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Left by  mhagemann1 ( track member | ignore member ) - December 03, 01:24PM
I agree with all of those except for # 3. At some
point you have to be able to take some profits off
of the table and reinvest back in to maximize your
earning potential. Buffet is right in his ways,
his results are unquestionable, but very few
people will accumulate that kind of wealth to be
able to make millions every qtr off dividends
alone. Most Joe 6-pack investors need to be able
to take a 20% profit off of the table from time to
time and if you like the stock just hold that
money until you can reinvest it at a lower price.
For example, I bought into BoA in Sept I believe
at $19. At the time it was the 52 week low. It
jumped to $29 and I sold half of my positions
which left me with half as many shares but with
almost all of my capital recouped. It went down
again to $25 and I rebought the same amount of
shares that I previously sold and still had some
cash in my pocket. The stock then jumped to $36
and I sold all of it. I rebought into the company
once the stock got to the $15 range, so not only
did my overall position increase relative to my
initial buy but I only used the profits to buy the
stock, so I kept my seed money and now own 50
shares of their stock which pays me a dividend and
I bought all of it with their cash. I don't do
this on a regular basis, this was a perfect storm
scenario, but the Buffet approach would have left
me at a -$3 a share position had I bought and
held. If you're a buy and hold I recommend SO. My
grandfather is a millionaire because he bought
their stock while he started working there after
WWII. They've always paid around 4.4% on the
dividend and I just read an article that projected
growth in the Southeast at 17% while
southerncompany is only projecting an 8% growth in
their output. Electricity is going to get much
more expensive. Especially with Obama's plan to
hike rates on carbon emissions and go to "clean
coal" Another good buy and hold will probably be
ETP. They pay an 11.5% dividend and they are a
natural gas company, but 90% of their revenue
comes from the fees they charge other gas
companies to us the pipelines which they own
virtually all of. Their business structure also
mandates that they must pay out most all of their
revenues. Just some tips from the buy and hold
point of view. My 401k portfolio is basically a
buy and hold at the moment while I'm taking some
risk in my brokerage portfolios with Citi.
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Left by mhagemann1 ( track member | ignore member ) - December 03, 07:20AM
Thank you, that's very kind of you to say. I can
see why you're disenchanted with the banks. Its
hard to trust a business model where not only is
money given to those undeserving, it is leveraged,
in some cases, 40 to 1. That model is insane. I'm
hoping that we're nearing a bottom but I agree
with Jim Cramer that the current market structure
and the introductions of triple leveraged ETF's
are just going to encourage wild swings. Who knows
though.
Conversation |
Left by mhagemann1 ( track member | ignore member ) - December 02, 04:48PM
My bad. I thought you were simply running Buffet
in the ground for his moves. I like trinity (TRN)
if the price of gas rises. They are the leading
producer of rail cars which are very efficient
when compared to motor freight. I still like the
banks though. I believe that with the up coming
change in the presidency and the focus on
infrastructure projects lending will begin to open
up. I work as a civil engineer that does municipal
and development projects and the developers who
have little to no debt are beginning to resurface
and buy up drowning small timers and property that
has already been permitted and have roads and
sewers already installed. This means that half of
the engineering and work has been done and the
property will be dirt cheap. I think this will
have banks drooling over the possibilities since
there will be developers taking out loans with
huge amounts of colateral and municipalities who
borrow money and repay that money with tax
dollars. Some of the clients my firm works for
simply tack the expenses onto the sewer fees that
are included in the water bill, and people will
buy water no matter the cost. Plus with Ruben on
Obama's economic advisory committee, used to be on
the Citi board, Citi is almost a lock with BoA in
close second. If you're going long the banks are
it.
Conversation |
Left by mhagemann1 ( track member | ignore member ) - December 02, 03:46PM
You've only got a month of time in. All you're
doing is buying down trodden stocks and showing a
small return. Your results are not due to your
investing prowess, but an overly defensive measure
in DOW 30 stocks. Basking Buffett is insane on
your part especially since you are following the
same premise as he is. Actually you'd be better
buying banks since the ROI is much higher with the
current inflated dividends. All of your stocks
would be hard pressed to pay the dividends that
banks are paying.
Conversation |
Left by  bourse ( track member | ignore member ) - November 27, 12:29PM
BTW, right now I am sitting out of the market (I
got mostly out in late Jan early Feb should have
shorted but I am too much of a novice) as I
believe that earnings and sales will keep dropping
over all and we are in for phase 2 of the drop. As
soon as that plunge happens I want to be ready to
buy big and have a good idea who will have big
earnings and sales, thus having low PE as P low E
rising.
Conversation |
Left by bourse ( track member | ignore member ) - November 27, 08:32AM
Thanks for the tip I will followup. This is a test
portfolio and have set it up to reflect my actual
holdings as well as potential holdings and then
play with it before changing them around. I
started out with value; low PE and low PB and
little to no debt. Now I am learning as much as I
can about focusing on the E (earnings) part of PE
and as well as price to sales, looking for
sustained and sustainable growth at value pricing
as well as throwing off cash and cash flow. If
only I could find a great free back testing site
if would be faster. Cheers,
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