Investing 102

[pw2006]

Trying to time the market is nearly impossible. As Greg mentioned in an earlier post, there is some dude somewhere watching to see if you you are a buyer or a seller. As soon as you make your move, that dude calls his buddies and moves the stock in the opposite direction. They attacked me twice today!

Earlier this week I decided to reduce a little risk in my portfolio and decided to sell ~50% of one of my speculative position and put that money into a something with less volatility. I wasn't trying to time anything, but ran into some bad timing. That dude was watching me!

One of my speculative positions is in a small, thinly traded biotech (FOLD). I've owned it for a couple years with an average cost of around $5.50. It has been trading between $2.10~$4 for the past few months with lots of volatility. So I sold ~1/2 my FOLD position for ~$3.55 and added to my Chevron (CVX) position.

After the market closed yesterday, Chevron pre-announced they were going to miss their earnings and the stock traded down nearly 2.5% today. And as if that wasn't bad enough, FOLD jumped 30% today and ended the day at $4.54! As I mentioned, I wasn't trying to time anything, just bad timing.

[GregWeld]

Originally Posted by pw2006

Trying to time the market is nearly impossible. As Greg mentioned in an earlier post, there is some dude somewhere watching to see if you you are a buyer or a seller. As soon as you make your move, that dude calls his buddies and moves the stock in the opposite direction. They attacked me twice today!

Earlier this week I decided to reduce a little risk in my portfolio and decided to sell ~50% of one of my speculative position and put that money into a something with less volatility. I wasn't trying to time anything, but ran into some bad timing. That dude was watching me!

One of my speculative positions is in a small, thinly traded biotech (FOLD). I've owned it for a couple years with an average cost of around $5.50. It has been trading between $2.10~$4 for the past few months with lots of volatility. So I sold ~1/2 my FOLD position for ~$3.55 and added to my Chevron (CVX) position.

After the market closed yesterday, Chevron pre-announced they were going to miss their earnings and the stock traded down nearly 2.5% today. And as if that wasn't bad enough, FOLD jumped 30% today and ended the day at $4.54! As I mentioned, I wasn't trying to time anything, just bad timing.

It's NOT BAD TIMING -- there is some SOB back there watching your every move! I'm telling' ya!

That's EXACTLY why I throw that into my posts once in awhile! Because I swear - a stock can go up every day for a month - and 5 minutes after you buy in - they take 'er down! Ditto on the sale side. I sold 1000 Apple a week or so ago -- I had a nice (huge) gain in it so didn't particularly care about the very last dollar -- but we all want to get the max -- and it was just kinda floating around 400 --- so I pulled the trigger -- within about two days it was up to $420+ --- and that's 20 GRAND! But.... it never fails so you just have to get over it... and understand it... then it doesn't get your goat.

[Sieg]

Originally Posted by pw2006

Trying to time the market is nearly impossible. As Greg mentioned in an earlier post, there is some dude somewhere watching to see if you you are a buyer or a seller. As soon as you make your move, that dude calls his buddies and moves the stock in the opposite direction. They attacked me twice today!

Earlier this week I decided to reduce a little risk in my portfolio and decided to sell ~50% of one of my speculative position and put that money into a something with less volatility. I wasn't trying to time anything, but ran into some bad timing. That dude was watching me!

One of my speculative positions is in a small, thinly traded biotech (FOLD). I've owned it for a couple years with an average cost of around $5.50. It has been trading between $2.10~$4 for the past few months with lots of volatility. So I sold ~1/2 my FOLD position for ~$3.55 and added to my Chevron (CVX) position.

After the market closed yesterday, Chevron pre-announced they were going to miss their earnings and the stock traded down nearly 2.5% today. And as if that wasn't bad enough, FOLD jumped 30% today and ended the day at $4.54! As I mentioned, I wasn't trying to time anything, just bad timing.

I understand completely, that dude bites me in the butt 8 out of 10 times. So I do like to attempt to cover it with a little due diligence if at all possible. I guess I'm really trying to protect myself from real bad timing but it's still timing.

I bought a 100 shares of Nike 35 years ago when they first began trading for $5..........that dude convinced me doubling my money was a good thing and I sold it for $10........the rest is history.

But learning what's important to other successful people is where the learned lesson is.

Right now I'm evaluating my portfolio sector diversity vs risk level and plotting the best options to fill the weak spots in Consumer Staples, Energy, Health Care, Industrials, Materials, and Utilities. I'm weighted heavy in Information Technologies but don't feel too bad because the over-weight products are DELL, HP, INTC, MSFT, MU, ORCL.

Thanks to this thread and the research tools Schwab online provides it's becoming a very entertaining challenge. Business is slow this time of year and our sector outlook is not promising, so at least I feel like I'm accomplishing something.

[Sieg]

Originally Posted by GregWeld

It's NOT BAD TIMING -- there is some SOB back there watching your every move! I'm telling' ya!

That's EXACTLY why I throw that into my posts once in awhile! Because I swear - a stock can go up every day for a month - and 5 minutes after you buy in - they take 'er down! Ditto on the sale side. I sold 1000 Apple a week or so ago -- I had a nice (huge) gain in it so didn't particularly care about the very last dollar -- but we all want to get the max -- and it was just kinda floating around 400 --- so I pulled the trigger -- within about two days it was up to $420+ --- and that's 20 GRAND! But.... it never fails so you just have to get over it... and understand it... then it doesn't get your goat.

1:06 PM "Time to sell Apple," declares Thomas Kee of Stock Traders Daily, as it doesn't treat its customers properly. Kee isn't refering to the end users but to carriers like Verizon (VZ) and Sprint (S), whose margins are suffering because of the high cost of the iPhone. These resellers will look for alternatives and eventually find them.

I can understand how easy it is for you to fall victim to a short-sell though.

[GregWeld]

Originally Posted by Sieg

1:06 PM "Time to sell Apple," declares Thomas Kee of Stock Traders Daily, as it doesn't treat its customers properly. Kee isn't refering to the end users but to carriers like Verizon (VZ) and Sprint (S), whose margins are suffering because of the high cost of the iPhone. These resellers will look for alternatives and eventually find them.

I can understand how easy it is for you to fall victim to a short-sell though.

Wasn't really a "short sale" --- I owned those shares since $85 a share..... I took some of the gain off with a loss in Goldman Sachs... the main reason is - APPLE does not pay a dividend - GS pays a very small dividend... I had a GIANT gain in one and a loss in the other -- so year end house cleaning. I still own 1000 shares of GS and will hold them paper loss and all.

I had half a million bucks in Apple - and needed to just do some rebalancing as I do at the end of every year. While it's THE HARDEST to sell winners.... it's the right thing to do --- so I kept 250 shares and bought some Connoco Phillips and raised my cash position for right now. I had also just lopped off a chunk of cash buying that building for my brother in law... and since I paid all cash for it - I looked at the Apple as a cash replenishment. I've ridden that horse for quite awhile - and the pigs get fat hogs, get slaughtered argument won out.

[GregWeld]

A quicky little story about the Apple purchase.... We had just bought the house we're in -- and I wanted to get away from having a desktop computer and a laptop (too much computer management!) so went to look at the Apple laptop. Bought one --- and while there - noticed that it was the ONLY STORE IN THE MALL WITH A LINE OF PEOPLE WAITING TO BUY STUFF! -- Pretty simple research in my mind... every other store was empty -- and these guys have a line up! I come home and realize that everywhere I looked the kids had an iPod... we had like 4 or them!

Bought the stock.... every time I went to the mall (once a year MAX - I hate malls) the dump was PACKED with people... buy a little more... and hold.

And the rest - as they say - is history.

[Sieg]

KISS theory works.....all said and done it's simple fundamental logic. The amount of marketing clutter these days can really cloud those basic tried and true fundamentals.

[GregWeld]

Originally Posted by Sieg

KISS theory works.....all said and done it's simple fundamental logic. The amount of marketing clutter these days can really cloud those basic tried and true fundamentals.

It's actually the Peter Lynch school of investing.... and he was a fantastic money manager! For those that don't know - he ran Fidelity Magellan fund for years... and that was his way of investing. It worked then - and it still works today.

He has a great book -- "Beating the Street"... which he wrote about his style of investing. Smart guy - and fantastic results over a long period of time.

[Sieg]

So......thanks to this thread I've been digging in the files and found a State Farm Flexible Premium Annuity IRA that I opened in 1983 which a fund it and forget about it deal.........total premiums paid $6,500, current value $13,200....cha-CHING!

Then I quizzed the wife about her 401K plan at work which I've paid little attention to..........comprised of 3 Mutual Funds (SUPAX, OUTDX, SMCAX) through DWS Investments (Deutsche Bank Group) asset allocations are Growth & Income and Growth. The Sept 30, 2011 YTD performance was -$13,600.

I researched each fund's performance and Morningstar basically rated 2 of the 3 as dogs and the other mediocre.

I will definitely be making modifications as I figure she's still got a good 15 working years left in her!

Having 66% of that fund in say 5 Steady Eddies and one decent mutual fund would have certainly beat -$13.6K over the same period right?

[GregWeld]

Originally Posted by Sieg

So......thanks to this thread I've been digging in the files and found a State Farm Flexible Premium Annuity IRA that I opened in 1983 which a fund it and forget about it deal.........total premiums paid $6,500, current value $13,200....cha-CHING!

Then I quizzed the wife about her 401K plan at work which I've paid little attention to..........comprised of 3 Mutual Funds (SUPAX, OUTDX, SMCAX) through DWS Investments (Deutsche Bank Group) asset allocations are Growth & Income and Growth. The Sept 30, 2011 YTD performance was -$13,600.

I researched each fund's performance and Morningstar basically rated 2 of the 3 as dogs and the other mediocre.

I will definitely be making modifications as I figure she's still got a good 15 working years left in her!

Having 66% of that fund in say 5 Steady Eddies and one decent mutual fund would have certainly beat -$13.6K over the same period right?

Sadly -- Another reason mutual funds SUCK!

Yes -- you could throw a dart at a board and beat that performance!