Investing 102

[toy71camaro]

I thought this was a good read today...

what do to about the doom and gloom of the impending "correction"... basically? not a whole lot for us long term dividend investors. LINK

[Tony_SS]

Originally Posted by toy71camaro

I thought this was a good read today...

what do to about the doom and gloom of the impending "correction"... basically? not a whole lot for us long term dividend investors. LINK

I want to read that 2nd page w/o signing up on that site.

[Rybar]

Greg, what is your opinion on this article saying TNH is entering oversold territory.

http://www.forbes.com/sites/dividend...old-territory/

I have been looking to buy more of this stock and see this as an opportunity for a "sale price" but this article makes me weary as this sort of thing happened with BPT and that one dropped quite quickly after that.

[toy71camaro]

Originally Posted by Tony_SS

I want to read that 2nd page w/o signing up on that site.

Just sign up. its free. you can opt in/out of any email (I have it send me my daily portfolio updates). It has a lot of good info on there.

[WSSix]

anyone catch the Tommy Boy reference on that seeking alpha link?

[toy71camaro]

Originally Posted by WSSix

anyone catch the Tommy Boy reference on that seeking alpha link?

His callahan auto parts image? LOL yeah, i noticed that.

[GregWeld]

Originally Posted by Rybar

Greg, what is your opinion on this article saying TNH is entering oversold territory.

http://www.forbes.com/sites/dividend...old-territory/

I have been looking to buy more of this stock and see this as an opportunity for a "sale price" but this article makes me weary as this sort of thing happened with BPT and that one dropped quite quickly after that.

Sent you a PM --- I'm not sure I'd add to a current position.... unless you really need to average down. We're headed into summer -- and everyone knows summer is the time to buy -- but not sell stocks. With the run up we've had this year - this summer could take a pretty good dip and then it would be really "on sale". If not - no biggie.

With the economy seeming to be on the mend -- you need to be very careful with chasing "yield".... as interest rates rise -- stock prices will take a dip... Of course when, how much.... blah blah blah... We're in one of those periods where we're not sure what is coming -- better economy which will help stocks -- but if the economy is too good - we get a rising rate environment....

[Tony_SS]

A few pages back I was crowing about Bitcoin at $70 each. Many friends of mine screamed "bubble!!!" at that price and ran away... not me. Right now the price is $190.00 / bitcoin.

The question remains, is it an exploding market searching for its true value? Or is it a gigantic bubble?

Personally, I still think this is a good price. Markets are emerging, companies are creating ATMs for Bitcoin and we will see its use streamlined and mainstreamed. I think the opening door to get in is closing fast though. But I could be wrong, millions of users could decide to sell at once or have security breach at an exchange to drop the value. If that happens, I'm buying!

[GregWeld]

This morning I was reminded of something that is somewhat important... especially in this thread.


AT&T (T) will trade today "EX" dividend -- meaning - that if you owned the stock PRIOR to today - you'll get this quarters dividend payment. That isn't very important actually except that you might see T trade down the equivalent .45 cents per share - on what otherwise might me an up day for the market. This is perfectly normal - do not adjust your television set... LOL


What I picked up on though -- which I know and understand -- is that as the stock price has RISEN -- that wonderful dividend % payout has decreased on a percentage basis. I pulled up my spreadsheet to see that T is paying me 6.22% on my cost basis... but if you bought Friday -- you'd only (only?) be getting 4.75% -------- this is the same .45 per share but your cost basis would be higher.

WHY IS THIS IMPORTANT YOU ASK.... <like the old Romper Room -- I can hear you through my computer>

Well it's important IF --- big IF --- and WHEN --- big WHEN --- interest rates start to rise. As an investor -- and we're really talking big sum investors here -- but they're the ones that move the markets.... you're always doing the math on where you can earn money NET NET. So when and if treasuries etc start to rise --- and a guy could earn 4% tax free vs T's 4.75% taxable well... share prices will FALL because money will move out of T and into the other comparable investment.

WHAT I'M SAYING here is not that this is going to happen this week - or this year or even this decade..... what I'm saying here is to learn and pay attention to these market relationships! EVERYTHING is based on interest rates... WE have zero control of this but we can, do, and should, pay attention to them!

While we want our share price growth AND we want our dividend.... the share price only grows when someone is willing to pay more per share than we did/were. But the dividend percentage falls as the price grows.... at some point this math catches up to OTHER interest bearing investments... and the price will have to be adjusted to make it all "work".

What I look at is % return on my money. I live off my investments and their cash flow. I try to be somewhat tax adverse... so I trade VERY little.... I call up the old spreadsheet and think 6.22% (with 20% tax rate) is pretty decent and the company is solid as hell -- and well run. So I'm a happy camper.

Interest rates - in the environment the world is in right now - move pretty slowly. Don't fight the FED is an old saying that usually holds true... so as long as the FED is working hard to keep interest rates LOW.... the stock market is pretty good! But if the FED starts to allow those rates to rise... then just beware - and learn from - what happens to housing - the stock market - auto sales etc.

PLEASE do not read anything into this post other than exactly what I'm saying -- it's just a reminder for Investing 102 -- so that you don't forget about all the little things that affect the stock market. EARNINGS are the most important -- if they're good or growing -- we're golden.... and INTEREST RATES being low are good! There will be a point going forward that earnings are good and interest rates are low because the economy is good... once it gets TOO GOOD... then rates will creep up. We have no clue when that's going to be. We don't have to take any action... just understand the relationship.

[Sieg]

Thank you