Investing 102

[GregWeld]

Originally Posted by captainofiron

So If Im thinking of this and reading it right

I have 10 stocks, I should have all 10 sectors covered, hence why I am a little nervous about having 3 in consumer goods

So I spent a little more time looking around, looking at dividends, and ex-dividend dates

So here are my Hot Picks! haha

Consumer Discretionary I think I am going to jump on Mattel at 4.42 since Christmas is coming up



Not a name I'd invest in -- it's been broken for far too long. No hot kids movies - so no hot Xmas toys...




I like Target and Mcdonalds, but I think Mcdonalds is a little high for me right now, and Im not sure how Target is going to do with their stores in Canada supposedly suffering.




Agree





Consumer Staples: MO - Altria Group 4.8% dividend, Im going to wait until 10/10 on their payout to buy so I can see if I can get a little better bargain





Shows you're thinking. Just don't get "cute" on the dividends etc -- you're buying LONG TERM here - .35 one way or the other isn't important.





Energy: really not sure about this one, but I am going with Shell at 4.79%, I was really tempted by Ensco and offshore drilling company at 6.36%, but Im not sure and think Shell is a safer investment





Shell or Chevron or British Petroleum -- all fine. Remember to COMPARE total returns and go with the ones that have a history of the best total return.




Financials: UHT Universal Health Realty 5.71% dividend, Im buying this one ASAP because the exdividend date is tomorrow




You may get the discounted price "EX" dividend - but you WILL NOT get the dividend. There's many posts here about the length of time you must have bought the stock before the EX date. Brokerages take time to actually register the transaction etc. before you become the real owner. Again -- I wouldn't try to get cute on cutting the dividend dates ex or otherwise. I do this -- but I'm buying 10,000 to 50,000 shares of a name and the dividend going ex or picking up the dividend is real money.... but for most... 35 or 50 cents on 50 or even a 100 shares or more really isn't worth trying to time the market. Just buy when you're ready and you'll do just fine.




Health Care: GSK Glaxo Smith Kline: 5.61% dividend




Good pick. Did you do any comparison work to others in the same category for total returns etc. It's sometimes an eye opener. Never a guarantee but it's just a bit more time and can make a difference or at least educate you.



Industrials: GE General Electric 3.40%, I was tempted by Metso 3.44%, they make alot of components for refineries, as well as NASA ground support (when I used them alot) so I am familiar with their stuff and its good quality. But GE is the bigger name with a wider market




Again -- rather then just go by your own thoughts -- which is fine -- but also look at comparable charts - 10 years - total return - have they split - have they increased the dividend etc. There's lot of interesting stuff you can find just digging around.





Information Technology: Cisco 3.05%
I was tempted by Canon at 3.8% but it looks up overall, but its going down the past couple years, I think Nikon is starting to eat into their market, as well as smart phones having awesome cameras built in nowadays



Canon had some fraudulent accounting and really hurt them. Not sure why you'd lump Canon - Nikon and Cisco in the same realm -- except that perhaps they're technology? IDK - doesn't matter.... Nikon and Canon are RETAIL names whereas Cisco is a giant OEM supplier... But doesn't seem to have the latest greatest chips and technology anymore. Still a great company.






Materials: BASF 3.73%, I was looking at Dow, but its dividend is 2.77%



Again -- it's ALL about total return and security..... so don't forget to compare more than just Dividend percentage.





Telecommunication Services I am torn here between Vodafone and ATT, I think I am going to just have 2 here




I used to own Verizon and AT&T --- then realized it was too much of one kind of tech and held AT&T (I own 40,000 shares) because it's my carrier. Decent dividend - slow capital growth - but I sleep well at night and consider it a "steady eddie".




Utilities Con Ed, with 4.43%
I was looking at Dominion Exploration with 5.36% but seems like Con Ed is a "better name"





This is a sleep well at night name - gives you diversification and they certainly aren't going anywhere and during recessions people still have to pay their power bill.






Finally my "Gamble" Im going to stick 5% in Adidas, they are really down since the beginning of this year, and overall they are up, and I just dont see a global brand like them going away soon

I'd own Nike before Adidas.... but again I'd do some comparison because you want your money to be "safe" and also GROW and you need to get paid to own any of em.






Ordinarily I wouldn't help anyone with picks like this -- but because you're new -- I wanted to give you some things to think about.

[GregWeld]

Captofiron....


I was reminded this morning while watching CNBC just how different TWO stocks in the same business can diverge as far as their stock goes.

Kroger (KR) vs Whole Foods (WFM)--- Kroger is UP 33+% while Whole Foods is DOWN 31+% (using a ONE YEAR chart)

There is a function in Google Finance charts where you can compare charts and it can be eyeopening!


My point is -- that just to pick A single name and hope that what you think about it is spot on -- can be deadly. Poke around a bit - compare and make sure that what YOU think, is the same thing the "MARKET" thinks. I've found that I'm often wrong. The above being a perfect example!

[Sieg]

Here's an interesting article "Your Guide TO The Best And Worst Stocks In The Dow" that list what one could consider to be all good stocks......at least IMO.

http://seekingalpha.com/article/2488...-the-dow?ifp=0

FWIW - NKE in last place on this list I bought 25 shares in '97, splits left me with 100 shares and 555% gain.

We won't talk about the 100 shares I bought in '76 for $5 and sold when I'd double my money at $10. Life would be much different now if I would have held on to that $500 investment.

[GregWeld]

FANTASTIC ARTICLE!!!


Easy to read and understand... and really points to what I've been saying here for the last 3 years --- TOTAL RETURN is what is important!! It's not complicated and all the names in this list are companies you know. Just don't limit yourself to these companies only... it's just a comparison to make a point.

Originally Posted by Sieg

Here's an interesting article "Your Guide TO The Best And Worst Stocks In The Dow" that list what one could consider to be all good stocks......at least IMO.

http://seekingalpha.com/article/2488...-the-dow?ifp=0

FWIW - NKE in last place on this list I bought 25 shares in '97, splits left me with 100 shares and 555% gain.

We won't talk about the 100 shares I bought in '76 for $5 and sold when I'd double my money at $10. Life would be much different now if I would have held on to that $500 investment.

[captainofiron]

Originally Posted by GregWeld

I'd own Nike before Adidas.... but again I'd do some comparison because you want your money to be "safe" and also GROW and you need to get paid to own any of em.

Ordinarily I wouldn't help anyone with picks like this -- but because you're new -- I wanted to give you some things to think about.

Originally Posted by GregWeld

Captofiron....

I was reminded this morning while watching CNBC just how different TWO stocks in the same business can diverge as far as their stock goes.

Kroger (KR) vs Whole Foods (WFM)--- Kroger is UP 33+% while Whole Foods is DOWN 31+% (using a ONE YEAR chart)

There is a function in Google Finance charts where you can compare charts and it can be eyeopening!

My point is -- that just to pick A single name and hope that what you think about it is spot on -- can be deadly. Poke around a bit - compare and make sure that what YOU think, is the same thing the "MARKET" thinks. I've found that I'm often wrong. The above being a perfect example!

Thanks I do really appreciate the input.

Im going to go back and look at my picks again, and then see what their total returns and payout are as well as compare their graphs. I started using my google finance but havent really compared stocks side by side like that.

I think I did definitely get caught up in focusing too much on the dividend and the cost of the stock and if the chart was up overall the past 5-10+ years

back to my excel sheel

[96z28ss]

I took this from Zerohedge.com its an investment website, a lot of what they talk about is way over the head of average people. I'm reading and trying to learn.

The 7-Deadly Investing Sins


Wrath – never get angry; just fix the problem and move on.

Individuals tend to believe that investments that they, or their advisor, make should "always" work out. They don't and they won't. Getting angry about a losing bet only delays taking the appropriate actions to correct it.

"Loss aversion" is the type of thinking that can be very dangerous for investors. The best course of action is to quickly identify problems, accept that investing contains a "risk of loss," correct the issue and move on. As the age-old axiom goes: "Cut losers short and let winners run."



Greed – greed causes more investors to lose more money than at the point of a gun.

The human emotion of "greed" leads to "confirmation bias" where individuals become blinded to contrary evidence leading them to "overstay their welcome."

Individuals regularly fall prey to the notion that if they "sell" a position to realize a "profit" that they may be "missing out" on further gains. This mentality has a long and depressing history of turning unrealized gains into realized losses as the investment eventually plummets back to earth.

It is important to remember that the primary tenant of investing is to "buy low" and "sell high." While this seems completely logical, it is emotionally impossible to achieve. It is "greed" that keeps us from selling high, and "fear" that keeps us from buying low. In the end, we are only left with poor results.



Sloth – don’t be lazy; pay attention to your money because if you don’t – no one else with either.

It is quite amazing that for something that is as important to our lives as our "money" is, how little attention we actually pay to it. Not paying attention to your investments, even if you have an advisor, will lead to poor long term results. Portfolios, like a garden, must be tended to on a regular basis, "prune" by rebalancing the allocation, "weed" by selling losing positions, and "harvest" by taking profits from winners.

If you do not regularly tend to a portfolio, the bounty produced will "rot on the vine" and eventually the weeds will eventually reclaim the garden as if it never existed.



Pride – when things are going good don’t be prideful – pride leads to the fall. You are NOT smarter than the market, and it will "eat you alive" as soon as you think you are.

When it comes to investing, it is important to remember that a "rising tide lifts all boats." The other half of that story is that the opposite in also true. When markets are rising, it seems as if any investment we make works; therefore we start to think that we are "smart investors." However, the reality is that there is a huge difference between being "smart" and just being "along for the ride." Ray Dalio, head of Bridgewater which manages more than $140 billion, summed it up best:

"Betting on any market is like poker, it's a zero-sum game and the deck is stacked against the individual investor in favor of big players like Bridgewater, which has about 1,500 employees. We spend hundreds of millions of dollars on research each year and even then we don't know that we're going to win. However, it's very important for most people to know when not to make a bet because if you're going to come to the poker table you are going to have to beat me."



Lust – lusting after some investment will lead you to overpay for it.

"Chasing performance" is a guaranteed recipe for disaster as an investor. For most, by the time that "performance" is highly visible the bulk of that particular investments cyclical gains are already likely achieved.
Importantly, you can see that investment returns can vary widely from one year to the next. "Lusting" after last year's performance leads to "buying high" which ultimate leads to the second half of the cycle of "selling low."

It is very hard to "buy stuff when no one else wants it" but that is how investing is supposed to work. Importantly, if you are going to "lust," "lust" after your spouse – it is guaranteed to pay much bigger dividends.



Envy – this goes along with Lust and Greed

Being envious of someone else’s investment portfolio, or their returns, will only lead to poor decision-making over time. It is also important to remember that when individuals talk about their investments, they rarely tell you about their losers. "I made a killing with XYZ. You should have bought some" is how the line goes. However, what is often left out is that they lost more than what they gained elsewhere.

Advice is often worth exactly what you pay for it, and sometimes not even that. Do what works for you and be happy with where you are. Everything else is secondary, and only leads to making emotional decisions built around greed and lust which have disastrous long term implications.



Gluttony – never, ever over-indulge. Putting too much into one investment is a recipe for disaster.

There are a few great investors in this world than can make large concentrated bets and live to tell about it. It is also important to know that they can "afford" to be wrong - you can't.

Just like the glutton gorging on a delicious meal – it feels good until it doesn’t, and the damage is often irreversible. History is replete with tales of individuals who had all their money invested in company stock, companies like Enron, Worldcom, Global Crossing; etc. all had huge, fabulous runs and disasterous endings.

Concentrated bets are a great way to make a lot of money in the markets as long as you are "right." The problem with making concentrated bets is the ability to repeat success. More often than not individuals who try simply wind up broke.

[glassman]

This might sound stupid, but apparently Gilligan's Island was based on the seven deadly sins, each character represents one. I googled it, pretty funny.

Good article though.

[GregWeld]

Originally Posted by glassman

This might sound stupid, but apparently Gilligan's Island was based on the seven deadly sins, each character represents one. I googled it, pretty funny.

Good article though.

You're banned from speaking to me on the Hall of Fame tour. Just pretend you don't know me.

[GregWeld]

That is really a great read.


Not saying that I'm smart -- rather -- I'm going to tell you that if you read this and then go back and read this thread. The very same "advice" is given over and over again right here.

Investing isn't hard - doesn't take "brilliance" - doesn't take much more than $500 to get started - doesn't require gut wrenching decisions. It does take - GETTING STARTED - doing a little homework - patience.

Buy good stuff - don't gamble - diversity the best you can at any given point - keep a heads up - buy more when the market is at it's worst - don't be a trader but do pay attention to fundamental changes and be willing to make adjustments - reinvest the dividends automatically. You will be rewarded over TIME. If your guts tell you to sell - SELL! But then don't sit on your hands - get those employees (funds) back to work!! Funds "on vacation" aren't very productive!

Investing is like a golf swing - the harder you try to swing (gambling and risk) - the deeper you'll be in the woods. You can't win the game on one hole... you have to play until the end. Best game I ever had I never hit anything longer than a 5 iron. 150 off the tee - 150 off the fairway - a chip and run - two putt for a bogey. When I try to birdie - I end up with a snowman.

Originally Posted by 96z28ss

I took this from Zerohedge.com its an investment website, a lot of what they talk about is way over the head of average people. I'm reading and trying to learn.

The 7-Deadly Investing Sins


Wrath – never get angry; just fix the problem and move on.

Individuals tend to believe that investments that they, or their advisor, make should "always" work out. They don't and they won't. Getting angry about a losing bet only delays taking the appropriate actions to correct it.

"Loss aversion" is the type of thinking that can be very dangerous for investors. The best course of action is to quickly identify problems, accept that investing contains a "risk of loss," correct the issue and move on. As the age-old axiom goes: "Cut losers short and let winners run."



Greed – greed causes more investors to lose more money than at the point of a gun.

The human emotion of "greed" leads to "confirmation bias" where individuals become blinded to contrary evidence leading them to "overstay their welcome."

Individuals regularly fall prey to the notion that if they "sell" a position to realize a "profit" that they may be "missing out" on further gains. This mentality has a long and depressing history of turning unrealized gains into realized losses as the investment eventually plummets back to earth.

It is important to remember that the primary tenant of investing is to "buy low" and "sell high." While this seems completely logical, it is emotionally impossible to achieve. It is "greed" that keeps us from selling high, and "fear" that keeps us from buying low. In the end, we are only left with poor results.



Sloth – don’t be lazy; pay attention to your money because if you don’t – no one else with either.

It is quite amazing that for something that is as important to our lives as our "money" is, how little attention we actually pay to it. Not paying attention to your investments, even if you have an advisor, will lead to poor long term results. Portfolios, like a garden, must be tended to on a regular basis, "prune" by rebalancing the allocation, "weed" by selling losing positions, and "harvest" by taking profits from winners.

If you do not regularly tend to a portfolio, the bounty produced will "rot on the vine" and eventually the weeds will eventually reclaim the garden as if it never existed.



Pride – when things are going good don’t be prideful – pride leads to the fall. You are NOT smarter than the market, and it will "eat you alive" as soon as you think you are.

When it comes to investing, it is important to remember that a "rising tide lifts all boats." The other half of that story is that the opposite in also true. When markets are rising, it seems as if any investment we make works; therefore we start to think that we are "smart investors." However, the reality is that there is a huge difference between being "smart" and just being "along for the ride." Ray Dalio, head of Bridgewater which manages more than $140 billion, summed it up best:

"Betting on any market is like poker, it's a zero-sum game and the deck is stacked against the individual investor in favor of big players like Bridgewater, which has about 1,500 employees. We spend hundreds of millions of dollars on research each year and even then we don't know that we're going to win. However, it's very important for most people to know when not to make a bet because if you're going to come to the poker table you are going to have to beat me."



Lust – lusting after some investment will lead you to overpay for it.

"Chasing performance" is a guaranteed recipe for disaster as an investor. For most, by the time that "performance" is highly visible the bulk of that particular investments cyclical gains are already likely achieved.
Importantly, you can see that investment returns can vary widely from one year to the next. "Lusting" after last year's performance leads to "buying high" which ultimate leads to the second half of the cycle of "selling low."

It is very hard to "buy stuff when no one else wants it" but that is how investing is supposed to work. Importantly, if you are going to "lust," "lust" after your spouse – it is guaranteed to pay much bigger dividends.



Envy – this goes along with Lust and Greed

Being envious of someone else’s investment portfolio, or their returns, will only lead to poor decision-making over time. It is also important to remember that when individuals talk about their investments, they rarely tell you about their losers. "I made a killing with XYZ. You should have bought some" is how the line goes. However, what is often left out is that they lost more than what they gained elsewhere.

Advice is often worth exactly what you pay for it, and sometimes not even that. Do what works for you and be happy with where you are. Everything else is secondary, and only leads to making emotional decisions built around greed and lust which have disastrous long term implications.



Gluttony – never, ever over-indulge. Putting too much into one investment is a recipe for disaster.

There are a few great investors in this world than can make large concentrated bets and live to tell about it. It is also important to know that they can "afford" to be wrong - you can't.

Just like the glutton gorging on a delicious meal – it feels good until it doesn’t, and the damage is often irreversible. History is replete with tales of individuals who had all their money invested in company stock, companies like Enron, Worldcom, Global Crossing; etc. all had huge, fabulous runs and disasterous endings.

Concentrated bets are a great way to make a lot of money in the markets as long as you are "right." The problem with making concentrated bets is the ability to repeat success. More often than not individuals who try simply wind up broke.

[GregWeld]

I'm surprised nobody has asked about Alibaba.... and it's IPO.


Frankly -- I really haven't paid all that much attention to it because I'm "done" playing in the IPO market. That doesn't mean you younger guys shouldn't be playing with some of this stuff.

I thought Alibaba was like Amazon.. or eBay. So I decided to go visit the site. What I found - and I didn't spend more than 4 minutes poking around - is that it seemed to be mostly for business customers not individuals. When I checked on buying some 2" X 60" belts for my Burr King.... I had to buy 1000 of them or 100 of them. I also found "mostly" Chinese suppliers. While you could select which country you wanted as a manufacturer -- there would be 50 Chinese suppliers to 1 or 2 USA.

What I'd really like to know about this company is whether or not USA companies are willing to buy from them (Alibaba) or use them the way the Chinese market has. It will be very interesting to watch.

Remember too -- the STOCK (IPO) is very different from the COMPANY... there is a ton of hype on this IPO. I would "expect" it to be "the IPO" of the year... given it's size and sales etc. And IPO's can be very interesting and fun to play with. Just look at GoPro so far! Wow!