My philosophy of investing

Discussion in 'Investing' started by gtrudeau88, Feb 14, 2021.

  1. gtrudeau88

    gtrudeau88 Active Member

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    Sound advice
     
  2. Rustic1

    Rustic1 Well-Known Member

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    The olive branch has been offered, the rest is up to you. I'm a nickel and dimes guy. The other 2 have just given you a wake up call.
    Your money,your choice. I honestly want to see you make it.
     
  3. WXYZ

    WXYZ Well-Known Member

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    I think you are well on the way already.....you have awareness of investing and issues involved in investing...beyond most people.

    EVERYONE goes through what you are right now. It takes time to find out what is the right strategy.....for every investor....it is different. KEEP AT IT....you will find the best way for yourself and YOU will be successful.
     
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  4. gtrudeau88

    gtrudeau88 Active Member

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    Tough love hey?

    Back in November I wrote down what I wanted out of all this, the goals, the limitations, etc. I'm going to reread them. I don't think the goals have changed (grow my 43k that I started with in Sept to 250K in 13 years) but I strayed a little bit (i.e. the reddit driven trades, trying to jump in response to earnings surprise) which had cost me losses. I also strayed by jumping on certain positions that didn't lose money but maybe didn't square with the limitations I had setup. So in some ways I've acted like a day trader without the day trader mentality and knowledge.
     
  5. gtrudeau88

    gtrudeau88 Active Member

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    Thank you. I know I will be successful but I also know that I need to reevaluate and make sure each decision lines up with the plan and I don't let myself get off track.
     
  6. gtrudeau88

    gtrudeau88 Active Member

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    Forgot what I said was my plan above. I've slowed myself down and am reverting back to the original precepts of my investing that got me the gains I've made so far. Someone was right when they said I've been chasing my tail, at least over the last 4-5 weeks or so and my plan above would somewhat have extended the tail chasing. Gonna sit on my thoughts for another night. Will keep you all posted.
     
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  7. Rustic1

    Rustic1 Well-Known Member

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    Longterm investors don't have short-term goals.
    Steady wins the race. Nothing wrong with culling the herd, just don't shoot yourself in the foot.
     
  8. gtrudeau88

    gtrudeau88 Active Member

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    Won't shoot myself in the foot. Would have done so eventually if I didn't arrest a few bad trends and tendencies. More tonight after work or tomorrow
     
  9. gtrudeau88

    gtrudeau88 Active Member

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    Here is the deal. Maybe my self-analysis can help others. Note that I am at 5.83% gain YTD so I have not failed miserably. I've done OK but I need to arrest some behaviors if I'm going to keep it up and even improve.

    A. I am uncomfortable with a lot of tech stocks because it is hard for me to evaluate the viability of what they do and determine whether it really has value. I'm an ex software developer so I know some names/products like Microsoft, Cisco, Apple, Datadog, Dell, McAfee, and so forth but a lot of tech companies I can't get my head around. I lost $ because I bought ATEN, Dropbox, and others based on analyst recommendations, etc. without understanding exactly what their product does and how it is used.

    B. I am comfortable with industrial products and processes because I understand these more tangible products and I also can understand the underlying pipelines. I understand that if PG announced Pampers diaper sales increased, then that means wood pulp sales increased, plastic production (made from oil!) increased, etc. If Dell announces a 100,000 laptop sale to the IRS, that means chips (AMD, Intel), hard drives (Seagate), retail sales (Best Buy), etc. I can grasp how underlying commodities are needed for specific products. if housing starts are going up that means Home Depot and Lowe's does well and sales of wood, marble, carpeting, and more also go up.

    C. I had intended at the beginning to always keep some cash around, say 5% of my account total in order to take advantage of opportunities. However I lost track of how each "opportunity" fit within the whole plan. I also never sold anything in response to buying an "opportunity" therefor I had 0 cash which meant no real opportunities.

    D. I had intended at the very beginning to have no more than 10 positions and I wouldn't buy a new position without exiting another. Now frankly I like having more than 10 because I like the diversification it gives me. But if I don't set an absolute limit on max # of positions then I won't think through the reasons for opening a positions or ending one as diligently as I should.

    E. I've done really really well at not being emotionally attached to specific positions. I've never fretted over "should I sell" due to a stock dropping more than x% below buy price.

    F. I made a rule originally to always sell if prices drop 6-8% below buy prices or exceed 20-25% gain. I intend to still follow the 6-8% rule (done well with this) but will evaluate better before selling at 20-25% gain.

    G. I don't have spare cash to improve my portfolio so dividend bearing stocks are to be the mainstay of what I choose. My brokers' original picks for me were chosen with this in mind. Unlike what he picked out for me, I won't consider only dividends in choosing a position but I intend to keep dividends above a certain amount monthly at all times.

    H. I never wanted to spend more than 1-2 hrs a day tops doing this stuff. If I'm going to keep to this then day trading and short term trend capturing is out of the picture.

    I. I intend to make as many gains built upon other gains as possible. So I'm not a buy and hold investor for longer than 12 months. I am a buy and hold investor for 3-12 months. This doesn't preclude me from reopening a position in a company that again looks promising.

    J. At our current income my wife and I be in a 10% federal tax bracket for a while so I'm not concerned about long term versus short term capital gain taxes.

    so I'm going to....

    K. Not own tech stocks directly but own tech driven ETFs instead like QQQ (will improve existing position).

    L. Own large cap ETFs like VV (will improve existing position) that expose me to large tech stocks like Microsoft but will also expose me to large cap non-tech stocks.

    M. Maintain and even build on positions in KMI,ENB, DIS, CSSEP, ABBV that have good growth potential and pay good dividends.

    N. Reopen position in NVAX since I think their vaccine program is going to make them a substantial profit.

    O. Improve positions in GTN and GOF (high dividend) and open positions in CLF (commodity), QTS (REIT), and IWM (small cap fund)

    P. Keep position in TRTN but not grow it for now. Not sure if there is much growth potential in the short/medium term.

    Q. The intended new positions or expansion of existing positions will be done under the most beneficial buy prices that I can figure out. This means buying in smaller chunks most likely and gradually building up to the desired % of portfolio. Buying on downward swings is the goal.
    -
     
    #49 gtrudeau88, Feb 23, 2021
    Last edited: Feb 23, 2021
  10. Onepoint272

    Onepoint272 2019 Stockaholics Contest Winner

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    Be careful about holding those high dividend paying pipeline companies like KMI in a tax deferred account. I believe part of their earnings distributions are qualified dividends and part are non-dividend distributions ( non-corporate-taxed returns of capital where you pay the corporate tax when you file your tax return). Since you don't include tax deferred accounts on your tax return, it is illegal to hold these types of investments there and could cause you headaches down the road.
     
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  11. gtrudeau88

    gtrudeau88 Active Member

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    None of these are in a tax deferred account. This money is in a basic td ameritrade cash account.
     
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  12. gtrudeau88

    gtrudeau88 Active Member

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    I decided not to buy CLF as their earnings report today was pretty lousy. I'll consider them later. I have 13 positions now instead of 18 like before and I'm limiting myself to 15. Should be easier to manage. Morning off to a good start. I bought more than I originally anticipated in GTN. They had a dynamite earnings report today and announced they are paying quarterly dividends starting next month. It isn't a huge dividend, only .08 per share but it is a start.

    Should add that I have 6% in cash at the moment. Will keep this around 5% and will use it to grow positions or whatever but if I do that I intend to lock profits in something in order to maintain the cash reserve.

    TRTN is up 17.37% so will likely be the 1st candidate to sell for locking profits. Wish I had put more into it.
     
  13. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Be careful of selling winners, because then you need to find another winner.
     
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  14. gtrudeau88

    gtrudeau88 Active Member

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    Hadn't intended on it but may spend some of my cash reserve today while positions are down. Just bought a few shares of disney (since down > 2%) and a few more shares of kmi (down 1.5%).
     
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  15. gtrudeau88

    gtrudeau88 Active Member

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    OK. I've got almost $3100 to buy with next week due to my sale of some ABBV shares plus a dividend payment from CSSEP. I'm going to expand existing positions versus opening a new one. Here's why;

    KMI, ENB, and CSSEP together account for 33.5% of my portfolio and represent 63% of my unrealized gains. CSSEP is the most risky of the three and already represents 12.5% of the portfolio which is high enough. KMI analyst mean target is a 1.79% gain so maybe not as much growth room as something else and it is 11.6% of my portfolio. ENB mean target represents a 17.9% gain, it's dividend is good and growing, it's only 9.3% of my portfolio, so I'm going to grow ENB a bit.

    GTN is 8% of my portfolio and represents 6.8% of my unrealized gains. Now I expect the gain to drop in the next couple days as we just passed the ex-dividend date but the gain is impressive considering I've only owned it a month. It's analyst median target represents an 18% gain so I'm going to build this one.

    TRTN represents 4.9% of my portfolio and 6.5% of my unrealized gains. It's analyst mean target represents a 13% gain and it has maybe already experienced it's price drop following the dividend date. Going to build this one too.

    KLIC is a new comer which is 4.2% of my portfolio and 2.4% of the unrealized gains which is high considering I've only owned it a week. It's analyst median target represents a 26.6% gain and it's in an industry (semiconductors) which might go crazy over the next few months. Going to grow this but slowly until I know that the growth so far is not a fluke.

    I anticipate buying the following:

    ENB 21 shares for $764
    GTN 29 shares for $599
    KLIC 15 shares for $699
    TRTN 17 shares for $1023
     
  16. Rustic1

    Rustic1 Well-Known Member

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    Oops.
     
  17. gtrudeau88

    gtrudeau88 Active Member

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    So I expanded my positions as I said. I did OK with buying ENB and KLIC, and should have waited on GTN, TRTN to get a better price. Not off to a great morning

    ENB - $36.51 per share
    KLIC - $46.85 per share
    TRTN - $59.85 per share
    GTN - $20.63 per share
     
  18. gtrudeau88

    gtrudeau88 Active Member

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    Let me add that I thought TRTN was starting to swing up and it did, so I had raised my buy price from $59 whatever to $59.75 which didn't get taken as it went up over $59.96 I think. I went up to the $59.85 which got taken and now it's barely above $59. Nuts!
     
  19. Dave Kraayeveld

    Dave Kraayeveld Active Member

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  20. gtrudeau88

    gtrudeau88 Active Member

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    I assume you are going to tell me I'm chasing my tail? Well let me tell that my german shepherd has caught hers on occasion so I know it's possible that I could capture mine.
     

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