Investing 102

[GregWeld]

I keep checking Bitcoin... just because... no other reason than that.


If you look at a Bitcoin price chart --- it's CLASSIC lower lows and lower highs since December... it just peaked and has been on a death march ever since.


The only reason I bring this up --- is because some stocks do this from time to time and you should be able to recognize when something is going nowhere fast. There are people that like to "bottom fish" -- or try to find "value" in stuff that has sold off...

What I do is RUN --- why try to play a crap shoot when there's great companies with classic GOOD charts and solid business and profits.

[GregWeld]

I was watching -- as I do every morning -- CNBC... and they begin talking about World Wrestling Entertainment (WWE). I'm laughing -- because it was a "who knew?" moment for me. Really? WWE is a publicly traded stock? WOW... So as usual I poke around on the internet to see about this "down for the count" winner... UGH. Who would invest in TV "wrestling" in the first place? Never mind - that's a rhetorical question.

So -- pull up a chart -- it's been a sub $10 stock since 2011... and HAD never been above $20 since day one... SUDDENLY it climbs to $30 since December - and this thing has a chart that goes straight up! Like a tsunami. By the way - it pays a dividend despite have ZERO P/E... so they're losing money (which is explained by seeing a "Dash" where P/E should be... Money losing companies shouldn't be paying a dividend --- and if you're in a money losing company that is paying a dividend -- you SHOULD EXPECT THAT DIVIDEND TO DISAPPEAR. But that's a different issue -- but one you should KNOW and UNDERSTAND. (One of the reasons I'm writing this morning).

Now -- I have no idea why WWE (and frankly don't care)... would be a $10 stock and in mere months it goes parabolic and runs to $30... so if that's happening -- there should be a FUNDAMENTAL REASON for that and it should be well known. A FUNDAMENTAL reason would be something like -- they started minting cash... or they're getting bought out... or they signed a big deal that will start minting cash... But I couldn't find any reason for this gigantic move. Warren Buffet didn't announce that he just bought a big position in the company.

For Investing 102.... when you see something like this... PLEASE AVOID IT LIKE PLAQUE.

Once it peaked -- the selloff began -- it peaked in Mid-March... and this morning it opened DOWN 47%. How would you like to wake up and see you've lost half of your investment? GEEE --- My bigger question would be -- why did you "invest" in something like this in the first place!?!?!?!

The take-away here.... Unless there is some fundamental NEW information --- that would be reason to buy a name -- the fact that it's going up based on nothing.... is reason to avoid whatever it is. Because when people realize there's no reason behind the move -- it will fall back down. If you bought at the high or near the high -- you now own a $11 stock -- that's down $20 in 60 days.

[GregWeld]

I love to wake up in the morning -- walk down to the shed -- knowing that I can buy parts and go racin' and weld up stuff.... and those dividends just keep coming.


Remember! Dividends come 4 times a year!! So just about the time you've forgotten all about them.... BINGO! Somebody makes a deposit in your account --- and for most of you - it buys more shares -- and then the next quarter it buys more shares than last time - and so on.




05/15/2014 Cash Dividend NNN
NATIONAL RETAIL PPTYS RE...
$8,100.00
05/15/2014 Cash Dividend KMP
KINDER MORGAN ENERGY LP ...
$30,360.00

[WSSix]

KMP sent me a dividend payment on my birthday. I thought that was really thoughtful of them.

[GregWeld]

Originally Posted by WSSix

KMP sent me a dividend payment on my birthday. I thought that was really thoughtful of them.

Well isn't that sweet!!!



LOL



I like them so much... well .... once every quarter anyway.

[Vortech404]

I hope none of you have to do this. Not good investing 102

https://finance.yahoo.com/news/early...mYlQ?.tsrc=sun


John

[GregWeld]

Originally Posted by Vortech404

I hope none of you have to do this. Not good investing 102

https://finance.yahoo.com/news/early...mYlQ?.tsrc=sun


John

John ---


Here's the part that kills me and for the life of me - I can't understand!


If having STUFF is so f'n important to a person NOW -- that they refi'd the house 10 times to stay afloat -- and now they can't live within their means so need to cash out the tiny bit they have in the IRA..... just to buy stuff..... Which tells me NOW is the most important part of their lives. How do they expect to live and have STUFF in the future -- when they'll have no savings - and little income?

When a person turns 70+ -- and has no retirement - the house isn't paid for - the have a leased car... and the savings is drained to zero. NOW WHAT ARE THE PLANS TO IMPRESS THE FRIENDS WITH ALL THE "WEALTH"?

Americans are headed to the poorhouse as fast as they can get there.

First it was credit cards that bailed them out charging when the paycheck wouldn't cover - then the house ATM bailed them out again - and now it's the IRA... or all of the above.

[glassman]

Yeah, it frosts my hide to. Like a place to take (actually leave) a crap isnt important. A senior living in an apartment community is really going to have their rent at "25%" of their income, bunch bs. My 69 year old dad who preached saving and being conservative fiscally is in the poorhouse. My brotherr and I have to "help" him, and hes to "prideful" to get a job at Home Depot or walmart, so kids today arent the only ones with that "entitlement"......sux.

Eff those reverse mortages, live within your meens.....

And speaking of "stuff", its all temporary anyways, aren't we just "renting" it? last time i checked, weve all got an "expiration" date.... ....'..La dolce vita"......Live the good life, dont work too hard and dont work too little. And for heavens sakes people, manage your money (i didnt do it well for years and would be much better off now had i)......

[Vegas69]

I've been encouraged with many of my clients since the deflation of the economy. I'm seeing more people with less debt and more conscience of the amount of house they buy.

It really comes down to self awareness. I don't think it's unreasonable to think that many expect some type of magic to happen down the road that will allow them a life of riches.

It happens with vision, discipline, and time.

[GregWeld]

We've talked about -- or discussed -- LIMIT ORDERS.


I've said that I use them -- but that if someone is buying 10 to 100 shares of something - then a few pennies one way or the other probably doesn't matter very much. Just do a market order. Get the shares bought - and sit back and start collecting the dividends. What can happen is if you get cute with a LIMIT ORDER, you might miss the fill by a penny... and it expires at the end of the business day... and you forget that it was a Limit Order so you think you now own the shares.. and the dividend goes EX and you miss that. So sometimes being cute doesn't work out all that well.

The reason I thought about this today - was that I had put in a limit order for JNK... this is a name I move in and out of frequently... (meaning maybe I'm in it for months... we're not talking about trading it hourly!). I figured that what was a good open this morning might fizzle out - like the market does many Fridays. Since we're getting near the end of the month - and JNK will go EX shortly -- I wanted to at least pick up this months dividend rather than sit in cash... AND I used a limit order because when I'm buying 20,000 shares of something -- a few pennies here and there add up. AND because I didn't want to pay market price in the morning - only to see the market go south in the afternoon selling.

I'm telling you all this because it's a THOUGHT PROCESS. The dividend is .20 for the month... why - when this is just a placeholder - should I pay UP .05 when I can use a limit order and PERHAPS buy them cheaper... which is the same as making money. That's the way I have to look at it. As it turns out - many of my names sold off in the afternoon - just as I had expected them too -- but, of course, JNK closed UP... and my order went unfilled.

I'm okay with this -- I'm on top of what I'm doing -- I will try again Monday (if it wasn't a holiday!) or Tuesday. I'm not as likely to forget what I'm doing with $800K as perhaps you might be with $1,000.... You're not active in the market daily, and you have a job to do, and kids at home, and blah blah blah. I have none of those distractions...