Stocks and Trading Thread - Channeling your inner Mono

[MadImmortalMan]

Yeah, it's a hobby. Has been for a long time.


I dumped my gold stocks - GLD and AEM a couple weeks ago, and I'm damn glad I did. I'm still holding some oil and NatGas in the form of CVX and LINE, plus a chunk of Banco Santander which I bought at seven bucks and a couple hundred shares of their Brazilian IPO (BSBR). I like Brazil as a growth market, particularly in banking and oil. I also have a decent share in Caterpillar. Here's a transplant post:

You know, every now and then I get this feeling that things are going to go down for a bit any maybe I go go all in cash and watch what happens. Problem is, I usually have some specific plan for when and under what condition I want to sell it before I buy something. Each of my stock positions has some kind of thought behind it like that, and I know that suddenly deciding that things are going down the crapper and dumping it all is a panic move. Like Mojo said--don't trade on emotion.

But here's the thing. An example, if you will. I bought CAT at $31.79 back in October as the market was sinking. As you may know, the current price of CAT is at just under $60. And I've been collecting their dividends all year. So, you would think that's good, right?

Well, I did have the urge to dump it later in October as it traded down through 28-ish. Not because I didn't like the company, but because I didn't like the overall economy. Sure enough, it went all the way down to $21 or so but I still held on thinking I was smarter than the market. So I still own it today at $59 or whatever it happens to be as of this posting.

But was I really smarter than the market? If I had heeded my gut when I didn't like the market, dumped it, and then picked up the same stock, say in April or March for $23 or $25--well I would have lost out on two dividend payments, but I would currently be up six or seven points more than I am.

All considered, I think I did all right by holding. But what if the swing was a lot bigger, say like Citi or something. Down to $1 before coming back up, but not to where it was. In that case, I would have been right to dump it and come back in later.

I think the difference is the amount of exposure the company in question has to the downfall and what type of downfall it is. Clearly Citi is a lot more exposed to a banking collapse than CAT is, but CAT is not immune.

The trouble is, a banking collapse is kinda easy to figure out who will suffer. Banks. Homebuilders, etc. What may be coming up, not so easy.

Things don't look super-optimistic right now. A lot of uncertainty. I'm not going anywhere near pharma or healthcare or anything related right now, like GE (Centricity--look it up). Too much shit up in the air. Metals and commodities had a boom, but I don't know if the inflation rate will keep that going. Basically, I don't know what to do next. If the inflation rate keeps going up, a lot of things will be bullish. We'll see.

  <-- Capitalist hat

[Monoriu]

I simply don't believe this is the end of the economic troubles.  I've experienced it myself.  I've seen what's going on in Japan.  The bursting of giant housing bubbles has nasty and long-term consequences, and the effects may take years to surface.  Ours burst in 1997, and the lowest point of the stock market was not reached until 2003.  Between 97 and 03 there were lots of ups and downs. 

But then, I could be wrong    I have half in stocks and half in cash right now.  In case I'm wrong.

[Tamas]

By January, I will have enough money which (barely)  worth investing. I was thinking some fund, but I am also thinking: why should the bank get most of the profits from stocks? On the other hand, I am not very good in this. Me:

[Monoriu]

By January, I will have enough money which (barely)  worth investing. I was thinking some fund, but I am also thinking: why should the bank get most of the profits from stocks? On the other hand, I am not very good in this. Me:

The bank is no better than you in picking stocks.

[Caliga]

Cool, I like these threads. 

Here's a list of my current holdings:

ACN (Accenture)
AWF (AllianceBernstein Global High Income)
BLKB (Blackbaud)
CHK (Chesapeake Energy)
F (Ford)
GRMN (Garmin)
HPY (Heartland Payment Systems)
SNE (Sony)
T (AT&T)

[Ed Anger]

I share F and AT&T with Cal. 

[Caliga]

For a while I was down (way down) on Ford, but I've been up on it for the past few months, given how it's the only American car manufacturer that seems to understand how to properly function. 

[DGuller]

I've got my first urge to buy individual stocks a couple of days ago, when I saw a bunch of Keurig coffee makers being sold for Christmas.  Considering how good these coffee makers are, and how they require K-cups that cost a bundle, I figured that it was a very good income stream for the company that makes them.  Then I looked up the stock history of Green Mountain Coffee Roasters, and I realized that I was beaten to the punch by a year.  Damn.

[Caliga]

Never buy a stock just because the company puts out a product you (and/or others) like.  It's as much, or more, about how well the company manages its finances than what they happen to be producing.

That said, I rarely buy a stock if I can't understand what the company is doing in order to make money, and especially if their product is something intangible.

[Rasputin]

Adm

Everything else will make your eyes bleed as we close in on the next collapse.

[DGuller]

Never buy a stock just because the company puts out a product you (and/or others) like.  It's as much, or more, about how well the company manages its finances than what they happen to be producing.

That said, I rarely buy a stock if I can't understand what the company is doing in order to make money, and especially if their product is something intangible.

I didn't consider buying it because I personally like their product.  I considered buying it because I saw a lucrative monopoly.  If plenty of people buy those machines, then plenty of people will need to keep buying the supplies for them that cost a fortune.  If you're selling something that's not just a commodity, you're poised to make very good money.

[Admiral Yi]

By January, I will have enough money which (barely)  worth investing. I was thinking some fund, but I am also thinking: why should the bank get most of the profits from stocks? On the other hand, I am not very good in this. Me:

Index funds give you diversification without soaking up all your gains in management fees.

I currently own

JPM (JP Morgan)
SPY (S&P 500 index fund)
WMT (Wally World)

[Slargos]

I was tricked by my older brother and a german market analyst into buying stock in Obducat, a company that makes machines for the production of microchips. OSTENSIBLY.

They hardly sell anything, but have been in business for over 20 years.

I was young, stupid, and my investment is currently worth about 15% of the $1000ish I paid for it 5 years ago, nominally.

I'm keeping the stock out of a morbid curiosity more than any notion that they will ever be worth more than hot air.

[DGuller]

Hot stock tips always wind up like that.  I suspect that all of those tips get started by pump and dumpers, and then rely on word of mouth to disseminate.

[Zanza]

Apparently my stocks are Deutsche Telekom (the guys behind T-Mobile) and DWS Top 50 World (a mutual fund from Deutsche Bank that invests into HP, Novartis, Nestle, Cisco, JP Morgan, IBM, BHP Billington, Pepsico etc. ). I haven't followed their development in the last years so I have no idea if they went up or down. Presumably, they went down.