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The Stock Market and Investing

Karen_CMKaren_CM Posts: 5,027
Are you an investor or is your financial plan less risky? Like playing the lottery!

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,356
    I'm just sitting here watching my (very conserative) ROTH IRA plunge further and further....I'm getting whoozy.....ugh!

    I can hardly imagine what the more aggressively invested people are going through right now.

    Best not to look for a month or so.

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  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,914
    I heard it put very well on an investment show on the radio yesterday. Whether it's the stock market or real estate, if you're not looking at it as a long term investment, you're just speculating.
    If you hear yourself saying, "I bought 100 shares of XYZ Corp six months ago, and made $XXXX...", you're a speculator. If you're a day trader, you're a full fledged gambler. :surprise:

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  • fintailfintail Posts: 34,013
    I try not to look at all. I got hosed for a bit back in 01/02 and I don't want to have that feeling again. I'll stick with some blissful ignorance.

    I do fear a recession with a dose of inflation is coming.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,356
    Oh I think real estate is much more of a speculation than the stock market because in the stock market at least you can invest solely in companies that have added value, services, building or income. With a house, only the price goes up---it's the same old house most of the time, there is no value added as the price goes up. So I think a well=picked stock is a much better investment than real estate.

    Also historically stocks have performed better. Real estate has been stagnant for most of the time it has been monitored. The last crazy 20-25 years could be the exception rather than the rule.

    Basically I believe that real estate values are nothing more than a concept in people's heads. Grandpa's $40,000 house in 1970, now worth $500,000, might really only be worth $40,000 after all. People might just wake up and think that some day and there's nothing to prove otherwise. But Wal-Mart has grown quite a bit since 1970, so that's different.

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  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,914
    It IS the same old house. It's sort of like the way I look at my car. My car doesn't increase or decrease in value, it's worth exactly one functioning car.
    My house is sort of the same way. While the world sees it as increasing in value, it's worth one place to live for me. I've been very good about not trying to leverage that increasing value by taking home equity loans and the like. The equity "reward" comes at the end of my use of the house, when I sell it and can afford to finish my day roaming the countryside, or pass it along to my kids to leave them a place to stay :shades:

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,356
    There you go. Sell it and buy an RV and take off and simplify.

    Hmmm...not that all RVs are "simple" these days.

    Well then buy a SIMPLE RV!

    I decided to retire early, about age 29. :P

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  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,914
    Hmm... maybe being back on the road would be fun :P

    Thanks for the inspiration for Sunday's blog entry! :shades:
    http://www.carspace.com/blogs/AlternateRoute/

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  • corvettecorvette United StatesPosts: 4,183
    My numbers look really bad with the recent volatility plus various expenses (paint and other minor repairs and upgrades that don't really add monetary value) for my new house. In the long term, the brokerage accounts should look better, and my expenses on the house will have given me a nice place to live.
  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,914
    If you follow the market day to day, you could go nuts :P

    But when those moments of despair hit me, and I'm wondering about the future, I just think about the people who have $20-$30,000 out on credit cards at a 29% interest rate and then I don't feel bad that I have my mortgage paid down to less than that to go at 6%.

    When I have an emergency and have to have a couple of hundred out on a credit card I get all edgy!

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  • gamlegedgamleged Posts: 442
    I do indeed follow the market every day (more than once in a day) and I consider myself lucky to be down only about 6% in my cumulative retirement accounts. But recently I've bought some severely depressed bulk shipping stock (EGLE) that I'd earlier in the year made some money on (and then sold, fortunately!). Since the sector is dependent on the global economy with people shipping iron ore and grain and coal hither and yon, it'll be a while before shipping recovers, but I suck at predicting a low, so I'll buy a little more on the larger dips (DOW down another 500 points or so) and then I'll be patient. :shades:

    I noted yesterday that spot gold broke below 700 for a bit, touching 680 before closing back up at 734. I think we're seeing the gold bugs seeking liquidity, getting ready to get back into equities as a bottom forms someday soon in the equity markets...
  • Kirstie_HKirstie_H Posts: 10,907
    I'm in a stock club, and we're looking at this dip as an opportunity to buy stock at a discount. Look for companies with plenty of cash-on-hand that are likely to be undervalued only because of the massive sell-offs and economic fears, then buy 'em. Those are the ones most likely to survive, and re-bound quickly once there's an upturn.

    Well... that's our operating theory, anyway - we're just a bunch of pub economists when it comes down to it :)

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  • steverstever Viva Las CrucesPosts: 41,322
    Or loses less than expected, depending on which headline you read.

    In any event their stock popped 7% in early trading today and is on course to close at a 52 week high.

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  • cyclone4cyclone4 Posts: 2,287
    Enough car talk for now ;) . Let's all raise a glass and toast Len for his prediction months ago that the Dow would reach at least 10,000 by the end of the year. More recently (October 8), here is what he said:

    I was never big on a correction down to 9100 or 9200. I always thought small adjustment and then back up we go. My belief was tied to stronger than expected earnings (thanks to all those job cuts unfortunately, plus high incremental margins) and some optimism on future revenue growth. So far the little bit of earnings news we saw is bearing that out. Unless we see some real negative news here or a geo-political issue, I'm going to say that we may have seen the fall back bottom out already. If earnings are more robust we may end up nearer 1200 on the S&P and 10,750+ on the Dow by year end or early Q1 2010. That's my thinking now.

    How can anyone not believe Len now? The great earnings report of first, Intel after yesterday's close and JP Morgan early this morning are testaments to Len's uncanny foresight into the stock market. Len, is it possible for the Dow to reach 12,000 to 13,000 in 2010? I started buying some of the stocks back (that I sold near the previous high) about a week ago, but unfortunately I did not buy them when the Dow corrected down to 9,500 (I think that's about where it corrected, or was it a little lower?).
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Let's all raise a glass and toast Len for his prediction months ago that the Dow would reach at least 10,000 by the end of the year.

    yes... "clink".

    The great earnings report of first, Intel after yesterday's close

    Charlie, check the posts... I urged you to buy Intel days before that report came out. I had it pegged when to buy it. I have recently shared some of my huge winners with you guys, including AIG when it made that massive recent gain... I made six digits on AIG. And, I'm not just talking about predicting the Dow's average here... because the media is full of guys that have predicted the Dow's average. I'm talking about picking actual specific stocks that have outperformed the Dow... and sharing some of them with you. :)

    I did not buy them when the Dow corrected down to 9,500

    Sorry Charlie, the market has not "corrected"... not yet. That most recent drop was just a typical dip in a string of similar dips... check the percentages and you will see. The actual "correction" is yet to come, but I don't expect it before more gains... that's why I'm back in the market, after getting out during the dip.

    Anyway, no matter what your perspective is on all of this, I just don't want you out there thinking the correction has happened when it hasn't.

    TM
  • cyclone4cyclone4 Posts: 2,287
    Charlie, check the posts... I urged you to buy Intel days before that report came out. I had it pegged when to buy it.

    Yes you did but I did not buy it. I bought a few others that will do well I think. Tag, you also deserve a lot of credit for being on record with certain individual stocks. BTW, as you know I deserve a bit of credit as well (patting myself on the back :blush: ). I stated back in March that the early March market low was going to hold. That is the time I started buying stocks. Where I differed with Len here was that I was very confident in the Obama Administration making the right decisions as opposed to Len who was thinking that people like Bernake were the key.

    Sorry Charlie, the market has not "corrected"... not yet. That most recent drop was just a typical dip in a string of similar dips... check the percentages and you will see. The actual "correction" is yet to come, but I don't expect it before more gains... that's why I'm back in the market, after getting out during the dip.

    I believe it is a matter of semantics. To me that was a correction (small one but a correction nevertheless). I just wish I had pulled the trigger sooner and buy a lot of stocks at that time. Timing is everything in the markets. The question now becomes this: When are we going to see a MAJOR pullback of let's say at least 800-1000 points on the Dow?
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Tag, you also deserve a lot of credit for being on record with certain individual stocks. BTW, as you know I deserve a bit of credit as well (patting myself on the back). I stated back in March that the early March market low was going to hold.

    I think we can safely pat ourselves on the back without getting any inflated egos... because we have legitimately made some very good calls here, and shared very good information with each other and others here that are interested. After all, when a team has good strategy and wins a series of games, they have every right to feel good together about their accomplishments.

    I believe it is a matter of semantics.

    How can that be? If there have been a series of similar-sized (percentage-wise) dips along the way, why would we call any one of them a correction?

    It was a dip that came at a good point, granted, from a psychological perspective, but it was by no means a correction... semantics shmantics... it was not a correction Charlie. You need to be careful here, because the real correction is yet to come.

    When are we going to see a MAJOR pullback of let's say at least 800-1000 points on the Dow?

    We need to see around a 10% pullback at some point, IMO. But, also IMO, after we see that ultimate correction, we will see new highs. So, even if you are stuck in the correction, you could weather it out and come out on top. Of course, if you can navigate around that correction, that would be even better, but it would take some very good market timing.

    As far as when?

    IMO, at some point we will hear some very negative news from either the government or the private business sector... negative enough to suggest that the market has gotten ahead of itself... or that the market has too much risk. Once that happens, the selling will begin.

    Now, here is how I would respond to that scenario, when/if it should happen. I would get out of the market as soon as possible and then before I believe a bottom is reached, I would start to buy in at intervals, even if the market is still going down. I would ultimately build an average investment that is a little higher than the low, but considerably lower than the highs, and when the market returns, I would be well ahead. Trying to perfectly time the market is too risky in that we could lose those few important days with the huge gains, and that is always the biggest risk to being completely out of the market... because the truth is that most of the biggest gains happen in a small percentage of trading days... those are the key days we want to be in the market.

    Semantics, shmantics... sorry, I just wanted to say that again... has a bit of an East Coast ring to it. :P

    :)

    TM
  • anthonypanthonyp Posts: 1,857
    Mr Cyclone

    I may have hurt your feeling with my compliment on the Sun, the other day, and not your market calls :) I too want to compliment Tagman, and yourself, with this latest round of market information....All I have benn able to commenton is that I think we are and have been in a bull market---and my travel posts that has lead to those thoughts.....The individual stocks I`l leave to others, as the cheap ones jump twenty forty percent quickly, and need to be purchased early ,,,,,Jflix certainly made a good observation in his gutsy predictions, Now if a person were to step back and take a look at where we were, it is very possible that when the Dow was say seven thousand, it was way oversold---way---and now at ten thousand, we a closer to even, so there may not be a meaningful selloff, just rolling selloffs, and resting....As I am not going to try and time anything, I am just buying slowly----mostly bonds-----in etf---and hope not to have to live through something we had last year....I just don`t see the long term value to owning a stock with a very small dividend, even though it is growing.....This is a traders market, and I don`t trust it Tony
  • circlewcirclew Posts: 8,389
    Well, I want to complain TO the Sun....absolutely missing here in NJ today!

    I've been following all of the fantastic advice and strategies by the posters here regarding investing. Alas, I'm a buy and holder, probably one of the last. I kept everything pat throughout the holocaust and the ride was a doosie!! (Doosie: a thing which is an extreme example of its type).

    Now I am still down about 20% from the all-time S&P high. From all of the forecast, I should start gaining from the previous market top in about 5 years!!!! :sick:

    Speaking of Duesenberg - enjoy!
    image

    Regards,
    OW
  • cyclone4cyclone4 Posts: 2,287
    How can that be? If there have been a series of similar-sized (percentage-wise) dips along the way, why would we call any one of them a correction?

    It was a dip that came at a good point, granted, from a psychological perspective, but it was by no means a correction... semantics shmantics... it was not a correction Charlie. You need to be careful here, because the real correction is yet to come.


    Tag, my friend, to me whether the words used are correction, dip, sell-off, pull-back, they all mean the same thing. It is just a matter of how much of a correction, sell-off, dip, we are talking about. When the Dow went from just above 9900 to 9500 a few weeks ago, that was a correction, sell-off, pull-back, or dip. Now if I use the word "collapse", that has an entirely different and much more ominous meaning for the market. In the late summer and fall of of 2008 and the first quarter of 2009 we had a cataclysmic collapse.

    IMO, at some point we will hear some very negative news from either the government or the private business sector... negative enough to suggest that the market has gotten ahead of itself... or that the market has too much risk. Once that happens, the selling will begin.

    Now, here is how I would respond to that scenario, when/if it should happen. I would get out of the market as soon as possible and then before I believe a bottom is reached, I would start to buy in at intervals, even if the market is still going down. I would ultimately build an average investment that is a little higher than the low, but considerably lower than the highs, and when the market returns, I would be well ahead. Trying to perfectly time the market is too risky in that we could lose those few important days with the huge gains, and that is always the biggest risk to being completely out of the market... because the truth is that most of the biggest gains happen in a small percentage of trading days... those are the key days we want to be in the market.


    I have no disagreement at all with your above statements. BTW, the earnings of Google, IBM, and I believe one other technology stock were outstanding this afternoon. This will carry the market to new highs again tomorrow. We need Len to now give everyone his expertise once again.
  • anthonypanthonyp Posts: 1,857
    Wow :) I hope Jose sees this ......What an era Tony
  • cyclone4cyclone4 Posts: 2,287
    I may have hurt your feeling with my compliment on the Sun, the other day, and not your market calls

    Tony, the thought never crossed my mind. As I told you before, you are a wonderful human being and the world needs more people like you.

    This is a traders market, and I don`t trust it

    Everyone has different comfort levels. If you play the market, only risk what you can afford to lose.
  • cyclone4cyclone4 Posts: 2,287
    Well, I want to complain TO the Sun....absolutely missing here in NJ today!

    Well, the sun has been missing from much of the Midwest for about a week now. Harvesting is the slowest in history.

    Alas, I'm a buy and holder, probably one of the last. I kept everything pat throughout the holocaust and the ride was a doosie!!

    Keep the faith in this nation and you will be fine.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    This will carry the market to new highs again tomorrow.

    I am invested in the tech stocks, as you know, like Intel and Google and others. I also own financials, but... beware the financials. They are the ones that might put on the brakes... very soon. Maybe next week? Watch closely, so we can get out when/if the bad news comes. If it does happen, Tony will be sitting pretty. :)

    TM
  • circlewcirclew Posts: 8,389
    BTW, the earnings of Google, IBM, and I believe one other technology stock were outstanding this afternoon. This will carry the market to new highs again tomorrow. We need Len to now give everyone his expertise once again.

    As the W.O.O. would say: Not So Fast...Not SoFast...

    image

    AMD's results were also strong, with a much better than expected pro forma loss of 26 cents a share on a 22 percent sales decline to $1.4 billion. AMD shares fell 3 percent on the news, however.

    IBM's earnings of $2.40 a share and sales of $23.6 billion both topped forecasts, and the company raised its earnings guidance, but its shares slumped 3 percent in after-hours trading after services signings were less than expected.


    Regards,
    OW
  • 2001gs4302001gs430 Posts: 767
    have recently shared some of my huge winners with you guys, including AIG when it made that massive recent gain... I made six digits on AIG. And, I'm not just talking about predicting the Dow's average here...
    Cheers and congrats on your winner.
    OTOH, I did not pick up any of your recommendation as I am a bit fixated on acquiring some depressed real estate. Therefore my portfolio is on a steady march to paltry10-15% gain for the year (fingers crossed).
    Why do you think the financials are at risk?
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Why do you think the financials are at risk?

    Well... it turns out my warning on the financials was a bullseye... within hours ahead of the bleeding.

    I already told you that the market's direction was based largely upon irrational trading, and not the concrete numbers... which we now see today. It's one thing to invest when there is a market sentiment, and ride the wave... but eventually the wave fizzles out and the real numbers present themselves... which is what is happening right now.

    I sold my stocks early this morning... all of them. I said yesterday that I would do that when the financials start their decent, and bring the market down with them. Now, the trickiest part is to determine if we are going to have that genuine correction, or if the irrational folks take this market back up higher than it should really be without a correction. At this point, I really want to see a major correction, and then get back in full force... but we'll see. If we don't see the genuine correction, I'll cherry pick a few stocks and work my way back in, and hopefully my timing won't be too far out of whack.

    I posted it here yesterday... "beware the financials" is what I posted... and today... bingo!

    TM
  • 2001gs4302001gs430 Posts: 767
    Got to give it to you tm, bullseye again...
    It looks like the December calls I wrote on BOA won't get called after all. :D
  • cyclone4cyclone4 Posts: 2,287
    Tag, there was a lot of talk/concern yesterday that the Bank of America report would not be at all pleasing this morning. Indeed it was a stinker and the market has been lower all day (but well of its lows at this writing).

    I only have a few stocks that I have been buying over the past 10 days and I am planning to stay with them right now. It is not a big investment. I also would like to see a decent correction, but the market has a way of fooling a lot of us.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    I gotta give you credit Charlie for the way you hang in there during all sorts of brutal market ups and down. I tend to get out when it's bleeding, and sometimes that's a good thing, but sometimes it's not, because getting back in is always the next thing to figure out.

    In spite of what you might think, I actually don't have the cast iron stomach for stocks that some folks have. As a result, about 50% of my entire portfolio continues to be in bonds... long term bonds that offer very good interest rates, because they were acquired back when the rate of return was pretty good, especially in contrast to today's interest rates. So... half of my investment strategy is exactly in line with Tony's approach. :)

    Now that I am out of stocks (once again), I am forced to consider which ones I think are good investments moving forward. As I look at the world, I see areas of growth as well as areas of sluggishness, and then I see that some stocks depend upon certain types of spending that just isn't likely to happen, and others depend upon spending that is very likely to take place.

    IMO, I see certain areas of healthcare as possiblities, but risky and perhaps too complicated for my understanding, due to the U.S. political climate with regards to the healthcare programs that are being tossed around our government. In addition, I see that the automobile industry is poised for a comeback, but it will be a different kind of comeback then ever before, due to the changing face of the world energy situation, changing consumer preferences and perspectives on automobiles and transportation, and the increasing trend towards more future-minded vehicles than the SOS. I also see certain sectors of technology as very good possiblities. And, I see certain select retail areas that are currently trendy, such as Vans footwear as an example, which is a part of VF Corporation (VFC), a stock I have owned recently and it has done very well.

    As a result, going forward, I am leaning first and foremost towards investing in companies related to the wireless mobile internet expansion that is literally starting to explode all around the globe. This will be my primary focus over the next few days... to pick those companies that I believe will be the "best of the best" key players in this segment. This is where I totally believe a lot of money can be made, especially if I do this well. So, I am going to give this a very serious effort. I am not just making general statements or market predictions here, as I will give you the exact names of the stocks I select, and I will put my money where my mouth is. (Then I will pray a lot...LOL.)

    After that primary investment segment, I will then look towards a few other areas. I'll probably add a little Ford again, which you already know is simply a personal favorite of mine, as well as only a small handfull of other stocks that I believe will be leaders in their segments, or rising stars. And frankly, that's it! That's all I want to do at this point. The rest just feels too risky to me right now.

    Anyway, that's my current position with regards to the market (subject to change... haha)... for whatever it's worth... just sharing my perspectives on this with you and the rest of the gang here that might be interested. :)

    TM
  • lexusguylexusguy Posts: 6,419
    As a result, going forward, I am leaning first and foremost towards investing in companies related to the wireless mobile internet expansion that is literally starting to explode all around the globe. This will be my primary focus over the next few days... to pick those companies that I believe will be the "best of the best" key players in this segment.

    Any ideas in mind yet for this sector? I've been watching telecom in general and dipping my toes in every now and then, but I've mostly avoided it as it seems like there's a lot more risk here than reward. For example, I got into Verizon just as they were starting to rollout FiOS and did pretty well, but left soon after because it was evident that Verizon was going nowhere, since then, the stock has taken a beating.

    I think a lot of broadband in the future will be wireless, particularly to rural areas that will never make financial sense to wire with fiber optics. I'm just not sure yet who's going to do it. WiMax by all indications is a dud. LTE? Maybe, but again who's going to really benefit?
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