Investors Thread

[VolsNSkinsFan]

Yeah, it's too unstable and far to overpriced for me. Last time I checked Google was selling at nearly 200x their current earnings. And people were still buying it.

That's like buying a taco stand that made 1,000 dollars last year at 200,000.

Google? trades at a 30 pe, and it has $60 billion in cash. Do you mean Amazon?

 

[Vol8188]

Google? trades at a 30 pe, and it has $60 billion in cash. Do you mean Amazon?

Yes, and dear god they are over 400 now. That's insane. Why do people still buy that?

 

[Ernest T. Vol]

I'll go first.

1. I take a long term approach that I mainly developed from The Intelligent Investor. If you've not read it, you should.

I look for the following:

P/E<15
Dividend>0
>5 years of dividend history
And at least 3 years of continuous profits.

The two I put the most weight on are P/E and dividends. Most study's I've seen show that over the history of the stock market, if you adjust for inflation, the majority of all gains made by investors were in the form of dividends.

I pretty much agree. The only drawback in Tennessee is the Hall Tax of 6% on dividends in excess of $2,500 if filing married joint (1,250 if single). The bulk of my holdings in the market are dividend payers. I get in and out of these depending on market forces (both the stock and overall market macros and micros). Usually works out to buying opportunities for the long term. I also play (trade) with some growth stocks short term.

 

[Vols520]

I'll include some direct quotes from the intelligent investor later, if I have time.

DIVIDENDS – THE KEY TO RETURNS, EVEN FOR GROWTH STOCKS | PRAGMATIC CAPITALISM

80% of the real returns (adjusted for inflation) over the history of the stock market are from dividends.

Only 20% are from the actual growth of the company. Mostly the increase in price of the stock market is related to inflation. When you adjust for inflation, you find out the only people making money are those receiving dividends.

This doesn't mean you should invest in companies with the largest dividends. Instead try to find large companies, that are going through unpopular times and pay some form of a dividend.

The stock I've done best from was Bank of America. It's dividend is only .01 per share. Not even 1% of their price. But they are a massive bank. The US government has even proclaimed them to big to fail, so I knew my was safe (priority number 1). And their p/e was less than 10 at the time (making it a major bargain).

I agree with this.

 

[Danl]

I appreciate all the posts RE:dividends. Thanks all.

 

[mdrew27]

I have fidelity for work purposes and I've opened up my Roth just because I can monitor all my accounts. They aren't the cheapest but are by far not the most expensive. I own about 10 stocks that make up 50% of my portfolio. An index fund that makes up about 25% and the rest in cash waiting for other opportunities. A stock I own is FNMA. I'm already up 20% and I feel it's only going to go up from here.

 

[govols09]

Are you looking for rentals or flips?

Rentals

 

[Burger]

Der

I thought it would be cool if we had a thread to discuss investing (bonds and stocks mainly). And bounce ideals and strategies of each other.

A few prompts to get the convo going:

1. What do you look for in an investment?

2. What company do you trade through?

3. What are some of your current holdings or things you're considering?

1) I look for seriously undervalued companies. I'm a believer in the buy + hold community. I look for improving sales, low inventory turnover, and undervalued assets.

2) tradeking

3) Ford, Corning glass, looking for others.


I will add that the warren buffet strategy is what I'm held to.

 

[Burger]

I have fidelity for work purposes and I've opened up my Roth just because I can monitor all my accounts. They aren't the cheapest but are by far not the most expensive. I own about 10 stocks that make up 50% of my portfolio. An index fund that makes up about 25% and the rest in cash waiting for other opportunities. A stock I own is FNMA. I'm already up 20% and I feel it's only going to go up from here.

Roth is what you want because you will avoid taxes on your earnings. You pay them when you invest.