Yet another stock market thread!

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mithrandir2001

Diamond Member
May 1, 2001
6,545
1
0
Originally posted by: PAB
As I said, even if you want to go on a fund to fund benchmark - I'm more than 50% certain that I own one or more funds that outperform almost anything from Vanguard and their balanced, total market, or target products.

A contrarian philosiphy has made my family a lot of money in the past in FCNTX...

You may own one or more funds that outperform Vanguard's passive funds but you probably also have one or more funds that underperform. Full disclosure please.

Yes, FCNTX performed wonderfully between 2001 and 2005 but it now suffers from asset bloat and may become the next Magellan Fund. I liquidated my Contrafund position last summer and believe it's "high alpha" days are over. It's just too big.
 

dnuggett

Diamond Member
Sep 13, 2003
6,703
0
76
Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: bigdog1218
Originally posted by: PAB
Originally posted by: IHateMyJob2004
STOP TRADING!!!!!

After taxes, etc ... YOU WILL LOOSE OUT TO ANY BUY/HOLD INVESTOR!

Buy and hold = Buy and lose. Look what happened with Corning. I waited for a catalyst to get that stock off it's ass for a while.

You can't make money if you hold infinitely. You have to sell and know when the right time to sell it. Sector rotation is important in an economy as diverse and dynamic as ours.

Buy and hold is outdated and wrong. You HAVE to sell eventually or when there isnt a good/compelling reason to own that stock anymore. For example, my compelling reason on CVX was the analyist meeting. The boosted production but forecast a relatively flat year - shortly after I got stopped out and didnt make my full point but caught 75 cents. Not the greatest return ever, but not bad for three days.

Your just said you have owned a stock since 2001 that you've been holding for the past 6 years and still haven't made your money back, so one of these statements is full of sh!t.

And have fun riding ATI to 93.

Right, because I was drinking the buy and hold kool aid. I'm holding corning NOW because their diesel/LCD business has shored up nicely and I'm waiting to get in the 30's before I sell.

My investment philosiphy has changed, obviously since 2001. I bought corning with the buy and hold mindset - and I just said buy and hold dosent work and I illustrated my point perfectly.

And when ATI hits 93, I'm buying more. I'm calling you out on that one. If/when ATI hits 93, I'm going to average down and when it hits 103 a week later I'm going to post trade confirmations and PWN your ass.

If you knew anything about ATI you'd know that they've got a very solid business, and their stock goes down for short periods of time and comes right back. They are a quality company with a great product, great margins, and are poised to make a lot of money off the ethanol craze - which I have market research supporting that ethanol is NOT going away anytime soon, and they're suppliers of high performance products to Boeing, which is having a spectacular run.

When earnings comes out on ATI in April, we'll know who's right.

And are you the only guy on the street that discover ATI is a great business? What gives you an edge? Cramer?

Low cost index fund beat almost everything in the long run for most individual investors.

And if ATI is such a great business....tell me about what they do and how much they make from each of their businesses...which one of its business drove the growth it had in 2005-6? Which one of its business are you seeing growth in the future 2007-2008? How big its margin going to get?

High performance metal, stainless steel, titanium, engineered products, etc. They even make armor plate!

I guess what you're asking is if I've bothered to do any homework on what the company makes, where they make it, and how much they sell it for - all information that is readily available in their annual report.

Aerospace represents 25% of their 2005 sales. Titanium, andi their alloys (representing 18% of their business in 05) are going to be used more extensively in avation throughout 2008.

Growth in Oil/Gas Drilling and Exploration increases demand for ATI's products as well....

I could go on and on.

BTW, Cramer pumped up CAT bigtime recently. I dont know if this is a smart move and here's why.

ACERT still isnt operationally sound. I havent heard one good thing about it. Did you know CAT acknowledged they would not meet EPA deadlines on getting ACERT into production and would have to pay fines to the EPA for not being in compliance?

North America still represents their largest sales area, not to mention one of their most visible.

On Highway Engines represents a gigantic part of CAT branding. When truckers stop saying IF IT AINT A CAT ITS A DOG - thats a big problem. The OHE business is one of their most visible product lines, representing 29% of their 2005 sales. 29% = $3,000,000,000 in revenue. Thats a lot of yellow paint. The big problem right now is that PACCAR, which owns Peterbilt and Kenworth both offer CAT engine options.

Peterbilt's Denton, TX factory has 500+ tractors sitting at the factory waiting for CAT engines. This is not good news. In fact, I'm somewhat inqusitive about it. I wonder if dealers and end users will go to something like an ISM/ISX from CMI instead of waiting around for big yellow.

Anyhow, thats my .02 cents on it. I might sell the put on CAT and see use it as a cost reduction strategy to get the stock cheaper if the buyback pops it up. I personally dont see a particularly (get the joke?) strong catalyst thats going to propel CAT up anytime soon.

edit: show me a low cost index fund that you like, and I'll show you a fund that I probably own that has outperformed it.

Be careful of what you show me and that past performance is NO WAY an indication of future performance. For regular investors, you are better off buying something like Vanguard Total Market Fund or similar funds that track S&P 500. Of course, you you add a little exposure to the Russell 2000 tracker (5-10%). But most of your portfolio would concentrate in Big Caps Index.

Also, to outperformed the S&P 500, you have to outperform it on Reward-Risk basis. You can't have a small cap fund that return 20% last year and said you "beat" the market.

Most people don't follow the market and bother spending hours reading about a company. Passive index fund is the way to go. Even you do spend time doing your "homework", what make you any better than the pros who spend countless of hours reading the same thing and having MIT grads run quant models trying to figure out how to outperform the market (and only 3-5% of them outperform in the long run).

I do, however, believe in hard work, skillful traders- who is discipline enough to apply tools and STRICT money/risk management to trade the market SHORT term. BUT THAT requires your FULL attention...and most people have their business/ fulltime job that they can't pay full attention to the market.- and those players probably has their retirement fund set aside in a conservative portfolio/index funds.

I'm glad that you are so enthus about trading, and the bull market had been treating you well I assume. But I'll be very careful of those Cramer's picks in the future.

I disagree. A "passive" index or total market fund has limited options. As I said, even if you want to go on a fund to fund benchmark - I'm more than 50% certain that I own one or more funds that outperform almost anything from Vanguard and their balanced, total market, or target products.

A contrarian philosiphy has made my family a lot of money in the past in FCNTX and its continuing to make us money in JSVAX. I believe that you can beat any index, dow, S&P, russell, with the proper selection of diversified funds.

....plus, I called my broker to get my orders in for the day. Even with the dip, I am still outperforming the DJIA and SPX since inception.


And can you explain to me what is a "contrarian philosophy" to you? Contrarian means that people who short into the bull market...and looking at those funds return, it doesn't seem like it contrarian to the market- or else it would've have opposite of the return of the market if its contrarian.

You, like PAB, are off on your understanding of terminology. Just becuase it is contraian does not mean you should expect inverse (or opposite as you put it) market results. It's a viewpoint, not an inverse relationship with the market.


 

imported_Lothar

Diamond Member
Aug 10, 2006
4,559
1
0
Originally posted by: PAB
Originally posted by: Lothar
Originally posted by: sm8000
I dumped all my SUNW in favor of SUN(oco) ;) And ATI was the first thing I bought.

Why don't you join our game here?
http://forums.anandtech.com/messageview.aspx?catid=38&threadid=2011914

And you too PAB...

To be honest....

I have more fun playing with actual money. Plus, I doubt your game has options.

I don't believe it has options.
But the fact still remains...You can join in to dispel all this "myths" and "rumors" about you.
If you end up winning, I'm sure everyone will worship you like a God and those who doubted your instinct won't do so again.
You can set it up to mirror the stocks you just mentioned in this thread, mirror it to your current portfolio, or just pick new ones.
 

PAB

Banned
Dec 4, 2002
1,719
1
0
Originally posted by: mithrandir2001
Originally posted by: PAB
As I said, even if you want to go on a fund to fund benchmark - I'm more than 50% certain that I own one or more funds that outperform almost anything from Vanguard and their balanced, total market, or target products.

A contrarian philosiphy has made my family a lot of money in the past in FCNTX...

You may own one or more funds that outperform Vanguard's passive funds but you probably also have one or more funds that underperform. Full disclosure please.

Yes, FCNTX performed wonderfully between 2001 and 2005 but it now suffers from asset bloat and may become the next Magellan Fund. I liquidated my Contrafund position last summer and believe it's "high alpha" days are over. It's just too big.

Full disclosure? No problem. BTW, I too feel that Contra suffers from asset bloat. We sold it in November. My portfolio is in your PM box.

Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: bigdog1218
Originally posted by: PAB
Originally posted by: IHateMyJob2004
STOP TRADING!!!!!

After taxes, etc ... YOU WILL LOOSE OUT TO ANY BUY/HOLD INVESTOR!

Buy and hold = Buy and lose. Look what happened with Corning. I waited for a catalyst to get that stock off it's ass for a while.

You can't make money if you hold infinitely. You have to sell and know when the right time to sell it. Sector rotation is important in an economy as diverse and dynamic as ours.

Buy and hold is outdated and wrong. You HAVE to sell eventually or when there isnt a good/compelling reason to own that stock anymore. For example, my compelling reason on CVX was the analyist meeting. The boosted production but forecast a relatively flat year - shortly after I got stopped out and didnt make my full point but caught 75 cents. Not the greatest return ever, but not bad for three days.

Your just said you have owned a stock since 2001 that you've been holding for the past 6 years and still haven't made your money back, so one of these statements is full of sh!t.

And have fun riding ATI to 93.

Right, because I was drinking the buy and hold kool aid. I'm holding corning NOW because their diesel/LCD business has shored up nicely and I'm waiting to get in the 30's before I sell.

My investment philosiphy has changed, obviously since 2001. I bought corning with the buy and hold mindset - and I just said buy and hold dosent work and I illustrated my point perfectly.

And when ATI hits 93, I'm buying more. I'm calling you out on that one. If/when ATI hits 93, I'm going to average down and when it hits 103 a week later I'm going to post trade confirmations and PWN your ass.

If you knew anything about ATI you'd know that they've got a very solid business, and their stock goes down for short periods of time and comes right back. They are a quality company with a great product, great margins, and are poised to make a lot of money off the ethanol craze - which I have market research supporting that ethanol is NOT going away anytime soon, and they're suppliers of high performance products to Boeing, which is having a spectacular run.

When earnings comes out on ATI in April, we'll know who's right.

And are you the only guy on the street that discover ATI is a great business? What gives you an edge? Cramer?

Low cost index fund beat almost everything in the long run for most individual investors.

And if ATI is such a great business....tell me about what they do and how much they make from each of their businesses...which one of its business drove the growth it had in 2005-6? Which one of its business are you seeing growth in the future 2007-2008? How big its margin going to get?

High performance metal, stainless steel, titanium, engineered products, etc. They even make armor plate!

I guess what you're asking is if I've bothered to do any homework on what the company makes, where they make it, and how much they sell it for - all information that is readily available in their annual report.

Aerospace represents 25% of their 2005 sales. Titanium, andi their alloys (representing 18% of their business in 05) are going to be used more extensively in avation throughout 2008.

Growth in Oil/Gas Drilling and Exploration increases demand for ATI's products as well....

I could go on and on.

BTW, Cramer pumped up CAT bigtime recently. I dont know if this is a smart move and here's why.

ACERT still isnt operationally sound. I havent heard one good thing about it. Did you know CAT acknowledged they would not meet EPA deadlines on getting ACERT into production and would have to pay fines to the EPA for not being in compliance?

North America still represents their largest sales area, not to mention one of their most visible.

On Highway Engines represents a gigantic part of CAT branding. When truckers stop saying IF IT AINT A CAT ITS A DOG - thats a big problem. The OHE business is one of their most visible product lines, representing 29% of their 2005 sales. 29% = $3,000,000,000 in revenue. Thats a lot of yellow paint. The big problem right now is that PACCAR, which owns Peterbilt and Kenworth both offer CAT engine options.

Peterbilt's Denton, TX factory has 500+ tractors sitting at the factory waiting for CAT engines. This is not good news. In fact, I'm somewhat inqusitive about it. I wonder if dealers and end users will go to something like an ISM/ISX from CMI instead of waiting around for big yellow.

Anyhow, thats my .02 cents on it. I might sell the put on CAT and see use it as a cost reduction strategy to get the stock cheaper if the buyback pops it up. I personally dont see a particularly (get the joke?) strong catalyst thats going to propel CAT up anytime soon.

edit: show me a low cost index fund that you like, and I'll show you a fund that I probably own that has outperformed it.

Be careful of what you show me and that past performance is NO WAY an indication of future performance. For regular investors, you are better off buying something like Vanguard Total Market Fund or similar funds that track S&P 500. Of course, you you add a little exposure to the Russell 2000 tracker (5-10%). But most of your portfolio would concentrate in Big Caps Index.

Also, to outperformed the S&P 500, you have to outperform it on Reward-Risk basis. You can't have a small cap fund that return 20% last year and said you "beat" the market.

Most people don't follow the market and bother spending hours reading about a company. Passive index fund is the way to go. Even you do spend time doing your "homework", what make you any better than the pros who spend countless of hours reading the same thing and having MIT grads run quant models trying to figure out how to outperform the market (and only 3-5% of them outperform in the long run).

I do, however, believe in hard work, skillful traders- who is discipline enough to apply tools and STRICT money/risk management to trade the market SHORT term. BUT THAT requires your FULL attention...and most people have their business/ fulltime job that they can't pay full attention to the market.- and those players probably has their retirement fund set aside in a conservative portfolio/index funds.

I'm glad that you are so enthus about trading, and the bull market had been treating you well I assume. But I'll be very careful of those Cramer's picks in the future.

I disagree. A "passive" index or total market fund has limited options. As I said, even if you want to go on a fund to fund benchmark - I'm more than 50% certain that I own one or more funds that outperform almost anything from Vanguard and their balanced, total market, or target products.

A contrarian philosiphy has made my family a lot of money in the past in FCNTX and its continuing to make us money in JSVAX. I believe that you can beat any index, dow, S&P, russell, with the proper selection of diversified funds.

....plus, I called my broker to get my orders in for the day. Even with the dip, I am still outperforming the DJIA and SPX since inception.

Have your broker statements for last 5-10 years? As I said...there's only 3-5% mutual fund managers beat the index in long run 10 year. When you have wide selection of funds...your risk profile is no longer SIMILAR to the S&P 500 or the Dow. You are expect to to get more reward for more risk taken.

And can you explain to me what is a "contrarian philosophy" to you? Contrarian means that people who short into the bull market...and looking at those funds return, it doesn't seem like it contrarian to the market- or else it would've have opposite of the return of the market if its contrarian. These funds you listed seem to be highly correlate to the market.

And once again, you not understanding "outperforming the market" when you said you called your broker. Having ATI, RIG and whatever else you listed in your portfolio...you are not diversified- meaning you are taking on MORE risk. You are not necessarily beating the market on reward/risk basis.

Ohh, and we are talking about after tax and fees return. Passive index funds charge way less fees.

I do have statements for the past 5-10 years, but what relevance does this have to do with anything?

Contrarian dosent mean short into a bull market. In fact, your definition of contrarian is way off the mark. Funds like Janus Contrarian and Fidelity Contrafund have done very well in both a bull and bear market.

From wiki: In finance, a contrarian takes the view that widespread pessimism tends to lead to market rallies and that widespread optimism tends to lead to market slumps. Contrarians are sometimes thought of as perma-bears?market participants who are permanently biased to a bear market view. However, the contrarian is not biased specifically towards a negative view of the price trend in a market. Further, contrary to popular belief, the contrarian is not necessarily limited to taking a contrary position to the prevailing crowd's view. Rather, the contrarian seeks opportunities to profit from situations when the crowd mentality leads to unreasonable valuations for assets, either on the upside or the downside.

I have 12 funds that I hold, as of this morning I have outperformed the dow by 5% since inception of this beating the market strategy. I am diversified because each fund has holdings in different sectors, and just because I'm trading a 500 share block of ATI dosent change that.


Originally posted by: iversonyin
Originally posted by: PAB
Well, lets see how the naysayers like me after today.

BA - I ordered 400 at 90, got it this morning. I've got 50 cents on the stock right now.

CVX - Up to 73 briefly

BP - Up to 62.25

ATI - Up to 108.50 and change, I'm not counting the 109 and change at open because it would have been untradeable. Ordered at 107.50, and called it 50 cents off the bottom of the day. Wrote the April 105 at 108.50 at a $6.40 premium putting the stock at my target of $111.60 before my stock gets called.

First on ATOT:

If ATI runs to 110 and holds it and I'm long the stock at the time, I will have bumper stickers made up that say BLUE HORSESHOE LOVES ALLEGHENY TECHNOLOGIES and I will send some to Pat Hassey and Jim Cramer. W

From $107 to $110...whats the big deal?

110 represents resistance, if it can break it the stock will go higher.

Originally posted by: Lothar
Originally posted by: PAB
Originally posted by: Lothar
Originally posted by: sm8000
I dumped all my SUNW in favor of SUN(oco) ;) And ATI was the first thing I bought.

Why don't you join our game here?
http://forums.anandtech.com/messageview.aspx?catid=38&threadid=2011914

And you too PAB...

To be honest....

I have more fun playing with actual money. Plus, I doubt your game has options.

I don't believe it has options.
But the fact still remains...You can join in to dispel all this "myths" and "rumors" about you.
If you end up winning, I'm sure everyone will worship you like a God and those who doubted your instinct won't do so again.
You can set it up to mirror the stocks you just mentioned in this thread, mirror it to your current portfolio, or just pick new ones.

I would play the "game" but I'm a little busy doing the same thing with real money. Thanks for the invite though!

So guys, integrated oil went up again. ATI took a shot down to the 106 range whereupon I doubled my position. The technicals look good and I forsee a run past 110 with the good technicals.

As I said before, I am long ATI until 111. If it can break 110 and hold I'm having bumper stickers made.
 

PAB

Banned
Dec 4, 2002
1,719
1
0
ATI took a shot to 106, whereupon I tripled my position and the gain on my covered call is 26%.

Not bad for a week's work. Not bad.
 
Sep 29, 2004
18,656
67
91
Originally posted by: PAB
Originally posted by: bigdog1218
Originally posted by: PAB
Originally posted by: IHateMyJob2004
STOP TRADING!!!!!

After taxes, etc ... YOU WILL LOOSE OUT TO ANY BUY/HOLD INVESTOR!

Buy and hold = Buy and lose. Look what happened with Corning. I waited for a catalyst to get that stock off it's ass for a while.

You can't make money if you hold infinitely. You have to sell and know when the right time to sell it. Sector rotation is important in an economy as diverse and dynamic as ours.

Buy and hold is outdated and wrong. You HAVE to sell eventually or when there isnt a good/compelling reason to own that stock anymore. For example, my compelling reason on CVX was the analyist meeting. The boosted production but forecast a relatively flat year - shortly after I got stopped out and didnt make my full point but caught 75 cents. Not the greatest return ever, but not bad for three days.

Your just said you have owned a stock since 2001 that you've been holding for the past 6 years and still haven't made your money back, so one of these statements is full of sh!t.

And have fun riding ATI to 93.

Right, because I was drinking the buy and hold kool aid. I'm holding corning NOW because their diesel/LCD business has shored up nicely and I'm waiting to get in the 30's before I sell.

My investment philosiphy has changed, obviously since 2001. I bought corning with the buy and hold mindset - and I just said buy and hold dosent work and I illustrated my point perfectly.


And when ATI hits 93, I'm buying more. I'm calling you out on that one. If/when ATI hits 93, I'm going to average down and when it hits 103 a week later I'm going to post trade confirmations and PWN your ass.

If you knew anything about ATI you'd know that they've got a very solid business, and their stock goes down for short periods of time and comes right back. They are a quality company with a great product, great margins, and are poised to make a lot of money off the ethanol craze - which I have market research supporting that ethanol is NOT going away anytime soon, and they're suppliers of high performance products to Boeing, which is having a spectacular run.

When earnings comes out on ATI in April, we'll know who's right.

Brought this discussion WAY BACK .....

Totally shocked by PABs comments .....

I boldfaced the biggest problem with his lack of understanding of buy/hold. Instad of saying what did he do wrong (possibly valuation based), he simply dismissed buy/hold as a dumb idea. Now that there has been a nice run up (a rising tide lifts all boats) and his short term trading appears to be "working" he thinkgs it is the way to go. Try it for 30 years ..... it will show lackluster results. I'll skip what everyone has already told PAB about taxes (short term) and commissions eating away all those gains, whatever they may be.

I can make 10% annually simpyl holding my stocks and PAB has to do 15%+ via trading to beat buy/hold simpyl because of taxation.

It's funny though ... no one was talking about REITS in 2001. They've had quite a nice run up. I benefitted. Yet I don't bitch about my LLTC holding of 5 years that has gone no where. Via dollar cost averaging, I'm at about break even. But I've colelct dividends , done covered calls and naked puts in regards to LLTC. All while being a buy/hold investor. It's been good to me over the long term. Not great, but then we'd have to talk about diversification.

EDIT:
ANALYZE/INTERPRET/REPEAT
ANALYZE/INTERPRET/REPEAT
ANALYZE/INTERPRET/REPEAT

What I've learned. Learning valuation techniques (very basic ones) in combination with buy/hold and high quality issues is the biggest joke I have run into in 30 years. I won't teach waht I do, but I find investign to be the biggest scam going out there. I make money for sitting on my a$$ and every year I make more (thanks to companies that increase their payout annually)

I am currently holding bullish positions in the following companies:
http://finance.yahoo.com/q?s=WM,BAC,PFE...,TJX,JNJ,LLTC,CAT,C,FRE,MAS,SLM,GD&d=s

Go look at their quality and history of dividend payments. Investing is a joke. My "pay raise" (aka payout increase) is about 10% annually, all while sitting on my a$$. And better than 50% of those companies are probably known by everyone.
 

PAB

Banned
Dec 4, 2002
1,719
1
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Sweet, raising the level of debate. I will address these statements.

Here's the problem with buy and hold: Buy and hold precipitates laziness. Buy and hold is an ideal that says "If you buy a stock and hold it, you will by the nature of the market and time - make money!"

Buy and hold is WRONG. Buy and Hold = Buy and LOSE. The hold philosiphy prevents people from using their brains and saying "Oh well they're having a bad year....but if I BUY AND HOLD it will get better!"

As JC likes to say - hope is not part of the equation.

I'm not saying short term is the best of ideas, but if you never sell you never book gains. If you're not constantly evaluating your positions regularly and utilizing sector rotation in this economy, you're going to lose against the business cycle. I'm not advocating owning a stock for a week, but at the same time I'm not saying you should buy something with the idea that time = profit.

ST capital gains = At most, I'll pay uncle sam 28%. I've managed to add 3% to the portfolio so far this month, and I like to think I know what I'm doing. When I clear $10k in gains by June, I'll have paid uncle sam $2800. I can live with that.

You also have to remember that in short term trading, I am booking a gain whereas your 10% gain with buy and hold is simply on paper. Additionally, I'm having fun! Note: I still have positions in managed money and this is strictly my speculation account.

I do like a few of your ideas though!

WM? Not bad. I'd rather be holding C and GS though.
BAC? I'd give this a thumbs up.
PFE? Not big on pharma/med, thanks though!
TJX - Retail isnt my idea of the best sector but I do like JWN. Solid brand with great management.
JNJ - See PFE.
LLTC - I dont want to be in Tech
CAT - Not a fan re: operational concerns with ACERT and DPF's
C - One of the better financials
FRE - You're getting a good bit of overlap in the financials here
MAS - Forecasting a building boom? I'm staying away from housing until the fed cuts rates.
SLM - More finance? Damn.
GD - I like HRS, LMT, and BA as far as defense contractors go but GD has been solid.

A few favorites that I own:

HRS - JC just plugged this today, which suprised me. They're in my hometown and I know a few engineers burning the midnight oil. Lots of good guys there working on cool stuff.

ATI - Strength in aero is going to bolster earnings. I'm bullish.

NOV - Supplies wellhead and other parts to guys like RIG. Pin action is awesome.

 

Mardeth

Platinum Member
Jul 24, 2002
2,608
0
0
"Holding" in my mind isnt keeping it forever. Anything 1+ year is holding to me.

My biggest "mistake" was buying a stock for 6.90 and selling it for ~12. After that it went all the way to 38 + I lost a lot dividends. But it taught me a lot, most of all, to be patient...

I usually invest at time scale of 1 year (+-6 months). But its pretty flexible.
 

PAB

Banned
Dec 4, 2002
1,719
1
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Originally posted by: Mardeth
"Holding" in my mind isnt keeping it forever. Anything 1+ year is holding to me.

My biggest "mistake" was buying a stock for 6.90 and selling it for ~12. After that it went all the way to 38 + I lost a lot dividends. But it taught me a lot, most of all, to be patient...

I usually invest at time scale of 1 year (+-6 months). But its pretty flexible.

The biggest problem with buying and holding is that when you buy, theres usually a good if not very compelling reason to buy.

When that reason dosent exist anymore, its time to sell. I cant tell you how many times I've seen "I'm going to buy this stock, they have a great new product!" the product flops, the stock goes in the toilet and the idea that if you hold the stock long enough you will irk a profit still exists all the way into the bankruptcy.
 

PAB

Banned
Dec 4, 2002
1,719
1
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That covered call is looking mighty nice right now.

As are BP, CVX, and other integrateds and refiners.
 
Sep 29, 2004
18,656
67
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Originally posted by: PAB
Sweet, raising the level of debate. I will address these statements.

Here's the problem with buy and hold: Buy and hold precipitates laziness. Buy and hold is an ideal that says "If you buy a stock and hold it, you will by the nature of the market and time - make money!"

Buy and hold is WRONG. Buy and Hold = Buy and LOSE. The hold philosiphy prevents people from using their brains and saying "Oh well they're having a bad year....but if I BUY AND HOLD it will get better!"

As JC likes to say - hope is not part of the equation.

I'm not saying short term is the best of ideas, but if you never sell you never book gains. If you're not constantly evaluating your positions regularly and utilizing sector rotation in this economy, you're going to lose against the business cycle. I'm not advocating owning a stock for a week, but at the same time I'm not saying you should buy something with the idea that time = profit.

ST capital gains = At most, I'll pay uncle sam 28%. I've managed to add 3% to the portfolio so far this month, and I like to think I know what I'm doing. When I clear $10k in gains by June, I'll have paid uncle sam $2800. I can live with that.

You also have to remember that in short term trading, I am booking a gain whereas your 10% gain with buy and hold is simply on paper. Additionally, I'm having fun! Note: I still have positions in managed money and this is strictly my speculation account.

I do like a few of your ideas though!

WM? Not bad. I'd rather be holding C and GS though.
BAC? I'd give this a thumbs up.
PFE? Not big on pharma/med, thanks though!
TJX - Retail isnt my idea of the best sector but I do like JWN. Solid brand with great management.
JNJ - See PFE.
LLTC - I dont want to be in Tech
CAT - Not a fan re: operational concerns with ACERT and DPF's
C - One of the better financials
FRE - You're getting a good bit of overlap in the financials here
MAS - Forecasting a building boom? I'm staying away from housing until the fed cuts rates.
SLM - More finance? Damn.
GD - I like HRS, LMT, and BA as far as defense contractors go but GD has been solid.

A few favorites that I own:

HRS - JC just plugged this today, which suprised me. They're in my hometown and I know a few engineers burning the midnight oil. Lots of good guys there working on cool stuff.

ATI - Strength in aero is going to bolster earnings. I'm bullish.

NOV - Supplies wellhead and other parts to guys like RIG. Pin action is awesome.


I am admittadly overweight in financials. Kinda upset about that now, but it's not the end of the world. Most of those financials carry 4%+ yields :) Financials are not doing well now. Kinda like REITS in 2001. My only true worry is WM, but even then I am not that worried. They carry some sub-prime risk but they are also diversified so I view it as a small headache.

Making 10% via short term gains isn't 10% after taxes and no one can predict the short term market volatility over the long term. That's the biggest problem. You cvan do well for several years, but eventually, you'll get nuked in one very short unexpected bearish run.

The key to buy/hold is valuation. Buying stocks blindly is not a good idea. Using valuation on stocks like BAC right now makes BAC a hard stock to ignore. PFE is a slow grower, but a 5% yielding slow grower. When things turn around, that yield won't be 5% anymore :) It's only a matter of when, not if.

Reetail is awesome right now. WMT, TJX and TGT are my favorites right now, even though I own some HD stock.

EDIT:
I also do the options thing, mostly through naked puts. WM is bringing tghe pain now though as I have naked puts and stock. Not overly concerned though.

MAS isa be st of breed comapny. I'm not worried. People will still need to replace things, even if MAS isn't makign as much via new home construction. They are a very well comapny and even with the housing conditions, I still expect EPS and dividend growth over the long haul. Maybe a short term hickup, but that's something I don't mind as a long. A big hickup is a buying opportunity and short term hickups are to be laughed at.

Best of luck.
 

PAB

Banned
Dec 4, 2002
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Eh, whatever works for you.

I covered the write at $3.70, way off the previous Thursday high of $6.40.

Made a very nice premium for one week's work.

Again, I bought the stock exactly 50 cents higher than the day low. I've been doing that EVERY day!

ATI is still in accumulation. I've gotten a lot of it and I'm hoping we can catch a pop after the GDP numbers.
 
Sep 29, 2004
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Originally posted by: PAB
Eh, whatever works for you.

I covered the write at $3.70, way off the previous Thursday high of $6.40.

Made a very nice premium for one week's work.

Again, I bought the stock exactly 50 cents higher than the day low. I've been doing that EVERY day!

ATI is still in accumulation. I've gotten a lot of it and I'm hoping we can catch a pop after the GDP numbers.

It won't last. 50 cents a day isn't great if you loose $5 in one day later on. Bad news comes out all the time and stocks plummet with questionable cause. It's just a matter of when, not if.

Anyways .... best of luck.
 
Sep 29, 2004
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Just noticed you don't like JNJ right now. Talk about a hell of a comapny to buy into right now. The thing is cheaper than it has been in years. UI've litterally waited 3 years for JNJ to hit these levels. I've owned it for about a year now and bought in for less than one dollar off it's 52 week low. The stock is just one of those berkshire quality issues.

Keep in mind that what JNJ sells is no where near as risky as what PFE sells.
 

PAB

Banned
Dec 4, 2002
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Originally posted by: IHateMyJob2004
Just noticed you don't like JNJ right now. Talk about a hell of a comapny to buy into right now. The thing is cheaper than it has been in years. UI've litterally waited 3 years for JNJ to hit these levels. I've owned it for about a year now and bought in for less than one dollar off it's 52 week low. The stock is just one of those berkshire quality issues.

Keep in mind that what JNJ sells is no where near as risky as what PFE sells.

Not big on it, if you are thats fine. I just dont see a lot of growth. If I want a defensive play I'll take MO.
 
Sep 29, 2004
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Originally posted by: PAB
Originally posted by: IHateMyJob2004
Just noticed you don't like JNJ right now. Talk about a hell of a comapny to buy into right now. The thing is cheaper than it has been in years. UI've litterally waited 3 years for JNJ to hit these levels. I've owned it for about a year now and bought in for less than one dollar off it's 52 week low. The stock is just one of those berkshire quality issues.

Keep in mind that what JNJ sells is no where near as risky as what PFE sells.

Not big on it, if you are thats fine. I just dont see a lot of growth. If I want a defensive play I'll take MO.

Defensive play is MO? Wow. More defensive that JNJ? Wow.
 

PAB

Banned
Dec 4, 2002
1,719
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Originally posted by: IHateMyJob2004
Originally posted by: PAB
Originally posted by: IHateMyJob2004
Just noticed you don't like JNJ right now. Talk about a hell of a comapny to buy into right now. The thing is cheaper than it has been in years. UI've litterally waited 3 years for JNJ to hit these levels. I've owned it for about a year now and bought in for less than one dollar off it's 52 week low. The stock is just one of those berkshire quality issues.

Keep in mind that what JNJ sells is no where near as risky as what PFE sells.

Not big on it, if you are thats fine. I just dont see a lot of growth. If I want a defensive play I'll take MO.

Defensive play is MO? Wow. More defensive that JNJ? Wow.

I've seen bleeding people walk past a first aid kit and go for the marlboro lights.

I'll take MO.
 

PAB

Banned
Dec 4, 2002
1,719
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Originally posted by: PAB
ATI took a shot to 106, whereupon I tripled my position and the gain on my covered call is 26%.

Not bad for a week's work. Not bad.

Looks like tripling my position at 106 wasnt a bad move.

Stock is at 108 and rising.