I'm slow because it took me awhile to buy a cheap laser but seeing my Brother last and last with the original cartridge (given a few shakes) let's me say to HP.... :P
Considering MSFT hasn't moved it's rich behind regarding the stock value in years, it might be a great play as it enters the world of the web in a more pronounced way.
It better get real quickly because it's far behind despite it's attempt to enter the apps market.
Microsoft (MSFT): Goldman funds increased holdings of Microsoft by 3.2%. MSFT has a market cap of $208.21B, and offers a $0.64 (2.50%) dividend. The stock currently trades at a P/E of 10.58. Microsoft is a relatively safe and mature company, but is also working hard to expand its business. They recently released Internet Explorer 9 and have entered into a partnership with Nokia (NOK) in an attempt to build their mobile phone software business. On the other hand, the company has killed production on its Zune music player, in what appears to be a defeat to the iPod.
We will see if it's a dark horse great investment or a lingering has been in the software world. :confuse:
Here's my next investment move. Up to this point, I have held 40% in fixed securities (various types of bonds). The rest has been in equities and cash.
Months ago, I mentioned that I was expecting interest rates to rise at some point this year. I still expect that to happen. Existing bonds can typically decline in value (although still pay their rate of return) when interest rates are on the rise, because older lower-rate bonds obviously become less desireable (and valuable) than newer bonds that issue higher rates of return.
So... at this point, I do not expect the Fed to ease interest rates. Even if the Fed were to attempt to do that, there really isn't much more room to go down. And, I don't expect to see any QE3. I actually expect at some point this year, the Fed will raise interest rates. I see the possible threat of inflation worming its way into the economy, which typically results in a Fed move that increases the rates.
If the Fed does indeed raise rates, then I really don't want to be holding onto a whole pile of bonds.
Today, I started the process of transitioning 20% of my bonds to cash. I will then only have 20% of my portfolio in bonds. The rest will be in cash and equities. After the next big dip in the market, I intend to buy more equities. And, this time around, I intend to use more of the cash that I have kept on the sidelines for way too long.
It is my belief that the stock market will show about a 14% - 18% return for this entire year, after a nasty correction (maybe two)... which I definitely expect. So, I want to be in equities, since that will provide a much better return than bonds. I intend to keep diversified, and I will NOT, I repeat NOT, be relying too heavily on AAPL. I will own a fair number of quality stocks and quality dividend-paying stocks, as well as those stocks that I see having a decent amount of potential for growth in spite of an unpredictable economy.
I am still VERY concerned about the housing crisis, and I don't think housing is recovering like we need. Also, the price of gasoline is going to create an emotional (as well as financial) problem for consumers. Yet, in spite of all these crazy problems, the economy is indeed more robust than it was. Hopefully, the consumer doesn't freeze up.
Bottom line... I am departing from my many years of holding 40% in bonds... and I am currently in the active process of decreasing my investment in those bonds, and I will also decrease my cash holdings, and significantly increase my investment in equities.
EDIT: I will be LESS interested in using any market timing with my entire portfolio... so, unless I see a very significant reason to do so... it's just not going to happen. Small trades based upon timing might occur, but as I move forward from this point, I am going to be much less motivated to pop my entire porfolio in and out of the market.
TM - There is only one part of your strategy that I believe you may be off. The recent sluggish behavior of AAPL is very temporary in my opinion. Apple has SO much going for it in the coming months. As I have stated before, their earnings reports will continue to astound the market and I plan to hold on to every share of the this stock and possibly add to it on a decent break.
But who knows for sure. Maybe Apple will be affected by a parts problem more than I realize. Or perhaps competition from amzn, etc., will eat away at Apple's profit margin. I doubt it will have much of an effect, but maybe my thinking is flawed.
Don't get me wrong... I love AAPL, but I just don't want to think of it as the Holy Grail. Sure, I expect the company to do well, and that's why I own the stock. It is, and will continue to be an important part of my portfolio, but I will not allow it, or ANY single individual stock, to become too weighted within the portfolio.
Sounds like a well thought out strategy, and well presented....
If I were involved with a client, with this outlook, I would suggest he/she not get involved with dividend producing securities, until the return were to be more meaningful.....That might happen with a correction, and dividend boost, but at this level , and aggressive attitude with `story` stocks would be the way to go, and a very quick trigger....
I personally think Bill Gross is going to be right.....A very long time with low interest rates.....Short rates to go up shortly, but longer term not....I do not think the economy can stand rate increases.....Tony
I understand your logical point-of-view regarding the dividend-paying stocks. There's no doubt that they don't always generate as much ROI, but I personally believe (as do many/most investors) that it is smart to include a nominal percentage of stocks that are solid quality companies that pay dividends.
Some of them have actually appreciated significantly in value as well as pay a dividend, such as Vodaphone (VOD), which is a stock I own, and it has gained 24.07% in the last year!... and on top of that yields 4.61%. What's wrong with THAT? I also own AT&T (T), which has gained 17.95% in the past year and yielded 5.62%. I recently added McDonalds, which gained 13.61% in the past year, and yields 3.19%. I have always had Altria (MO) in my portfolio and I still own it again in my latest portfolio... it has gained 26.15% in the past year!!, and yields 5.83%!!
Those are compelling numbers, IMO.
So, as much as I hate to disagree with you regarding dividend-paying stocks... I must.
OTOH... when it comes to interest rates... I definitely agree with you that the economy can't stand a major rate increase, but a small one might be necessary to begin to put a lid on inflation, and to signal that the days of ridiculously low interest rates are over.
I`m sort of talking from this point forward....on the dividend paying stocks.....Your selections have been good ones, but now with the volatility-- a three month wait between dividends could be costly..
Never the less you have a very good point, as you have astutely picked some worthwhile companies...Some of which I personally have held in the past, although I lost money on T, while just looking for a haven a couple of years ago..
All in all I am only suggesting that a quick trigger could come in hand ....and further that the stock market is not what it use to be....one needs to be very skeptical now a day....Tony
Moving forward sure seems like it could be difficult. But, I don't see a better alternative. I still believe the market will advance.
Consider what the market has done this quarter against soooo much bad global news.
Overall, I am still bullish. The economy has plenty of room for improvement, and that improvement should result in an improved stock market.
Risks are everywhere, but the market's strength is so profound that I can't ignore it. I have been "in" the market for most of this quarter, but I did not go in nearly as deep as I should have, IMO. I held onto waaaay too much cash. So now, I am prepared to use that cash as well as generate even more cash by the sale of half of my bonds. I will hold the cash on the sidelines until genuine good opportunities present themselves, and then I will pounce.
I consider unusual dips in individual stocks as good opportunities, and I see an overall market correction as a good opportunity.
You are right that the market seems different than typical, but I can't help but wonder when the last time you might consider that the market was "normal". Maybe never? Afterall, what is "normal" anyway? The only thing that might be "different" that comes to my mind is "computer trading". Do you think that perhaps the market was more normal before "computer-trading"?
Although I have nothing to compare it to, as WE, the both of us, don`t have access to the institutional trades...The mega blocks that are done off floor ( I think)....All we see now is the public stuff, hundred to a few thousand shares....That is really no heads up, so all we are left with is how we` feel,` which is so influenced by the media...
When most trades were viewable, and the floor was level, everyone had a fairer chance, so I think that now is no longer available, and the big--no make that huge-firms just sort of set the price, and we just trade around that..
I`m with you about the economy...Things are perking up...but when the huge firms decide WE need a little scare, we get a scare...That keeps commissions and trades flowing...and then the whole thing is that we have to be aware what starts out to be a scare, turns out to be more than that....That is why I have said what I said previously..
I wonder how much money I have lost waiting for a dividend that is x in only a few weeks.....again a `quick` trigger is important...Tony
Yes! All well said. I understand your point, and the institutional market manipulation is something I have complained about in the past. I do believe it occurs, and I agree we are at the mercy of a big arm reaching out and sweeping away all the chips on the table. That's why a fast trigger can be important.
Consider, however, that even though the market is "forced" downward on occassion... it will indeed come back, and it is during that comeback that we can hopefully invest more.
The unpredictable nature of the market is even more unpredictable when it is manipulated. But paying attention to fundamentals ultimately works most of the time... although clearly not always, as had been shown by the unrealistic high price of oil in recent years.
Too bad those 10 percent CD's from the late 80's are no longer available... I'd buy the heck out of 'em and ditch stocks if they were available again... lol.
To follow up a bit-----Warren Buffet has done a magnificent job of investing and managing Berkshire.....I have read and reread many of his annual letters, and frankly have tried to have the patience he has urged....I`v failed ...but as you are aware, they haven`t paid out anything over all these years.....Invested and re invested.....Now on the other hand they have received dividends from their investments, and encourage the companies to pay dividends....Just this last big purchase, Burlington, he ( Mr. Buffet) was quite excited that Berkshire would be able to pump money into the railroad, but in reality has gotten many billions of dollars from the company.... The idea many years ago, was to have a huge split to enable the investors to be able to sell off shares , to be able to live...only a long term capitol gain to pay taxes on....I was a share holder many years ago, and although I made a handsome return, the holding period was just a few years, but for me I just don`t have the type of patience required to invest in that manner..
I do have the patience to invest that way in real estate, and as I mentioned a while ago, I think this is an opportunity to do just that...What I mean is that if a person has an opportunity to improve their standard of living, this time period is a good one....You might have to pay the typical costs to move and even take a loss of some nature on the present asset, but the more desirable location will have a larger comeback than the present investment...To my way of thinking this is not a bad thing...and it further removes some appreciated stocks from a portfolio......Just a thought..
For some reason I just don`t think that the guy that works for Berkshire did anything unusual.....I personally usually don`t take an interest in a company until I have` skin in the game`, although I do do my homework...I`m just more focused, sort of like Charlie and apple...Too big a position I chicken out quickly, but a smaller one, I don`t worry near as much.... and if the `puritans` think that is bad, just wait till they find out what is really going on behind the scene . Tony
I feel the same way Tag. Nobody commented on that GDP article I posted over the weekend, which said stocks sell off at 110% of GDP and we are currently at 95% of GDP. But with an improving economy the GDP will grow and stocks have greater room. The big issue is how will the market do when the Fed policy gets a little more unfavorable probably later this year or early next. IMO one hit and corrction and then resumed upward trend as interest rates will still be quite low and the overall fed policy is still a great one for stocks. Inflation always needs to be watched and prevented but it will make a bigger comeback when real estate gets on steady ground and jobs improve. That is likely next year IMO. This year the economy is benefitting from pent-up demand by those that have steady jobs or improving businesses and high confidence in them.
Tony - good post also though as real estate is a good investment as well. It may be where stocks were a few years ago but when it does come back I think it will be slowly and still offer plenty of time to get in at, or at least very close to the ground floor.
My parents finally sold a home in Florida which they inherited from my grandparents yesterday. At least it should be sold. They have a contract with a preapproved buyer with over 20% down. It appears things are picking up a bit. They went about 3 years w/o an offer. They've lowered the price consistently over that time and they ended up getting 3 offers in the last few weeks.
What's shocking is the selling price is only about $10k more than what my grandparents paid for the house in 1985 and is nearly 50% less than the original asking price 2-3 years ago.
The question is, should my parents have sold now. We are only talking about an $80k selling price (crazy to think you can get a 3 bedroom 1700 sq ft ranch in good shape for that low). But nobody uses it, I don't think anyone has been to the house in over two years (I was in Florida last week but we stayed at a Disney resort). They rented it once and that turned into a disaster and just maintaining it costs about $5k year (utilities, taxes, maintenance, insurance). So even if the market were to increase 5% a year, it's break even at best 10 years from now.
I am getting nibbles on mine, at 80K above my purchased price last year. It's true that prices are low. The appraisal to rebuild the house for insurance purpose came in at 260K, so I basically got a free lot that is on boatable water, and 10 minutes drive to Siesta Key beaches.
Nice, I like that area. Having water access certainly gives you a leg up. My aunt used to have a place in Sarasota on a channel to the bay. Beautiful area. She sold it 6 years ago for 1.3 mil. The buyer was planning on a complete rebuild on the house as it was from the 50's. I wonder what that property would go for now?
Several weeks ago, I posted a stock tip, WFT. IIRC... you were the only one here that followed up and actually bought some. I think you will be glad in the long run. The stock, WFT (not to be confused with WTF... haha), has risen over 10% in just those several weeks since I mentioned it. I definitely expect more upside, so I recommend you don't flip it yet, and if there is any big dip, buy a little more. As I mentioned before, we must use caution when we are speculating.
Yes I did buy WFT with the broker accounts on your recommendation. However, I don't remember the exact entry price. I think it was around $20-21. I can't get a hold of the broker at this moment to find out for sure.
Man, what is wrong with AAPL? It has been acting like dog poop lately. Oh well, this too shall pass. The new earnings report will shock the world in a bullish way.
I have obviously chosen your 2nd option (waiting). And, when the stock reaches $365 in the near future, I will look back and say, "what an idiot I was, I should have bought more down there".
It cost seventy$ up from fifty five $ so I thought what a good deal Tag got on his new car.....The price here in Charleston is around 3.70$ to 3.80$ and what really uses up fuel is the tractor etc at the farm...
I really can`t put my finger on it, but business activity although robust, just has a softish feel to it...I am only speaking for the last few weeks, say month, so with Spring in full flow, and daylight savings behind us, I look forward to a boom...Tony
Tony, One of the very first and earliest signs of a slowdown is in my own business. The computerized virtual design and physical production of printed materials used for promotional purposes is one of the first business activities to slow down in advance of a recession... and therefore is a great barometer. Essentially, this is a very core advertising-related business activity. It is known that core advertising activity is one of the best indicators of economic vitality.
The last few weeks have indicated a slight decline in activity, but not at any alarming level at this point. I do believe that high gas (energy, in general) and food prices are going to have a slightly negative impact.
The fed will ultimately be caught between a rock and a hard place... it will be almost unable to lower rates, yet raising them too abruptly could spell serious trouble. It could come to a head before the end of this month. I already have plans in place to respond to the fed and the market's reaction, which could obviously be good or not so good, depending upon the fed's actions and the market's reaction... and I think that it's important for investors and traders to be prepared for either scenario.
Anyway, even though trouble is indeed on the horizon, it's still too early to say with any certainty that it will come our way.
BTW... it is nearly IMPOSSIBLE to get a Lexus CT out here without waiting at least three months or longer. So, I'm glad to have a CT. It's a decent car for the money, and I do appreciate driving by the gas pumps instead of stopping as often. The CT has very long waiting lists to get one, and even Prius inventories are getting squeezed. No surprise with gas closing in on $5.00/gallon. I predicted this over a year ago, and I currently will go on record to say that I believe that if/when prices stabilize, they will NEVER return for any significant duration to their recent lows. It's a continuation of what I said the last time... only worse! IOW, IMO, high gas prices are now a way of life. Isn't it all just dandy?... Now we have yet another "new reality" for all of us to acclimate to.
What a freakin' mess. Is there anybody in government capable of doing the right things to straighten all of this out?
Most all politicians seem to put their personal or party agenda ahead of what is best for the country. I don't know how we let things get in such a mess as this.
I seem to be inundated with as much junkmail and credit card offers than at any time I can remember. I hope that's a positive sign.
Also inundated with the same credit card offers... more than at any time. Not sure it's a positive sign or not. Could be a sign banks are hurting... or money is readily available... or maybe the banks believe interest rates are going to rise soon, and they want to get more consumers stuck making high interest payments... it's hard to know what it really means.
I do agree gas prices will never see a significant low time again.
The next gas price "high" will be between $5 and $6/ gallon... and it will be sooner than a lot of folks think.
Government and capability of doing things right are oxymorons.
When it comes to government... you sure got the "morons" part right... LOL!
If you know what you're doing, or know someone that does... maybe you could make a ton of money in natural gas... but I've avoided it like the plague. Way too tricky for me.
I am not sure, but perhaps Len or Charlie know enough about natural gas to offer a solid recommendation.
I've heard there are 0% cards coming or already out now...of course, pay your balance monthly and it doesn't matter, but still interesting.
I've noticed that locally, a few high end (7 figures) houses for sale have "sold" signs on them, while some others continue to sit...and a house I like, less expensive (but still way out of my league) just sold, at a price that would have been 50% higher during the crazy days. That could be a sign the economy isn't dead...but gains are going to a small subset of the population, which won't help anything in the long run.
I'm paying over $4 for gas now...$5 will indeed be a reality.
Let your imagination run wild,as what use to be expensive to a person, now may be with in reach......Just take thirty percent off just to start with, and amazingly many houses are selling for much less.....No rush, but the opportunity is out there for those that `dream` Tony
I'll have to keep dreaming...in the case of what I like, it's a house that once might have brought 850-900 now selling (transaction price) for ~575, hugely cheaper but too rich for my blood :shades:
But it's encouraging either way, I finally made a good decision about 4-5 years ago, and didn't buy anything. I have a co-worker who is trying to sell a place for 130K less (350 vs 220) than was paid 4 years ago...if they hadn't accumulated equity to put into it, they'd be having a disaster now, and they are still in trouble.
No question about the poor real estate situation, but my point is some of the houses are starting to sell, therefore some people are now buying more preferable houses than they presently have....The huge majority of people really are living where they want to live, so this just doesn`t relate to them Tony
I am not sure, but perhaps Len or Charlie know enough about natural gas to offer a solid recommendation.
I don't know how much I can help here but here is my take on nat gas. It has been the dog of dogs of the energy markets the past couple years or more. The telling tale was over the winter during severe cold waves in the Midwest and Northeast where most of the natural gas consumption takes place. On numerous occasions, this market would plunge either on a forecast or an actual cold wave in these areas. At the same time crude would go to the moon. To say that there have been huge supplies of nat gas would be an understatement. Therein lies the problem.
Obviously, with crude SO high, nat gas will likely stabilize and in fact it may even show some upside potential. But there will not be any huge moves in this market until the supply dwindles a lot more from here.
I have been very busy the past couple days and I have not had much chance to post. The bottom line is that I did the unthinkable yesterday. I sold all my shares of AAPL at about $341. As you could tell from my previous concerns here, AAPL, for whatever reason, (AMZN competition, supply problems from Japan, etc.) has been acting horribly compared to the market in general. I did not want to fight it anymore.
I fully expect to buy back AAPL with a vengeance possibly as early as today depending on how it acts. I still fully believe that Apple will reach at least $400 this year and perhaps $500 next year. This is a golden company. I hope It doesn't leave me in the dust and takes off all of a sudden.
Charlie... in the case of AAPL, at it's current levels, I would NOT be a seller here. I would simply hold. You are risking saving nickels when you could lose dollars. AAPL is at or near it's bottom. Buy it back and close your eyes for six months. The stock will be $375 or higher, and eventually AAPL will break through $400.
The market giveth and taketh away... and then giveth more and taketh away. AAPL has already taken most of it's hit. It might go a little lower, but it's almost too late to sell, IMO... it's now probably better to hold or buy.
My recommendation is what I have done... diversify. I trimmed my percentage of AAPL, but am holding it along with other stocks. For example, buy a little Ford again... it's likely to go up 10-15 percent very soon... and it's not in the tech sector, which has been under pressure (including AAPL).
Edit: At this moment, futures are down enough to consider buying a number of stocks. AAPL is down sharply in pre-market... could be a good time to buy. Your position will be improved. Don't lose that edge. Perhaps if you are still so concerned, go lightly and dollar-cost-average your repurchases over a period of time. Good luck.
Apple has been down and may fall off more becaause the nasdaq changed its weighting in the index. So funds that try to track the index are big sellers right now. Apple is trading below the s&p multiple these days and with this dip is going to be a screaming buy
Yes, I agree it is begining to look very attractive.
So, are you therefore going to buy more AAPL at the open?
Personally, however, I'm just holding onto my AAPL shares for the long term. I can't make the market all about AAPL any more. I have about 45 other stocks at this point, and they are all very important.
That said, AAPL does look like a good opportunity, and perhaps I will add just a little more to the current mix... but only if it goes even lower... say, perhaps $325.
TM
EDIT: bought a lot more equities this morning... none of it AAPL... have enough of it for now.
No harm done. As I stated very early this morning, I may get back in today. Well, I bought SOME at about $339. I am trying to be patient and see how it acts. It still acts pretty crappy in my opinion. If it drops down toward $336 I will buy a little more but not the total amount that I had prior to yesterday.
BTW, I did nothing yesterday with the broker accounts. I sold all my AAPL I had in the 2 E-Trade accounts.
Yes, a few people in this weird economy are doing well and are able to get everything they want. Whether or not this is sustainable is another story. Nothing is trickling down yet again.
I don't know if the rest are living where they want to live, or where they have to live.
If I remember correctly, you live in the Seattle area. My son and his family are also there. They bought an old (1925) home for something like $380K about 2.5 years ago. This house has terrible insulation and it is rather beat up. A comparable home here in Des Moines would have cost no more than about $80K I would say. My wife and I were flabargasted at the cost of real estate in that area. I imagine that now their house is worth no more than $280K. Is that about right? Btw, their house is located about 10-12 miles north of downtown on Dayton Avenue. I may be off on the distance a bit.
Those prices sound about right. I googled the street, that's kind of a north Seattle area, not a bad neighborhood but nothing amazing, pretty average. Maybe 5-6 miles from downtown, but with the ridiculous traffic, it could easily seem twice as long. You'll have to drive an hour or more to find somewhat reasonably priced housing.
I'm in an adjacent eastern suburb, affluent for some time with even higher housing prices, but here too they have fallen sharply, with a glut of condos on the market too. Wages just didn't keep up. And this is one of those areas where rent and purchase price don't align...you can get a 400K house for 1500/month.
Now there is something I haven`t really ever understood......It sore of means, to me, that funds are just some how some day going to land in my lap, for free..It is not going to happen..
What does happen, when someone buys a house, is big sums of money are spent on all sorts of services, and many different people earn varying sums of money for their services......If any trickling down happens I would guess it would be in some far off country who provides basic tangibles..Here in this country , the system begins to work......I think by this time next year , the housing debacle will be well on it`s way to showing real light at the end of the tunnel...and I further think that `housing` and it`s many tentacles are way more important than statistics show it to be
I am talking about this being a good time to re-position oneself if they are inclined to do so.....No rush, but this is the time ...Tony ps Of course this is just my opinion
1. When large companies prosper, their advertising budgets tend to go up, and they spend money at my company. IOW, greater corporate profits trickle down from their companies to mine.
2. When I get very busy because business is good, I can hire more employees (I used to have quite a few more), and give raises and bonuses and perks to them as well. IOW, my company's greater prosperity trickles down to my employees. (and they continue with the trickle down process, of course)
3. If I am not taxed to death, and if I am left with some extra disposable income after taxes, I generally spend much of it... sometimes on consumer products, cars (as you remember the good 'ol days), travel and leisure, home improvement, and more. IOW, my greater personal wealth trickles down into the economy in general.
There is an interesting equation that you might want to consider. If you don't tax people at all, the government can't flourish. If you tax people and businesses too much, then the consumers and companies can't flourish. Therefore, It really makes sense to understand that there is a bell curve that MUST NEVER be ignored. If taxes are at a comfortable range, the economy can flourish... and trickle down is a big part of it. That's why over-taxing the successful is a huge mistake.
I just don`t phrase thing that way, as I think almost all contribute their service to the overall good of our nation...I mean what comes first, the `chicken or the egg?`
Just where does this trickle down start from? and another question I have been thinking about lately, when you spend your excess funds on say a property, like the Chines building their country, does that then just eliminate the excess capitol sloshing around? I wonder about this thing called `Inflation`and maybe if capitol is spent on tangibles, than things may turn out differently than thought......Just a question Tony
I think it's a nice theory, but that's about it. The socio-economic changes of the past 30 or so years don't seem to support it.
You are right of course, the housing picture will eventually change and become positive. It can't decline forever. I do think it can still fall though, at least in my area - employment isn't really improving, real incomes are falling, and there are still lots of foreclosures and short sales out there.
I replied to the trickle down question, but I didn't reply to the housing perspective you have been posting about.
I just want to let you know that you are soooo very right about housing. THIS IS THE LOW. Anything lower is irrelevant at this point. The low home prices combined with the ultra low interest rates are nothing short of historic. People can often wait a lifetime and never get this kind of opportunity. Anyone that is serious about owning a home should do everything within their ability to secure a home at this point in time.
When I say this point in time, I don't mean today or this week... but I do mean over a course of numerousmonths ahead. A home buyer can be diligent and patient and end up getting quite the opportunity of a lifetime.
Your posts regarding real estate are right on target, IMO.
For those that already own and are contemplating moving up the ladder, I have this to say... Personally, I have no desire whatsoever to ever re-purchase a 4 - 5 million-dollar estate property like I previously owned. I let it go for exactly 3 million when I bailed out, and it might be worth even less now, I am not sure. But, I am sure that I don't miss paying that monster mortgage, or that $1,500 monthly electric bill or the $800 monthly water bill, or the $2,000 monthly association dues, or the $400 monthly gardner, and the pool service, and the maid service, and the routine repairs and maintenance, and the astronomical homeowners insurance and property taxes.
But, my wife sure misses it... lol.
No... I don't miss it at all. I love the simpler life by the beach. :shades:
I learned my lesson... for me, the simpler the better. Sorry, but the wife will have to adjust.
Sometimes LESS is actually MORE.
On a different and lower dollar scale, of course, but just maybe that's why some folks aren't scrambling to move up the ladder during this historic opportunity.
But, for first-time buyers, or those that TRULY need to step up another notch... THIS IS THE TIME.
Well, I think this dude is full of skata as we say in Greek.
On a serious note, I had orders this morning to buy more AAPL at $336.40. I did not think I was going to get filled. Then, the "unthinkable" happened in reverse. I noticed that ALL markets were tanking like there is no tomorrow about 45 minutes ago. I obviously got filled. I look for news and all of a sudden see that there was a 7.4 quake in Japan with the epicenter close to the original historic 9.0 quake. I realized then what was causing the markets to collapse. But after a few minutes the markets were digesting what just happened and they started to stabilize and bounce up again. I hope it's not a "deadcat" bounce .
The news coming in now seems to indicate the new tsunami caused by this monster aftershock will not be that big of a deal. One of my biggest concerns was what this new quake/tsunami was going to do to the already stricken nuclear plant at Fukushima. I am hearing that it will not cause any further harm. Let's all hope that is the case. What a world!
As I write this, I see that AAPL has bounced from near $336 to steady for the day.
EDIT: 11:00 AM Central...Good news! The tsunami warning has been lifted and the news is that there has been no additional damage to the nuclear plant.
Comments
Regards,
OW
It better get real quickly because it's far behind despite it's attempt to enter the apps market.
Microsoft (MSFT): Goldman funds increased holdings of Microsoft by 3.2%. MSFT has a market cap of $208.21B, and offers a $0.64 (2.50%) dividend. The stock currently trades at a P/E of 10.58. Microsoft is a relatively safe and mature company, but is also working hard to expand its business. They recently released Internet Explorer 9 and have entered into a partnership with Nokia (NOK) in an attempt to build their mobile phone software business. On the other hand, the company has killed production on its Zune music player, in what appears to be a defeat to the iPod.
We will see if it's a dark horse great investment or a lingering has been in the software world. :confuse:
Regards,
OW
Months ago, I mentioned that I was expecting interest rates to rise at some point this year. I still expect that to happen. Existing bonds can typically decline in value (although still pay their rate of return) when interest rates are on the rise, because older lower-rate bonds obviously become less desireable (and valuable) than newer bonds that issue higher rates of return.
So... at this point, I do not expect the Fed to ease interest rates. Even if the Fed were to attempt to do that, there really isn't much more room to go down. And, I don't expect to see any QE3. I actually expect at some point this year, the Fed will raise interest rates. I see the possible threat of inflation worming its way into the economy, which typically results in a Fed move that increases the rates.
If the Fed does indeed raise rates, then I really don't want to be holding onto a whole pile of bonds.
Today, I started the process of transitioning 20% of my bonds to cash. I will then only have 20% of my portfolio in bonds. The rest will be in cash and equities. After the next big dip in the market, I intend to buy more equities. And, this time around, I intend to use more of the cash that I have kept on the sidelines for way too long.
It is my belief that the stock market will show about a 14% - 18% return for this entire year, after a nasty correction (maybe two)... which I definitely expect. So, I want to be in equities, since that will provide a much better return than bonds. I intend to keep diversified, and I will NOT, I repeat NOT, be relying too heavily on AAPL. I will own a fair number of quality stocks and quality dividend-paying stocks, as well as those stocks that I see having a decent amount of potential for growth in spite of an unpredictable economy.
I am still VERY concerned about the housing crisis, and I don't think housing is recovering like we need. Also, the price of gasoline is going to create an emotional (as well as financial) problem for consumers. Yet, in spite of all these crazy problems, the economy is indeed more robust than it was. Hopefully, the consumer doesn't freeze up.
Bottom line... I am departing from my many years of holding 40% in bonds... and I am currently in the active process of decreasing my investment in those bonds, and I will also decrease my cash holdings, and significantly increase my investment in equities.
EDIT: I will be LESS interested in using any market timing with my entire portfolio... so, unless I see a very significant reason to do so... it's just not going to happen. Small trades based upon timing might occur, but as I move forward from this point, I am going to be much less motivated to pop my entire porfolio in and out of the market.
TM
But who knows for sure. Maybe Apple will be affected by a parts problem more than I realize. Or perhaps competition from amzn, etc., will eat away at Apple's profit margin. I doubt it will have much of an effect, but maybe my thinking is flawed.
Don't get me wrong... I love AAPL, but I just don't want to think of it as the Holy Grail. Sure, I expect the company to do well, and that's why I own the stock. It is, and will continue to be an important part of my portfolio, but I will not allow it, or ANY single individual stock, to become too weighted within the portfolio.
TM
Sounds like a well thought out strategy, and well presented....
If I were involved with a client, with this outlook, I would suggest he/she not get involved with dividend producing securities, until the return were to be more meaningful.....That might happen with a correction, and dividend boost, but at this level , and aggressive attitude with `story` stocks would be the way to go, and a very quick trigger....
I personally think Bill Gross is going to be right.....A very long time with low interest rates.....Short rates to go up shortly, but longer term not....I do not think the economy can stand rate increases.....Tony
I understand your logical point-of-view regarding the dividend-paying stocks. There's no doubt that they don't always generate as much ROI, but I personally believe (as do many/most investors) that it is smart to include a nominal percentage of stocks that are solid quality companies that pay dividends.
Some of them have actually appreciated significantly in value as well as pay a dividend, such as Vodaphone (VOD), which is a stock I own, and it has gained 24.07% in the last year!... and on top of that yields 4.61%. What's wrong with THAT? I also own AT&T (T), which has gained 17.95% in the past year and yielded 5.62%. I recently added McDonalds, which gained 13.61% in the past year, and yields 3.19%. I have always had Altria (MO) in my portfolio and I still own it again in my latest portfolio... it has gained 26.15% in the past year!!, and yields 5.83%!!
Those are compelling numbers, IMO.
So, as much as I hate to disagree with you regarding dividend-paying stocks... I must.
OTOH... when it comes to interest rates... I definitely agree with you that the economy can't stand a major rate increase, but a small one might be necessary to begin to put a lid on inflation, and to signal that the days of ridiculously low interest rates are over.
TM
I`m sort of talking from this point forward....on the dividend paying stocks.....Your selections have been good ones, but now with the volatility-- a three month wait between dividends could be costly..
Never the less you have a very good point, as you have astutely picked some worthwhile companies...Some of which I personally have held in the past, although I lost money on T, while just looking for a haven a couple of years ago..
All in all I am only suggesting that a quick trigger could come in hand ....and further that the stock market is not what it use to be....one needs to be very skeptical now a day....Tony
Moving forward sure seems like it could be difficult. But, I don't see a better alternative. I still believe the market will advance.
Consider what the market has done this quarter against soooo much bad global news.
Overall, I am still bullish. The economy has plenty of room for improvement, and that improvement should result in an improved stock market.
Risks are everywhere, but the market's strength is so profound that I can't ignore it. I have been "in" the market for most of this quarter, but I did not go in nearly as deep as I should have, IMO. I held onto waaaay too much cash. So now, I am prepared to use that cash as well as generate even more cash by the sale of half of my bonds. I will hold the cash on the sidelines until genuine good opportunities present themselves, and then I will pounce.
I consider unusual dips in individual stocks as good opportunities, and I see an overall market correction as a good opportunity.
You are right that the market seems different than typical, but I can't help but wonder when the last time you might consider that the market was "normal". Maybe never? Afterall, what is "normal" anyway? The only thing that might be "different" that comes to my mind is "computer trading". Do you think that perhaps the market was more normal before "computer-trading"?
TM
When most trades were viewable, and the floor was level, everyone had a fairer chance, so I think that now is no longer available, and the big--no make that huge-firms just sort of set the price, and we just trade around that..
I`m with you about the economy...Things are perking up...but when the huge firms decide WE need a little scare, we get a scare...That keeps commissions and trades flowing...and then the whole thing is that we have to be aware what starts out to be a scare, turns out to be more than that....That is why I have said what I said previously..
I wonder how much money I have lost waiting for a dividend that is x in only a few weeks.....again a `quick` trigger is important...Tony
Consider, however, that even though the market is "forced" downward on occassion... it will indeed come back, and it is during that comeback that we can hopefully invest more.
The unpredictable nature of the market is even more unpredictable when it is manipulated. But paying attention to fundamentals ultimately works most of the time... although clearly not always, as had been shown by the unrealistic high price of oil in recent years.
Too bad those 10 percent CD's from the late 80's are no longer available... I'd buy the heck out of 'em and ditch stocks if they were available again... lol.
TM
The idea many years ago, was to have a huge split to enable the investors to be able to sell off shares , to be able to live...only a long term capitol gain to pay taxes on....I was a share holder many years ago, and although I made a handsome return, the holding period was just a few years, but for me I just don`t have the type of patience required to invest in that manner..
I do have the patience to invest that way in real estate, and as I mentioned a while ago, I think this is an opportunity to do just that...What I mean is that if a person has an opportunity to improve their standard of living, this time period is a good one....You might have to pay the typical costs to move and even take a loss of some nature on the present asset, but the more desirable location will have a larger comeback than the present investment...To my way of thinking this is not a bad thing...and it further removes some appreciated stocks from a portfolio......Just a thought..
For some reason I just don`t think that the guy that works for Berkshire did anything unusual.....I personally usually don`t take an interest in a company until I have` skin in the game`, although I do do my homework...I`m just more focused, sort of like Charlie and apple...Too big a position I chicken out quickly, but a smaller one, I don`t worry near as much.... and if the `puritans` think that is bad, just wait till they find out what is really going on behind the scene
Tony - good post also though as real estate is a good investment as well. It may be where stocks were a few years ago but when it does come back I think it will be slowly and still offer plenty of time to get in at, or at least very close to the ground floor.
What's shocking is the selling price is only about $10k more than what my grandparents paid for the house in 1985 and is nearly 50% less than the original asking price 2-3 years ago.
The question is, should my parents have sold now. We are only talking about an $80k selling price (crazy to think you can get a 3 bedroom 1700 sq ft ranch in good shape for that low). But nobody uses it, I don't think anyone has been to the house in over two years (I was in Florida last week but we stayed at a Disney resort). They rented it once and that turned into a disaster and just maintaining it costs about $5k year (utilities, taxes, maintenance, insurance). So even if the market were to increase 5% a year, it's break even at best 10 years from now.
It's true that prices are low. The appraisal to rebuild the house for insurance purpose came in at 260K, so I basically got a free lot that is on boatable water, and 10 minutes drive to Siesta Key beaches.
Several weeks ago, I posted a stock tip, WFT. IIRC... you were the only one here that followed up and actually bought some. I think you will be glad in the long run. The stock, WFT (not to be confused with WTF... haha), has risen over 10% in just those several weeks since I mentioned it. I definitely expect more upside, so I recommend you don't flip it yet, and if there is any big dip, buy a little more. As I mentioned before, we must use caution when we are speculating.
So far, not too shabby.
TM
Man, what is wrong with AAPL? It has been acting like dog poop lately. Oh well, this too shall pass. The new earnings report will shock the world in a bullish way.
If you are uncertain, however, then just wait and see.
If you no longer have confidence in the stock, then sell it while the price is still high, and while there are great profits to claim and retain.
Those are your choices, based upon your outlook for the stock.
TM
That is up to you. It's not too late. The opportunity is in front of you on a silver platter.
TM
I really can`t put my finger on it, but business activity although robust, just has a softish feel to it...I am only speaking for the last few weeks, say month, so with Spring in full flow, and daylight savings behind us, I look forward to a boom...Tony
One of the very first and earliest signs of a slowdown is in my own business. The computerized virtual design and physical production of printed materials used for promotional purposes is one of the first business activities to slow down in advance of a recession... and therefore is a great barometer. Essentially, this is a very core advertising-related business activity. It is known that core advertising activity is one of the best indicators of economic vitality.
The last few weeks have indicated a slight decline in activity, but not at any alarming level at this point. I do believe that high gas (energy, in general) and food prices are going to have a slightly negative impact.
The fed will ultimately be caught between a rock and a hard place... it will be almost unable to lower rates, yet raising them too abruptly could spell serious trouble. It could come to a head before the end of this month. I already have plans in place to respond to the fed and the market's reaction, which could obviously be good or not so good, depending upon the fed's actions and the market's reaction... and I think that it's important for investors and traders to be prepared for either scenario.
Anyway, even though trouble is indeed on the horizon, it's still too early to say with any certainty that it will come our way.
BTW... it is nearly IMPOSSIBLE to get a Lexus CT out here without waiting at least three months or longer. So, I'm glad to have a CT. It's a decent car for the money, and I do appreciate driving by the gas pumps instead of stopping as often. The CT has very long waiting lists to get one, and even Prius inventories are getting squeezed. No surprise with gas closing in on $5.00/gallon. I predicted this over a year ago, and I currently will go on record to say that I believe that if/when prices stabilize, they will NEVER return for any significant duration to their recent lows. It's a continuation of what I said the last time... only worse! IOW, IMO, high gas prices are now a way of life. Isn't it all just dandy?... Now we have yet another "new reality" for all of us to acclimate to.
What a freakin' mess. Is there anybody in government capable of doing the right things to straighten all of this out?
TM
How do you feel about investing in natural gas?
2013 LX 570 2016 LS 460
I do agree gas prices will never see a significant low time again.
Government and capability of doing things right are oxymorons.
Also inundated with the same credit card offers... more than at any time. Not sure it's a positive sign or not. Could be a sign banks are hurting... or money is readily available... or maybe the banks believe interest rates are going to rise soon, and they want to get more consumers stuck making high interest payments... it's hard to know what it really means.
I do agree gas prices will never see a significant low time again.
The next gas price "high" will be between $5 and $6/ gallon... and it will be sooner than a lot of folks think.
Government and capability of doing things right are oxymorons.
When it comes to government... you sure got the "morons" part right... LOL!
TM
If you know what you're doing, or know someone that does... maybe you could make a ton of money in natural gas... but I've avoided it like the plague. Way too tricky for me.
I am not sure, but perhaps Len or Charlie know enough about natural gas to offer a solid recommendation.
Sorry I can't help on that one.
TM
I've noticed that locally, a few high end (7 figures) houses for sale have "sold" signs on them, while some others continue to sit...and a house I like, less expensive (but still way out of my league) just sold, at a price that would have been 50% higher during the crazy days. That could be a sign the economy isn't dead...but gains are going to a small subset of the population, which won't help anything in the long run.
I'm paying over $4 for gas now...$5 will indeed be a reality.
Let your imagination run wild,as what use to be expensive to a person, now may be with in reach......Just take thirty percent off just to start with, and amazingly many houses are selling for much less.....No rush, but the opportunity is out there for those that `dream` Tony
But it's encouraging either way, I finally made a good decision about 4-5 years ago, and didn't buy anything. I have a co-worker who is trying to sell a place for 130K less (350 vs 220) than was paid 4 years ago...if they hadn't accumulated equity to put into it, they'd be having a disaster now, and they are still in trouble.
I don't know how much I can help here but here is my take on nat gas. It has been the dog of dogs of the energy markets the past couple years or more. The telling tale was over the winter during severe cold waves in the Midwest and Northeast where most of the natural gas consumption takes place. On numerous occasions, this market would plunge either on a forecast or an actual cold wave in these areas. At the same time crude would go to the moon. To say that there have been huge supplies of nat gas would be an understatement. Therein lies the problem.
Obviously, with crude SO high, nat gas will likely stabilize and in fact it may even show some upside potential. But there will not be any huge moves in this market until the supply dwindles a lot more from here.
I fully expect to buy back AAPL with a vengeance possibly as early as today depending on how it acts. I still fully believe that Apple will reach at least $400 this year and perhaps $500 next year. This is a golden company. I hope It doesn't leave me in the dust and takes off all of a sudden.
The market giveth and taketh away... and then giveth more and taketh away. AAPL has already taken most of it's hit. It might go a little lower, but it's almost too late to sell, IMO... it's now probably better to hold or buy.
My recommendation is what I have done... diversify. I trimmed my percentage of AAPL, but am holding it along with other stocks. For example, buy a little Ford again... it's likely to go up 10-15 percent very soon... and it's not in the tech sector, which has been under pressure (including AAPL).
Edit: At this moment, futures are down enough to consider buying a number of stocks. AAPL is down sharply in pre-market... could be a good time to buy. Your position will be improved. Don't lose that edge. Perhaps if you are still so concerned, go lightly and dollar-cost-average your repurchases over a period of time. Good luck.
TM
Yes, I agree it is begining to look very attractive.
So, are you therefore going to buy more AAPL at the open?
Personally, however, I'm just holding onto my AAPL shares for the long term. I can't make the market all about AAPL any more. I have about 45 other stocks at this point, and they are all very important.
That said, AAPL does look like a good opportunity, and perhaps I will add just a little more to the current mix... but only if it goes even lower... say, perhaps $325.
TM
EDIT: bought a lot more equities this morning... none of it AAPL... have enough of it for now.
BTW, I did nothing yesterday with the broker accounts. I sold all my AAPL I had in the 2 E-Trade accounts.
I don't know if the rest are living where they want to live, or where they have to live.
If I remember correctly, you live in the Seattle area. My son and his family are also there. They bought an old (1925) home for something like $380K about 2.5 years ago. This house has terrible insulation and it is rather beat up. A comparable home here in Des Moines would have cost no more than about $80K I would say. My wife and I were flabargasted at the cost of real estate in that area. I imagine that now their house is worth no more than $280K. Is that about right? Btw, their house is located about 10-12 miles north of downtown on Dayton Avenue. I may be off on the distance a bit.
I'm in an adjacent eastern suburb, affluent for some time with even higher housing prices, but here too they have fallen sharply, with a glut of condos on the market too. Wages just didn't keep up. And this is one of those areas where rent and purchase price don't align...you can get a 400K house for 1500/month.
Now there is something I haven`t really ever understood......It sore of means, to me, that funds are just some how some day going to land in my lap, for free..It is not going to happen..
What does happen, when someone buys a house, is big sums of money are spent on all sorts of services, and many different people earn varying sums of money for their services......If any trickling down happens I would guess it would be in some far off country who provides basic tangibles..Here in this country , the system begins to work......I think by this time next year , the housing debacle will be well on it`s way to showing real light at the end of the tunnel...and I further think that `housing` and it`s many tentacles are way more important than statistics show it to be
I am talking about this being a good time to re-position oneself if they are inclined to do so.....No rush, but this is the time ...Tony ps Of course this is just my opinion
Here are three ways trickle down works for me...
1. When large companies prosper, their advertising budgets tend to go up, and they spend money at my company. IOW, greater corporate profits trickle down from their companies to mine.
2. When I get very busy because business is good, I can hire more employees (I used to have quite a few more), and give raises and bonuses and perks to them as well. IOW, my company's greater prosperity trickles down to my employees. (and they continue with the trickle down process, of course)
3. If I am not taxed to death, and if I am left with some extra disposable income after taxes, I generally spend much of it... sometimes on consumer products, cars (as you remember the good 'ol days), travel and leisure, home improvement, and more. IOW, my greater personal wealth trickles down into the economy in general.
There is an interesting equation that you might want to consider. If you don't tax people at all, the government can't flourish. If you tax people and businesses too much, then the consumers and companies can't flourish. Therefore, It really makes sense to understand that there is a bell curve that MUST NEVER be ignored. If taxes are at a comfortable range, the economy can flourish... and trickle down is a big part of it. That's why over-taxing the successful is a huge mistake.
Hope you get what I'm saying here.
TM
I just don`t phrase thing that way, as I think almost all contribute their service to the overall good of our nation...I mean what comes first, the `chicken or the egg?`
Just where does this trickle down start from? and another question I have been thinking about lately, when you spend your excess funds on say a property, like the Chines building their country, does that then just eliminate the excess capitol sloshing around? I wonder about this thing called `Inflation`and maybe if capitol is spent on tangibles, than things may turn out differently than thought......Just a question Tony
You are right of course, the housing picture will eventually change and become positive. It can't decline forever. I do think it can still fall though, at least in my area - employment isn't really improving, real incomes are falling, and there are still lots of foreclosures and short sales out there.
I replied to the trickle down question, but I didn't reply to the housing perspective you have been posting about.
I just want to let you know that you are soooo very right about housing. THIS IS THE LOW. Anything lower is irrelevant at this point. The low home prices combined with the ultra low interest rates are nothing short of historic. People can often wait a lifetime and never get this kind of opportunity. Anyone that is serious about owning a home should do everything within their ability to secure a home at this point in time.
When I say this point in time, I don't mean today or this week... but I do mean over a course of numerousmonths ahead. A home buyer can be diligent and patient and end up getting quite the opportunity of a lifetime.
Your posts regarding real estate are right on target, IMO.
For those that already own and are contemplating moving up the ladder, I have this to say... Personally, I have no desire whatsoever to ever re-purchase a 4 - 5 million-dollar estate property like I previously owned. I let it go for exactly 3 million when I bailed out, and it might be worth even less now, I am not sure. But, I am sure that I don't miss paying that monster mortgage, or that $1,500 monthly electric bill or the $800 monthly water bill, or the $2,000 monthly association dues, or the $400 monthly gardner, and the pool service, and the maid service, and the routine repairs and maintenance, and the astronomical homeowners insurance and property taxes.
But, my wife sure misses it... lol.
No... I don't miss it at all. I love the simpler life by the beach. :shades:
I learned my lesson... for me, the simpler the better. Sorry, but the wife will have to adjust.
Sometimes LESS is actually MORE.
On a different and lower dollar scale, of course, but just maybe that's why some folks aren't scrambling to move up the ladder during this historic opportunity.
But, for first-time buyers, or those that TRULY need to step up another notch... THIS IS THE TIME.
TM
It's like missing a party if you are out of it too long.
http://finance.yahoo.com/blogs/breakout/real-contrarian-greg-estes-anti-apple-lo- ng-microsoft-20110407-051735-522.html?sec=topStories&pos=9&asset=&ccode=
On a serious note, I had orders this morning to buy more AAPL at $336.40. I did not think I was going to get filled. Then, the "unthinkable" happened in reverse. I noticed that ALL markets were tanking like there is no tomorrow about 45 minutes ago. I obviously got filled. I look for news and all of a sudden see that there was a 7.4 quake in Japan with the epicenter close to the original historic 9.0 quake. I realized then what was causing the markets to collapse. But after a few minutes the markets were digesting what just happened and they started to stabilize and bounce up again. I hope it's not a "deadcat" bounce
The news coming in now seems to indicate the new tsunami caused by this monster aftershock will not be that big of a deal. One of my biggest concerns was what this new quake/tsunami was going to do to the already stricken nuclear plant at Fukushima. I am hearing that it will not cause any further harm. Let's all hope that is the case. What a world!
As I write this, I see that AAPL has bounced from near $336 to steady for the day.
EDIT: 11:00 AM Central...Good news! The tsunami warning has been lifted and the news is that there has been no additional damage to the nuclear plant.