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Author Topic: Stocks, bonds and investing  (Read 33218 times)
ghost
The Dentist
Posts: 10515


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.   DRILLING AND MANLINESS

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. 
TheWalrus
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Reply #1 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.

Paelos: Somebody find that post where I declared Seattle dead, because those fuckers are NFL cockroaches in the NFC.
Sheepherder
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Reply #2 on: January 31, 2012, 05:56:44 PM

Miasma
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Stopgap Measure


Reply #3 on: January 31, 2012, 06:00:25 PM

sort of like the Goonfleet investment threads but for real life.
Spy.
proudft
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Reply #4 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!

Abagadro
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Possibly the only user with more posts in the Den than PC/Console Gaming.


Reply #5 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.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.

-H.L. Mencken
ghost
The Dentist
Posts: 10515


Reply #6 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.
apocrypha
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Planes? Shit, I'm terrified to get in my car now!


Reply #7 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.

"Bourgeois society stands at the crossroads, either transition to socialism or regression into barbarism" - Rosa Luxemburg, 1915.
rk47
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The Patron Saint of Radicalthons


Reply #8 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.

Colonel Sanders is back in my wallet
Merusk
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Badge Whore


Reply #9 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.

The past cannot be changed. The future is yet within your power.
ghost
The Dentist
Posts: 10515


Reply #10 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" 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.  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", which takes only the cheapest 5 of those ten. 
Baldrake
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Reply #11 on: February 01, 2012, 07:47:23 AM

Of course you could just follow the Dilbert investment approach.
ghost
The Dentist
Posts: 10515


Reply #12 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. 
Longstrider
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Reply #13 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.
« Last Edit: February 01, 2012, 08:58:51 AM by Longstrider »
Johny Cee
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Reply #14 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.
Murgos
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Reply #15 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.
« Last Edit: February 01, 2012, 09:25:42 AM by Murgos »

"You have all recieved youre last warning. I am in the process of currently tracking all of youre ips and pinging your home adressess. you should not have commencemed a war with me" - Aaron Rayburn
Johny Cee
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Reply #16 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.
Sky
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I love my TV an' hug my TV an' call it 'George'.


WWW
Reply #17 on: February 01, 2012, 10:20:19 AM

I once made $250 at the blackjack table.

Viin
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Reply #18 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?

- Viin
Johny Cee
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Reply #19 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.


ghost
The Dentist
Posts: 10515


Reply #20 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. 
bhodi
Moderator
Posts: 6817

No lie.


Reply #21 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.
« Last Edit: February 01, 2012, 11:08:05 AM by bhodi »
ghost
The Dentist
Posts: 10515


Reply #22 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. 
Viin
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Reply #23 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.

- Viin
bhodi
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Posts: 6817

No lie.


Reply #24 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.
« Last Edit: February 01, 2012, 11:28:07 AM by bhodi »
Viin
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Reply #25 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

- Viin
Salamok
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Reply #26 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 Hat
bhodi
Moderator
Posts: 6817

No lie.


Reply #27 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.
« Last Edit: February 01, 2012, 11:41:31 AM by bhodi »
Salamok
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Reply #28 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.
bhodi
Moderator
Posts: 6817

No lie.


Reply #29 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.
« Last Edit: February 01, 2012, 11:44:20 AM by bhodi »
ghost
The Dentist
Posts: 10515


Reply #30 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.
bhodi
Moderator
Posts: 6817

No lie.


Reply #31 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.
« Last Edit: February 01, 2012, 11:57:48 AM by bhodi »
Salamok
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Posts: 2633


Reply #32 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.
Miasma
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Stopgap Measure


Reply #33 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 swamp poop.

I dug up the article.
« Last Edit: February 01, 2012, 12:09:37 PM by Miasma »
Surlyboi
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eat a bag of dicks


Reply #34 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.

Tuned in, immediately get to watch cringey Ubisoft talking head offering her deepest sympathies to the families impacted by the Orlando shooting while flanked by a man in a giraffe suit and some sort of "horrifically garish neon costumes through the ages" exhibit or something.  We need to stop this fucking planet right now and sort some shit out. -Kail
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