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Posted: 1/2/2015 12:34:40 AM EDT
I have been posting my gains for the last 3 years.....

2011: 28.74%
2012: 63.20%
2013: 67.26%


YEAR 2014





Edit: I had a post back in Jan. 2014 regarding a 15% gain at that point while the DOW was down 6% and someone said I made a mistake buying airlines.............

Edit #2 and hints for 2015: I am thinking Financials, Airlines, Retail and certain Biotech for the 1st half then dipping my toes into Energy companies around April. ****notice I said Energy companies and NOT oil.
Link Posted: 1/2/2015 1:30:33 AM EDT
[#1]
What happened in sept/oct?

Roughly how much money you playing with? I have found I can make some wicked returns with relatively small amounts but I don't have the balls to do it with serious money. By that I mean I have no problems making a risky bet with $1,000 but I can't make myself do the same with a six figure retirement portfolio.
Link Posted: 1/2/2015 2:08:40 AM EDT
[#2]
Ebola happened in October. I was heavily into airlines at that point. I thought airlines would benefit when oil was starting to go down in June and the output was increasing. October 15th was almost 21 days after the 1st report at Dallas. When the people close to Duncan was not getting infected, I double down and borrowed with margin as much as I can and brought 5000 more shares of AAL,DAL,and UAL. When all said and done, I had about $5 left on my margin account on Oct. 16.

Right now, I have over $500,000 in stocks. I started with under $50,000 in 2009.

Edit: Every stock I owned is large Caps with a minimum of $1 Billion market Cap. I don't like to gamble.
Link Posted: 1/2/2015 5:03:32 AM EDT
[#3]
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Quoted:
I double down and borrowed with margin as much as I can and brought 5000 more shares of AAL,DAL,and UAL. When all said and done, I had about $5 left on my margin account on Oct. 16.
Right now, I have over $500,000 in stocks.
View Quote


You sir have balls that clank. People who do shit like that either get extremely rich or go bankrupt. Usually both in time.
Link Posted: 1/2/2015 7:36:14 AM EDT
[#4]
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Quoted:


You sir have balls that clank. People who do shit like that either get extremely rich or go bankrupt. Usually both in time.
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Quoted:
Quoted:
I double down and borrowed with margin as much as I can and brought 5000 more shares of AAL,DAL,and UAL. When all said and done, I had about $5 left on my margin account on Oct. 16.
Right now, I have over $500,000 in stocks.


You sir have balls that clank. People who do shit like that either get extremely rich or go bankrupt. Usually both in time.


One of my coworker during dotcom boom borrowed money to ride the irrational exuberance and

lost.  He is in poor house.
Link Posted: 1/2/2015 7:39:56 AM EDT
[#5]
That's some dangerous investing gambling your doing there
Link Posted: 1/3/2015 1:51:55 PM EDT
[#6]
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Quoted:
That's some dangerous investing gambling your doing there
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*Another hint*

The stock market is a casino. That's the truth to it.  Every dollar "invested" in a company is a "bet" that the company will do better in the future. The stock market is also a popularity contest. It's an "election" process where someone else likes the company more than you would and will paid a higher price than you had paid for.

Link Posted: 1/3/2015 9:45:45 PM EDT
[#7]
Learn the difference between luck and skill.  You have had some great returns but the best in the world can't maintain those kind of returns.  Good job though.
Link Posted: 1/4/2015 2:57:19 AM EDT
[#8]
How much of those gains are realized? If those are your sells that is quite impressive.
Link Posted: 1/4/2015 1:51:13 PM EDT
[#9]
Excellent.  Which energy companies are you looking at?
Link Posted: 1/4/2015 5:10:13 PM EDT
[#10]
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Quoted:
How much of those gains are realized? If those are your sells that is quite impressive.
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About 50%.

Sold almost all those airline shares I purchased in Oct. for around 60-70% gain. I held on to the shares I purchase a few years ago. I still have 1500 shares of AAL that I purchased for around $10, 1000 DAL purchased for $13, 1000 shares of UAL purchased for $21. The best long term "bet" I still have is DIREXION DAILY FINANCIAL BULL 3X SHARES(FAS). I purchased 1000 shares back in 11/2011 for $21.41. It's trading $127.54 Friday. 5000 shares of BAC on 8/2011 for $6.52. 1000 shares of AIG on 4/12 for $31.95. These are going to be most of my long term holdings for now. The best part of it if I played them right I should have 0% capital gain taxes because they are long term gains.


Edit- Plus Financial stocks should be good once interest rates goes up. I am not even losing sleep at night about them because interest rates can't go much lower after QE and they should either stay at the same price level or go up. Either way, I got time to sell them for 0% tax.
Link Posted: 1/4/2015 5:26:12 PM EDT
[#11]
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Excellent.  Which energy companies are you looking at?
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Too many choices but that should change once the smaller ones go bankrupt or consolidation.

Right now I am looking at:

Devon Energy(DVN)- It has hedged about 140,000 barrels per day (bpd) of crude for all of next year, equivalent to 80 percent of its third quarter output, according to company filings.
Most are hedged @ $76 for 2015 so oil prices go down, they still make money. If US crude prices were to remain at about $65 a barrel next year, those hedges could net Devon an extra $1.3 billion in revenue, according to Reuters calculations.

Marathon Oil(MRO)- Eagle ford oil is going to be the cheapest oil to get out of the ground.

Halliburton(HAL)- King HAL isn't going bankrupt

DIREXION DAILY ENERGY BULL 3X SHARES(ERX)- Hold on. It's going to be a bumpy ride. Trading can be profitable. Buy low, Sell High. It's 3X index to the major oil companies like Exxon, SLB, CVX..etc. Trade with caution!!

Seadrill(SDRL)- Very Speculative. They are an offshore driller. Cut their dividends and the stock got crushed. $2 Billion a year savings is still $2 Billion.

U S SILICA HLDGS INC COM(SCLA)- Not a oil company but supply the Frac sand to frackers. Down a lot along with oil but they have contracts till 2018 for 80% of their sand. It's a "take or pay" contracts. Drillers don't take, they still got to pay.....unless they go bankrupt.

All these companies will depend on the price of oil. I have taken a very small position (~200-500 shares of MRO, DVN, HAL) for now. The most important date to look out for is JUNE 5th. That's the next OPEC meeting(167th). Oil should start going up at the date if not sooner i.e. emergency meeting before that.

Edit- Looking at all the times we had a breakdown of oil prices in the past half century, oil companies will turn before the price of oil has turned. Just keep that in mind.
Link Posted: 1/4/2015 7:50:29 PM EDT
[#12]
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Quoted:



About 50%.

Sold almost all those airline shares I purchased in Oct. for around 60-70% gain. I held on to the shares I purchase a few years ago. I still have 1500 shares of AAL that I purchased for around $10, 1000 DAL purchased for $13, 1000 shares of UAL purchased for $21. The best long term "bet" I still have is DIREXION DAILY FINANCIAL BULL 3X SHARES(FAS). I purchased 1000 shares back in 11/2011 for $21.41. It's trading $127.54 Friday. 5000 shares of BAC on 8/2011 for $6.52. 1000 shares of AIG on 4/12 for $31.95. These are going to be most of my long term holdings for now. The best part of it if I played them right I should have 0% capital gain taxes because they are long term gains.


Edit- Plus Financial stocks should be good once interest rates goes up. I am not even losing sleep at night about them because interest rates can't go much lower after QE and they should either stay at the same price level or go up. Either way, I got time to sell them for 0% tax.
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Quoted:
How much of those gains are realized? If those are your sells that is quite impressive.



About 50%.

Sold almost all those airline shares I purchased in Oct. for around 60-70% gain. I held on to the shares I purchase a few years ago. I still have 1500 shares of AAL that I purchased for around $10, 1000 DAL purchased for $13, 1000 shares of UAL purchased for $21. The best long term "bet" I still have is DIREXION DAILY FINANCIAL BULL 3X SHARES(FAS). I purchased 1000 shares back in 11/2011 for $21.41. It's trading $127.54 Friday. 5000 shares of BAC on 8/2011 for $6.52. 1000 shares of AIG on 4/12 for $31.95. These are going to be most of my long term holdings for now. The best part of it if I played them right I should have 0% capital gain taxes because they are long term gains.


Edit- Plus Financial stocks should be good once interest rates goes up. I am not even losing sleep at night about them because interest rates can't go much lower after QE and they should either stay at the same price level or go up. Either way, I got time to sell them for 0% tax.


was looking at the 3x bull etfs too. seem really risky now since most are at all time highs. guess whoever hasnt bought them has missed the boat  by now. would you say its not good time to buy in to them?
Link Posted: 1/5/2015 12:35:00 AM EDT
[#13]
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Quoted:


was looking at the 3x bull etfs too. seem really risky now since most are at all time highs. guess whoever hasnt bought them has missed the boat  by now. would you say its not good time to buy in to them?
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Quoted:
Quoted:
Quoted:
How much of those gains are realized? If those are your sells that is quite impressive.



About 50%.

Sold almost all those airline shares I purchased in Oct. for around 60-70% gain. I held on to the shares I purchase a few years ago. I still have 1500 shares of AAL that I purchased for around $10, 1000 DAL purchased for $13, 1000 shares of UAL purchased for $21. The best long term "bet" I still have is DIREXION DAILY FINANCIAL BULL 3X SHARES(FAS). I purchased 1000 shares back in 11/2011 for $21.41. It's trading $127.54 Friday. 5000 shares of BAC on 8/2011 for $6.52. 1000 shares of AIG on 4/12 for $31.95. These are going to be most of my long term holdings for now. The best part of it if I played them right I should have 0% capital gain taxes because they are long term gains.


Edit- Plus Financial stocks should be good once interest rates goes up. I am not even losing sleep at night about them because interest rates can't go much lower after QE and they should either stay at the same price level or go up. Either way, I got time to sell them for 0% tax.


was looking at the 3x bull etfs too. seem really risky now since most are at all time highs. guess whoever hasnt bought them has missed the boat  by now. would you say its not good time to buy in to them?


You got to realize these are DAILY ETF so they will reset everyday. If you have 2 bad days in a row then the losses are much higher than an regular ETF or vice versa if there are gains.

Now, after saying and if a sector is at the bottom of a correction(maybe oil in April?), the payoff on the way up is going to be extreme.

I really don't have a problem with the financial 3X ETF if the price is right. Let's say it's trading at $127 today and there is a selloff in the market(DOW or S&P) of 10%. That ETF should selloff about at least 20% or $25. At $102, that should be a good entry point. Buy some(10 or 100 shares?) and wait for any pullback to buy some more. You are cost average when the stock is going down. If it goes down more then I would be buy at a technical point where the 20 day moving average crossing over the 50 day moving average AND when the RSI is below 10. If it goes much further then that, we are talking about 2008-2009 again and that's not going to happen for a few more years, at least for the Financials.
Link Posted: 1/5/2015 9:13:11 PM EDT
[#14]
Next few days and weeks will be telling.  I think there is still room for lower prices - and the ensuing damage it will do to energy companies.  I dont see a bottom yet.
Link Posted: 1/8/2015 1:24:11 PM EDT
[#15]
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Too many choices but that should change once the smaller ones go bankrupt or consolidation.

Right now I am looking at:

U S SILICA HLDGS INC COM(SCLA)- Not a oil company but supply the Frac sand to frackers. Down a lot along with oil but they have contracts till 2018 for 80% of their sand. It's a "take or pay" contracts. Drillers don't take, they still got to pay.....unless they go bankrupt.
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Excellent.  Which energy companies are you looking at?


Too many choices but that should change once the smaller ones go bankrupt or consolidation.

Right now I am looking at:

U S SILICA HLDGS INC COM(SCLA)- Not a oil company but supply the Frac sand to frackers. Down a lot along with oil but they have contracts till 2018 for 80% of their sand. It's a "take or pay" contracts. Drillers don't take, they still got to pay.....unless they go bankrupt.

On the fracking sands side, what do you think about Hi-Crush (HCLP)?
Link Posted: 1/8/2015 10:08:08 PM EDT
[#16]
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Quoted:

On the fracking sands side, what do you think about Hi-Crush (HCLP)?
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Excellent.  Which energy companies are you looking at?


Too many choices but that should change once the smaller ones go bankrupt or consolidation.

Right now I am looking at:

U S SILICA HLDGS INC COM(SCLA)- Not a oil company but supply the Frac sand to frackers. Down a lot along with oil but they have contracts till 2018 for 80% of their sand. It's a "take or pay" contracts. Drillers don't take, they still got to pay.....unless they go bankrupt.

On the fracking sands side, what do you think about Hi-Crush (HCLP)?



Good dividend. It's got a 8% along with EMES with a 10% dividend. Those dividends should be safe unless their cash flow is disrupted by too many drillers going bankrupt. In situations like this I really don't count on the dividends as anything that is safe; learning painfully 1st hand from the 2008 financial crash. I think all 3 companies(SLCA, HCLP, EMES) will trade in tandem and the price of oil will dictate how they will trade.
Link Posted: 1/9/2015 11:58:06 AM EDT
[#17]
Op sounds like he is doing his homework and not going at it blind, good job op!
Link Posted: 1/9/2015 2:36:16 PM EDT
[#18]
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Quoted:



*Another hint*

The stock market is a casino. That's the truth to it.  Every dollar "invested" in a company is a "bet" that the company will do better in the future. The stock market is also a popularity contest. It's an "election" process where someone else likes the company more than you would and will paid a higher price than you had paid for.

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Quoted:
That's some dangerous investing gambling your doing there



*Another hint*

The stock market is a casino. That's the truth to it.  Every dollar "invested" in a company is a "bet" that the company will do better in the future. The stock market is also a popularity contest. It's an "election" process where someone else likes the company more than you would and will paid a higher price than you had paid for.




That is a huge misconception to the point that I'm thinking you've been lucky rather than good.

Yes, you can play the popularity contest in the stock market by being a trader and trying to gauge momentum.  However, that is pretty far from the fundamental nature of how value is really being created in the market.

It's all about earnings and while speculating on growth may be forward looking, the earnings that companies are making in the here and now are very material to the price of most stock stocks.  That component of investing is not a gamble but rather purchasing a known quantity and it is a pretty big chunk of the entire picture.

There are lots of investors, myself included, who couldn't possibly care less what the share price of a stock is doing by itself but rather are focused on earnings and the share price in relation to those earnings.  Whether earnings are reflected as dividends or increases in shareholders equity, that's the real value being created and I'm getting it one way or another.  

Stocks may go up or down but they can't ignore fundamentals forever.  The "popularity contest" notion only has merit in the short term.  In the long term, all that bullshit walks and earnings is what actually talks.
Link Posted: 1/10/2015 2:17:46 AM EDT
[#19]
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Quoted:



That is a huge misconception to the point that I'm thinking you've been lucky rather than good.

Yes, you can play the popularity contest in the stock market by being a trader and trying to gauge momentum.  However, that is pretty far from the fundamental nature of how value is really being created in the market.

It's all about earnings and while speculating on growth may be forward looking, the earnings that companies are making in the here and now are very material to the price of most stock stocks.  That component of investing is not a gamble but rather purchasing a known quantity and it is a pretty big chunk of the entire picture.

There are lots of investors, myself included, who couldn't possibly care less what the share price of a stock is doing by itself but rather are focused on earnings and the share price in relation to those earnings.  Whether earnings are reflected as dividends or increases in shareholders equity, that's the real value being created and I'm getting it one way or another.  

Stocks may go up or down but they can't ignore fundamentals forever.  The "popularity contest" notion only has merit in the short term.  In the long term, all that bullshit walks and earnings is what actually talks.
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Quoted:
Quoted:
That's some dangerous investing gambling your doing there



*Another hint*

The stock market is a casino. That's the truth to it.  Every dollar "invested" in a company is a "bet" that the company will do better in the future. The stock market is also a popularity contest. It's an "election" process where someone else likes the company more than you would and will paid a higher price than you had paid for.




That is a huge misconception to the point that I'm thinking you've been lucky rather than good.

Yes, you can play the popularity contest in the stock market by being a trader and trying to gauge momentum.  However, that is pretty far from the fundamental nature of how value is really being created in the market.

It's all about earnings and while speculating on growth may be forward looking, the earnings that companies are making in the here and now are very material to the price of most stock stocks.  That component of investing is not a gamble but rather purchasing a known quantity and it is a pretty big chunk of the entire picture.

There are lots of investors, myself included, who couldn't possibly care less what the share price of a stock is doing by itself but rather are focused on earnings and the share price in relation to those earnings.  Whether earnings are reflected as dividends or increases in shareholders equity, that's the real value being created and I'm getting it one way or another.  

Stocks may go up or down but they can't ignore fundamentals forever.  The "popularity contest" notion only has merit in the short term.  In the long term, all that bullshit walks and earnings is what actually talks.



So what you just said is that it comes down to it the stock market it is still just an educated guess.....just like picking those lucky numbers.

For example, who in their right mind would have brought American Airline stock a few years ago when it was in bankruptcy trading at 50 cents? All the fundamentals says it's a broken company along with all the other airlines. Who would have purchased them even at $10 when they merged with US Airways because the standing joke was, "if you want to make a million dollars on the airlines, start with a Billion dollars." Who would have brought them at the beginning of 2014 when they were trading for $20 when there was no P/E and no future P/E at that point and oil was trading at $110?  Who would have brought them in Oct. 2015 when the ebola virus was going to stop air travel?  The fundamentals and all the numbers would have never seen this company as making so much money and with a future 2015 P/E of 5 just 2 years ago.

And don't get me started with Wall Street getting a hissy fit when a good company like Apple misses their "whisper numbers" and punishes the stock by 10% when Apple beats the earning estimates. Nobody could have ever seen that.

No doubt forward earnings, P/E, forward earnings is very important in my calculations in deciding when to buy a stock but noting is written in stone that  stock will increased in price just because the fundamentals looks fantastic.

Edit- Never forget the #1 reason why someone buys a stock is for the increase of the stock price and not to fall in love with the company.
Link Posted: 1/10/2015 11:12:02 AM EDT
[#20]
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So what you just said is that it comes down to it the stock market it is still just an educated guess.....just like picking those lucky numbers.

SNIP

Edit- Never forget the #1 reason why someone buys a stock is for the increase of the stock price and not to fall in love with the company.
View Quote


Casino outcomes are purely random.  That's why you can't beat the house.  An educated guess implies that you have information that gives you an edge.  It's no longer a casino game at that point.  If you pick stocks like you pick lotto numbers, sure that's the lottery.  That's not how I invest.

Once again, my entire post is based on disagreeing with your last statement.  The #1 reason to buy a stock is not to achieve an increase in share price.  That's only one possible outcome of the right reason to buy a stock but it's not the reason.  The #1 reason to buy a stock is earnings and whether those earnings are captured by the shareholder in the form of dividends or increased shareholders equity is secondary.  If you don't understand this, you are flying blind.

Poo Poo that if you want but it's held true through all the past bubbles and bursts unlike the notion of a popularity contest.  Playing the popularity contest is how people got burned paying to much for earnings in the late 90s and ended up as bagholders after the crash.

Link Posted: 1/10/2015 1:37:58 PM EDT
[#21]
Link Posted: 1/11/2015 2:40:52 AM EDT
[#22]
Several people has messaged me about my strategy and it's hard to explain everything so the only way to explain my trading/gambling strategy is to talk about a recent trade I just did. Sorry for the long read.

I was watching Cramer's Mad Money on CNBC back in June 2014 and he was talking about a company call Gilead Sciences(GILD), a biotech company. I usually don't listen to Cramer but what really caught my ear was Gilead has found a cure for Hepatitis C and has been selling a FDA approved drug since the beginning of the year . The drug is call Solvaldi. That is big news and I did some research on it. It seems like Gilead is already famous for their cocktail for treating  HIV but back in 2011 they brought Pharmassett for $11 billion. Yes, no typo, $11 billion. However, Gilead charges about $90,000 for the cure and there are 20 million people in just the U.S. with Hep C.  Insurance conpanies are willing to pay because it's cheaper than a liver transplant and most importantly it's a cure for Hep C!  It is projected Solvaldi alone will make Gilead $12 billion in revenues in just 2015 with that growth to grow exponentially in the future. Eveything about the company looks good. It's a large cap biotech company with a cap of $100 billion. The earnings and future earnings looks good. I took and gamble and purchased 300 shares for $65 each. This is where fundamentals with the numbers and earnings do count. Gilead later got another version of Solvaldi called Harvoni approved to market which is a one pill a day drug for Hep C.

Gilead's stock was on an uphill climb to $114 and it was at $104 on December 19, 2014.

Not everything is coming up all roses because there will always be competition with such a huge money making drug. Bristol-Myers Squib and Johnson and Johnson got their drugs delay or not approved. AbbVie(ABBV) was probably going to get their Hep C drug approved by December. AbbVie's drug is a 4 pill a day regiment call Viekira Pak with a 99% cure rate. It got approved on Friday December 19, 2014  by the FDA for sale at a price of $87,000. Wow, I guess I just dodged a bullet and there will not going to be a price war plus there is only going to be 2 companies making a Hep C cure. Hooray, let the money printing press continue!

The largest managed health company Express Scripts announced 2 days later on Monday December 22, 2014 that they WILL ONLY insured Viekira Pak and WILL NOT insured Gilead's Solavldi or Harvoni. Oops, the shit just hit the fan. All the analyst and fundamental numbers hasn't forseen this. The reason Express Scripts decided to go only with Viekira Pak is they got a sweet deal from Abbvie for about a 30% discount. Needless to say, Gilead's stock was dropping like a rock at pre-market. Every number that was given by every analyst doesn't mean jack and just got thrown out the window.

I sold my 300 shares at pre-market for $97. I stlll made a $9600 gain for 3 months. Not too shabby.

Gilead was trading at $87 two days later, a 20% drop since Friday. This is where every P/E, future P/E, earnings doesn't count anymore. It's going to be traded on gut instincts and stock charts. First clue I got was the 20 day moving average was making a steep turn and cross the 50 day moving day average. A clue that there is some heavy buying. The RSI indicator was also turning. So I brought 500 shares at $89. This purchase was just based on my gut feeling that Gilead is still a good company and I brought shares really on a gamble without any news and no insider information.

Two weeks later on Monday January 5, 2014, CVS selected Gilead as their drug of choice to treat Hep C. I immediately purchased 500 shares at market for $92 on instinct again. My cost average is now $90.50. On Thursday January 8, 2014, Anthem also selected Gilead as their drug of choice to treat Hep C!

At this point I sold 500 shares of Gilead for $102.50 for a gain of $6000 in 2 weeks. A gain is still a gain. No need to gamble it anymore when I already made money early on.

My total gain for Gilead is $15,600 for six months and I still hold 500 recent shares of Gilead at a cost of around $80 and I again let fundamentals take over again.

As you can see. I took gambles on this stock several times when I needed to but I also did my homework with the numbers when I first purchase this stock.

It's really all about making money and not being married to the company. Another rule I have regarding to stocks is that I am getting a piece of paper for another piece of paper. Only one piece of that paper is worth something.


Edit- AbbVie got downgraded by Bank of America when Gilead got their drug selected by Anthem on Thursday. I went ahead and brought 500 shares of ABBV(a $100 billion market cap company, btw) for $65.20 on a gamble that both companies will succeed. For god sakes, it's a Hep C cure !!! Analyst...what the hell do they know??
Link Posted: 1/11/2015 9:23:02 PM EDT
[#23]
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Quoted:



The #1 reason to buy a stock is for increase in share price or dividends without too much of a decrease in share price.

There is NO other reason but to MAKE MONEY.


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Quoted:
Quoted:
Quoted:
So what you just said is that it comes down to it the stock market it is still just an educated guess.....just like picking those lucky numbers.

SNIP

Edit- Never forget the #1 reason why someone buys a stock is for the increase of the stock price and not to fall in love with the company.


Casino outcomes are purely random.  That's why you can't beat the house.  An educated guess implies that you have information that gives you an edge.  It's no longer a casino game at that point.  If you pick stocks like you pick lotto numbers, sure that's the lottery.  That's not how I invest.

Once again, my entire post is based on disagreeing with your last statement.  The #1 reason to buy a stock is not to achieve an increase in share price.  That's only one possible outcome of the right reason to buy a stock but it's not the reason.  The #1 reason to buy a stock is earnings and whether those earnings are captured by the shareholder in the form of dividends or increased shareholders equity is secondary.  If you don't understand this, you are flying blind.

Poo Poo that if you want but it's held true through all the past bubbles and bursts unlike the notion of a popularity contest.  Playing the popularity contest is how people got burned paying to much for earnings in the late 90s and ended up as bagholders after the crash.




The #1 reason to buy a stock is for increase in share price or dividends without too much of a decrease in share price.

There is NO other reason but to MAKE MONEY.




No shit Sherlock.  

I think you are reading without trying to comprehend what I am saying, why I'm saying it, and the context in which I am saying it.  I'll highlight the important part.

The reason it matters is because lots of people ignored earnings in the late 90's because "hey, my share values are growing at 20%+ per year" and lost every bit of money they had made on paper when the reality check came.  Likewise, lots of people ignored earnings in 2009-2014 and missed out on a pretty stellar bull market.  The current era of everyone feeling smart about themselves and their big returns is going to come to an end at some point and I'm trying to point out some basic truth about investing that will help people avoid the inevitable.

I'm not a bear and trying to say that time is coming this year or next, but I am saying that people who don't know what they are buying and think the market is a casino game or popularity contest are the ones who end up winning big right until they lose it all.  Both appreciation and dividends ultimately come from earnings and when those realities no longer line up, shit is about to hit the fan.  Count on it.



Link Posted: 1/12/2015 9:23:32 AM EDT
[#24]
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No shit Sherlock.  

I think you are reading without trying to comprehend what I am saying, why I'm saying it, and the context in which I am saying it.  I'll highlight the important part.

The reason it matters is because lots of people ignored earnings in the late 90's because "hey, my share values are growing at 20%+ per year" and lost every bit of money they had made on paper when the reality check came.  Likewise, lots of people ignored earnings in 2009-2014 and missed out on a pretty stellar bull market.  The current era of everyone feeling smart about themselves and their big returns is going to come to an end at some point and I'm trying to point out some basic truth about investing that will help people avoid the inevitable.

I'm not a bear and trying to say that time is coming this year or next, but I am saying that people who don't know what they are buying and think the market is a casino game or popularity contest are the ones who end up winning big right until they lose it all.  Both appreciation and dividends ultimately come from earnings and when those realities no longer line up, shit is about to hit the fan.  Count on it.



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So what you just said is that it comes down to it the stock market it is still just an educated guess.....just like picking those lucky numbers.

SNIP

Edit- Never forget the #1 reason why someone buys a stock is for the increase of the stock price and not to fall in love with the company.


Casino outcomes are purely random.  That's why you can't beat the house.  An educated guess implies that you have information that gives you an edge.  It's no longer a casino game at that point.  If you pick stocks like you pick lotto numbers, sure that's the lottery.  That's not how I invest.

Once again, my entire post is based on disagreeing with your last statement.  The #1 reason to buy a stock is not to achieve an increase in share price.  That's only one possible outcome of the right reason to buy a stock but it's not the reason.  The #1 reason to buy a stock is earnings and whether those earnings are captured by the shareholder in the form of dividends or increased shareholders equity is secondary.  If you don't understand this, you are flying blind.

Poo Poo that if you want but it's held true through all the past bubbles and bursts unlike the notion of a popularity contest.  Playing the popularity contest is how people got burned paying to much for earnings in the late 90s and ended up as bagholders after the crash.




The #1 reason to buy a stock is for increase in share price or dividends without too much of a decrease in share price.

There is NO other reason but to MAKE MONEY.




No shit Sherlock.  

I think you are reading without trying to comprehend what I am saying, why I'm saying it, and the context in which I am saying it.  I'll highlight the important part.

The reason it matters is because lots of people ignored earnings in the late 90's because "hey, my share values are growing at 20%+ per year" and lost every bit of money they had made on paper when the reality check came.  Likewise, lots of people ignored earnings in 2009-2014 and missed out on a pretty stellar bull market.  The current era of everyone feeling smart about themselves and their big returns is going to come to an end at some point and I'm trying to point out some basic truth about investing that will help people avoid the inevitable.

I'm not a bear and trying to say that time is coming this year or next, but I am saying that people who don't know what they are buying and think the market is a casino game or popularity contest are the ones who end up winning big right until they lose it all.  Both appreciation and dividends ultimately come from earnings and when those realities no longer line up, shit is about to hit the fan.  Count on it.





I agree with this statement. Earnings are an easy fundamental to calculate value. However, this is based on past performance and future earnings might be vastly different (technology changing in the market for HP/Compaq or a new revolutionary drug for Biotech). It can also be manipulated by stock buy-backs or other innovative accounting methods. But it is something that gets us close.

This is also why I am getting skittish in this market. The current S&P500 PE is getting rich for me. I am finding it more difficult everyday to find bargains in this market. The Shiller's P/E Ratio puts us back in the same territory as 2007-2008 but not yet in the nosebleed area of 2000.

But I just have a gut feeling that 2015 will be similar to 2000 or 2008. Maybe something bad from the Euro-zone and it spreads. Could start with something small like the change of government in Greece (economic) or a terrorist attack that spooks the market. Or even Iran, Venezuela, or Russia becoming even more aggressive due to their mounting economic troubles (increasing debt and decreasing oil revenues).  Sometimes I think it is all just a house of cards and we are just one disaster away from it all falling down.

It is definitely feeling like 'irrational exuberance' where every Joe feels like a stock trading be-their-own hedge fund hero. Their portfolio is a masterpiece that can never go down. Their uncanny wits have conquered the market and they can expect to always make over 20% returns due to their intellect. They finally found a way to beat the house and win! Now they are leveraging all their assets going 'all-in' on the market.

There is a lot of money available.


It is definitely being put into the market.


And being reflected in the P/E ratio.


Link Posted: 1/12/2015 7:09:34 PM EDT
[#25]
You guys are always interesting to read.  I just started investing with a focus on dividend returns.  I have taken a 2% hit counting today but I have picked up some long term great earners yielding 1-2% more than there average.  It's fun to read but how do you guys sleep at night?
Link Posted: 1/13/2015 9:07:01 AM EDT
[#26]
Think long term.
Link Posted: 1/13/2015 7:23:14 PM EDT
[#27]
getchevyn I appreciate your insights.

Up until I started reading this thread I always considered stocks too much of a gamble, and though that hasn't changed yet, I have spent a lot of time reading about how a decision for choosing a stock can be better informed and more likely to succeed. i hope you keep posting updates, tips, experiences and information for the noobies like myself.
Link Posted: 1/16/2015 3:11:19 PM EDT
[#28]
I bet you got a little worried in October

Good job!!!

One of my biggest regrets is no taking my house down payment money and throw it into Ford stock after they didn't take the bailout.

I would have bought in at $1.42 a share with $30K. Ford made it to around $16 a share. Could have made about $300K.
Link Posted: 1/20/2015 6:06:12 PM EDT
[#29]
Tag
Link Posted: 1/21/2015 1:25:43 PM EDT
[#30]
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was looking at the 3x bull etfs too. seem really risky now since most are at all time highs. guess whoever hasnt bought them has missed the boat  by now. would you say its not good time to buy in to them?
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How much of those gains are realized? If those are your sells that is quite impressive.



About 50%.

Sold almost all those airline shares I purchased in Oct. for around 60-70% gain. I held on to the shares I purchase a few years ago. I still have 1500 shares of AAL that I purchased for around $10, 1000 DAL purchased for $13, 1000 shares of UAL purchased for $21. The best long term "bet" I still have is DIREXION DAILY FINANCIAL BULL 3X SHARES(FAS). I purchased 1000 shares back in 11/2011 for $21.41. It's trading $127.54 Friday. 5000 shares of BAC on 8/2011 for $6.52. 1000 shares of AIG on 4/12 for $31.95. These are going to be most of my long term holdings for now. The best part of it if I played them right I should have 0% capital gain taxes because they are long term gains.


Edit- Plus Financial stocks should be good once interest rates goes up. I am not even losing sleep at night about them because interest rates can't go much lower after QE and they should either stay at the same price level or go up. Either way, I got time to sell them for 0% tax.


was looking at the 3x bull etfs too. seem really risky now since most are at all time highs. guess whoever hasnt bought them has missed the boat  by now. would you say its not good time to buy in to them?


My two favorite ETFs are NUGT and DUST both Direxion funds.
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