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The Long Term Investor

Discussion in 'Investing' started by WXYZ, Oct 2, 2018.

  1. The Brontide

    The Brontide Active Member

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    I agree with the both of you, but reverting back to "making shares more affordable for the small guy", that was my basis in point.

    I love fractionals.

    But I am not saying I am a smaller investor.

    When I go to buy, likely in blocks, it just makes it so much easier for me to calculate, for example, the total cost.

    IE: 100 shares at $10.97 each, comes to $1097.00 .

    So I just buy $1100 dollars worth and call it good.

    Makes my books easier as it only Tally's dollars and cents, numbers of shares don't play a part in my bookkeeping method until end of year when cost basis may be needed for tax purposes.
     
    Jwalker likes this.
  2. A55

    A55 Active Member

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    I like the idea. It would be easier to buy $1000 at a time. Then every time you look it's easy to see if your $1000 has gone up, and how much. Then when you take money, it's easy to take whatever and leave the original $1000.
     
  3. A55

    A55 Active Member

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    Increased spending on healthcare. We saw with ObamaCare that companies selling healthcare insurance and processing MediCare claims got a boost. A lot to choose from. Good way to get in the game right now would be a fund. Then you can pick companies from the basket which you like, or increase your position in the fund.


    With Corona virus, even Trump will have to spend money for Healthcare. Similar scenario to when Nixon made kidney dialysis available via MediCare. Government will end up paying for prevention, testing, treatments...... with funds flowing through United Healthcare, Cigna, Anthem, Centene, etc. Screenshot_20200801-125812_kindlephoto-941144602.png Screenshot_20200801-125643_kindlephoto-941025591.png
     
    T0rm3nted likes this.
  4. WXYZ

    WXYZ Well-Known Member

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    BIG TIME GREEN Friday. ALSO a nice BEAT of the SP500 by .85%.

    Zukodany......you should be fine with goog over the long term. They DO SEEM to be lagging the other tech names lately.
     
  5. zukodany

    zukodany Active Member

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    Thanks I think so. Google is another company that WE USE as a business and rely on to get us traffic to our business. We love Ad words and yes, I can see why they’re not making money now... people don’t use them much cause their businesses are closed, or at least were closed during the heightened period of corona. But let’s face it.. our business would struggle without google. We used to advertise in the village voice, craigslist and local musician newspaper, and the response was very very poor compared to google. Up until 6-7 years ago I would ask our clients “ so how did u hear about us” and the majority would say google. Now we don’t ask anymore cause it’s ALL google. People would laugh at me if I asked them how did they hear about me. Kinda like asking someone “ so how did you find directions to the place”... duh! GPS!
    So, regardless of google doing bad or good, it was well overdue for me to own shares in the company. I believe it will at least double by next year. Kinda like how amazon was last year and now. It ain’t going ANYWHERE
     
  6. zukodany

    zukodany Active Member

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    Another thing really quick. We tried Facebook ads SEVERAL times. I think we try it every 6 months JUST TO SEE if their ads have changed. And I hate to say it - Facebook ads are the worst!
    I get TONS of visibility, tons of “likes” but no actual contact. Facebook is great for product awareness, but not for a tangible transaction.
    We have our page on Facebook and we update it regularly. And as I mentioned, once in a while we’ll promote an ad. And for 6-7 years now we haven’t gotten A SINGLE CLIENT off Facebook.
    The same goes for my collectible business. I actively participate almost daily with comic book and art collectible discussions on Facebook AND Instagram. But guess what, 99% of my business begins and ends on eBay and Amazon. Facebook would get the fanboys to “like” listings and lowball offers regularly. But rarely would it generate an actual transaction.
    So I can’t really speak on behalf of every business, I’m sure that everyone has their own experience, and based on facebooks reports they seem to be doing well with their ads, but for me Facebook didn’t work
     
    B Russ likes this.
  7. A55

    A55 Active Member

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    Real world feedback. Thanks.
     
    zukodany likes this.
  8. andyvds

    andyvds New Member

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    facebook might disappear as fast as it has grown. there is not one single ad that i see there that really makes sense to me.

    google ad's - who likes google? i search for a picture of this or that - and google delivers shop results...or ad's.

    i just can not believe that's the future of searching - it's just a monopoly. and like AON, yahoo or Nescape, they might lose relevance very fast with some serious competition.
     
  9. WXYZ

    WXYZ Well-Known Member

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    Zukodany......you are a business owner. You have done the survey of your customers and you know where you get business from. You know exactly what drives customers to you. So YEAH.

    Facebook......I agree that this business could be gone in as little as 5-10 years. They are in a very dangerous business niche. The NEXT big thing in social media could make them obsolete tomorrow. Personally........I dont like Facebook and have NEVER owned the company. OBVIOUSLY........I own the other BIG TECH names.......AMAZON, GOOGLE, MICROSOFT, APPLE. But Facebook.......NO......I dont like them as a long term business model. AND......just like this small bit of this thread.......I NEVER hear anyone saying anything positive about them.
     
    The Ragin Cajun likes this.
  10. WXYZ

    WXYZ Well-Known Member

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    This week, Wall Street will see quarterly earnings reports from 130 members of the S&P 500, including Walt Disney Co. DIS, +1.10%, Uber Technologies Inc. UBER, +0.06% and Beyond Meat Inc. BYND, +2.09%.

    ANOTHER big week starts tomorrow. Reports this week from 26% of the SP500. We are in the HEART of earnings right now.......and.......so far so good.

    SP500 year to date +1.25%
    DOW year to date (-7.39%)

    LAST WEEK........Monday through Friday........SP500 UP by 1.73%.
    LAST MONTH...................................................SP500 UP by 4.51%.
    LAST THREE MONTHS................................... SP500 UP by 15.56%.
    LAST SIX MONTHS......................................... SP500 UP by 1.41%.

    LOOKS LIKE.a trend to me. Lets keep it going this week and make some money.
     
  11. A55

    A55 Active Member

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    I still use yahoo.

    Did you forget MySpace and Friendster?



    Old school was like the product, and like the stock. That's why I don't own beyond meat, or Fiat Chrysler.

    I never bought social media stocks. Afraid of trends passing. Not understanding how they make money. Not grasping why stock rises as companies lose money. Social media gives me dotcom flashbacks.
     
  12. WXYZ

    WXYZ Well-Known Member

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    AGREE....A55. If I dont like what a company does or their products.......I will not buy it. Beyond Meat......I dont like ONE HORSE product.......FAD based.......companies. I ALSO do NOT like to buy young IPO companies with no profit. I prefer to wait a few years and see how they do. MOST will not be successful......at least enough for me to ever buy them.

    ON another topic:

    Buy, sell, repeat! No room for 'hold' in whipsawing markets

    https://www.reuters.com/article/us-...-for-hold-in-whipsawing-markets-idUSKBN24Z0XZ

    (BOLD is my opinion OR what I consider important content)

    "LONDON (Reuters) - Warren Buffett’s favourite holding period — forever — has few fans these days, with the average length of time shares spend in a portfolio hitting record lows this year as investors surf wild market swings for quick gains.

    The length of time that investors hold shares has been shrinking for decades but the trend accelerated this year in volatile markets that have made people nervous about sitting on investments for too long.

    There are different ways of slicing it, but Reuters calculations based on New York stock exchange data show the average holding period for U.S. shares was 5-1/2 months in June, versus 8-1/2 months at end-2019.

    The previous record low of six months was hit just after the 2008 crisis. In 1999, for example, 14 months was the average.

    Europe displays a similar trend, with holding periods shrinking to less than 5 months, from 7 months last December.

    [​IMG]
    Rob Almeida, a portfolio manager at asset manager MFS, said for years mom-and-pop punters, commission-free investing and more machine-trading have contributed to the trend.

    But 0% interest rates, trillions of dollars of central bank and government stimulus and high levels of uncertainty caused by the pandemic have added to the momentum.

    “Capital doesn’t have a price thanks to all this stimulus,” Almeida said, “The COVID-19 crisis has accelerated the trend of short-termism in investing.”

    Meanwhile there’s little clarity on companies’ future earnings, the economic outlook and the pandemic outcome.

    “So what’s happening is this ability to act or trade or churn, whatever you want to call it, based on information that may not be material,” Almeida said.

    Turnover ratios, the percentage of portfolio holdings that are replaced in a 12-month period, increased to 92% at end-June, from 85% a year ago for a group of global multi-asset funds tracked by Lipper.

    The trend has ensured rich returns for nimble traders but also poses questions about market stability once stimulus fades.

    ‘BACK TO FRONT’
    Market short-termism was highlighted as far back as 2010 by Bank of England chief economist Andrew Haldane who described it as “subconscious myopia.”

    But buy-and-hold investors have had a rough year so far. Stocks fell 40% and bounced by the same margin in the space of three months. Around the 2008 crisis, moves of such magnitude occurred over three years.

    Kevin Russell, CIO of UBS’ O’Connor hedge fund, with $6.1 billion in assets under management, said his lowest turnover strategies, unable to quickly adjust hedges and exposures, are now his worst performing.

    Low-turnover strategies struggle in this environment as they are not as durable against the swift rotations happening across sectors and style factors, he said, referring to different investment styles.

    And when short-term returns are so attractive, it makes little sense to hold assets for longer. Returns on 10-year Treasuries in the first 2020 quarter almost matched what would mathematically accrue after a decade, BCA Research strategist Dhaval Joshi noted.

    “The same principle also applies to mainstream stock markets which are priced for feeble long-term returns – yet can rally by 20-30% in the space of a few weeks,” Joshi said.

    The incentive structure is back to front.”

    On bonds too, whether high-grade government securities or “junk” debt, average daily turnover is running 10-20% above historical averages, trading platform Marketaxess said.

    Asset manager BlueBay generally churns bond positions twice a year. But that horizon shrank in March-April to 2-3 months as volatility constantly threw up buying opportunities, said portfolio manager Kaspar Hense.

    The issue has implications for spending on investment research, which is often used to set out strategies for longer-term investing, as well as for long-term pension and insurance investors. And BCA’s Joshi said short-term players buying and selling at the same time can extinguish market liquidity, increasing volatility.

    In terms of real-world impact, it is a poor incentive for long-term corporate planning, Fabio Di Giansante, Amundi’s head of large cap equities, said.

    “Because what ultimately drives share price performance is earnings and you need to hold on to good investments for a while to see (companies) execute their business decisions,” he said"

    MY COMMENT

    One BIG......very BIG.......problem with the above article is a FOOLISH assumption that all the short term trading that is going on is making money. I suspect that if looked at over a 6-12 month time period the MAJORITY of short term traders will either be NEGATIVE or FLAT when taxes and other costs are considered. There is NO DATA to verify that the average trader can actually make money.

    I ALSO BELIEVE that this trading trend will ESCALATE.......nothing to do with the virus or anything else. It is simply the PUSH by brokerage businesses to HYPE trading as the way to go. You RARELY see anyone use the terms......INVESTOR......INVESTING.....of similar terms anymore. The terms you see being used are......TRADE....TRADING.....TRADER. ADD in the internet and the video culture generation as well as the total lack of long term knowledge on the part of younger people.......ON EVERY ISSUE......and you have a recipe for disaster.

    MANY people are going to learn some......VERY BIG.....investing lessons the hard way. BUT....that is fine with me.....I STRONGLY PREFER.....to NOT be investing in the mainstream style of the moment. I KNOW what works for me and has for decades and I stick with it. It is INTERESTING to watch all the traders FLAILING around and CHURNING their own holdings......BUT.......I PREFER......to actually make and compound REAL MONEY.
     
    Jwalker likes this.
  13. WXYZ

    WXYZ Well-Known Member

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    SPEAKING about......TRADING. I have to run right now.....but.....will discuss later a TRADE that I am doing........NOW. I purchased 150 shares of APPLE at the open. I put the order in yesterday so it executed at the open automatically. I got the shares at $433 per share. Looking at the chart, I see that the price at the open was the absolute low of the day.....so far. Twenty minutes into the session it was back above $440.

    Have to run.....will discuss later. YES shocking stuff........I am doing a RARE TRADE.
     
    B Russ likes this.
  14. emmett kelly

    emmett kelly Well-Known Member

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    yes, shocking. i made the same trade on friday. just seemed like a no brainer to me.
     
  15. The Ragin Cajun

    The Ragin Cajun New Member

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    Don't you think the herd is going to take us all down with them. How can the real investor avoid it?
     
  16. A55

    A55 Active Member

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    GOOGL & Amazon fell.
     
  17. A55

    A55 Active Member

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    Unless the entire world shifts away from real meat, to artificial, processed substitute: it's a passing fad. Soy burger, Boca Burger, Garden Burger......

    Let's assume the most extreme scenario. Animal consumption is banned worldwide. Companies in Asia will step up. They have already been making vegetarian meat substitute for hundreds of years. They just haven't IPO. They have the technique, recipes, and established product line way beyond just a burger.
     
  18. The Ragin Cajun

    The Ragin Cajun New Member

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    I'm referring to the trend to flip and fast money away from investing (not meat or fake meat products, sorry if that wasn't clear). If it is a recipe for disaster wouldn't the investor be screwed as well when the house of cards falls? Why would we be better off not joining the party while it lasts? Wouldn't it be smart to have a higher percentage of liquidity on the sideline ready to buy low? That's the only way I can think to leverage myself against this bizarro world market.
     
  19. WXYZ

    WXYZ Well-Known Member

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    WELL.....looks like Emmett Kelly and I are in this together. I wanted to get that trade on here for full disclosure and because I always try to put up any moves as they happen. My entry price was $433 and a few cents for 150 shares right at the open today.

    I had been thinking about doing a short term.......3-4 week.......trade on APPLE when the GREAT earnings and the split came out. I personally call this a MOMENTUM TRADE or an OPPORTUNITY TRADE. After giving this some thought over the weekend, I decided to put in the order for today. My reasoning:

    The Robinhood environment is going have a strong BIAS toward buying this stock rather than selling over the next 3-4 weeks.

    1. The GREAT earnings and stock split announcement will create an environment of escalating MEDIA HYPE as we near the split date.

    2. APPLE is.....at the moment......the focus of MUCH positive media attention during a GENERALLY rising market.

    3. The stimulus package WILL be agreed to and pass SOON....during my 3-4 week time period.

    4. It is likely there will be POSITIVE virus vaccine news during the next 3-4 weeks.

    5. I DO NOT see anything that is going to TANK APPLE over the next 3-4 weeks.

    6. Continued media attention and speculation about APPLE. APPLE is hitting on all cylinders right now, their business is booming during the pandemic. I anticipate even GREATER financial numbers as we move forward........if they could put up the numbers they just put up for the second quarter......I believe the third quarter whisper numbers and analyst evaluations will be very positive ESPECIALLY over the next 3-4 weeks.

    When I do a trade like this.......an OPPORTUNITY TRADE.......I do not use options or any other sort of leverage. I simply buy the shares. I have such HUGE margin capacity in my account......being a short term trade........I will just use margin. By owning the shares outright I have the option.........if I wish.........to hang onto them and more flexibility to decide when or IF to sell.

    The DANGERS:

    The GREATEST DANGER is a black swan event some time during the 3-4 week time period that tanks the markets. Probability of this is 5-12% in my opinion........trying to be very conservative and figure on the high side.

    I consider that the POSITIVE side of the PROBABILITIES is so strong that there is only about a 85% to 90% chance to LOSE money. In other words ........just break even. These odds are as high as they are because I will have TOTAL LEEWAY to decide when or if to sell.

    I consider the PROBABILITY to actually MAKE MONEY to be 70% to 80%. Based on the positive reason listed above.

    I consider the DOWNSIDE RISK to be the potential to lose $9700. or about 15% worst case.

    I am WILLING and ABLE to take and absorb the loss if the worst case situation happens......and.......understand that everything in this post is................FAMOUS LAST WORDS.......and.......could end up as.................WELL THAT DIDNT WORK OUT TOO WELL.

    I have done these sorts of trades in the past. I do not do them often but when I have it is usually during a time period of CRAZY DAY TRADING MANIA and when there are LOTS of new people buying stocks and funds. I see the current environment from now going forward over the next 3-4 weeks to be a HIGH PROBABILITY opportunity and I will take the ODDS. My ASPIRATIONAL goal is to make $100 per share. I will PROBABLY SELL before the split date. From my life experience MOST splits run up leading to the split date and than drop back or stagnate for a short time after the split. I do not want to drag this trade out longer than 3-4 weeks.

    I am taking this opportunity to try to add some money to my ART BUDGET for the year. YES........GREED......but very CALCULATED greed.

    PLEASE.....I am not recommending that anyone else do this.......if any new investors are reading this. There is RISK and my personal circumstance is a big factor in being willing to take that risk.
     
    #1719 WXYZ, Aug 3, 2020
    Last edited: Aug 3, 2020
    B Russ likes this.
  20. The Ragin Cajun

    The Ragin Cajun New Member

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    Good calculated trade in my opinion.

    I myself just bought shares this morning of BRKB, of which I am in for the long term but should see a good boost since Berkshire is around 40% Apple. So basically I'm investing in a stock I love long term which should benefit big from what is happening with Apple in the short term, not to mention I love Berkshire's liquidity (140 billion or so) and the small moves they have made in BofA and Natural gas recently. They are setup to buy low with any downturn. I'm curious to see Berkshire's earnings which should be sometime this week, the insurance sector scares me and they have some stocks that are way down due to Covid so not sure what to expect for recent earnings too be honest.

    Also bought into Microsoft today, was waiting for it to drop under 200 (was hovering around 201-205 the last couple weeks, those plans changed quick with the tik tok news and Trump) so I had to bite the bullet to get in now as I don't think we'll see 200 again!

    As I mentioned in a previous post I'm starting up a retirement portfolio and its been weighing heavily on my mind how to go about the initial investments (bulk purchases or percentage alotments) with the uncertain market climate. I decided to make bulk purchases in the companies I like but keep about 33% on the sidelines ready to invest if the market has a big downturn. I'm looking at about 8 or so companies along with a S&P 500 fund or QQQ. Today was my big first two investments with BRKB and MSFT. Wish me luck on a long and profitable journey to retirement!
     
    #1720 The Ragin Cajun, Aug 3, 2020
    Last edited: Aug 3, 2020
    TomB16 and Jwalker like this.

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