Investing 102

[GregWeld]

Originally Posted by WSSix

That's not a bad idea, Bryan. I might try that next time just to see if it works out. Sure, in the long run it won't matter but it would be nice to one, ensure you don't buy at a spike like you mentioned, and two, basically bargain on the price of your purchase.

The "bargaining" you mention is exactly what this is -- in a round about way. You say what you're willing to pay --- and if someone is willing to sell at that price -- then GREAT. If not - you can then choose to set a different price.

I would NEVER set a limit order above the current market price.... I always go below... if you get filled great -- if not -- you have time -- wait for another day.

I always buy on DOWN days... thus the lower limit price. At some point during the day -- someone comes in and hits my target. Of course it can always continue to fall... but that's a different issue.

[GregWeld]

So here's another strategy that I employ from time to time. Today I used it.


LuLuLemon (LULU) sold off big time today due to the CEO announcing she was stepping down. There was no reason given for her departure -- but the company just came out with blow out --- as in great --- numbers for the quarter. Sales were up huge - profits were good etc.

But the shares were at $81 -- and this morning are under $70....


I'm taking a giant leap of faith here and thinking that numbers (business) is good... and maybe the CEO is just simply leaving. Sometimes people actually make or have so much money - they just don't need or want to work anymore. :>)


So I owned 1000 shares @ 80ish. This stock pays NO DIVIDEND -- so I never invest much in just plain "growth" stocks. That's because of my own personal situation. I just don't really need the gamble of pure growth.... I like the income and some growth that dividend stocks give me. But I'm certainly not against growth stocks. I just own them in very small numbers rather than my usual 10 and 20 thousand shares per name -- I'll buy 500 or 1000 or maybe 2000 shares.

So with the shares almost $12 below my cost level -- I BOUGHT 3000 more shares. With this purchase -- I now own 4000 shares @ $72.75 -- and IF -- BIG IF -- the shares manage to get back to say $75ish -- I'll sell off half... get some cash back -- and end up (hopefully) with a lower cost basis going forward.


My "theory" in doing this is that while I might not have a gain -- I should be closer to where the market is currently. I would only do this in a name that I truly believe is a good well run company regardless of the "market" conditions.



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A CAVEAT here...... I once owned 8000 shares of a company that started to go down because interest rates were rising.... as it went down - I doubled up - to 16,000 - then again to 32,000 shares and so on. I finally threw in the towel when I owned 93,000 shares and it was "only" down a buck a share. So this theory doesn't always work. But 9 times out of 10 it has for me.

[sik68]

Hey Greg, search "lululemon bend over test"

They had a rash of problems lately, and are the butt of a lot of jokes. A load of their pants slipped through the cracks in quality control, and the shear number appears to be larger than they once admitted to. I think the CEO was squeezed out.

[GregWeld]

Yes Steven I knew about the see thru pants.... And that may very well have cost the CEO her job.... Unless they announce that - I guess we'll never really know why she's "leaving".

I'm really more about the numbers -- and the numbers are/were great. My wife and Daughter shop there -- and the retail stores are always busy... and their quality is top notch (except the see thru pants -- and then I wish they'd have just kept selling them!! LOL).

This is another one of those backyard buys I do from time to time... I bought Apple at $85 after coming home from the mall... having seen a line of people trying to buy their stuff... That worked out pretty well.


We'll give it some time -- a quarter or two -- and see where the chips fall.

[ErikLS2]

Oh Greg almighty! Have you taken a look at TSLA Tesla? I know it's had a huge run-up lately but it recently was rated the best car Consumer Reports has EVER tested. They are putting up their Supercharger centers quickly among other things. I'm fully hybrid trained and certified and all that, and thinking of trying to go to work for them, they don't even have service centers set-up in Phoenix yet.

I know it's speculative but thinking about putting a little play money (that I can afford to lose) in it and see what happens. Just wondering what the Investing 102 guru thinks? If their is going to be a big time electric car player it looks they they'll be in the running for sure.

[GregWeld]

Originally Posted by ErikLS2

Oh Greg almighty! Have you taken a look at TSLA Tesla? I know it's had a huge run-up lately but it recently was rated the best car Consumer Reports has EVER tested. They are putting up their Supercharger centers quickly among other things. I'm fully hybrid trained and certified and all that, and thinking of trying to go to work for them, they don't even have service centers set-up in Phoenix yet.

I know it's speculative but thinking about putting a little play money (that I can afford to lose) in it and see what happens. Just wondering what the Investing 102 guru thinks? If their is going to be a big time electric car player it looks they they'll be in the running for sure.

A buddy just took delivery of his and absolutely LOVES it... last night a lawyer buddy was here for dinner and he's thinking he might buy one... dumping his MBZ S55...


So here's my take on it as an investment. If I was a young guy and had some play money - I'd be buying it. I'd also EXPECT it to be a bit of a wild ride... this is a new manufacturer - building a new technology - THERE WILL BE BUMPS IN THE ROAD. A battery recall - a new model that doesn't sell - etc... but I agree with you - they seem to have a good grip on what they're doing.

As a car guy -- we've all been talking about this company. The downside of this rather expensive car is either the lack of charging stations - the time it takes to re-charge - or the batteries capable of getting some range out of it.

Tony would like to drive it over to Sun Valley from Seattle - as we'll be over there... but can't figure out how it would work - because he'd need to make a two day trip out of what should be a one day drive. The reason - charging... but WHERE is he going to be able to charge....

He and my lawyer buddy just commute to downtown and home again for work -- and this car works flawlessly for that... the problem is doing almost anything else. And it's a chicken and an egg issue -- not enough cars to justify charging stations - not enough charging stations to justify buying a car... And NO STANDARD set for the type of plug in etc.

I think all this will be over come eventually.... and more people will want this technology.

[WSSix]

In my opinion, another thing to think about possibly is what is your particular take on their direction, goals, product etc. Sure, we are here to make money with our investments but another aspect is what/who are you willing to support. There are companies I flat out will not support so I will not invest my money in them regardless of how good of an investment it is. Maybe that's naive or flat out dumb but I don't care. Meanwhile, there are others I invest in simply because I believe in what they are doing. Now that Tesla has paid back their loan and to me is showing they are serious about making a car versus get government loans, receive fat paychecks, and then declare bunkruptcy I may start looking into them, too. Could it pay off in the long run? I don't know. I do however believe in supporting real alternatives to energy and transportation. So, I think I'll put my money behind my beliefs to an extent of course. I'm certainly not going to bet the farm on this type of investment. Your opinion may vary.

[GregWeld]

Trey -- That's good thinking -- and there's nothing wrong with investing what you believe in and leaving other stuff alone. I'm more of a whore when it comes to that stuff -- thus my investments in Altria (MO) even though it's tobacco and booze... and I do neither of those! I just like it that others are willing to pay me to go have fun while they kill themselves!


That's been the drum beat of this entire thread -- just look around -- invest in what you see and know and understand --- it's not rocket science -- and in fact, people make mistakes and loose money when they stray from that line of investing.

[GregWeld]

Well the last couple days were a little wild... hope some of you were able to get in on the two day sale!


Bought more LULU down at $66.... but regardless of where it goes from here I've hit my share limit (5000) so we'll kick back now and see where that goes. You guys can watch me get sliced and diced or (hopefully) see this play out favorably. It will take MONTHS.... because nothing is going to happen until the search for a new CEO is finalized. Depending on who they hire -- (MY GUESS) -- will make or break this investment. I really invested in the company (my initial 1000 share purchase) because I like the company --- then the big event (CEO "quits").... and the shares tank. Stuff like this happens in investing. You have to learn to deal with it. It's why you NEVER put money into ANYTHING that you may need down the road. Remember the little guy on Wall Street knows everything -- and he knows you're gambling -- and he'll know you need the money -- and he's there to kill you!!

Anyone in the gold or silver market??? You're getting absolutely killed --- and gold and silver don't pay you to wait. That market is like playing oil futures - better left for the big boys.

[GregWeld]

How many of you are learning to only buy on down days.....???