Am I going through a phase?

Attica, Attica...

Or maybe that's "Cattica"... :p

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

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

img_647724_0_28223f7db72749cc94835dadaffc81d9.jpg
 
HFWR said:
Attica, Attica...

Or maybe that's "Cattica"... :p

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

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

Can I use that as my signature?
 
cute fuzzy bunny said:
Hey I'm ready for ya...

img_647800_0_28223f7db72749cc94835dadaffc81d9.jpg
Click to expand...
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!" :D

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... :2funny: :angel:
 
Psst...its in french. Which is frequently mistaken for japanese... ;)

Renegade rabbit vaporization is always a good option.
 
Trapshooter said:
I only invest in individual stocks. I couldn't get excited about paying a pro to invest my money when most of them can't beat the dart board method. In their defense, fund managers have to diversify to a degree that makes it hard to beat the market.
Click to expand...

I agree. I gradually switched from mutual funds to individual stocks after figuring out that the great majority of managers are highly-paid closet indexers.

ETFs are a legitimate alternative, but personally I avoid them because they contain lousy companies in low margin industries: e.g., auto manufacturers, restaurant chains, airlines, retailers, etc.
 
Milton said:
I agree. I gradually switched from mutual funds to individual stocks after figuring out that the great majority of managers are highly-paid closet indexers.

ETFs are a legitimate alternative, but personally I avoid them because they contain lousy companies in low margin industries: e.g., auto manufacturers, restaurant chains, airlines, retailers, etc.
Click to expand...

Oh no! Another certifiable nut job who thinks that he can actually invest his own money. LOL! Welcome to the club. Whatever you do, don't make the same mistake I did by sharing your results or you will be branded a liar.
 
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Trapshooter said:
Those who can, do. Those who can't, [-]teach[/-] ridicule those who can.
Click to expand...
Maybe:
"Those who believe they can, try"
"Those who fail either shut up about it or lie"
"Those who succeed and brag about it are the subject of strong suspicion and get defensive"^-^
 
Hey I'm not ridiculing you. Its just that you're gonna step on a rake at some point. You *can* be successful at building your own home grown mutual fund with a bunch of well picked diverse individual stock and bond holdings.

But dang, its work!
 
I edited out the portion of my prior post which implied that some people can't invest in individual stocks successfully. That goes against my philosophy. The main reason I originally chimed in on this thread was to espouse my belief that the average Joe can beat the market. It is a lot of work and I wouldn't recommend it to anyone unless they enjoy it but it can be done. I think it is worth it. I may change my opinion on this at some point if my methods cease working. That is a very real possibility. Perhaps a probability. Some say it's a certainty. If it comes to that I may go over to the dark side, but not quite yet.
 
So, Brewer, if you don't like the Gardners, what do you think of Suzi Orman? :)

Actually, I mention her because something I heard her say on the radio last year is driving my investment strategy right now:

"If you own a stock and you won't buy more of it when the price drops, then you should be selling that stock".

Earnings calls the last few days have me throwing money at the losers. Hope this works out.
 
Suze is frequently factually incorrect or gives questionable advice, whch is generally exactly what the boobs who call her show deserve.

I have been adding to stakes in the unloved lately. Thinking about what I would be willing to part with to pursue compelling opportunities.
 
Gazingus said:
"If you own a stock and you won't buy more of it when the price drops, then you should be selling that stock".
Click to expand...

Its not quite that simple. I think the million year old investing saw this is derived from is a warren buffett or peter lynch quote that said if a stock dropped in price and none of the fundamentals that caused you to want to own it have changed, then you should be buying more.

Its entirely possible to have some fundamentals change, a price drop to occur, and an investor not feeling the changes are enough to divest, but enough to not call for further investment.

Comments like the above to a nationwide viewing audience of relatively immature investors may result in a whole lot of people selling stocks when they go down because they're scared to buy more when its on sale. The latter being a typical problem with most investors. Then compounded by locking in the loss.

Thanks Suze.
 
Gazingus said:
"If you own a stock and you won't buy more of it when the price drops, then you should be selling that stock".
Click to expand...

This doesn't make sense to me. As cute fuzzy bunny points out, it may well prompt nervous people to dump their stocks at a loss.

Rules of thumb always need to be approached with discretion, but I'd be comfortable with the following variation on the above: "If you own a stock but are reluctant to buy more of it even if you have the cash available and diversification is not an issue, then you should ask yourself whether you really want to continue holding that stock".

I'm sure some of you can improve on the precise wording, but you get my point.
 
Milton said:
This doesn't make sense to me. As cute fuzzy bunny points out, it may well prompt nervous people to dump their stocks at a loss.
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Loss aversion is a behavorial finance trap. It is very important to sell your losers. Your portfolio should not have any losers that are more than year old. One can always find something to replace the losers with. So nervous people should dump their stocks at a loss if they have held them a little while.
 
Well see, thats something I wouldnt do. If I was comfortable with the company fundamentals, the direction, management and so forth it would be sort of irrelevant that it was down. In fact, if it was a good company just receiving weak attention from buyers, it'd have a better than average upside potential.

So I wouldnt sell a stock just because it had been down for a set period. I'd sell it because of new information that made it not be something I wanted to continue to hold.

This is why I dont hold any more individual stocks. Even when you've got all the info, you havent got all the info.
 
LOL! said:
Loss aversion is a behavorial finance trap. It is very important to sell your losers. Your portfolio should not have any losers that are more than year old. One can always find something to replace the losers with. So nervous people should dump their stocks at a loss if they have held them a little while.
Click to expand...


I pretty much agree especially in a taxable account. I found the 30 day cooling off period needed to comply with wash sale rules is an important perspective. Sometimes after I sell a loser I still want to buy it after 30 days most often I find that there is a better opportunity.

I am not as rigorous for selling my loser in my IRAs. Still if a stock under preforms the market by ~25% over many months, you should either sell or buy more, unless there is new information.
 
Gazingus said:
I've seen several posters refer to "back when I was buying individual stocks". I started buying them 18 months ago using TMFs Stock Advisor and Global Gains services as my guides. I'm currently "playing" with 1/8 of our portfolio in this manner.

It's exciting and probably mildly addictive, but I am buying for the long-term. I put the most money in the losers and the only stock I've sold was Jet Blue.

My self-devised strategy is to spread the risk by holding small positions in lots of companies (anywhere from $2k-$10k in about 25 or more different stocks). I would appreciate any feedback on this strategy.

I'm still working and planning to FIRE before 50 (hopefully two more years of work).

My question is: Did you once by individual stocks and then stop because,

A) You realized it wasn't a sound strategy for the average investor, or

B) You moved from the investing to the withdrawal phase?
Click to expand...

Back to the OP.

In my case I have moved the opposite direction. I've never been a pure mutual fund person. Since ERing I have switched from managed mutual funds to index funds/ETF (except for a few special case closed end funds.). However, my AA has moved from 50% funds 25% stocks 25% bonds/bond funds to 50% individual stocks 30% index funds 20% bonds/bond funds.

Since, I retired I have found more time to study the market and stocks. I have also gained more confidence in my skills and primarily temperament as an investor.

Much like Ha Ha I buy stocks for their future income stream in most cases this means dividends. I have gotten away from thinking of stocks as whose price goes up and down somewhat randomly, and trying to figure out when to buy them (hopefully low) and sell them hopefully (higher). Instead I focus on income, so I get more excited when 4 of my stocks raised their dividend this week than the one who went up 15% last week. Even if dividend increase is only a penny a share in the case of a bank ASBC. I'll admit to being lazy and depending on analyst like the folks at M* far too much. Still having a pretty dependable stream of dividend income is quite comforting when both the market falls and MM and CD interest rates plunge.

If I didn't find investing in individual stocks intellectually interesting, I would be perfectly content to pick 4 of 5 ETFs and get on with life, but right now stock selection is a hobby which I think I provides a superior risk adjusted return.
 
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