Investing 102

[sik68]

If you want to peer into the mind of Warren Buffet this evening, here's a pretty cool "memo" (19 pages) he wrote to the Washington Post CEO in 1975. Re: Pension Plans.

http://finance.fortune.cnn.com/2013/...graham-letter/

Direct link to download the memo in pdf:
http://www.scribd.com/document_downl...d&source=embed

Enjoy!

[glassman]

Originally Posted by GregWeld

When I was in "sales" ---- there were customers I couldn't stand but had to work with anyway. I justified it mentally by thinking that there's one way to get even with them - and that was to sell them something. Made it all mo beta.


People are going to smoke - and they're going to drink - so I might as well make money off them. It's called "laughing all the way to the bank".

Greg, that is a great way to put it. I have customers that i DONT like, but, the price is reflected in it. Good way too look at the stocks...

[Vegas69]

I completely agree and almost wrote something similar. It's their life and choice. I'm certainly not fanning the flames, you taking advantage of an opportunity. I did read that the number of smokers are diminishing some, that was also a factor.

[GregWeld]

Originally Posted by Vegas69

I completely agree and almost wrote something similar. It's their life and choice. I'm certainly not fanning the flames, you taking advantage of an opportunity. I did read that the number of smokers are diminishing some, that was also a factor.

So without "pitching" a particular stock -- as this is NOT what this thread should turn into...


I hold Altria (MO) because they're terbacky AND booze... Great brands in both. In fact I added 3000 shares this morning - and now hold 23,000 shares. :>)

[96z28ss]

Originally Posted by Vegas69

I completely agree and almost wrote something similar. It's their life and choice. I'm certainly not fanning the flames, you taking advantage of an opportunity. I did read that the number of smokers are diminishing some, that was also a factor.

I had the same concern you did, why invest in something that people are aware of the cancer risks and less people are smoking and more are quiting.

Full disclosure: I did learn about MO through this thread and Greg bringing it up a few times. He always mentioned it as a tobacco company.

So I did some research. www.altria.com I looked around hit the ABOUT tab.
hit the investor tab. They own smokless tobacco companies, Cigar company, and they own Wineries that I have spent thousands of dollars with (Robyn is a wino).
The wineries really made it that more attractive for me. They also have a ventures side of the company that looks to buy other companies. In the future it could aquire some e-cigarettes, or more booze. So I bought some.

I do recommend researching the company as much as you can and make a somewhat educated purchase, no one can predict what will happen in the future but if you do some homework upfront it may pay you back in the future.

[GregWeld]

Originally Posted by 96z28ss

I do recommend researching the company as much as you can and make a somewhat educated purchase, no one can predict what will happen in the future but if you do some homework upfront it may pay you back in the future.

This is all part of UNDERSTANDING what you own and WHY.... Which helps you when the chips are down and you're struggling with "what to do".

Nobody cares when the market is flying....

The worry about "the market" and your investments begins when you're dying the death of a 1000 cuts... and your portfolio starts to sound like a punctured tire. THAT is when (you need to KNOW BEFORE THIS HAPPENS) you must have faith in the names you've chosen to invest in.

That is also why I don't think ANYONE should buy anything because someone else told them about it. Hot stock tip or not... KNOW what you buy. There's 10's of 1000's of companies out there -- you only need to know 20 of them at most. Being comfortable with them will save you from bailing out at the bottom (the old buy high and sell low syndrome). It might also help you to continue to buy in down markets === which for me === is how I've made real money.

Be careful of course -- of buying more of a company "just because it's down" -- make sure there isn't a fundamental reason why it's down, first.

[Vegas69]

I saw your email today Greg and has actually logged onto their site and checked out all the branches last week. Your email has more info and I'll take a look when I'm ready to buy more.

Why did so many of my stocks end up down today when the dow went up? Are people selling? I'm as green as they come.

[GregWeld]

Originally Posted by Vegas69

I saw your email today Greg and has actually logged onto their site and checked out all the branches last week. Your email has more info and I'll take a look when I'm ready to buy more.

Why did so many of my stocks end up down today when the dow went up? Are people selling? I'm as green as they come.

Well.... who knows. Some days I see the market is down - and my account is positive -- some times it's the opposite... There's just now telling why on any given day some shares are up and some are down. When you think you have it all figured out --- somebody on wall street pulls the rug out from under you.


Remember too -- that particularly with DIVIDEND paying stocks -- the day they go "EX" dividend or pay the dividend (which is the pay date not the EX date) they'll go down the amount they paid out.

[GregWeld]

So here's an explanation of "EX" date and "PAYABLE DATE" -- because they're different.

The "EX" date is the date on which anyone that owns the shares on that DATE is going to be paid the dividend on the Pay date.

You can sell the shares the next day and still pick up the dividend -- or you can buy the shares the day before (maybe even the day of but don't count on it) and get the dividend.

Some "TRADERS" do nothing but try to buy shares - pick up the dividend - and move on.



A typical news release showing the EX and PAY dates -- I happen to own these shares.






The Board of Directors of National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, declared a quarterly dividend of 40.5 cents per share payable November 15, 2013 to common shareholders of record on October 31, 2013. National Retail Properties is one of only four publicly traded REITs and 102 publicly traded companies in America to have increased annual dividends for 24 or more consecutive years.

[GregWeld]

Apple "earnings" declined this quarter compared to the year ago quarter… now for anyone that pays attention to anything -- was that a DOH moment?

When you sell a lot of stuff - and the ASP (average selling price) is LESS - doesn't it make sense that then your numbers might suffer.

This is why I say it's so easy to invest -- if you pay the least amount of attention to your investments and just give normal fundamentals a thought.

If you went into a store that USED to be swamped with people -- and YOU noticed the last couple of times you went in there were LESS people… maybe that should be a clue you'd think about. Or -- is the inventory at the store you buy all your hardware at - shoddy and missing and crap is laying in the aisles? Then maybe that's a hunch things aren't being run so well.

Here's one - if you used to eat at some place all the time and EVERYONE was talking about the same place - and you noticed you've not been back there for months and nobody is talking about it any more -- what would you think their business might be like?


UH HUH…. pretty simple.

Now - I don't smoke and I don't drink and I don't often eat at McDonalds. But I pay attention to these things via news articles - in other words - if I see an article about those things - I read it! I want to know what people are thinking and saying and how they're reacting.

If I'm not interested -- then I should sell those investments and buy some where I have some connection and want to pay attention to them.

You wouldn't buy a rental house and then never drive by it - or bother to check the neighborhood would you?