Investing 102

[GregWeld]

Originally Posted by GregWeld

Note that the close of KMI today was it at $31.79


Now you see how this can SOMETIMES work out.

This "trade" has just gone green.... with KMI trading at $32.52


This is where you learn whether or not you're "greedy" -- meaning that the trade worked as you wanted it to - but now - rather than stick to your plan and sell the original shares etc as explained in the thread...... instead you decide it's worked so well - and you want even more gain - so change to holding it for an even bigger gain.

OR........

You stick to "the plan" - acknowledge that you were lucky this time - beat the street... and you breathe a sigh of relief. Pull the trigger and sell the higher cost shares. And carry on. And use the new cash to go back to your "adding to existing holdings".

Remember that this trade works SOMETIMES --- and the greedy dudes end up holding the far larger % (the 5% rule) and then it can go SOUTH real quickly and destroys your plan and your account. That's where the saying "pigs get fat and hogs get slaughtered" comes from.

[ironworks]

Originally Posted by GregWeld

This "trade" has just gone green.... with KMI trading at $32.52


This is where you learn whether or not you're "greedy" -- meaning that the trade worked as you wanted it to - but now - rather than stick to your plan and sell the original shares etc as explained in the thread...... instead you decide it's worked so well - and you want even more gain - so change to holding it for an even bigger gain.

OR........

You stick to "the plan" - acknowledge that you were lucky this time - beat the street... and you breathe a sigh of relief. Pull the trigger and sell the higher cost shares. And carry on. And use the new cash to go back to your "adding to existing holdings".

Remember that this trade works SOMETIMES --- and the greedy dudes end up holding the far larger % (the 5% rule) and then it can go SOUTH real quickly and destroys your plan and your account. That's where the saying "pigs get fat and hogs get slaughtered" comes from.

So just to expand on your further plan B option. I'm in KMI originally at 41 dollars ( we have a little ways to go ) I only have 21.5 shares. I picked up a 1/2 share in the 10 months I have had it. But the P/E rating is really high from the numbers you guys say to be around 20. It is at 40. SO does that indicate it might be a while before some thing happens to put me in the green.

So if I'm in this for 20 plus years should I let it sit hope to make it green some day? Or double down and move that number down? Or take the number out into some thing else that might be more profitable sooner then waiting on the green.

My shop has done personal 401k for a year for Shannon and I and we started offering it to the employees this year so we could do more of it ourselves ( we have 2 plans - The standard and another called the SIMPLE ). The first one is limited to 6k per year and the 2nd has a pretty big limit - maybe 12k per year, more then I can fully fun for both of us, but we contribute and the company matches the contribution. But I get smaller payments every month so we only get to buy a handful of shares at a time. I doubled down on Shannon's BPT last week and did well on it this week. But the BPT is still way under water from what it was 18 months ago.

Just looking for the ideas on the little guy strategy.

[CRCRFT78]

This is where you learn whether or not you're "greedy" -- meaning that the trade worked as you wanted it to - but now - rather than stick to your plan and sell the original shares etc as explained in the thread...... instead you decide it's worked so well - and you want even more gain - so change to holding it for an even bigger gain.

OR........

You stick to "the plan" - acknowledge that you were lucky this time - beat the street... and you breathe a sigh of relief. Pull the trigger and sell the higher cost shares. And carry on. And use the new cash to go back to your "adding to existing holdings".

Remember that this trade works SOMETIMES --- and the greedy dudes end up holding the far larger % (the 5% rule) and then it can go SOUTH real quickly and destroys your plan and your account. That's where the saying "pigs get fat and hogs get slaughtered" comes from.

Would it be wrong to hold onto the original shares due to my time frame before retirement (22 years if I can retire at 60) because it is a long-term investment? Or should I just be excited that I learned something new, got lucky THIS TIME and sell anyway?

[GregWeld]

Originally Posted by CRCRFT78

Would it be wrong to hold onto the original shares due to my time frame before retirement (22 years if I can retire at 60) because it is a long-term investment? Or should I just be excited that I learned something new, got lucky THIS TIME and sell anyway?

Don't get greedy --- this worked for right now. That's considered being LUCKY.... MAKE IT WORK by sticking to the plan of unloading the original higher cost shares.

The dividend on the new lower cost shares is a huge "gift" that will pay you back for years.

You're better off now taking advantage of some other "on sale" shares that are also paying a higher than normal dividend due to the share price haircut everything has gotten lately.

I'd go back now to your original plan and pick up some AT&T (T) and Caterpillar (CAT)... again - it's hard to own CAT here... but over the long term you'll be happy.

[GregWeld]

Originally Posted by ironworks

So just to expand on your further plan B option. I'm in KMI originally at 41 dollars ( we have a little ways to go ) I only have 21.5 shares. I picked up a 1/2 share in the 10 months I have had it. But the P/E rating is really high from the numbers you guys say to be around 20. It is at 40. SO does that indicate it might be a while before some thing happens to put me in the green.

So if I'm in this for 20 plus years should I let it sit hope to make it green some day? Or double down and move that number down? Or take the number out into some thing else that might be more profitable sooner then waiting on the green.

My shop has done personal 401k for a year for Shannon and I and we started offering it to the employees this year so we could do more of it ourselves ( we have 2 plans - The standard and another called the SIMPLE ). The first one is limited to 6k per year and the 2nd has a pretty big limit - maybe 12k per year, more then I can fully fun for both of us, but we contribute and the company matches the contribution. But I get smaller payments every month so we only get to buy a handful of shares at a time. I doubled down on Shannon's BPT last week and did well on it this week. But the BPT is still way under water from what it was 18 months ago.

Just looking for the ideas on the little guy strategy.

Anything in the oil patch is awful... and could stay awful. What you have to ask yourself is - 5 years from now will this still be awful?

The market has given many people a gift of lower temporary prices coupled with higher dividend percentage - in many areas not just oil... Personally - I always take that gift and run with it. MOST of the time it works out really well if your time horizon is longer than a cup of coffee.

[Vegas69]

Not all, OB1.

[CRCRFT78]

When KMP turned into KMI the shares I held long-term became short-term, although this is a retirement account is this something I should be concerned about when I sell the original shares? Or should I just sell anyway because the tax implications won't affect me?

[SSLance]

Seeing all of the green on my sheets the last week or so has me thinking...might have been the time to put a few more dollars in.

Hopefully your sheets are looking better the past few days as well.

[GregWeld]

Originally Posted by CRCRFT78

When KMP turned into KMI the shares I held long-term became short-term, although this is a retirement account is this something I should be concerned about when I sell the original shares? Or should I just sell anyway because the tax implications won't affect me?

Don't concern yourself with taxes inside of an IRA/401... and this is such a small amount and would be a LOSS sale anyway so no taxes will apply.

These accounts are "tax deferred"... you won't have any issues until you've actually taken the gains etc.... and for the most part - these would be spread over numerous years - and the plan is - to be in a lower tax bracket when you're retired in the first place. That's the entire reasoning behind them.

I prefer a ROTH IRA -- which has ZERO taxes - EVER. If you qualify - look into opening a ROTH and funding that over a standard IRA/401

[Kingcater]

First post here as I mostly lurked enjoying all the builds I can't afford from afar. Never registered because I don't have a Pro Touring car yet ( but maybe this thread will help with that in the future )

Anyways, I was looking on google since I've finally found a long term career as I was and I'm getting to an age where I need to think about my financial future. I have to say the knowledge in this thread is very awesome and it also explains things in a manner pretty much anyone can comprehend. I've even forwarded it to many friends.

Who would've thought a Stocks/Investing thread would finally be the thing to get me to sign up to this site.

Once again thank you OP for making this thread. Also thank you Greg, PW2006, and others for continuing to post in this thread. I'm only 34 pages deep but I went out and bought a notebook to take notes.

I hope to have enough money saved up in the next 6 months to start diving into Investing. I was apprehensive as I didn't know where to start but this thread has really helped me!