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Originally Posted by SSLance
only reason for posting the analysis of MO Friday was to see what my return might have been back when I was in the market if I had owned MO.
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#1 - MO is a bad choice to use since it not only went thru the Great Recession but it also split off Philip Morris - which you keep forgetting in your analysis… Everyone that owned MO - got a nice chunk of PM in ADDITION to their shares of MO. I'm not wasting my time going back to research and show you how that took place and what that looked like. I don't mean that in a mean spirited way -- but stuff like that takes time… and I'm just not willing to piss away my time trying to show you how wrong you are (about that particular company). In fact - I never read your analysis - nor have I gone back to check on it's facts and figures. I just really don't care. Again - not mean spirited in that statement. I own a ton of that company and it makes money for me every quarter and I'm EXTREMELY HAPPY with that investment over a very long period of time. I - in fact - sold the Philip Morris (PM) shares I picked up because I didn't see a need to own both companies. I used to own Verizon AND AT&T - and likewise did the same there - I sold off Verizon for no other reason than I'm a long term AT&T customer.
Quote:
Originally Posted by SSLance
Several have accused me of thinking too much by doing this exercise, but at the same time all suggest that each of us do our own homework and research then decide what to invest on based on said research.
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I think what you're being "accused of" -- which really isn't what anyone is trying to do -- is trying to show you that you're making "investing" too complicated. It's NOT complicated. A person can make it that way if they choose to… but I'll repeat for all those that read these posts… INVESTING is about buying good stuff - believing thru thick and thin that they own good stuff. And letting TIME compound their money. WE ARE NEVER TALKING ABOUT THE GYRATIONS ALL MARKETS GO THROUGH DURING A TIME PERIOD. We are trying to learn that when looking at a longer term picture - that while HELL YES things go down… And we need to learn to live with that because we as ordinary humans will never foresee that "dip" --- and we'll never be back in the market when it rises. History will teach you that had you done nothing - except to let it ride - that you'll be made whole again and then some. And if you're reinvesting the dividend - you'll come out even better.
Quote:
Originally Posted by SSLance
the record, my FA had me in the "dividend income" plan in the 2006-2008 period, and I understand it very well. What I experienced was in lock step with what MO went through. A stock in their "dividend income" plan would cut it's dividend (for whatever reason) like MO did in 2008 and not only would the share price plummet, but at the same time they'd decide the stock didn't fit the parameters of the plan, so they'd sell it and go into another stock. The net result typically was a capital loss on the sell wiping out the return made up until that point.
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MO spilt off ANOTHER dividend paying stock -- THEY DID NOT CUT THEIR DIVIDEND -- THEY GAVE YOU ANOTHER DIVIDEND PAYER. Let's be factual.
YOU might have had other dividend paying stocks that cut or quit paying their dividend. I did too. But that is why we don't have all our eggs in one basket. If you had kept every investment you owned to the 5% rule - then that "loss" of dividend would have been very very small to your overall portfolio. And my guess is - that if you were actually in the Best of Breed companies that we're taking about investing in… you'd be very very happy with your overall investments right now. But we can't discuss your individual investments since we don't know what they were.
Quote:
Originally Posted by SSLance
haven't gone back and looked at it since, and I haven't seen where anyone else has corrected my numbers from Friday...but if they are true, how can one NOT include the 3% a year ROI on the stock for the 15 year period in their analysis?
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Because nobody is going to waste their time trying to disprove something that nobody cares about. You're MO example was completely flawed by not factoring in the Philip Morris (PM) spilt.
Quote:
Originally Posted by SSLance
, I agree, the 5 year history numbers look fantastic, but doesn't just about every stock's 5 year chart look great. It's because they start at the bottom. The 10, or 15 year charts look much different... In my opinion one can not claim to disregard "timing the market" yet cherry pick the time periods to show return history of a certain stock or strategy.
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Again - you're choosing to argue "semantics" rather than a larger picture view. The point of going back to look at charts is to help choose those companies that have a track record of RISING OVER TIME -- and RECOVERING OVER TIME their share prices. It's "reassurance" rather than hard and pat fact. You're trying to disprove each investment. I choose and have tried to guide the newb investors here - that what we're looking to do is to see that by and large - stocks - over time - go up. They are stair steps to be sure - and we need to realize and acknowledge that - but if overall - you begin to SEE - that over time - prices have advanced - despite the occasional wind sucking periods. Some websites only go back 5 years -- not everyone has the ability to go out and find "since the beginning of time" charts. This is INVESTING 102… it is NOT a primer on how to do every last thing regarding every stock ever in the history of time. Nor is it a primer on how to calculate the very last percentage point during the last 15 years.
It IS a primer on big picture thinking - and trying help people past their fears of something they might not fully understand - or have NEVER understood, i.e., "the stock market" and kinda sorta how investing in it works.
Quote:
Originally Posted by SSLance
for the record, I am not using this example as a reason to stay out of the market, I'm using this research as a way to find my own path for investing for the future... I agree with much of what has been said in this thread, one has to be confident and comfortable with the investment choices that are made. Having been there, done that for a significant period of time...I'm now trying to find a new way to be confident and comfortable...
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Sorry --- I can only read into your posts what I see. And to me - and perhaps others (from reading their posts to you) that staying OUT of the market is exactly the confirmation you're searching for.
What we're all trying to tell you -- is that while you're busy figuring - the rest of us are busy making money. Frankly - nobody gives two hoots if you're in or out… and I personally have given up trying to lead you by the nose. I really want to -- but I'm only going to spend so much time (already past that point) of trying to prove to you that you're "method" is a losing battle and that had you just done what I've tried to show people here… you'd have a different outlook/outcome.
There is absolutely NO QUESTION in my mind - that I will suffer "market losses" -- on paper -- My net investment will most likely not be worth what I paid. BUT I also absolutely know that I own some of the greatest companies in the world (you or anyone else here has only been shown a very small fraction of my personal investments)… and that at 60 years old - I plan to live long enough that those investments will continue to grow and provide for me. I won't have REAL LOSSES because I won't sell them and therefore actually suffer the losses. That's for losers. My plan is to be a winner. To do that - I have to stay with my investments and continue to collect the dividends (called getting paid to wait - what are we waiting for? For the market dip to come back and start going up AGAIN as it has always done).
HERE'S YOUR ANALYSIS HOMEWORK.
Show me that owning a home is "profitable". In other words -- take a house that you paid $X for in 19XX year -- and had a 30 year 5% mortgage - and factor in hard costs of upkeep - and a minor $50K remodel - and property taxes (that's an actual hard cost of carrying that "investment")…
What this will look like is that some times your "investment" was okay - and sometimes it wasn't keeping up with inflation -- and what I will tell you - is that all the time you owned it - and you finally sold it for more than you paid for it (that's way different than actually making a profit on it)… that whatever you sold it for - the new house was also equally inflated. So you traded dollars - you didn't actually come out ahead unless you sold in San Francisco and moved to Minot ND.
I own a couple apartment complexes -- let me assure you there were times when they SUCKED… Rents were down (especially when the banks would give loans to buy a house for free) - and we had to improve them just to keep tenants. BUT these pay for themselves and spin off cash flow (like dividends) and if and ever I get ready to sell -- they'll be worth more than I paid for them. Maybe. And if they just hold steady - then they still pay me every quarter. And the idiots that rent make my mortgage payment -- so what's not to like? Point is -- real estate was a HORRIBLE investment during the great recession. Hey! Maybe that's why I held on to 'em.
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