Investing 102

[WSSix]

Well, that's certainly no good. I wonder if it'll have any effect on GoPro.

So I decided to spend some money today and buy some more shares. For the fun of it, I did three separate limit orders. I was stoked to see all three of my orders went through especially since I didn't post them until 1pm EST. I should have shot lower. Every single stock I bought closed lower than my purchase price, lol. Oh well. Fun times.

[96z28ss]

Blaming the Gopro camera on his brain injury is the most stupid thing I've heard. How does a camera mounted outside the helmet with either a strap or double side tape have caused a brain injury?

[WSSix]

Are you sure that's how it was mounted? Also, the double sided tape can easily be bonded well enough to radically change the forces applied to the helmet. Take 3M's outdoor double sided tape, the stuff with the red backing, it's ridiculously strong. Plenty of motorcycle riders talk about the drag the camera causes, too. It's very easy to understand how the camera could cause extra damage to the helmet depending on how it is installed/attached. If the helmet fails, then his head is virtually unprotected.

[chichirone]

Originally Posted by GregWeld

I would FIRE your "financial advisor" instantly and never give him another chance. He doesn't know what he's talking about and obviously missed the most basic education. He either doesn't understand -- or doesn't know how to explain your situation.

I will tell you from my own personal situation -- and I have a quite complicated tax filing. 2013's income tax form was 154 pages.... and our income was just under one million dollars this year.... and my tax rate was 20%. I DO NOT have a lot of deductions - but I have ZERO EARNED INCOME... so all our taxes are dividends - interest - long or short term capital gains.

Greg, thanks for your candor and clarity. Amy and I had an epiphany after reading your response and realizing he really did not know what we were talking about and I found myself educating him. We laughed, in a pissed off kind of way, at the idea that not only are we paying him for advice but now I'm paying him for me to give him advice. WTF???

I can't wait for the day of ZERO EARNED INCOME!

[GregWeld]

Originally Posted by chichirone

Greg, thanks for your candor and clarity. Amy and I had an epiphany after reading your response and realizing he really did not know what we were talking about and I found myself educating him. We laughed, in a pissed off kind of way, at the idea that not only are we paying him for advice but now I'm paying him for me to give him advice. WTF???

I can't wait for the day of ZERO EARNED INCOME!

Financial Advisors always bust me up...


It's really hard to understand all of the tax rules - tax changes - little nuances that can have big impacts. An example --- I own an apartment complex that I bought inside our IRA... STUPID.... The income is considered "passive income" - that's not allowed in an IRA - so now the IRA has to file income taxes. Huge nuisance. Live and learn.

Here's my big point of the day. Nobody is more responsible for their own wellbeing than themselves... we owe it to ourselves to learn what to do - even on a basic level. It doesn't take very long. The internet has many sites that will explain stuff to us until we do understand. Investopia will give definitions on almost any term you can type in their search box.

A few bucks (a couple hours of their fee) spent with a tax pro -- and I don't mean the ones that set up shop at the mall just before tax time... I mean a real honest to goodness tax pro... is money well spent. Go to them when it IS NOT tax time! They'll save you money by helping you to not make mistakes.

A good brokerage - like Schwab - will also have people there that are well trained to guide people on IRAs and many other questions that people have. They WILL NOT help you pick a stock... but they can help with just about anything else... and they're FREE. It's so f'n easy.

[chichirone]

I wonder if the past 30-180 days performance, or lack there of, leads to a buying opportunity. An example is COP. They are down 13% since Sept 15th and down nearly 20% over the past 6 months and 5% YOY. There are a number of good payers out there so does it make sense to scoop some up at a discount. The saying goes, buy when people are selling and sell when people are buying? Or is there still discounting available to stretch the investing dollar? It is a long term hold pattern for us but my curiosity is getting the best of me knowing none of us have a crystal ball to truly answer this question, but there has to be some indicators to consider a good buy.

So I guess my question really is, what is a good indicator(s) to consider to make a buy but not wait until its too late and the "opportunity" to buy at a discount has passed on bye.

[GregWeld]

I will make this unequivocal prediction:


You will never buy at the low point - and you'll never sell at the highest point.


You buy when you can... and when you feel "okay" about the market. Buying is harder than selling. I "scale in"... I figure the position I want (in dollars or number of shares) and then I tip toe - then down or up - I buy more - and so on until I hit my position. Okay --- I fully get that I'm buying positions that allow me to do that. If a guy is buying 25 or 50 shares.... furgidaboudit. Just buy. If you're buying 100 shares.... buy 50 and then sit back and see how you feel about that (and all other inputs) and then buy 50 more when you're ready.


Now --- OIL is terrible.... all my oil stuff is terrible and anything related to oil is terrible. OH HELL YES I'M BUYING. As the price drops - the percentage the dividend represents goes up. The price that kept me out because the yield wasn't there - can now come in and that yield is suddenly in my range. I'm much more about the yield than I am about the few bucks the share price swing is "today - or this week". I'm going to go with my knowledge of the last 50 years that the price WILL go up over time. So the price I pay today isn't really all that important other than it makes me feel smart. What I'm really after is the yield on that particular investment. I'm a buyer in a terrible market I'm never a seller in that market.

What happens if I wait too long for just the perfect "low" -- the friggin' market snaps back on me and the next thing you know the stock I wanted to own has run away. So I just try to do the best I can over a longer period of time. Once you get your head around that kind of investing you have far less stress about it.

Originally Posted by chichirone

I wonder if the past 30-180 days performance, or lack there of, leads to a buying opportunity. An example is COP. They are down 13% since Sept 15th and down nearly 20% over the past 6 months and 5% YOY. There are a number of good payers out there so does it make sense to scoop some up at a discount. The saying goes, buy when people are selling and sell when people are buying? Or is there still discounting available to stretch the investing dollar? It is a long term hold pattern for us but my curiosity is getting the best of me knowing none of us have a crystal ball to truly answer this question, but there has to be some indicators to consider a good buy.

So I guess my question really is, what is a good indicator(s) to consider to make a buy but not wait until its too late and the "opportunity" to buy at a discount has passed on bye.

[GregWeld]

Real world "buying" regarding above question and answer about "when to buy".


Nobody knows. You'll never know. If you do -- you'd be the richest man in the world... the info would be priceless. I've never gotten it "perfect". I just do what I think is "okay".


I know energy is horrible - getting killed - might very well go lower.... I also know that September and October are ALMOST ALWAYS horrible months in the market. I stash some cash HOPING they are!! WTF.... it's like knowing you need sheets and you know every August all the stores have big white sales. Might as well get excited about the fact that you'll be allowed to put some money to work. Money sitting around is on vacation... a short vacation is okay -- but you can't let it sit around too long.


I bought 2000 shares of Energy Transfer Partners (ETP) at almost $59.... I bought 2000 more at $58.50.... I bought another 1000 at $58

I just bought another 5000 at $55.40

It might go to $50.... I don't know. I can't possibly know. But the yield on this is nearing 7%... and my average will yield near 6.74% (I haven't done the math - I just did the math and the 6.74% is my yield on my average cost). I'm done building this position. I will now sit back and collect the dividend at a respectable return. That's the best I can do.

[GregWeld]

Okay --- one more post this morning - because these markets are so "interesting" which gives me lots of fodder for posting.


The whole buying question is just "un-answerable".... I wish I had a pat response.


Here's one thing that I personally have trained myself to do. It took years to get to this point. I look at my investments as a whole. I don't look at them as "this stock sucks" and "this stock is hot". I own lots of stuff. Some of it's working - some of it is "okay" - some of it is "killing it". As long as I'm okay overall - then so be it. I can't get 100% working perfectly day after day. It ebbs and flows. I've owned property when you couldn't give it away -- right now - all the property I own (which used to suck) is deep into the green.... Right now I'm losing on my ETP purchases -- but I'm killing it on Con Ed (ED).... one is going down daily - one is going up daily. My "steady eddy" is the current hot ticket... WTF!! - my steady eddy is beating the pants off GoPro (GPRO) which would be killing me if I'd bought it near the highs.

After doing this for so many years --- I've come to understand that I'll never get it right -- but what I do know - is that I'm way ahead of where I was 10 years ago. That's winning. What happens today - isn't so important. I'm very confident that 10 years from now - I will most likely be richer than I am now. LOL What part of my investments that will get me there is anyones guess. I'll just keep plugging along. I keep my expenses low - and my investments liquid (for the most part) and I only invest in stuff that spins off cash... and that cash is the key. What they're worth this morning isn't the driver.

[GregWeld]

Today's market action is PRECISELY what I was talking about when I said you buy whenever you think or you can.


I bought that ETP when everyone was scared this morning - 5000 shares at $55.40 using a limit order... and now a few hours later they're trading at $58+

My first couple buys were too early. Okay - no biggie. I'll scale into the position and move my average cost closer to where it's trading. Might trade lower than my cost basis - but I'll move that direction in a down market. Ditto in an up market. If I was early and got some shares of "X" at $50 - and more at $55... and some more at $62.50.... I'm OKAY with paying up for them. WTF! The share are just doing what I hoped they'd do -- which is to go higher. Why would I then be afraid to buy more? Because it might go down? It might also go higher yet!! I can't ever tell so why get my panties in a knot over it. Do I want to own shares in the company or not. That's my more important question.


Am I smart? No. Lucky? Sometimes. But truthfully - it's more that I'm not afraid. I don't panic and sell - and I love to buy when everyone hates everything. You build calluses on your nerves. You look at your overall situation and think to yourself... "I'm in good shape"... "what does the income look like on the trade"... "are they going to go broke next year?"... "am I okay if it goes lower?".