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f13.net General Forums => General Discussion => Topic started by: ghost on January 31, 2012, 04:29:23 PM



Title: Stocks, bonds and investing
Post by: ghost on January 31, 2012, 04:29:23 PM
I don't know if any of you do any of your own stock management or dabble in investing.  I like to keep an eye on stocks and tend to do it myself after years of dumping money into ETF funds only to see my money stagnate.

I though it would be fun to have a thread where we could discuss stocks/bonds/etc. and general investment and tax strategy.  There's enough smart folks on here that maybe people could get some ideas and better their retirement funds, sort of like the Goonfleet investment threads but for real life. 

I know that there are a lot of different philosophies for investing.  My personal tactic is to put a lot of money into one or two stocks, stay in until I think that the profit is maxed out or I anticipate a big stock market down turn and then get out for a bit.  It's served me pretty well and I have increased my portfolio a fair amount this year.  But then again I pay a lot of attention to my stocks.  I don't dive in and out constantly, but I do move when I feel that things are maxed out.  Some folks may choose to do the super diversified portfolio.  My problem with this is that I think it dilutes out your potential for earning.  I guess it may be significantly safer though. 

My current stocks that I own are Two Harbors Investment Corporation, a REIT, which has a roughly 16.5% dividend which I reinvest, and Chevron, which has a very good P/E ratio, has a 3.14% dividend and hey, it's oil.   :drill:

Some other stocks that intrigue me, but I'm very wary of, include Apple and Amazon.  Amazon looks like they are getting ready to take over the world, but they haven't really made any money yet and I'm a little concerned that the stock is overpriced for what you get.  Apple, I think, is going to suffer now that Jobs is gone and I can already see a little bit of where they may be heading by hiring John Browett (from the UK Dixons chains) to run their retail division.  I think that the days of the barista Apple store may be leaving us soon. 

Another thing that is coming down the pike is that Facebook may be filing for an IPO, which is another company that I really wonder how they make all their money.  It certainly is something to consider buying right off the bat and then selling after the initial bump that it's bound to get from name recognition alone.  But then again it may turn into a Google type phenomenon.  I'm not sure I'm ready to pump a lot of money into Facebook either. 

So if anyone else has any thoughts, dive in and share them. 


Title: Re: Stocks, bonds and investing
Post by: TheWalrus on January 31, 2012, 05:19:18 PM
I did really excellent with netflix. Even after the price change announcement. Sold at it's peak, waited just the perfect amount of time for people to get over the initial oh noes, then rebought. Then they did the surprise announcement about the business split they wanted to do and I couldn't get to a computer fast enough to get out before taking a royal shellacking. Good stuff.

Other stuff I'm in is Blizzard and Nike, both of which have been doing just keen. Blizz is more of a steady money deal, Nike is up and down with whatever next shoe and signing deal they have.


Title: Re: Stocks, bonds and investing
Post by: Sheepherder on January 31, 2012, 05:56:44 PM
This seems relevant. (http://www.youtube.com/watch?v=LhpIFkDU5Gg)

 :why_so_serious:


Title: Re: Stocks, bonds and investing
Post by: Miasma on January 31, 2012, 06:00:25 PM
sort of like the Goonfleet investment threads but for real life.
Spy.


Title: Re: Stocks, bonds and investing
Post by: proudft on January 31, 2012, 06:03:36 PM
My personal tactic is to put a lot of money into one or two stocks, stay in until I think that the profit is maxed out or I anticipate a big stock market down turn and then get out for a bit. 

Personal tactic question #1: do you stay in each stock long enough avoid short-term capital gains or just bail whenever?

I have Chevron too.  Go evil oil companies!



Title: Re: Stocks, bonds and investing
Post by: Abagadro on January 31, 2012, 08:29:22 PM
I just do dollar cost average investing in index funds so anything I would contribute would be very boring.  This year my AGI was such that I had to rejigger how I do it (457 instead of my IRA), but that's about as exciting as it gets for me.


Title: Re: Stocks, bonds and investing
Post by: ghost on January 31, 2012, 08:32:56 PM
My personal tactic is to put a lot of money into one or two stocks, stay in until I think that the profit is maxed out or I anticipate a big stock market down turn and then get out for a bit. 

Personal tactic question #1: do you stay in each stock long enough avoid short-term capital gains or just bail whenever?

I have Chevron too.  Go evil oil companies!



I'm not sure it matters with IRAs, which is what I mostly deal with.  And I don't dive in and out randomly like a day trader.  I personally will stay in a stock for six months or a year or more, depending on the situation.


Title: Re: Stocks, bonds and investing
Post by: apocrypha on February 01, 2012, 02:02:55 AM
We buy savings stamps at the supermarket each week and when you fill the card you get a £5 bonus voucher. That's a guaranteed 5% ROI, as long as you don't spill coffee on the card over the course of the year.


Title: Re: Stocks, bonds and investing
Post by: rk47 on February 01, 2012, 02:14:12 AM
 :awesome_for_real: Well quit smoking and no alcohol is a great investment for me.
Maybe going vegetarian too. But I'm on the fence for that one. Not sure if it's green enough.


Title: Re: Stocks, bonds and investing
Post by: Merusk on February 01, 2012, 06:43:19 AM
I've got a small potatoes fund I started in 2010 that's an aggregate from  former jobs that either booted me out of their 401(k)s after I left when my balance fell below plan minimums or I'd been gone long enough that they reabsorbed my non-vested balances.   It's only about $13k and I use it to buy dividend stocks that I sit on. 

It's up $700 since I started it, so I can't complain about anything other than Kraft currently bitching that I don't have 100 shares so they want to buy-out my lot of 10 as they make the company split they announced last year.

I know Surlyboi disagrees but I dumped Apple from this fund.  I realized my idea behind it was to just let it sit and grow based on dividends.  Apple doesn't do that so it wasn't really part of the 'grand scheme' I rather regret it now as I got a lucky buy at the September 2010 dip when it was ~$250 a share.  It's now $456.  I made money but I'd have made more holding.  Ah well, that's what happens when you treat it like gambling rather than investing. 

You evidently don't feel they're going to keep the course so you wouldn't be comfortable and would probably dump it at the first sign of trouble, right?  So knowing they've only continued to climb - even after Steve's death - you've got to ask yourself if they'd climb enough to make it worth your while.  The stuff Fidelity shows me indicates it's still rated a good by (But we all know that's just 20-somethings making guesses and gambling with other people's money.)

Netflix I only made about $120 on.  It was ~$120 when I bought in 2010 and I waited a day too long to dump it because I didn't hear the whole price change nonsense until after market close and the stock was already tanking.


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 07:23:37 AM
I think that the fact that most of us probably have "small potatoes" type portfolios is exactly why I want to get some ideas out and discuss them.  I don't really know what I'm doing with my investing, but from what I've seen nobody that is willing to share really does either, and most mutual funds seem to either: a.  skim a lot off of the top, or b. not be actively managed very well.  ETF's seem to go too much with the overall market, and I'm not sure that is the best way to go either.

I like the idea of dividend stocks that you can roll over the dividend into additional investment.  I really like the REITs for this because they have a minimum level of their taxable income that has to be given back into dividends (90%).  The reason I personally like this strategy is that it can be more predictable.

A very, very interesting strategy for investing in stocks is the "dogs of the dow (http://www.dogsofthedow.com/)" strategy.  Basically this works by taking the ten highest yielding dividend stocks in the down at the end of a given year and then dividing your investable monies equally between them.  Here is the Wikipedia explanation (http://en.wikipedia.org/wiki/The_Dogs_of_the_Dow).  I've often considered going this route, but I don't like the idea of owning 10 stocks.  I might try the "small dogs of the dow (http://seekingalpha.com/article/317886-5-small-dogs-of-the-dow-offer-better-yield-little-diversification)", which takes only the cheapest 5 of those ten. 


Title: Re: Stocks, bonds and investing
Post by: Baldrake on February 01, 2012, 07:47:23 AM
Of course you could just follow the Dilbert investment approach (http://www.marketwatch.com/story/dilberts-9-point-financial-plan-worthy-of-economics-nobel?siteid=myyahoo&dist=myyahoo).


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 07:55:53 AM
Quote
Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement

I don't like the bolded part.  That leads people to not pay attention to their investments and to not sell when they need to get out, thus losing a lot of money.

Back to the Small Dogs of the Dow-  I'm going to actually try this and see how it works.  As I said, I've been intrigued by the idea for years, but haven't done it due to the number of stocks, so I'm going small dogs.  I'll keep you abreast of how it goes. 


Title: Re: Stocks, bonds and investing
Post by: Longstrider on February 01, 2012, 08:57:11 AM
FYI, I did the dogs of the Dow strategy in the Nineties and lost a lot of money on it.  Motley Fool used to push it back then.  I remember people on the street calling it discredited, but I don't remember why.  Best I could do to cover the loss was make some change selling near-term in the money covered calls.  Just a word of caution.

Edit:  Stupid phone.


Title: Re: Stocks, bonds and investing
Post by: Johny Cee on February 01, 2012, 09:05:27 AM
Quote
Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement

I don't like the bolded part.  That leads people to not pay attention to their investments and to not sell when they need to get out, thus losing a lot of money.

You're in index funds.  There is no reason you should ever have to "get out", as a broad based index fund naturally hedges against risk at the expense of gains.... if index funds are way down, everything has taken a beating.


Ten years in public accounting, and hundreds of individual tax returns, and I never saw anyone make money day trading... and the returns on stock-picking were largely incredibly mediocre.


Title: Re: Stocks, bonds and investing
Post by: Murgos on February 01, 2012, 09:17:49 AM
Some folks may choose to do the super diversified portfolio.  My problem with this is that I think it dilutes out your potential for earning.  I guess it may be significantly safer though.  

I just want to point out that this is the classic risk vs. reward crux of investing.

A well diversified portfolio has almost no risk (read about Total Market Investing).  Money put in will probably (almost certainly given enough time) be able to come back out.  Investing in single stocks, like say, Netflix means that you buy today at top dollar and tomorrow they could announce a new pricing scheme, everyone will see that it sucks and by 1:30pm you've lost 90% of the last 10 years gains.

It can go the other way of course, I bought F at $3 in 2008 and sold at $15.  That worked out pretty well but you have to be paying attention.  One day of not checking in and *poof* (it had since dropped to $9-$10).

e: Personally, (after the last few years of ups and downs) I like stocks that pay good dividends.  That 3 or 4% goes a long way to making up for bad timing and I think that companies that have to pay frequent dividends are more stable/responsible over long periods.


Title: Re: Stocks, bonds and investing
Post by: Johny Cee on February 01, 2012, 09:29:02 AM
Back to the Small Dogs of the Dow-  I'm going to actually try this and see how it works.  As I said, I've been intrigued by the idea for years, but haven't done it due to the number of stocks, so I'm going small dogs.  I'll keep you abreast of how it goes. 

Why try it?  Just find out what stocks they are, and use a historical quote website to plug in a couple years of stock prices into a spreadsheet to see how it would perform.


Title: Re: Stocks, bonds and investing
Post by: Sky on February 01, 2012, 10:20:19 AM
I once made $250 at the blackjack table.


Title: Re: Stocks, bonds and investing
Post by: Viin on February 01, 2012, 10:35:46 AM
I just do dollar cost average investing in index funds so anything I would contribute would be very boring.  This year my AGI was such that I had to rejigger how I do it (457 instead of my IRA), but that's about as exciting as it gets for me.

Isn't a 457 an insurance annuity?


Title: Re: Stocks, bonds and investing
Post by: Johny Cee on February 01, 2012, 10:41:27 AM
I just do dollar cost average investing in index funds so anything I would contribute would be very boring.  This year my AGI was such that I had to rejigger how I do it (457 instead of my IRA), but that's about as exciting as it gets for me.

Isn't a 457 an insurance annuity?

Deferred compensation plan.




Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 10:52:57 AM
You're in index funds.  There is no reason you should ever have to "get out", as a broad based index fund naturally hedges against risk at the expense of gains.... if index funds are way down, everything has taken a beating.


It seems to me that if the market tanks that you might be well suited to get out and buy back at a lower price point.  For instance, if you sold at or near the peak prior to the most recent recession and then bought back during uptick or near the bottom you would have been better off than riding it out.  Or if you are in a particular aspect of the market, e.g. a commodities index or oil index, and anticipate more growth in another area you would be well suited to get out and reinvest somewhere else. 


Title: Re: Stocks, bonds and investing
Post by: bhodi on February 01, 2012, 11:04:35 AM
I have a bunch of money I need to invest, and what I should really do is get a financial planner. With ING's orange account paying less than inflation, it's pretty much time i get involved. I've just been putting it off because it really scares me and I am extremely risk-adverse. And, because every time I look, my IRA has lost more money.

Bah. I really need a professional to tell me what to do. Rich people don't manage their money, why can't I just pin my investments to a senator or something?

Anyone have a trustworthy financial planner friend in the DC area who does hourly/contractual advice (rather than 'invest in OUR funds and...')


Maybe we should all just ask surlyboi.


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 11:06:18 AM
I would get a lot of references if you have a fair amount of cash.  My problem is that I don't really trust most of these folks. 


Title: Re: Stocks, bonds and investing
Post by: Viin on February 01, 2012, 11:16:12 AM
Anyone have a trustworthy financial planner friend in the DC area who does hourly/contractual advice (rather than 'invest in OUR funds and...')

I haven't had any luck here either. The two financial planners we talked to (one was an independent, one was with a company that has their own funds) were mostly worthless. The independent was better, but he basically said "your debt/income ratio looks good, you might invest in a vacation home, your diversity looks good for your age". Basically nothing useful.


Title: Re: Stocks, bonds and investing
Post by: bhodi on February 01, 2012, 11:24:42 AM
Yeah, that has been my experience. I know how to manage my money in the short term, but everything about investing & the stock market screams 'SCAM' to me, it's all just a huge house of cards that people build up using leveraged money and trading shares back and forth, with the middlemen getting a cut here and a cut there and so far I haven't found anyone who's told me different and every time I stick my toe in I get burned.

Unfortunately, I am at the point where there is no alternative, and I can't continue to put it off. I have been reading a lot in the last few months, reddit has helped a bit with r/ frugal, finance, etc. but let's face it, it's the internet.


Title: Re: Stocks, bonds and investing
Post by: Viin on February 01, 2012, 11:27:23 AM
I don't suppose you have enough money to be part of a VC angel fund? I don't.  :awesome_for_real:


Title: Re: Stocks, bonds and investing
Post by: Salamok on February 01, 2012, 11:35:06 AM
Ten years in public accounting, and hundreds of individual tax returns, and I never saw anyone make money day trading... and the returns on stock-picking were largely incredibly mediocre.

I had a work acquaintance that was a professional day trader for 6 years or so made 150k+ a year.  Admittedly he said there were well over 100 people that started with him in a sponsored program and out of all those people only 2 or 3 that he knew of were successful.  Austin was actually sort of a hub for professional day traders starting in the mid to late 90's and there are still a few companies/individuals in town that will hire you as an intern attempt to teach you to trade using their money.

I have a bunch of money I need to invest, and what I should really do is get a financial planner. With ING's orange account paying less than inflation, it's pretty much time i get involved. I've just been putting it off because it really scares me and I am extremely risk-adverse. And, because every time I look, my IRA has lost more money.

Bah. I really need a professional to tell me what to do. Rich people don't manage their money, why can't I just pin my investments to a senator or something?

Anyone have a trustworthy financial planner friend in the DC area who does hourly/contractual advice (rather than 'invest in OUR funds and...')
Unless you have millions it just seems like the "Stock Adviser" method is just an elaborate shell game where the fees + mediocre gains + all losses get pawned off on you while your adviser is building his book of "important" clients that he is protecting.  The $100k my dad has had sitting with his Wells Fargo adviser is pretty much in the same place it was a decade ago, I suppose he should move it but rolling TSA's around is a PITA.

Yeah I know...  :tinfoil:


Title: Re: Stocks, bonds and investing
Post by: bhodi on February 01, 2012, 11:36:06 AM
VC angel funding is pretty much the complete opposite of something I would get into, being extremely risk adverse :P I am likely looking for a more traditional IRA+Index+Bond portfolio. Unfortunately, from what I can tell, no one really has any better idea of how that game works than I, if I were to sit down and get into the gritty for a few weeks and manage it myself.

I am not in the millions of dollars range, but hopefully I will be someday with the miracle of compound interest! (Of course this is the lie I am trying to avoid, since poor/negative returns during initial years have a hilariously extreme impact on future growth/earnings, 'average return rate' means virtually nothing)

I've had an opportunity to touch the VC world since I've meet a few VC people professionally and they really don't strike me as being able to tell a rose from a pile of shit. The stuff VC funds has a 95% failure rate, and that is expected. I've seen first hand how people piss VC money away.

The only thing I'd really angel invest in right now is an industrial quantity graphene production company.


Title: Re: Stocks, bonds and investing
Post by: Salamok on February 01, 2012, 11:38:27 AM
Unfortunately, I am at the point where there is no alternative, and I can't continue to put it off. I have been reading a lot in the last few months, reddit has helped a bit with r/ frugal, finance, etc. but let's face it, it's the internet.

Buy a duplex, 4-plex or small apartment complex.


Title: Re: Stocks, bonds and investing
Post by: bhodi on February 01, 2012, 11:41:11 AM
You're insane. I investigated that already, and there are a slew of problems with it and reasons why property investment is, in general, not for me. I am surprised ANYONE can make it work, honestly. I had a long conversation with someone who fixes up / rents / sells mortgaged properties and owns a management company. He was my realtor when I sold my last house, and I can assure you that is not a world which I would like to dive into. It's a world that eats up enormous amounts of time and requires you to have a very hands-on approach. Yes, he makes a good living doing it, but he's also a workaholic and puts in 10+ hour days.

The entire point of this is so that I can be hands-OFF.


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 11:47:26 AM
there are still a few companies/individuals in town that will hire you as an intern attempt to teach you to trade using their money.

This is frightening.  

I suspect that to get truly good, quality advice you have to have money in quantities that I don't have.  I suspect that most "financial consultants" are folks that have very little training whatsoever.  

As to the earlier point about the Dilbert strategy, I don't think that it's a bad strategy at all, I just think it suggests the "forget about it" mentality, which I don't like.  People should pay attention to their investments.

Addendum:  real estate is a crazy world.  I also know people that make money as slumlords, but it is a lot more work than you might think.


Title: Re: Stocks, bonds and investing
Post by: bhodi on February 01, 2012, 11:53:29 AM
I suspect that to get truly good, quality advice you have to have money in quantities that I don't have.  I suspect that most "financial consultants" are folks that have very little training whatsoever.  
Unfortunately, this has been my experience as well. On the internets, almost all advice has been nothing more than opinion with no actual experience or follow-through. At best, a personal anecdote about what worked for them, individually, in the past. And, as we all know, the plural of anecdote is not data. It seems like the only person you really want is someone who has already made as much money as they care to and derives satisfaction from helping smaller fish succeed. Good luck finding that guy. When you do, let me know. The only ones I've found are people who use other people's money as an ego boost.

I mean, why would I take financial advice from someone who has not already secured their individual future? Unless the whole thing is as completely random as it appears from the outside and some people just get fucking lucky and others don't? What a depressing thought.


Title: Re: Stocks, bonds and investing
Post by: Salamok on February 01, 2012, 11:57:45 AM
there are still a few companies/individuals in town that will hire you as an intern attempt to teach you to trade using their money.
I suspect that to get truly good, quality advice you have to have money in quantities that I don't have.  I suspect that most "financial consultants" are folks that have very little training whatsoever.  

Even if you have millions to invest and have a highly skilled and well trained person managing your money there is still a significant risk that you are being scammed.  Madoff. Goldman telling clients to do the opposite of what they are doing with their own money.  There are plenty of recent examples of Dilberts weasels going after the ultra rich.


Title: Re: Stocks, bonds and investing
Post by: Miasma on February 01, 2012, 12:01:48 PM
My money has just been sitting in cash for years now, it's a bad idea but like some others here I don't know what else to do.  If it wasn't in a Canadian version of what you call an IRA I would just take it out and pay off my mortgage, at least that way I reduce my expenses and don't have to pay interest.

I should get an advisor but I'm cynical about it.  Unless you have millions to invest you probably can't get anyone very good, certainly no one worth handing over your life savings to, they would just be bank tellers who have taken an extra short course.  A few months back there was a story about a financial advisor in the NYT, about how he made so many bad decisions that he lost his own house etc.  The scariest thing in the article was how he got his job.  He applied to a newspaper help-wanted ad asking for Securities people.  He didn't know what that was, he thought it was a security guard job.  They hired him anyways.  Fidelity investments, the giant firm with over 1.5 trillion under management :uhrr:.

I dug up the article. (http://www.nytimes.com/2011/11/09/business/how-a-financial-pro-lost-his-house.html?pagewanted=all)


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on February 01, 2012, 12:17:40 PM
there are still a few companies/individuals in town that will hire you as an intern attempt to teach you to trade using their money.
I suspect that to get truly good, quality advice you have to have money in quantities that I don't have.  I suspect that most "financial consultants" are folks that have very little training whatsoever.  

Even if you have millions to invest and have a highly skilled and well trained person managing your money there is still a significant risk that you are being scammed.  Madoff. Goldman telling clients to do the opposite of what they are doing with their own money.  There are plenty of recent examples of Dilberts weasels going after the ultra rich.

This.

A great deal of the money to be made in the financial services industry is to be made telling other people what to invest in and then taking your commission off the top, regardless of performance. Also, the biggest difference between a successful analyst and some random tool off the street is just the amount of information they have access to and their ability to process said information.


Title: Re: Stocks, bonds and investing
Post by: bhodi on February 01, 2012, 12:36:12 PM
This.

A great deal of the money to be made in the financial services industry is to be made telling other people what to invest in and then taking your commission off the top, regardless of performance. Also, the biggest difference between a successful analyst and some random tool off the street is just the amount of information they have access to and their ability to process said information.

So since you got out of the rat race, WTF do you do now with your stuff?


Edit:

I realized I have been doing nothing but bitching in this thread; sorry.

The biggest advice I can personally give is to make sure you are READY to invest. If you're still paying PMI on your mortgage, have ANY credit card debt or any debt that's more than a percent or two of interest, and don't already have a few months worth of expenses in a readily available place (that you can liquidate in a day or two), you aren't ready to invest yet.

And dear god, don't buy a house if you have to pay PMI. Really, it's just not worth it. Especially since they raised the rates recently. Rent until you can put 20% down or you might as well flush thousands upon thousands of dollars down the toilet instead.


Title: Re: Stocks, bonds and investing
Post by: Miasma on February 01, 2012, 12:42:11 PM
They also have God knows how many deals on the back end, they get commisions from selling financial products not only from you but from the companies themselves.  They have every reason to try and steer you into buying whatever their kickback is the highest on.  They've tried to clean it up but they're smarter and more motivated than the regulators so they will get around it.


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on February 01, 2012, 12:43:09 PM
A great deal of the money to be made in the financial services industry is to be made telling other people what to invest in and then taking your commission off the top, regardless of performance. Also, the biggest difference between a successful analyst and some random tool off the street is just the school they went to and what clubs they joined while there.
FTFY.  Seriously, most of the time, the reason for "why does this guy have his job" on Wall Street can be explained this way.  A successful analyst is one who either follow the consensus of other analysts or "makes the market" (has so much influence their pronouncements become self-fulfilling).

--Dave


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 12:44:24 PM
So my current strategy will be to invest in the "small dogs of the dow".  Of this group, there are some fairly interesting looking stocks:

1.  GE-  this is at a very, very low price point historically.  The yield is 3.57% and the 52 week range has been from 14.6 to 21.  Most "analysts" rate it as a fairly strong buy, for what that is worth.  
2.  Intel-  also at a very low price point historically.  The yield is currently 3.14% and the 52 week range is 19.2-27.  The consensus seems to be a lukewarm buy.  
3.  Pfizer-  yield of 4.1% but the P/E ratio is a little higher than some of its counterparts.  It's also rated as a decent buy.  
4.  AT and T-  yield of 5.9%.  52 week range of 27-31.  It seems to have been pretty stable over that time, but the deal with T-mobile seems a little sketchy.  It is weighted more to a hold rating currently.  
5.  Verizon-  yield of 5.28%.  52 week range of 32-40.  Weighted toward hold rating.  

On the surface, this seems like a pretty non-dynamic group of stocks.  I like GE and Intel on their own, and would probably consider buying one or both alone.  I do like the high yields on the telecom stocks and Pfizer.  The dogs did pretty well last year, but a lot of that came from McDonald's.  As the US economy bounces back I think that the telecoms and GE could do very well, however.  


Title: Re: Stocks, bonds and investing
Post by: bhodi on February 01, 2012, 12:51:20 PM
As for specific stock advice, a friend of mine said:

pepco, ge, fsc, iau, gsk. winners.
ivr, cvh, vod, mo, tosbf losers.

Who knows if it's true. I sure don't!


Title: Re: Stocks, bonds and investing
Post by: Murgos on February 01, 2012, 01:08:38 PM
It seems to me that if the market tanks that you might be well suited to get out and buy back at a lower price point.  For instance, if you sold at or near the peak prior to the most recent recession and then bought back during uptick or near the bottom you would have been better off than riding it out.  Or if you are in a particular aspect of the market, e.g. a commodities index or oil index, and anticipate more growth in another area you would be well suited to get out and reinvest somewhere else. 

This involves being able to successfully predict the future (time the market).  If you can do it, great.  If you can't, well then trying to avoid risk is probably the best you can do.

If people were able to do what you're suggesting (buy low and sell high) consistently then you would only ever need to watch one stock, any of them would do, and place options on it depending on your intuition and you would be a billionaire in 6 months and have exponential growth.


Title: Re: Stocks, bonds and investing
Post by: Merusk on February 01, 2012, 01:13:05 PM
I'd been looking at GE previously and didn't know what to do with the last $1100 that's been sitting in cash since I sold Apple.  Looks like I'll put that through today, thanks Ghost.

My little portfolio:

P&G, Intel, McDonald's, Wal*Mart, Duke Energy, Kraft, and some in a Spartan Market index fund (FSEMX).   The index fund has underperformed so far, sitting at -.03% since I bought it.  McD is -.61% but I get dividends and wasn't looking to make money there so I'm OK with that.


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 01:14:09 PM
It seems to me that if the market tanks that you might be well suited to get out and buy back at a lower price point.  For instance, if you sold at or near the peak prior to the most recent recession and then bought back during uptick or near the bottom you would have been better off than riding it out.  Or if you are in a particular aspect of the market, e.g. a commodities index or oil index, and anticipate more growth in another area you would be well suited to get out and reinvest somewhere else. 

This involves being able to successfully predict the future (time the market).  If you can do it, great.  If you can't, well then trying to avoid risk is probably the best you can do.

If people were able to do what you're suggesting (buy low and sell high) consistently then you would only ever need to watch one stock, any of them would do, and place options on it depending on your intuition and you would be a billionaire in 6 months and have exponential growth.

It appears to me that there is probably a reasonable middle ground.  I'm a rank amateur at this though, so maybe it is appropriate to not get out when you see a big turndown.  I certainly am not advocating day trading.  I don't think it's going to work for little fish like me to try and invest like Warren Buffet though, and a big question I have always had with these "sit on the EFT" suggestions is who stands to make money from it?  Maybe the little guy, maybe not.  


Title: Re: Stocks, bonds and investing
Post by: K9 on February 01, 2012, 01:35:04 PM
I thought Warren Buffet's schtick was that he always invested for the long haul. Getting in on small companies that have good prospects and riding it out until the went huge. Admittedly he had the ideal period in history to enjoy that sort of investment.

I'm looking to buy a house at the moment, so investing is a ways off. From what I have read though (depending on how soon you need the returns) there are almost no stock-picking approaches that outperform the market over long time frames (10-30y) so index funds make more sense in that regard. Yes there are lucky (emphasis lucky) people who make a killing flipping stocks, but for every one of them there are a hundred who piss all their money away. You might as well bet on the NFL or play roulette. YMMV


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 01:41:14 PM
Buffett moves a lot of money into and out of big stocks, like Coca Cola.  Yes, he has some "smaller" stocks, but his portfolio is cock full of heavy hitters that you would expect to be there.  He does recommend long haul investing, but you kind of have to when you're dealing with millions and millions of dollars at a time. 


Title: Re: Stocks, bonds and investing
Post by: Bann on February 01, 2012, 01:42:37 PM
My investment strategy:

Disclaimer: I inherited some stock along time ago, found it recently and sent it off to a freshly opened ING sharebuilder account. I sold the inherited stock, netting about $1350, and have decided to use that as my investing money for education/gambling fix. For Serious, I contribute a good hunk of my salary to a 403b investment account and will not look at/touch it till retirement or whatnot.

1. Read interesting article (usually in economist) about company/industry X in some (usually Asian) country.
2. Click around Google Finance for a company in Industry/Country from the article.
3. Realize 90% of the time the said Company is not tradable via my ING account.
4. End up finding some other company only very tangentially related to my initial search but that I could buy, and invest in some small amount of shares.
5. Take my well deserved beating.

Some examples of this strategy would be Longwei Petroleum Holdings (LPH) and Mongolia Energy Corp (MOAEY).

Only company of note I've had luck with (and it has been total luck) is CVV. It has been fluctuating pretty wildly since the summer when I started peeking at it every day. I've gone in and out twice and that has managed to pretty much cover all my other losses.


Title: Re: Stocks, bonds and investing
Post by: Sky on February 01, 2012, 01:48:13 PM
My general strategy is to not pay interest on things and keep your costs as low as possible.

Any time you're not paying interest, you're making that money. So tempted to refi, I just missed a no-point 3% deal for my mortgage, dammit (paying 5.5% now).


Title: Re: Stocks, bonds and investing
Post by: Viin on February 01, 2012, 01:57:22 PM
We thought of refi-ing too, but the closing costs wouldn't be worth the 150 basis point gain. Instead, we are focused on paying the house off in the next 5-6 years.


Title: Re: Stocks, bonds and investing
Post by: Merusk on February 01, 2012, 02:24:06 PM
Look around on closing costs and see if you can find a small local bank.  A co-worker just gave me a lead on a place locally whose closing costs were $250.  No, I'm not missing a 0. 

Doing another 30-year at 3.875 with them has a total cost of $~850 to me, because they then require a .5% delivery fee based upon house price at time of appraisal. 

A 15-year at current rates (3.5%) will cost me $27 more per month than my current loan and drop 6 years off my repayment terms - netting me about $66k in kept money after taking the extra $27 in to account.  Plus we'd pay off the house by the time I was 52.  That's huge.

Only thing keeping me from it is our own laziness about getting my name on the deed.  That's done now and I've got to wait 6 months to refi, but rates aren't going anywhere with the Fed having declared no change until 2013.


Title: Re: Stocks, bonds and investing
Post by: Hammond on February 01, 2012, 03:08:33 PM
Merusk That sounds EXACTLY like my situation.  I am at the tail end of my refinancing and hope to have it done this week.  My closing costs were roughly 500 bucks total.  The only messed up part is its taking about 3 months total to do it.  Backlog with the bank if you can belive that.


Title: Re: Stocks, bonds and investing
Post by: Sky on February 01, 2012, 03:15:04 PM
A 15-year at current rates (3.5%) will cost me $27 more per month than my current loan and drop 6 years off my repayment terms - netting me about $66k in kept money after taking the extra $27 in to account.  Plus we'd pay off the house by the time I was 52.  That's huge.
That's why I brought it up. How much money would you have to invest to make $66k?


Title: Re: Stocks, bonds and investing
Post by: Lantyssa on February 01, 2012, 03:21:01 PM
I have a bunch of money I need to invest, and what I should really do is get a financial planner. With ING's orange account paying less than inflation, it's pretty much time i get involved. I've just been putting it off because it really scares me and I am extremely risk-adverse. And, because every time I look, my IRA has lost more money.
I've got the perfect fund for you.  I'll handle it all.  Just make the check out for all your worth to L-A-N-T-Y-S-S-A and I'll get you set up in no time.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on February 01, 2012, 03:24:45 PM
The hardest part of investing is overcoming emotion.  As an individual investor, ALWAYS sell your losers first to buy new ideas and ALWAYS sell your losers before they become long-term.  Understand that if you lose 20% on a stock, then you have to make 25% on the next one to get back to even.  This math gets worse the more you lose.  Preventing losses should be priority number one.  Do this by selling losers quickly.  If you stick to this, you will find that your portfolio has lots of winners in it and you will feel good!

The bottom line, though, is that you are competing with people who have much better information and spend all day doing this, and still most of those people cannot beat the index whatever it happens to be (I am one of these people).  I get paid a lot to try and beat the market.  I get paid a lot if I just do an average job of it.  Why do I get paid a lot? Fees.  Investors do not understand the long term costs of fees.  

Buy a US stock ETF, an international stock ETF and a bond fund or two.  Be boring.  Keep fees low.  The best way to save is to add money to your account regularly, not try to pick the hot thing.  It is virtually impossible to get high returns without high volatility.   The guys who can do it charge a fortune in fees once people notice and the high returns then tend to stop.  

They key is getting a nice chunk invested as soon as you can.  Better to scrimp up $5000 and get it invested today than start with $1000 and add $1000 a year.  The math of compounding is very powerful.  Still, the regular adding is better than nothing





Title: Re: Stocks, bonds and investing
Post by: Murgos on February 01, 2012, 03:45:35 PM
The hardest part of investing is overcoming emotion.  As an individual investor, ALWAYS sell your losers first to buy new ideas and ALWAYS sell your losers before they become long-term.  Understand that if you lose 20% on a stock, then you have to make 25% on the next one to get back to even.  This math gets worse the more you lose.  Preventing losses should be priority number one.  Do this by selling losers quickly.  If you stick to this, you will find that your portfolio has lots of winners in it and you will feel good!

What's your threshold for loser? 1%, 5%?  If you're using stops you can have a hiccup that drops you out at the bottom of an upswing so you have to make your stop big enough to avoid that but yet small enough not to be painful when you inevitably buy a dog that just keeps dropping.


Title: Re: Stocks, bonds and investing
Post by: ghost on February 01, 2012, 03:58:52 PM
That's the thing, Shiznitz-  I had ETF indexes for years and they just sat there.  I've done much better since 2008 since I started paying attention to this stuff myself.  Do you have particular indexes that you like?


Title: Re: Stocks, bonds and investing
Post by: Abagadro on February 01, 2012, 05:54:16 PM
I just do dollar cost average investing in index funds so anything I would contribute would be very boring.  This year my AGI was such that I had to rejigger how I do it (457 instead of my IRA), but that's about as exciting as it gets for me.

Isn't a 457 an insurance annuity?

It's the government employee version of the 401(k).  I've been putting stuff into my IRA from the roll-over I did from my private practice profit-share but now I can't deduct it so went with the 457 contribution. It's kind of a bummer because I really liked the fund I have my IRA in (Vanguard Target 2035).  I've gone with low-expense ratio bond (20%) and stock index (80%) funds in my new account.
 


Title: Re: Stocks, bonds and investing
Post by: Johny Cee on February 01, 2012, 07:24:21 PM
I just do dollar cost average investing in index funds so anything I would contribute would be very boring.  This year my AGI was such that I had to rejigger how I do it (457 instead of my IRA), but that's about as exciting as it gets for me.

Isn't a 457 an insurance annuity?

It's the government employee version of the 401(k).  I've been putting stuff into my IRA from the roll-over I did from my private practice profit-share but now I can't deduct it so went with the 457 contribution. It's kind of a bummer because I really liked the fund I have my IRA in (Vanguard Target 2035).  I've gone with low-expense ratio bond (20%) and stock index (80%) funds in my new account.
 

hmm...  you don't have a 403b?  I thought most governments and non-profits had swapped by now.


Title: Re: Stocks, bonds and investing
Post by: Abagadro on February 01, 2012, 07:30:28 PM
I thought those were only for schools, churches and hospitals, not pure municipal government employees.


Title: Re: Stocks, bonds and investing
Post by: Viin on February 01, 2012, 09:06:40 PM
I've been putting stuff into my IRA from the roll-over I did from my private practice profit-share but now I can't deduct it so went with the 457 contribution. It's kind of a bummer because I really liked the fund I have my IRA in (Vanguard Target 2035).  I've gone with low-expense ratio bond (20%) and stock index (80%) funds in my new account.

I use Vanguard for my rollover IRA too - though I have my money spread around a bit more. Target 2040, bond index fund, and 3 EFTs - two are international small-cap/emerging markets.


Title: Re: Stocks, bonds and investing
Post by: Torinak on February 01, 2012, 11:36:39 PM
That's the thing, Shiznitz-  I had ETF indexes for years and they just sat there.  I've done much better since 2008 since I started paying attention to this stuff myself.  Do you have particular indexes that you like?

What are your expectations for what the indexes should do?

What are your goals for investing?

There are no realistic ways to get rich quick. There are some ways to get rich slowly. There are lots of ways to get poor quick, or get poor slowly.


Title: Re: Stocks, bonds and investing
Post by: K9 on February 02, 2012, 07:16:05 AM
Since this is the investing thread, here's a really good Economist article about private equity. (http://www.economist.com/node/21543545)


Title: Re: Stocks, bonds and investing
Post by: shiznitz on February 02, 2012, 08:16:33 AM
The hardest part of investing is overcoming emotion.  As an individual investor, ALWAYS sell your losers first to buy new ideas and ALWAYS sell your losers before they become long-term.  Understand that if you lose 20% on a stock, then you have to make 25% on the next one to get back to even.  This math gets worse the more you lose.  Preventing losses should be priority number one.  Do this by selling losers quickly.  If you stick to this, you will find that your portfolio has lots of winners in it and you will feel good!

What's your threshold for loser? 1%, 5%?  If you're using stops you can have a hiccup that drops you out at the bottom of an upswing so you have to make your stop big enough to avoid that but yet small enough not to be painful when you inevitably buy a dog that just keeps dropping.

Severe market drops are rare, even if they have been more common in the last few years.  I like the 15% loss threshold myself.  The other loss threshold I like is if a stock was making money (+10% or better) and then slips to a loss, sell it immediately.  Lastly, a losing stock in a rising market should be puked.  I know that sounds like chasing, but in a bull market investors tend to chase.  It works for the most part.  It is ok if you miss the first and last 10% of a bull market.

Quote from: ghost
That's the thing, Shiznitz-  I had ETF indexes for years and they just sat there.  I've done much better since 2008 since I started paying attention to this stuff myself.  Do you have particular indexes that you like?

I like the SPY and and SCHB for broad US market exposure.  I also use the double long and double shorts (SSO and SDS) on top to play momentum and juice returns.  If you try these leveraged ETFs, do NOT buy and hold.  They are meant for trading.  I don;t hold them for more than a week. I have not found an international ETF with reasonable fees.  Use a Vanguard fund.


Title: Re: Stocks, bonds and investing
Post by: Xanthippe on February 02, 2012, 08:36:44 AM
I have a little IRA. I buy $1000 worth of stock at a time from some company that I like for some reason (i.e., I like their products, like to shop there, like their employees, or something similar). I read what I can about them before buying to make sure they're not in financial trouble. Then I forget about it, until I start to not like them and then I sell and buy something else. I've only sold a few times.

My return is probably on par with randomly picking stocks, which is basically what I'm doing, because I pay little attention to P/E ratios and so on, and I don't know much about investing, but my return is way way better than my husband's 401k, which gets eaten up by administrative fees from all the buying and selling that those assholes do.



Title: Re: Stocks, bonds and investing
Post by: Salamok on February 02, 2012, 10:15:49 AM
And dear god, don't buy a house if you have to pay PMI. Really, it's just not worth it. Especially since they raised the rates recently. Rent until you can put 20% down or you might as well flush thousands upon thousands of dollars down the toilet instead.

And that interest crap is really f'd up.  Whatever you do don't buy a house until you have 100% down, you might as well flush hundreds of thousands of dollars down the toilet.  PMI is a few thousand dollars with 10% down on a 250k house or do a 95% FHA loan with monthly MIP and once your home value inflates you to an 80% LTV refi to an 80% conventional loan.  There is a huge gap between being able to absorb a $2500 hit over the course of 5 years and saving up an extra $35k to put down on a house.

Buffett moves a lot of money into and out of big stocks, like Coca Cola.  Yes, he has some "smaller" stocks, but his portfolio is cock full of heavy hitters that you would expect to be there.  He does recommend long haul investing, but you kind of have to when you're dealing with millions and millions of dollars at a time. 

Too bad he is so old, if he was 20 years younger I would say just buy a share or 2 of Berkshire and let it sit, as it is when he dies I'm guessing that will take some sort of a hit.


Title: Re: Stocks, bonds and investing
Post by: Murgos on February 02, 2012, 11:12:32 AM
Too bad he is so old, if he was 20 years younger I would say just buy a share or 2 of Berkshire and let it sit, as it is when he dies I'm guessing that will take some sort of a hit.

That would make a good death pool.  Every year you just buy a few put options that are way out of the money and the year it hits you make a small fortune.


Title: Re: Stocks, bonds and investing
Post by: Abagadro on February 02, 2012, 12:35:36 PM
Yea, just buy a share or two. They are only 117, 000 dollars a piece right now. :)


Title: Re: Stocks, bonds and investing
Post by: K9 on February 02, 2012, 12:38:25 PM
Well, the B shares are only ~$76 each.


Title: Re: Stocks, bonds and investing
Post by: Abagadro on February 02, 2012, 12:48:35 PM
Feh. Who wants to own a share with a 1/10,000th voting right.


Title: Re: Stocks, bonds and investing
Post by: K9 on February 02, 2012, 01:02:21 PM
It might be fun to have a ticket to the Omaha shindig; I think I'd like to see that at least once.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on February 02, 2012, 02:43:17 PM
It is a crowded love fest with real life banner ads for other Berkshire companies all over the place. 


Title: Re: Stocks, bonds and investing
Post by: ghost on May 16, 2012, 02:28:48 PM
Facebook IPO is in two days.  I'm not surprised to see that many insiders are going to "cash in" on their holdings immediately (http://online.wsj.com/article/SB10001424052702303448404577407774136362662.html?mod=WSJ_hp_LEFTWhatsNewsCollection). 

My gut feeling is that the IPO is going to make an absolute shitton of money for those selling but that we won't see the same sort of takeoff that Google had.  I honestly don't have much feel for how well the company will do long term, however.  As a communications media that is free, Facebook is bloody brilliant in most aspects.  But the problems arise where the rubber meets the road-  what is going to pay for their business?  The advertisements are forgettable and the social media create a site and get people to "like" your business deal only seems to be so effective, particularly as the media becomes more saturated.  The frenzy on Friday should be worth watching, even if most of us couldn't get our hands on the stock even if we wanted to. 


Title: Re: Stocks, bonds and investing
Post by: Teleku on May 16, 2012, 03:12:45 PM
Facebook is a bit more solid than people realize.  They are investing heavily into many different areas, trying to turn themselves into the next Google, and not just be a social media company.  Whether they can pull that off is another issue.  We are currently in the midst of another tech bubble, however, so I expect plenty of stock hilarity.


Title: Re: Stocks, bonds and investing
Post by: HaemishM on May 16, 2012, 03:50:43 PM
The Facebook IPO is one giant pump and dump scam. Get in early so you can get out quickly.


Title: Re: Stocks, bonds and investing
Post by: Viin on May 16, 2012, 04:22:07 PM
I agree with Haemish. Facebook has no staying power, I think the stock will be significantly down in a year and in the toilet in 3.

But my Amazon stock sure is doing good!


Title: Re: Stocks, bonds and investing
Post by: Miasma on May 16, 2012, 06:18:08 PM
There was a story today (http://www.msnbc.msn.com/id/47436225#.T7Q0ysXAGM8) about how a full 50% of people think facebook is a fad.  I'm not sure about that but I don't think it will ever be as profitable as their ipo numbers indicate.  Every time I see a story about their ipo I think of that horrible online pet store sock puppet dog.  There will be a lot of stupid people snapping it up but since there are so many stupid people it could be sustainable.

Of course this is coming from the same guy who thought "the iPad won't be successful, it's just a larger Goddamn iphone without the phone ability".  So, ignore me.


Title: Re: Stocks, bonds and investing
Post by: pxib on May 16, 2012, 07:34:55 PM
This WSJ article (http://online.wsj.com/article/SB10001424052702303448404577407774136362662.html) (probably behind a pay wall) says that 57% of the 100 million shares Facebook is offering are coming from existing holders liquidating a portion of their shares:
Quote
In comparison, when Google Inc. went public in 2004, existing holders represented 28% of sales, according to Dealogic. Private holders sold no shares in the public offerings of Yahoo Inc. and Amazon.com Inc. in the 1990s.

Caveat emptor.


Title: Re: Stocks, bonds and investing
Post by: ShenMolo on May 16, 2012, 08:43:59 PM
Ask yourself before buying a stock 'Is this something I can see holding for 20 years?" If not, don't buy it.


Title: Re: Stocks, bonds and investing
Post by: bhodi on May 16, 2012, 08:56:48 PM
The Facebook IPO is one giant pump and dump scam. Get in early so you can get out quickly.

What he said.

And if you're trying to get in on the IPO, set a sane limit buy.


Title: Re: Stocks, bonds and investing
Post by: ghost on May 16, 2012, 10:47:38 PM
From what I understand, unless you have $500k or more in long term investment portfolios many brokerages won't even give you the time of day on this one.  It will be tough to get in at a level where it's sane enough to make sense.  This will be a popcorn spectacle, not something to participate in.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on May 17, 2012, 09:35:44 AM
They are investing heavily into many different areas, trying to turn themselves into the next Google, and not just be a social media company.  Whether they can pull that off is another issue. 

This is the key for Facebook.  Right now, it is just a company collecting advertising $.  Like Yahoo.  Like Lycos.  Like AOL.  That model will not sustain the premium stock valuation being set by the IPO.  Google trades at about 25x earnings right now.  It has 65% gross margins and 33% pre-tax margins.  It is growing at a healthy double digit clip.  I find it hard to believe Facebook will be able to sustainably deliver better margins and a better growth rate than Google, which - like Microsoft - has one of the most profitable businesses in the world.  If it cannot, the stock will not hold its IPO level over the long term.  In the short term, who knows. 



Title: Re: Stocks, bonds and investing
Post by: HaemishM on May 17, 2012, 09:43:39 AM
From what I understand, unless you have $500k or more in long term investment portfolios many brokerages won't even give you the time of day on this one.  It will be tough to get in at a level where it's sane enough to make sense.  This will be a popcorn spectacle, not something to participate in.

That ought to clue anyone with half a brain in. This is big money looking for a place to park some money for 6 month to 1-year (or less) interest returns above 3%. They aren't buying Facebook because they think it'll be a profitable company, they are buying it to inflate the price, park some money long enough so it isn't taxed at normal income rate, then sell it the minute it starts to take a nose dive, which will further precipitate the dive as the suckers get in on its past success, only to be sucked under by the whirlpool of its downfall.

And the media is doing its level best to hype it, just to make sure it's nice and hyperinflated.


Title: Re: Stocks, bonds and investing
Post by: pxib on May 17, 2012, 09:49:37 AM
Looks like they're upping the stakes. (http://www.forbes.com/sites/stevenbertoni/2012/05/17/facebooks-elite-cash-in-but-other-insiders-must-wait/)
Instead of 100,000,000 shares, of which 57% are insiders cashing out, Facebook seems to be planning to sell 484,418,657 shares, of which 189,369,144 (39%) are insiders cashing out EVEN MORE. Also, all other current shareholders are forbidden from selling their stock for 180 days. At the planned price of about $36 a share, that would be $7 billlion for insiders and $10.5 billion for Facebook itself... enough to lose money expanding its business and playing accounting games for decades.


Title: Re: Stocks, bonds and investing
Post by: ghost on May 17, 2012, 09:51:53 AM
This whole thing seems like a massive Ponzi scheme when you put it that way, pxib.


Title: Re: Stocks, bonds and investing
Post by: HaemishM on May 17, 2012, 09:53:06 AM
Or, in other words, the modern stock market.  :why_so_serious:


Title: Re: Stocks, bonds and investing
Post by: ghost on May 17, 2012, 10:04:09 AM
I still think there are some good stocks out there that are trying to get good returns for the investors.  This has scam written all over it though, the way the rats are bailing off of the ship.

Addendum:

So you want to buy some Facebook IPO?  You're not good enough..... (http://cnnmoneytech.tumblr.com/post/23223813082/cnnmoney-is-trying-to-buy-facebook-ipo-shares?hpt=hp_c1)


Title: Re: Stocks, bonds and investing
Post by: Paelos on May 17, 2012, 12:36:17 PM
I've made more money betting baseball this season than I have in my portfolio. Just saying. The market is dumb right now. Long term strategy is fine, but the short term is just...I don't understand it.

Example: I picked up ATVI a few months ago when it was in the 11s off the cataclysm crap. The stock bounces around, but it's been DROPPING post-Diablo 3 release. Their Q1 numbers showed an average return on equity of 14%, but for some reason the stock is dropping after one of the biggest money makers for them of the last 3 years releases?

People are dumb.


Title: Re: Stocks, bonds and investing
Post by: HaemishM on May 17, 2012, 01:58:51 PM
The stock market isn't built on profits of the company whose stock is being bought, but on the hype around that stock which make people by the stock. It's the giant hype machine in dollar form.


Title: Re: Stocks, bonds and investing
Post by: Paelos on May 17, 2012, 02:47:10 PM
The stock market isn't built on profits of the company whose stock is being bought, but on the hype around that stock which make people by the stock. It's the giant hype machine in dollar form.

And that's the ridiculous part that puts us into financial crashes over and over again. The point of trading stock is to trade it for the returns of the stock, not the market value. If you ignore the inherent parts of stock ownership (ie - returns of profits on your equity investment), then you will never make consistent money. Warren Buffett didn't make his money on pump and dump.


Title: Re: Stocks, bonds and investing
Post by: bhodi on May 17, 2012, 02:58:18 PM
I've made more money betting baseball this season than I have in my portfolio. Just saying. The market is dumb right now. Long term strategy is fine, but the short term is just...I don't understand it.

Example: I picked up ATVI a few months ago when it was in the 11s off the cataclysm crap. The stock bounces around, but it's been DROPPING post-Diablo 3 release. Their Q1 numbers showed an average return on equity of 14%, but for some reason the stock is dropping after one of the biggest money makers for them of the last 3 years releases?

People are dumb.

This guy has some pretty sound reasoning behind it (http://seekingalpha.com/article/593621-why-i-left-my-cheerleader-pom-poms-at-the-door-and-sold-activision-blizzard-part-2).

Personally, I have a ton of ATVI and I bought more a few days ago. I plan on holding it a quarter and when next quarter's earnings are enormous, bolstered by D3 box and RMAH, I'm going to sell.

My portfolio has also been crap this year. In fact, I'd have been better off in some 1% fund. But that's life! At least my dividend funds are still paying dividends... even my IID which has been doing.. particularly bad.

Like everyone else, I'm betting on an election year and hoping for QE3 to divest myself in the green before it all comes crashing down next year.


Title: Re: Stocks, bonds and investing
Post by: Paelos on May 17, 2012, 03:21:28 PM
I read that article as well. He's wrong simply for how he discounts the effect that D3 will have on their income.

He went as far as to make this statement:

Quote
"StarCraft 2 (which was just as anticipated as Diablo 3 I will add)"

That was when I went, yeah this guy doesn't know their business. He's a typical ratio fuckhead.



Title: Re: Stocks, bonds and investing
Post by: bhodi on May 17, 2012, 03:27:58 PM
Well, he said 'look at black ops and starcraft 2 which sold like crazy, that didn't budge the price, what makes you think diablo 3 will?'. It's all due to the WoW cash cow slowly deflating, which I do have to agree with. I expect diablo 3 will sell quite a few more copies than starcraft 2, but let's be honest - it's not going to sell as much as black ops, console games are at an entirely different level.

Still, he counted the 10 active sell limit as a bad thing, whereas I think it's a good thing which will encourage lots of volume, quick selling, and little trash. And I think it's going to make them a lot of cash this quarter. In fact, I put money on it! It's straight gambling though. It's from my 'play money' part of my portfolio.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on May 17, 2012, 03:44:08 PM
ATVI will not make you rich.  It has too many shares outstanding for the share price to rise dramatically.  With 1.1 billion shares outstanding, for the stock to rise $1, the perceived value of the firm as a whole must rise $1.1 billion.  Diablo 3 is not likely to deliver an incremental $1.1 billion of economic value.

You could make 20% though.  The company's value is too large for one game to make a really significant difference relative to the economic importance of WoW.


Title: Re: Stocks, bonds and investing
Post by: Goumindong on May 17, 2012, 08:55:48 PM
ATVI will not make you rich.  It has too many shares outstanding for the share price to rise dramatically.  With 1.1 billion shares outstanding, for the stock to rise $1, the perceived value of the firm as a whole must rise $1.1 billion.  Diablo 3 is not likely to deliver an incremental $1.1 billion of economic value.

You could make 20% though.  The company's value is too large for one game to make a really significant difference relative to the economic importance of WoW.


                                             Q1          '11
Return on average equity    14.42%    10.33%

This is pretty much what you want to know(in combination with their beta values) if you're going to get the barest minimum of information for a stock. Your belief in where those numbers will go and your own risk tolerances determine whether or not you should buy?

If you're in for the long term, the guy might be right, but i don't see if from what he is suggesting. You can't just do a regression on the data and get good results [for a number of reasons]. However, let us look at the stock using a simple hypothesis.

"For any market risk there is a demanded return and that demanded return is higher as market risk increases and lower as market risk decreases"

Activision is currently releasing the end run of its signature products and will be starting on new IP's pretty soon. New IP's mean more risk, and more risk means a higher required return on equity.

But the profits and firm value isn't expected to change much[or change in growth trajectory rather]. If the products succeed they're in the same place they were. If they fail they lose a lot of money. So what is the only way to get a higher return on equity with the same profits? The value of the equity has to fall.

Basically, investors expecting that in the long term the stock is going to become more risky should be expecting a price reduction. People that know that it doesn't matter what IP blizzard releases its going to sell a lot will do just fine in the long term. But it might look bad in the medium term as the people who don't get it bail.

People who are in the know about what blizzard does AND know that other people aren't in the know will win by selling early and then rebuying in the medium term.


Title: Re: Stocks, bonds and investing
Post by: Margalis on May 18, 2012, 03:18:56 AM
Facebook is a bit more solid than people realize.  They are investing heavily into many different areas, trying to turn themselves into the next Google, and not just be a social media company.  Whether they can pull that off is another issue. 

They can't. Their engineering is dogshit. Their API is relatively simple and still has not only a lot of bugs but new bugs being introduced constantly.

If they tried to do something like Android not only would it not work it would explode and fry your face with battery acid.


Title: Re: Stocks, bonds and investing
Post by: ghost on May 18, 2012, 12:14:35 PM
Well, Facebook hasn't provided the predicted entertainment value I expected today.  It broke in at $42 and has seemed to stabilize out at about $39.  I wanted fireworks (glad I didn't purchase any of this).


Title: Re: Stocks, bonds and investing
Post by: Paelos on May 18, 2012, 12:42:27 PM
Facebook is no google.


Title: Re: Stocks, bonds and investing
Post by: Soln on May 18, 2012, 02:37:39 PM
Maybe not but they had the cash before and now after the IPO to hire whomever they want.  Increasingly, I see people going there.  The comp is great apparently (or was a few months ago).


Title: Re: Stocks, bonds and investing
Post by: Minvaren on May 18, 2012, 03:10:13 PM
Well, Facebook hasn't provided the predicted entertainment value I expected today.  It broke in at $42 and has seemed to stabilize out at about $39.  I wanted fireworks (glad I didn't purchase any of this).

There was some this morning when a possible typo (http://www.zerohedge.com/news/facebook-pulls-reverse-bats-flash-smashes-%E2%82%AC50000share) briefly sent their valuation to about $100 trillion.   :awesome_for_real:


Title: Re: Stocks, bonds and investing
Post by: shiznitz on May 18, 2012, 03:20:03 PM
Maybe not but they had the cash before and now after the IPO to hire whomever they want.  Increasingly, I see people going there.  The comp is great apparently (or was a few months ago).

Facebook the company is getting no cash from the IPO.  All the proceeds are going to selling shareholders.


Title: Re: Stocks, bonds and investing
Post by: pxib on May 18, 2012, 04:02:09 PM
Nope. Almost 40% of it was insider selling, but the other 60% was new shares and sold for about $10 billion in cash for the company.

They can throw money away for years now.


Title: Re: Stocks, bonds and investing
Post by: ghost on May 18, 2012, 08:07:10 PM
It's a gigantic pyramid scheme.


Title: Re: Stocks, bonds and investing
Post by: Sky on May 18, 2012, 10:53:13 PM
Has anyone even mentioned bonds in this thread or is that too stuffy?

I took my federal tax returns in I bonds this year, so I wouldn't blow it on something.


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on May 19, 2012, 12:10:23 AM
Facebook will make money. Eventually and slowly. Maybe.

But. Only if they get their shit together. Faceberg and his boys went on a travelling road show to over the past few weeks to drum up hype for the IPO among the financial class. They failed miserably to manifest said hype because, among other things, they have no idea about why the company is valuable. They believe their own hype that they've done something new and interesting, rather than the true value which is all the rubes updating their status hourly and reading all the ads sent to them and being tooled for whatever the fuck the 'book can get out of them.

If Faceberg and co wise the fuck up and realize what the fuck is up, shit may get real, otherwise, they'll founder and be the biggest disappointment since pets.com. We'll see.


Title: Re: Stocks, bonds and investing
Post by: Viin on May 19, 2012, 12:07:01 PM
Has anyone even mentioned bonds in this thread or is that too stuffy?

I took my federal tax returns in I bonds this year, so I wouldn't blow it on something.

You can do that? Or did you just take that money and buy bonds through your broker?


Title: Re: Stocks, bonds and investing
Post by: Sky on May 19, 2012, 08:05:14 PM
No, it's an option for the return. Ye Olde paper bonds, even. They've otherwise done away with paper bonds almost completely.

I did a bit of quick homework and they seemed decent (if ultra-conservative, but that's me) to stash some money in to hold some value vs stashing it in a mattress. I really don't want to invest in stocks, but I won't get into my crazy coot rant about how the stock market is destroying 'merica.


Title: Re: Stocks, bonds and investing
Post by: Morat20 on May 19, 2012, 10:50:02 PM
No, it's an option for the return. Ye Olde paper bonds, even. They've otherwise done away with paper bonds almost completely.

I did a bit of quick homework and they seemed decent (if ultra-conservative, but that's me) to stash some money in to hold some value vs stashing it in a mattress. I really don't want to invest in stocks, but I won't get into my crazy coot rant about how the stock market is destroying 'merica.
Hey, I'm still pissy my company match is all in their stock. :( I don't buy my company stock otherwise, and I'd divest of it if I could.

I've got my 401 split between bonds, large-scale indexes (stock portfolios designed to mimic the S&P 500, that sort of thing), and one of those retirement-date funds. I've got more in company stock than I'd like, but they're matching a sizeable amount a year, so...*shrug*.

Right now I'm deciding if I want to bump from 16 to 17% withholding next year. 16 is probably enough, though. I haven't actually seen a real raise in five years. It's eaten up by bumping my 401 a full point and benefits increases.


Title: Re: Stocks, bonds and investing
Post by: Paelos on May 20, 2012, 11:42:50 PM
A match is a match. Assuming the stock doesn't drop to 10% of the value you got it for, you're going to make out like a bandit on any match you get.


Title: Re: Stocks, bonds and investing
Post by: Sky on May 20, 2012, 11:56:50 PM
Yeah, I miss the matching Walmart used to give when I was there. Both 401k and stock. The library, it matches nada, though I am vested in the NYS retirement system through an old loophole, so that's cool. If there's any money in it twenty years from now.


Title: Re: Stocks, bonds and investing
Post by: ghost on May 21, 2012, 09:53:28 AM
Facebook sinks ~15% today (http://online.wsj.com/article/SB10001424052702303610504577417911775222058.html?mod=WSJ_hp_LEFTTopStories).  That didn't take long.


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on May 21, 2012, 05:33:18 PM
Here's why. (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/05/FB%20a%20few%20more%20numbers.jpg)  Essentially, Facebook is past it's exponential growth phase and is now at best linear, if not completely plateaued (there's another chart out there that plots Facebook growth against Friendster and MySpace growth, that essentially says plateauing is the best case scenario now, the historical record would call for a slow death).  The monetization it might manage on its existing userbase does not justify a $100B valuation, no matter how you spin it.

--Dave


Title: Re: Stocks, bonds and investing
Post by: ghost on May 21, 2012, 06:15:10 PM
Their quarter over quarter ad revenue growth was even in the negative a couple of times according to that graph.  Interesting stuff.

I'll stand by my theory that the big time shareholders (including Zuckerberg) were cashing out at just the right time with the IPO because they knew that it was going to be a slow declining platform. 


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on May 21, 2012, 06:20:29 PM
Their quarter over quarter ad revenue growth was even in the negative a couple of times according to that graph.  Interesting stuff.

I'll stand by my theory that the big time shareholders (including Zuckerberg) were cashing out at just the right time with the IPO because they knew that it was going to be a slow declining platform. 
It does kind of remind me of the AOL/Time Warner merger, they're converting hype to money before the reality sets in.

--Dave


Title: Re: Stocks, bonds and investing
Post by: ghost on May 21, 2012, 11:38:50 PM
Fuck, Zuckerberg is already richer than the Google guys.  It's insane. 


Title: Re: Stocks, bonds and investing
Post by: Ironwood on May 22, 2012, 11:22:53 AM
Well, sure, but is he happy ?

 :oh_i_see:


Title: Re: Stocks, bonds and investing
Post by: Draegan on May 22, 2012, 02:24:54 PM
Doubtful, you ever see how the man ties a tie?


Title: Re: Stocks, bonds and investing
Post by: Teleku on May 22, 2012, 05:51:18 PM
Happiness is having no idea how to tie a tie, trust me.

Well except for about 20 minutes before that job interview you need to make it to on time, and then you suddenly realize you can't remember.  Not that I speak from experience.


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on May 22, 2012, 10:14:19 PM
I can tie a tie and I'm quite happy.

Then again, I wear one a lot now that I don't have to more than I ever did when I was a banker.


Title: Re: Stocks, bonds and investing
Post by: KallDrexx on May 22, 2012, 11:31:02 PM
It gets better!

facebook under investigation for Violations of laws relating to their ipo (http://www.reuters.com/finance/stocks/FB.O/key-developments/article/2545419)


Title: Re: Stocks, bonds and investing
Post by: Paelos on May 23, 2012, 09:09:44 AM
Don't be shocked when Zuckerberg screws over a bunch of people to make a buck. Again.


Title: Re: Stocks, bonds and investing
Post by: ghost on May 23, 2012, 10:54:18 AM
Paul B. Ferrell feels that Facebook may be the Black Swan that kills us all (http://www.marketwatch.com/story/how-facebook-could-destroy-the-us-economy-2012-05-22).  

Now we've gone the other way.   :ye_gods:

Addendum-  maybe this guy's right.  It is alleged that Morgan Stanley was doing some pretty shady business (http://news.blogs.cnn.com/2012/05/23/oh-zuck-facebooks-bumpy-start-just-got-a-little-worse/?hpt=hp_t1) in covering up the weaknesses of Facebook prior to the IPO. 


Quote
The report, and now the lawsuit, raises questions about whether Morgan Stanley, one of the underwriter companies that handled Facebook's IPO, or other banks knowingly offered certain investors privileged information that should have been made public. Other underwriters targeted by the lawsuit include Barclays Capital, Goldman Sachs, JPMorgan Chase and Merrill Lynch, a unit of Bank of America.

It is possible that Morgan Stanley may have signed off on a price that was too high or agreed to sell too many shares in the deal, CNNMoney.com reports. Then, Morgan Stanley analysts are alleged to have told certain people they had a negative assessment of the social network's offering.

"If true, the allegations are a matter of regulatory concern to FINRA and the [Securities and Exchange Commission]," Ketchum said in a statement via a spokeswoman.

The New York Times reported Morgan Stanley did more than just quietly share a negative outlook; they actually "held conference calls to update their banks' analysts on business."

"Analysts at Morgan Stanley and other firms soon started advising clients to dial back their expectations," the article says. "One prospective buyer was told that second-quarter revenue could be 5 percent lower than the bank’s earlier estimates."


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on May 23, 2012, 01:16:47 PM
Ah, there goes the Morgan I used to know and loathe.

Glad to see that they're still up to the same shit years later.


Title: Re: Stocks, bonds and investing
Post by: ghost on May 23, 2012, 01:35:06 PM
But wait.  It gets better (http://blogs.wsj.com/deals/2012/05/23/morgan-stanley-other-underwriters-make-100-million-profit-on-facebook-ipo/)........


Quote
Morgan Stanley and other underwriters have made a profit of about $100 million stabilizing Facebook Inc. stock since trading began on Friday, people familiar with the matter said.

As the lead underwriter responsible for Facebook’s IPO, Morgan Stanley would receive the largest chunk of those profits, the people said. The bank would receive the money on top of millions of dollars in IPO fees, the people added.


Let's see......support IPO, drive up prices as high as possible, short sell shares.....Boom!  There's a hundred million dollars.  This is amazing. 


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on May 23, 2012, 06:29:24 PM
Business as usual.


Title: Re: Stocks, bonds and investing
Post by: pxib on May 23, 2012, 06:42:48 PM
Indeed. This is only unusual in how publically brazen and obvious it is.


Title: Re: Stocks, bonds and investing
Post by: Chimpy on May 23, 2012, 07:11:21 PM
The asshats on Wall Street have been given free reign for so long that they have lost any need to hide their shenanigans anymore because they know they will never be held accountable.


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on May 23, 2012, 08:54:00 PM
They scammed *rich people*.  That's still a crime that gets investigated (but not necessarily prosecuted, see Jon Corzine/MF Global).  The ones that are going to get seriously pissed are the ones that Goldman hooked on the last round of private financing that can't sell until 6 months after the IPO, while the earlier investors got to cash out immediately (much of why the IPO fizzled is because it was just too big, and it was so big because of the insiders cashing out).

This is the top 1/10th of one percent turning on each other because there's nobody else left with enough money to be worth scamming.

--Dave


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on May 23, 2012, 09:13:59 PM
They scammed *rich people*.  That's still a crime that gets investigated (but not necessarily prosecuted, see Jon Corzine/MF Global). 

How do you think I made my money? They only investigate it if you don't make those rich people a modicum of profit, or at least allow them to break somewhat close to even.



Title: Re: Stocks, bonds and investing
Post by: Ironwood on May 24, 2012, 04:33:05 AM
I was gonna guess hooking.


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on May 24, 2012, 06:29:45 AM
Hooking is more honest.  :awesome_for_real:


Title: Re: Stocks, bonds and investing
Post by: bhodi on May 24, 2012, 01:23:40 PM
How do you think I made my money? They only investigate it if you don't make those rich people a modicum of profit, or at least allow them to break somewhat close to even.
Funny, a guy I know said the same thing in a chat we were having yesterday.

Quote
I mean that a) the underwriters are going to get sued and pay up, b) the stock is dropping like a rock, and c) I would not be surprised to see a lot of short interest in FB.
on point c… Zuck annoyed wall street by wearing his hoodie and not sucking up to them. I would not at all be surprised to see tons 'o naked shorting going on.
http://wallstcheatsheet.com/stocks/is-this-the-real-reason-behind-facebooks-plunging-stock.html/

Wall Street likes to fuck people who annoy them.  Just ask Jeff Citron.
http://www.investopedia.com/terms/s/soesbandits.asp#axzz1vcjj2Oq6
http://blog.themistrading.com/soes-bandits-revisited/
Quote
Today we are going to do a little electronic trading history lesson.  Who remembers Sheldon Maschler?  Harvey Houtkin?  They were the original SOES Bandits.  Sheldon headed up the infamous Datek Securities.  In 1989, with the help of two boy wonders, Jeff Citron and Josh Levine, they created Watcher, a software program that allowed day traders to take advantage of a weakness in the SOES system–relatively slow updating of price quotes.
Sound familiar to anyone? One thing I have learned.  If you fuck the big boys they will fuck you back sooner or later.  You only get to play by their rules.

(Question by another guy) Isn't that type of thing what got cartine beat down in the currency markets?

No, they were playing the currency markets differently. they were doing exchanges from A -> B -> C -> D -> E -> A where the marginal differences between them gave you a profit on going back to A
The problem was that some of the C and D currency markets were so small that their trades were causing them to deflate precipitously over a short period of time
Cartine basically exploited arbitrage loopholes in currency but didn't have the backing of the big boys. So what he did was viable and 'legal', but because he wasn't sharing, they came after him
Stealing is fine, as long as you are sharing with the right people. That's the lesson in both cases

That's the reason that they weren't charged with anything. What they were doing was totally legal.

My comment was "If Jeffy is considered fucked, bend me over. He still got hundreds of millions". And he did. And he bought a huge yacht with it. It's a pretty nice looking yacht.


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on May 26, 2012, 12:53:39 AM
Bingo. I get to run around New York, the Hamptons and the Bay Area like I own the places I hang mostly because I and my group at MS fucked people enough to make us some cash, but not enough to cause them any real pain.


Title: Re: Stocks, bonds and investing
Post by: Viin on February 23, 2015, 10:07:10 PM
We haven't had a good investing discussion lately, so maybe we should stir one up!

What's your strategy for 2015? Day trading? Dump it all in S&P 500 and don't look back? Buy gold bullion?


A family friend convinced me to put some money into super special fund via a 401k rollover, but this is what you get when you don't do what you know you should:
(https://dl.dropboxusercontent.com/u/42220/TA_performance_2014.PNG)


Title: Re: Stocks, bonds and investing
Post by: Abagadro on February 23, 2015, 10:16:38 PM
Yeesh. Those F-Squared yahoos just got hammered by the SEC for 35M in penalties for fraud. Get your money out of there if it is still sitting in there.

I'll do what I have been doing for 20 years, bi-monthly dollar-cost average buys of broad based index funds in tax-deferred or tax-advantaged accounts and then don't touch it.


Title: Re: Stocks, bonds and investing
Post by: Viin on February 23, 2015, 10:28:04 PM
Yeesh. Those F-Squared yahoos just got hammered by the SEC for 35M in penalties for fraud. Get your money out of there if it is still sitting in there.

Ahh hadn't noticed that, thanks for pointing that out. Now to start yelling.  :awesome_for_real:


Title: Re: Stocks, bonds and investing
Post by: Abagadro on February 23, 2015, 10:33:44 PM
http://www.sec.gov/litigation/admin/2014/ia-3988.pdf

http://fortune.com/2014/12/22/sec-f-squared-fraud/


They basically back-analyzed their data using time-shifted and cherry-picked dates to wildly inflate a non-existent performance history.


Title: Re: Stocks, bonds and investing
Post by: Morat20 on February 23, 2015, 11:00:06 PM
Diversified 401k, 16% of my salary up to the cap. I try to keep company stock below 15% (company match is in stock). All passively managed. The bulk is a target date retirement fund, the rest is index funds and a large-cap and small-cap company funds.

I check it quarterly to make sure the percentages haven't gotten all out of whack (mostly to trim company stock back every few years) and ignore it otherwise.

I've been doing this since I was...21 or 22? Anyways, it tends to make more money a year than I actually put in, so it's hit self-sustaining pretty nicely.

Other than that -- I have a kid (who is 18 and thus his mistakes are aggravating AND expensive), and student loans and shit. Like I have money for investment. When I get that bullshit 6.8% student loans for my wife's master's degree paid off, then maybe.

Admittedly, as a hobby I play around with day-trading futures using machine learners. But only, you know, simulations Because I'm not exactly the risk-taking sort and day trading futures is a good way to go so freaking broke even a loan shark would take pity on you.


Title: Re: Stocks, bonds and investing
Post by: angry.bob on February 24, 2015, 12:04:12 AM
What's your strategy for 2015? Day trading? Dump it all in S&P 500 and don't look back? Buy gold bullion?

I only have the stuff my Great Uncle bought. It's all utilities along the Northeast Coast, oil companies, and and a bunch of other similar stuff like distilling companies. Most of it pays dividends and does okay. I don't really pay any attention to the details and I don't particularly care to. If I did I'm pretty certain I'd fuck it all up and let some dickass trader talk me into something stupid so he could get a bunch of commissions. My Grandpa said that his strategy was to invest in stuff people absolutely had to have no matter what else was going on and that stuff you had to sell to make money off of was no good because you had to kill the goose to get the egg.

In all honesty, if you aren't already wealthy with and from stocks, forget it at this point. The system is so fucked and rigged now and designed to take your money and give it to rich people. So I guess I would suggest you sit on your pile of money in a corner until you get pissed enough to start killing our capitalist and executive classes.


Title: Re: Stocks, bonds and investing
Post by: Samwise on February 24, 2015, 01:41:45 AM
So I guess I would suggest you sit on your pile of money in a corner until you get pissed enough to start killing our capitalist and executive classes.

And here I've been thinking I was crazy.  Thanks for the validation.

 :why_so_serious:

I have a 401k that I contribute to regularly and periodically reshuffle it according to the latest and greatest strategy from our investment advisor at work, but on some level I don't believe that money is real since I know a big chunk of it could evaporate in an instant.  My main retirement plan is to pay off my house.  If you can live rent-free in the Bay Area you've pretty much got it made.


Title: Re: Stocks, bonds and investing
Post by: Teleku on February 24, 2015, 02:28:53 AM
Been piling the maximum Im legally allowed to into the TSP (federal governments 401K).  Have that split between an account that invests it with the assumption you are retiring in 2040, and a straight stock index.  Both have done pretty good over the last two years.

Well, I should say that's how I normally keep things.  Currently transferred all of it into bonds till the Greece situation works out, just in case they fail to make an agreement, Greece does something drastic, and the stock market decides this is the end of the world (as it seems to periodically do).  I'll move it back into stocks once we are past that, heh.


Title: Re: Stocks, bonds and investing
Post by: Shannow on February 24, 2015, 07:31:15 AM
I would be lying if I said that some of us who exist in the same competitive space as F-Squared and Good Harbor aren't watching their troubles with some amusement.


Title: Re: Stocks, bonds and investing
Post by: Paelos on February 24, 2015, 08:19:05 AM
ARCP
KO
SYY
OZRK
FBIOX

Some of the current holdings. ARCP is a REIT which got busted for an accounting scandal, but the underlying real estate is still good. The price dropped to $7.50 when it happened, I snapped it up and I'm holding it.
Coke is my long-term holding. People always doomcast Coke and yet it still makes money year over year.
Sysco is the connection to every restaurant's supply chain for the most part. They are the lifeblood of the industry. Better economy means more restaurants which means more money for these guys.
Bank of Ozarks is a play I'm making based on some changes with bank regulations that could benefit mid-level banks. More will come on that as we go.
FBIOX is a Fidelity Biotech fund. It's earned 28.5% in 6 months. I'm looking to see how big it gets.


Title: Re: Stocks, bonds and investing
Post by: Merusk on February 24, 2015, 09:27:19 AM
Sysco also announced they are looking to merge with the 2nd largest food distributor in the US late last week. They are either doomed to stop growing or about to become a defacto monopoly. They're great at what they do, but I can't see them getting much bigger.

Thanks for pointing out FBIOX, I was looking for another one to toss money at since my international fund crapped-out last year at only 2%.



Title: Re: Stocks, bonds and investing
Post by: Paelos on February 24, 2015, 09:46:44 AM
Yeah I'm stuck in a large cap that's basically holding stead and throwing off divvies. But I'm probably going to dump it soon in favor of other things.


Title: Re: Stocks, bonds and investing
Post by: Teleku on February 24, 2015, 09:55:24 AM
Sysco is a god awful shitty evil company.  Which is why they make a big profit, but still, don't think I could morally bring self to own their stock.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on February 24, 2015, 10:23:20 AM
Here is a simple idea. When the US Fed implemented QE (quantitative easing - basically, buying bonds in the public markets to keep interest rates low to boost the economy), US stock s rose because low interest rates encourage investors to take more risk.  When the Bank of Japan started QE in 2013, stocks rose. Now, the ECB - the Fed of Europe - has announced a new QE program.  So it is logical to buy Europe.

But QE can cause a country's currency to devalue. The Yen and the Euro have dropped sharply. So how do you protect yourself? There are ETFs that hedge the currency against the dollar. You won;t get hurt if the currency falls but you also won't benefit if the currency rises.

I recommend HEFA, an ETF that invests in the developed markets ex-US, and hedges the currency risk.  If you look it up, it will describe itself as tracking the MSCI EAFE Index.  EAFE stand for Europe, Australia, Far East (which is only Japan in this case).  Yes, calling Japan the Far East is anachronistic but EAFE is just shorthand that has been used for 30 years and it isn't going to change.

So, bottom line is that QE drives stocks up at the potential expense of currency so buy an ETF that invests in countries starting QE and hedge the currency.

HEFA.

If you want to just buy Japan, which generally is much cheaper than the US and Europe on a valuation basis, use HEWJ.

Both of these will give you good diversified exposure.


Title: Re: Stocks, bonds and investing
Post by: rattran on February 24, 2015, 07:56:31 PM
(http://m.quickmeme.com/img/63/6382cd064455ede79c4f625217e5f1556a2cd30b30a80f9a4bd6c71f29c77483.jpg)


Title: Re: Stocks, bonds and investing
Post by: Yegolev on February 27, 2015, 12:54:54 PM
I'm partially betting on energy, which so far in 2015 has gotten me +4%.


Title: Re: Stocks, bonds and investing
Post by: Viin on February 27, 2015, 01:44:26 PM
I'm just going to invest in whatever Elon Musk does.


Title: Re: Stocks, bonds and investing
Post by: Paelos on February 27, 2015, 02:03:49 PM
I'm considering AT&T as a 3-year conservative play due to the the dividend yield at 5.5% and an increase for the next few periods with the DirectTV purchase.

I want to get into bonds, but the chance the Fed fucks with rates mid-year is pushing me off that idea.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on February 28, 2015, 10:13:24 PM
I'm just going to invest in whatever Elon Musk does.

That would be energy, sort of.  I understand he's intent on selling his batteries to residential solar setups.

I suppose if I was going to hitch to one man, why not Buffett?  Of course, he's 82 and as soon as I buy my first Berkshire Hathaway stock, he's going to buy his last Dairy Queen chili dog.


Title: Re: Stocks, bonds and investing
Post by: Miasma on March 01, 2015, 08:36:57 AM
He actually released a statement a few days ago that people shouldn't expect his fund to outperform the market the next fifty years like it has the last fifty.  Can you imagine some hedgefund sleezebag admitting such a thing?


Title: Re: Stocks, bonds and investing
Post by: Morat20 on March 01, 2015, 12:13:16 PM
He actually released a statement a few days ago that people shouldn't expect his fund to outperform the market the next fifty years like it has the last fifty.  Can you imagine some hedgefund sleezebag admitting such a thing?
Musk annoys me at times. His hyperloop thing, for instance -- it just flat out ignores to basic realities of transport. Like, you know, how much land costs and problems getting people to sell it -- and that the top speed of your system is nice, but the real time wasters are the part where you stop and people get on and off.

It irks me. It's like someone bragging that their new car gets 50% better mileage once you're past 120 mph. Thrilling engineering feat, but 99% of all cars are going a heck of a lot slower than that, Jeeves.


Title: Re: Stocks, bonds and investing
Post by: Paelos on March 01, 2015, 01:50:20 PM
I follow Buffetts strategies. Long term holds, stocks that produce dividends, slow and steady portfolio growth with some 20% in aggressive growth.


Title: Re: Stocks, bonds and investing
Post by: Viin on March 01, 2015, 03:53:11 PM
Musk annoys me at times. His hyperloop thing, for instance -- it just flat out ignores to basic realities of transport. Like, you know, how much land costs and problems getting people to sell it -- and that the top speed of your system is nice, but the real time wasters are the part where you stop and people get on and off.

Sure, he dreams big but you'll notice he's a bit practical too. You don't see a company making a hyperloop (yet). His other ventures are doing well: SpaceX, Tesla, SolarCity.


Title: Re: Stocks, bonds and investing
Post by: Miasma on March 01, 2015, 06:10:01 PM
He actually released a statement a few days ago that people shouldn't expect his fund to outperform the market the next fifty years like it has the last fifty.  Can you imagine some hedgefund sleezebag admitting such a thing?
Musk annoys me at times. His hyperloop thing, for instance -- it just flat out ignores to basic realities of transport. Like, you know, how much land costs and problems getting people to sell it -- and that the top speed of your system is nice, but the real time wasters are the part where you stop and people get on and off.

It irks me. It's like someone bragging that their new car gets 50% better mileage once you're past 120 mph. Thrilling engineering feat, but 99% of all cars are going a heck of a lot slower than that, Jeeves.
?

I was referring to Buffet not Musk, not sure if you meant to quote me.  Musk has clearly done very well but he strikes me more of a hype man than someone solid.  Very good at PR and generating excitement but that leads to crazy overvaluations like Tesla.  I'd much rather have a nice boring old guy that buys other companies than a great salesperson touting his own company.


Title: Re: Stocks, bonds and investing
Post by: Torinak on March 01, 2015, 06:41:22 PM
I follow Buffetts strategies. Long term holds, stocks that produce dividends, slow and steady portfolio growth with some 20% in aggressive growth.

If you're a multi-billionare, you too can do what he does--when he sees a company he likes, he doesn't "invest" in it--he buys it.

Or, you can invest like he says his family should (http://www.reuters.com/article/2014/03/03/us-buffett-letter-advice-idUSBREA221YY20140303): low-cost passive index funds.


Title: Re: Stocks, bonds and investing
Post by: Morat20 on March 01, 2015, 08:04:19 PM
I was referring to Buffet not Musk, not sure if you meant to quote me.  Musk has clearly done very well but he strikes me more of a hype man than someone solid.  Very good at PR and generating excitement but that leads to crazy overvaluations like Tesla.  I'd much rather have a nice boring old guy that buys other companies than a great salesperson touting his own company.
Think I just quoted the wrong person. :)


Title: Re: Stocks, bonds and investing
Post by: shiznitz on March 02, 2015, 02:04:42 PM
I follow Buffetts strategies. Long term holds, stocks that produce dividends, slow and steady portfolio growth with some 20% in aggressive growth.

Look at OZM. Big hedge fund shop that pays out most of the profits as dividends. Ride the coattails of billionaires!


Title: Re: Stocks, bonds and investing
Post by: Paelos on March 02, 2015, 02:21:27 PM
Interesting. I may have to give that a shot to dump dividend money into other things.


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 10, 2015, 08:28:38 AM
Added SBUX - Starbucks to the portfolio at the beginning of April. As of yesterday it went through a split so the timing is good. I'd recommend it as a play if you like the product. Their tax strategy is convoluted but I believe sound, they just offered employees a chance to earn a college degree they will pay for, and they are a potential growth player in the market still.


Title: Re: Stocks, bonds and investing
Post by: Signe on April 12, 2015, 11:19:14 AM
I saw that and even I thought it was nice.  I also didn't get the problem over talking about race.  Of course, most of the people who don't blink at spending $4 or $5 for a cup of coffee probably don't care about that sort of thing.  Coffee shops USED to be a place to talk but now it's a place to bury your face in a keyboard, rest your feet from shopping at Nordstrom or look over the books you're about to buy. 

Why would my spell checker suggest Strongroom instead of Nordstrom?  What the fuck is a Strongroom??


Title: Re: Stocks, bonds and investing
Post by: Nebu on April 12, 2015, 12:24:41 PM
Is the market still a good place to put money?  We're at such a high water mark for the DOW and NASDAQ that I'd think looking elsewhere would be better.  Any ideas about the bond market with the impending interest rate increases coming this summer?


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 12, 2015, 02:53:17 PM
Is the market still a good place to put money?  We're at such a high water mark for the DOW and NASDAQ that I'd think looking elsewhere would be better.  Any ideas about the bond market with the impending interest rate increases coming this summer?

I'm off the bond market completely until they make a decision on rates. If they do nothing by October, I'm back in.

Right now, the market is fine, but I'm putting less money in current growth plays and more money in established companies that pay dividends in case of a market shift this summer. Obviously both established and growth is ideal.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on April 14, 2015, 04:13:22 PM
At this stage of the market cycle, there are a few ways to go.

1) chase what is hot: as long as the market holds up, this will be the where the greatest gains will be, but risks significant and sharp losses if the Fed acts quickly on rate increases. Examples are biotech (Celgene) and internet (Facebook, Zulilly).

2) find good companies that have not risen with the market: these will likely get some investor attention from those not willing to keep chasing the winners and will hold up better if the market rolls over. Examples are Coke, Paccar, Proctor & Gamble.

3) just wait: if you have not invested yet, you have missed a 200% run. Is missing the next 20-30% going to really matter at this point? Wait and pounce on the next 20-30% sell off.

Stock markets sell off for two reasons: recession or rising interest rates. I don't think a recession is a risk for at least 2 years but rising rates are.  Currently, investors believe rates will rise a lot slower than the Fed is messaging.


Title: Re: Stocks, bonds and investing
Post by: Torinak on April 14, 2015, 05:14:24 PM
Is the market still a good place to put money?  We're at such a high water mark for the DOW and NASDAQ that I'd think looking elsewhere would be better.  Any ideas about the bond market with the impending interest rate increases coming this summer?

What does your investment policy statement say? Having some kind of basic investment policy can help you ignore all the noise from whatever the latest financial porn pushers are yelling. An IPS can be as simple as "Aim for a 70/30 mix of stocks and bonds in low-cost passive index funds" or "jump on whatever hot stock is pushed on my favorite gaming forum until I lose my house".

A steadily rising market will hit new highs on a regular basis.

The "experts" (pundits with agendas to push) have been crying about inflation and higher interest rates for several years; listening to them would have resulted in missing out on substantial returns in most bond funds. Rates will rise at some point, but they don't know when any better than I do. Besides, any news should already be priced into the markets, unless you have better information than, say, Goldman Sachs.

If you're really uncertain about what to do, you can dollar-cost-average into the market. If the market keeps going up, you won't miss out on all the gains. If the market goes down, you'll buy more at lower prices. But more importantly, you don't have to waste your time guessing about what's going to happen.


Title: Re: Stocks, bonds and investing
Post by: Shannow on April 14, 2015, 08:13:02 PM
Is the market still a good place to put money? 

Yes, however you are asking the wrong question. If you are an individual investor stop trying to guess the market. You'll get it wrong (fuck most of the experts do to). Over the last 20 years the S&P 500 averaged 9.2% annual returns, the average investor? 2.50%? (Inflation has been 2.4% over the same time.:))

So the question isn't whether its a good place. The question is it right for me? What age are you? How much do you have saved? Kids? Family? Income? Location?

(and seriously an IPS?  :uhrr:)

If the answer to the first two questions are under 50 and 'not enough' then put your money in the market and forget the password to whatever account it is. Find it again when you are 50, then we'll talk.


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 14, 2015, 09:56:22 PM
The market is a great place to make money if you believe in a long term strategy and you don't panic easy.

Oh and you believe America won't crumble in 30 years.


Title: Re: Stocks, bonds and investing
Post by: Viin on April 14, 2015, 11:24:36 PM
Speaking of investing (and my 401k) does anyone have a link to a good but not crazy in-depth calculator for determining if current retirement savings + future retirement savings + investment growth will provide a sufficient nest egg? Most of the ones I've found on Google are really too basic.


Title: Re: Stocks, bonds and investing
Post by: Abagadro on April 15, 2015, 12:45:24 AM
bankrate.com (http://www.bankrate.com/calculators.aspx) has some good calculators on it but they might be too basic.


Title: Re: Stocks, bonds and investing
Post by: Torinak on April 15, 2015, 01:36:35 AM
Speaking of investing (and my 401k) does anyone have a link to a good but not crazy in-depth calculator for determining if current retirement savings + future retirement savings + investment growth will provide a sufficient nest egg? Most of the ones I've found on Google are really too basic.

Pretty much every brokerage has some form of retirement calculator; they have varying degrees of sophistication. Schwab's (http://www.schwab.com/public/schwab/investing/retirement_and_planning/saving_for_retirement/retirement_calculator) lets you fiddle with a fair number of parameters but isn't too crazy. Vanguard's (https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementIncomeCalc.jsf) makes it easy to tweak assumptions and see the results. Fidelity's (https://www.fidelity.com/calculators-tools/retirement/saving-for-retirement) non-basic tools pretty much require a login as far as I can tell.

The "gold standard" of planners is probably I-ORP (http://www.i-orp.com/), as it computes both savings and spending down in retirement, including tax issues, IRA->Roth conversions, etc. It's a bit of a beast, though.

For more free-form modeling, there's Firecalc (http://www.firecalc.com/) which is mostly about longevity of savings based on one's portfolio, though it does have an option to model starting well before retirement (the "Not Retired?" tab). It may not be quite what you're looking for.
 
There are also a lot of really bad calculators out there. The biggest issues IMO are ones that assume overly optimistic rates of return (e.g., 8% nominal and up), or ones that make unrealistic assumptions about spending needs in retirement. There are many "rules of thumb" such as needing to replace 80% or 100% of one's income in retirement, but that fails to account for the many major changes in spending and savings habits that usually occur with retirement--such as no longer saving for retirement, often lower taxes, no child-related expenses, and often higher health care.


Title: Re: Stocks, bonds and investing
Post by: Merusk on April 15, 2015, 09:49:47 AM
The market is a great place to make money if you believe in a long term strategy and you don't panic easy.

Oh and you believe America won't crumble in 30 years.

So you're saying I should invest heavily in a water/ bullet portfolio.  What are your views on fortification options?


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 15, 2015, 10:12:16 AM
Speaking of investing (and my 401k) does anyone have a link to a good but not crazy in-depth calculator for determining if current retirement savings + future retirement savings + investment growth will provide a sufficient nest egg? Most of the ones I've found on Google are really too basic.

You can create some simple models if you have a spreadsheet. Just have one column with how much you want to add per year. Then the column next to that is your total account value from the year before plus the amount you added. Then you multiply that by an return rate plus 1. So 5% return is 1.05. You can run that for however many years and change the variables to get an idea.

Example, if you want $1M in 25 years. You need to contribute $10,500 + ($1000 x N-1) where N is the number of years you do this for 25 years. That's at a rate of 5% return. However, if you have a 6% return you would only need to start with $8500 as a starting point instead of $10500.

You can also calculate how many years that Theoretical million dollars would last by subtracting however much you need to live per year from the formula instead of adding money to it. In this example at 6% return, you could pull out $70k for 28 years before the money ran out.


Title: Re: Stocks, bonds and investing
Post by: Merusk on April 15, 2015, 10:19:18 AM
Shit. You know when you see a solution so obvious you feel like an idiot for not realizing it yourself?

 I was doing that first step to gague my portfolio at retirement but never thought to reverse it with estimated expenses to see how long it would last.  Thanks monkey. 

Obviously i would want the "amount withdrawn" to increase per year due to inflation and price increases.  Is 3% as good a historical value to use as I assume it is?


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 15, 2015, 10:22:02 AM
Inflation has been a lot lower recently, but it depends on what you believe. It's been trending lower for the last 10 years.


Title: Re: Stocks, bonds and investing
Post by: Viin on April 15, 2015, 10:39:01 AM
Thanks for the tips and pointers to other calculators. I found this one which seems like a good starting point (and is the easiest for me to see how I could do this in a spreadsheet): http://www.calcxml.com/calculators/are-my-current-retirement-savings-sufficient

Now I have to do an exercise to figure out how much we'd spend per year in retirement in 2035 dollars. Can't someone just give me the answer?!?  :uhrr:


Title: Re: Stocks, bonds and investing
Post by: Yegolev on April 15, 2015, 11:24:15 AM
The answer, or an answer? :oh_i_see:

It's all rather mysterious but I trust in the greed of others to continue the market trends upward.  At the moment, I think Earth is too big to fail.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on April 15, 2015, 01:33:19 PM
I would also point people to the Acorns app. It rounds up all your CC purchases to the next dollar, putting those extra cents into an investment account. No fees.


Title: Re: Stocks, bonds and investing
Post by: slog on April 15, 2015, 07:23:04 PM
How did I miss this thread?  I just buy index funds and never sell. 


Title: Re: Stocks, bonds and investing
Post by: Viin on April 16, 2015, 01:07:26 PM
How did I miss this thread?  I just buy index funds and never sell. 
No no, day trading is where it's at. I gained 2% just yesterday!


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 16, 2015, 01:40:02 PM
How did I miss this thread?  I just buy index funds and never sell. 

And the hilarious thing? If you just bought the S&P and let it ride, you do better than most professional traders.


Title: Re: Stocks, bonds and investing
Post by: Quinton on April 17, 2015, 07:18:07 AM
How did I miss this thread?  I just buy index funds and never sell. 

And the hilarious thing? If you just bought the S&P and let it ride, you do better than most professional traders.

That's been working great for me.  Trying to beat the market seems like a lot of work for uncertain success, but index funds are nice and straightforward.  I'm probably a bit too heavy in S&P and a couple other stock indexes vs bonds even so...


Title: Re: Stocks, bonds and investing
Post by: Shannow on April 17, 2015, 08:36:09 AM
How old are you?


Title: Re: Stocks, bonds and investing
Post by: shiznitz on April 17, 2015, 12:04:21 PM
I am 46 and I don't own bonds. I view my salary as my bonds.

A large part of why I don;t own bonds even at an age where almost all retirement "models" would give me at least 20% is that rate are so low it creates an adverse risk-return situation.  If you buy a 10 year bond that yields 2% and interest rates rise 1%, the bond will drop 10% in value. The inverse is also true. This effect is called duration if anyone wants to look it up and learn something most non-finance people don't know.

So, with rates at record lows, I would stash a bit in cash and earn nothing that put money where I might earn 2% or -10%.


Title: Re: Stocks, bonds and investing
Post by: Shannow on April 17, 2015, 12:42:46 PM
A lot of retirement models are crap. Stick it all in stocks and lose the password for 5 years.

As you get closer to retirement the reason to own bonds is to avoid the soul crushing losses that a buy and hold portfolio can take if the cycle breaks wrong.
You are correct that bonds are a bit problematic right now as yields are extremely low, but any upswing in yields will also mean a down swing in value. Bond funds have benefited from a very friendly interest rate environment for the last 15 years (and yes you can make the argument that its been 35 years).
However the industry has been talking about rising rates now for 6 years and we haven't seen shit, look at long bond returns in 2014. Everyone went short duration in 2013 and it turned out that long bonds were the best performing asset class (mothersuck).

So the question is , what are your 'bonds' for? Return? Volatility management? Start educating yourself on deeper ways to assess the investments you buy. Specifically correlation and downside deviation. You want to look for funds that have like downside to the bond market but don't correlate to it. They do exist.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on April 17, 2015, 03:24:31 PM
You ask the right questions. I do not view bonds as a source of return since rates are so low. Therefore, I prefer to increase my cash holdings as the market rises so that I can buy back into stocks at a later date.  I have the luxury of a mostly complete nest egg. For those just getting started, "buy stock index funds and lose the password" is a good attitude.  Even better, work for an employer that offers 401k matching. There is no investment on earth better than 401k matching.

I repeat: THERE IS NO INVESTMENT ON EARTH BETTER THAN 401K MATCHING.  It is worth a 10%+ lower salary when you consider the after tax and compunding benefits.

When investing, always ask yourself "how wrong can I afford to be today?" This is a good question to ask yourself every 6 months or so.

Time will eventually heal mistakes as long as you don't let panic push you out completely.


Title: Re: Stocks, bonds and investing
Post by: Shannow on April 17, 2015, 03:31:19 PM

When investing, always ask yourself "how wrong can I afford to be today?"


I am so stealing this line.


Title: Re: Stocks, bonds and investing
Post by: Nebu on April 19, 2015, 05:34:46 PM
To this point in my life I've been VERY conservative.  While most of my friends scoffed at this, my portfolio was making money in 2008 when they all took a 40% hit.  Yes, most of them have made their losses back by now but did so at the cost of a lot of fucking stress.  I'm fine with a steady 5-8% per year gain because I get a 10% match from my employer.  I'm pretty risk adverse.


Title: Re: Stocks, bonds and investing
Post by: Torinak on April 19, 2015, 07:10:01 PM
To this point in my life I've been VERY conservative.  While most of my friends scoffed at this, my portfolio was making money in 2008 when they all took a 40% hit.  Yes, most of them have made their losses back by now but did so at the cost of a lot of fucking stress.  I'm fine with a steady 5-8% per year gain because I get a 10% match from my employer.  I'm pretty risk adverse.

There are no conservative investments that make anywhere near 5% a year, let alone more than 1-2%, and that's nominal and not real. Conservative real returns are zero, or even negative now.


Title: Re: Stocks, bonds and investing
Post by: Nebu on April 19, 2015, 08:30:56 PM
There are no conservative investments that make anywhere near 5% a year, let alone more than 1-2%, and that's nominal and not real. Conservative real returns are zero, or even negative now.

Explain.


Title: Re: Stocks, bonds and investing
Post by: Torinak on April 19, 2015, 08:52:15 PM
There are no conservative investments that make anywhere near 5% a year, let alone more than 1-2%, and that's nominal and not real. Conservative real returns are zero, or even negative now.

Explain.

Conservative investments are usually bonds, especially US treasuries. The yield on the 30-year US treasury is currently 2.51%. If inflation is 2.5%, that means the treasury effectively yields 0 over a 30-year timespan. If it's higher, it loses buying power. The current rate on a 30-year TIP is 0.54%, which means that it returns 0.54% more than inflation a year, for 30 years.

In Europe, some banks are actually charging people for holding their savings, in the form of negative interest rates. Those are negative nominal yields, so adding any inflation just makes the losses even higher.

A conservative long-term portfolio is usually at least 50% bonds, if not more. Such a portfolio would have lost about 15-20% in 2008. In the past (prior to this ultra-low-yield environment), such a portfolio has usually returned 5-8% nominal (2-5% real) over the long term with annual rebalancing. That was back in the day when long-term yields were a heck of a lot higher (if you're old enough, you might remember 10% CD rates!); with the current low bond yields many feel that a 3-5% nominal return is probably as good as it'll get on a 50-50 portfolio over the next few decades. A 50-50 portfolio will still drop in value quite a bit when there's another major correction in the stock market.

There are some stable value funds which are restricted to institutional investors and usually have minimum investments in the millions to tens of millions; they show up in some 401k plans. They may yield around 3-4% nominal now, but those rates are subject to fluctuation (NOT guaranteed over any long time period), and there are usually a lot of restrictions on how you can access your money such as mandatory advanced notification before withdrawals, very limited numbers of withdrawals per year, etc. If you're fortunate to have access to one, these days it's often a good replacement for bonds in one's portfolio.


Title: Re: Stocks, bonds and investing
Post by: Nebu on April 20, 2015, 01:11:22 AM
Good stuff.

That's wonderful stuff.  Thanks for taking the time. 

My investments are in a low-risk diversified portfolio with some guaranteed and some low risk (blue chip) investments.  Perhaps I'm too stupid to label it properly.


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 20, 2015, 08:04:38 AM
Torinak is right in that simply putting money in T-bills or CDs right now is a complete waste of time. The interest rates are so bad it's costing you money to put them there, when you're better off putting them in things like municipal bonds which have more risk but provide more tax-advantaged returns.

Here's the thing, there's risk everywhere. You have to be comfortable with the idea that risk exists and not just sit on your money. Because at the end of the day, you will absolutely not lose your ass long term in the market. It's all about riding short term (see less than 4 years) waves.


Title: Re: Stocks, bonds and investing
Post by: Shannow on April 20, 2015, 11:07:12 AM
I'm interested to see what rates as high-risk in Nebu's estimation. :)

You may not lose your ass long term in the market (well let's hope not otherwise we are all fucked) however there can be large amounts of volatility and long term periods of flat returns. These don't matter so much at 40 but they DO matter a hell of a lot at 60, 65, 70 etc.


Title: Re: Stocks, bonds and investing
Post by: Nebu on April 20, 2015, 11:48:22 AM
I'm interested to see what rates as high-risk in Nebu's estimation. :)

Options scare me. So do initial offerings.


Title: Re: Stocks, bonds and investing
Post by: Torinak on April 20, 2015, 01:51:35 PM
I'm interested to see what rates as high-risk in Nebu's estimation. :)

Options scare me. So do initial offerings.

Both of those are almost always good ways to lose money, so it's not a bad thing to be scared of them. :)

And it's fine to be conservative in one's investments, as long as the ramifications are understood. My portfolio is a bit more conservative than it "should" be for my age, but my current allocation satisfies two very important criteria: it's very likely to give enough for a very long retirement at my family's accustomed standard of living, and it lets me sleep at night.

It's much better to accept lower returns and just work a few more years (or save more aggressively, never a bad thing!) than to take so much risk that it keeps you up at night, or worse yet, makes you panic and sell low, then wait so long you end up buying high.


Title: Re: Stocks, bonds and investing
Post by: Nebu on April 20, 2015, 05:00:09 PM
It's much better to accept lower returns and just work a few more years (or save more aggressively, never a bad thing!) than to take so much risk that it keeps you up at night, or worse yet, makes you panic and sell low, then wait so long you end up buying high.

That's my outlook.  I already plan to work until I'm 70 as I enjoy my career (for the most part).  My standard of living is so low with $1500 a month student loan payments that I'll feel downright wealthy when they go away in 3 years.


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 20, 2015, 05:57:54 PM
I have a target annual withdrawal of $75k per year after I hit age 60, adjusted upward by 2% per year thereafter. That's relatively simple for me to plan, and execute with a nestegg that's a little over a $1.5M.

That's also assuming I've paid off property and I don't have any kids to support post-college, which are going to be other investment holdings anyway.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on April 21, 2015, 11:46:24 AM
I'm interested to see what rates as high-risk in Nebu's estimation. :)

Options scare me. So do initial offerings.

Both of those are almost always good ways to lose money, so it's not a bad thing to be scared of them. :)


Very true. By their very nature, options decline in value as time passes. Still, I am willing to lose 1-2% of my portfolio value when the market has had a big run by buying puts.  If the market doesn't fall, then I don;t really miss than 1-2%.  If it does, the puts turn a 15% decline into a 10-12% decline.  Still, not for the faint of heart and not for the inexperienced investor.

Right now I have puts on TLT (30yr Treasury ETF) which will make me money if the Fed raises rates this year, athenahealth (ATHN), WUBA and VEEV.  If they all fail, I lose 5% of my trading portfolio which is about 10% of my total savings.


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 21, 2015, 02:24:48 PM
I'm dumping one of my regular REITs and buying into Medical REITs.


Title: Re: Stocks, bonds and investing
Post by: Viin on April 21, 2015, 04:02:49 PM
I have a target annual withdrawal of $75k per year after I hit age 60, adjusted upward by 2% per year thereafter. That's relatively simple for me to plan, and execute with a nestegg that's a little over a $1.5M.

That's also assuming I've paid off property and I don't have any kids to support post-college, which are going to be other investment holdings anyway.

Whenever I do a calculator, it always adds inflation to my salary to calculate my future earnings .. even using a 2% inflation rate by the time I retire my total household income is something like 500k/year. And of course "they" expect you to take 75-80% of your then-current earnings for retirement funds. That's $375k/year for retirement! Which is super crazy. (So is making 500k year in 20 years).

So I decided to make my own calculator (using the output of one of the ones I linked above as a starting point) and basically kept my earnings flat (1% growth) for the next 20 years. Took 75k in todays dollars and inflated it by 2% for the next 20 years, which put me at $109k/yr in retirement (+ 2% year for inflation to be conservative).

Anything like this sound reasonable or way too complicated? Missing anything obvious? (Happy to share my spreadsheet if anyone wants to see the calculator in action)


Title: Re: Stocks, bonds and investing
Post by: shiznitz on April 22, 2015, 10:07:07 AM
I like your assumptions better.


Title: Re: Stocks, bonds and investing
Post by: Torinak on April 22, 2015, 01:57:29 PM
Whenever I do a calculator, it always adds inflation to my salary to calculate my future earnings .. even using a 2% inflation rate by the time I retire my total household income is something like 500k/year. And of course "they" expect you to take 75-80% of your then-current earnings for retirement funds. That's $375k/year for retirement! Which is super crazy. (So is making 500k year in 20 years).

So I decided to make my own calculator (using the output of one of the ones I linked above as a starting point) and basically kept my earnings flat (1% growth) for the next 20 years. Took 75k in todays dollars and inflated it by 2% for the next 20 years, which put me at $109k/yr in retirement (+ 2% year for inflation to be conservative).

Anything like this sound reasonable or way too complicated? Missing anything obvious? (Happy to share my spreadsheet if anyone wants to see the calculator in action)

Using real returns and real dollars can simplify calculations. Subtract expected inflation from expected nominal returns to get expected real returns, and all calculations are then in real (inflation-adjusted) dollars. Keeping things in real terms can also make goals seem more obtainable, as it can be less daunting to think about needing $X in today's dollars to retire instead of needing $4X in future dollars, even if the spending power is the same.

Omitting or underestimating the effects of inflation can be very bad. Even trailing inflation by 1% in one's accumulation ends up with an effective shortfall of nearly 20% after only 20 years.

Sequence of returns risk is something that's very hard to capture in a simple spreadsheet, and it can make an enormous difference. If one is anticipating needing to spend 3% of one's retirement portfolio every year and the market drops 50% the year you retire, an all-stock portfolio means that your withdrawal rate is effectively 6%...which means you'll probably run out of money long before you die. Mitigating this risk is one of the main factors behind the suggestion that portfolios become more conservative as one ages (more bonds, less stocks, like the "100% - age in bonds" rule of thumb), as there's less time to recover from a significant drop. Monte Carlo simulators or sequence-based ones like Firecalc can illustrate the impacts of sequence of returns in a very vivid fashion.


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 22, 2015, 02:07:39 PM
But for terms of planning, I'm not sure you want to go that far down the rabbit hole. The basic idea is that as you draw closer to retirement, you'll have a better idea of what you need to live on going forward. Trying to guess at a number that's a moving target of inflation or need 25 years into the future isn't the best way to plan.

The reality is you should be putting 10% away for retirement at the bare minimum, and if you can comfortably do more, that's even better. Each early dollar creates higher returns later.


Title: Re: Stocks, bonds and investing
Post by: Torinak on April 22, 2015, 03:07:03 PM
But for terms of planning, I'm not sure you want to go that far down the rabbit hole. The basic idea is that as you draw closer to retirement, you'll have a better idea of what you need to live on going forward. Trying to guess at a number that's a moving target of inflation or need 25 years into the future isn't the best way to plan.

The reality is you should be putting 10% away for retirement at the bare minimum, and if you can comfortably do more, that's even better. Each early dollar creates higher returns later.

As long as one isn't using overly optimistic projections or unrealistically rosy assumptions to justify lower savings rates, I agree.

I've seen otherwise bright people totally ignore inflation in their retirement projections, so they "could" save a low single digit percentage and spend more now. Thankfully, showing them the exponential graphs using even modest inflation estimates (2%) brought most of them around and they upped their savings to 10-15% at least. 10-15% is a good baseline given the near-total absence of pensions these days.

A double bonus of saving more earlier is that it helps prevent lifestyle creep--if one gets used to living less extravagantly, one will "need" less in retirement to maintain the same standard of living. That means an earlier retirement becomes an option, which is always a nice option even if one loves one's job. Money buys freedom, and all that.


Title: Re: Stocks, bonds and investing
Post by: Paelos on April 22, 2015, 10:26:26 PM
A double bonus of saving more earlier is that it helps prevent lifestyle creep--if one gets used to living less extravagantly, one will "need" less in retirement to maintain the same standard of living. That means an earlier retirement becomes an option, which is always a nice option even if one loves one's job. Money buys freedom, and all that.

That's really what I impress upon people. You can live how you want, but you have to understand the ramifications of rampant consumerism or depreciating assets.


Title: Re: Stocks, bonds and investing
Post by: Hawkbit on June 17, 2015, 10:46:11 AM
I'm an hour and eight phone calls into a simple rollover I want to do from an IRA to my 401k. Forms are being physically mailed from the funds recipient, so I can sign them, so I can forward them to the holder. Who in turn has to send those to the recipient.

I don't understand why the investment industry is still stuck in the 80s as far as process goes. Fucking web forms, folks.


Title: Re: Stocks, bonds and investing
Post by: Shannow on June 17, 2015, 11:04:01 AM


I don't understand why the investment industry is still stuck in the 80s as far as EVERYTHING GOES

Fify.

Don't worry robo-advisors are here to save the day.


Title: Re: Stocks, bonds and investing
Post by: Paelos on June 17, 2015, 01:11:40 PM
I'm an hour and eight phone calls into a simple rollover I want to do from an IRA to my 401k. Forms are being physically mailed from the funds recipient, so I can sign them, so I can forward them to the holder. Who in turn has to send those to the recipient.

I don't understand why the investment industry is still stuck in the 80s as far as process goes. Fucking web forms, folks.

Blame the laws and the lawyers. They don't know how to adapt the laws and regulations to a digital world yet.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on June 17, 2015, 02:30:51 PM
I was able to just call Previous 401k Firm and have them write a check made out to My Rollover Firm, which was mailed to me to then mail to my firm.


Title: Re: Stocks, bonds and investing
Post by: Merusk on June 17, 2015, 02:51:38 PM
401 to 401 is easy like that and I've done the same a few times over the years when switching jobs if my balances were  a few times greater than my vested balances. 

However, he said IRA to 401.  I can totally believe that would be a byzantine process because you're putting taxed money into a pretax investment fund.  I didn't even know you could do that, I thought it'd have to remain in another IRA type of account.


Title: Re: Stocks, bonds and investing
Post by: Paelos on June 17, 2015, 03:06:28 PM
401 to 401 is easy like that and I've done the same a few times over the years when switching jobs if my balances were  a few times greater than my vested balances. 

However, he said IRA to 401.  I can totally believe that would be a byzantine process because you're putting taxed money into a pretax investment fund.  I didn't even know you could do that, I thought it'd have to remain in another IRA type of account.

Depends on if it's a deductible IRA.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on June 17, 2015, 03:14:57 PM
That's what I was about to say, so if it's a taxable/nontaxable problem then GOOD LUCK SIR.

I had some taxed monies in a 401k along with the untaxed, and I took the taxed amount as a distribution while rolling the untaxed into a IRRA.  I had to write a letter to the IRS once it caught their attention, though.


Title: Re: Stocks, bonds and investing
Post by: Hawkbit on June 17, 2015, 04:30:33 PM
The IRA is pre-tax. I had a 401k that I rolled into the IRA when I quit working to take care of my kid for a few years. In theory is should just be a direct rollover, but for some reason they're making me work for my transfer.

I wouldn't even worry about the consolidation, but it's a small enough IRA that my yearly fees cut into the returns heavily. I'd rather it just sit in my 401k because no fees!

Invesco is being a supreme shitheel about the process.


Title: Re: Stocks, bonds and investing
Post by: Torinak on June 17, 2015, 05:04:18 PM
The IRA is pre-tax. I had a 401k that I rolled into the IRA when I quit working to take care of my kid for a few years. In theory is should just be a direct rollover, but for some reason they're making me work for my transfer.

I wouldn't even worry about the consolidation, but it's a small enough IRA that my yearly fees cut into the returns heavily. I'd rather it just sit in my 401k because no fees!

Invesco is being a supreme shitheel about the process.

It may be too late, but you could do a custodian-to-custodian transfer. They're usually pretty easy, as you typically just contact the new custodian and give them the details of where the IRA is at present, and they should handle all of the paperwork without needing you to be involved past that point. The last custodian-to-custodian transfer I did required only about one page of forms, and the transfer itself took about 4 weeks to complete once the forms were faxed to the new institution.

Your 401k does have fees (it's not free), but they may be hidden. Employers are required to make the fees more transparent now, but some are better at that than others. Your 401k may have much better investment choices than your old IRA, depending on where you work and what the options were for the old IRA. Some IRA custodians offer incredibly low-expense funds such as Vanguard or Fidelity (if you pick only the Fidelity Spartan funds; many Fidelity funds are quite expensive). Watch out for "management fees" or "wrap fees" on any account, and God help you if any accounts are actually equity-indexed annuities or some similar super-expensive beast.

If you're doing the IRA->401k shuffle so you can do a backdoor Roth conversion or are otherwise needing to lower the pre-tax basis of your IRA, then you may just need to slog through the IRA->401k pain.


Title: Re: Stocks, bonds and investing
Post by: Paelos on July 13, 2015, 03:14:06 PM
Greece is the word. Everything's on the move upward.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on July 13, 2015, 03:17:44 PM
It's too late in the day to call my guy or google that.  Spill it! :awesome_for_real:


Title: Re: Stocks, bonds and investing
Post by: Paelos on July 14, 2015, 07:12:11 AM
It's too late in the day to call my guy or google that.  Spill it! :awesome_for_real:

Markets had the rally we expected due to the Greece decision. The DOW jumped 200 points, and the NASDAQ jumped almost 75 points.

In my personal holdings, COSTCO is up, Bank of the Ozarks, and Starbucks have all had great gains since I picked them up in Feb/Mar of this year. On average about 15-20% in that time frame.

In the family holdings, a company called ANACOR (ANAC) is up almost 56% in a day based on a study of their drug having positive results on eczema which has 25M potential customers in America.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on July 14, 2015, 07:38:34 AM
Ah well, in that area I guess I can say that I had a Facebook note come due with 31% over 12 months.


Title: Re: Stocks, bonds and investing
Post by: Paelos on July 16, 2015, 06:29:46 PM
I just pushed some money into CTL, Centurylink for the dividend yield. It's up about 2.5% on the day.


Title: Re: Stocks, bonds and investing
Post by: Merusk on July 16, 2015, 07:03:51 PM
So I've been trying to figure out what my annual rate of return has been on my messing-around rollover IRA so I can compare to my 401(k) which has only done 8 or 9% on good years. I think I'm doing the math wrong because I keep coming up with ~20% rate and I don't honestly believe I'm doing that good just dicking with a few stock picks.

The calculator I found online was this one:
http://www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php

I set it to calculate for R and then enter my current value, the value from 4 years ago when I last rolled-over a 401(k) into the fund and calculated for that 4 year period (monthly)

It comes out to be 19.8916%

Can somebody tell me what I'm doing wrong in this calc please and thanks.


Title: Re: Stocks, bonds and investing
Post by: Abagadro on July 16, 2015, 10:16:43 PM
Try this one.

https://www.dinkytown.net/java/AnnualReturn.html

But, depending on your start date, 20% annual return over the last four years is very possible.  The S&P 500 from its low in 2011 to today has  an 18% annualized rate of return.


Title: Re: Stocks, bonds and investing
Post by: Paelos on July 17, 2015, 02:16:16 PM
Google's now up over 15% on the day, and 28% since we got it at the beginning of the year in the family holdings.


Title: Re: Stocks, bonds and investing
Post by: Viin on July 17, 2015, 04:55:56 PM
And here I thought Google (and Apple) surely couldn't keep going up like bats out of hell. Sigh.


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on July 17, 2015, 11:09:23 PM
 :drill:


Title: Re: Stocks, bonds and investing
Post by: Paelos on July 18, 2015, 12:03:58 PM
:drill:

Exactly. I mean I don't own Apple, but still. The underlying accounting of both structures is on solid bedrock.


Title: Re: Stocks, bonds and investing
Post by: Viin on July 23, 2015, 05:04:47 PM
Wholly Hell:    Amazon shares jump 15% following quarterly results (http://www.marketwatch.com/story/amazon-shares-jump-15-after-beating-earnings-expectations-2015-07-23)


Title: Re: Stocks, bonds and investing
Post by: Merusk on July 23, 2015, 06:20:49 PM
This almost makes me happy enough to compensate for forgetting to buy Google 6 months ago when Paelos reminded me.  (I didn't have enough cash so I sold stuff to get some... then got busy and forgot about it until the 20% jump last week. Damnit.)

Of course none of that shows on the day, where it posted a 1.25% loss, as the gain was after-hours. Makes up for the day and then some, at least.


Title: Re: Stocks, bonds and investing
Post by: Paelos on July 23, 2015, 08:44:05 PM
I've stayed out of Amazon, mostly because their margins are odd, and their EPS doesn't compare even close to something like Wal-Mart where the P/E is around 14.

But yeah, if there was a time it was this year. The stock is up roughly 60% since January. I think it's WILDLY overvalued, but then again if you're on short term plays it was a monster.


Title: Re: Stocks, bonds and investing
Post by: Soln on July 23, 2015, 09:48:23 PM
:drill:

Edit:  what Dr.Surly said


Title: Re: Stocks, bonds and investing
Post by: Paelos on July 24, 2015, 07:55:52 AM
Mmmmm dividend payment day. One of my favorite days of the quarter.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on July 24, 2015, 09:24:55 AM
I believe the competition for Amazon cloud is basically Azure and Google.  Unfortunately, I haven't had time with either Azure or Google to make a comparison.  Still, if you spread across all three, I figure you'll ride the wave of commodity IT.


Title: Re: Stocks, bonds and investing
Post by: Chimpy on July 24, 2015, 10:32:39 AM
Google doesn't have a cloud hosting solution. The scalable cloud virtualization market is pretty much AWS and Azure with Rackspace and VMware being the only other relatively big players though they are so far behind compared to AWS/Azure that you could say they don't even exist.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on July 24, 2015, 10:51:23 AM
I thought they had a thing called Google Compute Engine, but looks like I made some major assumptions from the context I learned of it from (notes on Cassandra performance vs AWS).


Title: Re: Stocks, bonds and investing
Post by: Viin on July 24, 2015, 11:02:57 AM
The margins are odd on Amazon, but they have a lot of pent up potential for revenue. If they stopped investing in innovation/research, they'd make money hand over fist until someone took them out.


Title: Re: Stocks, bonds and investing
Post by: Chimpy on July 24, 2015, 11:04:09 AM
I thought they had a thing called Google Compute Engine, but looks like I made some major assumptions from the context I learned of it from (notes on Cassandra performance vs AWS).

They may have something but whatever it is is definitely not on demand server/storage virtualization like the other players.


Title: Re: Stocks, bonds and investing
Post by: Viin on July 24, 2015, 11:04:56 AM
Google has their app engine:
https://cloud.google.com/appengine/docs/whatisgoogleappengine


Title: Re: Stocks, bonds and investing
Post by: Yegolev on July 24, 2015, 12:33:10 PM
Free trial wants payment info, so I'll probably just wait for it to come up in the tech rotation at work.

Whatever the current state, other than Google being Google I don't see any reason they would not try an entry into the wholesale-compute arena.

I could tell you who not to invest in, but I think we already know those names.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 05, 2015, 11:51:16 AM
Considering a play on TGH, Textainer group. The stock is plummeting, but the portfolio of cash is still very sound for the next 3 years. They are one of the largest lessors of fleet containers for shipping. It's down about 50% over the year but its dividend yield is still strong and its PE is less than 6.

It seems like a good gamble, but it's that. If you gamble right, you're getting a dividend and almost doubling your money within 3 years. Gamble wrong and you lose everything. If you're into more of a high risk play, it's one to consider.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on August 05, 2015, 01:28:47 PM
Not for the faint of heart but Peabody Coal (BTU) at $1 is a reasonable speculation. The shares were $16 a year ago. The balance sheet isn't great but bankruptcy is not looming. Some other coal companies have filed Chap 11, but BTU is the best in a bad neighborhood.  A lot of successful investors bought stock in the $4-5 range.

It is not often that a possible 10x return comes our way. Don't be greedy but don't be scared either.  Invest only what you are willing to lose in this one.


Title: Re: Stocks, bonds and investing
Post by: Merusk on August 05, 2015, 01:34:43 PM
Considering a play on TGH, Textainer group. The stock is plummeting, but the portfolio of cash is still very sound for the next 3 years. They are one of the largest lessors of fleet containers for shipping. It's down about 50% over the year but its dividend yield is still strong and its PE is less than 6.

It seems like a good gamble, but it's that. If you gamble right, you're getting a dividend and almost doubling your money within 3 years. Gamble wrong and you lose everything. If you're into more of a high risk play, it's one to consider.

What's the story behind them crashing so hard? No, I only have time to post the question not Google it right now. .

Not for the faint of heart but Peabody Coal (BTU) at $1 is a reasonable speculation. The shares were $16 a year ago. The balance sheet isn't great but bankruptcy is not looming. Some other coal companies have filed Chap 11, but BTU is the best in a bad neighborhood.  A lot of successful investors bought stock in the $4-5 range.

It is not often that a possible 10x return comes our way. Don't be greedy but don't be scared either.  Invest only what you are willing to lose in this one.

Cheap natural gas, even cheaper solar and falling oil say fuck coal companies to me. That's why they're going bankrupt in the first place. There was a blurb on Marketplace this week about coal's struggles and the market - not Obama - being the one killing them right now.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 05, 2015, 02:40:30 PM
TGH released a bad set of underwhelming earnings, and their is concern that their demand is weak over the next 6 months. But they can rebound with a new set of leases, and they have current lease revenues that don't expire for another 3 year minimum. They do leases on a long term greater than 5 year basis though.

EDIT: Also betting on coal right now is the extreme end of high risk. You essentially have no financial reason to pick up the stock other than the fact you're a contrarian and believe that the regulations will fuck themselves over while the market for coal will re-emerge.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on August 06, 2015, 02:23:31 PM
Cheap natural gas, even cheaper solar and falling oil say fuck coal companies to me. That's why they're going bankrupt in the first place. There was a blurb on Marketplace this week about coal's struggles and the market - not Obama - being the one killing them right now.

None of that is wrong, but those are reasons why the stock is already where it is. No stock goes from $16 to $1 on good news. Has the value of the coal in the ground declined by 99% in the past year? Highly doubtful. Is it worth less than previously thought? Probably. But there is a large space in between those two assessments.


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on August 06, 2015, 03:44:41 PM
Cheap natural gas, even cheaper solar and falling oil say fuck coal companies to me. That's why they're going bankrupt in the first place. There was a blurb on Marketplace this week about coal's struggles and the market - not Obama - being the one killing them right now.

None of that is wrong, but those are reasons why the stock is already where it is. No stock goes from $16 to $1 on good news. Has the value of the coal in the ground declined by 99% in the past year? Highly doubtful. Is it worth less than previously thought? Probably. But there is a large space in between those two assessments.
To make that kind of bet, you have to do some deep digging into their leveraging, their net present liabilities, what they actually *own* when it comes to that coal in the ground (frequently all they own is an option to dig it up, with various restrictions). There may be some herd stampede going on right now that has left something in the sector grossly undervalued, but you'll need something better than a dartboard to pick it.

--Dave


Title: Re: Stocks, bonds and investing
Post by: Quinton on August 10, 2015, 12:05:17 AM
I thought they had a thing called Google Compute Engine, but looks like I made some major assumptions from the context I learned of it from (notes on Cassandra performance vs AWS).

They may have something but whatever it is is definitely not on demand server/storage virtualization like the other players.

GCE and its related storage stuff is pretty competitive feature-wise with the likes of AWS/EC2/etc, very competitive price-wise, has some really slick features like seamless virtual host migration across physical server downtime, etc, but Amazon was there first and more middleware and existing deployments are integrated with Amazon solutions at the moment.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on August 10, 2015, 08:04:07 AM
Unsurprisingly, the term "cloud provider" is a widely-varied space.  The dust must settle from our 2nd provider deployment before we cast around for a 3rd, but I think GCE is on the radar for someone.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 24, 2015, 08:23:55 AM
Buckle up. This week is about to get seriously weird.


Title: Re: Stocks, bonds and investing
Post by: Shannow on August 24, 2015, 08:35:33 AM
Watching the talking heads on CNBC moan like this is the end of the world is HILARIOUS.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 24, 2015, 08:42:20 AM
Just as a side note, when people panic, my strategy is to double down. I hold onto reserves for this scenario. It's why you can make serious money when things crash if you'd dollar-cost-averaging on the way down.


Title: Re: Stocks, bonds and investing
Post by: Merusk on August 24, 2015, 09:08:01 AM
Wish I had your foresight. I blew my cash reserves on a few additional stocks and now can't snag bargains. On top of the net loss of 3% of my dividend portfolio. Boo.


Title: Re: Stocks, bonds and investing
Post by: Tannhauser on August 24, 2015, 09:10:39 AM
Dow Jones dropped more than 1,000pts this morning.  Thanks Obama!

Glad I moved my 401k to a stable account last week.  I do wish I knew how to go in on all of this.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 24, 2015, 09:23:08 AM
I just dumped some money into TGH, which I had noted earlier as a high div yield stock with a low PE. I was waiting for it to go under 16 and it did.

EDIT: And it's now up to 16.45 heh.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on August 24, 2015, 10:05:22 AM
My money is all tied up right now so I'm just going to
(https://dl.dropboxusercontent.com/u/85916/commander_coffee.jpg)

Maybe later I'll
(https://dl.dropboxusercontent.com/u/85916/space_ghost_coffee.png)


Title: Re: Stocks, bonds and investing
Post by: Engels on August 24, 2015, 10:32:06 AM
It seems hard to make any sort of mid to long term market predictions period, but in particular, with China. Their economy is so monumentally different than western economies, their 'rules' seem so patchwork and arbitrary that it seems impossible that the whole thing won't blow up in their faces. On the other hand, they make everything, so that argues that there's some basic built-in market security right there. NO idea what to make of the current situation.


Title: Re: Stocks, bonds and investing
Post by: Tannhauser on August 24, 2015, 10:44:14 AM
My investments are tied up in Beanie Babies and Pet Rocks, which will pay off any day now.


Title: Re: Stocks, bonds and investing
Post by: HaemishM on August 24, 2015, 11:05:32 AM
I know fuckall about the stock markets and individual stocks, but just having seen that the Dow shit itself last Friday, and yet still was OVER 16000!!!! (when I remember there being news about 14k being a previous record high) tells me there's a shitton of overvalued stocks out there that are in fact, utter utter shit. China's economy is literally built on the cotton candy foundations of never-ending yet somehow unused construction and foreign money from outsourced manufacturing. China is heading for a complete catastraphuck meltdown.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 24, 2015, 12:09:20 PM
I know fuckall about the stock markets and individual stocks, but just having seen that the Dow shit itself last Friday, and yet still was OVER 16000!!!! (when I remember there being news about 14k being a previous record high) tells me there's a shitton of overvalued stocks out there that are in fact, utter utter shit. China's economy is literally built on the cotton candy foundations of never-ending yet somehow unused construction and foreign money from outsourced manufacturing. China is heading for a complete catastraphuck meltdown.

Everything is overvalued right now if you asked me. But that's why I tend towards stocks that pay out dividends as opposed to relying entirely on their value at any given point in time. If I know I'm getting a 5-7% return on combined dividends in addition to the value change? I can play long-term and hold games while buying in during downswings.


Title: Re: Stocks, bonds and investing
Post by: Fabricated on August 24, 2015, 01:28:50 PM
The market has been grossly overvalued for a while now. We got a few good bubbles going on right now and the China one is looking to finally pop no matter how hard China fudges things to keep it going.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on August 24, 2015, 03:35:32 PM
The Dow added Apple at just the right time to cause maximum carnage.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 24, 2015, 04:06:12 PM
The Dow added Apple at just the right time to cause maximum carnage.

LOL so true.


Title: Re: Stocks, bonds and investing
Post by: Khaldun on August 24, 2015, 04:12:46 PM
Can I ask something with a certain amount of carefully cultivated naivete?

So, all the investment experts come on the radio today saying in the most avuncular and bemused way, "Oh, my, no, silly peoples, don't panic, just sit tight on your investments, don't worry, they'll make it all back, you're in for the long haul." Like they're talking indulgently to children who just asked whether Santa Claus is real.

But here's what never comes up on the "Oh, relax, you silly billies":

1. What if you have no long haul? I mean, shit, the people I know in their 70s or even 80s, since there IS no safe place to park money really, so they're all in TIAA-CREF or whatever still, telling them, "Oh, relax, it'll all come back in ten years or so, don't worry about the hit to your income if it shits the pooch for a year or two or five or ten"? I think those folks can't be faulted for thinking, "Um, wait a minute."

2. More importantly, there is something really uncomfortable about all these investment professionals hitting the airwaves and saying, "don't worry, just stick tight, that's what the professionals do" when rather obviously, some professionals DIDN'T. That's when I can't help but feel a bit of the old MMOG twinge--that sense that all the guys who are out abusing the dupe bug that the elite guild found last week are saying, "no, no, keep buying stuff on the Auction House, it's totally ok". I mean, what a coincidence that the calm, non-panicky professionals are the guys on the radio and TV and the panicky ones are on the trading floor...

3. None of the guys talking in the media ever seem--until the economic consequences are already screamingly obvious--to talk about the fact that we have a ton of civic institutions (who are major employers) who are part of the asset class now. I sure as shit see it in academia--every single institution with an endowment is drawing much of its operating budget from that, whether it has a big endowment or a small one. In 1929, it was not altogether that clear whether the stock market was just an exotic horse race for the swells, but now it's a horse race that much of the society is betting on. This seems like it's important.


Title: Re: Stocks, bonds and investing
Post by: Viin on August 24, 2015, 04:16:45 PM
People smarter than me can respond, but:
a) if you are in retirement you shouldn't have most of your funds in the stock market. Bonds are still pretty safe, yeah?
b) the trading floor is meant to be volatile and respond to market forces every day, this is what gets us the nice trends over time vs flat lining for 3 months then crashing or going sky high
c) umm was there a c?


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 24, 2015, 04:19:25 PM
1 - If you have no long haul you shouldn't be involved in equities that would be this volatile. You'd be in bonds, and blue chips. And right now neither of those are having issues in the interim because they produce income. Value is only if you're worried about liquidating today, and if you're positioned to have income producing holdings, you honestly don't care.

2 - Professionals don't sit tight, they buy. Then they buy again. Or they bail out completely and buy something else. They dollar cost average for bargains with the liquidity they have or create. Then they sell on the way back up.

3 - Almost every endowment is in low risk shit. They don't care about short term (see less than 3 years) market fluctuations as much as other institutions. They can afford to go long long long term because they have high-dollar holdings. And they don't worry about death.


Title: Re: Stocks, bonds and investing
Post by: Chimpy on August 24, 2015, 05:05:01 PM
Number 3 is becoming less "low risk" simply because, as Khaldun mentioned, these academic institutions are pulling larger percentages of their operating budgets out of the endowments every year because the decrease in funding from other sources (state funding, decrease in federal grants, etc.). We are nowhere near the point that a precipitous market drop will erase the endowments, but I know for a fact that getting increasing rates of return and actively managing the investment portfolios is an increasing priority which makes short term market fluctuations more of a concern than they have been traditionally.


Title: Re: Stocks, bonds and investing
Post by: Khaldun on August 24, 2015, 05:39:35 PM
From what I am hearing today, bonds are barely safer.

If professionals don't sit tight and buy, then who is selling. There is no way all the selling is just some middle-aged fuck with a $10,000 portfolio who is day trading his way into a panic froth.

Look into endowment investment some time. For a surprisingly large number of institutions, it's not low risk, long-term any more. Some of these fuckers, even w/2008 in their rear-view mirror, are in seriously risky positions of some kind, though they generally diversify in some way. They absolutely DO CARE about short term market fluctuations. That much is goddamn nonsense--their investment income is next year's operating budget. That's what having "asset classes" in this country means now--this is not rainy day money any more.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 24, 2015, 05:51:59 PM
From what I am hearing today, bonds are barely safer.

If professionals don't sit tight and buy, then who is selling. There is no way all the selling is just some middle-aged fuck with a $10,000 portfolio who is day trading his way into a panic froth.

Look into endowment investment some time. For a surprisingly large number of institutions, it's not low risk, long-term any more. Some of these fuckers, even w/2008 in their rear-view mirror, are in seriously risky positions of some kind, though they generally diversify in some way. They absolutely DO CARE about short term market fluctuations. That much is goddamn nonsense--their investment income is next year's operating budget. That's what having "asset classes" in this country means now--this is not rainy day money any more.

Honestly, I haven't looked at endowment investment in years. So you're probably right. They probably got stupid and let a bunch of idiots take over the money with promises of big returns for shiny new things. If so, they got greedy and they better stop or they will get seriously poor seriously fast. Either way, I'm out of the audit industry now so AFAIK the good ones were still managing with diversity in the right places and not relying on their budgets coming from returns.

Many professionals sell. The good ones don't sell into a down market unless they see the position as untenable or the company as a going concern. Or they have clients who can't manage a certain time frame short fall. Many are simply running computers that do sales for them so they sell if markets move a certain percentage, which triggers other percentages, which starts a cascade. Then when the actual humans see what happened, they buy back in. That's why you usually see a rebound at some point late in the day when these fuckers wake up and realize their computers just sold off a ton of shit.


Title: Re: Stocks, bonds and investing
Post by: Cheddar on August 24, 2015, 09:20:08 PM
People bet on China?  News at 11!

Buyers. Market.


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on August 24, 2015, 11:15:33 PM
From what I am hearing today, bonds are barely safer.

If professionals don't sit tight and buy, then who is selling. There is no way all the selling is just some middle-aged fuck with a $10,000 portfolio who is day trading his way into a panic froth.

Look into endowment investment some time. For a surprisingly large number of institutions, it's not low risk, long-term any more. Some of these fuckers, even w/2008 in their rear-view mirror, are in seriously risky positions of some kind, though they generally diversify in some way. They absolutely DO CARE about short term market fluctuations. That much is goddamn nonsense--their investment income is next year's operating budget. That's what having "asset classes" in this country means now--this is not rainy day money any more.

This. the needle doesn't move that much with just individual traders selling shit off. This was all the institutionals shitting themselves and running for cover or hedges shorting the shit out of everything in sight and collecting the profits. Further proof that financial types these days are either fucking morons, soulless assholes with an angle or both.


Title: Re: Stocks, bonds and investing
Post by: rattran on August 24, 2015, 11:29:04 PM
Bubbles are generally only recognized in hindsight, or when they're beyond obvious. https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds (https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds) is still a good read, and I think we should go back to making stock jobbers criminals.


Title: Re: Stocks, bonds and investing
Post by: Viin on August 25, 2015, 11:29:14 AM
Just remember, those computer programs (or traders, if they do anything these days) can't sell unless someone is buying (ok ok another computer program). So for the market to crash means someone is buying the stock at those low prices, because they see them as being worth that much.  I think flash crashes are going to be the norm for awhile - but predicting them will just make your head hurt.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 25, 2015, 12:07:57 PM
Not shockingly the DOW has rallied up 300+ points. I wouldn't be shocked if it was back up over 17000 by the end of the month.


Title: Re: Stocks, bonds and investing
Post by: Khaldun on August 25, 2015, 03:48:37 PM
Not shockingly the rally disappeared by the end of the day and it ended down another 200+.  Might want to wait a bit before you puff your prediction pipe.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 25, 2015, 04:02:48 PM
Not shockingly the rally disappeared by the end of the day and it ended down another 200+.  Might want to wait a bit before you puff your prediction pipe.

It's still ridiculous. There's nothing wrong with the US Economy, which is what these companies are mostly trading on. Job markets are up, housing is up, oil is down. There's no conditions in place for a recession slide like 2008. There's this "fear" about China that no analyst can seem to actual quantify, in addition to the fact that China just cut rates.


Title: Re: Stocks, bonds and investing
Post by: Khaldun on August 25, 2015, 04:09:02 PM
You are acting like the market is about real things and is based on real fundamentals. Maybe parts of it are, but another part of it is just a giant Ponzi scheme being farmed by a small elite group of investors using HFT, or boilerroom level scheming being used to puff up unicorns for investors looking to join the plutocracy.  Let a souffle expand too much in the oven and guess what happens: you find out it was a bunch of air that could have fed a large dinner party and now it's a bunch of burnt goop on the bottom of a pan.


Title: Re: Stocks, bonds and investing
Post by: Paelos on August 25, 2015, 05:01:23 PM
Well that's fairly cynical. The majority of the market is based on expected value, and then trading on that underlying business practice of a company. The expected returns and expected growth create that value. If you're trading on other things, you're gambling.

If your expectations are wrong, that's fair. It happens. But for that to happen something usually triggers it to burst the bubble. In the case of China we've known there was a bubble for a long time. They've been building ghost cities for heaven's sake. You didn't even have to look hard.

My expectation of the market is that it was very overvalued and this may take it down to where it probably realistically settles. My personal expectation is that it wasn't overvalued by 20%. But even if the DOW goes to 10,000 over the next month as the scare gets worse, it doesn't change the underlying business of the stuff I'm invested in. They still will sell product here in the USA. They will still service loans from US Banks. They will still produce a dividend and income, and I will get a portion of that paid to me. It's why I never invest in value-only stocks.

It also means I can pounce on it because I have a job, I'm not out of work like in 2008, and I can take advantage of a downturn. That's where you make money.


Title: Re: Stocks, bonds and investing
Post by: Ironwood on August 25, 2015, 05:22:17 PM
Do please keep posting your progress.  It will be hilarious.


Title: Re: Stocks, bonds and investing
Post by: Shannow on August 25, 2015, 06:27:34 PM
Not shockingly the rally disappeared by the end of the day and it ended down another 200+.  Might want to wait a bit before you puff your prediction pipe.

It's still ridiculous. There's nothing wrong with the US Economy, which is what these companies are mostly trading on. Job markets are up, housing is up, oil is down. There's no conditions in place for a recession slide like 2008. There's this "fear" about China that no analyst can seem to actual quantify, in addition to the fact that China just cut rates.

While no one thinks that this is 2008 again you could point several problems with the U.S. economy: While unemployment is low the participation rate is at its worst in 40 years, wage grow has been non existent. A large part of the economic growth we've seen has been  in the U.S. energy industry, that depends on oil being over 60 dollars a barrel.

Most of us however shouldn't give a fuck. Ignore this shit unless you intend on retiring in the next 10 years.  Human brains are really really bad at dealing with losses in the market. (It's been theorized that it's the old caveman part of the brain that equates losses in the market with loss and danger (aka large animals with pointy teeth are trying to eat me! Run away!)). There's a reason that the average annual return over the last 20 years in the S&P 500 has been over 9 percent while the average investor has only done 2.4 percent annually.


Title: Re: Stocks, bonds and investing
Post by: Engels on August 26, 2015, 11:27:14 AM
(http://i.imgur.com/AT43GsWm.jpg)


Title: Re: Stocks, bonds and investing
Post by: shiznitz on August 26, 2015, 12:48:01 PM
I do like to sell in these environments...and turn around and buy something else. Lock in the tax loss and reinvest in something at the new lower prices.

Have a loss in IBM? Sell it and buy Oracle.  Is your recent investment in Home Depot in the red? Sell it and buy Lowe's.  Keep the exposure for the long term but save yourself some taxes this year.


Title: Re: Stocks, bonds and investing
Post by: Viin on August 26, 2015, 02:01:40 PM
You must not be playing with 401k money like the rest of us hicks.
If I can get my damn bank account to link to my Vanguard account I'd actually buy some stocks for my girls in a non-retirement account.


Title: Re: Stocks, bonds and investing
Post by: Viin on August 26, 2015, 03:49:32 PM
Of course my buy order didn't go through until this afternoon. Of course.

Eat it, doubters:  
S&P 500 and Dow industrials post biggest percentage rises since 2011
Dow industrials close 619 points higher; Nasdaq gains nearly 200 points

Remember, you play this just like you play roulette. If it's hitting red, then bet black!


Title: Re: Stocks, bonds and investing
Post by: Yegolev on September 03, 2015, 07:48:09 AM
Bought 500 Fireeye + 100 Netflix.  Hooray downturn!  Also some other semi-random shit.


Title: Re: Stocks, bonds and investing
Post by: Paelos on October 15, 2015, 11:58:35 AM
Do please keep posting your progress.  It will be hilarious.


DOW's back over 17000 again. I was about 45 days off of my September projection  :awesome_for_real:

Current investments are fine but I'm probably going to cash out some of them soon and reallocate to some more conservative stuff until the rate hike in December.


Title: Re: Stocks, bonds and investing
Post by: Viin on October 15, 2015, 02:22:52 PM
You should totally put it all in 10 year T-Notes right about now.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on October 21, 2015, 09:58:47 AM
Well, the crowded trade that is Valeant has come crashing down. The shares were $260 in early August and are trading at $115 today after a short selling newsletter called it the next Enron. If you look at the 13F report, as of June 30, Valeant was owned heavily by some of the best firms in the business: Lone Pine, Viking, Pershing Square, et al.

I hope you all were spared.



Title: Re: Stocks, bonds and investing
Post by: Yegolev on October 21, 2015, 10:37:16 AM
Seems I was, but thanks for prompting me to look at all the red on my sheets. :oh_i_see:


Title: Re: Stocks, bonds and investing
Post by: Paelos on November 11, 2015, 07:37:48 AM
I sold off almost everything in my holding portfolio and I'm planning to reallocate before the end of the year. I wanted to trigger all the gains/losses in the current year, and I'm wary of holding any bigger plays as we head into December where we may see the interest rate hike finally happen. Portfolio in total was up 10% on the year.

In that regard, I'm looking towards banking stocks as the next play over the next 2 years as rates go up, and real estate building is increasing. But not longer than that. I think we're due for another overbuild situation after 2017.


Title: Re: Stocks, bonds and investing
Post by: Merusk on November 11, 2015, 10:21:30 AM
We're already in an overbuild situation in some sectors. Some national RMU developers we work with put projects on hold because they're still waiting to lease out the projects we completed in the past two years.

The portfolio you're talking about is post-tax income distributions, right? The one I'm playing with most often is an old rollover so I don't think I have to worry about the gains/ losses side of things until I'm old and retiring. So another 30 years or so. :P


Title: Re: Stocks, bonds and investing
Post by: Yegolev on November 11, 2015, 10:26:07 AM
Is someone going to seriously argue that we are not headed to another overbuild?  I remember hearing that a major component of the US economy is/was new housing, which tells me that lots of scum are interested in doing that shit again.


Title: Re: Stocks, bonds and investing
Post by: Merusk on November 11, 2015, 10:40:28 AM
The national HBA is blind to overbuild concerns. They were, at the bottom of the market, still selling the line that there were underserved places ALL OVER and we had to 'just keep building.'

They'd cite national numbers of "households created" vs. "saleable units" and would look correct because of it. Ignoring that those households were often created in poor/ lower-middle neighborhoods where people can't afford the $250k margin price of a 4 person home. 

The solution there, you see, is for RICH people to buy a new home and then the used-home market trickles down to the poor people. Eventually..

It's fucking maddening.



Title: Re: Stocks, bonds and investing
Post by: Yegolev on November 11, 2015, 11:48:35 AM
Planning on neighborhoods sliding downward in economic terms?  Then gentrifying those when they bottom out?  Delicious.


Title: Re: Stocks, bonds and investing
Post by: Merusk on November 11, 2015, 12:28:34 PM
No, Gentrifying is what landlords and the Real Estate agents group want.

The NAHB would much rather you bulldoze the entire thing and start over.


Title: Re: Stocks, bonds and investing
Post by: Paelos on November 11, 2015, 01:09:00 PM
Is someone going to seriously argue that we are not headed to another overbuild?  I remember hearing that a major component of the US economy is/was new housing, which tells me that lots of scum are interested in doing that shit again.

No it's a question of when. It's also a question of when the China bubble bursts for good and where you want to be standing.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on November 11, 2015, 03:46:20 PM
I thought gentrifying involved bulldozing, but maybe it works differently in urban areas.  In suburbia, they are building enormous things on tiny lots and Ye Olde Ranch doesn't cut it.

But if I was smart about this, I'd be rich already.


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on November 11, 2015, 03:59:27 PM
Gentrifying can involve bulldozing in the late stages, but the initial stages are focused on remodeling existing properties. By the time the bulldozers are clearing entire blocks for luxury condos, the original inhabitants are generally already priced out.

--Dave


Title: Re: Stocks, bonds and investing
Post by: shiznitz on November 24, 2015, 01:06:02 PM
FWIW, I think the really bad news and serious financial danger facing Volkswagen has passed (or been pushed so far into the future so as not to be a big deal.) The shares should slowly creep back up to the mid 30s.


Title: Re: Stocks, bonds and investing
Post by: Merusk on December 24, 2015, 07:51:48 AM
I feel dirty. I have this urge to invest in Comcast because the CEO is floating the idea of doing away with unlimited data usage on Cable as well as wireless. This is a ridiculous and abhorrent idea to the technologist in me.

However, the capitalist knows that 1) Lawmakers are technology-stupid when not outright technophobes and they WILL fall for the "data is like electricity and gas" idiocy. 2) there will be nothing to stop him from doing it other than his board. This will lead to megabux for Comcast if it happens and I want a piece of it.


Title: Re: Stocks, bonds and investing
Post by: Goumindong on December 25, 2015, 01:40:55 AM
I feel dirty. I have this urge to invest in Comcast because the CEO is floating the idea of doing away with unlimited data usage on Cable as well as wireless. This is a ridiculous and abhorrent idea to the technologist in me.

However, the capitalist knows that 1) Lawmakers are technology-stupid when not outright technophobes and they WILL fall for the "data is like electricity and gas" idiocy. 2) there will be nothing to stop him from doing it other than his board. This will lead to megabux for Comcast if it happens and I want a piece of it.

I mean yea, how else will you pay for your cable subscription?


Title: Re: Stocks, bonds and investing
Post by: Merusk on December 25, 2015, 05:21:34 AM
Internet fees, duh.  :awesome_for_real:


Title: Re: Stocks, bonds and investing
Post by: shiznitz on December 25, 2015, 06:28:08 PM
I feel dirty. I have this urge to invest in Comcast because the CEO is floating the idea of doing away with unlimited data usage on Cable as well as wireless. This is a ridiculous and abhorrent idea to the technologist in me.

However, the capitalist knows that 1) Lawmakers are technology-stupid when not outright technophobes and they WILL fall for the "data is like electricity and gas" idiocy. 2) there will be nothing to stop him from doing it other than his board. This will lead to megabux for Comcast if it happens and I want a piece of it.

Just remember that Comcast wants to do this to offset the decline in TV subscribers so it won't be pure new profit. I agree, though, that the combination will be higher revenues than today at least to start.


Title: Re: Stocks, bonds and investing
Post by: Merusk on December 30, 2015, 09:21:37 PM
Again, it's also not the cable side I'm looking at.

In many, many places Comcast or Time Warner are still the only viable broadband internet providers many places. While there may be plenty of cord-cutters and cord-nevers out there, but the cable companies still have a stranglehold on the infrastructure for broadband. Until that's seized by the government, well, they've got plenty of space to make-up revenue.

Sure Google is building gigabit networks and there's fiber options like Fioptics and the Verizon version of it, but those are still very limited in service areas. You're not going to see them in rural areas or outside of major beltways for some years yet.


Title: Re: Stocks, bonds and investing
Post by: Paelos on January 13, 2016, 02:54:19 PM
If the slide continues below 15,500 I'm buying in again in increments. I'm already eyeing COSTCO stock again which I sold for $160 last month, and it's dipping below $150. At $145, I think it's a steal.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on January 14, 2016, 08:41:22 AM
My ignorance in the finance field is being actively exposed.  I'm letting my guy do the stuff.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on January 14, 2016, 12:05:04 PM
I think we are very close to the bottom in the energy stocks but don't go shopping in the low quality names. Actual bankruptcies are always less than everyone fears but dilutive equity raises could be common. I hesitate to give actual names but PM me if you want. This is a sentiment call much more than a prediction that oil prices rise. I have no idea where oil will be in 6-12 months.



Title: Re: Stocks, bonds and investing
Post by: ghost on January 14, 2016, 07:21:09 PM
I always feel dirty buying BP or Exxon stock.  But now's probably a good time.


Title: Re: Stocks, bonds and investing
Post by: Morat20 on January 15, 2016, 12:10:01 AM
I think we are very close to the bottom in the energy stocks but don't go shopping in the low quality names. Actual bankruptcies are always less than everyone fears but dilutive equity raises could be common. I hesitate to give actual names but PM me if you want. This is a sentiment call much more than a prediction that oil prices rise. I have no idea where oil will be in 6-12 months.
A friend of mine works for a fairly large chemical company, and I've been eyeballing their stock. They've been sliding for a good time now, and frankly they're somewhere between a quarter and half of what they're probably worth long-term.

I wish I had the spare cash right now to invest in it. It's a solid company, it's getting hammered on for fairly general market-based reasons (well, and one poorly thought out acquisition that they're already moving to sell off), but they're a solid long-term company. If I had 10k or so, I'd probably plug it in and ignore it for four or five years.

Instead, I'm paying off medical bills...


Title: Re: Stocks, bonds and investing
Post by: Yegolev on January 15, 2016, 08:37:58 AM
I always feel dirty buying BP or Exxon stock.  But now's probably a good time.

Yes.  I mean, I'm not because I already have enough in energy (and it's mostly pipeline companies, fuck watching barrel prices), but someone is going to win the game and it might as well be you.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on January 15, 2016, 10:28:17 AM
I always feel dirty buying BP or Exxon stock.  But now's probably a good time.

Don't forget XLE - large energy company ETF. It actually has a higher dividend yield than Exxon these days.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on January 15, 2016, 11:59:39 AM
Hmmm, I might be buying that today.  I forget what I authorized but that sounds familiar.


Title: Re: Stocks, bonds and investing
Post by: Paelos on January 19, 2016, 01:43:37 PM
COSTCO is about at the point I'd jump on it. Just saying.


Title: Re: Stocks, bonds and investing
Post by: Paelos on January 20, 2016, 10:01:51 AM
I bought Costco today at $147. The DOW is just freefalling. If it continues to go down I'll dollar cost average my COSTCO buys as it goes.

I also picked up some more Coke stock.


Title: Re: Stocks, bonds and investing
Post by: Bungee on January 20, 2016, 10:54:17 AM
I also picked up some more Coke stock.

 :awesome_for_real:


Title: Re: Stocks, bonds and investing
Post by: Merusk on January 20, 2016, 10:58:00 AM
I bought Costco today at $147. The DOW is just freefalling. If it continues to go down I'll dollar cost average my COSTCO buys as it goes.

I also picked up some more Coke stock.

They had a 7% drop last year and people are worried the current rebrand "all as one" attempt won't work for them.


Title: Re: Stocks, bonds and investing
Post by: Paelos on January 20, 2016, 11:14:55 AM
Maybe, but I'm not heavily leveraged in Coke, and they've weathered this kind of thing before. There have been diet or backlashes to sugary drinks for the last 30 years. They keep on rolling.

Right now they are relatively even over the last 3 years with a good dividend at over 3%. So I'm comfortable in a not too big position on them.


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on January 20, 2016, 11:40:34 AM
I bought Costco today at $147. The DOW is just freefalling. If it continues to go down I'll dollar cost average my COSTCO buys as it goes.

I also picked up some more Coke stock.
Why do people delude yourselves this way? You're not automagically reducing the price you already paid. Even if you accept that bit of book-keeping sleight of hand, it means that you are overpaying for the new shares (by attaching the earlier loss to them).

You made an investment, the stock went down. You still think the stock is going to go up, so you are buying more. Why can't you just call it that?

--Dave


Title: Re: Stocks, bonds and investing
Post by: Paelos on January 20, 2016, 12:36:35 PM
It just means you're taking a total holding and establishing a value to them in an average, then deciding at a point in the future what value you are willing to sell on that meets your expectation on that average.

It's not delusion, it's simply a way of assessing your total holding value.


Title: Re: Stocks, bonds and investing
Post by: Paelos on February 08, 2016, 11:59:33 AM
The downturn is starting to get ugly. It's not often I see 4 figure swings in portfolio in a matter of a day.

http://www.marketwatch.com/story/resist-the-urge-to-buy-this-stock-market-pullback-says-jp-morgan-2016-02-08

JP Morgan guys are laying the groundwork. I think we're about to see a big shift down if this continues.


Title: Re: Stocks, bonds and investing
Post by: HaemishM on February 08, 2016, 12:01:23 PM
Perhaps the bottom we should have seen in 2008 is finally upon us?


Title: Re: Stocks, bonds and investing
Post by: Paelos on February 08, 2016, 12:06:50 PM
Perhaps the bottom we should have seen in 2008 is finally upon us?

The reality is that this is oil-driven right now, but the China stuff we've all know is crap is going to accelerate the process. I was hoping it would hold off until 2017, but I'm now thinking it won't. Which means I'm going to start hording more cash instead of putting it into funds until the other shoe drops. Then I'll start buying in bulk.

In the meantime, everyone's portfolio has given back the gains, and now you're looking at a DOW drop of 11% in 3 months.


Title: Re: Stocks, bonds and investing
Post by: shiznitz on February 08, 2016, 01:36:33 PM
Oil was the catalyst that reinvigorated skepticism. Investors were so complacent. Then we had a couple earnings misses in internet and software darlings and we are finally getting close to a bounce. On Friday, one $2 billion hedge fund had two top 4 holdings down over 40%.

Pull up the charts of WDAY and DATA. These stocks were loved and owned by many "smart" investors. Their cracking is a sign that things will calm down soon. At least I hope so.


Title: Re: Stocks, bonds and investing
Post by: Paelos on February 08, 2016, 01:52:46 PM
I would hope so but I've been wrong before when these slides start.

The issue for me right now is that I still think the overall American economy is fine, but it's getting overbuilt in the real estate sector at a rapid rate over the next 2 years. If the oil stuff continues, and the housing market finally realizes they can't sell the crap they have projected to his in early 2017, we're in for a world of hurt.

The China economy is far from fine, and we all understand that. But the big boys are also playing the game of WHEN it burns, not IF. That's a dangerous play that only fucks the smaller investors for the most part. The European economy is taking a hit over all kinds of political crap, so I don't like what's going on there either.

Either way I'm more concerned now about the fallout than I was 12 months ago for sure.


Title: Re: Stocks, bonds and investing
Post by: Viin on February 08, 2016, 03:27:39 PM
The issue for me right now is that I still think the overall American economy is fine, but it's getting overbuilt in the real estate sector at a rapid rate over the next 2 years. If the oil stuff continues, and the housing market finally realizes they can't sell the crap they have projected to his in early 2017, we're in for a world of hurt.

Not sure I agree with this. At least from where I sit, there is a huge shortage of housing. (Thus the sky rocketing increase in rental and home prices the last two years). If anything we need more lower-end homes to be built. Sure, eventually it will be overbuilt, but such is the supply/demand cycle.

http://www.theatlantic.com/business/archive/2015/09/a-bleak-future-for-renters/406453/
http://www.citylab.com/housing/2015/06/every-single-county-in-america-is-facing-an-affordable-housing-crisis/396284/


Title: Re: Stocks, bonds and investing
Post by: Merusk on February 08, 2016, 03:56:49 PM
Lower end homes are absolutely what we need. That and multi-family density housing.

None of the build projects are slated for that market. The underlying economics and the cities themselves don't support it. You make far more profit selling 4 $350k homes than you do 10 $90-$125k apartments/ condos/ homes. Tax incomes for cities on the properties and homeowner incomes are also higher on those 4 households. (Numbers fudged, I don't recall the break-down the Regional president cited but it was around there.)

The material and labor costs for the higher density are greater and the profit margin is much smaller, so it's pointless to pursue without incentives. So we will continue to have a housing crunch as builders will pursue the smaller-but-more-profitable upper-income level for homes.

A breakthrough in factory-to-site housing or even panelized homes would make huge strides to fix this. However Americans are stupid and prefer homes that are stick-built on-site to panelized or factory-supplied housing parts. That's despite the inferior construction and engineering of such a home.


Title: Re: Stocks, bonds and investing
Post by: MahrinSkel on February 08, 2016, 04:13:26 PM
The financing structures aren't friendly to the low end, either, as the paperwork and various bits of due diligence overhead (inspections, permitting, title, credit checking) are the same but the potential income is smaller. What does exist is totally focused on mobile homes and doesn't want to evolve to pre-fabs that aren't hauled on wheels to the site.

--Dave


Title: Re: Stocks, bonds and investing
Post by: HaemishM on February 08, 2016, 05:14:54 PM
I see the same shit in commercial building as well. Strip malls that were built to be the swanky places to shop in the suburbs at the turn of the century are fucking ghost towns now because some asshole developer built a swankier spot closer to the pricier suburbs and farther away from the city. I mean, we're talking about places that were in their lease a decade or less before moving to another more ritzy strip mall. For a little while, we had 3 Best Buys within a 20-mile radius and now the one in the city has closed while the 2 in the burbs are still going. Meanwhile there's a shitton of decent retail space in the city just collecting dust.


Title: Re: Stocks, bonds and investing
Post by: Chimpy on February 08, 2016, 06:09:07 PM
No one wants to do in-fill development without all kinds of ridiculous tax-incentives like the horrible (for the commnity) TIF districts.


Title: Re: Stocks, bonds and investing
Post by: Morat20 on February 08, 2016, 10:01:03 PM
I was reading that liar loans might be making a comeback. But of course, you know, they've learned their lesson! Won't go wrong again.

As for the market -- timing it is a fool's game. I've got 20+ years to retirement, so I'll just keep plugging into my 401k and my normal purchases. I'm not in anything that's going to go out in a recession (well, if it DOES my 401k won't matter) so it's mostly just...not locking in my losses by selling.

I've got a lot of time for it to recover.

Oh well, even as the market craters, unemployment is dropping so I suspect this will be more 'contained' to the financial side. Betcha it's a bunch of over-leveraged crap at the bottom, getting shafted by dropping oil prices.


Title: Re: Stocks, bonds and investing
Post by: Chimpy on February 09, 2016, 07:13:03 AM
The fact that Quicken Loans has come up with a new "everyone deserves to own a home, use our new Rocket Loans website to shop for mortgages" and bought SuperBowl commercials reminds me of 2007-2008 all over again. LET'S GIVE A LOAN TO EVERYONE!


Title: Re: Stocks, bonds and investing
Post by: Merusk on February 09, 2016, 07:37:33 AM
So long as flipping loans brings-in more money than real investments there will be a market for terrible loans. Selling them off makes them someone else's problem.

Want to stop this bullshit, make banks hold on to loans they make for a minimum term greater than a quarter. My first home loan was sold before I even had the ink on the paper.

The Big Short points out at the end of the movie that the terrible financial instruments of 2008 were being sold again under a new name as of 2013/4. I wish I could remember what they're called now.


Title: Re: Stocks, bonds and investing
Post by: Ironwood on February 09, 2016, 08:14:15 AM
Bespoke CDO or Single Tranche CDO.

Watched that film yesterday.  Wow.


Title: Re: Stocks, bonds and investing
Post by: Merusk on February 09, 2016, 08:27:38 AM
Thanks!

It was good watching it and recalling everything from the meltdown thread. Very little of it was new to me except Carrel's group and it laid everything out just perfectly. Pity like most smart films people won't watch it.


Title: Re: Stocks, bonds and investing
Post by: Ironwood on February 09, 2016, 08:43:53 AM
I fucking loved it from start to finish.  However, I was extremely clued up on all of the ins and outs, but didn't know about these specific chaps.  Which just made it all the more of a horror story.

Really, really put paid to 'no-one could have predicted this' when everyone was predicting it (which I knew) and people were actively betting on it (which was news to me).


Title: Re: Stocks, bonds and investing
Post by: HaemishM on February 09, 2016, 10:05:12 AM
The fact that Quicken Loans has come up with a new "everyone deserves to own a home, use our new Rocket Loans website to shop for mortgages" and bought SuperBowl commercials reminds me of 2007-2008 all over again. LET'S GIVE A LOAN TO EVERYONE!

I had the exact same reaction to those commercials. I was all like "Wait, wasn't that the fucking mentality that caused us to bubble the ever-living fuck out of the real estate market in 2007?" and it was a literal slideshow presentation about the Bush-era's "everyone needs to own a home!" philosophy. And I'm like "didn't we learn that not everyone CAN buy a home and isn't there a shitton of people who can't buy a home now because their credit rating got shitcanned by the last real estate bubble meltdown?"

Fuckers learned their lesson well. Get the easy money up front then sell the loan and fuck off before the whole thing falls to shit.


Title: Re: Stocks, bonds and investing
Post by: Selby on February 09, 2016, 10:23:33 AM
"didn't we learn that not everyone CAN buy a home and isn't there a shitton of people who can't buy a home now because their credit rating got shitcanned by the last real estate bubble meltdown?"
It's been 6-7 years since those people lost their homes, the foreclosures and terrible ratings are just now starting to drop off and make them available to the predators again (like my ex wife).


Title: Re: Stocks, bonds and investing
Post by: Ironwood on February 09, 2016, 11:02:30 AM
Your Ex-Wife is a Predator ?  Does she have that cool luminous blood ?


Title: Re: Stocks, bonds and investing
Post by: shiznitz on February 12, 2016, 03:43:52 PM
The average mortgage FICO score last year was still over 750. Bad credits still have a hard time getting financing. The banks are safe for a few more years yet.


Title: Re: Stocks, bonds and investing
Post by: brellium on February 14, 2016, 10:47:10 AM
The average mortgage FICO score last year was still over 750. Bad credits still have a hard time getting financing. The banks are safe for a few more years yet.
You can get a FHA loan through Fannie Mae with 3.5% down and a 580 FICO.


Title: Re: Stocks, bonds and investing
Post by: Paelos on March 04, 2016, 01:05:41 PM
DOW's over 17000 for the first time since the beginning of the year. So there's that.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on March 04, 2016, 02:30:08 PM
Yeah, I'm still thinking about how to invest in mini-storage before the next housing massacre.  So whatever.


Title: Re: Stocks, bonds and investing
Post by: Paelos on March 04, 2016, 02:36:53 PM
You could invest in PSA - Public Storage. They have a decent dividend, the revenue has been increasing over the last 4 years, and they have next to no debt for all their assets.


Title: Re: Stocks, bonds and investing
Post by: Merusk on March 04, 2016, 03:04:52 PM
Just build one. Find an acre of land in an area near a bunch of expensive homes and build a small self-storage facility.

A quick layout I just did based on the privately-owned one I was using two years ago yielded approximately 16,000 sq. ft. of exterior, unconditioned units. (Bonus because very low overhead and less construction/ architect fees) with a small 4,300 sq. ft. conditioned area for another 2k sq. ft of storage 10x10 and smaller units and an office. All on a single acre of land.

The self-storage place I was using is run by some kid in his 20s. His grandfather started the place in the early 70's by the looks of the leasable buildings also on the property and now kid works 5 hours a week doing billing and collections. 90% of the office-hours listed he's never in the office and you have to call his mobile to set-up an appointment.

Now I want to do the math..

Conditioned Spaces:
5x5 units - 8 @ $52 = $416
5x10 units - 8@ $74 = $592
5x15 units - 8@ $105 = $840
10X10 units - 8 @ $109 = $872

Unconditioned Spaces:
10 x 10 units - 48 @ $81 = $3,888
10 x 20 units - 20 @ $149 = $2,980
10 x 30 units - 24  @ $199 = $4,776

Total Income = $14,364 per month if full. The places around me are always at ~80% or better. The only reason people aren't building more is the market is saturated and the only land is in the shitty rural area we high-income folks won't drive to.  :why_so_serious:



Title: Re: Stocks, bonds and investing
Post by: shiznitz on March 18, 2016, 03:05:02 PM
Get ready for a rollover. Volatility measures are breaking to 4 year lows. Dow won't likely hit 18,000 this month or next but I don't expect the 15,660 low to be tested either.


Title: Re: Stocks, bonds and investing
Post by: Paelos on March 18, 2016, 04:16:09 PM
I bought Public Storage when we discussed it and it's already up over 5%


Title: Re: Stocks, bonds and investing
Post by: Tale on September 15, 2016, 06:58:43 PM
What's really happening  (http://www.afr.com/business/banking-and-finance/bby-used-psychic-to-make-budget-forecasts-20160913-grffnw)when stockbrokers issue an upgrade/downgrade and a price target...

(https://pbs.twimg.com/media/CsbZEuaUIAAVoqC.jpg)


Title: Re: Stocks, bonds and investing
Post by: Surlyboi on September 15, 2016, 07:18:25 PM
I wish it was that scientific.


Title: Re: Stocks, bonds and investing
Post by: Paelos on September 15, 2016, 07:53:45 PM
The market is basically playing with itself right now waiting for the election, or a possible China collapse.


Title: Re: Stocks, bonds and investing
Post by: Shannow on September 15, 2016, 09:54:54 PM
Don't forget the Fed.


Title: Re: Stocks, bonds and investing
Post by: HaemishM on September 15, 2016, 10:09:01 PM
Otherwise known as the Jizz Moppers for said masturbating brokers.


Title: Re: Stocks, bonds and investing
Post by: satael on September 16, 2016, 01:02:18 AM
Psychics don't sound too bad considering A fresh blow for stockpickers as semi-annual survey finds 90% fall short of benchmark (http://www.ft.com/cms/s/0/fddca86c-7ab7-11e6-ae24-f193b105145e.html#axzz4KJZpScM1).  :why_so_serious:
(quotation in spoiler since FT link):


Title: Re: Stocks, bonds and investing
Post by: Paelos on September 16, 2016, 08:25:36 AM
There's a reason why most brokers are terrible. They've been taught to look at the movements rather than the underlying day to day operations of the stock. They are about tips and metrics and blah blah blah.

But eventually stocks are valued based on companies ability to produce income. Nothing more than that. Anything else is just fancy ass posturing. And eventually even companies that have supressed values like ATVI 4 years ago see a resurgence when the market finally catches up.

It's why I prefer dividend producing stocks only. Show me you can make money and send that money to your shareholders in some form.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on September 16, 2016, 09:04:18 AM
Man, I don't want to manage my own money but looks like I need to make a phone call.


Title: Re: Stocks, bonds and investing
Post by: Shannow on September 16, 2016, 09:32:14 AM
Psychics don't sound too bad considering A fresh blow for stockpickers as semi-annual survey finds 90% fall short of benchmark (http://www.ft.com/cms/s/0/fddca86c-7ab7-11e6-ae24-f193b105145e.html#axzz4KJZpScM1).  :why_so_serious:
(quotation in spoiler since FT link):

Man lands on the moon.  Any advisor worth their salt knows this and for large cap exposure for instance should just go out and buy the index (eg: SPY). To many people buying the same things, with shitloads of information available will make an active investors job extremely difficult. There are asset classes however where an active manager does make sense, smaller markets, less liquid or with less information such as international stocks or high yield bonds.

The idea of a broker picking individual securites is one that died 10+ years ago but still persists. Maybe it's still stronger than I think it is with the general public, being in the industry does skew my view.


And fuck brokers, who the fuck uses a broker anymore? If your guy or girl still calls themselves a broker fire them immediately, if they charge commissions take a serrrrious look at wtf they are doing for you. An ADVISOR should provide value in not just managing your portfolio but doing everything else around that.

/ad over


Title: Re: Stocks, bonds and investing
Post by: Paelos on September 16, 2016, 09:34:40 AM
I agree with everything Shannow said.


Title: Re: Stocks, bonds and investing
Post by: Viin on September 16, 2016, 12:20:58 PM
Man, I don't want to manage my own money but looks like I need to make a phone call.

It's easy. Throw most in an index fund (aka SP 500 (as above: SPY)) and some in bonds. Ignore it for 5 years. Rebalance.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on September 16, 2016, 03:05:54 PM
I also have a liquidity requirement in my non-retirement accounts.


Title: Re: Stocks, bonds and investing
Post by: Torinak on September 16, 2016, 04:48:42 PM
I also have a liquidity requirement in my non-retirement accounts.

A total stock market index fund and a total bond market fund for your retirement accounts, and cash ("high yield" money market for high liquidity, CDs for lower liquidity but no non-inflation risks) for the rest. 3 investment positions, spend 5-10 minutes a year managing it yourself. The amount of time it takes does NOT scale with the amount, either--it's still just a few minutes a year at 10K or 10M.

A lazy portfolio built from low-cost funds like the above can also give you literally hundreds of thousands of dollars more at retirement than hiring an "advisor" (salesman) to make things look harder than they have to be.

If you're fast approaching or over the current estate tax cutoffs ($10.9M for a couple, $5.45M for single), talking to an estate planner is a good idea. 99%+ of all Americans will never have to worry about it. Even at that level, you probably don't need to hire a professional to manage your money, and will do better without one than 90%+ of those who do.

If you're convinced that retirement investing can't really be that simple, spend a few hours learning the basics (e.g., read Bernstein's If You Can (https://www.etf.com/docs/IfYouCan.pdf) 16-page pamphlet, or browse the Boglehead's wiki (https://www.bogleheads.org/wiki/Main_Page) that focuses on low-cost investing) and you're done.


Title: Re: Stocks, bonds and investing
Post by: Nebu on September 17, 2016, 01:38:16 AM
A total stock market index fund and a total bond market fund for your retirement accounts, and cash ("high yield" money market for high liquidity, CDs for lower liquidity but no non-inflation risks) for the rest. 3 investment positions, spend 5-10 minutes a year managing it yourself. The amount of time it takes does NOT scale with the amount, either--it's still just a few minutes a year at 10K or 10M.

A lazy portfolio built from low-cost funds like the above can also give you literally hundreds of thousands of dollars more at retirement than hiring an "advisor" (salesman) to make things look harder than they have to be.

If you're fast approaching or over the current estate tax cutoffs ($10.9M for a couple, $5.45M for single), talking to an estate planner is a good idea. 99%+ of all Americans will never have to worry about it. Even at that level, you probably don't need to hire a professional to manage your money, and will do better without one than 90%+ of those who do.

If you're convinced that retirement investing can't really be that simple, spend a few hours learning the basics (e.g., read Bernstein's If You Can (https://www.etf.com/docs/IfYouCan.pdf) 16-page pamphlet, or browse the Boglehead's wiki (https://www.bogleheads.org/wiki/Main_Page) that focuses on low-cost investing) and you're done.

Thank you for this. I'm going to do some reading.


Title: Re: Stocks, bonds and investing
Post by: Abagadro on September 17, 2016, 11:18:21 AM
Also pay attention to the expense ratio of any index fund you get into. It should be very low since it is basically buying the entire market or a defined basket of stocks (i.e. the S&P 500).  I prefer Vanguard's target retirement accounts (pick a year you want to retire, put money in, forget it) since they basically self-balance and are super cheap.


Title: Re: Stocks, bonds and investing
Post by: Shannow on September 18, 2016, 11:16:07 AM
Blah I wrote up a big thing on the difference between advisors and reps etc and managed to delete it. Poop.

In a nutshell, yes lots of people who call themselves 'advisors' are just salesppl in the financial services industry. There are people who are advisors who have to act as a fiduciary for their clients BY LAW. So don't call me a sales person. Fuck you! (nicely)

You're right most people don't need an advisor and a lazy portfolio is a pretty good way to go. However be aware that a good advisor DOES add value and not just in the investments they buy. I spent Friday advising clients on how to potenially secure a loan with private stock, re-characterize an over-contribution to a ROTH IRA and why they SHOULDN'T liquidate their stock holdings to buy a cheap ETF (TAXES!!).

If you're under the age of 45 and don't have 500k , yah go the lazy route. Just don't look at your portfolio when bear markets happen. Also be aware than indexing looks great right now because both the stock market AND bond market have been heading up at a fairly consistent rate over the last 8 years with somewhat historically low volatility. Also that proposed portfolio is very US centric.



Title: Re: Stocks, bonds and investing
Post by: Torinak on September 18, 2016, 04:56:15 PM
Blah I wrote up a big thing on the difference between advisors and reps etc and managed to delete it. Poop.

In a nutshell, yes lots of people who call themselves 'advisors' are just salesppl in the financial services industry. There are people who are advisors who have to act as a fiduciary for their clients BY LAW. So don't call me a sales person. Fuck you! (nicely)

You're right most people don't need an advisor and a lazy portfolio is a pretty good way to go. However be aware that a good advisor DOES add value and not just in the investments they buy. I spent Friday advising clients on how to potenially secure a loan with private stock, re-characterize an over-contribution to a ROTH IRA and why they SHOULDN'T liquidate their stock holdings to buy a cheap ETF (TAXES!!).

If you're under the age of 45 and don't have 500k , yah go the lazy route. Just don't look at your portfolio when bear markets happen. Also be aware than indexing looks great right now because both the stock market AND bond market have been heading up at a fairly consistent rate over the last 8 years with somewhat historically low volatility. Also that proposed portfolio is very US centric.



Most advisors are not good (as they're salesmen and not fiduciaries), but being a fiduciary does not guarantee that an advisor will add value. A small number of advisors will add value, absolutely. How does one determine that a given advisor will add value in the future?

Not aiming at you personally. I have too many co-workers who (collectively) wasted millions of dollars in fees due to having their assets managed by advisors, even some "good" ones with fiduciary responsibilities. A low-for-advisors flat 1% AUM (even absent putting their assets into front-loaded or high-ER funds) cost them literally years of possible retirement. One of them spent a few hours learning the basics and realized just how much in fees their (fairly good) advisor had cost them. As they put it, they realized they'd put their advisor's 3 kids through college.


Title: Re: Stocks, bonds and investing
Post by: Viin on September 18, 2016, 06:15:52 PM
why they SHOULDN'T liquidate their stock holdings to buy a cheap ETF (TAXES!!).

Can you clarify this a bit for us?

I'm assuming you are referring to liquidating stock holdings (triggering capital gains) in non-retirement accounts. Is that right?


Title: Re: Stocks, bonds and investing
Post by: Shannow on September 18, 2016, 08:06:54 PM
why they SHOULDN'T liquidate their stock holdings to buy a cheap ETF (TAXES!!).

Can you clarify this a bit for us?

I'm assuming you are referring to liquidating stock holdings (triggering capital gains) in non-retirement accounts. Is that right?

Correct. We spend a lot of time dealing with the impact of taxes and consistently find people who have portfolios of individual stocks with large embedded gains. A lot of times we will simply tell the client NOT to sell the position (as usually its a collection of blue chips) and use it as a proxy for a US large cap position in our models. Unless the stocks are crappy or they have other tax losses in the year they can balance off to. We'll re-valuate those positions to see if it is worth selling out over a period of time or the tax situation changes. A lot of the times it won't and we'll simply leave the position alone. (Or you get the doctor client who's still clinging to his penny biotech stock with an 80% percent loss..'no doc, it's dead, let it go and enjoy the tax write off')


Title: Re: Stocks, bonds and investing
Post by: Shannow on September 18, 2016, 08:19:15 PM
Blah I wrote up a big thing on the difference between advisors and reps etc and managed to delete it. Poop.

In a nutshell, yes lots of people who call themselves 'advisors' are just salesppl in the financial services industry. There are people who are advisors who have to act as a fiduciary for their clients BY LAW. So don't call me a sales person. Fuck you! (nicely)

You're right most people don't need an advisor and a lazy portfolio is a pretty good way to go. However be aware that a good advisor DOES add value and not just in the investments they buy. I spent Friday advising clients on how to potenially secure a loan with private stock, re-characterize an over-contribution to a ROTH IRA and why they SHOULDN'T liquidate their stock holdings to buy a cheap ETF (TAXES!!).

If you're under the age of 45 and don't have 500k , yah go the lazy route. Just don't look at your portfolio when bear markets happen. Also be aware than indexing looks great right now because both the stock market AND bond market have been heading up at a fairly consistent rate over the last 8 years with somewhat historically low volatility. Also that proposed portfolio is very US centric.



Most advisors are not good (as they're salesmen and not fiduciaries), but being a fiduciary does not guarantee that an advisor will add value. A small number of advisors will add value, absolutely. How does one determine that a given advisor will add value in the future?

Not aiming at you personally. I have too many co-workers who (collectively) wasted millions of dollars in fees due to having their assets managed by advisors, even some "good" ones with fiduciary responsibilities. A low-for-advisors flat 1% AUM (even absent putting their assets into front-loaded or high-ER funds) cost them literally years of possible retirement. One of them spent a few hours learning the basics and realized just how much in fees their (fairly good) advisor had cost them. As they put it, they realized they'd put their advisor's 3 kids through college.

Quibble again. They're reps, not advisors if they are taking a commission. There are still however shitty advisors too, I will grant you that.

I'll make one argument that if you are simply judging your advisor on current performance, then your advisor is shitty for not explaining to you why you have him or her. Essentially a big part of what we do is play therapist to our clients and prevent them from making mistakes. There's a common stat that goes '80% of investment return is not determined by investments but by investor behaviour'. Aka , it's not what you buy , it's WHEN you buy and sell it. Behavioral finance is a bitch. Again the last 8 years have been excellent for index investors, a good advisor keeps an eye on where markets are going not just where they have been. I don't think the next 8 are going to be as rewarding. Could be wrong though!

A lot of people really don't need an advisor, I'll be the first one to tell you that. I turn people away on occassion and tell em to make sure they have the basics in place and maybe find a CFP who can write em up a half decent financial plan for a once off fee, IF they really want to go that far.



Title: Re: Stocks, bonds and investing
Post by: Yegolev on September 19, 2016, 02:34:52 PM
Sounds like a great plan until I decide I want to pull out $80k for a new pool house or fancy car.  Then I'll need to talk to a CPA, presumably.


Title: Re: Stocks, bonds and investing
Post by: Torinak on September 19, 2016, 03:49:59 PM
Sounds like a great plan until I decide I want to pull out $80k for a new pool house or fancy car.  Then I'll need to talk to a CPA, presumably.

If you use a CPA, you have to give them all of the information you'd use to figure out what to sell on your own, and you also have to be able to check that the CPA did things correctly. Unless one has a massively complicated tax situation and are already paying $1K+ for tax prep, it's well worth learning how to do one's own taxes as it provides a lot of insight into how things work.

You'll need to keep track of your basis in all of your non-retirement assets--that's just the total amount you've paid for the investment, including any reinvested dividends. When you sell something, you owe taxes on the gains only, not on the basis amount. For example, if you spent a total of $50000 on a specific investment, and sell it all when it's grown to $80000, you have taxable gains on $30000. If you only sell part of it, the gains are based on what part you sold. That depends on how you're tracking the basis and purchases (average vs specific lot, etc); for a fairly comprehensive review see Cost Basis Methods (https://www.bogleheads.org/wiki/Cost_basis_methods) or IRS publication 550 (https://www.irs.gov/publications/p550/index.html). It's actually pretty straightforward, and consumer tax prep software (TurboTax, etc) can handle the details.

When deciding what to sell from a taxable account, it really depends on one's total portfolio and situation, including unrealized taxable gains or losses. One approach is to use the sale as an opportunity to rebalance. If part of your taxable portfolio has grown too much (maybe you lucked out with a stock picking gamble and it took off, or maybe you have a lot of stock in your employer due to option grants or an ESPP), sell that first and just pay the taxes. Or, if you have any unrealized losses, you can do some tax loss harvesting (https://www.bogleheads.org/wiki/Tax_loss_harvesting) along with the sale. If you just focus on minimizing taxes, you may end up missing out on some opportunities, or end up exposing yourself to a lot more risk than you intended.

To make it easier to report taxes after a sale, don't set up any taxable accounts for automatic dividend reinvestment. Instead, send dividends to a money market account or even a bank account. Use some of that to cover taxes on the dividends, and treat the rest as money you've saved and invest based on your target allocations (how much you want in US/international stocks, bonds, etc) a few times a year. Or draw from it to buy that car. Or if you know about when an expense will come up (you're going to treat yourself to a new car in response to the mid-life crisis you're sure your 50th birthday will trigger  :oh_i_see:) set aside money in a separate account just for that, so you don't have to sell any of your taxable investments at all.

See the above links for overviews and details of considerations for taxable investing. Or, when you have a significant expense that requires tapping your taxable accounts, you can post specific questions and get solid advice for free on the Boglehead's personal finance forum (https://www.bogleheads.org/forum/viewforum.php?f=2). "How should I pay for X" questions come up pretty regularly.


Title: Re: Stocks, bonds and investing
Post by: Shannow on September 19, 2016, 03:51:20 PM
edit (personal bloody jinx Torinak..:D. Also the custodian that's holding the portfolio (Schwab, Fidelity etc) should track those cost-basis for you)

Depends. Where's the money coming from, have you planned for this expense and what does your tax situation look like for the year. Also, don't do it..:D

Again, a good advisor and you should have already discussed this purchase (we hate spur of the moment shit/large impulse buys) and have a plan in place. You're not pulling money out of your retirement savings for this shit, you dirty consumerist. You might've parked money in cash for this outlay, or, depending on the interest rate/terms you can get, it might be worth financing.

If you have to liquidate part of your portfolio for this (really? you don't fucking need it!) you'll look at stuff that maybe has a loss, or at least long-term cap gains, not short. Unless your situation is hideously complicated (ie your a business owner self-filing, depreciation etc etc) a CPA probably isn't needed.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on September 19, 2016, 06:21:50 PM
Unless one has a massively complicated tax situation and are already paying $1K+ for tax prep,

This describes me.

Lots of good info and it only makes me somewhat tired.

Let us pretend that there exists this pair of working people who do not like debt and so do not have any.  These imaginary people do, however, feel like chumps if they just keep their cash in a checking account.  These mythical people would already have the liquid cash to buy a $60,000 car and like having life-options (travel, etc), but would rather have their assets doing some income-generation.  That is where these hard-working parents with very little free time are likely to get in trouble and lose value.

I'll digest this info but I really just want to dump my dollars in a pile and let dividends (or something) roll in.


Title: Re: Stocks, bonds and investing
Post by: Samwise on January 02, 2018, 03:13:31 PM
I was trying to remember if we'd ever talked about investing here and found this thread.  Rise!

My situation is pretty similar to Yeg's these days, including the general aversion to risk and debt, and over the past year I've been dipping my toe into investing, so I'm interested in comparing notes.

Robo-advisors seem like they're built for exactly the use case of "I want my money to work for me but I don't want to have to think about it".  I've been trying out Wealthfront, on the advice of my CPA, and while I think I'm going to change things up in the coming year I'd still recommend it to someone in the position of wanting to start investing but not knowing wtf they're doing.  Essentially a Wealthfront account acts like a bank account in that you can just transfer money in and out of it.  While the money is in there, it gets invested in ETFs that make up a target portfolio (which is based on a "risk level" that they determine with a little questionnaire).  When you pull the money out, your shares get sold to convert them into cash, and Wealthfront decides which shares to sell based on what gives you the smallest tax liability.

With a balance of more than $100k you also get their "direct indexing" feature which does clever loss-harvesting stuff by buying individual stocks that make up an index and swapping them around to generate short-term losses that are balanced against long-term gains (which ends up saving you about 15% of whatever losses get harvested).  All that just happens automatically -- I'm curious to see what the year-end tax docs look like, but as the "end user" really all you see is the overall numbers.

Of course now that I've gotten a taste I'm moving on to the harder stuff and once I cash out and pay down debt (because I'm pretty sure this shit is all going to crash soon) I'm going to start building up an ETF portfolio that I manage myself.   :why_so_serious:  Part of my motivation is to divest from oil, so I'm going to be putting most of it into SPYX (fossil-free S&P 500 index), with the rest split between clean power (probably TAN) and CA municipal bonds (probably CMF).  The brokerage fees I incur by depositing/investing every month or so will be way less than even the paltry 0.25% that Wealthfront charges.

Any of you more adventurous traders gotten fabulously rich over the last year?


Title: Re: Stocks, bonds and investing
Post by: Viin on January 02, 2018, 09:12:33 PM
I've been using Vanguard for managing my retirement accounts (IRAs) and non-tax-exempt (brokerage) accounts. I think Wealthfront and a few others like it are interesting (what's the app called that rounds up every purchase to the next dollar and puts that money into a brokerage account?) but I worry about how much they charge in fees. I guess for small amounts it doesn't matter much, though the flat rates would be high as a percentage.

We are doing quite well in our portfolios, which is basically a mix of index (bond and stock) ETFs and a few straight stocks I will own for awhile (Amazon being one).

I'm interested in this SPYX index though, first I've heard of it. Time to do a little research.

Edit:

Looking at SPYX, the management fee is 0.25% which is pretty darn high. For comparison, my Vanguard S&P 500 Admiral Shares are 0.04%.
(John Oliver's take: https://www.youtube.com/watch?v=gvZSpET11ZY)


Title: Re: Stocks, bonds and investing
Post by: Teleku on January 02, 2018, 09:34:38 PM
(http://dogecoin.com/imgs/dogecoin-300.png)

Dogecoin had a 3300% return on investment for the year 2017.


Title: Re: Stocks, bonds and investing
Post by: Viin on January 02, 2018, 10:04:48 PM
I might like it better if it didn't have such a stupid name.


Title: Re: Stocks, bonds and investing
Post by: Abagadro on January 02, 2018, 10:23:29 PM
I just plow stuff into the lowest fee index funds and target retirement date funds for which I have the option and then don't touch it.


Title: Re: Stocks, bonds and investing
Post by: Viin on January 02, 2018, 11:05:42 PM
I can't remember, did the FIFO rule for selling stocks make it into the tax changes? If so, next year will take some planning ..


Title: Re: Stocks, bonds and investing
Post by: Abagadro on January 02, 2018, 11:20:51 PM
No, it was dropped from the conference bill.


Title: Re: Stocks, bonds and investing
Post by: Shannow on January 03, 2018, 08:07:42 AM
No, it was dropped from the conference bill.

Thank fucking god for small mercies.

(Acorns I believe is the app that rounds up purchases and invests the pennies, I've heard some not so good things about it)

Betterment, Wealthfront and Personal Capital all play in the robo advisor space. I have a client who loves Personal Capital for their planning tools, think of like Mint plus long term retirement planning stuff. It's pretty cool.

There are no ways to get fabulously wealthy by trading an ETF portfolio. Stop fucking doing it. You get wealthy by watching your spending, saving as much as you can automatically and investing for the long term, aka being patient. Outside of that , go start the next Facebook.

Btw the S&P 500 has gone up for 14 months straight, this has never happened before. Only good things can happen from here!


Title: Re: Stocks, bonds and investing
Post by: Sky on January 03, 2018, 09:48:17 AM
So if I'm looking at Vanguard for a 403(b), should I be thinking target (2030) or index? If index, which? They threw a massive dump of options at me.  US Stock: Vanguard Extended Market Index Fund Admiral Shares? Seems to be outperforming their balanced index both short- and long-term.

But their chart also conveniently mentions 'without fees' and then doesn't give data on what fees for each funds would be...

Btw the S&P 500 has gone up for 14 months straight, this has never happened before. Only good things can happen from here!
This is the thing. I despise everything about the modern stock market and hate the idea of having to put money into it, but I'd also like to, you know, retire. Luckily, I have a state pension that will hopefully be waiting for me (NY seems pretty set on staying progressive).

Also, I watched my dad get slaughtered twice since he retired in the late 90s.


Title: Re: Stocks, bonds and investing
Post by: Shannow on January 03, 2018, 10:03:22 AM
How old are you Sky?  I'm 41 and my portfolio is 75% equity (mix of us large and small and international) and the rest alts and bonds. A target date fund is easy , but doesn't always perform the best (they are set on autopilot to lower risk as the target date gets closer but doesn't always adjust for current market conditions). You could use a mix of Vanguard Total Market, Intl and Bond to get an easy portfolio if you want to keep things simple.

Your Dad retired in the late 90s and then got slaughtered twice? This smells like a portfolio that had way too much money in equities for a retiree.

In this particular market I hear constantly from intelligent people that they are upset that their portfolio is not beating the S&P, when I then ask them if they'd like me to allocate their portfolios 100% to US Large Cap equity they sometimes understand why they shouldn't do that.


Title: Re: Stocks, bonds and investing
Post by: Nebu on January 03, 2018, 11:22:07 AM
I put my money into some low cost index funds last June and they have performed VERY well.  The question is... when is the best time to get out and where do I shelter my money until a rebound?  I have my concerns that the artificial inflation of the market isn't going to hold up much longer. 



Title: Re: Stocks, bonds and investing
Post by: Sky on January 03, 2018, 11:28:47 AM
How old are you Sky?  
47, target date is 2030 (when I'm maxed out in the pension).

Let's assume I understand none of this, because all this stuff represents what I dislike about our society  :grin: The reality of wanting to retire is kinda forcing my hand here.

Your Dad retired in the late 90s and then got slaughtered twice?
No idea where he had it, but the dot bomb and 08 recession killed his dough, according to him (no reason for him to fib, none of it is my money ever, heh).


Title: Re: Stocks, bonds and investing
Post by: Samwise on January 03, 2018, 11:39:43 AM
I put my money into some low cost index funds last June and they have performed VERY well.  The question is... when is the best time to get out and where do I shelter my money until a rebound?  I have my concerns that the artificial inflation of the market isn't going to hold up much longer.  

I'm planning on cashing out as soon as I hit the one year mark from when I invested my windfall last year (two months to go) so I don't get hammered with short term taxes.  I'll be paying down debt and then using the reliable extra cash I'll have each month after that to buy back in gradually so that whatever catastrophe is coming gets smoothed out by dollar-cost averaging.  It's tempting to just sit on it and wait until after the crash to buy back in all at once, but I've heard over and over that trying to time the market is never a good bet, and I'm still in my thirties so I can afford to wait for the rebound.

If you're trying to lower risk and don't have any debts to pay off my understanding is that government bonds are the way to go.


Title: Re: Stocks, bonds and investing
Post by: Viin on January 03, 2018, 11:46:34 AM
Just to add to the discussion, I'll post my allocations from my IRAs here. My rate of return from 2011 to 2017 was 13%. (By no means am I suggesting my allocations are the way to go, I already see a few areas I want to tweak, namely less Large Cap).

(https://lh3.googleusercontent.com/LPYK_YGXoQwPwoz5EPfd2p6i3VuaMe4e3b9xOmhrXjh50n2ow-RTw4pLD7GeyWFNzXoPEOM81HIWG8-49eP512Mx5vWu0L_vqlKap5ZoVkNLZCJVGHhRSL3Hd4FZ59drWRMNo5IfGw=w218-h158-no)

Stocks:
(https://lh3.googleusercontent.com/RoSOy-oo-Nbc2Y9zm7OMcnKdtBlPxL4I1R5Xf5hIs1q6kWok9oyHK1BwD-xJHJ3HsUsg45n0f18Cq0M_FpW25yep8W7Wt9cIroTJ2p7CWa55UROTpJqe13qavESU_o97UwBXHv1qvw=w437-h196-no)

(https://lh3.googleusercontent.com/JXrOVhNKeP3wz-YlFOekvvPIpVC_rquB2l7aO5ZYqY2mdUcQ21VLc6ZgCftE9RhSsNkHjUOCEqkY29x31GvWywQ44la2iVcI83ApFZxJnKdzuuyntrMsaac-PuFko6xCg623rwSZwA=w454-h335-no)

(https://lh3.googleusercontent.com/6FqLEL0bvhxU92z-dOD1j4MTNJ34NNidml9QUEQ7TnKj2LVvw5IakY52W7AjqGtwfiQtexcXqyLVIZc9zigy2IsUZov70v6blYhWQe9GsXpzeWTFFmzBIibGI90M6VToqvQwhM2RiQ=w430-h237-no)



Title: Re: Stocks, bonds and investing
Post by: Shannow on January 03, 2018, 12:49:59 PM
I put my money into some low cost index funds last June and they have performed VERY well.  The question is... when is the best time to get out and where do I shelter my money until a rebound?  I have my concerns that the artificial inflation of the market isn't going to hold up much longer. 



Who knows and don't are the answers. We've been predicting the fall/crash of the market since 08 and it hasn't happened. There WILL be market pullbacks but no one can predict that shit with ANY sort of reliability. AKA don't market time. So instead, what's your age and what's your emotional tolerance for loss. As you get closer to retirement age the basic advice is to add more bonds to your portfolio to lessen volatility in times of down markets.

Also diversification is not owning 3 different stocks, or frankly even owning 3 different types of stocks (say large cap, small cap, mid cap, growth or value) or even international stocks (as the world has globalized correlation in international stock markets has gone up too). It's about owning NON-correlated assets, aka things that go in different directions from each other in different market conditions. Historically US treasury prices head up when stocks go down, as do most bonds (but not all) to some degree based upon their credit worthiness . Govt bonds are safest typically, followed by things like high grade corporate bonds with junk/high yield bonds at the bottom (and while HY bonds are bonds they are highly correlated to stocks in terms of price movement).


We try to take the view that markets can't be controlled and that we managed for RISK first and return second. Determining your risk profile (primarily based upon your retirement horizon) is critical.

Sky if you hate this stuff then a robo advisor might be good for you, they can do automatic portfolios and rebalances for you based upon your risk profile. A target date can work but I think a well-designed portfolio of funds and etfs should work well.

Past Performance is no guarantee of future results (hello Mr. SEC, see what I did there?)


Title: Re: Stocks, bonds and investing
Post by: Shannow on January 03, 2018, 12:52:54 PM
I put my money into some low cost index funds last June and they have performed VERY well.  The question is... when is the best time to get out and where do I shelter my money until a rebound?  I have my concerns that the artificial inflation of the market isn't going to hold up much longer.  

I'm planning on cashing out as soon as I hit the one year mark from when I invested my windfall last year (two months to go) so I don't get hammered with short term taxes.  I'll be paying down debt and then using the reliable extra cash I'll have each month after that to buy back in gradually so that whatever catastrophe is coming gets smoothed out by dollar-cost averaging.  It's tempting to just sit on it and wait until after the crash to buy back in all at once, but I've heard over and over that trying to time the market is never a good bet, and I'm still in my thirties so I can afford to wait for the rebound.

If you're trying to lower risk and don't have any debts to pay off my understanding is that government bonds are the way to go.

As you're in your 30's I'd say dont get out of the market, keep it in the market for the long term. You do have time for recovery (or two). The thing to keep in mind about paying debt: What's the interest you are paying on that debt vs the likely returns you can get in your portfolio?  With most debt being so cheap right now it's usually worth keeping the debt and staying invested.

If this was the early 80s when interest rates were in the teens I'd suggest pay down that debt, but with most rates in the 3-5% range get your money working for you and enjoy the cheap prices of debt.


Title: Re: Stocks, bonds and investing
Post by: Samwise on January 03, 2018, 02:35:14 PM
As you're in your 30's I'd say dont get out of the market, keep it in the market for the long term. You do have time for recovery (or two). The thing to keep in mind about paying debt: What's the interest you are paying on that debt vs the likely returns you can get in your portfolio?  With most debt being so cheap right now it's usually worth keeping the debt and staying invested.

There's a somewhat intangible/psychological factor here where I really really want to pay off my house while I'm still in my thirties.  The 401k (which is also of course doing really well) is not getting touched so I'm not going completely nuts here, but I think I'm willing to sacrifice the 3% difference on what's left of the mortgage for the rock-solid financial security of having a fully paid off house in an area where the median rent is $4k.


Title: Re: Stocks, bonds and investing
Post by: Shannow on January 03, 2018, 03:11:05 PM
Emotions are a big part of it. It's your money! Another wrinkle in your favor is that with the loss of the SALT deduction keeping that mortgage alive ain't worth as much anymore.

Make sure you save those mortgage payments once they stop.


Title: Re: Stocks, bonds and investing
Post by: Samwise on January 03, 2018, 03:28:05 PM
Emotions are a big part of it. It's your money! Another wrinkle in your favor is that with the loss of the SALT deduction keeping that mortgage alive ain't worth as much anymore.

That's part of my calculus, yeah.  I was already counting down the days before I'd be able to pay the house off, and everything that's happened in the last year has been a really strong push to git 'er done.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on January 03, 2018, 03:43:09 PM
Did you guys sell your Intel stock yet?


Title: Re: Stocks, bonds and investing
Post by: Viin on January 03, 2018, 04:44:28 PM
Another wrinkle in your favor is that with the loss of the SALT deduction keeping that mortgage alive ain't worth as much anymore.

The mortgage deduction shouldn't impact most people:
Quote
The mortgage interest deduction can only be taken on mortgage debt of up to $750,000, down from $1 million currently. This only applies to mortgages taken after Dec. 15, 2017, preexisting mortgages are grandfathered in. And the interest on home equity debt can no longer be deducted at all, whereas up to $100,000 in home equity debt could be considered.

The biggest change for the "average" person is that you can't deduct interest from the home equity anymore. Which actually sorta makes sense, since most people probably don't use it for home improvements anyways these days.

Regarding SALT (different from mortgage deductions):
Quote
Perhaps the most controversial aspect of tax reform on the individual side was the fate of the SALT deduction. Early versions of the bill proposed eliminating the deduction (which stands for "state and local taxes"), which didn't sit well with some key Republicans in high-tax states.

The final version of the bill keeps the deduction, but limits the total deductible amount to $10,000, including income, sales, and property taxes.

From the same article, here's a good kick in the balls when you are already down:
Quote
Finally, the threshold for the medical expenses deduction has been reduced from 10% of AGI to 7.5% of AGI. In other words, if your adjusted gross income is $50,000, you can now deduct any unreimbursed medical expenses over $3,750, not $5,000 as set by prior tax law. Unlike most other provisions in the bill, this is retroactive to the 2017 tax year.

(From the Fool.com tax changes article (https://www.fool.com/taxes/2017/12/30/your-complete-guide-to-the-2018-tax-changes.aspx))


Title: Re: Stocks, bonds and investing
Post by: Chimpy on January 03, 2018, 04:54:17 PM
Did you guys sell your Intel stock yet?

I read somewhere that the Intel CEO did....in November around the time MS released the fix for today's insanity to the insider channel   :why_so_serious:



Title: Re: Stocks, bonds and investing
Post by: ghost on January 03, 2018, 06:57:27 PM
Did you guys sell your Intel stock yet?

Are you referring to this (https://www.reuters.com/article/us-cyber-intel/security-flaws-put-virtually-all-phones-computers-at-risk-idUSKBN1ES1BO)? 

I'm just not convinced that any digital/computer device can be made completely safe from hacking.  Hence why I'm not real keen on the idea of self driving cars.


Title: Re: Stocks, bonds and investing
Post by: Paelos on January 03, 2018, 08:39:52 PM
Any of you more adventurous traders gotten fabulously rich over the last year?

I've invested in several major pieces over the last 18 months, the grand total of which is up about 13% counting dividends. Not fabulously rich by any means, but I take a very steady approach to the whole affair and live by a few simple rules:

1 - Use mostly mutual funds to diversify risk. Target funds with lowest fees. (I like Med Tech, Blue Chip Growth, OTC, and Balanced funds)
2 - Put more than 50% into index funds which will by nature have the lowest fees, and you basically get to ride the returns of the market. (I'm in Nasdaq & SP500)
3 - Put some of the money into lower return funds that produce dividend and income. Reinvest that into the funds. (I'm in Fidelity Dividend and Income)
4 - Pick one stock you like for a purpose. Like you specifically buy it and target a price or a date, you get to either one of those and you sell. I'm in SBUX as an example.

There you go.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on January 04, 2018, 08:31:09 AM
Did you guys sell your Intel stock yet?

Are you referring to this (https://www.reuters.com/article/us-cyber-intel/security-flaws-put-virtually-all-phones-computers-at-risk-idUSKBN1ES1BO)?


Yes, but for this thread mostly that the Intel CEO sold 1.5 million shares.  Also, AMD says they are not affected per https://lkml.org/lkml/2017/12/27/2 which kinda gives some idea of how it works.


Title: Re: Stocks, bonds and investing
Post by: Yegolev on January 04, 2018, 08:41:39 AM
I'm not being adventurous at all.  I did have quite a bit of cash waiting for a bargain, and at some point I realized I was going to be waiting a while due to the 12% return overall I was getting.  So we took that cash, sold a few things that might be overvalued, and loaned the cash to people we know to use for their businesses for 10% interest.


Title: Re: Stocks, bonds and investing
Post by: Sky on January 04, 2018, 08:49:35 AM
Emotions are a big part of it. It's your money! Another wrinkle in your favor is that with the loss of the SALT deduction keeping that mortgage alive ain't worth as much anymore.

Make sure you save those mortgage payments once they stop.
It took me a couple years to stash away those 'payments' into savings, but holy shit THIS. And to be fair, most of the money in the interim was used to pay down various little debts I'd built up over the first five years of home ownership, mostly my truck...and even that debt I'd been bouncing around to 0 interest accounts for very small transaction fees...just got tired of keeping track of that web of crap.

As someone living completely debt free, I will say that a huge benefit of paying off the mortgage asap is that you have security. Since my job is exposed to political decision-making (and we're seeing how that can go on the national stage), security means a lot to me. Also why those 'payments' are going into a shitty savings account so I can pull it out as needed.

Actually, we started that savings setup as part of a thing the fiancee was nuts about a few years back, because she thinks we can't afford anything at all, mortgage-wise. So she had some formula from a financial tv guy she likes, saying 1/3 of your paycheck should go toward housing. I started putting that away, which was actually about 30% more than I had been spending on PITI...I assume she's doing the same, but who knows, she doesn't open the books. Anyway, I only pull my taxes and insurance out of that account and it is growing nicely, even on my shitty salary...but it's getting to the point where I wouldn't mind some of that sweet compound interest.

I wish rates would jack back up to double digits, I hate borrowing money and like saving to interest-bearing accounts rather than gambling with the shitty herd mentality of wall street. It would also punch a hole in this stupid debt society we live in where you can't sensibly buy a house because some chuckleheads just keep flipping the values higher and higher because other chuckleheads can borrow and everyone wins, right? My area is losing jobs and wealth and somehow housing is almost double what it was when I bought...in 2008. I guess I'll stop before I get into reforming bankruptcy and foreclosure rules...  :why_so_serious:


Title: Re: Stocks, bonds and investing
Post by: Viin on January 04, 2018, 09:19:10 AM
...but it's getting to the point where I wouldn't mind some of that sweet compound interest.

You might look into a high interest savings account that make it easy to move money out, such as CapitalOne360.
ING has an interesting account you might like (2.8%): https://www.ing.com.au/savings/savings-maximiser.html
Just realized that was AU only. Bummer. 1.3% is the highest at Capital (https://www.capitalone.com/bank/savings-accounts/) right now, but there are other options.

We keep some emergency money in our primary bank's savings account and the rest of our cash savings is in a Vanguard brokerage account invested in a 50/50 stock/bond mix. Getting the money out of the Vanguard account takes 3-5 days to sell/ACH transfer to our checking account.


Title: Re: Stocks, bonds and investing
Post by: Tale on January 23, 2018, 12:43:37 AM
Just seen a certain internet currency referred to as "Dunning-Krugerrands" and laughed out loud.


Title: Re: Stocks, bonds and investing
Post by: rattran on January 23, 2018, 07:45:50 AM
Just seen a certain internet currency referred to as "Dunning-Krugerrands" and laughed out loud.

My boss put a bunch of money in those Dunning-Krugerrands near the height of the madness. I don't think he'll ask my opinion about it again after all the laughter.


Title: Re: Stocks, bonds and investing
Post by: Soln on January 23, 2018, 10:34:05 AM
Did you guys sell your Intel stock yet?

Serious question.  Linus is alleging Intel is not telling Microsoft everything:  http://lkml.iu.edu/hypermail/linux/kernel/1801.2/04628.html


Title: Re: Stocks, bonds and investing
Post by: Tale on January 29, 2018, 10:51:28 PM
Just seen a certain internet currency referred to as "Dunning-Krugerrands" and laughed out loud.

My boss put a bunch of money in those Dunning-Krugerrands near the height of the madness. I don't think he'll ask my opinion about it again after all the laughter.

Finally, a shitcoin that tells it like it is: http://ponzicoin.co

Edit: and another (https://www.strayacoin.org/)


Title: Re: Stocks, bonds and investing
Post by: Sir T on January 31, 2018, 04:09:23 AM
Finally, a shitcoin that tells it like it is: http://ponzicoin.co

The saddest quote from that site

Quote
This has gotten crazy out of hand, I apologize but we will no longer be selling PonziCoin on this site because this was a joke. I cannot terminate the contract but I will not be selling any coins that I own. For clarification, I did NOT profit from this: the contract got depleted by other people selling their coins, I did not "take off with the money" and I never sold my coins, you can easily verify this on Etherscan.

Even when you tell the twats that this is a joke they still buy it up like its the next coming of Joseph Smith.