Showing posts with label Investing. Show all posts
Showing posts with label Investing. Show all posts

4.23.2019

Why I'm still in the market: S&P 500, Nasdaq Notch Highest Closings on Record


S&P 500, Nasdaq Notch Highest Closings on Record

Posted by Jim Peet at 4/23/2019 06:29:00 PM 0 comments

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3.09.2019

The Bull Market a Decade on ... Running with the Bull



The Bull Market Began 10 Years Ago.

Excerpt:

The financial system had nearly collapsed. The deepest recession in decades was devouring over 700,000 jobs a month. Roughly $13 trillion in stock market wealth, slowly rebuilt since the dot-com bust, had again been incinerated. It was March 2009. And it was one of the best times in a generation to buy stocks. A decade later, the bull market that began back then ranks among the great rallies in stock-market history. The 305 percent surge in the S&P 500 is the index’s second-best run ever. The rise has generated more than $30 trillion in wealth. Adjusted for inflation, that is the most created during any bull run on record, edging out the $25 trillion in gains during the epic streak from December 1987 to March 2000, which ended with the bursting of the dot-com bubble, according to Federal Reserve data.
Mark Haines Calls the Stock Market Bottom, March 10, 2009

Excerpt:

In this clip from the March 10, 2009 edition of CNBC's Squawk on the Street, the late Mark Haines tells Erin Burnett, "I think we're at a bottom. I really do." As the credit crisis continued to swirl, the Dow had closed the day before at 6,547.05, a staggering 54 percent plunge from its all-time closing high above 14,000 in October of 2007.

Mark Haines Calls the Stock Market Bottom, March 10, 2009 from CNBC.

2/20/2009 is the day I started individual investing. I called a broker and bought 1,000 shares of FITB for just above $ 1,000. I later sold for about $ 10,000.

From there:
  • I opened a Wells Trade account enabling me to have 100 free trades a year (I'm grandfathered into this deal ... no longer offered)
  • Shortly thereafter we paid our mortgage off and I began to invest $ 2,000 per month 
  • After a bit, we were at the point that we lived in one salary and invested the other
  • We continue to invest. Recently buying IBM and CSCO

Posted by Jim Peet at 3/09/2019 03:05:00 PM 0 comments

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9.21.2018

Bear Scare ... Have a Cash Buffer



Retiring Soon? Plan for Market Downturns

Excerpt:

Retirees with cash buffers often react more calmly to market declines, reducing the odds that they will panic and bail out of the market completely, says Ross Levin, a financial adviser in Edina, Minn. The problem, Mr. Levin says, is that the low returns on cash often reduce a portfolio’s long-term returns. “If you have 80% in stocks and 20% in bonds with a three-year cash position, that’s a worse strategy from a returns standpoint than having 70% in stocks and 30% in bonds,” and nothing in cash, he says. A cash buffer “allows you to manage a client’s psychology during bad times, but it’s not an optimal strategy.” To solve that problem, some advisers instead use bonds as a buffer. A $1 million portfolio with 60% in stocks and 40% in bonds effectively holds eight years of living expenses in bonds, Mr. Pfau says.
Comment: This is our current strategy ... hold some in cash (using my T-Bill strategy) and if the market declines (it feels very high right now), buy on the dip

Posted by Jim Peet at 9/21/2018 02:14:00 PM 0 comments

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8.20.2018

Reality Bites



Dow Rises to Highest Level Since February

Excerpt:

The Dow Jones Industrial Average rose to its highest level since early February on Monday, lifted by investor optimism about deal activity and trade developments. .... 

“The signal that we can take away from that is that sentiment has not been hit sufficiently by the trade uncertainty that it puts business decisions in question,” said Gabriela Santos, global market strategist at J.P. Morgan Asset Management.

The Dow industrials climbed 89.37 points, or 0.3%, to 25758.69—their highest close since Feb. 1. The S&P 500 added 6.92 points, or 0.2%, to 2857.05, bringing it 0.6% below its January record. The tech-heavy Nasdaq Composite edged up 4.68 points, or less than 0.1%, to 7821.01. The trio of indexes has climbed in three straight sessions.

Stocks tied to commodities and global growth lifted large indexes, with the materials, energy and industrials sectors ranking as the S&P 500’s best performers. Investors are now waiting to see if the S&P 500 can set a new high after the index came within 0.5% of that level earlier this month.
Another epic economic collapse is coming

Excerpt:

This Wednesday, according to the Financial Times' Robin Wigglesworth and Nicole Bullock, "the U.S. stock market will officially have enjoyed its longest-ever bull run" -- one that rises 20 percent from its low, until it drops 20 percent from its peak. And Sept. 15 will be the 10th anniversary of the collapse of Lehman Bros., the fourth-largest U.S. investment bank. History's largest bankruptcy filing presaged the October 2008 evaporation of almost $10 trillion in global market capitalization. 

The durable market rise that began March 6, 2009, is as intoxicating as the Lehman anniversary should be sobering: Nothing lasts. Those who see no Lehman-like episode on the horizon did not see the last one.

Economists debate, inconclusively, this question: Do economic expansions die of old age (the current one began in June 2009) or are they slain by big events or bad policies? What is known is that all expansions end. G od, a wit has warned, is going to come down and pull civilization over for speeding. When He, or something, decides that today's expansion, currently in its 111th month (approaching twice the 58-month average length of post-1945 expansions), has gone on long enough, the contraction probably will begin with the annual budget deficit exceeding $1 trillion.
Comment: It's just a matter of time ...

Then (source)


Updated - 8/21



The Longest Bull






Update on 8/22: Bull Market Hits a Milestone: 3,453 Days.

Posted by Jim Peet at 8/20/2018 09:41:00 PM 0 comments

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3.03.2018

Tyson - My "Chicken Run"

Why I used my tax refund to invest in Tyson:
  • While the dividend is low (1.6%) (beats what I'm getting at the bank)
  • The payout ratio is also low - 11.84%
  • The forward P/E ratio is 10.64
  • It's not currently in our portfolio (so some diversification)
  • It rules the roost: " The company is the world's second largest processor and marketer of chicken, beef, and pork after JBS S.A. and annually exports the largest percentage of beef out of the United States. Together with its subsidiaries, it operates major food brands, including Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright Brand, Aidells, and State Fair. It supplies Yum! Brands chains that use chicken, including KFC and Taco Bell, as well as McDonald's, Burger King, Wendy's, Wal-Mart, Kroger, IGA, Beef O'Brady's, small restaurant businesses, and prisons". Source
  • Chicken is growing in popularity: "Today chicken is cheap, and it has become America’s favorite meat. In the land of the hamburger, we eat more of it than beef. And while we enjoy turkey at Thanksgiving, over the course of the year we will consume five times as much chicken."
  • I like it myself: This past week I had a chicken sandwich for lunch once, and grilled chicken breast once for dinner


Comment: The movie "Chicken Run" is a real hoot! Think "The Great Escape" on claymation! As an investing aside: CALM did not turn out well for us.

Posted by Jim Peet at 3/03/2018 10:05:00 AM 0 comments

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2.23.2018

Bitcoin, Gold, Cash, or Equities


Let's start with a hypothetical $ 10,000 (that I don't have). But upcoming the hypothetical investor is about ready to receive $ 10,000: perhaps from a bonus, an inheritance, a tax refund or pennies from heaven. What would I do?

Bitcoin? 

This expresses my view perfectly: Bitcoin and the Incredible Power of Fiction
"When the history is written, cryptocurrencies will likely be described as one of the most brilliant scams in history." ... "We all laugh at primitive tribes which used large stones (or pigs) as currency. Well, laugh as you will, but a stone or a healthy pig is something. Cryptocurrencies are nothing except the marketing power of inventors, financiers and others who love the idea of buying a black box (which is obviously empty) for the price of a Kia and dreaming that it will turn into a Mercedes. There have been times recently when this dream has materialized within hours. This is not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars."
As an aside, I have .0039 in Bitcoin. I "invested" a dollar 3 years ago.

You'll need a bit (no pun) more than $ 10,000 for 1 Bitcoin today





 Gold? 

 A metals broker I have used: Apmex
Negatives:
  1. Must be stored (safety deposit box)
  2. No dividend
  3. While there is a market, there's no ready market: to sell you have to box, insure and ship
  4. Some view Gold the same as Bitcoin: "“(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” ... "Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money, and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that." Warren Buffett
Positives:
  1. If the sky ever falls ... (remember ... if the world "ends" the Internet will be down!)
  2. Beauty
  3. Makes a nice gift to grandkids when they turn 18 (my plan!)
  4. You can buy an ETF 
  5. To counter Warren Buffett:

At today's rate, $ 10,000 will buy you this:


Cash? 

Have an solid emergency fund: How to Build an Emergency Fund When You're Counting Every Penny - There are ways to save money even when money is tight
You’ve heard it time and again: It’s important to set aside three to six months’ expenses for an emergency fund. Easier said than done, right? If you have a lot of debt, live on a fixed income or have unpredictable expenses, putting aside that much money can seem nearly impossible. The good news is you don’t have to do it all at once - even a little money in savings can go a long way.
Comment: $ 1,000 isn't enough! If you have none, use that $ 10,000 for your emergency fund!

Image source


Equities?
I'm going with Warren's view expressed above. I have an emergency fund. I've got my couple of coins. I would go with a solid dividend stock like sleepy General Mills (in the news today because they are acquiring Blue Buffalo). 100 shares of GIS (which pays a 3.6% dividend) for about $ 5,400 and 100 shares of Coca-Cola for about $ 4,400 (pays a 3.6% dividend as well) 


Comment: If interested in Bitcoin, Coinbase is a good place to buy. But it's funny money








Contrarian view: Bitcoin is a better gold





On ICO's


I don't either!





Posted by Jim Peet at 2/23/2018 10:36:00 AM 0 comments

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12.21.2017

My Three, Very Conservative, Dividend Stocks for 2018






These are not growth stocks but will be steady, very conservative, dividend payers! Quotes: ED, RDS-B, DUK


Posted by Jim Peet at 12/21/2017 08:35:00 PM 6 comments

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9.11.2017

IBM or Apple? Revisited at 4 Months






4 months ago

Comments: Will IBM ever turn around?

Posted by Jim Peet at 9/11/2017 12:15:00 PM 2 comments

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12.09.2016

Jim's Investing Continuum



Let’s Be Honest: Are You an Investor or a Speculator?

Excerpt:

With the stock market seemingly setting all-time highs every day even as bond prices crumple, this is a crucial time to clarify the difference between investing and speculating.

Unfortunately, that distinction — often credited to the great investment analyst Benjamin Graham — has never been entirely clear.

Every asset is an investment in some people’s hands and a speculation in others’. So it isn’t what you buy, but rather why you buy, that determines whether you are investing or speculating. In his classic 1934 book “Security Analysis” and again in “The Intelligent Investor” (1949), Graham wrote: “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory [or ‘adequate’] return. Operations not meeting these requirements are speculative.”

I used to regard that description as definitive, but I began to see its flaws a few years ago. Can any analysis ever be thorough enough to “promise” safety or a positive return?

The traditional view, dating back at least to the 19th century, is that an investor buys to capture a predictable long-term stream of cash flow, while a speculator buys to harvest a short-term change in price.
Comment: Click on the image above for larger. On the right is Mark Wahlberg from The Gambler . On the left is the Speculator. In the middle is the planter who patiently waits. Several have asked about my own investing strategies. Here goes:

  • Basically the speculator is the gambler but the gambler may just not care.
  • I try to "treat every nickel like a manhole cover"
  • I don't pay an investment advisor so right there I am saving myself 1% (or more). And I figure that I could be an investment advisor and I care more about my assets than another.
  • About "my assets" - they really are The Lord's. All came from Him - I must glorify Him. A practical outcome of this is that I do not hoard and I do not invest in companies such as tobacco stocks (although their returns are attractive as in MO or BTI)
  • The aforementioned The Intelligent Investor by Benjamin Graham is the definitive read.
  • I do not Day Trade. Never have. I doubt I could make $$ doing it. I regard it as gambling
  • I rarely trade any stock short term 
  • I don't trade Options. I've thought about it and have investigated it but have not and doubt I ever will.
  • If I don't understand what I am buying I pass on the investment
  • I research the company sufficiently to know something about it. I have many examples but here is just one. We think Cracker Barrel is a great restaurant and we have stock in it. 
  • I explain it and "sell" the investment to my wife. She has to agree.
  • It has to, there are exceptions such as BRK-B, pay a dividend.
  • I have to have some confidence that the equity will continue to pay a dividend.
  • Diversification: No one stock dominates. Although we are heavy into several stocks such as ED, JNJ, MMM, and KMB
  • I don't need to beat another investor. I'm not in a contest with another
  • I hope to have a combination of dividends + some growth. I'm happy with 5%
  • I am not looking for spectacular returns - sounds like speculate
  • I buy and hold
  • I try to live humbly (I have a 10 year old car with just about 100,000 m and a 15 year old truck)

Posted by Jim Peet at 12/09/2016 04:26:00 PM 6 comments

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4.13.2016

American Funds by Capital Group - 7 Reviewed



Above link has profile, holdings, fees, et cetera

















Posted by Jim Peet at 4/13/2016 08:11:00 PM 0 comments

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3.09.2016

The Bull at Seven



Why this is the most untrusted bull market ever

 Excerpt (some nice charts in this article): (basically the S&P 500 has tripled!)

The bull market rally in the S&P 500 (^GSPC) that began on March 9, 2009 (when it touched the ominous 666) turned seven today, making it the second longest bull market since World War II.
Comment: Image source.


Comments: 
  • While we had been investing in our 401Ks, it was in 2008 or 2009 that we began investing extra in a brokerage account. One trade was 1000 shares of FITB at about $ 1, Later sold for $ 14. It was $ 1.24 on March 9th, 2009
  • I bought 100 shares of Ford on 7/15/09 for $ 6.92. Still have 80 of the 100.
  • In the Fall of 2008 or 2009,  we paid off our mortgage. That's when we began regularly buying stock outside of our retirement accounts.
  • Our retirement target was to be debt free, the S&P at 1500, and have a million invested. It did not work out exactly like that, but we are debt free with investments.




Posted by Jim Peet at 3/09/2016 04:02:00 PM 2 comments

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2.24.2016

The FANG stocks



What Are FANG Stocks and Why Does Jim Cramer Love Them?

Excerpt:

FANG, an acronym created by TheStreet's Jim Cramer a few years ago, is representative of four of the most popular and best-performing tech stocks in recent memory
Beware the FANG, and other quirky stock market indicators

Excerpt:

The FANG? It’s among the latest in a long line of quirky predictors, funky barometers and other theories that contribute to the noise surrounding why stocks go up and down. Some indicators are tied to the calendar, while others track presidential elections, the Super Bowl and horse racing’s Triple Crown. The FANG is an acronym for four high-flying stocks that are investor favorites: Facebook, Amazon, Netflix and Google. Never mind that Google is now called Alphabet.
Comment: Image source.  None are in our portfolio but I may do a future investment of about $ 2200:




Posted by Jim Peet at 2/24/2016 07:36:00 AM 0 comments

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