Investing 102

[Vegas69]

Biggest down slide I've seen since I started this a bit over 2 years ago. It's only a mud puddle in the road of prosperity and financial freedom.

[ErikLS2]

Ok, I'll play the optimist, I remember 1999 and 2008, this one is nothing but a buying opportunity compared to those.

I'm getting a large chunk of cash from the sale of a house that'll I'll have to put to work. I always figured that would be easier than taking the losses I did in those past drops but now that I'm here, it really isn't. There is that fear of making the same mistakes again.

[Vince@Meanstreets]

Originally Posted by ErikLS2

Ok, I'll play the optimist, I remember 1999 and 2008, this one is nothing but a buying opportunity compared to those.

I'm getting a large chunk of cash from the sale of a house that'll I'll have to put to work. I always figured that would be easier than taking the losses I did in those past drops but now that I'm here, it really isn't. There is that fear of making the same mistakes again.

Thats what im saying...I made a killing with AIG and SAH back then. Couple friends did real well, im talking retired at 45 good. its only research.

[GregWeld]

Originally Posted by ErikLS2

Ok, I'll play the optimist, I remember 1999 and 2008, this one is nothing but a buying opportunity compared to those.

I'm getting a large chunk of cash from the sale of a house that'll I'll have to put to work. I always figured that would be easier than taking the losses I did in those past drops but now that I'm here, it really isn't. There is that fear of making the same mistakes again.

Sorry - this was a confusing post to me. I can't tell if what you're saying is - that in the past you sold low?? And therefore this time around you plan to buy low? Having learned NOT to sell low. Or that you're afraid this time around too?

[GregWeld]

Originally Posted by Vegas69

Biggest down slide I've seen since I started this a bit over 2 years ago. It's only a mud puddle in the road of prosperity and financial freedom.

Thank gawd some folks are LEARNING!!! Buy low -- painful? Yep. Harder to do than when the stocks are flying higher? Yep. Smarter by a margin of 10,000? Yep.

[ErikLS2]

Originally Posted by GregWeld

Sorry - this was a confusing post to me. I can't tell if what you're saying is - that in the past you sold low?? And therefore this time around you plan to buy low? Having learned NOT to sell low. Or that you're afraid this time around too?

It's actually kinda interesting. One of the first investments I made was in a mutual fund called PBHG Technology and Communications, probably in the early to mid 90's. I noticed the technology revolution fairly early on and nothing more than a little common sense told that it should continue and grow quite rapidly, which it did.

A $2500 investment in that fund peaked at just over $200k. Somewhere around there I was talking to my father about selling it all because even though I was a complete newb it just didn't make sense to me that it could go up that fast and stay there ("irrational exuberance" maybe? Hmm). Well my dad had a friend who personally knew the manager of another big super successful technology fund, Firsthand Technology Value, and got it straight from him that things were solid and not to worry. Still didn't compute to me but I figured he was a big successful fund manager and what did my totally novice common sense have over all that experience, so I just stayed invested and watched it go back down.

Each time I checked it my thoughts were something like "well hell, it's gone down that far already, can't go down that much more so might as well just ride it out now". This was also the first time, but not the only, that I hesitated in doing something due to the big tax bill it would create (never mind the huge profit I would have realized, that was nowhere near as important apparently).

Well I did eventually get out of it, but not until after most of those gains had vaporized and well after the original PBHG top brass had gotten in trouble or possibly even indicted for wrongdoings and the fund was taken over by another fund company.

In 2008 I wasn't really invested all that much as we had burned through all our cash on fertility treatments trying to have another kid. One thing stands out in my mind at that time though. I distinctly remember Jim Cramer asking viewers if they were ready for Dow 7000 and I remember thinking WHAT???, no way that could happen. Well that was at about Dow 10,000 mid 2008 and we all know where it went from there.

What do I know but this time around, right now, looks more like a normal, healthy correction fueled by what's happened in China as well as an irrational fear of rising interest rates (which are still historically extremely low).

Think 2008 can't happen again? Like I mentioned a few weeks ago, read about "bespoke tranche opportunities". Here is one good one I found that sort of explains it:

http://thinkprogress.org/economy/201...d-now-america/

[glassman]

Is that why its called "paying" attention?

[SSLance]

Holey Crap!

http://thesource.com/2016/01/15/chip...res-for-a-day/

CHIPOTLE WILL BE CLOSING ALL OF ITS STORES FOR A DAY

ROCKO RATHON JANUARY 15, 2016
Unfortunately for all lovers of Chipotle, they will have to go without the popular franchise on February 8, 2016 as all of the chains will be closed that day. The move comes after quite a few of their locations were forced to shut down permanently when an E.coli outbreak in 2015 and a norovirus outbreak infected 141 people in Boston, MA, which was one of the worst in history.

All of this of course was a public relations nightmare and CEO Steve Ellis took full responsibility in a open letter and ensured customers that this will never happen again. The nation wide close on the 8th of next month will be for a company-wide meeting where food safety will be the main topic of discussion. To make it all up to customers, Chipotle will be doubling up on the amount of free food given upon their return.

[GregWeld]

The market is poopie no doubt.... but here's what I want you to focus on. Your guts. Are you full of fear when you look at your account? Do you see this sell off as the end of your investing and you're telling yourself you should have never ever gotten in the market because it's doing exactly what you feared? Or do you look at this as a set up for buying lower, so you can kill it when the market rebounds?

You need to pay attention to these feelings - because investing is about emotions many times. Emotions can override your brain and make you do things that aren't good for you.

I reminded people many times to "take stock" so to speak when the market was going up every day.... and to remember how that felt - so you could recall that when the market SUCKS. Well.... now it sucks.... and I want you to remember how you feel about it. Because if you're going to be a true investor - there will be MANY highs and lows over many years. Days when you're just crushing it - and days when you wonder what the hell are you doing.

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


Lance mentions Chipotle Mexican Grill (CMG) -- it's been a tremendous stock for quite a while now.... huge gains -- and also some huge dips. I've personally bought and sold it many times. It's not a core holding for me because it's expensive - and it doesn't pay a dividend... BUT ---- if a guy was patient and bought near the 400ish low this last week... he's picked up $75 a share in just the last 4 days of so. If you're a longer term player and you bought this stock back in 2006 or 07 or 08 or 09 or 10 or 11 or 12 or 13..... you have a gain even with the selloff. If you bought recently - you're feeling used and abused.

The company has had some issues - no question about that!! Will it regain it's luster? Who knows? My personal guess is - it will learn from this bad experience and institute some controls so this doesn't happen again. I wish there was one around me because I loved the food and the concept. I'd like one here because it would give me a read on traffic and whether or not the customer abandoned them or are they coming back and creating lines again. Without that read - I can't make an investment. I need that sense of how it's going.

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


Oil and related:

I continuously hear the talking heads on TV telling me how lower oil prices are good for the consumer. I'm calling this nothing but talking head bullcrap. The damage this is doing to the COUNTRIES that produce - our STATES that produce - The suppliers that feed this industry pipe and pumps and trucks and anything else they use -- they HAVE to be feeling this big time. California is a producer - Alaska - The Dakotas - Texas.... Oil is important to these regions. So I ask myself -- is it important that I'm saving (pocketing) $30 a week when I fill up the Jeep -- or is it more important that Caterpillar (CAT) sells a $400K tractor... I personally feel these low prices are HURTING the economy not helping it. Where it goes is anybodies guess. We'll just have to wait and see where this goes.

[GregWeld]

Originally Posted by ErikLS2

It's actually kinda interesting. One of the first investments I made was in a mutual fund called PBHG Technology and Communications, probably in the early to mid 90's. I noticed the technology revolution fairly early on and nothing more than a little common sense told that it should continue and grow quite rapidly, which it did.

A $2500 investment in that fund peaked at just over $200k. Somewhere around there I was talking to my father about selling it all because even though I was a complete newb it just didn't make sense to me that it could go up that fast and stay there ("irrational exuberance" maybe? Hmm). Well my dad had a friend who personally knew the manager of another big super successful technology fund, Firsthand Technology Value, and got it straight from him that things were solid and not to worry. Still didn't compute to me but I figured he was a big successful fund manager and what did my totally novice common sense have over all that experience, so I just stayed invested and watched it go back down.

Each time I checked it my thoughts were something like "well hell, it's gone down that far already, can't go down that much more so might as well just ride it out now". This was also the first time, but not the only, that I hesitated in doing something due to the big tax bill it would create (never mind the huge profit I would have realized, that was nowhere near as important apparently).

Well I did eventually get out of it, but not until after most of those gains had vaporized and well after the original PBHG top brass had gotten in trouble or possibly even indicted for wrongdoings and the fund was taken over by another fund company.

In 2008 I wasn't really invested all that much as we had burned through all our cash on fertility treatments trying to have another kid. One thing stands out in my mind at that time though. I distinctly remember Jim Cramer asking viewers if they were ready for Dow 7000 and I remember thinking WHAT???, no way that could happen. Well that was at about Dow 10,000 mid 2008 and we all know where it went from there.

What do I know but this time around, right now, looks more like a normal, healthy correction fueled by what's happened in China as well as an irrational fear of rising interest rates (which are still historically extremely low).

Think 2008 can't happen again? Like I mentioned a few weeks ago, read about "bespoke tranche opportunities". Here is one good one I found that sort of explains it:

http://thinkprogress.org/economy/201...d-now-america/

Couple of things come to mind here:


NEVER be afraid to take a profit (gain).

Nobody ever went broke taking a gain.

When your gain hit big time -- I'd have been scaling it back.... paying the taxes and reinvesting it in other things. THEY ALL might have taken a huge hit in '08 etc --- but the hit would have been to "free money (the gains)".... and as long as you were ahead of the original $2500... that's what counts.

It's okay to go with your gut feeling! What else is there?!?

None of us will ever get it exactly right. For every gut feeling that had us take a gain or loss.... there will be plenty that hit you broadside -- or that keep running after you take some off the top. I've never gotten it perfect. Never will.