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Old 06-12-2013, 11:55 AM
 
Location: NE Mississippi
25,438 posts, read 17,128,344 times
Reputation: 37134

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Quote:
Originally Posted by icicles View Post
I will make my case.........If you used common sense and just randomly threw darts at ...........
Dunno what throwing darts has to do with common sense.



Quote:
Originally Posted by icicles View Post
Honestly, look in your wallet, see the credit cards you own and invest in them. Where do you buy food? invest in it. Where do you buy gasoline, invest in it. Natural gas or utility you have? excel energy? invest in it....................
BAC....5 year ago it was 40. Now it's 15
Kroger.....5 years ago it was 30. Now, 34.
BP (to pick one).... 5 years ago it was 70. Now, it's 43.

That's that Peter Lynch malarkey, I believe, that "buy the companies you shop at" nonsense. And I don't do that. I research companies, make sure I understand their business model and then back up the truck, so to speak. I kept 3M for over 30 years; been driving the same pickup since 1990; owned 2 houses since 1985, and have the third paid for but we've only been in it 10 years.

My investment/acquisition style has served me well. I will typically own many thousands of shares of a company for many years. I keep spreadsheets and information of all sorts on them and I am encouraging jbeigs to do the same.
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Old 06-12-2013, 12:22 PM
 
651 posts, read 860,380 times
Reputation: 320
Quote:
Originally Posted by Listener2307 View Post
Dunno what throwing darts has to do with common sense.




BAC....5 year ago it was 40. Now it's 15
Kroger.....5 years ago it was 30. Now, 34.
BP (to pick one).... 5 years ago it was 70. Now, it's 43.

That's that Peter Lynch malarkey, I believe, that "buy the companies you shop at" nonsense. And I don't do that. I research companies, make sure I understand their business model and then back up the truck, so to speak. I kept 3M for over 30 years; been driving the same pickup since 1990; owned 2 houses since 1985, and have the third paid for but we've only been in it 10 years.

My investment/acquisition style has served me well. I will typically own many thousands of shares of a company for many years. I keep spreadsheets and information of all sorts on them and I am encouraging jbeigs to do the same.

well, you are going to have loser and winners. and over a 30-40 yr period of investment life...you will have more winners than loser if you stick with the large companies.

I have money in Chevron, Chipotle, Visa, Mastercard, Tsingtao, Sam Adams, Buffalo Wild Wings, Riocan, Calloway, Monster Energy, Pepsi, Coca-cola, Mcdonalds, Nike, Addidas, Monsanto, Atwood oceanics, Ultra Petroleum, Google, Baidu, Metlife, China Life Insurance, Southern Copper, Teck, AGL resources, CPFL energia, Dominion resources, sabmiller, Philip Morris, Altria, canadian oil sands, United Technologies (work), Boeing (used to work), heineken, Artis Reit.

And a whole lot of silver bullion

Not to mention I have had a lot of companies bought out over the years. Whiterock REIT, XTO energy, Goodrich Corporation, Arena Resources, etc.
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Old 06-12-2013, 05:06 PM
 
Location: Los Angeles, Ca
2,883 posts, read 5,879,421 times
Reputation: 2762
I think you have to realize great companies are rare.

You can't just buy anything.

-Re boring companies. I think there's some human nature involved here. People like to gravitate to "hot" stocks. Biotech, tech, internet. It's "exciting". Yet "boring companies" are often better buys because....their products are reconsumptive. They are resued alot. They don't attract as much competition. And the stocks don't move as much (say a utility).

-About common sense. Look at the tech bubble of 1999/2000. How many learned experts on Wall Street were bullish on internet stocks in 2000? They were going to go up forever.

The housing bubble of 2006. That was going to go on forever. There wasn't going to be a recession in 2008, the experts said. Yes.

Many experts get too fancy for their own good. Too many models, theories, equations. Look at long term capital managements famous blow up in 1998. An over reliance on math and equations can get you into trouble. Feet on the ground common sense is still a good indicator.
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Old 06-12-2013, 07:34 PM
 
651 posts, read 860,380 times
Reputation: 320
Quote:
Originally Posted by John23 View Post
I think you have to realize great companies are rare.

You can't just buy anything.

-Re boring companies. I think there's some human nature involved here. People like to gravitate to "hot" stocks. Biotech, tech, internet. It's "exciting". Yet "boring companies" are often better buys because....their products are reconsumptive. They are resued alot. They don't attract as much competition. And the stocks don't move as much (say a utility).

-About common sense. Look at the tech bubble of 1999/2000. How many learned experts on Wall Street were bullish on internet stocks in 2000? They were going to go up forever.

The housing bubble of 2006. That was going to go on forever. There wasn't going to be a recession in 2008, the experts said. Yes.

Many experts get too fancy for their own good. Too many models, theories, equations. Look at long term capital managements famous blow up in 1998. An over reliance on math and equations can get you into trouble. Feet on the ground common sense is still a good indicator.

I totally agree with this. I say common sense, and then I said to look for positive cash flow, good ROE, and low debt.

The tech bubble was easy to see. dow to gold ratio 44:1. see below. Biggest stock market bubble in the history of the stock market.

http://greenbackd.files.wordpress.co...00-to-2009.png

The housing bubble was laughable it was so easy to spot the bubble. Biggest housing bubble ever in history.

http://investletters.com/blog/wp-con...uy-a-house.gif


Right now bonds are in a huge bubble (biggest in history), and stocks are in a bubble. I will still leave my stocks alone that I purchased.

I am accumulating COSWF (canadian oil sands), (CCJ, UEC) Uranium companies, URPTF (Uranium), and I recently purchased Natural Gas stocks. Silver bullion buys will be soon
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Old 06-12-2013, 07:53 PM
 
995 posts, read 3,925,150 times
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Quote:
Originally Posted by jbeigs View Post
I am a beginner and I am looking for some advice for investing in stocks
Understand the benefit of diversification.
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Old 06-13-2013, 08:27 AM
 
Location: NE Mississippi
25,438 posts, read 17,128,344 times
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Quote:
Originally Posted by acegolfer View Post
Understand the benefit of diversification.
But be sure to define diversification for yourself.

We are diversified. We own 2 stocks. 2. But, we also own 3 houses and have enough cash in the bank to last forever (we are retired, and keep cost of living down) So I say we are diversified.

Someone - I can't remember who - posted a lengthy list of stocks that he owns. Must have been about 30 of them. I said then that I believe he was fairly ridiculously spread out. In his case diversification works against him, especially since he is interested in stocks. He should be an index fund or something and take up some other hobby, since he is not actively managing his assets.

For me, though, investing is my hobby.
I own 18,000 shares of a certain company. This is not a penny stock; it has real value. Call it ACC, A Certain Company. Yesterday, the market was down but ACC was up 5%. New announcements, new products, new approvals, all that stuff. And I know enough about ACC so that I can spot errors in reporting by analysts, who should know more than I do.

When I saw the news I diverted some assets from My Other Company (MOC) to ACC. Turned out to be a good move, too. I don't really expect great things from MOC for a year or two. BUT ACC is ripping right along. If I were stretched too thinly over too many stocks I would not be able to react quickly and effectively when I recognized that I was right. Or wrong!

I have no idea how long I will be right, or how right I will be. I'm hoping to be very, very right and make 30$ per share, but I don't know. I'll give it a year or two. Then, I'll shift money back to MOC, if the business model still looks good and the figures still make sense.

Remember (or learn); when Cornelius Vanderbilt, who owned so many ships that he was called "The Commodore", realized that railroads were going to be the new life blood of America he sold all his ships. He then placed all his money in railroads and proceeded to buy up the competition.

Obviously, I think diversification is important. The way it is defined could use some discussion.....
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Old 06-13-2013, 04:39 PM
 
Location: Los Angeles, Ca
2,883 posts, read 5,879,421 times
Reputation: 2762
I think every investor has their stong suits.

I've traded options in the past. I combine technicals and fundamentals when buying stocks. But I've never traded futures. Never traded currencies.

-I don't think I could ever put my net worth into only 2 or 3 companies. Or even 50% into 2 or 3 companies. To me, there's too much that can go wrong in any one company. Management? New management may not be as good (i.e. Tim Cook after Jobs?). Product risk. Unforeseen events. Scandals.

If you worked in the industry and had intimate knowledge of the area, that'd be better than being regular Joe Public buying shares.

-A danger with sticking with one industry and not knowing anything else. The industry could be dead for years and never come back. Berkshire Hathaway, the textile mill. If you didn't diversify away from that, you'd be dead. Similar with American manufacturing.
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Old 06-13-2013, 09:29 PM
 
Location: NE Mississippi
25,438 posts, read 17,128,344 times
Reputation: 37134
Quote:
Originally Posted by John23 View Post
..........I don't think I could ever put my net worth into only 2 or 3 companies. Or even 50% into 2 or 3 companies...........
Entire net worth? I guess maybe some people do. Well, in fact, there used to be GM millionaires in Detroit who had done just that. It didn't end well for them, but they were not seasoned investors - just company men.

50%? I don't know that I have 50% of our net worth in my active portfolio, but no matter. The portion that is not in the portfolio is adequate for our needs. And I have lived long enough to outgrow the greed thing that kills so many in the investment community. With me, I am either in pretty heavy or not in at all.
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Old 06-14-2013, 12:24 PM
 
Location: Under a bridge
2,420 posts, read 3,838,868 times
Reputation: 2496
Some common and basic things I look into before investing in a company. Everyone should do their due diligence before investing.

1.) Does the company have a history of profitability and stability?
2.) Does the company have a competent front office?
3.) Who are the competitors of the company?
4.) How does the company's products/services differ from its competitors?
5.) Where will the company be in 24 months or longer from now in the marketplace?
6.) Does the company have a favorable sentiment with the public, suppliers, etc?


-Cheers!
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Old 06-22-2013, 10:06 AM
 
Location: inland empire,ca
26 posts, read 44,505 times
Reputation: 30
Jbeigs:
You say your looking for some advice, please see my recent posts here on the Investing forum.
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