Investment guru please stand up.

[JMapleton]

This is not investment advice and I am not an investment advisor.

If I had $20k, I would stick in an oil trust. In my personal opinion, they're super safe and yield huge dividends. Prudhoe Bay Royalty Trust (BPT) yields over 10% a year and as oil prices rise, dividends with it usually rise.

An extra $20k would yield about $180 a month in dividends assuming market conditions remained the same.

 

[iGas]

I lost fate in American tech companies for now because it took me down a few pegs in 2008. I'm on a buying US stock spreed at the moment due to the strong CAD vs. the USD, and I may increase my portfolio to 60~65% in US stocks.

I converts all of my stocks into bonds on trips that are longer than a week.

 

[Blackjack200]

Would you invest in a company when you don't even know what they do? That's as bad as lending money to people you've never met before. Actually, that's what it is. You're putting money in a company that you've never met before.

Well, let's level set. What level of familiarity are we talking about here?

It's one thing to know that IBM is a technology company.

(This is common knowledge)

It's another thing to know that IBM is a multinational computer, technology and IT consulting corporation that manufactures and sells computer hardware and software, infrastructure services, hosting services, and consulting services.

(This takes 30 seconds on wikipedia)

And it is quite another thing to understand each of those businesses at a granular level, including the regulatory, competitive, counter-party, market, and other risks, the total market opportunity in each business, the corporate structure, exposure to international risks and opportunities, corporate leadership, executive compensation policies, etc. etc. etc. which is the level of detail any equity analyst worth his or her salt will begin with.

To think that an individual sitting behind a keyboard with a hobby of trading stocks can reach even a superficial understanding of a large cap publicly traded company is pure fantasy.

 

[iGas]

Would you invest in a company when you don't even know what they do? That's as bad as lending money to people you've never met before. Actually, that's what it is. You're putting money in a company that you've never met before.

I'm not going into this blind. Most if not every time I do a history check & cross reference before I purchase to minimize risks. It is not that I haven't lost money in the market, but it is also know when to fold and put my money where it have better potential than holding.

If I hold NVDA I would still be down, since I purchased it at $22. I felt that Nvidia didn't have anything worth while coming down the pipe in 2009 therefore I sold at $10 a share and took the residue from that to apply on Canadian mining companies. And, so far the mining investment have done well for me.

No one would invest if investment in stocks is purely a gamble.

 

[Blackjack200]

No one would invest if investment in stocks is purely a gamble.

Why do people buy lottery tickets and go to the track?

 

[iGas]

This is not investment advice and I am not an investment advisor.

If I had $20k, I would stick in an oil trust. In my personal opinion, they're super safe and yield huge dividends. Prudhoe Bay Royalty Trust (BPT) yields over 10% a year and as oil prices rise, dividends with it usually rise.

An extra $20k would yield about $180 a month in dividends assuming market conditions remained the same.

Thanks.

I prefer oil & gas pipeline stocks, because they are a safe bet over that of oil & gas companies. Oil & gas delivery is a constant therefore the fluctuation in oil & gas price doesn't affect them. However, I do not put most of my money in safe bet because I prefer to split my investment in to 3 categories, from safe bet with dividend, to medium risk with low dividend yield, and high risk with little or no dividend yield (this last category are mostly stocks that I screen for under $4 a share, and do a bit of research before I buy).

 

[JMapleton]

Thanks.

I prefer oil & gas pipeline stocks, because they are a safe bet over that of oil & gas companies. Oil & gas delivery is a constant therefore the fluctuation in oil & gas price doesn't affect them. However, I do not put most of my money in safe bet because I prefer to split my investment in to 3 categories, from safe bet with dividend, to medium risk with low dividend yield, and high risk with little or no dividend yield (this last category are mostly stocks that I screen for under $4 a share, and do a bit of research before I buy).

I agree 100%. Overall, I prefer the royalty trusts. You're just owning nothing but the right sto the oil and you're nearly immune to loss over the long run. There are no employees in the company, no debt, no scandal, no crazy ventures that could bankrupt the company. Prudhoe Bay being my favorite. Downside is over the long long run they will eventually run out and become worthless, so don't reinvest the dividends over the super long term (20+ years), but it's a great income generator.

This is just my personal opinion.

 

[ShawnD1]

Well, let's level set. What level of familiarity are we talking about here?

If you don't know what the company logo looks like, you shouldn't own that company. I can't draw a Coca Cola logo but I know sort of what it looks like. I definitely recognize it when I see it.

If you can't name several products sold by that company (assuming they sell products), you should not own that company. I've been inside Walmart and I've seen what they sell, so I understand this part about Walmart.

If you don't know how large the company is or what percentage their market share is (ballpark), you should not own that company. I know almost every desktop computer has an Intel processor and that Intel has the most popular video chipsets, so I know this much about Intel.


Some companies almost act like index funds because of how diverse the company is. I've used HP computers, I have an HP printer, I used an HP gas chromatograph in university, and Best Buy has HP graphing calculators. Companies like GE and Philips sell so many things that they don't really go down unless the entire market goes down. GE's price closely follows the market; a steady $35 until early 2008, bottom hit $7 in March 2009, current price is $18 and going back up. Within a couple years it should probably be right back where it was, somewhere around $30.

Why do people buy lottery tickets and go to the track?

Mental illness? If I'm not mistaken, dopamine seems to be very strongly correlated with risky behavior, downplaying the significance of what is going on (why this is a bad idea), and being overly optimistic of what will happen as a result of doing something. People high on caffeine are a little too optimistic sometimes; I know I often set very optimistic goals when I drink coffee. People who take methamphetamine are known to be extremely impulsive and often engage in risky behavior such as unprotected sex with random people.

Here's an interesting one: Miraprex, a medication for parkinsons disease. Parkinsons is when you lack dopamine. The side effects of this drug are exactly what one would expect from a drug that increases dopamine activity. Compulsive gambling (ie going to the track and then buying lottery tickets), insane shopping, and hypersexuality.

 

[Blackjack200]

If you don't know what the company logo looks like, you shouldn't own that company. I can't draw a Coca Cola logo but I know sort of what it looks like. I definitely recognize it when I see it.

If you can't name several products sold by that company (assuming they sell products), you should not own that company. I've been inside Walmart and I've seen what they sell, so I understand this part about Walmart.

If you don't know how large the company is or what percentage their market share is (ballpark), you should not own that company. I know almost every desktop computer has an Intel processor and that Intel has the most popular video chipsets, so I know this much about Intel.

Intel has maintained its market share for years by abusing its power as a monopoly. Now that this is less of an option, what kind of threats will Intel have to fend off from AMD, Motorola, IBM, and other microchip manufacturers? Will microchips for mobile devices become commoditized? What is the growth potential for the microchip industry? What is the international opportunity? What if the US Government decides that Intel is unfairly blocking Nvidea and other video chipset manufacturers from gaining market share?

These are just the questions that come to the top of mind for a lay person. I'm sure if I was an equity analyst covering Intel, I'd have a lot more.

Some companies almost act like index funds because of how diverse the company is. I've used HP computers, I have an HP printer, I used an HP gas chromatograph in university, and Best Buy has HP graphing calculators. Companies like GE and Philips sell so many things that they don't really go down unless the entire market goes down. GE's price closely follows the market; a steady $35 until early 2008, bottom hit $7 in March 2009, current price is $18 and going back up. Within a couple years it should probably be right back where it was, somewhere around $30.

GE's price does not closely follow the market. Look at a chart. It has severely underperformed the DJIA since Jack Welch left in 2001.

Most mega cap stocks will move in the same general direction as the broader indexes over the short term (absent special cases like the financial meltdown in 2008) but over any long term holding period their over or under performance will be substantial.

 

[ShawnD1]

Intel has maintained its market share for years by abusing its power as a monopoly. Now that this is less of an option, what kind of threats will Intel have to fend off from AMD, Motorola, IBM, and other microchip manufacturers? Will microchips for mobile devices become commoditized? What is the growth potential for the microchip industry? What is the international opportunity? What if the US Government decides that Intel is unfairly blocking Nvidea and other video chipset manufacturers from gaining market share?

Intel has a patent on x86 processor architecture. Nvidia and Motorola can go ahead and make processors for desktop computers, and they'll be great computers, but none of the software on your current computer will work on those computers. Apple's computers at one time used Motorola and IBM processors. They were good computers. There's no law stopping anyone from bringing back computers that have IBM processors.

The Intel/Microsoft PC will be around for a while. Both companies have held a monopoly for more than 20 years.

GE's price does not closely follow the market. Look at a chart. It has severely underperformed the DJIA since Jack Welch left in 2001.

Most mega cap stocks will move in the same general direction as the broader indexes over the short term (absent special cases like the financial meltdown in 2008) but over any long term holding period their over or under performance will be substantial.

True enough. The safest bet anyone can make is to invest in the index. Dow Jones and S&P 500 can't crash to 0 unless the US has an armed revolution, basically. Same is true for US treasury bonds. Armed revolution required.

 

[RbSX]

Thanks,

I'm going to back out from the margin trading idea & stick the money back into my regular portfolio.

PS. TCK.B, GCE, GC, TKO, TLM, and DW have been very nice for me in 2009/2010.

Intriguing, you really like western canadian companies, which I'm very familliar with. Some of the returns you've seen on the last few months have been great.

I'm slowly but surely losing my over the last little while, bought in too late.

 

[iGas]

Intriguing, you really like western canadian companies, which I'm very familliar with. Some of the returns you've seen on the last few months have been great.

I'm slowly but surely losing my over the last little while, bought in too late.

I'm living in BC Canada and my friends/family & myself at one point or another worked with/or for the mentioned companies.

I keep a pretty close tap on Western Canada companies because I truly believe that it is time for us to grow.

I got in at the right time in 2009 with every companies that I mentioned above, but I was too chicken to jump in when they were ultra low. However, I was in low enough in some of them to see more than 400% gain for 2009.

IMHO, coal & metallurgy is where it at for at least another 2 years because the demand and growth is very high till the Chinese fully develop their coal and iron mines (maybe in 10 years).

At the moment I'm keeping an eye on UUU, because it price have been ultra low for the last 2 years, so as OPC.

 

[totalnoob]

If I had 20k, I'd buy 1,100 ounces of silver bars.