Investing 102

[GregWeld]

Originally Posted by Rick D

Greg is it better to go to the brick and mortar or can it be done online?? Does it really matter which brokerage house??

I think the brokerage choice is more about CONVIENENCE... as long as we're talking "discount" brokerages. Fidelity / Schwab etc.

I'm positive you can not do the transfer via "on line" as you'd need to sign documents etc.

RE: The ROTH vs traditional rollover (basically nothing more than a fancy word for transferring control).... BE VERY CAREFUL HERE!! The US Government wants you to screw this up so they can stick their hand in your pocket!! TALK TO A PROFESSIONAL before doing anything! Thus going to see your new discount brokerage first hand and asking some important questions.

Their are limits to the ROTH --- Tax consequences -- Income limitations - and on and on.... The ROTH account is by far the best but this is a math issue when transferring one type of account into another type of account. The brokerage can help you think thru this plan.

[GregWeld]

If you've read this thread --- then you've heard me complain about hidden fees -- etc --- and particularly --- in company retirement plans... and MUTUAL FUNDS.... and how these can affect your account dramatically over time.

I'll give Obama credit for finally trying to do something about it (I won't give him credit for much else). It's just ABOUT TIME someone quits ripping people off!



President Obama will order the Labor Department on Monday to begin developing new rules for financial managers who handle retirement accounts for working Americans.

The goal is to end "hidden fees that hurt consumers and back-door payments that help Wall Street brokers," said a statement from White House senior adviser Brian Deese.

[JKnight]

Originally Posted by Obama

President Obama will order the Labor Department on Monday to begin developing new rules for financial managers who handle retirement accounts for working Americans.

The goal is to end "hidden fees that hurt consumers and back-door payments that help Wall Street brokers," said a statement from White House senior adviser Brian Deese.

Well, that's all well and good, but we kinda already did that 2+ years ago. See DOL Rule 404(a)5 (for participants) and 408(b)2 (for plan sponsors). The problem is, the DOL requirements were so broad that the resultant fee disclosures coming from these "financial managers" range from being so brief they don't actually tell you anything to so complex that only those with finance and legal background can draw any valuable conclusions.

So...I say lets fix what's already in place by having the DOL work with those who have implemented these existing regulations rather than layer yet another new regulation onto the retirement industry. Which, by the way, will inevitably increase costs to the participant...exactly what he's trying to avoid.

Edit: The regs I listed above were about disclosure of fees. If they're going to make certain payments illegal, I think that's trying to hit a moving target. People will find new ways to classify a fee or payment or make other arrangements so that it fits within the law. I say lets improve the disclosures and then dare the over-charging entities to try to slip one by their client. But, it's a two-way street. We, as investors and/or company owners, have to take responsibility for this stuff, learn about the industry/fees/disclosures, and be accountable to our employees.

[GregWeld]

IMPORTANT WORDS you want to avoid....


"Your Government is here to help you".

Originally Posted by JKnight

Well, that's all well and good, but we kinda already did that 2+ years ago. See DOL Rule 404(a)5 (for participants) and 408(b)2 (for plan sponsors). The problem is, the DOL requirements were so broad that the resultant fee disclosures coming from these "financial managers" range from being so brief they don't actually tell you anything to so complex that only those with finance and legal background can draw any valuable conclusions.

So...I say lets fix what's already in place by having the DOL work with those who have implemented these existing regulations rather than layer yet another new regulation onto the retirement industry. Which, by the way, will inevitably increase costs to the participant...exactly what he's trying to avoid.

Edit: The regs I listed above were about disclosure of fees. If they're going to make certain payments illegal, I think that's trying to hit a moving target. People will find new ways to classify a fee or payment or make other arrangements so that it fits within the law. I say lets improve the disclosures and then dare the over-charging entities to try to slip one by their client. But, it's a two-way street. We, as investors and/or company owners, have to take responsibility for this stuff, learn about the industry/fees/disclosures, and be accountable to our employees.

[JKnight]

Originally Posted by GregWeld

IMPORTANT WORDS you want to avoid....


"Your Government is here to help you".

No doubt. I could have probably left out my diatribe and just said the part about us being accountable for these things. But, I also know it's a utopian view to expect that everyone in the general public will open their brain and learn about this stuff.

You've done an excellent job of opening people's minds and spreading the knowledge of investing Greg, well done sir.

[glassman]

And coming from an employer's perspective (me and the company i own/run), this pension/401k is simple yet complicated. I keep telling my employees, ya gotta invest/watch/manage your money as well, DONT count on just your pension. Myself included. Most people will have SSI, and maybe a pension. Our investing goal for graduated incomes should be Pension, Roth's, SSI, and our personal investments (what i'm doing here and with real estate, in other words, income)

If you make over "X" in retirement, do you still qualify for SSI? my understanding is if you paid in, its "owed" to you....

[GregWeld]

So -- let's use a recent well known IPO (Initial Public Offering) i.e., GOPRO (GPRO) to learn from and continue to learn from what happens when a coming comes under the critical eye of WALL STREET - via going from a private company to a publicly traded one.

To set the tone -- let me say I have no dog in this fight -- and I AM an owner of at least 3 of these cameras.... and I believe them to be THE brand name in the business.


Today I see it's trading in the 43 to 44 range.... That would make it DOWN 30% since January 1st.... That's a real OUCH if you purchased on it's way up to, or near the top... You've lost even more -- DOWN 52% from the peak trades...

I've said in the past that many times it pays to WAIT and see where these IPO's are going to go --- waiting one or two quarters.... a quarter is 3 months -- so we're not talking about waiting a life time. Sometimes waiting costs you the opportunity to get in early -- so you leave some of the massive gains behind -- but sometimes it's better to wait and NOT lose money! And then have to wait and wait and wait for it to come back to break even!

Now -- HERE'S THE INVESTING 102 part of this....


When a company is hyped up - as was GPRO - and the stock shoots up... there's nothing wrong with that!! But what we don't know is how the company is going to do going forward... the management is "new" perhaps... we know the company is probably relatively new... maybe management needs to learn how to manage "wall street" and it's expectations (I'm thinking back to the big hiccup in Netflix when they made some unexpected announcements)..... Sometimes there's a big learning curve... Sometimes the HYPE just plain overshoots the actual execution and the stock has to adjust back down to the real facts.... SOMETIMES the expectations are exceeded and then some and it's off to the races! But here's the problem with that.... WE DON'T KNOW WHICH WAY THIS IS GOING TO GO. We have no history! We're just Betting with the herd!! Great when it works - not so great when it doesn't.

Now -------- I just found this pretty important info on GoPro....




Questions related to inventory revealed GoPro might have over-shipped end demand in the busy holiday season last quarter. 73% of respondents revealed there had been no stock-outs for GoPro products in the recent past. Bidness Etc believes the lower stock-outs are a function of slowing demand (due to seasonality) and higher inventory left over from the last quarter.

If GoPro did end up over-shipping end demand last quarter, it would explain why the company managed to post brilliant numbers for unit shipments last quarter. However, it would also mean that unit shipments this quarter may come in lower-than-estimated, leading to a possible revenue miss.

However, the problem seems to be at a manageable level. If there had been a build-up of GoPro inventory, retailers would have tried to clear it out by giving discounts. Our survey revealed that only 13% of the sampled locations are currently giving discounts on GoPro products. We believe that retailers are in no hurry to get rid of the old inventory because there is a lot of time until GoPro rolls out the new versions of its Hero series. Moreover, the strong brand presence of GoPro almost insures the retailers against write-downs, due to low demand.


When those two things happen (missing sale or guidance numbers) --- you wake up one morning and you have gotten your ass handed to you! Boom! Huge downdraft!!

Many times this will lead to what's called a "broken" stock. Where fundamentally there is really nothing that wrong with the stock --- but the investors that lost huge money (usually the "hot money boys") drop the stock and move on to something else. We need BUYERS to move the price up -- not sellers! It's usually best to just put a name like that on the "watch it" list... and see what happens over another quarter or two. Sometimes they spring right back - and other times they just continue to drift lower. Better to wait than to lose.

Some times the market is now going to go into the P/E ratio valuation... meaning that everyone is waiting to see if they can be profitable --- or if they can really crank up the sales numbers on a growth path which hopefully then they'll "grow into" the often lofty P/E (Price to EARNINGS ratio).

What we're really wanting to see is big growth - or stellar earnings - or BOTH... in order to assign a "value". It's hard to do this with most IPO's. They're generally still in their infancy as companies. If the P/E gets way out ahead of these numbers -- then the price has to shrink to bring it in to line with reality. I think this is the case with GoPro. The company has killer product... has the name... basically owns the market it's in ------ BUT WE DON'T KNOW WHAT THE SIZE OF THAT MARKET IS YET. Is the market billions or simply hundreds of millions going forward... WHO KNOWS?!

This has been a great IPO to be sure! It's up some 40% if you were able to buy it at the IPO price.... but you've not had a happy ride if you bought it almost anywhere else.

Would I buy this stock? Not yet... I want to see what the real sales/growth rate is going to be. Did everyone rush out and buy one for Xmas -- but hasn't used it - or doesn't feel they need another.... Or did they buy one and can't wait to buy one for everyone in their family? We'll find out...

[gearheads78]

So far I have been lucky on my COP stock. My additional buy on it ended up being .08 cents from the bottom of the recent down turn. My other two I was able to average down too.

Now my 2 3D stocks have been killed. One is so bad I'm just going to just hang on and ride it to the ground or back up.

Over all my dividend stocks are up 9-23% after only one year not including the dividends. My 4 down or very little gained stocks are (play money) stocks I was hoping would make big gains and sell to invest in divident players. Its been a good learning experience. Had I invested that $4000 spead among my dividend players a year ago it would be worth $5000 instead of $2800 that it is today.

[GregWeld]

...... and that's why I preach what I do... it's SO EASY to lose money.

Originally Posted by gearheads78

So far I have been lucky on my COP stock. My additional buy on it ended up being .08 cents from the bottom of the recent down turn. My other two I was able to average down too.

Now my 2 3D stocks have been killed. One is so bad I'm just going to just hang on and ride it to the ground or back up.

Over all my dividend stocks are up 9-23% after only one year not including the dividends. My 4 down or very little gained stocks are (play money) stocks I was hoping would make big gains and sell to invest in divident players. Its been a good learning experience. Had I invested that $4000 spead among my dividend players a year ago it would be worth $5000 instead of $2800 that it is today.

[captainofiron]

Originally Posted by gearheads78

So far I have been lucky on my COP stock. My additional buy on it ended up being .08 cents from the bottom of the recent down turn. My other two I was able to average down too.

Now my 2 3D stocks have been killed. One is so bad I'm just going to just hang on and ride it to the ground or back up.

Over all my dividend stocks are up 9-23% after only one year not including the dividends. My 4 down or very little gained stocks are (play money) stocks I was hoping would make big gains and sell to invest in divident players. Its been a good learning experience. Had I invested that $4000 spead among my dividend players a year ago it would be worth $5000 instead of $2800 that it is today.

right now Im around -6% in COP,

I keep it only because I have visibility on it with my Dad working on the Eagle Ford.

they are letting go of people, BUT its still not bad, they still have the man-camps going and the cooks out there serving steak and lobster.

Once all that goes, then maybe its time to panic.

I think COP is just trying to ride out the price drops