Investing 102

[WSSix]

No idea, Captain. Though, I must say investing in the content provider sounds like the safer option.

With that said, anyone else having fun watching MCD?

[68Cuda]

Greg. The last 5 years have been nice... but I have to admit, since about the beginning of the year I have been feeling a bit nervous, kind of bearish so to speak. I am having trouble comprehending the market... last time I had this feeling was late 1999. I'll have to admit, this does not feel bad in quite the same way, just seems a bit high.

Is this just a natural reaction to the market hitting new highs?

What say you?

[GregWeld]

Originally Posted by 68Cuda

Greg. The last 5 years have been nice... but I have to admit, since about the beginning of the year I have been feeling a bit nervous, kind of bearish so to speak. I am having trouble comprehending the market... last time I had this feeling was late 1999. I'll have to admit, this does not feel bad in quite the same way, just seems a bit high.

Is this just a natural reaction to the market hitting new highs?

What say you?

Not being mean here -- please understand the response.


Go to any company that has a chart longer than say 20 years.... put the chart in ALL mode. If the chart goes back to about 1950 --- how many "NEW HIGHS" were put in as we climbed from a DOW that was about 300 back then.

The DOW was 130.57 on January 1st 1941....

The reason that I have urged people to buy DIVIDEND paying stocks is because we can not rely on day to day price increases to fund our retirement savings or our retirement income. That takes cash flow. If the stocks you own are paying dividends and they are being re-invested - then if the market takes a dip - you will be buying MORE shares - which is a good thing! The whole point of this long winded thread is to get people to STOP trying to second guess the "market" and just buy the best of the best - that pay dividends - and HOLD ON TO THEM for the long term. Be a Warren Buffett.... He buys - he never sells... he's one of the richest men on the planet.

If you sell every time you "think" you know what's going to happen -- you're never going to get anywhere with your investments. The market will - mark my words WILL - go down.... it will also go back up - or maybe just tread water for a long period of time (as in YEARS - not days). You will never know in advance when any of that is going to happen.

[gearheads78]

Originally Posted by 68Cuda

Greg. The last 5 years have been nice... but I have to admit, since about the beginning of the year I have been feeling a bit nervous, kind of bearish so to speak. I am having trouble comprehending the market... last time I had this feeling was late 1999. I'll have to admit, this does not feel bad in quite the same way, just seems a bit high.

Is this just a natural reaction to the market hitting new highs?

What say you?

I think oil being down and it says down will have a ripple affect in the overall market. I think we will see it more around here than other parts of the country. I personally know 2 guys that were making a ****load of money in West Texas that live here and they are back home looking for work now. They were both spending and buying up toys, new big houses, reasturants every day they were home ect.

I keep telling people around here so happy about cheap gas that they need to be carefull what they wish for. They might get it and nothing comes free.

[GregWeld]

Originally Posted by captainofiron

what do you guys think about investing in the players in the "Cable wars"?

I was reading an article about cutting the cable and investing.

They were talking about how some invest in the big cable companies (comcast, att etc)

and some invest in the new comers who are looking to disrupt the cable industry (google with fiber, netflix, hulu, amazon etc)

But they were saying to instead invest in the content providers, since no matter who wins the battle to get the consumer the content, the content providers will still be there making money.

I was looking at FOX, AMC, VIA and DISCK

I watch a ton of programming on the channels under the Discovery umbrella and they look decent on the chart.

Thoughts?

The smart bet is to have a little in all of the categories you bring up. As in most things - there is rarely a "ZERO SUM" game. Investing like this is called DIVERSIFYING.... because none of us have a crystal ball. While it's easy 20 years from now to look back and pick the 'winner' and wish you'd have invested every dime in "it"... that is just dreaming. Better to put $500 in each category (or whatever a guys allotment is) and let 'em grow. You can always adjust the investment when and if "the picture" becomes clearer.

[68Cuda]

Originally Posted by GregWeld

The reason that I have urged people to buy DIVIDEND paying stocks is because we can not rely on day to day price increases to fund our retirement savings or our retirement income. That takes cash flow. If the stocks you own are paying dividends and they are being re-invested - then if the market takes a dip - you will be buying MORE shares - which is a good thing! The whole point of this long winded thread is to get people to STOP trying to second guess the "market" and just buy the best of the best - that pay dividends - and HOLD ON TO THEM for the long term.

Greg - just occasionally have doubts - I know, hold the course. I don't do much of anything in this arena on a whim. I'll obsess about it for a while before I do anything. In the 90% of my 401k that I can port to a self directed brokerage account I am about 10% MO(since 2012), 6% CAG (since 2010), 8% JNJ (since 2011), 6% KMB (since 2011), 10% MRK (since 2011), 8% NUE (since 2011), 12% VZ (since 2012), and 8% WM (since 2012). I moved about 10% to BP and 10% to GE this past December... my only real recent moves. So, as you see, not a lot of jumping in/out or churning and all of them are big names that pay decent dividends. Of course the account is set up to reinvest on all of them. Of the 10% that I cannot do the brokerage on, about 1/2 is in company stock and the rest is in "growth" funds. I have another little IRA account we set up that has mostly KMB and PG that I have held since 2011. And then there is my wife's 401 which is stuck in some generic Schwab funds, but there are not very many choices for us in that one.

[GregWeld]

Originally Posted by 68Cuda

Greg - just occasionally have doubts - I know, hold the course. I don't do much of anything in this arena on a whim. I'll obsess about it for a while before I do anything. In the 90% of my 401k that I can port to a self directed brokerage account I am about 10% MO(since 2012), 6% CAG (since 2010), 8% JNJ (since 2011), 6% KMB (since 2011), 10% MRK (since 2011), 8% NUE (since 2011), 12% VZ (since 2012), and 8% WM (since 2012). I moved about 10% to BP and 10% to GE this past December... my only real recent moves. So, as you see, not a lot of jumping in/out or churning and all of them are big names that pay decent dividends. Of course the account is set up to reinvest on all of them. Of the 10% that I cannot do the brokerage on, about 1/2 is in company stock and the rest is in "growth" funds. I have another little IRA account we set up that has mostly KMB and PG that I have held since 2011. And then there is my wife's 401 which is stuck in some generic Schwab funds, but there are not very many choices for us in that one.

You have good names --- and kudos to you for understanding investing! Now -- quit fretting about all the "news" and talking heads... they'll only get you churned up in the interest of "news".

[SSLance]

Right now I'm bouncing between feeling like I should be buying more right now and just ignoring things...and letting them roll.

Either way, I'm still sleeping very VERY well.

[ErikLS2]

Originally Posted by 68Cuda

Greg. The last 5 years have been nice... but I have to admit, since about the beginning of the year I have been feeling a bit nervous, kind of bearish so to speak. I am having trouble comprehending the market... last time I had this feeling was late 1999. I'll have to admit, this does not feel bad in quite the same way, just seems a bit high.

Is this just a natural reaction to the market hitting new highs?

What say you?

I've kinda wondered at times if we're getting to 1999-2000 levels. Take a look at these two charts. If you look at individual tech names like Cisco, Intel, etc the spread is much wider between then and now. I think the biggest risk is some geo-political or terrorist event, aside from that things look pretty good I think, but what do I know, my crystal ball broke last week

http://www.multpl.com/

http://www.multpl.com/shiller-pe/

[GregWeld]

Please remember that the build up to 1999 was a whole bunch of investment into companies that had nothing behind them! They were "eyeball counts" and "page views" and a whole bunch of crap metrics that meant nothing! That was the whole "dot bomb" era.

Now... we repeated this in a round about way when anyone and everyone could buy a house with nothing down - and zero payments and zero job or income to support it. That was a house of cards that had to implode on itself.

Today you need real income and a down payment to buy a house -- and the whole 1 year no interested etc is all but gone.

Ditto the companies you SHOULD be investing in. They should have real brands with real sales and real profits and paying dividends supported by all of that. If you choose to play the "maybe some day they might grow into a real company" that's a whole other scenario. When I "invest" in companies that maybe one day might be something ---- I might buy a couple hundred shares of that -- versus 1000's of shares of the real stuff. So if you buy 100 shares of Ford - or Coke - or McDonalds -- maybe you'd buy 10 shares of GoPro or Alibaba.... Just saying.

The only thing I'd be really wary of right now is INTEREST RATE SENSITIVE STOCKS.... Stuff that might find themselves in an interest rate squeeze with a bunch of low yielding rate investments in a rising rate environment. Banks might actually do well in this scenario because they're spreads might increase but they won't if the consumer says NO to the higher mortgage rates. Remember that in order to make money with higher rates -- you have to be able to lend that money out! So we'll see how the public reacts to that when and if it happens.