Investing 102

[dhutton]

Originally Posted by GregWeld

#4 --- If you "have to work" until you're 65 or 70..... or beyond.... it's an epic failure of personal responsibility.

If it spurs on ONE person to kick themselves into a different gear - then it was worth the "statement".

I'm retiring next week on my 58th birthday thanks to this thread and a real estate investment I made 16 years ago. Thanks Greg, you have at least one more success story under your belt! It would not have been possible with the track I was on before I read this thread.

Don

[glassman]

Originally Posted by dhutton

I'm retiring next week on my 58th birthday thanks to this thread and a real estate investment I made 16 years ago. Thanks Greg, you have at least one more success story under your belt! It would not have been possible with the track I was on before I read this thread.

Don

Thats awesome Don!!! I'm ten years behind ya and hope to be getting out (full time) about the same time. I dont plan on ever retiring from what i do, i'm an expert at it and still love the technical and customer side, hate the business side (well, people who dont pay their bills, vendors that lie, customers with unrealistic expectations etc...)

But key for alot of us is, WANTING to work vs. HAVING to work...

I'm hoping this thread goes on for 15-20 years and see what happens and how many lives its touching in a positive fiscal way and hear more stories like Dons....just wish i had a crystal ball lol...

[GregWeld]

Originally Posted by dhutton

I'm retiring next week on my 58th birthday thanks to this thread and a real estate investment I made 16 years ago. Thanks Greg, you have at least one more success story under your belt! It would not have been possible with the track I was on before I read this thread.

Don

Okay -- That's just about the coolest thing ever! And that's exactly why I've poured my soul into this thread. I'm truly honored! Amazed! Kudos to you sir!

[GregWeld]

I'm a relatively early riser -- and I NEVER stop reading and listening to what's happening in the world. I knew today was going down hard - last night - when I checked what Asia was doing in their markets.

I gather KNOWLEDGE - I DO NOT stew about it. I didn't go to sleep last night with churning guts about the "money" I was going to lose in what I know is going to be a sea of red today. Rather - I went to bed thinking about which stocks I would start to pick away at with BUY orders. Perhaps a little more Apple under $100.... Altria (MO) which just raised it's dividends another 9%.... Seems people smoke no matter what (have to laugh at that sad as it is).

Here's the deal. If you own the very best of the best companies... they're still alive and well (maybe not big oil... which could catch a cold that could grow to pneumonia)...

With Altria's (MO) latest raise --- and THIS IS THE INVESTING 102 reason for posting today --- my yield on COST is 5.5% (cost is $41.33 divided into the current ANNUAL divided of $2.26... result is .05468 ..... move the decimal and that's 5.468%). THE ONLY REASON IT'S THAT HIGH ON MY COST??? BECAUSE I'M NOT SELLING AT EVERY LITTLE DIP IN THE MARKET. It's a LONG TERM hold... The company is good (all the companies I invest in are good!). I'm not in and out of the market - I'm NOT a trader - I'm an INVESTOR! When the market puts things on sale --- I try to take advantage of that. I "IMPROVE" my position when possible. There are companies I like that are on sale that I don't own.

My mindset is that no matter what I buy... it will go lower. I'm okay with that. It's like buying a rental house in a bad market -- you buy it - if you don't someone else will... and then you fix it up - rent it out - and EVENTUALLY you'll collect nice rents and the market will come back and you'll be the smartest guy in your office. : > )

I know most of you don't sit around with a pile of cash just waiting for a market correction. I get it. I'm trying to set you up for when you might some day. You need to have spent some TIME in the market - live thru it - LEARN FROM IT - and get your head wrapped around "it".... so when you CAN strike - you'll know what to do.

This thread is not your ultimate guide of buy this - sell that - move here... I'm trying to hand you THOUGHT PROCESSES... Ways to calculate things - ways to LOOK at things.

[PBarkley]

Originally Posted by GregWeld

It's a LONG TERM hold... The company is good (all the companies I invest in are good!). I'm not in and out of the market - I'm NOT a trader - I'm an INVESTOR! When the market puts things on sale --- I try to take advantage of that. I "IMPROVE" my position when possible. There are companies I like that are on sale that I don't own.

I like the part in bold. I've been bitten before by the mentality that I can be my own day trader, and I'm lucky I didn't get completely hosed in the process. I've been quietly reading this thread ever since I've joined. It really is a treasure trove of information (especially for a 30 y/o like myself), and I thank you for that.

There is definitely opportunity to be had today for those with the cash, haha.

[SSLance]

I'm going shopping today as well...

[GregWeld]

Originally Posted by SSLance

I'm going shopping today as well...

I couldn't log into my WELLS FARGO account that I use for examples on this thread (trust me - I don't tell you Aholes EVERYTHING).... So I texted my team at the bank... which resulted in an immediate phone call from them.

I put just over 1MM "to work" (I always maintain a pretty sizable cash horde). By the time I tried to log into the account -- and the manual buy order was placed - -ALTRIA (MO) moved from $49.97 to $50.24 (my fill).... on a 5000 share order -- that's a big move (a cost to me!!). I had to switch from LIMIT orders to MARKET orders because the market was moving to the upside so fast. I could write a book about that "strategy" -- you have to move and make decisions in a fast moving market - that you WOULD NOT do in a "normal" moving market. If you're buying 100 or 10 shares - this isn't going to make or break you - and if you WANT the shares... and you should have decided that weeks or months before the actual action...

I bought AAPL -- NFLX -- MO -- T -- KMI

An hour later - I still don't have order confirmations.

[WSSix]

Congrats Don! Best of luck to you in your retirement.

I had some extra bonus money I decided to dump into my brokerage account instead of savings. I'm looking at making some purchases today.

[GregWeld]

Originally Posted by WSSix

Congrats Don! Best of luck to you in your retirement.

I had some extra bonus money I decided to dump into my brokerage account instead of savings. I'm looking at making some purchases today.

I don't want to be a sooth sayer trying to say what I THINK the market will do.... but there are some dynamics that will come into play.

#1 --- this thread is about INVESTING. There is so much more to a market... but we're trying to build long term - cash creating investments.

So --- Here's some dynamics in a wild ass market like this. Many people are SHORT the market waiting for an opportunity to cover. What does this mean?? It means that a SHORT SELLER can sell a stock he doesn't own.... collect the cash from the sell -- and hopefully wait to buy the shares at lower prices than he sold at --- because he OWES the brokerage the shares he sold. If I was a short seller -- I'd have been covering all my shorts this morning... and making very nice gains on the spreads.

A short in NFLX --- just a "scenario".... guy sells 1000 shares short at $122..... and covers the short today at $99.... he makes 23K on that trade (minus interest expense etc).


#3 --- In my old days of trading.... Anything I bought this morning I'd be flipping out this afternoon (and then go play a round of golf!). Let's take a normal name ---- Altria (MO) --- was down under $50 early this morning. If you'd have bought 5000 shares at $50.50 ---- and it's back to $52 this afternoon ---- that's a buck fifty times 5000 shares -- or a quick $7,500 "gain".


SHORT TERM TRADES (GAINS) INCUR MAX TAX RATE!! So we're talking GROSS gains here.

[WSSix]

What I've been doing with my money these last few years is saving through the year to be able to dump the max I can into my Roth on January 1 each year. I also keep adding extra instead of spending it.

I started looking at everything I have going on in my life and where I am with my different accounts, too. I already have my rainy day fund and house down payment fund. I also have general spending in there for the car. So I thought to myself, why should I put this bonus money into a 1% savings account when I already have my Roth covered for the next year? I could just as easily put it into AT&T and with no capital gains in the stock price make 5% on the money. AT&T could go down 3% and I'd still make more than if I had it in savings.

So that's what I did. Only I looked at the long term charts and picked Hasbro and General Mills over AT&T. Lower dividend payments but the long term charts for both kill AT&T by a huge margin. I got lucky that I had put this extra money into the account only recently so I wasn't waiting around for this to occur. I'll take a simple 2-3% drop in price and feel like I've won the lottery any day. I just wish I could add more money to my Roth because I have some good companies in there, JNJ and MO for example, that I would have liked to be able to add to but oh well.