Investing 102

[GregWeld]

Originally Posted by sik68

It went down 15% today, so I just bought Staples (SPLS) after hours. It pays a 4.23% dividend.

I REALLY like that they plan to trim back their storefronts and focus more heavily on online ordering. Last I checked, schools and offices still need supplies, and they have good brand recognition.

Thoughts?

This IS NOT a stock picking thread --- but I would like to use STAPLES (SPLS) as an example here.

Steven - I know you've read and followed this thread for awhile now... so I have to ask you:

What part of the SPLS chart is lower on the left and higher on the right - 1 year it's down - 5 year it's down - 10 year it's down

More importantly -- it's 3 and 5 year TOTAL RETURN are both negative.

Now - it's just announced store closings.


My bet would be that the next "cost cutting" they do is the dividend payout.


So here's my FOOD FOR THOUGHT when picking stocks. If all the indicators are negative - and the stock is falling week after week and month after month... WHY BUY IT WHEN YOU CAN PUT YOUR MONEY IN SOMETHING THAT'S HEADED IN THE RIGHT DIRECTION. Rather than "gambling" that after you buy - it's all going to somehow turn around?

I'm not trying to pick on you - or talk you out of your buy - I just want to use this particular buy / name to reiterate (for INVESTING 102) how to keep it easy and relatively safe - with GROWTH and INCOME... and that is to buy best of breed -- with good charts -- and total return (POSITIVE) -- so that at least we THINK we're headed in the right direction.

Another old market saying --- "Don't try to catch a falling knife".


:>)

[CamaroMike]

^Its like Sears, was once good but has been on a long downtrend.

[sik68]

Originally Posted by GregWeld

This IS NOT a stock picking thread --- but I would like to use STAPLES (SPLS) as an example here.

Steven - I know you've read and followed this thread for awhile now... so I have to ask you:

What part of the SPLS chart is lower on the left and higher on the right - 1 year it's down - 5 year it's down - 10 year it's down

More importantly -- it's 3 and 5 year TOTAL RETURN are both negative.

Now - it's just announced store closings.


My bet would be that the next "cost cutting" they do is the dividend payout.


So here's my FOOD FOR THOUGHT when picking stocks. If all the indicators are negative - and the stock is falling week after week and month after month... WHY BUY IT WHEN YOU CAN PUT YOUR MONEY IN SOMETHING THAT'S HEADED IN THE RIGHT DIRECTION. Rather than "gambling" that after you buy - it's all going to somehow turn around?

I'm not trying to pick on you - or talk you out of your buy - I just want to use this particular buy / name to reiterate (for INVESTING 102) how to keep it easy and relatively safe - with GROWTH and INCOME... and that is to buy best of breed -- with good charts -- and total return (POSITIVE) -- so that at least we THINK we're headed in the right direction.

Another old market saying --- "Don't try to catch a falling knife".


:>)

Thanks Greg, I hear you on this one. It's less than 1% of my holdings... most of my other stuff falls right in line with the philosophy on this thread.

I know the stock chart looks bad...my only 'defense' is that the fire sale yesterday got me digging into their financial statements. Their books look a fair amount better than the stock chart indicates. Buying SPLS is me trying to put on my Warren Buffet cape for a stock that I think is undervalued.

[GregWeld]

Originally Posted by sik68

Thanks Greg, I hear you on this one. It's less than 1% of my holdings... most of my other stuff falls right in line with the philosophy on this thread.

I know the stock chart looks bad...my only 'defense' is that the fire sale yesterday got me digging into their financial statements. Their books look a fair amount better than the stock chart indicates. Buying SPLS is me trying to put on my Warren Buffet cape for a stock that I think is undervalued.

As long as YOU are happy owing it -- that's all that counts. And like I said before and repeat often -- the person doing the buying needs to UNDERSTAND why they bought, and WHAT they bought.

It just was a great example of -- in my opinion -- the opposite of what kinds of stocks we've been discussing here so I had to use it to show why.

[sik68]

Originally Posted by GregWeld

As long as YOU are happy owing it -- that's all that counts. And like I said before and repeat often -- the person doing the buying needs to UNDERSTAND why they bought, and WHAT they bought.

It just was a great example of -- in my opinion -- the opposite of what kinds of stocks we've been discussing here so I had to use it to show why.

I know it's all about best-of-breed, and here I go buying underdog! Just my thought process...basically I'm 30 and need to learn a thing or two. If it bombs, You me


I should also mention that although Staples does sound like a 'has been', they are the #2 online retailer in the world (yes, just behind Amazon). IMO, they are positioned very well for the future. Like everyone is saying, this is not a stock-picking thread...but I am bringing SPLS to the discussion because we all think we know an overvalued bubble stock when we seen one, but it's perhaps more worthwhile to think about good businesses whose stocks have tanked. Of course I don't know the future of SPLS, but maybe they aren't as washed-up as we thought, just in the dog house.

[gearheads78]

So I learned a little lesson today. There are a hand full of stocks I want to own but they have been too expensive for me to consider an entry point at current levels. Called my local Schawb office and asked if I have limit orders for more than one stock but only enough money in the account to buy one what would happen if more than one dropped to my buy point before I had a chance to cancel other orders. I was told since I don't have a margin account the first order would go through and the next would not fill since there is no money.

This was bad information. There was a large gap over the weekend on two of the stocks and both were purchased at market open this morning leaving my account balance negative. I have 3 days to make my account current.

All in all things will be fine. I was about to put my March deposit in the account that will cover my positions and both stocks are stocks I have faith will be excellent long term stocks to hold. In fact both are up above my buy point by the end of the day.

[SSLance]

I received (and reinvested) my first dividend payment yesterday...thanks JNJ!!

[toy71camaro]

Originally Posted by SSLance

I received (and reinvested) my first dividend payment yesterday...thanks JNJ!!

Woohoo!!

[GregWeld]

Pretty sad information if you ask me.





http://www.usatoday.com/story/money/...vings/6432241/

[Sieg]

Originally Posted by GregWeld

Pretty sad information if you ask me.


http://www.usatoday.com/story/money/...vings/6432241/

Very sad though not surprising considering the lifestyles "standards" of the last three decades.

The survey was a relatively small sampling and wonder how many of those surveyed were from the private vs public sector.