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Old 02-13-2011, 03:00 PM   #41
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3.89 % individual stock for me.

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Just wondering - is there a correlation between personality type and willingness (or lack of) to "bet" on your own stock picking prowess?
At one point years ago I thought I knew what I was doing, so I bought a few stocks. It didn't take long to realize it wasn't much fun, so you can put me in the 'lack of willingness' camp.
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Old 02-13-2011, 05:39 PM   #42
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Sure, but then you have the "I have outperformed the market in 10 of the 11 years I have been invested solely in individual companies" types who refuse to believe they aren't smarter than everyone else.

Or you have those who because they can't do it rationalize that nobody can do it.
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Old 02-13-2011, 06:16 PM   #43
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Or you have those who because they can't do it rationalize that nobody can do it.
That's the spirit!

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Old 02-13-2011, 06:58 PM   #44
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17% of which 80% is my company stock, stock options and restricted stock. The plan is to get this down to 5% when I retire in 2-3 years. I've had more individual stocks in the past but got burned. One burn with only a few companies hurts. Now I'm an index guy.
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Old 02-13-2011, 07:45 PM   #45
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I do have a take, but it's purely personal choice, IMO. I have the opposite situation and I'm trying to decide what to do.
A stock that I purchased for $60 with a 4% yield is now trading at $100 and pays the same dividend amount, so the current yield is "only" 2.4%. While I might sell to capture the gain, I won't sell just becuase the dividend payout is 2.4% If I sell, I would try to find another stock that pays around 4%.
I'm glad for you. I wish my situation were similar. Still, this stock pretty much "made" my ER 12 or more years ago, so I can't complain too much that I didn't sell all of it in time. Since I didn't get rid of this relatively small amount, at least I'm so glad that it's paying me to keep it at this point. Though possible, I can't imagine it going much lower as it's always been a growth stock (instead of a value stock as it is now).

Good luck with your stock!!
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Old 02-14-2011, 01:55 PM   #46
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Or you have those who because they can't do it rationalize that nobody can do it.
Though there's a fair amount of data showing that "most" people don't...

Oh, 0% for me. All funds/ETFs...
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Old 02-14-2011, 02:24 PM   #47
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Or you have those who because they can't do it rationalize that nobody can do it.
What, specifically, is your edge?
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Old 02-14-2011, 06:48 PM   #48
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I am about 85% individual stocks and 15% cash.

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What, specifically, is your edge?
A ton of experience a good temperament and a broad body of knowledge.

Institutions are not able to get in and out of small companies providing small investors with a advantage on a number of levels. I am not constrained with limits on the size of a position. I have no need to window dress to attract more investment dollars. I don't have to pick my 17th favorite stock because I have too much money to invest. If I have 8 really good ideas I can just stick with the 8. Sometimes I drop to 50% individual stocks and at other times I have 95%. The remaining is almost always cash. I probably average 20% cash.

There is no substitute for experience valuing companies and in depth accounting knowledge.
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Old 02-14-2011, 07:03 PM   #49
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There are times when individual securities make perfect sense. try this one:

Someone A Canadian wants exposure to Canadian REITs. There is an index fund for this (XRE.TO, MER = 0.55%). This fund has 13 REITs. How hard is it to buy the components and save the MER? Alternatively, you can but the 4 biggest holdings and have > 50% of the index.
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Old 02-14-2011, 07:31 PM   #50
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Or you have those who because they can't do it rationalize that nobody can do it.
You go to it! Every diligent researcher/valuation specialist/basement accountant and (to a lesser extent) "technical analyst" helps keep our markets efficient and that's what makes profitable indexing possible. If it weren't for millions of people thinking they were smarter than the crowd, the crowd wouldn't be smart and I couldn't get by with tiny ERs and miniscule trading costs. Every low-cost index investor owes a debt to the guys who know they are smarter than indexers. I hoist a mug in your direction and wish you the best!

I also owe a debt to those who buy state lottery tickets and indirectly reduce my state income taxes. I never discourage them--they might win big! The evidence argues against it, but I can never prove they won't win. They want to try, and I want them to try.
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Old 02-14-2011, 08:13 PM   #51
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You go to it! Every diligent researcher/valuation specialist/basement accountant and (to a lesser extent) "technical analyst" helps keep our markets efficient and that's what makes profitable indexing possible. If it weren't for millions of people thinking they were smarter than the crowd, the crowd wouldn't be smart and I couldn't get by with tiny ERs and miniscule trading costs. Every low-cost index investor owes a debt to the guys who know they are smarter than indexers. I hoist a mug in your direction and wish you the best!

I also owe a debt to those who buy state lottery tickets and indirectly reduce my state income taxes. I never discourage them--they might win big! The evidence argues against it, but I can never prove they won't win. They want to try, and I want them to try.
And every individual investor that can exploit the inefficient allocation of capital promoted by indexing owes a debt to the passive indexer. Indexers pay expenses that are multiple times higher than what is often .07% or less in expenses. Lower than any index fund.
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Old 02-14-2011, 08:19 PM   #52
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(Emphasis added.)
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And every individual investor that can exploit the inefficient allocation of capital promoted by indexing owes a debt to the passive indexer. Indexers pay expenses that are multiple times higher than what is often .07% or less in expenses. Lower than any index fund.
All Fidelity Spartan Advantage class domestic MFs have expense ratios of 7 basis points.

That's .07% (for non accountants)

But, I'm sure most index investors pay more than that. And I'm sure most active stock traders pay LOTS more than that.
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Old 02-14-2011, 08:29 PM   #53
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There is no substitute for experience valuing companies and in depth accounting knowledge.
That plus 3,000 hours per year of time to dedicate to a single sector, access to senior management, deep contacts within the rumor mill, and a broad network of other similarly dedicated investors who share ideas won't get you an edge. It gets you even.

Good luck.
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Old 02-14-2011, 08:37 PM   #54
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(Emphasis added.)

All Fidelity Spartan Advantage class domestic MFs have expense ratios of 7 basis points.

That's .07% (for non accountants)

But, I'm sure most index investors pay more than that. And I'm sure most active stock traders pay LOTS more than that.
Thanks for the correction. I didn't realize index funds expenses had made it this low.
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Old 02-14-2011, 08:43 PM   #55
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Ever notice how most threads here, regardless of how they start, eventually evolve into one of a few unresolvable issues?

1. Active vs passive

2. Net benefit of retiring overseas

3. Definition of retirement

Any I've missed?
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Old 02-14-2011, 08:47 PM   #56
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Ya, What's a "Financial Adviser"?
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Old 02-14-2011, 09:02 PM   #57
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interesting - should be a poll.

I was expecting more individual stock holders.
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Old 02-14-2011, 11:47 PM   #58
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Ever notice how most threads here, regardless of how they start, eventually evolve into one of a few unresolvable issues?

1. Active vs passive
It appears to me that at least 90% of forum members favor passive indexing approaches, and that there is very little controversy. A few people may handle their own portfolios differently, but they are smart enough to know that is a generally unpopular approach here. In fact, a frequent indexer's statement goes something like "I know I am not smart enough blah blah blah, cleverly implying that those who actively manage are both arrogant and deluded.

I have to admire this much word skill.

Whoops! I just saw the "hands on investor" thread, so I guess I was wrong about no controversy on this topic.

Ha
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Old 02-15-2011, 12:23 AM   #59
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That plus 3,000 hours per year of time to dedicate to a single sector, access to senior management, deep contacts within the rumor mill, and a broad network of other similarly dedicated investors who share ideas won't get you an edge. It gets you even.

Good luck.
That might be what you imagine it involves, but is not even close to what myself and many investors like myself undertake. There is a fallacy that complex is better. It rarely holds true when investing unless it is a tool to take advantage of the ignorant.
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Old 02-15-2011, 12:32 AM   #60
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0%. My money is only in CDs, cash, money market or equivalent. I feel OK about it since I am risk averse, but not great.

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So I'm wondering, what % of your port is individual stocks, and how do you feel about it?
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