Investing 102

[toy71camaro]

Originally Posted by Vegas69

I've been at this about 6 months and my account is up 7.45%. Not bad for money that would've been rotting in Wells Fargo.

I have one real dog out of the 10. I'm noticing that it tends to gain on down days quite often. Am I right in thinking people are buying in on the down days in hopes of some movement in the right direction? I know the company is expanding it's stores and business model currently, that's why I bought it.

Great!! It certainly is better than getting $.001% interest at the bank, isnt it? lol


Not sure on your second question. Its hard to say without knowing the investment. Some investments tend to mirror the market, some are the opposite.

[RECOVERY ROOM]

Im going to the Berkshire shareholders meeting Sat here in Omaha, should be interesting to hear what is said, The "b" stock has done well the last 2 years. slow growth but always consistent,

[GregWeld]

Originally Posted by Vegas69

I've been at this about 6 months and my account is up 7.45%. Not bad for money that would've been rotting in Wells Fargo.

I have one real dog out of the 10. I'm noticing that it tends to gain on down days quite often. Am I right in thinking people are buying in on the down days in hopes of some movement in the right direction? I know the company is expanding it's stores and business model currently, that's why I bought it.

I've been doing this for a very long time --- and there's always some picks that just never do what you intended them to do. Out of 10 -- people usually have 2 that lead the way -- 3 that are pretty decent -- 4 that are "okay" or barely okay -- and one or two that just flat suck. Hold 'em long enough -- and it's like a horse race - the barely makin' it jump into the lead the the leader falls back to 4th. It's just the way it is ---- as long as they're all mostly headed in the right direction.


Never be afraid to dump a stock you've bought that you thought was going to do X --- and doesn't. You hold when you're absolutely positive it's still going to do what you thought... but that's hard to do. Sometimes the market just speaks their collective idea with their feet... and no amount of hoping will correct that.

[GregWeld]

Originally Posted by RECOVERY ROOM

Im going to the Berkshire shareholders meeting Sat here in Omaha, should be interesting to hear what is said, The "b" stock has done well the last 2 years. slow growth but always consistent,

Say hello to Charlotte Guyman for me! She's on the board and a friend... I just can't afford their stock without a dividend to support the ownership. Charlottes brother in law Greg - owns one of my old boats (a Grady White) and they're both members of Seattle Yacht Club. Great people -- Charlotte is SUPER smart and super nice.

[Vortech404]

Sounds like you guy's are having fun with this. I know I am. I went from just having money in the Funds in my 401k to having 13 names COP,GIS,KMI,KO,MCD,MMM,MO,NU,OHI,PFE,PG,VZ,WFC. Not sure if this is enough names or I should add to the ones I already have. I think I hit most sectors to am somewhat diversified. I also get UPS stock through work.

I went from a small amount of reinvested dividends to 4K annually so far. I also started A Roth for me with CVX,O,DFS and one for the wife with XOM,NNN,JNJ,PM. Working on diversifying these.

I now look forward to the dividend pay dates!

I know this is not a stock pickers thread so please I just post these as examples. These are not recommendations! lol Just investing 402 examles. ha

All this was possible because of this thread. Thanks again. Just wanted to pass on I'm having a good time with this. I also just got the Wall Street Journal. So I should have Greg Weld money here pretty soon. haha

next goal is to get to 5k in annual divies. I ckeck this thread everyday.

John

[Vortech404]

Thought this was a good read.

http://seekingalpha.com/article/2189...-being-patient

John

[WSSix]

Congrats, John! Glad you're getting a lot out of this thread as well.

[toy71camaro]

Originally Posted by Vortech404

Sounds like you guy's are having fun with this. I know I am. I went from just having money in the Funds in my 401k to having 13 names COP,GIS,KMI,KO,MCD,MMM,MO,NU,OHI,PFE,PG,VZ,WFC. Not sure if this is enough names or I should add to the ones I already have. I think I hit most sectors to am somewhat diversified. I also get UPS stock through work.

I went from a small amount of reinvested dividends to 4K annually so far. I also started A Roth for me with CVX,O,DFS and one for the wife with XOM,NNN,JNJ,PM. Working on diversifying these.

I now look forward to the dividend pay dates!

I know this is not a stock pickers thread so please I just post these as examples. These are not recommendations! lol Just investing 402 examles. ha

All this was possible because of this thread. Thanks again. Just wanted to pass on I'm having a good time with this. I also just got the Wall Street Journal. So I should have Greg Weld money here pretty soon. haha

next goal is to get to 5k in annual divies. I ckeck this thread everyday.

John

Thats awesome!!! woohoo!!

[GregWeld]

Many of you have asked about P/E RATIOS.... to which I say it's a metric that I don't use much -- except to determine if a stock is priced to perfection or as a comparison against other companies in their sector. BUT ---- If you eliminated all high P/E ratios -- that would mean that you're not buying companies that the market (and management) is telling you they EXPECT to earn more going forward. High GROWTH is usually rewarded with high P/E's. So don't use just that metric to buy -- and don't use that metric to stay out of a good company. Thus I "down play" this metric.


Here's were P/E (P = price of the stock - divided by - E = EARNINGS) ratios matter.....


When a company with a "high" P/E "misses" and or takes guidance down (tells you they're not going to make as much EARNINGS going forward.


WHOLE FOODS (WFM) missed (as they have done several quarters now) AND they said "we're not going to have the high growth in EARNINGS that we have had in the past" <not an actual quote>. The stock gets crushed. Why? Because the P/E was unusually high compared to others in the industry and the "market" had expectations that they'd grow into the high P/E.



Now the "market savvy" INVESTING 102 takeaway...... if it was a name you've been looking at -- or perhaps already own.... and you see this big "DIP". Do you buy more --- or SELL?


When a company comes out and misses -- and lowers guidance... That is a FUNDAMENTAL CHANGE which I've said many times in the past is an event that really needs to be examined!!! BUYER BEWARE!! WARNING -- DANGER AHEAD.... DO NOT TRY TO CATCH A FALLING KNIFE would be the normal mantra.

Here's when you step back and WAIT and WATCH. This is a really good company.... but the STOCK needs to settle in with the new earnings (we don't know what that is going to be in the future!).... LONG TERM it might be great -- but there is a "reset" to the share price... Let's wait and see what that is. YOU don't set that --- the big boys do.... wait until they're done if you want to buy. This might take a couple QUARTERS not days....

The rest of their story might be fine -- but the EARNINGS matter.


I'm using WHOLE FOODS today as nothing but an example --- I don't own it - I have in the past -- This is not a STOCK PICKING DISCUSSION.... I'm not saying buy or sell WFM ---- I'm simply using it's recent miss --- as an opportunity to discuss P/E's and WHEN they matter.

[glassman]

Thats a good explanation Greg. I had to read it twice to understand it, and will read it again to make sure i "get it". sometimes (lol) i'm a very slow learner.

ps, had a great time this weekend, i looked for you guys to say by, but couldnt find you and siegster anywhere, so hopefully dave said later for me...