Investing 102

[Sieg]

I stuck my head in the sand June 19th and just pulled it out today. Did something happen?


If I was in a good cash position to make some buys.....Monday had potential.

[GregWeld]

Originally Posted by XLexusTech

OK so the "stop investing" is referring to the gamblers not the investors I guess...

No that's not what I was trying to say. What I was saying is that the RETAIL investor -- mom and pop folks -- that contribute to 401K's etc -- tend to (as a group) stop investing or contributions or cut back on their contributions... in down markets. Doing exactly the opposite of what they should do.

The individual investor/trader (they're all the same - except for the holding period)... does the same. They buy on up days and sell on down days. The opposite of what they should do.

[GregWeld]

Originally Posted by Sieg

I stuck my head in the sand June 19th and just pulled it out today. Did something happen?


If I was in a good cash position to make some buys.....Monday had potential.

Yes you missed it -- WE all made a million bucks during that time frame.

[GregWeld]

Originally Posted by GregWeld

Knowing when to SELL is far harder than when to buy.... I use the same resistance in selling as I do buying --- I sell slowly... because it never fails that the day after you sell -- the market goes up.

The hardest part to selling is to question why you bought in the first place.

Here's the deal... if you look at the chart of the stock -- and you check it's total return over a long period of time.... Are you selling because it's down this quarter? Are you selling because you have too large of a gain? Or is it just portfolio rebalancing?

Today --- I asked my broker to sell ALL my BONDS.... Why? Because I have nice gains in them --- I just got the June interest payment... and I'm relatively certain that going forward my gain is going to turn into a loss as interest rates rise. I'll probably be wrong - but nobody ever went broke taking a gain (profit). I've owned them all longer than one year and a day -- so will be taxed at long term capital gains... So this is purely a "plan" -- and the trade off is I will loose the TAX FREE income.... but most of this laddered bond portfolio is out 2 - 3 and 4 years from now... I'd rather NOT loose the capital appreciation and have to hold the lower interest rate return for that time period.

IF -- big IF -- The economy is doing as I feel it is -- which is MUCH better than the unemployment numbers tell -- then we'll have a good XMAS selling period for retailers -- housing is making huge gains -- cars are selling like hot cakes etc.... so I'd rather chase that than hold tax free munis at 4 and 5%. I've started to build a position in FORD (F) etc.... I'm late to that party but I think they're just getting started on the road to recovery. So I'll position accordingly.

Sometimes a guy just manages to get it right......


That post was dated JUNE 5th....




http://www.usatoday.com/story/money/...funds/2460831/

[HAULNSS]

Does anyone have any wisdom on the Sprint merger?

Shareholders are expected to receive approximately $7.65 per share (or an option to convert their current Sprint stock holdings to "New Sprint common stock"), part of a $16.64 billion pie. Softbank already owns a 70 percent stake in Sprint, which it purchased earlier this year for approximately $20.1 billion. Should this merger go through as it's expected to next month, Softbank and Sprint will become one.

My wife has had a few shares for awhile and now needs to decide if she wants to hold it or sell it. I haven't had much time to dig into the history or the 'word on the street' to know if the "post merger" company has any promise.





The company I work for just went public today and had the big IPO day at NASDAQ. Hopefully, there will be stock options for employees next year.

Randy

[GregWeld]

Randy --- Your decision is simple....

Do you think SPRINT is a viable cellular provider going forward. Or not.

If not -- then cash out and use the money to invest in something you think has more potential going forward.

If yes -- then let them exchange the shares for the new ones...


Here's my personal view.... or how you might find an answer. Go around to every friend you have and ask them who their cellular provider is...

[WSSix]

Originally Posted by GregWeld

Actually --- the "RETAIL INVESTOR" which is what we are called in the industry - DO STOP investing in down markets....

Good call. I honestly didn't even think about those type of investors when I made my comment. I guess that's a good thing from the stand point of being programmed not to sell at the first sign of a hiccup. I was referring to the people that do know there are options and or methods of investments that will make them money or set them up for the rebound during a down period.

[GregWeld]

I woke up this morning thinking about what "investing" really is...

To most it's trying to game the system. Trying to buy "stocks" etc at one price and hope that when they want to sell - they're higher.

Here's what an INVESTOR should be focused on.

When you buy shares of a company - you are now a PARTNER in that company. Many of you own and operate your own small companies. You've not only invested your money - but you've also invested a great deal of your TIME. Maybe 15 or 20 years... You've been thru good times and bad and managed to survive and even prosper. STOCK investing is the same. Before you buy - ask yourself if you'd like to be a part owner (which is what you're going to be!) in this company. Do you like the products etc. Before you'd become a partner in a business - you'd hopefully understand what they do as well.... You'd never just blindly give someone your money because they asked you to "invest" --- hell no! You'd pester them with all kinds of questions. Cramer calls this "doing your work". When you do a modest amount of "work" beforehand - you'll feel better about your investments.

But here's the important part. When you think of yourself as a PART OWNER rather than "I'll buy some stocks"... you'll become a far better investor, and you'll be more likely to really enjoy the process thru the good and the bad.

You wouldn't put your money in your own company and then have a bad week or a bad month - and then just decide "I'm outta here" would ya? You'd only do that if you didn't really believe in the value of the company to begin with.... So don't become a partner in something you don't believe in to start with!

This reminds me of a friend in Seattle. We're both "boaters" and belong to the same club etc. We'd occasionally hook up on the water -- and the kids were the same ages etc. Eventually talk would turn to business and eventually that turned into a possible business deal. We were going to buy a city block - tear down the 1 story buildings - and put up a 4 story "mixed use" building - retail on the street level and apartments above. One day at lunch as we're getting into the "partnership" details (I was the bank - 51% - he was the managing partner - 49%) - he asked me. "Do you like pride of ownership or the depreciation and tax advantages of a building"? I said --- Pride of ownership. He said -- then our partnership wouldn't work out very well because I just want to cash flow buildings and then dump them within 10 years. He was right on! We wouldn't have made good partners at all! We had a nice lunch and that was that. Had we done the deal - I would have driven by and thought the building needed to be painted.... he would have let the paint peel off as long as we had full occupancy. I'd have gone crazy... I want to drive by and point the building out and say "I own that bad boy" and be proud of it (and make some money off it). We were polar opposites. We're still friends. I understand the way he wants to do business and he's quite well off... his method works for HIM. My guts would have been churning daily had we done the deal and I'd have been looking for a buyer for my "investment" and probably taken a loss.

Does that make sense to you guys.

[glassman]

That right there is true maturity not drivin by greed but savoy business practice. Most people in that arena would of tried to "work something out", when in fact, IT DOESN"T WORK!!.

Ya wouldn't of still been friends 5 to 10 years later, i've been told this many times in business "its just business", when i'm thinking, "ah, no, its just your greedy mismanaged bullsh!#".

Hard work continues to teach us lessons, I tell my employees when they "fail", ya didn't fail, you worked hard at something and the results were'nt what we wanted, but you learned from it, and education isn't free....

Hard work always produces results, just sometimes not what we expected.

Kinda off topic here, but i tell my clients and coworkers, "you don't go into Walmart and buy a reputation, you earn one, bad or good, they both come earned"

[GregWeld]

This morning I'm (as usual) watching the talking heads on CNBC... and again they're always blabbering about the same stocks... BLACKBERRY (BBRY) is one they just can't seem to forget... So as usual -- I decide to pull up the stock on Google Finance website just so I can "confirm" why I wouldn't be interested in listening to whatever they're talking about.

5 plus years ago all of my working professional friends had Blackberry phones - in fact - we jokingly called them Crackberries. If you were a lawyer etc -- you had one. But I noticed -- because that's the way my brain is wired (to pay attention to small details) that one by one - these folks were switching and their new phones were mostly iPhone - but the point is - they were buying anything but another Blackberry.

The chart is just awful --- regardless of what period you stretch it out to... so unless you bought it at it's IPO -- you're underwater in a major way.

Year to date you'd be DOWN 13% in a market that's UP 13% --- so your "loss" is even more dramatic - because while owning a loser you've also missed a gain in some other name.

I'm posting this -- not because it's so informational -- but to once again ask that as "investors" -- to pay attention to what you see and or feel about some business - or product - regardless of what it is. If you're a carpenter and notice that everyone used to use Makita -- and now all the saws and tools are Black and Decker... or vice versa -- those things (trends) can make you -- or loose you (if you're invested in the WRONG one!) money.

Let's say you own Home Depot or Costco or Wal Mart or Nordstrom or (pick a name/brand/product).... and you find yourself not going there anymore... Then you need to check your ownership - because you just might be part of a trend that you need to pay attention to.

Let's just pick on Apple because it's so obvious that there has been a major trend towards their products... if you looked around this Christmas and nobody got a new "iWhatever"... that would raise the hair on the back of my neck if I owned the shares. Or if you owned Faceybook -- and you notice there are fewer of your buddies posting and they've switched to using Instagram (I'm pulling these out of my you know what because I use neither). Just saying -- use your own "sense" for what's going on.