Investing 102

[GregWeld]

Originally Posted by Sieg

Too bad you didn't sell it prematurely like APPL.







Sorry GW, couldn't resist

Oh.... I only left about $192,000 on the table on that trade... I've done far far worse than that!

[Sieg]

Originally Posted by GregWeld

Oh.... I only left about $192,000 on the table on that trade... I've done far far worse than that!

So far................

[WSSix]

lol, you guys are awesome!

My Roth account stuff is approved so I just need to make a phone call on this first deal to get the money moved. Hopefully, I'll have a day this weekend to take a looksee at the stocks I'm interested in and make my final selection.

In the meantime I made another donation to my online savings account which has earned me mega bucks since the beginning of the year. $29 dollars to be exact.

[Sieg]

Good for you Trey!

[GregWeld]

Originally Posted by WSSix

lol, you guys are awesome!

My Roth account stuff is approved so I just need to make a phone call on this first deal to get the money moved. Hopefully, I'll have a day this weekend to take a looksee at the stocks I'm interested in and make my final selection.

In the meantime I made another donation to my online savings account which has earned me mega bucks since the beginning of the year. $29 dollars to be exact.

There ya go!!

Don't ya just love those .25% "savings" accounts! But hey! On the bright side this allows the banks to loan us money for "only" 4%!! LOL

[GregWeld]

Originally Posted by Sieg

So far................

I never look back....


Did you read the post about my 20 million dollar "yacht"? Or my 10 million dollar "house"? All that Microsoft stock I sold in '88... or '89...or '94...
OMG.... It's way to painful to look back.

[Bucketlist2012]

Originally Posted by GregWeld

Yep -- and it's why I purposely posted "Paper gains".... they come and they go... but now instead of a $59 grand paper gain I'm down to $30 grand...




I remember when I put new money to work around February 2011 (the account that I use for examples here).... and it went straight up about 200K.... and 3 or 4 months later (summer swoon) I was DOWN 200K.... so a 400K swing... but... always the big butt... I continued doing what I know works "most of the time"... bought a ton of stuff during the swoon and by Xmas I was up 335K (not counting any of the dividends -- we're just talking paper gains). We all know that since January 1st it's been off to the races.

I "pitch" DIVIDENDS because that is REAL MONEY.... money that I actually spend (quite liberally as you all know! ) and that keeps coming regardless of the paper gain or loss. That's why I like them!

I keep pitching them in this thread because they're particularly useful for guys just getting started and because they buy shares when the markets are lower so they're automatic savings.

Again, it isn't the value and total at a given time, but the dividends and income stream...

After all of 2011, i am still up, and i took a paycheck every month, and 10K extra to play with...Still up from my start point after all that...

High 5 figures in yearly income, and not hundreds of thousands, but still living nicely. that is why ,other than dividends, it is called unrealized gains...

Just to say that the power works.. me the little guy , was up and down 20K at times, per day up or down...per day , in 2011 !!! For me, that is a lot, especially if it went for two or three days.. but i stood the course...

[Bucketlist2012]

Originally Posted by GregWeld

Oh.... I only left about $192,000 on the table on that trade... I've done far far worse than that!

Clean up on isle three....clean up, on aisle three...

[BC69]

I "pitch" DIVIDENDS because that is REAL MONEY.... money that I actually spend (quite liberally as you all know! ) and that keeps coming regardless of the paper gain or loss. That's why I like them!

I am playing devils advocate, all in good spirit, as I probably came off way negative in my first post, but hopefully keep people thinking.

Why dividend stocks vs. corporate bonds? If the focus is the stability in real cash return? (And maybe its, again, trying to keep things 102 and simple).

Take JNJ (Johnson & Johnson) - on a capital gains basis, over the past 5 years the stock has moved alot in terms of volatility, (so timing would matter) but to the day 5 years ago. It was $64.15/sh today is at $64.94/share. Essentially nothing (less with inflation right?). BUT you are earning a 4% dividend yield (annually). Greg has shown how that is cash, its real, its great, and it beats the hell out of a savings account.

But JNJ also has bonds outstanding. The secured debt for a 2016 maturity will earn just above the dividend at 4.7%, a 2021 maturity - 7%. These rates are semi-annual, so there is a small amount more you earn because of compounding.

Yes, bonds are boring, getting capital gains out of them is rare and thats really just getting a higher implied yeild (I know there was a post on this).

But mature dividend stocks generally dont get you much capital gains either, as we discussed. Thats the nature of becoming a high dividend business (you start paying dividends when management and investors believe the capital is better off going to sharholders than into the business). But they come with more risk.

I know we could never imagine JNJ going bankrupt, but 15 years ago did we imagine Sears or Kodak? High dividend mature stocks. We didn't see that coming.

If I owned Kodak stock, I would have initially lost that income stream as they cut dividends to conserve liquidity. And then I would have lost my initial investment completely as the equity holders are last in line.

If I owned the secured bonds, I would have still received my income stream the entire time, and in depending on how bankruptcy comes out, generally over 90% of my face investment.

So yes, its boring, but if we have a diverse portfolio with some growth stocks, and some dividend income stocks. I would say consider the bonds there too as a substitute for the income portion of the portfolio. Assuming everything here is for a long term hold.

I think in summary, the security + the higher income stream can in some cases offset the potential cap. gain + risk of the underlying stock.

Just food for thought. Both great options to earn above savings rate with limited risk.

[Bucketlist2012]

Originally Posted by RECOVERY ROOM

Love this thread !!!!

Yes. It is a Great Thread.

I was just thinking a few things this morning.

One is Dividends were paid overnight again. Not much, a few hundred bucks, but hey, it is money.

The next is that this thread keeps going, and that is a blessing just to keep people thinking. All all other sites, when you talk about money, or someone asks about it, it turns into people thinking you are bragging about your money..

Far from it... I am a guppy compared to Greg, and some people would take him talking his numbers as bragging, and it would go south quickly. Yes, his numbers are mind boggling, but i commend the grown-ups on this site that are truly looking for Opinions from those that have and do...I call it, the Success leaves Clues method..It will speed up your learning curve by taking in those opinions.

Next, Since my method is the same , but my Choices are different, I have been Re-Researching all my Investments, just to see where I am at.

I did it by looking at what I owned and the 3 and 5 year Total returns, the Dividends paid, and it's strength long term against it's competition..

That best of the breed, long term numbers, and growth for the future..

For me, all is working good, but just saying that using the methods talked about here work, whatever you end up choosing.

Also, if you don't have a Schwab account, get one.. You can research and get all the numbers you will ever need to make your choices, and they are reasonable fees.

Thanks Greg and others that keep this alive... I have stopped talking Investing in other places...Seems like they don't want to hear it..

BIG mistake and missed opportunities..Also depending on Pensions, and the Government, is a dangerous Play. For me, it is a Worse play than my High Yielding assets..