Investing 102

[GregWeld]

Originally Posted by Sieg

That's OK, I don't have the 3 or 4 or 5 million either.

Again thanks for creating this thread and generously sharing your knowledge, one of the most valuable threads I've read in years.

Stay thirsty my friend.....

[GregWeld]

Originally Posted by WSSix

Well, I intend on getting a Schwab account since I found their website easy to use. So I'll be sure to look up the info there. To me, and with my expectations, that's a better way to view a stock. After all, growth and payouts(dividend) create value/money which is what I'm trying to do. I'm tired of my money earning 0.crap in a money market account. I really like the way you approach stocks and investing Greg. It's easy and it produces results over the long run. Thank you for taking the time to educate all of us. If we ever meet and I hope we do as I really want to attend some of these events, dinner's on me.

Thanks

Your thanks is enough === really! I love this stuff... and I love that a few people might be better off down the road. The gift that keeps on giving.

Your philosophy is sound... you have a good grip on what to look for... and it really is pretty dang simple.

Just remember - the road winds around - it's not a drag strip... There will be periods of time you'll ask yourself what the heck? When that happens - you remember a couple thoughts.... when the stock price is lower - you're buying more shares with the dividends... So really what you'd like to see is for the stock to go down by about half - but keep paying a growing dividend - and then suddenly be worth double the year you retire. Of course that would only be in our dreams... but you know what I'm saying.

[GregWeld]

So, on MONDAY -- it's the start of what's known as "earnings season" - which always kicks off by ALCOA (aluminum) AFTER the close of the trading session (1:00 PM on the "best coast").

I mention this because EARNINGS are what drives the market higher or lower... and this will be the beginning of a glimpse, perhaps, of where we're headed. If earnings start to become UPSIDE surprises - then Katie bar the door... a rising tide floats all boats... BUT -- (I really hate the big butt!) -- if company after company starts to report sales or profit declines, or woes over european sales etc... then we'll sink like a rock.

So what's the Investing 102 reason for the post?

If you're NOT in the market -- you don't get the kick if things are going better than expected -- and if you are IN the market and things are worse than expected - then you're going to loose (on paper only) value. The PROBLEM IS -- nobody knows BEFOREHAND... and it's IMPOSSIBLE to "TIME" the market correctly. Trying to do so - puts you in an always "behind the curve position". You have to take a longer look at the market. It's like a YoYo... it goes up and down - daily - weekly - and from year to year... but the GENERAL DIRECTION has been - and continues to be - upward and onward. So if your view is next week.... good luck. But if your view is "I'll be retiring in 2020 and I'm going to die in 2050..... then forget all the gyrations and just get in.

Here's what I'd do if I'm putting "new" money to work... (which is really what you're doing - you're making your MONEY go to work!)... ALCOA has ceased to be the bellwether stock that it used to be.. but it can and does "move" the market. Remember that YOU are INVESTING - but you're playing in a market that can move with TRADERS... IF ALCOA reports decent numbers that spells good news for automotive and manufacturing (think car blocks - heads - trim - and window frames in houses etc... and all manor of stuff that uses aluminum) And it's an international player (think China)... If they report poopie numbers -- I'm going to be a BUYER! I want to buy when things go on sale... I don't want to pay high prices! I want to buy when everyone else is selling. Will I buy at the bottom ..... never (I'm not that lucky).... the minute I buy - "they" take it down some more... but I'll scale in (buy a little) kick back and wait to see what happens... and make another trade (I'll buy a little more, whether its up or down).

Remember -- if the dividend stays the same - and the price goes DOWN - the dividend PERCENTAGE rises.... so I'm getting paid MORE to hold the shares -- and they're shares I want to own long term anyway. I just got them cheaper (perhaps) - but the opposite is true if the shares RISE.. then the dividend percentage decreases... so pay attention to that! If the market is rising - then I should offset the smaller dividend with more capital growth - so really -- either way - it's almost a non issue.

If the market is off to the races.... I'll buy a bigger initial position...because when the earnings season settles down a bit - there will be days that will "let me in" (down days). If the market looks to be headed lower -- I'll buy in smaller steps so I'm not "ahead" of a falling market... the more it falls the more I buy but I'll wait until I'm seeing the next earnings season.

This might be a bit too much info... but I'm trying to just explain some stuff as we go along here. I don't know which way the market is going to go. Nobody does. We're all just guessing. SO what I'm saying here is my STRATEGY for buying "in general"... because I'm never going to get it exactly right. Those people that freak out and sell every time the market goes down are LOSERS... because their attitude is all wrong...

Much of the new money I've made lately - was money put to work in 07 and 08 when things were BLEAK... and while everyone else was selling -- I was buying a little here and a little there... This last month (December) I rebalanced some great growth positions (I sold 1000 APPLE up HUGE and kept 250 on) - spread out a bit more - kept my LTCG's down by offsetting with some sales of losses (Goldman Sachs has tanked and I owned a big position so I can sell some of that and offset the big gain (and I have more gain than I have loss so overall I'm ahead) while still holding some GS long term). That's just TAX PLANNING for me - because my money is not IRA/401K stuff.

BTW ----- I'm not buying ALCOA ---- I'm just talking about the 'market' in general.

[pw2006]

Originally Posted by GregWeld

So, on MONDAY -- it's the start of what's known as "earnings season" - which always kicks off by ALCOA (aluminum) AFTER the close of the trading session (1:00 PM on the "best coast").

I mention this because EARNINGS are what drives the market higher or lower... and this will be the beginning of a glimpse, perhaps, of where we're headed. If earnings start to become UPSIDE surprises - then Katie bar the door... a rising tide floats all boats... BUT -- (I really hate the big butt!) -- if company after company starts to report sales or profit declines, or woes over european sales etc... then we'll sink like a rock.

So what's the Investing 102 reason for the post?

If you're NOT in the market -- you don't get the kick if things are going better than expected -- and if you are IN the market and things are worse than expected - then you're going to loose (on paper only) value. The PROBLEM IS -- nobody knows BEFOREHAND... and it's IMPOSSIBLE to "TIME" the market correctly. Trying to do so - puts you in an always "behind the curve position". You have to take a longer look at the market. It's like a YoYo... it goes up and down - daily - weekly - and from year to year... but the GENERAL DIRECTION has been - and continues to be - upward and onward. So if your view is next week.... good luck. But if your view is "I'll be retiring in 2020 and I'm going to die in 2050..... then forget all the gyrations and just get in.

Here's what I'd do if I'm putting "new" money to work... (which is really what you're doing - you're making your MONEY go to work!)... ALCOA has ceased to be the bellwether stock that it used to be.. but it can and does "move" the market. Remember that YOU are INVESTING - but you're playing in a market that can move with TRADERS... IF ALCOA reports decent numbers that spells good news for automotive and manufacturing (think car blocks - heads - trim - and window frames in houses etc... and all manor of stuff that uses aluminum) And it's an international player (think China)... If they report poopie numbers -- I'm going to be a BUYER! I want to buy when things go on sale... I don't want to pay high prices! I want to buy when everyone else is selling. Will I buy at the bottom ..... never (I'm not that lucky).... the minute I buy - "they" take it down some more... but I'll scale in (buy a little) kick back and wait to see what happens... and make another trade (I'll buy a little more, whether its up or down).

Remember -- if the dividend stays the same - and the price goes DOWN - the dividend PERCENTAGE rises.... so I'm getting paid MORE to hold the shares -- and they're shares I want to own long term anyway. I just got them cheaper (perhaps) - but the opposite is true if the shares RISE.. then the dividend percentage decreases... so pay attention to that! If the market is rising - then I should offset the smaller dividend with more capital growth - so really -- either way - it's almost a non issue.

If the market is off to the races.... I'll buy a bigger initial position...because when the earnings season settles down a bit - there will be days that will "let me in" (down days). If the market looks to be headed lower -- I'll buy in smaller steps so I'm not "ahead" of a falling market... the more it falls the more I buy but I'll wait until I'm seeing the next earnings season.

This might be a bit too much info... but I'm trying to just explain some stuff as we go along here. I don't know which way the market is going to go. Nobody does. We're all just guessing. SO what I'm saying here is my STRATEGY for buying "in general"... because I'm never going to get it exactly right. Those people that freak out and sell every time the market goes down are LOSERS... because their attitude is all wrong...

Much of the new money I've made lately - was money put to work in 07 and 08 when things were BLEAK... and while everyone else was selling -- I was buying a little here and a little there... This last month (December) I rebalanced some great growth positions (I sold 1000 APPLE up HUGE and kept 250 on) - spread out a bit more - kept my LTCG's down by offsetting with some sales of losses (Goldman Sachs has tanked and I owned a big position so I can sell some of that and offset the big gain (and I have more gain than I have loss so overall I'm ahead) while still holding some GS long term). That's just TAX PLANNING for me - because my money is not IRA/401K stuff.

BTW ----- I'm not buying ALCOA ---- I'm just talking about the 'market' in general.

Great post Greg! I love this stuff! I sold part of my ISRG investment (sold 300 and kept 200) last week and will be putting that money back to work soon.

[RECOVERY ROOM]

I already have some Alcoa..Lol

[Bucketlist2012]

Originally Posted by Sieg

That's OK, I don't have the 3 or 4 or 5 million either.

Again thanks for creating this thread and generously sharing your knowledge, one of the most valuable threads I've read in years.

Amen to that.. Most of my money was made during the Crash of 2008. i was lucky enough to have the balls during the opportunity of a lifetime..

But now it is mostly dividend payers in different sectors that fuel my income.. But i have to say, i am still hungry for more and the thread, and Greg's input on how he is doing things, is worth reading...Twice..

[GregWeld]

Originally Posted by RECOVERY ROOM

I already have some Alcoa..Lol

Well Tracy -- I'm real sorry to hear that buddy... 'cause as an investment goes - it sucks bilge water. I'm a member of AA and that's their trading symbol... but I still wouldn't buy it!

[GregWeld]

Originally Posted by solarguy09

Amen to that.. Most of my money was made during the Crash of 2008. i was lucky enough to have the balls during the opportunity of a lifetime..

But now it is mostly dividend payers in different sectors that fuel my income.. But i have to say, i am still hungry for more and the thread, and Greg's input on how he is doing things, is worth reading...Twice..

Good to hear! I'm not a "contrarian" - but I do tend to buy when the other guys are running for their lives.... This same "habit" served me well with buying class A apartment complexes in Scottsdale, AriDzona during the savings and loan crisis days... We could buy them from the RTC or the lenders... for 50 cents on the dollar. Those where the days buddy -- Cash was king (still is)... and there were deals to be had if you had the cojones!

[GregWeld]

Originally Posted by pw2006

Great post Greg! I love this stuff! I sold part of my ISRG investment (sold 300 and kept 200) last week and will be putting that money back to work soon.

Great stock! Doesn't pay a dividend so I'm not buying it, but man that's been a good ride!

Intuitive Surgical (ISRG) -- 5 year growth 389%

Buddy -- ya only need to hit these every once in awhile to really explode your savings to the upside... the problem is finding them and getting in BEFORE the big growth hits. Lucky you!

[RECOVERY ROOM]

Originally Posted by GregWeld

Well Tracy -- I'm real sorry to hear that buddy... 'cause as an investment goes - it sucks bilge water. I'm a member of AA and that's their trading symbol... but I still wouldn't buy it!

Thats why I'm a regular reader of this thread...And still working like a dog every day. (Its going to be sold)