Author Topic: What If You Just Picked Stocks... An Adventure Story  (Read 45411 times)

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #150 on: May 26, 2015, 06:51:26 AM »
I appreciate that sort of correction. Tell me if I have a booger too. Really I would tell you. I make more mistakes typing on my phone too.

On the tide going out-- that quote has leverage all over it. I learned that with CURE. Dips hurt on leverage. Cramer says don't do it. I agree

forummm

  • Walrus Stache
  • *******
  • Posts: 7389
  • Senior Mustachian
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #151 on: May 26, 2015, 07:32:52 AM »
You like Cramer a lot. Do you take all his advice, or pick and choose?

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 15843
  • Age: 39
  • Location: Toronto, Ontario, Canada
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #152 on: May 26, 2015, 08:36:57 AM »
I think everyone is making things too complicated. I quoted Buffet. Here is another Buffet quote " they miss the Forrest for the trees."

Another Buffett quote:

  "Only when the tide goes out do you discover who's been swimming naked."

And not to be pedantic, but if you're referring to Warren Buffett in your posts, his last name has two T's.

Kind regards.

The word 'forest' is typically not capitalized and spelled with a single r as well.  It's good to see that the quality of care Mr. Percentage spends on his investments shows through in other facets of his life.
« Last Edit: May 27, 2015, 04:52:05 PM by GuitarStv »

forummm

  • Walrus Stache
  • *******
  • Posts: 7389
  • Senior Mustachian
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #153 on: May 26, 2015, 09:21:13 AM »
I think everyone is making things too complicated. I quoted Buffet. Here is another Buffet quote " they miss the Forrest for the trees."

Another Buffett quote:

  "Only when the tide goes out do you discover who's been swimming naked."

And not to be pedantic, but if you're referring to Warren Buffett in your posts, his last name has two T's.

Kind regards.

The word 'forest' is typically capitalized and spelled with a single r as well.  It's good to see that the quality of care Mr. Percentage spends on his investments shows through in other facets of his life.

Forrest is a name too.
http://en.wikipedia.org/wiki/Asa_Earl_Carter
Forrest Gump
Forrest Whitaker
« Last Edit: May 26, 2015, 09:37:46 AM by forummm »

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 15843
  • Age: 39
  • Location: Toronto, Ontario, Canada
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #154 on: May 26, 2015, 09:26:54 AM »
Was Buffett talking about a man named Forrest that people were missing for the trees?

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 4015
  • Age: 37
  • Location: Madison Heights, Michigan
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #155 on: May 26, 2015, 09:32:04 AM »
Was Buffett talking about a man named Forrest that people were missing for the trees?

Camouflage.


grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4953
  • Age: 27
  • Location: NYC
  • Cast me away from yesterday's things
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #156 on: May 26, 2015, 09:32:14 AM »

Runge

  • Stubble
  • **
  • Posts: 219
  • Location: TX
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #157 on: May 26, 2015, 09:50:16 AM »
Wow...so I just realized that the "Cramer" everyone keeps talking about is not the "Kramer" from Seinfeld. Some of the conversations make a bit more sense...haha. I guess it shows how disconnected I am from TV these days... Although my guess is listening to Kramer isn't much worse than Cramer, but I don't really know the latter.

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 2100
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #158 on: May 26, 2015, 10:03:30 AM »
Wow...so I just realized that the "Cramer" everyone keeps talking about is not the "Kramer" from Seinfeld. Some of the conversations make a bit more sense...haha. I guess it shows how disconnected I am from TV these days... Although my guess is listening to Kramer isn't much worse than Cramer, but I don't really know the latter.

More than a few listen to George Costanza when also listening to Cramer (referencing the episode where George does everything opposite of what he would normally choose and has a perfect day)

forummm

  • Walrus Stache
  • *******
  • Posts: 7389
  • Senior Mustachian
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #159 on: May 26, 2015, 12:43:08 PM »
Wow...so I just realized that the "Cramer" everyone keeps talking about is not the "Kramer" from Seinfeld. Some of the conversations make a bit more sense...haha. I guess it shows how disconnected I am from TV these days... Although my guess is listening to Kramer isn't much worse than Cramer, but I don't really know the latter.

Funny observation. They are both oddballs that make sudden movements, yell a lot, and are laughed at by millions.

Runge

  • Stubble
  • **
  • Posts: 219
  • Location: TX
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #160 on: May 26, 2015, 03:13:26 PM »
Wow...so I just realized that the "Cramer" everyone keeps talking about is not the "Kramer" from Seinfeld. Some of the conversations make a bit more sense...haha. I guess it shows how disconnected I am from TV these days... Although my guess is listening to Kramer isn't much worse than Cramer, but I don't really know the latter.

Funny observation. They are both oddballs that make sudden movements, yell a lot, and are laughed at by millions.


I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8044
  • Location: United States
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #161 on: May 27, 2015, 09:21:27 AM »
Survivorship bias anyone?

When I was in high school, my Mom took $5,000 of my money and my sister's money and put half of it in Lucent and half of it in Pfizer. 

One of us made a lot of money, the other lost it all. 

I was the one who lost it all. Even though I knew that IBM stock was the entire reason my college was paid for, it was still a long time before I forgave the stock market.  I wish someone would have told me about index funds 10-15 years ago.

forummm

  • Walrus Stache
  • *******
  • Posts: 7389
  • Senior Mustachian
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #162 on: May 27, 2015, 09:50:19 AM »
Survivorship bias anyone?

When I was in high school, my Mom took $5,000 of my money and my sister's money and put half of it in Lucent and half of it in Pfizer. 

One of us made a lot of money, the other lost it all. 

I was the one who lost it all. Even though I knew that IBM stock was the entire reason my college was paid for, it was still a long time before I forgave the stock market.  I wish someone would have told me about index funds 10-15 years ago.

That's just your evidence-informed opinion speaking. What about the magic?

iamlindoro

  • Handlebar Stache
  • *****
  • Posts: 1520
    • The Earth Awaits
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #163 on: May 27, 2015, 10:20:57 AM »
Survivorship bias anyone?

When I was in high school, my Mom took $5,000 of my money and my sister's money and put half of it in Lucent and half of it in Pfizer. 

One of us made a lot of money, the other lost it all. 

I was the one who lost it all. Even though I knew that IBM stock was the entire reason my college was paid for, it was still a long time before I forgave the stock market.  I wish someone would have told me about index funds 10-15 years ago.

That's just your evidence-informed opinion speaking. What about the magic?

That's really the problem here-- we're just muggles trying to understand.  We didn't get our invitations to the Hogwarts school of witchcraft and investing.

matchewed

  • Magnum Stache
  • ******
  • Posts: 4381
  • Location: CT
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #164 on: May 27, 2015, 10:24:55 AM »
Survivorship bias anyone?

When I was in high school, my Mom took $5,000 of my money and my sister's money and put half of it in Lucent and half of it in Pfizer. 

One of us made a lot of money, the other lost it all. 

I was the one who lost it all. Even though I knew that IBM stock was the entire reason my college was paid for, it was still a long time before I forgave the stock market.  I wish someone would have told me about index funds 10-15 years ago.

That's just your evidence-informed opinion speaking. What about the magic?

Obligatory stock picking representation -

beltim

  • Magnum Stache
  • ******
  • Posts: 2964
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #165 on: May 27, 2015, 10:28:31 AM »
Survivorship bias anyone?

When I was in high school, my Mom took $5,000 of my money and my sister's money and put half of it in Lucent and half of it in Pfizer. 

One of us made a lot of money, the other lost it all. 

I was the one who lost it all. Even though I knew that IBM stock was the entire reason my college was paid for, it was still a long time before I forgave the stock market.  I wish someone would have told me about index funds 10-15 years ago.

That's just your evidence-informed opinion speaking. What about the magic?

Obligatory stock picking representation -


I can't be the only one who has "Final Countdown" playing in my head when I look at that.

Retire-Canada

  • Walrus Stache
  • *******
  • Posts: 7739
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #166 on: May 27, 2015, 02:00:32 PM »

I can't be the only one who has "Final Countdown" playing in my head when I look at that.

Nope ;)

MDM

  • Senior Mustachian
  • ********
  • Posts: 10105
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #167 on: May 27, 2015, 02:30:40 PM »
The word 'forest' is typically capitalized and spelled with a single r as well.  It's good to see that the quality of care Mr. Percentage spends on his investments shows through in other facets of his life.
Let he who is without sin.... ;)

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 2100
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #168 on: May 27, 2015, 02:47:44 PM »
I can't be the only one who has "Final Countdown" playing in my head when I look at that.

If investments go to hell, there is always money in the banana stand.

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 15843
  • Age: 39
  • Location: Toronto, Ontario, Canada
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #169 on: May 27, 2015, 04:53:31 PM »
The word 'forest' is typically capitalized and spelled with a single r as well.  It's good to see that the quality of care Mr. Percentage spends on his investments shows through in other facets of his life.
Let he who is without sin.... ;)



Dunno where 'not' went in my post, but have fixed the error that you pointed out.

markbike528CBX

  • Handlebar Stache
  • *****
  • Posts: 1350
  • Location: the Everbrown part of the Evergreen State (WA)
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #170 on: May 28, 2015, 12:08:54 AM »
@OP 
       The problem seems to be that you haven't specified your method for stock picking.
therefore the magic references
 
Any sufficiently advanced technology is indistinguishable from magic. Arthur C. Clarke


I'll place my method out for example and forum abuse.

caveat:  this method is only used for <4% of portfolio.

find Vsiax portfolio list.
choose the 50 stocks about 100 from the bottom  ie #600to 650  of the list of 750
(yields a micro-cap value list)

choose only those that have $1 denominated put options
(crappy stocks, slims the pick list down considerably )

sell cash covered put options on final list stock(s)
(similar to limit order, but you get paid to do so.)

if options expire, repeat the ---sell cash covered put options
get assigned the stock.

hold

results--  1000% in 2years  or 0.00% in less than three months
average?  about market avg.   but MUCH more exciting  :-)

I call it  "the advanced monkey-dart method"




« Last Edit: May 28, 2015, 09:39:22 PM by markbike528CBX »

NICE!

  • Pencil Stache
  • ****
  • Posts: 687
  • Location: Africa
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #171 on: May 28, 2015, 02:06:46 AM »
Holy hannah OP are you really going to continue deflecting and covering your ears yelling "la la la la"?

Just answer what people have been trying to get out of you in every. single. thread.

Break down, in a detailed fashion, a few stocks and why you like them. Break down, in a detailed fashion, your understanding of volatility.

Stop telling us BS about how Cramer likes this stock, your Mom said you're awesome, or how we're all lemmings. Those are all meaningless statements. Give us some hard data to judge the actual merits or demerits of your approach. You do realize that none of us are taking you seriously because you consistently refuse to do this? In fact, I expect that you will reply to my post with some rehash of the things you've said over and over again.

matchewed

  • Magnum Stache
  • ******
  • Posts: 4381
  • Location: CT
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #172 on: May 28, 2015, 05:03:31 AM »
Holy hannah OP are you really going to continue deflecting and covering your ears yelling "la la la la"?

Just answer what people have been trying to get out of you in every. single. thread.

Break down, in a detailed fashion, a few stocks and why you like them. Break down, in a detailed fashion, your understanding of volatility.

Stop telling us BS about how Cramer likes this stock, your Mom said you're awesome, or how we're all lemmings. Those are all meaningless statements. Give us some hard data to judge the actual merits or demerits of your approach. You do realize that none of us are taking you seriously because you consistently refuse to do this? In fact, I expect that you will reply to my post with some rehash of the things you've said over and over again.
In before picture of a bar graph.

money_bunny

  • Stubble
  • **
  • Posts: 114
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #173 on: May 28, 2015, 06:10:39 AM »

Maybe you will get lucky for a few years and then think you have it all figured out.  That is when you will decide to go all in.

I really like this quote. I think it also applies to the practice of medicine. Reminds me to stay humble.

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #174 on: May 29, 2015, 10:16:43 AM »
Holy hannah OP are you really going to continue deflecting and covering your ears yelling "la la la la"?

Just answer what people have been trying to get out of you in every. single. thread.

Break down, in a detailed fashion, a few stocks and why you like them. Break down, in a detailed fashion, your understanding of volatility.

Stop telling us BS about how Cramer likes this stock, your Mom said you're awesome, or how we're all lemmings. Those are all meaningless statements. Give us some hard data to judge the actual merits or demerits of your approach. You do realize that none of us are taking you seriously because you consistently refuse to do this? In fact, I expect that you will reply to my post with some rehash of the things you've said over and over again.

Geez-ass

Common sense
Have fucking guts
Don't be afraid to die
When this forum likes to laugh at you
Stick the results right in their eyes

Disney-- its obvious.. it has every condition to go cult.. look at Netflix.. think content.. Disney is closing parks because they are too full. They aren't open in China yet. China has millions of new investment accounts. Most new investors buy Disney for their kids. China has a shitload of kids

Apple-- seriously, get serious

JPM-- seriously, get serious

BRK-B.. the Buffett cult and serious results. Im not even looking at the numbers.

F-- 3.8% dividend, it is seriously underplayed right now. Just look at every report. Sure its not cult, but its safe, slightly undervalued with a big ass dividend. Im not looking for a rocket. Its my rock

PAH-- because I like to speculate.. It's pure bet. Serial acquirers have a good track record. I like the CEO.

NM-- because I like to speculate.. Its pure bet and its book is around 11x its price with a 6% dividend.

BA-- because it acquired McDonald Douglas, because its in the space race, because it builds airplanes, because it has a big dick. Bo does if you remember the old Nike commercial.

I sold everything else.. Thats is it. That is all it will probably be this year. Im building those, and am currently drinking. That is as raw as it gets. You have seen my brain.

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 4015
  • Age: 37
  • Location: Madison Heights, Michigan
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #175 on: May 29, 2015, 10:48:35 AM »
Disney-- its obvious.. it has every condition to go cult.. look at Netflix.. think content.. Disney is closing parks because they are too full. They aren't open in China yet. China has millions of new investment accounts. Most new investors buy Disney for their kids. China has a shitload of kids

I think this is the point everyone is trying to make...why is it obvious?  None of the reasons you gave suggests disney is going to outperform based on it's current market price.  In fact I suspect all these "obvious" signs are already baked into the price of disney, and I suspect everyone else here thinks the same. I have no reason to suspect I am smarter and more able to pick up on "obvious", or even non obvious, signs that a company is going to perform well in the future than everyone else that has access to that information (which is Billions of other people).

iamlindoro

  • Handlebar Stache
  • *****
  • Posts: 1520
    • The Earth Awaits
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #176 on: May 29, 2015, 11:13:43 AM »
It is painfully obvious at this point:  The OP does no rigorous numerical analysis.  Fine.  The OP does not employ a logic based decision making process, so it's unrealistic to expect him to respond to logic-based arguments that it's a bad idea. 

OP, I'm sure it's clear at this point, but the problem we have with your method is *not* the picking of individual stocks.  It's the total reliance on intuition to do so versus at least some semblance of a consistent mathematical analysis.  It's your right to do what you want.  We just happen to think it's crazy.  Sadly, I think me saying we think you're acting crazily will only *strengthen* your resolve to do it this way, because you see it as a badge of honor rather than a warning sign.  But, ask yourself-- of the "crazy ones," how many are Steve Jobs, and how many are just plain crazy?

Frankies Girl

  • Magnum Stache
  • ******
  • Posts: 3196
  • Age: 82
  • Location: The laboratory
  • Ghouls Just Wanna Have Funds!
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #177 on: May 29, 2015, 11:14:08 AM »

matchewed

  • Magnum Stache
  • ******
  • Posts: 4381
  • Location: CT
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #178 on: May 29, 2015, 11:20:58 AM »
That's it I'm taking my stock picking advice and going home.

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8044
  • Location: United States
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #179 on: May 29, 2015, 11:39:21 AM »
OP, I'm sure it's clear at this point, but the problem we have with your method is *not* the picking of individual stocks.  It's the total reliance on intuition to do so versus at least some semblance of a consistent mathematical analysis.  It's your right to do what you want.  We just happen to think it's crazy.  Sadly, I think me saying we think you're acting crazily will only *strengthen* your resolve to do it this way, because you see it as a badge of honor rather than a warning sign.  But, ask yourself-- of the "crazy ones," how many are Steve Jobs, and how many are just plain crazy?

Hmmm, well, if I was picking stocks today to invest in 16 years in the past- I think I'd pick on intuition as well. I'd intuitively pick stocks that haven't failed in the meantime.


sol

  • Walrus Stache
  • *******
  • Posts: 8474
  • Age: 43
  • Location: Pacific Northwest
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #180 on: May 29, 2015, 11:53:55 AM »
Part of the beauty of stock picking is that it doesn't require rigorous technical analysis, just making the right decisions.

Reams and reams of supporting analysis always boil down to a simple buy or sell decision, and any schmuck can make that decision.  OP has demonstrated that quite clearly.

forummm

  • Walrus Stache
  • *******
  • Posts: 7389
  • Senior Mustachian
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #181 on: May 29, 2015, 12:03:16 PM »
The way I read this, the approach seems to be full of contradictions and impossible to replicate. Get serious, go with your feelings, look at numbers, don't look at numbers, speculate. This seems to be very much based on personal whims. I know this is not at all how Buffett invests. He spends about 14 hours a day, every day, for 70 years, reading financial reports and other data, and talks at length with CEOs about their businesses, digging in to find the edge. And he still picks losers from time to time.

I hope your good luck continues, mrpercentage. But the evidence says that it's highly likely some of your picks will be underperformers, and your portfolio may end up lagging the market overall. And since you are selling occasionally to take profits, the taxes you pay will also make it more difficult for you to beat a buy-and-hold strategy. Buffett almost never sells anything.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28254
  • Age: -999
  • Location: Seattle, WA
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #182 on: May 29, 2015, 12:16:44 PM »
Apple-- seriously, get serious

JPM-- seriously, get serious

So here's the thing.  You are saying these are good companies, so that's why you don't need any more analysis.

But them being good companies has nothing to do with if their stock is appropriately priced or overpriced.

If Apple was suddenly 1000/share (from its current 130), but everything else about the company remained the same, would you still buy it?  What if it was 1 million/share?

If it was $1/share (and all else remained the same), you'd jump all over it.  It's a steal.  Probably even at $100/share it's a good deal.  But there's a price where it doesn't make sense to buy, and if your analysis is "the company is good," you can still be making bad investing decisions.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8044
  • Location: United States
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #183 on: May 29, 2015, 12:46:57 PM »
I of course cannot predict the future, but 15 years from now, I imagine someone who bought Apple today will not do as well as someone who bought Apple in 1999. Because that was picking it before it was one, if not the, top company in the world.

And that is the problem with this method.  It relied on knowing which companies have performed exceptionally over the last decade and a half.  Good thing the OP didn't put a bunch of his money in Enron, Geocities, Sharper Image, Polaroid, or Pets.com.   All things that looked pretty good in 1999.

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #184 on: May 29, 2015, 09:35:48 PM »
Both Disney and Netflix are entertainers. Does anything make sense about the difference between these two PE's? Im mean does Netflix even have physical assets anywhere close to Disney?



Doesn't make sense does it. Neither does Shake Shack.

If you haven't bowed to Mickey. You will. Just wait until China has a taste, and wait until those Shake Shack portfolio managers are sitting in the theaters watching Star Wars. You think they are going to stop buying. Nope. Not a chance in hell. I think they are trying to short themselves into a bigger spot right now.

You should pay attention to price, and if your alarm bells go off. Stay away.

Me I think Mickey is safe as long as you don't panic on a dip. Of course for someone reading this a year from now it might be a different story. You might not want to start a position then. I think Apple is safe for at least a couple years. My speculation positions (PAH,NM) are my smallest ones. Im not telling you to buy these companies. Im telling you many can and will beat the 500. Everyone has to find their own way and I wouldn't start with more than you are willing to lose. If that is zero. Don't do it.

Develop intuitive understanding in all things-- the Book of Five Rings

matchewed

  • Magnum Stache
  • ******
  • Posts: 4381
  • Location: CT
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #185 on: May 30, 2015, 05:45:35 AM »
He's been telling you guys the answer all along. If you just read old martial arts books you'll understand how to invest and truly see Disney for the gem that it is.

mizzourah2006

  • Pencil Stache
  • ****
  • Posts: 535
  • Location: NWA
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #186 on: May 30, 2015, 06:48:32 AM »
I actually own a lot of stock and have owned Disney since 2013 when I bought it at $63.50, but I actually agree with a lot of people here. I think you missed the major run from Disney. I'd wait for a pullback. Everything is baked in right now, especially with the Star Wars moving coming up. I could see a pullback after Star Wars as people forget about the Shanghai opening. That's when I would be looking. I think between $95-100 would be a great strike price.

I prefer a mixture of index funds and stock. There are certainly inefficiencies in the market, when a company has a bad quarter or gets bad news which is overreacted on. That's when I buy. Gilead was my favorite example. In late November Abbvie came out with Viekira Pak and the market crushed Gilead. If you had done just a bit of research you would have read about the superiority of 1 pill/ day vs 8 in actual cure rates because of patient's forgetting to take more pills. Gilead got crushed from 110 to 88 in a few days. 6 months later it's back up to $113 and the market itself has been essentially stagnant.

But for most people that don't do the research, or don't want to index funds are definitely the way to go and I have them in all of my 401ks and typically my immediate Roth deposits are in them too until I see a better investment opportunity.

hubcity

  • 5 O'Clock Shadow
  • *
  • Posts: 10
  • Age: 50
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #187 on: May 30, 2015, 07:14:20 AM »
Sorry for being a little late to the party.  This post would have fit better in this thread last week.  I hope I'm not too late - allow me to embarrass myself:

The year is 1999, I'm 29, work in the software industry and make more money than I can reasonably spend.  I think I'll open up one of these new Roth IRA accounts and put some money in the stock market.  I've never bought individual stocks before (although I had always put money in the company sponsored retirement plans).  The technology sector is obviously going to be huge forever.  I work with the stuff daily.  I'll just buy what I know.

Here's what I knew:

1.  The internet is obviously going to be huge (it's 1999, everyone knows that).  But I have a hard time believing that Microsoft will control the software market for servers like they have controlled the software market for desktops.  There will be a new king of server software.

2.  Computer gaming is already big and is going to get bigger.  The company that can produce better and more life-like graphics is going to win big.

3.  Mobile phones are going to be big business.  This may have already been true to everyone in '99.  I was late to the party, but even I knew this by now.  (I remember in the late 80s when my Dad's work bought him a cell phone.  I thought that sounded terrible.  Work can always get ahold of you no matter where you are - why don't they just chain you to the desk!  But by '99 I had had cell phone for 4+ years.  There could be no doubt how big this was going to be.)

4.  Time-shifted TV viewing was going to be massive.  I had one of these boxes and once they caught on they'd be in every house in the US.

Ok, maybe not ground-breaking realizations, but I'm not certain they were clear to everyone in '99.  Even so, I worked with the tech everyday, if anyone was going to be able to pick winners it was me.  Here is what I bought.

1.  RHAT - RedHat.  They were the company that was going to monetize linux and linux already ran a lot of the servers on the internet.

2.  SGI - Silicon Graphics.  I worked with these machines.  They were AMAZING graphics machines.  No one else was even close.

3.  VZ - Verizon.  The biggest name in cell phones in the mid-atlantic.  (I'm not certain if I bought them the day of the 30 year high for the stock or the month before).

4.  TIVO - TiVo.  I owned a Tivo box.  How they are not one of the biggest companies on the planet, I still do not know.

5.  ONMY - Omnisky.  I admit that I didn't work with their tech.  But they had something to do with wireless internet, had some sort of deal with Palm Computers and were in all the business magazines.  Can't lose really.

After 2 years that $2,000 of stock was worth $1,400.  It only got (much) worse.  I consider myself thankful that I was cured of stock picking before I had serious money in it.  Index-based mutual funds for me.  Currently trying to talk myself out of working OMY.
« Last Edit: May 30, 2015, 07:32:14 AM by hubcity »

mizzourah2006

  • Pencil Stache
  • ****
  • Posts: 535
  • Location: NWA
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #188 on: May 30, 2015, 07:30:37 AM »

Sorry for being a little late to the party.  This post would have fit better in this thread last week.  I hope I'm not too late - allow me to embarrass myself:

The year is 1999, I'm 29, work in the software industry and make more money than I can reasonably spend.  I think I'll open up one of these new Roth IRA accounts and put some money in the stock market.  I've never bought individual stocks before (although I had always put money in the company sponsored retirement plans).  The technology sector is obviously going to be huge forever.  I work with the stuff daily.  I'll just buy what I know.

Here's what I knew:

1.  The internet is obviously going to be huge (it's 1999, everyone knows that).  But I have a hard time believing that Microsoft will control the software market for servers like they have controlled the software market for desktops.  There will be a new king of server software.

2.  Computer gaming is already big and is going to get bigger.  The company that can produce better and more life-like graphics is going to win big.

3.  Mobile phones are going to be big business.  This may have already been true to everyone in '99.  I was late to the party, but even I knew this by now.  (I remember in the late 80s when my Dad's work bought him a cell phone.  I thought that sounded terrible.  Work can always get ahold of you no matter where you are - why don't they just chain you to the desk!  But by '99 I had had cell phone for 4+ years.  There could be no doubt how big this was going to be.)

4.  Time-shifted TV viewing was going to be massive.  I had one of these boxes and once they caught on they'd be in every house in the US.

Ok, maybe not ground-breaking realizations, but I'm not certain they were clear to everyone in '99.  Even so, I worked with the tech everyday, if anyone was going to be able to pick winners it was me.  Here is what I bought.

1.  RHAT - RedHat.  They were the company that was going to monetize linux and linux already ran a lot of the servers on the internet.

2.  SGI - Silicon Graphics.  I worked with these machines.  They were AMAZING graphics machines.  No one else was even close.

3.  VZ - Verizon.  The biggest name in cell phones in the mid-atlantic.  (I'm not certain if I bought them the day of the 30 year high for the stock or the month before).

4.  TIVO - TiVo.  I owned a Tivo box.  How they are not one of the biggest companies on the planet, I still do not know.

5.  ONMY - Omnisky.  I admit that I didn't work with their tech.  But they had something to do with wireless internet, had some sort of deal with Palm Computers and were in all the business magazines.  Can't lose really.

After 2 years that $2,000 of stock was worth $1,400.  It only got worse.  I consider myself thankful that I was cured of stock picking before I had serious money in it.  Index-based mutual funds for me.  Currently trying to talk myself out of working OMY.

Your problem was you were all tech and you got in at the height of the bubble.

diversification applies to sectors, not just companies, which is one reason index funds are so useful, they force people to diversify across sectors as the average person typically buys what they know, which is typically all in one or two sectors.

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #189 on: May 30, 2015, 08:39:02 AM »
I love it when people can't explain away stocks like Netflix and Tesla. If you model doesn't work with reality then it may be wrong. I guess Netflix's gains for the next 100 years are not priced in yet. Disney who is absolutely killing it, nah, they are too high-- Star Wars is over rated, ESPN sucks, what's ABC 15 anyway, China what? That's nothing, been beating the 500 for how long-- nope it's priced in-- what? the parks are full and saying you can't come in even though they just raised the price, no I think I will buy Shake Shack at 40,000,000 a truck.

It's demand and Disney will have it for a long time. Shit if they just rerelease the original unaltered theatrical versions of 4,5,&6 on blue ray they will make hundreds of millions. You know what that version goes for used on Amazon in regular dvd? $100. Look it up. Theatrical version with crossed light sabers in blue on cover. $100 for a used dvd. Lucas lost his touch but it's cool Disney has got this

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28254
  • Age: -999
  • Location: Seattle, WA
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #190 on: May 30, 2015, 09:00:13 AM »
I love it when people can't explain away stocks like Netflix and Tesla. If you model doesn't work with reality then it may be wrong. I guess Netflix's gains for the next 100 years are not priced in yet. Disney who is absolutely killing it, nah, they are too high-- Star Wars is over rated, ESPN sucks, what's ABC 15 anyway, China what? That's nothing, been beating the 500 for how long-- nope it's priced in-- what? the parks are full and saying you can't come in even though they just raised the price, no I think I will buy Shake Shack at 40,000,000 a truck.

It's demand and Disney will have it for a long time. Shit if they just rerelease the original unaltered theatrical versions of 4,5,&6 on blue ray they will make hundreds of millions. You know what that version goes for used on Amazon in regular dvd? $100. Look it up. Theatrical version with crossed light sabers in blue on cover. $100 for a used dvd. Lucas lost his touch but it's cool Disney has got this

You're straight up trolling now.

Literally no one has said those things I bolded.

You're being ridiculous.

We're saying that you should have some evaluation method to determine if it's too high.

Are you saying it's impossible for it to be too high?  Clearly not, as you made the ambiguous statement "You should pay attention to price, and if your alarm bells go off. Stay away." -- We're saying that's not a real method to follow, and following your gut leads to losing lots of money versus having a real plan.
« Last Edit: May 30, 2015, 09:26:29 AM by arebelspy »
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Scandium

  • Handlebar Stache
  • *****
  • Posts: 2317
  • Location: EastCoast
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #191 on: May 30, 2015, 09:59:17 AM »
I still think OP might just be a troll. But to be fair I do think doing "fundamental analysis" of a stock is nonsense for retail investors. 10s of thousands of some of the best paid people on the planet, with billions on the line have already analyzed many (most?) stocks in every possible way. What could I possibly hope to uncover? If all these millions of people say a stock is worth $38.79542 t right now, then the only logical conclusion to me is that it's probably worth exactly that.

The only reason I'd buy stocks with my "play money" would be speculative bets. Something that may or may not go big and anybody guess is equally good. Think early on tesla (I almost bought it at $30..), Netflix, gogo.

I really don't see the point of buying massive blue chip companies that are so scrutinized, and whose growth often just follow the market.

mizzourah2006

  • Pencil Stache
  • ****
  • Posts: 535
  • Location: NWA
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #192 on: May 30, 2015, 11:51:33 AM »
I still think OP might just be a troll. But to be fair I do think doing "fundamental analysis" of a stock is nonsense for retail investors. 10s of thousands of some of the best paid people on the planet, with billions on the line have already analyzed many (most?) stocks in every possible way. What could I possibly hope to uncover? If all these millions of people say a stock is worth $38.79542 t right now, then the only logical conclusion to me is that it's probably worth exactly that.

The only reason I'd buy stocks with my "play money" would be speculative bets. Something that may or may not go big and anybody guess is equally good. Think early on tesla (I almost bought it at $30..), Netflix, gogo.

I really don't see the point of buying massive blue chip companies that are so scrutinized, and whose growth often just follow the market.

I agree with you on OP being a troll.

The only counterpoint I will provide for retail investors vs. "experts" is that you have to keep in mind we don't all have the same goals, which can provide some opportunities. For example, mutual funds have to track the market & beat it or they will lose customers. Which means they need to be ohhh there every quarter. The easiest way to do that is become the market. I, on the other hand don't care if my stock outperforms the market every quarter all I care about is that it outperforms over the next 5-10 years. Time horizons really impact the experts because of consumer expectations, they shouldn't impact you.

Another thing is hedge funds and mutual funds try to lock in gains at the end of the year, this may cause larger dips in otherwise great companies that are completely unrelated to the market perception or quality of the equity.

Examples recently are Gilead and Union Pacific. Gilead dropped dramatically after some news that was overblown. What likely happened is hedge funds and mutual funds dropped it to lock in end of year gains and they saw better opportunities for growth over the next 3-6 months. It was a very smart decision for them because it traded flat for 5-6 months. But, I don't care about 6 months, I care about 5-10 years. I bought on the dip and am up 25% since late November, most of the movement has been in the last month though.

UNP dropped 20% because of short term concerns with railways as coal and oil consumption has stalled. Hedge funds and mutual funds sold it to find short term growth in greener pastures. Makes perfect sense for them as their customers expect immediate returns. Do you think Union Pacific became a company worth 20% less because of a somewhat down quarter? Perhaps, but maybe not.

It took me a long time to see the market like this and it does take some work. It most certainly is not for everybody. For some reason or another my quant background has made me really enjoy the market and I spend 3-4 hours a day looking at this stuff.

Like I said earlier for most people an index is most definitely a better option and I still hold the majority of my retirement in index funds, but there are competing priorities in the market that cause temporary inefficiencies and make otherwise expensive companies inexpensive for short periods of time.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28254
  • Age: -999
  • Location: Seattle, WA
Re: What If You Just Picked Stocks... An Adventure Story
« Reply #193 on: May 30, 2015, 12:11:30 PM »
MOD NOTE: So with nearly universal agreement that the OP either is a troll, or cannot coherently state an actual strategy, I don't see a point to this thread staying open--it's just leading to more trolling/frustration.

I'm going to lock it.  If you feel there is something substantial in here that you want to discuss, feel free to start a new thread on that topic.  As always, PM me or another mod with any concerns.

Cheers!
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.