Investing 102

[GregWeld]

Once again - I'm going to use just one name to make an example of how the market can work for you...

When this thread started (12/2011) Philip Morris (PM) was paying a dividend of 77 cents per share and their share price was around $75.... while we played and talked and learned -- this unexciting boring "sin stock" kept working and is now paying $1.02 per share and is trading at $100.

If you bought at $75 -- your percentage being collected on it is now 5.44% and you've had a very nice long term capital gain.

I can remember - at the time - discussions about the prices being too high or overvalued.... LOL


My guess is -- not many around here have gotten a 30% pay raise in the same timeframe.

[SSLance]

Keep on preaching the word Greg...

Just noticed that my XOM is almost back to the green side vs cost basis (including dividends reinvested). If I look at just dollars invested and value now, I'm in the green again.

Now I just need KMI and ETP to follow suit.

[GregWeld]

Originally Posted by SSLance

Keep on preaching the word Greg...

Just noticed that my XOM is almost back to the green side vs cost basis (including dividends reinvested). If I look at just dollars invested and value now, I'm in the green again.

Now I just need KMI and ETP to follow suit.

Note I colored those two in RED!!! LOL


Trust me on the KMI and ETP - Those two are just PAINFUL!!

I own 25,000 shares of KMI @ $36.34 or in other words a paper LOSS of $446,000 and a cut in dividend income from over $60K per year to $12,500

I own 15,000 shares of ETP @ $56.67 for a nice paper loss of $344,000 but at least for now it's still paying the dividend ($63,300 per year).

[WSSix]

Yeah, it's nice seeing the oil stocks starting to recover or at least not continue to drop. I hope this trend continues. I'd like to be green in those again.

[toy71camaro]

Originally Posted by GregWeld

Once again - I'm going to use just one name to make an example of how the market can work for you...

When this thread started (12/2011) Philip Morris (PM) was paying a dividend of 77 cents per share and their share price was around $75.... while we played and talked and learned -- this unexciting boring "sin stock" kept working and is now paying $1.02 per share and is trading at $100.

If you bought at $75 -- your percentage being collected on it is now 5.44% and you've had a very nice long term capital gain.

I can remember - at the time - discussions about the prices being too high or overvalued.... LOL


My guess is -- not many around here have gotten a 30% pay raise in the same timeframe.

I didnt go the PM route back then... but went the MO route. Purchased at $30. it's since doubled, and my Yield on Cost is 6.3% (i made an additional purchase in the middle in there at $40/share). One of my best yet. Based on my calculations, my Total Return is 123%. Yay!

[87SS]

MSFT looks good after a 7% drop.

[GregWeld]

So here's where there may be some "interest".... Apple (AAPL) posted very disappointing earnings after the close of the market today.... Nasty earnings really - with almost every segment of their business down and down pretty hard.... 12 and 15%

What's my point? We always need to be aware of FUNDAMENTAL CHANGES....What those look like are hugely variable! Some fundamental changes are good! Look at McDonalds (MCD) when they added a new CEO - who then promptly changed the menu (adding breakfast all day) and BAM! The stock took off big time.

Is the disappointing Apple sales number (top line) a fundamental change in the market place? What does it say? Does it say the consumer is weak? Or has the Apple product hit it's peak? Has something else come out that's better? If so, I'm not aware of it. But here's something that might be contributing...... I used to get a new phone whenever my "2 years" was up - because it was a cheap upgrade by just extending my phone contract. NOW!?!?! They want me to pay full price for the new toy.... to which I say - Heck no! My current phone is just fine.

So is that having an affect on sales all across the board? No new phone - no reason to go into the store - therefore no "extra" sales because of a lack of interest/traffic??

I don't know - but it's certainly interesting! Is there a fundamental change in the wind --- or are we just seeing a weak consumer or both??

[Vegas69]

I'm starting to see many similarities locally that I saw just over a decade ago. While I don't see the indicators there for the same type of meltdown, I do know that things cycle and I think Spring is over and we are well into Summer, maybe even approaching Fall in the cycle.

Housing is up over 40% in less than 4 years
People are spending, spending, spending on non essentials.
The construction industry is BOOMING driving construction costs up substantially. I met with a local architect that is a real player. He said it's curtailing the commercial segment.
Low to no down payment programs are back for housing
Sloppy and new professionals are coming back into my industry
A recent Inman poll showed a majority of Americans are moderately optimistic to optimistic about the real estate market. That's a stark contrast from a short time ago.
I have a listing appointment tomorrow where the value is ABOVE the price they paid in 2005!

We are coming up on 5 years into our housing recovery. The median price of a home has stayed stagnant for 9 months with a shortage of inventory. The stock market is up there...look at its growth in the same period.

I do feel the foundation is much stronger this time around. I just think the next cycle is coming on in 1-3 years. I want to be cash heavy and debt free this time around.

What's your local economy or industry feel like?

[GregWeld]

Originally Posted by Vegas69

What's your local economy or industry feel like?

If you're building a NEW house here - you might have to just get in line. Prices are way up - labor is not only tight - it's short. This is a SECOND or third home market and the projects being done are multimillion dollars (one house is 12,000 square feet). BUT....

If you have an existing CONDO (many here were built in the '70's) then the market is soft and prices have NOT gone up and in many cases have gone down. My realtor publishes a newsletter every Friday showing all the statistics and most are down or negative from a year ago comps. This is contradictory when compared to the NEW Town homes being built by the Sun Valley Corp and the foot of our street... they're larger than the older Condos - have single car garages - and are selling like they're giving them away (mind you - there are only 36 units). They're 1.3MM and up. So there seems to be a group of people that can afford "better" that are buying yet the "normal" second home market is suffering. Is this because of the financial strength of the buyer? The 1.7 guy can get (or doesn't need) financing? Where the $750K guy is fighting trying to get a mortgage? IDK.


http://www.whitecloudsresidences.com/townhomes.html


Note how many have the "Sold" red dot on them! And remember that these are SECOND or VACATION homes! So the money is being spent - just not on the middle of the market.

[SSLance]

The local "Spring homes tour" is going on right now and they have made note that there are more new homes included in the tour now than since 2007. I see more construction rigs on the highway and at QuickTrip every morning than I have in years. My friends that still dabble in new home construction (mostly starter homes done on a part time basis) are selling everything they build before they are finished.

I guess that all points toward a healthy real estate market at least in these parts anyway.

The no down payment loan option being available again freaks me out just a bit though, will we never learn?