Investing 102

[GregWeld]

Originally Posted by XLexusTech

No disagreement however I believe long I will make exponentially more on FB then JNJ which I actually bought for the dividend but my timing was optimal...

No -- Let's be HONEST... not arguing - just pointing out the reality. I personally made money this year on Twitter - Facebook - Alibaba and GoPro TRADES (I bought and flipped). I don't post that because I don't want people copying what I'm doing/do. Everyones situation is different. You were LUCKY. That's my point. Had you bought Twitter instead of Facebook - you'd be DOWN 40%. Whatever your choice(s) might have been doesn't matter -- some readers here would have missed the FB IPO and watched it stream ahead - and therefore plowed into TWITTER and lost their asses (SO FAR). That's not to say they, or you, might have bought some other name, and been equally up or down. The point of the OP was that these IPO's are not guarantees of success... the way you'd think they might be given the way they are touted on TV. The biggest IPO ever in history (BABA) lags behind if you'd just bought the NASDAQ.

[XLexusTech]

Originally Posted by GregWeld

No -- Let's be HONEST... not arguing - just pointing out the reality. I personally made money this year on Twitter - Facebook - Alibaba and GoPro TRADES (I bought and flipped). I don't post that because I don't want people copying what I'm doing/do. Everyones situation is different. You were LUCKY. That's my point. Had you bought Twitter instead of Facebook - you'd be DOWN 40%. Whatever your choice(s) might have been doesn't matter -- some readers here would have missed the FB IPO and watched it stream ahead - and therefore plowed into TWITTER and lost their asses (SO FAR). That's not to say they, or you, might have bought some other name, and been equally up or down. The point of the OP was that these IPO's are not guarantees of success... the way you'd think they might be given the way they are touted on TV. The biggest IPO ever in history (BABA) lags behind if you'd just bought the NASDAQ.

I can't disagree more I wasn't lucky by buying FB I was strategic an have and maintain a significant knowledge if the tech sector... Which will eventually lead to a twitter purchase ...
I understand more about the sector then the financials which is a very big lever that folks should explore...

I don't flip and stocks and I am up 31% market value this year on a whole yet couldn't tell you what the P/E is on any of my holdings

[ironworks]

What so I took "some" of you advice over the weekend and check out the competition part at the bottom of the stock page. I also tried to find a stock that I had no idea was even on the exchange. I have seen the Polaris market explode in the past few years. They really are the only ones in the industry with a 100hp 20" travel offroad buggy that really works and Polaris must be selling a ton of them as they are now leading sponsors for huge events all over. Do you see something like this as risky or will this growth if capitalized on set them up for a bigger future? I get nervous thinking every bubble can burst. They have decent dividend and over the long term seem to keep going up.

I wish I would have thought out Polaris and Chipotle 4 years ago when they both became aware in my life.


Also what is your take on the slump in the oil? I feel it has to come back again. I live in a heavy oil community and its sad to see all the parked rigs but I have seen this a few times before. Chevron stock is at a 20 year low and I'm trying to diversify my holdings, but I also see a market I think is on sale and has to come back strong as there is nothing to replace it. Should I continue to diversify or hold off and take advantage of what seems to be on "sale". It could go lower but the dividend is descent from what I have understood you to say to get in now and maybe buy more later.

[XLexusTech]

[/QUOTE]

Also what is your take on the slump in the oil? I feel it has to come back again. I live in a heavy oil community and its sad to see all the parked rigs but I have seen this a few times before. Chevron stock is at a 20 year low and I'm trying to diversify my holdings, but I also see a market I think is on sale and has to come back strong as there is nothing to replace it. Should I continue to diversify or hold off and take advantage of what seems to be on "sale". It could go lower but the dividend is descent from what I have understood you to say to get in now and maybe buy more later.[/QUOTE]

I am Not an energy sector expert by any means.. however the thing that causes me pause on the oil market is that it is artificially manipulated by OPEC.
So even though you know that demand is going to go up... (emerging markets in China India Ect..) however what about the supply?

OPEC manipulates the supply routinely to control the prices... Some theories around the recent drop is that OPEC isn't cutting supply (forcing prices to rise) as a way of hurting IRAN or ISIS or even Russia... Who knows... but at the end of the day.. since its artificially manipulated.. its a gamble...

I am staying neutral but will be keeping all of my CVX and XOM

[GregWeld]

Originally Posted by ironworks

What so I took "some" of you advice over the weekend and check out the competition part at the bottom of the stock page. I also tried to find a stock that I had no idea was even on the exchange. I have seen the Polaris market explode in the past few years. They really are the only ones in the industry with a 100hp 20" travel offroad buggy that really works and Polaris must be selling a ton of them as they are now leading sponsors for huge events all over. Do you see something like this as risky or will this growth if capitalized on set them up for a bigger future? I get nervous thinking every bubble can burst. They have decent dividend and over the long term seem to keep going up.

I wish I would have thought out Polaris and Chipotle 4 years ago when they both became aware in my life.


Also what is your take on the slump in the oil? I feel it has to come back again. I live in a heavy oil community and its sad to see all the parked rigs but I have seen this a few times before. Chevron stock is at a 20 year low and I'm trying to diversify my holdings, but I also see a market I think is on sale and has to come back strong as there is nothing to replace it. Should I continue to diversify or hold off and take advantage of what seems to be on "sale". It could go lower but the dividend is descent from what I have understood you to say to get in now and maybe buy more later.

Polaris (PII) has gone balistic since 2010. I do not know that market - but obviously you're involved in it so should be able to keep abreast... and be aware of any big competitors catching up or doing something better.... So that is EXACTLY what I'm always saying to invest in --- whatever that is --- something that you can stay aware of what's going on.

The dividend isn't very good on this name - BUT - you have to look at two factors. #1 huge recent growth and #2 This stock is a "splitter"... there's several splits in their history. Splits generally tend to be good for the investor.

#3 (I don't care that I said two things) -- you're relatively young - and it's okay to invest in higher growth (riskier) stocks as part of your portfolio.



+++++++++++++++


Oil is definitely "on sale"... and yes -- even if the USA becomes a net producer - as China's growth comes back on line and Russia's economy mends and European Union stops stalling and begins to grow again (just as the US has done) then DEMAND will / should pick back up.

Short term pain? Yeah most likely.... Longer term gain? I think so. Like anything - DO NOT OVER DO IT. That's gambling. Make INVESTMENTS - keep the percentages in line. People get screwed (screw themselves) when they gamble and lose the bet. NOBOBY KNOWS what the future has in store. So choose your bets wisely and keep them (keep yourselves) in check.

[XLexusTech]

http://www.bloombergview.com/article...l-is-different

[Flash68]

Originally Posted by GregWeld

Don't be a Rob Lowe investor.

[GregWeld]

I read an article this morning which contained this little snippet as a paragraph...
I talk about this often. Investors damage themselves - the market just moves up and down like waves on the ocean... It's when the investor doesn't understand what they own or have invested in names where their expectations are on the gambling side vs investing - that's when the panic sets in...

I've also taught myself to look at my finances as a WHOLE. I might be down in one or two or three investments - but if as a total I'm up - and I know for a fact that I'll never have every single investment in the green - I'm okay with it.




Any market segment can have some sort of event that even if unjustified fundamentally can still do permanent portfolio damage to the investor whose panic threshold is breached. This is why diversification and emotional control are both so important to long term investing success.

[GregWeld]

Here's something to watch out for -- or at least to be thinking about regarding the big OIL price decline. I have a bunch of money invested in oil and oil pipes etc and these investments have paid a higher than normal dividend. Dividends can typically build a "floor" in a share price because as the share price drops -- the dividend percentage payout increases -- investors searching for YIELD are then attracted to the shares (remember the market is about buyers and sellers - period).

BUT --- ALWAYS THE BIG BUTT -- At some point if a company is losing money they can and will CUT the dividend!! When they do that - then the price drops yet again.

The reason I say this now is because I don't want you to get caught up in trying to catch a falling knife. It's a mental game - where you've been in a great up market - everything you've touched has been good... and all of a sudden you're seeing companies share prices dropping and the yield rises - and you're like a moth to a flame. Have patience! None of us know what's going to happen with oil --- we have a new metric in place with the US production numbers rising dramatically... When there's too much of something - the price goes on sale... how much is too much? We don't really know... We don't really know what it costs certain oil producers to produce... We're not experts - we're just investors.... So WAIT until this settles out. I'm not selling what I had -- I've trimmed some to balance up and make other more diversified investments going into the end of the year. In other words I'm not panicking. We'll have plenty of time to sit back and let someone else battle it out - and then we can step in when the picture is clearer.



In the market this is called a VALUE TRAP. Where the value suddenly looks so enticing... but I'd still prefer to buy stuff that is on the upswing over dropping. Let the experts try to pick the bottom. They've got way more money than we have.

[WSSix]

Originally Posted by GregWeld

I've also taught myself to look at my finances as a WHOLE. I might be down in one or two or three investments - but if as a total I'm up - and I know for a fact that I'll never have every single investment in the green - I'm okay with it.

I just sat down and did my updates to see how I'm doing. I'm ok with the numbers I'm seeing overall. My oil stocks are in the toilet and MCD wasn't looking so hot. I was expecting my returns to be lower than they are. We'll see what I do since it's quickly becoming time to max my Roth out again, but it was nice reality check to see that even with some big numbers in the red, I'm doing alright overall.

What's funny to me is my boring, old stocks like KMB, CLX, and JNJ are killing it. Guess I got lucky on when I got into them because I'm seeing mainly CG gains from them.

Oh, something else that was nice to see. My one oil stock was/is a gamble. I wanted it for the low entry price and good dividend. It's 67% down. I intend to hold on for the ride because all indications are it will recover eventually. Time will tell of course. However, even if I lose it all, my overall returns will be fine. Before, my attitude was meh I might lose it. Now, I'm Meh whatever knowing that I'm fine even without it. Only gamble with what you can afford to completely lose.