From TomB16: "It would seem that someone who does not follow the media at all is better informed than someone who does." ABSOLUTELY TRUE. There is no reason in the slightest to invest according to what anyone in the MEDIA says. Research, fundamentals, company data and news.......yes, yes, and yes. Media blather.......no. As an investor, do you really think there is going to be some media article available to the general public that contains critical data as an investing "tip". NO. I agree with Tom, most of this stuff is simply people trying to manipulate the markets. Unfortunately the so called "reporters' are either too dumb or complacent in printing this garbage. Of course, they would have nothing to print every day if they did not publish this stuff.
You make a good point. I let reporters and the news industry off too lightly. They have had their pockets picked so often and with such regularity over many decades as to make it unlikely they are not in on it, at some level.
Some of TomB16's commentary got me thinking about stock picking. What I do is the following mental process: 1. I like and look for companies that have the LARGEST long term MOMENTUM possible. I dont have to get into a company when it is an IPO. I prefer to find companies that have already.......to a probability...... proven that they are going to be a long term DOMINANT company. The company might even be 10-20 years old. The key is companies that have become business category killers and are proven to the point of being long term rockets and money machines. For example......Amazon, Microsoft, Google, Nike, Costco, etc, etc, etc. I prefer to wait till companies like these are beginning to be recognized as unstoppable. As I said, I dont have to get in at the very beginning.........if I can get in before 60-75% of investors, when a company might be in the first 15-25% of its life span.......there is still plenty of money to be made when the company is going to be dominant for the next 20-30 years or more. 2. I try to find a superior business and pay a reasonable price for it, if possible. BUT........I dont even mind paying an UNREASONABLE PRICE for some companies. An example is Amazon. The KEY is the sustainability of the business itself. What is important is the “high-probability”—that the company is so dominant, its future so stable, momentum so great, reflecting DOMINANT acceptance by Millenials and most other age groups, and at the beginning/early (but not too early) stages of becoming an ICONIC HOUSEHOLD NAME. Companies that their products and services are woven into the everyday fabric of the lives of people all over America and the world. Companies where with daily usage and good, old-fashioned human behavior, this weaving will continue to greatly deepen over the LONG TERM. 3. I STRONGLY prefer companies that are HEAVILY ACCEPTED by the Millenial generation. That does NOT mean FAD COMPANIES. There are a HUGE number of fad companies right now in my opinion. Many will fail over the medium term. This is the largest single generation in our history. They have now eclipsed the numbers of the Baby Boomers. At the same time, the more broad acceptance by their consumers the better. This is why I no longer hold many stocks that I held for decades. Proctor & Gamble, Colgate, Kraft, Coke, Pepsi, IBM, GE, Phillip Morris, etc, etc. 4. The ABOVE factors are more important to me than even company financials. I look at financials AFTER I believe a company fits the above. I guess the above cam be summed up in one word.......LONG TERM MOMENTUM. (actually three words) I than will probably take a glance at 3-5 years of annual financials and also do some reading and see what others are saying about the financials. I dont care about all the various financials that are now broken out in the back of an annual report. I prefer to just look at the basics...... income statement, balance sheet, cash flow, and owner equity. I just take a general look and compare 3-5 years to the current year. I am just generally looking for some number to stand out as odd. Or, some change over time or from one year to another that seems unusual and can not be explained in a positive way.
Totally agree with WXYZ. Also, I will mention that I enjoy rhyming. As well as everything he wrote in post #663, I would add the following: Process: - Look for specific characteristics, very similar to those WXYZ has enumerated. - Test for value - if value good, buy - if value not good, *watch* Example: There is a rail company I've followed for over a decade. In 2016, it literally came within $0.05 of a standing limit order I posted when I could see the price coming down. That's the closest I've come to owning it. I know this is one way in which I differ from WXYZ. He pulls the trigger when he sees what he wants. I figure out what the company is worth to me. Specifically, valuation minus a pre-determined discount (I prefer not to buy retail). That's what I will pay. If I were never able to find other companies that I like and are available at a discount that interests me, I'd probably just pay retail. The thing is, there is almost always a bargain to be had and I'm patient. I follow over 30 companies on an ongoing basis but there have been times that number has shrunk into the mid 20s. Good companies are not that easy to find but certainly not impossible.
Yes, that is perhaps one of the few ways we differ TomB16. What you do, establishing a price and entering a limit order is used by many investors. As you mentioned, I do not use limit orders. When I decide to buy, I just buy. I feel that my LONG TERM horizon and my thinking process makes it relatively risk free to just do a buy and move on to holding that stock, hopefully for a long long time.
I respect your approach. I just don't happen to use it. There is far, far more overlap in our approaches than there are differences.
So I am thinking that.......IF....BIG IF.......there is going to be a SANTA CLAUS rally this year it will start tomorrow and go to year end. My reasoning is the strength and resilience that the general markets showed today in the face of a dreary open. As the day went on the markets made a very STRONG recovery, especially the Dow. Things could have easily gone upside down. Nearly EVERY economic indicator is lined up positive right now. BUT........it would have been very easy for the general markets and especially the DOW to capitulate today and escalate to a very nasty drop as the day went on based on generalized fear. I see NO EXUBERANCE in the current market. It is as though everyone is waiting for the shoe to drop. I consider this a very positive indicator along with all the very positive economic data. The recovery from open to close in the Dow showed that this market just will not be held down. Of course, being a LONG TERM INVESTOR, I am fully invested for the long term as usual and whether or not this little GUESS comes true is NOT relevant to my investing status. I DO NOT do short term market timing, especially based on this sort of short term educated "guess".
NICE. Lets keep them coming. One day after another to the end of the year. THINKING ONLY positive thoughts and market cheer-leading.
SEE prediction about Santa RALLY two posts above. HERE is another BIG push for that call: https://www.cnbc.com/2019/12/12/tru...eal-with-china-they-want-it-and-so-do-we.html US reaches a phase one trade deal with China in principle pending Trump’s approval LET it snow, let it snow, let it snow......Santa Claus is coming.....to town. (sorry for mixing the tunes) HOPEFULLY.....I could use another little 5-10% bump up for the year.......the icing on the cake for a very good year. October 7 all in investment is now well over $50,000 in gains. My view is you celebrate when the markets are up and just keep your head down and ignore it when they are down.
HEADING to the open tomorrow: DOW year to date +20.60% SP500 year to date +26.40% If we can hold on to the end of the year this would be the strongest gain for the SP500 in the last seven years. And would rank SECOND in the top four years in the past 21 years. 2013 +29.60%% 2019 +26.40% 2003 +26.38% 2009 +23.45% I would say at least EVEN ODDS that the SP500 by year end will be the BEST year in the past 21 years. AND, these figures are simply the percentage gain. The year end figures are actually higher with the addition of the roughly 2% in dividends. For example with reinvested dividends 2013 is at 32.18%.
TODAY is a classic example of......."buy the rumor and sell the news". PLUS....trade exhaustion and all the NEGATIVE NANCY analysis and nit-picking. ALSO....some profit taking to shore up and lock in 2019 results. REGARDLESS, the near term is looking very strong on all fronts once everyone gets this little bit of news digested.....which should just take a few days. Myself......NOT looking to sell anything any time soon on news or anything else.
NICE open for the day and week. Two weeks to year end and I am pulling for the SP500 to wrap up a GREAT year in SPECTACULAR fashion. Boeing is pulling the DOW down at the moment.........not that a 190 point gain at the moment is a bad thing. That stock continues to be a SCREAMING BUY for those with the guts to buy now with a year or more holding period for the gains. I imagine that most people are not thinking too much about the markets and their investments at the moment with us just entering the last full week before Christmas. Starting at the end of this week and through next week will be very shallow markets till after New Year. HERE.........once again, as usual, is my portfolio model that is the basic pattern for all the various portfolios of mine and family that I manage. PORTFOLIO MODEL "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 55% of the total portfolio and the fund side at about 45% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a VALUE style component (Dodge & Cox Stock Fund), a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 12 stock portfolio. STOCKS: Alphabet Inc Amazon Apple Boeing Costco Home Depot Honeywell Johnson & Johnson Nike 3M MSFT MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund Dodge & Cox Stock Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (70). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my eleven stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.
As to Boeing, I still see this stock as a STRONG BUY. The news today was NOT unexpected. They are producing 52 planes per month and have 500 siting in storage waiting for delivery as soon as they get approval. I am considering buying more shares. I will wait and see how the stock reacts tomorrow and will give it more thought. If I do decide to buy more shares, I will probably take some money out of the SP500 Index Fund to do so. Boeing Stock Is Sliding as Its 737 MAX Woes Continue. Some Big Mutual Funds Are Buying Shares. https://www.barrons.com/articles/bo...g-shares-51576520399?siteid=yhoof2&yptr=yahoo (BOLD is mine and what I consider important content) "Some prominent mutual funds have been trading Boeing stock in recent quarters, according to data from Morningstar.com, as the company struggles to get its 737 MAX plane back in the air. Boeing stock (ticker: BA) has faltered over the last nine months as global regulators grounded the 737 MAX following two fatal crashes. The stock is down about 4% today after The Wall Street Journal reported Boeing is considering suspending or cutting back production of the 737 MAX amid uncertainty about when the jet will be allowed to fly again. Many of the American Funds have purchased the stock recently, including Fundamental Investors(ANCFX), American Balanced (ABALX), Growth Fund of America(AGTHX), and Investment Company of America(AIVSX). Additionally T.Rowe Price Blue Chip Growth (TRBCX), T. Rowe Price Value (TRVLX), and T.Rowe Price Growth Stock (PRGFX) funds all purchased shares in the third quarter. Different divisions of Capital Group, American Funds’ parent, own more than 6% of the stock. T.Rowe Price (TROW) owns 7% of the stock. Vanguard owns another 7%. Among funds selling were T.Rowe Price Intl. Large Cap Growth(TRLGX), JHancock Disciplined Value (JVLAX), Fidelity Puritan(FPURX), and Fidelity Magellan(FMAGX). Major ETF and very concentrated owners include iShares U.S. Aerospace & Defense ETF (ITA), which has 21% of its assets in the stock. Fidelity Select Defense & Aerospace (FSDAX) has 14% of its assets invested in the stock. Boeing stock is down about 4% today. Cutting production would “inflate Boeing’s costs and trigger charges against its financial results as fixed expenses would be spread among fewer planes,” according to the Journal report. The stock is down nearly 18% since the second crash on March 10 of Ethiopian Airlines Flight 302." MY COMMENT I consider today a perfectly normal and expected........actually deserved.... reaction to a company announcement. Over the short term the market reaction today was justified. BUT.......the current issues are STILL very short term (3-9 months). I STILL see an UPSIDE of $100 per share over the next 1-2 years.
DECIDED......to follow my own view of Boeing.......and put another $10,000 into the stock in portfolios. I will take the funds from the SP500 Index Fund. I will also add $10,000 to the Home Depot position. A minimal buy that will add to both of these LONG TERM holdings. OBVIOUSLY, I have ZERO interest in selling either of these stocks going forward. I like companies like these that are part of TWO COMPANY monopolies.......AND in my opinion......are the dominant of the two. (Home Depot and Lowes) (Boeing and Airbus) EDIT: Buy of Boeing and Home Depot was done this morning.
My 2019 Review First of all, Merry Christmas to all! This year, like just about anyone involved in this year's market, was wildly successful for me. My 457 account returned 22%+ YTD. Last month I increased my contribution 5%. This was no small feat as I am also required to contribute 9.5% to my pension. In June, I opened a second taxed brokerage account with M1 Finance. A monthly automatic deposit is made and the contribution is distributed to my selected funds. I created this account because it allows me to have access to fractional shares of expensive premiere companies such as AMZN, GOOGL. This year I worked nearly 400 overtime hours. Although it was exhausting at times, it has also been rewarding. I work in a large city with a serious violent crimes problem. However, at the end of the day, I have no problem making the 40 minute commute each way to our new home (purchased 2018). The overtime hours I had worked in previous years allowed my girlfriend and I to put down a solid down payment on a beautiful home in a safe, quiet village. Outside of my IRA/Roth, my second largest contribution is a monthly deposit into my TD Ameritrade account. My biggest win by far has been AMD. I purchased a position in 2015 and the share price has more than doubled this year alone. My biggest bust has been STMP. In spring they lost their exclusive partnership with USPS. I still see the company as a leader in internet-based postage and they have a new deal with UPS. As a long term investor, I continue to hold the position and will ride out the storm in the mean time. In the past I had primarily focused on growth stocks, however, I have become more interested in dividend investing and creating a steady passive income stream. I will continue to look for growth stocks but I am now dedicating a percentage to solid dividend yielding stocks. I continue to pick up MO and T shares regularly. As a long term investor, I like to envision what that passive dividend income could materialize into in 20-25 years. Here's to a healthy and prosperous New Year!
Weight and Herbert. HOPE you guys will be regular contributors to this thread and the others in the INVESTING forum. CONGRATULATIONS to you Weight. You are on your way to investing, financial, and life success. Your long term focus and planing will pay off BIG TIME. You are already seeing the rewards for your hard work with your beautiful new home. With your pension contribution, you obviously have a nice pension that you are building up and at the same time you have the insight to invest outside your pension in both taxable and IRA accounts. You guys and anyone else.....FEEL FREE to post anything you want on this thread. Your portfolio, thoughts, results, critique, etc, etc, etc. Weight......your post for some reason makes me wonder if you are a first responder of some sort......if so thanks for what you do. Regardless, you are a good lesson in the value of hard work and life planing for success.
Wxyz, I'd like to hear about your perspective on investment activity. I've highlighted how I do certain things differently. I watch companies, indicators, etc. You indicate a more passive approach. The thing is, I love it. I enjoy following companies and watching numbers. I'm an investment geek, I suppose. Is your passive approach a function of burn out on the hyper awareness that comes from reading every word and observing every number and graph you can find or have you always been more relaxed about it? I assume, one day, I will be exactly as passive as you are now. Even now, I follow a lot of detail and do almost nothing about it. Can you provide some perspective on your trajectory?
Investment activity.......a BIG topic. or in my case a very....small topic....since I do virtually NO activity unless I have sold something in my portfolio and feel the need to add a new holding. I usually dont feel the need to add a holding as long as I have at least 10 to 12 stocks on the stock side. As you know I prefer to have a VERY CONCENTRATED stock portfolio. As to usual activity.....on my individual stocks, I usually look at the quarterly and annual financials and compare them to the past 3-5 years. I tend to NOT obsess over my holdings daily, weekly, monthly, etc. Most of my reading is general in nature and is reflected in what I post here. I DO NOT keep any data or info since I can just look up anything that I might want to online anything I wish. I keep No RECORDS except for the latest statement for each account. When the new statement comes I shred the old one. I DO check each portfolio daily and look at the performance of the stock side and the fund side and the portfolio as a whole compared to the SP500. I use the portfolio performance tools on Schwab to look at each portfolio a few times per month when it strikes me to look. I INTENTIONALLY try to not be too ACTIVE in what I am doing with my holdings. I DO NOT get too concerned about the day to day and month to month results. My FOCUS is on the annual results and how the portfolio is doing compared to the general economy and the SP500. I tend to focus on the performance of the portfolio as a WHOLE. To me the average investor is WAY TOO ACTIVE. Keeping charts and data, trading, responding to the general economy, etc, etc. To me.....the human brain....craves activity and LOVES BUSY WORK and data, and doing something, and stuff. I try to avoid that genetic predisposition in humans as much as possible. I DO NOT equate doing something with being on top of things. I try to do lots of BIG PICTURE reading and thinking. I move quickly when I decide to buy something or sell something. I rarely sell just a portion of a position. If and when I sell it tends to be to dump the entire position based on NOT being confident in the long term future of the company to out-perform any longer. I too am an investment geek at times, but NOT with my portfolio, more in general. I have NO burn out even after 45+ years. I tend to be a BIG PICTURE kind of guy with NO hyper-awareness involving day to day stuff. I guess with my business education, my non licensed law degree, my business ownership experience, my investing years........AND......most importantly, intuitive business talent, which I have had my entire life even when young.....I tend to usually make the right choices and have my whole life when it comes to business and investing. I DO STRONGLY believe in visualization techniques and self fulfilling prophesy. In my business life I handled large sums of money over 20+ years and have ABSOLUTELY no fear of money or nerves dealing with money and investments. Again.....something I was just born with.....a very CLINICAL nature and unemotional nature when it comes to business and investing. I have the FOCUS to invest the same way I am right now for most of my life. If it works, I dont care what anyone else is doing or what the latest fad is. On one hand my approach seems passive, but on the other hand I am looking at each portfolio daily. By having only 10-12 stocks and 3 long time funds, I am able to be intensely focused yet not have to do much at all in terms of activity. To me SIMPLICITY is the key to any investment strategy. The more complex the more it is just busy work. BUT...if someone enjoys doing that sort of research, more power to them.
I will add to the above, that between my daily business, investment, news, and general reading, and business TV, etc, etc, every day, I DO SEE or HEAR any daily story that applies to any of my stocks and if needed, I follow up. In fact, I usually see stuff BEFORE it is generally reported. So I stay VERY up to date on my companies with little effort beyond my normal daily reading.
