Investing 102

[GregWeld]

By the way --- ALL points of view are VALID and worth reading - discussing - and then each individual needs to decide for themselves what they're comfortable doing.

Investing - and we've said it a zillion times - IS EMOTIONAL. The investment will either make you comfortable or you're on edge. If you're on edge.... trade it for something that makes you happy to own thru thick and thin. Because that is the real key.

[Vegas69]

That's part of the reason I bought it up. It's good to see things from another perspective. After all, we all have our own unique set of circumstances.

[Brewtal66]

Hi Greg,

Just started going through this thread. Not sure what got me to click on it last week, but I did and have read the first 20+ pages so far. I opened up the brokerage account with Schwab, and hoping to put some money in there later today.

I do have a couple questions for you though if you don't mind.

1. I'm looking at Target(TGT) stock. I shop there weekly, so I have interest in it. If I look on the 5 year snapshop, it's low on the left, higher on the right, with increasing dividends. If I hit the research to Total Return on Schwab, the 5 year result is +65.7%. I know this probably isn't as high as some others, but would this be a good investment to get my feet wet?

2. On one of the pages you stated you owned 21 different stocks. But on another page I see you showed your dividends, which was more more than 21 different stocks. Is that right? I feel like I'm getting something confused. You also mention having only one account? as in one Schwab account? Not that any of this really matters, just trying to keep everything straight with all the lingo and such.

Thanks for writing all this up. You've inspired me and got me started towards investing. I always use to say that I didn't like investing in the stock market since I like tangible assets. For example, I have a second house that I rent out and since the tenants are paying the mortgage on that, I always felt like that was going in my pocket as a retirement. But I feel like that's just not enough. I'd like to own and rent out more houses, but I don't want all my eggs in one basket either.

[Vegas69]

How are you fellas analyzing your positions and new potential stocks?

I recently read a book that broke down some key numbers to look at. I decided to review my stocks on a regular basis with the attached breakdown and use it to gauge new positions. I'm using Morningstar for the data.

I'm far from an expert and green at this, but I'm learning quickly. As you start digging into the numbers and comparing different stocks, you start to get a better feel for your positions.

I analyzed Snap On which is attached. I found it to be very positive:

Gross and Net revenue have been increasing for 7 years
P/E ration is still below 20
Dividend payout has been consistent and the increases should out distance inflation
There debt is actually Decreasing! And they can pay off all their debt in less than 5 years based on net income.

The only factor that wasn't positive was that their outstanding shares is stagnant. Many of my other companies have been buying back their own stock decreasing outstanding shares.

If anybody would like this form blank, just shoot me a PM.

[GregWeld]

Originally Posted by Brewtal66

Hi Greg,

Just started going through this thread. Not sure what got me to click on it last week, but I did and have read the first 20+ pages so far. I opened up the brokerage account with Schwab, and hoping to put some money in there later today.

I do have a couple questions for you though if you don't mind.

1. I'm looking at Target(TGT) stock. I shop there weekly, so I have interest in it. If I look on the 5 year snapshop, it's low on the left, higher on the right, with increasing dividends. If I hit the research to Total Return on Schwab, the 5 year result is +65.7%. I know this probably isn't as high as some others, but would this be a good investment to get my feet wet?



So this is never going to be about "Me" and what "I" think YOU should own or not own. Having said that -- you have demonstrated the ability to comprehend the basic principals and that is 100% the goal here.

Now -- The above information you posted - is awesome.... and the reasoning sound. Now compare all of the information above against the "competition" and see if there is a better (or worse!) investment. Target should be compared against similar retailers. Who has had the best track record - who looks best going forward? Who has growth left?

Once you have done THAT research -- then you've narrowed it down - and CONFIRMED or denied what you believe. IN the end --- YOU have to like the stock and understand why you picked it. Otherwise - when they drop $2 a share after Xmas (just making this up) you'll be freaked out and sell at a loss. THAT is what we're trying to avoid.




2. On one of the pages you stated you owned 21 different stocks. But on another page I see you showed your dividends, which was more more than 21 different stocks. Is that right? I feel like I'm getting something confused. You also mention having only one account? as in one Schwab account? Not that any of this really matters, just trying to keep everything straight with all the lingo and such.




You'll need 100K invested before you get to NEEDING to own 20+ names... You're referring to the 5% rule.... and those rules need to be adjusted to fit teh circumstances.











Thanks for writing all this up. You've inspired me and got me started towards investing. I always use to say that I didn't like investing in the stock market since I like tangible assets. For example, I have a second house that I rent out and since the tenants are paying the mortgage on that, I always felt like that was going in my pocket as a retirement. But I feel like that's just not enough. I'd like to own and rent out more houses, but I don't want all my eggs in one basket either.

Real estate is a great investment - just not the only investment..... and frankly -- many other investments have better returns -- but YOU have done it right IMHO -- Getting a real estate investment going EARLY will work out great in the end - because of the length of time to pay off the mortgage..... 30 years or even 15 years is a LONG TIME - and it's nice to be able to pocket the payment in retirement! Good for you!

[Vegas69]

Are you guys sleeping at the wheel? You may want to go take a look at your positions today!

[dhutton]

Originally Posted by Vegas69

Are you guys sleeping at the wheel? You may want to go take a look at your positions today!

This has been a nice run.

Don

[WSSix]

Originally Posted by Vegas69

Are you guys sleeping at the wheel? You may want to go take a look at your positions today!

No, I'm out back whooping my own ass because I was asleep at the wheel a few weeks ago when T and VZ took big dips. I was being patient and not wanting to catch a falling knife. I was concerned with what the market was thinking about their recent acquisitions. I didn't have a problem with what was happening but the market apparently did. So I decided to be patient and missed the dips. I had the money ready to buy and was planning to buy anyway. The dips were icing on the cake. Still being patient right now and hating it, lol. Moral of the story, buy good names and don't worry about catching all the dips.

My oil stocks are coming up nicely though

[GregWeld]

Originally Posted by WSSix

No, I'm out back whooping my own ass because I was asleep at the wheel a few weeks ago when T and VZ took big dips. I was being patient and not wanting to catch a falling knife. I was concerned with what the market was thinking about their recent acquisitions. I didn't have a problem with what was happening but the market apparently did. So I decided to be patient and missed the dips. I had the money ready to buy and was planning to buy anyway. The dips were icing on the cake. Still being patient right now and hating it, lol. Moral of the story, buy good names and don't worry about catching all the dips.

My oil stocks are coming up nicely though

And many times continuing to be "patient" only causes you to miss even more of the run. Not picking on you when I make this broad general statement..... bending over to pick up dimes causing you to lose dollars??

LOL

You're thinking was all sound..... Where WE miss out is when we begin to think like we're big traders and we're going to buy low.... but when you really do the math on what we were trying to save buy waiting to "get in" is often the train leaves the station.

Once in a great while - the market moves with us and our waiting is rewarded by a fall in the price... but that's just dumb luck.

[GregWeld]

I had another thought here ----- Why are we always disappointed when the market does EXACTLY what we want it to? We WANT it to go UP right? So why are we upset when the train pulls out of the station and we're left behind --- didn't it just do exactly what we wanted it to?? LOL

But if you're not in - then you're standing on the platform watching the caboose get smaller and smaller, and no matter how fast you run you can't catch up.