Easy $: Buy before dividend payout, sell after payout. Rinse/repeat

[Blackjack200]

I had a very similar experience with Amazon once - I think profits were up 70% year over year for the quarter, yet the stock fell 25% or something ridiculous. It took me a while before I realized that the stock price factored in greater earnings growth than they delivered, and so that's why I lost money for the time being.

I've looked into banks before, but don't have the knowledge yet to understand them. I might look at local banks more, the big guys have too much going on for me to follow unfortunately - lawsuits, billions of loans that I can't analyze, etc.

That's because the big banks are massively complex business with so many different operations that an individual can't possibly follow or understand everything that's going on. What percentage of their mortgage loans are in default or more than 60 days behind? How much counterparty risk do they have with insurers? How much regulatory risk do they have? If congress decides to make "X" type of debit card fee illegal, as they did last year, that can have a massive impact on revenue. Heck, movement of broad economic indexes can directly impact the stock price. If the market goes up, we assume that more people will invest, and borrow.

 

[JS80]

Oil will plummet if the economy does, like it did 2 years ago.

Silver is undervalued compared to gold, it's been lagging. Gold is still great, but silver has greater upside potential.

The metals also plummeted 2 years ago when oil did. What makes you think there will be de-coupling next time around?

 

[Michael]

AgaBoogaBoo - in theory, the insntant a stock goes "ex-dividend", the price shoud adjust. It should not take "days".

Michael

 

[AgaBoogaBoo]

Because you pay for each transaction, and that alone would eat away your profits.

Everyone should read A Random Walk Down Wall Street ; this will explain everything for you.

http://www.tilsonfunds.com/superinvestors.pdf

That should be read too, everything else will be explained.

Markets cannot be 100% efficient, even academics will agree with this. Why? There's no reason to invest and keep prices "efficient" unless there is a profit. If there's a profit, it's inherently not 100% efficient.

Sure, maybe on the whole, it does a really darn good job, but securities individually won't be efficiently priced. Just look at how funds are setup and how the government regulates them, it's flawed from the start.

Activity like restricted short selling, circuit breakers only on the way down, stock price reactions when removed from an index, bankruptcy filing impacts, etc. and it should be clear that there is room for prices to be improved. They will only be improved by investors who can make a profit for their use of capital and analysis, and they will only do it for a profit. Without this profit in place, they won't do it, and the markets will be even more inefficient.

The ability to work towards efficiency inherently requires inefficiency. Grossman-stiglitz paradox

 

[AgaBoogaBoo]

That's because the big banks are massively complex business with so many different operations that an individual can't possibly follow or understand everything that's going on. What percentage of their mortgage loans are in default or more than 60 days behind? How much counterparty risk do they have with insurers? How much regulatory risk do they have? If congress decides to make "X" type of debit card fee illegal, as they did last year, that can have a massive impact on revenue. Heck, movement of broad economic indexes can directly impact the stock price. If the market goes up, we assume that more people will invest, and borrow.

100% agreed, and this is why I don't get into it banks mostly, especially the larger ones.

If I do at some point, I might look at the smaller ones locally. VulturesRoost.com is a good resource for this.

 

[Imp]

I had a very similar experience with Amazon once - I think profits were up 70% year over year for the quarter, yet the stock fell 25% or something ridiculous. It took me a while before I realized that the stock price factored in greater earnings growth than they delivered, and so that's why I lost money for the time being.

I've looked into banks before, but don't have the knowledge yet to understand them. I might look at local banks more, the big guys have too much going on for me to follow unfortunately - lawsuits, billions of loans that I can't analyze, etc.

Not going to lie. I'd be shitting myself if I didn't comfort myself with the assumption that we are still in a recesiion (current or post) low, and worst case scenario, it all goes back up within a year or two.

I more or less "day trade" but hold onto stocks for weeks/months. To mitigate some risk, I stick to large "too big to fail" (or too big not to be bailed out) bluechips. Was doing great (almost 10% in 2 months) until I went against all my inhibitions and went in hard for a company I strongly believed faced too much competition, and would only be going down.


As for gold, I like this article's explanation:

http://articles.moneycentral.msn.co...the-10-biggest-myths-about-gold.aspx?ucsort=3

"4. Gold is real money, while money created by the government is just paper. What nonsense. The only thing that makes anything "money" is that other people -- meaning society -- accept it as such. A fund manager was recently telling me about someone she knew who had bribed his way out of a crisis in Africa with bottles of liquor. She pointed out that, if society really fell apart, the best "money" would be the things people need, such as food, cigarettes and liquor."

 

[JMapleton]

The metals also plummeted 2 years ago when oil did. What makes you think there will be de-coupling next time around?

Because when the economy tanked, it wasn't the dollar that tanked, it was the economy and people fled TO the dollar.

When people flee FROM the dollar where else will they go?

 

[JMapleton]

hm.. i cant seem to buy silver eagles directly from the govt?

and dealers are charging $2 over strike price?

Apmex is the best. But there are a LOT of scammy places out there. And yes you will pay a bit over strike price for American Silver Eagles, it's just the way it goes because they're Silver Eagles.

If you want to roll the dice, you can buy junk silver or 79 center over spot:
http://www.apmex.com/Product/156/Generic_Silver_999_Fine___As_low_as_079_per_oz_over_spot.aspx

I buy Silver Eagles because if the dollar became worthless, I would venture a guess US Mint produced Silver and Gold Eagles would be the only ones, or the first ones approved by the government as a temporary replacement for currency in a crisis situation. Junk and generic silver may be banned as a currency, although I think such a ban would be difficult to enforce.

 

[alkemyst]

Apmex is the best. But there are a LOT of scammy places out there. And yes you will pay a bit over strike price for American Silver Eagles, it's just the way it goes because they're Silver Eagles.

If you want to roll the dice, you can buy junk silver or 79 center over spot:
http://www.apmex.com/Product/156/Generic_Silver_999_Fine___As_low_as_079_per_oz_over_spot.aspx

I buy Silver Eagles because if the dollar became worthless, I would venture a guess US Mint produced Silver and Gold Eagles would be the only ones, or the first ones approved by the government as a temporary replacement for currency in a crisis situation. Junk and generic silver may be banned as a currency, although I think such a ban would be difficult to enforce.

I am thinking people don't care if the government is backing gold / silver or not.

Gold ATM locally here. You can take up to 8oz out.
http://money.cnn.com/2010/12/17/news/companies/gold_atm_boca/index.htm

 

[JEDI]

Apmex is the best. But there are a LOT of scammy places out there. And yes you will pay a bit over strike price for American Silver Eagles, it's just the way it goes because they're Silver Eagles.

If you want to roll the dice, you can buy junk silver or 79 center over spot:
http://www.apmex.com/Product/156/Generic_Silver_999_Fine___As_low_as_079_per_oz_over_spot.aspx

I buy Silver Eagles because if the dollar became worthless, I would venture a guess US Mint produced Silver and Gold Eagles would be the only ones, or the first ones approved by the government as a temporary replacement for currency in a crisis situation. Junk and generic silver may be banned as a currency, although I think such a ban would be difficult to enforce.

$2.54 over spot in 1000 lots
http://www.apmex.com/Product/23331/default.aspx

I wonder how much is shipping.

hm.. bid/ask price is 29.25/oz.
apmex buy price is $31!?

what am i reading wrong?


edit:
interesting enuf, i have a 1/4oz $10 Gold American Eagle. apmex is willing to buy for $363.

it's in a small blue binder with a certificate of authenticity and a canceled envelope stamped Oct 20 1986 (First day of issue)

i guess it's worth more than $363 because of the paperwork and envelope?

 

[JS80]

Because when the economy tanked, it wasn't the dollar that tanked, it was the economy and people fled TO the dollar.

When people flee FROM the dollar where else will they go?

So why do you think people will flee the dollar when the economy tanks next time around?

 

[kranky]

$2.54 over spot in 1000 lots
http://www.apmex.com/Product/23331/default.aspx

I wonder how much is shipping.

hm.. bid/ask price is 29.25/oz.
apmex buy price is $31!?

what am i reading wrong?


edit:
interesting enuf, i have a 1/4oz $10 Gold American Eagle. apmex is willing to buy for $363.

it's in a small blue binder with a certificate of authenticity and a canceled envelope stamped Oct 20 1986 (First day of issue)

i guess it's worth more than $363 because of the paperwork and envelope?

The bid/ask is for the spot silver market. Silver Eagles are always sold for a premium over spot. Some dealers will pay more than spot for them (but this is unusual).

Your 1/4 oz. gold American Eagle will not sell for more because of the paperwork.

 

[JMapleton]

So why do you think people will flee the dollar when the economy tanks next time around?

You're missing the conversation. I'm not saying it's going to be "next time."

I'm saying the opposite of what you're suggesting. There will be a time when the economy tanks BECAUSE the dollar tanks, not visa versa.

There very well may be another recession or tank where the dollar increases with gold. But in the end, the grande finale will be the dollar falling apart, most likely within the next 20 years. Highly unlikely it will happen with in the next 5.

 

[Dacalo]

LMAO!! Thanks for the laugh!

 

[OCGuy]

The market is going to crash by 15-20% next year when the national debt passes $15,000,000,000,000.00. China will finally say "no mas" and we will be forced in austerity after Moodys carries out its ALREADY threatened downgrade of America's AAA credit rating.

Its going to be hell on Earth when we finally default (like Russia, Mexico and Argentina did). All existing currency will be cancelled or can be exchanged for "new dollars" at a rate of .05 per 1.00. Thats what happened in those countries. :'(

Quick, buy gold! Man your zombie bunker!

 

[JMapleton]

People who laugh at this concept failed at math.

It's mathematically impossible to fix the problems the US has. It's literally impossible but people are too blinded by the easy life they've had in America to see, thinking "it could never happen here."

 

[PimpJuice]

It won't happen anytime soon, but I do think the US will default.

I've bought silver to combat this.

You also wear womens jeans

 

[PimpJuice]

People who laugh at this concept failed at math.

It's mathematically impossible to fix the problems the US has. It's literally impossible but people are too blinded by the easy life they've had in America to see, thinking "it could never happen here."

says the guy who buys $200 womens jeans

 

[JMapleton]

says the guy who buys $200 womens jeans

Don't be jealous of my sweet threads.

 

[ElFenix]

this explains A LOT of p&n

 

[LegendKiller]

LOL @ OP and the gold/silver bugs.

There have been portents of dollar doom for 80+ years, still hasn't happened. Furthermore, our economy won't tank if it did, in fact, it'd probably increase.

 

[FelixDeCat]

LOL @ OP and the gold/silver bugs.

There have been portents of dollar doom for 80+ years, still hasn't happened. Furthermore, our economy won't tank if it did, in fact, it'd probably increase.

80 years ago we also werent choking in debt. If you think trillion dollars deficits are sustainable, you are only kidding you. :|

 

[JMapleton]

80 years ago we also werent choking in debt. If you think trillion dollars deficits are sustainable, you are only kidding you. :|

Don't worry, we can just print more dollars to pay for it.

SS? Print more money to pay for that.

Prescription drug coverage? Print some more.

Wars? Print some more.

Massive tax cuts for rich and poor? Print some more.

When the interest rates increase to normal levels and our interest payments to foreign governments increase? Just print some more.

It's all ok, because Bernanke has it all under control. </sarcasm>

Here is a summary of LegendKiller's economic policy:
http://www.youtube.com/watch?v=7ir-loICk-Q (funny video)

 

[Lifted]

I always liked troll math and troll physics. I think troll finance has potential, but it needs better delivery than the OP provided.

 

[AgaBoogaBoo]

I always liked troll math and troll physics. I think troll finance has potential, but it needs better delivery than the OP provided.

In science, progress is cumulative. In finance, progress is cyclical.