Investing 102

[WSSix]

Good post, Greg. Thanks for taking the time to type it.

[glassman]

Great explanation Greg. Personally, get back on top of or stay on that soap box cause i think you know what the f__k your talking about. I've never met ANY investors that can put it in layman's terms like you can.
I thought the same way about Google vs Apple three years ago, i "woulda" put all of it into Apple thinking they were the cats meow and Google just didn't have enough bling....well we know what happened(ing).....

So ya, thanx for your explanation, some times i can actually here you yelling at me lol, but i needs to learn. i'm still trying to put the basics together for me in my Schwab....

[XLexusTech]

A few months ago I posted on this thread asking about peer lending... I ended up going in with the equivalent of 10% of my post tax discretionary investment account.

Thus far my Net is 17 percent including charge offs

[WSSix]

Good job! Be safe with it.

[GregWeld]

Originally Posted by dhutton

Speaking of GoPro I read that the stock fell 10% and triggered the circuit breaker today. That could have been painful for folks that were late to jump in.

Don

Actually - that drop was 15% !


So here's what happens to small - retail investors.... that's "US".

A guy gets tired of hearing how much "X" stock is going up every day... and he finally listens to the idiot in his head telling him "WTF - why am I the only guy in the entire universe not making a fortune off this!?!?"

Then he plunges in with 5K.... and in hours or days --- He is now the only idiot in the entire universe that is DOWN $500 "already".... and he is now walking around with his stomach churning... and burning... and a couple days later when it goes up .10 a share - he sees his chance and bails out.

Give it another week and it's a buck a share more than he paid.... and he's confused - estranged - and can't figure out why he can't figure it all out. Now the worlds dumbest investor in the entire universe is walking around telling everyone how he WAS in X..... and WAS is the key word here. But now the worlds dumbest investor in the universe is afraid to pull the trigger on ANYTHING - buy or sell.... because he just showed himself that he can't buy right and worse - he can't even get the sale right! He now sees that he could have waited and bought on the dip -- and even better - he could have sold high and made a months wages in a matter of days... but he's now frozen like a deer in the headlights.

DON'T BE THIS GUY....


Be "okay" with stuff that gets away from you. Buy what you can hold on to and you can afford to buy. That includes houses - cars - woman.... Be the tortoise... the same one that your Mother read you the story about. That's a very sage story.

Does this mean DON'T buy a GoPro?? HELL NO! It means -- understand yourself - your expectations - your guts for pops and drops.... Can you really stomach losses and not have it affect your thinking.

102 investors should build a nice base -- live thru some ups and downs - watch their money grow and then watch as some or all of that growth melts away... what's that do to you.... can you handle it.... can you keep putting money in the market when it's down - and then it goes down more... can you put the next $500 in regardless or do you fold like a kleenex.

The dividends offer a "buffer" for the above scenario. That's why I recommend beginners invest in them. Reinvesting the dividend happens when you're looking the other way or laying under your car banging your knuckles... It puts your "investing" on autopilot.

Once you understand yourself... and the market (write me when you think ya got that goin' and good luck with that thinking!)... THEN MAYBE you're equipped to spread your wings and take a flier.


Think about a guy that hasn't ever seen Soccer... he runs out on the field and promptly gets the ball taken from him - has not a clue which end he should be at or what just happened to him. Versus the guy that stands on the sidelines --- studies a bit - talks to others on the sidelines and asks why this or that happened... runs some scenarios in his head... watches and understands who on the field seems to really be a good player.... When he THINKS he can play he finally goes out and has some success (vs the guy that just ran out there). The first idiot walks off the field humiliated and never plays soccer again, KNOWING that it's too hard for him, and he'd never be any good at it..... The other guy is enjoying a brew with the boys at the pub, enjoying his modest success, and his new found soccer buddies.

[GregWeld]

Sometimes -- if you're a real stupid "investor" -- all you're left with... is the crumbs. I'd call this a crumby investment...

#1 -- I had no idea they'd "list" some company like this...





http://abcnews.go.com/US/wireStory/c...tores-24461104

[GregWeld]

This is NOT a recommendation to own this name... it's just another example or at this point A REMINDER of why DIVIDEND INVESTING (nothing more than a particular style)... has proven to be a good thing OVER TIME....

I own 20,000 shares of this name... but what's important for 102 is -- I just got a RAISE for doing nothing. Not much of a raise... but a raise is a raise -- and over time raises in the dividend rate can keep you ahead of inflation...

And even more importantly --- A raise is on your cost basis! So over time you're earning a higher and higher PERCENTAGE on your investment!


I'm actually now being paid 13.56% on this investment because my cost basis is $89.41 a share.

See how that works! Sweet!






BP Prudhoe Bay Royalty Trust (NYSE:BPT) announced a quarterly dividend on Monday, July 7th, Analyst RN reports. Investors of record on Tuesday, July 15th will be paid a dividend of 3.0326 per share on Sunday, July 20th. This represents a $12.13 annualized dividend and a dividend yield of 12.47%. The ex-dividend date is Friday, July 11th. This is an increase from BP Prudhoe Bay Royalty Trust’s previous quarterly dividend of $3.01.

[96z28ss]

Originally Posted by GregWeld

This is NOT a recommendation to own this name... it's just another example or at this point A REMINDER of why DIVIDEND INVESTING (nothing more than a particular style)... has proven to be a good thing OVER TIME....

I own 20,000 shares of this name... but what's important for 102 is -- I just got a RAISE for doing nothing. Not much of a raise... but a raise is a raise -- and over time raises in the dividend rate can keep you ahead of inflation...

And even more importantly --- A raise is on your cost basis! So over time you're earning a higher and higher PERCENTAGE on your investment!

I'm actually now being paid 13.56% on this investment because my cost basis is $89.41 a share.

See how that works! Sweet!

BP Prudhoe Bay Royalty Trust (NYSE:BPT) announced a quarterly dividend on Monday, July 7th, Analyst RN reports. Investors of record on Tuesday, July 15th will be paid a dividend of 3.0326 per share on Sunday, July 20th. This represents a $12.13 annualized dividend and a dividend yield of 12.47%. The ex-dividend date is Friday, July 11th. This is an increase from BP Prudhoe Bay Royalty Trust’s previous quarterly dividend of $3.01.

I love raises. How do you calculate the yield for the investing 102 newbie crowd. I have very few shares of BPT but my Cost average is $86.79

[Vortech404]

Bob, pretty sure you divide annual dividend by share price.
$12.13 divided by $86.79 =13.9 percent. Yeeha



John

[GregWeld]

Originally Posted by Vortech404

Bob, pretty sure you divide annual dividend by share price.
$12.13 divided by $86.79 =13.9 percent. Yeeha



John

Exactly right.


Make sure you do this calc with the ANNUAL yield not the quarterly! There's 4 quarters (DOH!)...


Annual yield (in dollars and cents) divided by the share price (using your cost).


It will NOT come out with the decimal point in the right place -- but you'll get the number and you put the decimal where it belongs


i.e., 1.60 / $10.00 will show up as .16 ------ move the decimal 2 points --- 16%