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Nords · 04-20-2008, 11:22 PM

Quote:

Originally Posted by Leonidas

My current allocation is a little more than 13% cash, a little less than 1% in a single ETF, and the rest in individual issues (86%).
I was away from this forum for a while because I was spending all my time researching and learning

Yes, but you must have a really really really small expense ratio. So give yourself "salary" credit for the savings of at least 0.1% of your portfolio. Maybe more like 0.25%...

Hopefully that works out to more than minimum wage.

haha · 04-20-2008, 11:40 PM

I like individual stocks for several reasons. Volatility can work for you, if you are willing to limit your buying to busted but sound issues. You can control your tax planning better, all the while allowing sales in issues that you believe have become over-valued.

You must be actually risk averse, and not looking for a substitute for ski-ing the double black diamond slopes. If you call it playing, don't do it.

You have to restrain your admiration of most others' opinions; yet avoid arrogance and hubris.

You have to put in time. You need some understanding of how cash flows through a company, what that looks like in its financial statements, and what the drivers of these cash flows are.

My goal is usually not a trade, even when a trade may be construed as 5-7 years. My goal is usually something that will give me increasing cash pay-outs over time. Commodity stocks are different for the most part, here you tend to be speculating on the price of the underlying commodity, because over the cycle they are generally not very good generators of free cash.

For example, Trapshooter made good money on base metals, as did many others. Around the turn of the millennium I looked at them, but passed, preferring gold and oil and gas, and more recently just oil and gas. But the big base metal stocks have been powerhouses, and may continue to be for who knows how much longer. I can't tell how long a trend might last; but I can sometimes tell when a sector or company is ridiculously cheap.

I don't care what anyone says, all of these commodity stocks are vulnerable to recession. Nonetheless, what I prefer about crude and gas is that once these commodities are burned, there is no reclamation. The downside of oil and gas was that until recently at least the marginal cost of production by the low cost producers was quite low compared to world prices, and there was excess capacity. That may (or may not) be true any longer.

I can pay my taxes and live off pay-outs from my taxable account. Unless something goes haywire, I should never have to sell seeking liquidity.

Meanwhile my IRA grows, and someday I will tap SS. So I feel pretty secure in spite of having only portfolio income to relay on.

Ha

Gazingus · 04-22-2008, 01:52 PM

I think I knew what the consensus was gonna be... this is just my turn on the wheel. I spend no time looking at financial statements, I let the boys at Motley Fool do my thinnin' for me (for a small subscriber fee). Brazilian chickens and airplanes, Turkish cell phones, Chinese herbal remedies and tutoring companies, it's really fun to watch a stock go up 75% in six months. Nintendo! Of course, it's all balanced by my losers and I'm not keeping track of exact performance. Thus the term "playing".

I appreciate the input and will heed the advice to keep this at a small percentage of total. Thanks to all posters here.

REWahoo · 04-22-2008, 01:56 PM

Quote:

Originally Posted by Gazingus

I appreciate the input and will heed the advice to keep this at a small percentage of total. Thanks to all posters here.

Have fun playing and the best of luck. Hope you make money out the gazingus...

brewer12345 · 04-22-2008, 02:07 PM

Quote:

Originally Posted by Gazingus

I let the boys at Motley Fool do my thinnin' for me (for a small subscriber fee).

Gah!!!

You might as well buy a money and pick stocks based on what "turns up" when it flings its poop at the stock tables.

Gazingus · 04-23-2008, 07:45 AM

Quote:

Originally Posted by brewer12345

Gah!!!

You might as well buy a monkey and pick stocks based on what "turns up" when it flings its poop at the stock tables.

LOL, I didn't think that revelation would garner much respect! Hey, it makes me a sophisticated investor in my circles.

maddythebeagle · 04-23-2008, 08:10 AM

I always wonder about folks that post about their superior stock picking abilities....I suspect that those people are probably the ones making the most mistakes from overconfidence and should be indexing

dmpi · 04-23-2008, 09:43 AM

You'll be amazed... People have a way with rationalizing the belief that they get 20% yearly returns year after year with the fact that they still only have a 30K account.

W2R · 04-23-2008, 10:25 AM

It is interesting to me to hear from those who invest in individual stocks, and if they are happy with their results then more power to them. I'm told there is more than one way to skin a cat, and I suspect that decent returns can be obtained through any one of several investing strategies.

I am always interested in descriptions of investing techniques that people feel have worked for them. I do tend to be skeptical of those who brag on the forum about their investing acumen, but usually our regulars don't do that very much.

As for me, I think I have hashed out my own investment philosophy to some extent, and I guess it's a modified Diehards approach. No individual stocks any more, at least for now.

REWahoo · 04-23-2008, 10:28 AM

Quote:

Originally Posted by Want2retire

I'm told there is more than one way to skin a cat...

I hope you realize you've just alienated all the cat-lovers on the board...

W2R · 04-23-2008, 10:29 AM

Quote:

Originally Posted by REWahoo

I hope you realize you've just alienated all the cat-lovers on the board...

Probably did! Sorry, cat-lovers!

HFWR · 04-23-2008, 10:32 AM

Attica, Attica...

Or maybe that's "Cattica"...

Lots of smart people believe you can "beat" the market, and I do not doubt that.

I choose to listen to other smart folks who say dumb$hits like me are better off with low-cost diversification through indexing.

cute fuzzy bunny · 04-23-2008, 10:33 AM

All I can say is that its a dang good thing you didnt say anything about rabbits.

W2R · 04-23-2008, 10:36 AM

Quote:

Originally Posted by cute fuzzy bunny

All I can say is that its a dang good thing you didnt say anything about rabbits.

Just watch it, Bub! That's all I've got to say. (sharpening my fileting knife)

cute fuzzy bunny · 04-23-2008, 11:23 AM

Hey I'm ready for ya...

Notmuchlonger · 04-23-2008, 11:24 AM

Quote:

Originally Posted by HFWR

Attica, Attica...

Or maybe that's "Cattica"...

Lots of smart people believe you can "beat" the market, and I do not doubt that.

I choose to listen to other smart folks who say dumb$hits like me are better off with low-cost diversification through indexing.

Can I use that as my signature?

HFWR · 04-23-2008, 11:41 AM

Quote:

Originally Posted by Notmuchlonger

Can I use that as my signature?

Just drop that check in the mail...

W2R · 04-23-2008, 02:03 PM

Quote:

Originally Posted by cute fuzzy bunny

Hey I'm ready for ya...

The Japanese caption says, "This cute bunny is using his favorite flamethrower to properly season an oil coated cast iron skillet, instead of putting it upside-down on an outdoor grill. How clever!"

By "Am I going through a phase?" I doubt the OP was referring to the type of phase change that would occur due to being vaporized by a renegade rabbit...