Don't you think the investment advisory community would be better off if they were more brutally honest? In all the books and magazines I read you hear pretty much the same thing over and over again. Diversify your portfolio, make sure all your eggs aren't in the same basket, etc. While I agree with many of those notions, I think you need to have some of your portfolio with speculative stocks. IMO its much easier with the discount brokers because trades cost anywhere from $5-$10 as opposed to $75-$100 with a full service brokerage. You can take a flier on a stock and if it tanks you can move out pretty easily.
There is a ton of money to be made out there, but often times it takes a great deal of risk in order to make money. I am young and for the most part I prefer a dividend portfolio approach but I also put a certain percentage aside for more risky ventures.
The vast majority of people can't pick stocks. Average people trail the market and mutual funds typically by 5-15% depending on the index. I think it is fine for people to have a small portion to trade for themsevles, but speaking broadly and generally much people are better served by the old diversification approach.
That said I really like oneupper's post. I think if you're are young and have some cash there is something to be said for "going for it". It just isn't good investing.
Well one thing that can go wrong with waiting for a stock to rebound to its high, aside from the obviously already pointed out "it may never get back there", is that you could be missing out on a bunch of other opportunities along the way.
However, your line of thinking is on the right track (in my mind). The key questions to ask, is why is a stock off its high? What are the chances it returns to its high? Many stocks are knocked signficantly off their heigh by no reason of their own. How many stocks were cut in half in the recent market despite the company continuing to do solid business? How many stocks get hurt simply b/c a competitor is struggling in a fashion that may not relate to their company? Find opportunities and try to take advantage of them. Not all are going to work, so spread things around a bit, but its an approach that has well for guys like Ben Graham and Warren Buffett. If those 2 guys are proponents of something, its worth listening to.
Well, going back to my philosphy of Dividend Growth Investing.... I had two more of my stocks raise their dividends this week. TICC (a business development company) and NNN (a property REIT).
I don't have any in mind right now, but I'll share my fake google portfolio I created during the downturn in 2009. I haven't done anything to it since. I focused mainly on companies I thought had a good chance during a recession, which were cheap entertainment (TV, Internet) and car repair (people making a dollar stretch). I didn't think of Walmart and McDonalds, but I think they did well too.
Actually, the last 4 lines were added after the initial batch. The blank one is (was) Kendal, a Cincinnati company a relative had stock in that I was watching for them. Not a real pick. The P&G stock was along those same lines, a family stock, not a real pick. The last two were a re-visitation of my effort to pick a single stock. This time I was just looking for a cheap one that was probably way off it's high. I had no clear signals guiding me, in fact the only thing I remember was ignoring the fact that Books-a million was doubling down on paper book stores instead of internet based ideas. They had the cash to do it. It's not working I guess. That was probably 18 months ago.
Anyway, the take away is really that anybody could have made a lot of great picks in 2009, sure, but there were a lot of solid companies that were undervalued and if you could find them now, just one really, that could simplify things.
One other thing I've tracked is Fedex/UPS stocks, which this time of year (come to think of it) are usually down a bit in price before they rise in the fall and winter for Christmas. Looks like that trend is flat right now or still coming, nevertheless those stocks are too expensive for me.
Viacom, Time Warner, Comcast AND CBS?
You should be getting free cable SOMEWHERE.
"A person is smart. People are dumb, panicky, dangerous animals and you know it."
http://dalmady.blogspot.com
I think using technical analysis could be useful in finding entry/exit points, even if the overall strategy is buy and hold. My problem is that I'm not very educated on this. What charts do you use specifically and do you have any websites that you recommend for further study? Do you chart individual stocks or just the indexes?
"...You just have a wider lens than one game."
--Former Reds GM Wayne Krivsky, on why he didn't fly Josh Hamilton to Colorado for one game.
"...its money well-spent. Don't screw around with your freedom."
--Roy Tucker, on why you need to lawyer up when you find yourself swimming with sharks.
Jax - a strategy I tell my dad to use near retirement may be to buy dividend stocks, sell call options, and buy puts with the proceeds, this would band volatility.
Example if buying 1000 shares of Fifth Third (FITB) at 13.82, an annual dividend of $320 would be earned. 1000 Call options for Jan 17,2014 could be sold for $830 at $17 / share (capping the profits at $17 over the next year+) then with the proceeds put options could be bought at $10/share for $980. This would mean that the most you could gain is $3.20 / share and the most you could lose is $3.82 / share or less than 30% over the next year. If you aren't worried about the stock tanking selling options can be a way to generate income on the stock as well.
The first thing to know is that technical analysis is only as good as the guy interpreting it. (Similar to a baseball scout, some are just better than others)
The second thing you need to understand, is what are you hoping to get from the charts. Are you looking to find a tech stock that is primed for a run? A long time dividend payer at a low? The charts you may use to track entries/exits for those kinds of opportunities are very different.
Once you understand what you are looking for, look for the indicators you think will give you this info. I like to look at stocks that pay a dividend and are beat down. I am looking for a turnaround so I can buy in early.
Here is a good place to start understanding some basic charting/indicators. I would suggest starting with SMA and plot (3,13,50 for shorter term, and 20,40,200 for longer term) and check out some stocks you follow to see what it may/may not have told you.
I like to browse through these and see how other people implement them.
The last thing to be aware of is time. Some people chart in minutes, others in days, others in weeks, months, years, or decades. If you use other peoples charts to make decisions, you will often be very wrong. If you use a chart and don't do due dilligence, you will very often be wrong.
I use them purely to decide when to buy sell, not what to buy sell.
GL
/That's my opinion, and probably exactly worth what I am charging for it.
Thanks for the link Gonelong. I'll definantly check it out.
Anyone use the screens at AAII? I use to play around with them some and have been thinking lately about resubscribing.
I've always made the most money by using common sense to trade. I've always lost the most money by applying the same technique.
"...You just have a wider lens than one game."
--Former Reds GM Wayne Krivsky, on why he didn't fly Josh Hamilton to Colorado for one game.
"...its money well-spent. Don't screw around with your freedom."
--Roy Tucker, on why you need to lawyer up when you find yourself swimming with sharks.
http://www.lendingclub.com/public/ho...g-works.action
Anyone with stories about peer lending? I found this company. The returns look pretty good.
That's interesting. I'll read up on it.
Edit: Guess I'll stop reading. Florida and Ohio residents aren't eligible
http://www.lendingclub.com/kb/index....ry&EntryID=113
Last edited by JaxRed; 08-14-2012 at 02:33 PM.
"A person is smart. People are dumb, panicky, dangerous animals and you know it."
http://dalmady.blogspot.com
Board Moderators may, at their discretion and judgment, delete and/or edit any messages that violate any of the following guidelines: 1. Explicit references to alleged illegal or unlawful acts. 2. Graphic sexual descriptions. 3. Racial or ethnic slurs. 4. Use of edgy language (including masked profanity). 5. Direct personal attacks, flames, fights, trolling, baiting, name-calling, general nuisance, excessive player criticism or anything along those lines. 6. Posting spam. 7. Each person may have only one user account. It is fine to be critical here - that's what this board is for. But let's not beat a subject or a player to death, please. |