want to enjoy it. All of it takes constant work.

[Vegas69]

Originally Posted by XLexusTech

Thanks for that.. it was a really good motivator for me..

You're welcome..... Remember, motivation only gets the motor running. Discipline keeps it going. If I was managing my own money, I'd start by reading a good book, watching the market everyday at the same time, and listening to somebody way more successful than me(This Thread). Those are three great disciplines to start with.

You can only be great at so many things at once. I'm man enough to admit that I don't know enough about stocks or the market to manage my own money. It seems to me with something as important as your portfolio, you better be all in or all out. Learning all you can and gaining experience. Otherwise, you may do yourself more harm than good.

[GregWeld]

I think this article is worthy of a quick read.... and it's not for his personal portfolio --- but rather --- I think his way of THINKING is great! This is a kid that actually uses his brain to get a large picture about "sectors" and their possible issues.... I like that! He has a very good way to think about diversification --- that you don't need to be in EVERY sector - and in fact, there are sectors to avoid.

Remember that OTHER PEOPLES way of doing things may not have 100% merit... but there's usually a nugget here and there that should be considered and I think this writer has a couple of them. It's not so much the details -- but the "thought process".



http://seekingalpha.com/article/1280...g_income&ifp=0

[WSSix]

That was a good article. I agree with him about the tech and banking stocks. I don't care to follow or know enough about the sectors to get involved. Way too risky in my mind. Plenty of other sectors out there to choose from and still be diversified.

I've decided to take a gamble on a stock. It's only a small gamble and won't hurt me really if it fails but all indications are that it will be ok even if it's not a huge return. Considering I'm not trying to get rich quick with any of this, I figure why not try. It could work out well and I think I'm being conservative enough with my other selections so as not to be in risky territory. The company is Mid Continent Energy Partners(MCEP). They are a new company but are being run by experienced people. I'm interested in them for a few reasons. They are run by experienced people gives me piece of mind, they have a $0.50 per share dividend, the share price is low so I get more buying power with the dividend payment, they've increased their dividend twice already, and they are bringing in the petroleum like they predicted. They are a partnership like KMP so I did this under my Roth IRA to shield my tax liability. So we'll see what happens. Maybe it'll be a barn burner and I can retire after a few more years because of it Yeah, right. Regardless, I think it'll turn out alright.

[GregWeld]

Good for you Trey!


It's perfectly okay to take some risk.... you just need to be prudent about it... and you need to be in the head space that says - Oops it went to zero... okay... no biggie - maybe next time. Rewards don't come without risks. They key is to not "gamble" with money that is crucial - or money that you have other plans for "shortly"... where you put yourself into a "must sell at a loss" situation.


Several years ago -- I invested in a start up company. The shares cost me .53 cents each... I bought a bunch of them... the company then went public about 2 years later and it opened at $18 and went to $28.... RIGHT BEFORE IT WENT TO $1.70... I never sold any of it.... I used to tell myself "hey! at a buck seventy I still have a triple in it"! MY POINT IS --- I didn't have to sell, I wasn't worried about the investment because it was money that I could do without. It was a very small percentage of what I have (had) to invest.

Eventually we sold it all, in an all cash offer from EMC @ $34


Was it risky? Hell yeah! Was it rewarding? Uh... just a little.

[out2kayak]

Originally Posted by GregWeld

Several years ago -- I invested in a start up company. The shares cost me .53 cents each... I bought a bunch of them... the company then went public about 2 years later and it opened at $18 and went to $28.... RIGHT BEFORE IT WENT TO $1.70... I never sold any of it.... I used to tell myself "hey! at a buck seventy I still have a triple in it"! MY POINT IS --- I didn't have to sell, I wasn't worried about the investment because it was money that I could do without. It was a very small percentage of what I have (had) to invest.

Out of curiosity, how did you learn of the startup?

[GregWeld]

Originally Posted by out2kayak

Out of curiosity, how did you learn of the startup?

My wife spent 20 years in hi tech and we know everybody who's anybody in that industry in our town. Remember the old "better lucky than smart"... and it's not always what you know but who you know.

Want me to make a list of how many of those I LOST BIG MONEY in??