Investments Trade Log

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Dragline
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Post by Dragline »

I try not to trade very much. My last purchase was a block of FXY on August 4 right after the Japanese govt intervention. I have been accumulating it since late 2009. I hold almost no equities right now, but will probably buy some next year if the downturn in that market continues.


jacob
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Post by jacob »

NGG
Does anyone own this? Anything "funny" to report in terms of tax accounting, dividends paid out in shares, and other spurious hassles?


George the original one
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Post by George the original one »

NGG: Don't own it, but the only tax catch I can spot is that maybe there are some foreign taxes that will be withheld.


OurLifeInc.
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Post by OurLifeInc. »

Wouldn't that operate like any other UK stock in that since we have a tax treaty with the UK, nothing would be withheld? I thought I had looked into DEO once and that is what I found.


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jennypenny
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Post by jennypenny »

Should be a few interesting dips today. I've been waiting to pull the trigger on CAT and JPM. I think today might be it.
SAP would be a nice purchase on a dip. I don't own it for personal reasons, but I would have added it this month if I could have.
Is anyone buying anything right now? (except gold?)


George the original one
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Post by George the original one »

I was buying INTC during August.
In general, I'm waiting for Tuesday to roll around before deciding to buy back into mREITs. They've been falling in anticipation of a plan that helps underwater mortgagees.


NYC ERE
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Post by NYC ERE »

if I had any skin in the game, I'd be long FXF and short NFLX.


sree
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Post by sree »

Check out this classic exchange over at another website in the comments. I thought it was funny. This guy Mike would not listen to a valid argument and would not be shaken in his belief that stocks will hold up forever. I think Jacob eventually just gave up on him.

Maybe it will be people like this who will keep buying in, while the boomers cash out.
Early Retirement Extreme

At some valuations, the so-called long term may be long indeed. Most people have investment horizons of 30-40 years only. That’s not a long time. By assuming historical returns, you’re assuming that the next 30 years is going to be a repeat of the last 30 years. That’s not very likely. Given that the US is now in a Japan-like conditions, I suspect a higher return may be earned from a combination of gold (to cover inflation) and long term bonds (or consumer staples/utilities if you must be in equity) (to cover deflation). The stock market will be going nowhere or down.
2 Mike Young

Thanks for the comment. First of all, 30-40 years IS rather long. I’m not assuming the next 30 will be like the last 30, I’m assuming it will be like the last 70. That’s included going through many terrible and great times. To say with certainty that the stock market will be going nowhere or down over the next 30 years is quite a stretch. That will most likely be the case short term, but to assume that gold will continue to be a good investment when it’s at a record high right now doesn’t make much sense either. If our entire goal over the next 30-40 years is to just cover inflation, then no one is going to be able to retire. I just don’t know of any other place, where there is historical perspective, that will have a potential to produce the gains stocks have. I don’t sell any of this stuff, so I have no dog in the fight. I am just taking an educated risk that stocks will recover just like they always have. But, you do make a great point, that all of it is a risk: there are no guarantees. Thanks again for your input.
3 Early Retirement Extreme

From 1905 to 1942 US market returns were zero. That’s 37 years of going nowhere. Compared to that, 30-40 years is NOT long. If you have such an interval of zero returns, it will impossible to recover from it because you can’t invest for 70 years unless you plan to keep working until age 100.
Also, if you take out the large drop in interest rates which have been driving equity from 1983 onwards, that is, only consider historical returns up to 1983, stocks don’t look so hot “in the long term” anymore. This is important, because interest rates can’t go much lower than they already are. Hence there’s no similar drive left.
Compared to stocks (not devalued cash), gold is still 40% undervalued and not at a historical high.
4 Mike Young

Are you suggesting to put all retirement investing into gold? It appears so, which goes against any expert I know of. Smart Money Magazine still suggests being heavily invested in stocks if you are a young couple. They also just put up an article suggesting 2% of your portfolio into gold is sufficient, with 5% being “gutsy”. Kiplinger’s also suggests that stocks are still a good option: see http://bit.ly/nYjvTk and http://bit.ly/r4e9N5. I’m just curious, do you sell gold or something? I’ve yet to hear or read anyone with any credibility suggest that people (even close to retirement, not to mention decades before) get out of the stock market. Just not sure where you’re coming from here.


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jennypenny
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Post by jennypenny »

Not sure anyone cares (and I swore I would take the week off), but I have added to JPM and F. I will also buy (if I get the chance) SPY @113.50, HNZ @50.50 and DKS @32. I am considering ignoring my personal rule to avoid tech and buy SAP @ $50.
And God help me, if AIG gets much closer to its 52 wk low I'm in.


DVDend
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Post by DVDend »

"From 1905 to 1942 US market returns were zero."
Is this with reference to price appreciation without factoring in dividends?


JohnnyH
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Post by JohnnyH »

LOL, "Smart Money Magazine" -that settles that.


dragoncar
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Post by dragoncar »

JOhnnyh- I had the exact same reaction when I read the smart money magazine line!
I also just executed some big ass trades (like buy and sell me a few times over big) when my dad asked me to rebalance him from all cash into the pp. Scary, and I'm still worried everything will crash and burn, but kinda fun too.


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jennypenny
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Post by jennypenny »

That's cool you helped your dad. I think I'd be too nervous to handle someone else's money.
Is the PP really holding up? I'm having trouble figuring out how to account for our 401K in the allocation (it's limited to a handful of mutual funds). It's more than 25% so I'm not sure how I could do it.


jacob
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Post by jacob »

@dragoncar - I think $50k is the maximum trade I've ever done. It was kinda "interesting". (My usual movements are in the 500-5000 range.)
@jennypenny - Several years ago (about a year or two before the financial crisis) my dad (close to traditional retirement ago) had all his stock (quite a bit) invested in his [local] bank. I strongly recommend he get out of it and into cash ... which he did. There was some grumbling as the stock price kept moving up for about a year after selling. After crashing quite low over the next couple of years, he was quite pleased though. But yes, giving advice is always tricky ... if it fails, it's your fault. If it works, they're geniuses for acting on your advice. No way around that one :)


dragoncar
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Post by dragoncar »

Yeah, I bought him the Harry Browne book, but I made 100% sure that he owned the decision. The reason I executed is basically an old-person computer thing.
The PP is holding up... so far. But we all know past performance doesn't guarantee future returns. My worries are that I'm jumping on the bandwagon, so to speak. It seems to me that gold, bonds, and stocks have been more correlated recently than I'd like. On any given day, gold and bonds seem to do the same thing and stocks seem to do the opposite. Also, gold and bonds seem overbought to me. So short term, I worry that gold and bonds will go down, stocks will rise, but not enough to carry the portfolio. That's short-term though. Since I've bought into the long-term philosophy, short-term market timing seems like a gamble.
My other worry is that a lot of PP enthusiasts actually have trouble articulating why it works. Non-correlated assets do not equal growth. My personal understanding is that all assets, on average, will grow by inflation or more. On top of that, you have the rebalancing bonus. But what if the rebalancing bonus goes away? I think performance might suck.
401k question: My dad actually had 100% in a 401k. His 401k has a decent stable-value fund (actually paying a couple percent as of now), and a low-cost Total Market Fund. Everything else was kinda crap. So he rolled half over into an IRA. This has risk (in California) because the funds are not (may not be) as well protected from liability. That's why we tried to keep as much as possible in the 401k.
So the 401k has 25% total market, 25% stable value, and the IRA has 25% gold (split between IAU, GLD, and GTU) and 25% TLT. Maybe in the future, we'll replace the TLT with directly-held treasuries. Does that make it hard to value/rebalance? Any downsides? Strict PP probably would frown on the stable value fund for cash, but it's OK for now -- maybe he'll re-evaluate later.
Edit: I hope I there's not some special way to trade large sums that I screwed up. I mean, the trades were large to me, but compared to the really big fish playing in the market, it's nothing. I think there's enough liquidity in the funds that it shouldn't really matter.
The gyroscopicinvesting forum has quite a bit of discussion about crappy 401ks. They call it "making 401k lemonade" or something like that.


DVDend
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Post by DVDend »

> "From 1905 to 1942 US market returns were zero."

>

> Is this with reference to price appreciation without factoring

> in dividends?
With no comment, I checked this against Shiller's data: with dividend return included, the real inflation adjusted return over the above period was around 4% annually. Past return does not guarantee future etc. but the longest flat total return period has been less than 20 years (around 1970s).


DividendGuy
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Post by DividendGuy »

What's on everyone's shopping list?
I recently posted an article on my site regarding my interest in AFL, INTC, T, VOD and PEP.
AFL and INTC both seem pretty compelling buys right now. I'm going to receive a commission check tomorrow and put $1400 or so into one position.
Anyone doing any shopping this week?


Maus
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Post by Maus »

@DividendGuy

I'd like to add to my INTC and PEP positions as well, but don't have enough dry powder to make the Scottrade commission worth the while. I like to buy in lots >$1400 so that the $7 trade represents less than 50 basis points.


DividendGuy
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Post by DividendGuy »

@Maus
You're speaking my language my friend. >$1400 is right in my wheelhouse, and I try to keep transactions around $1500 when possible. I also use Scottrade.
I really like PEP and always consider it a buy under $64, but AFL seems like it's screaming at me right now. INTC also seems VERY favorable around $20.


KevinW
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Post by KevinW »

It seems to me that gold, bonds, and stocks have been more correlated recently than I'd like. On any given day, gold and bonds seem to do the same thing and stocks seem to do the opposite.
This has been an above-average year for the PP. So I wouldn't be surprised to see a below-average year soon, a reversion to the mean.
My other worry is that a lot of PP enthusiasts actually have trouble articulating why it works.
I wouldn't worry about whether other people can articulate why it works, but just whether you're comfortable with your own understanding of why it works. I don't think very many people could explain why an airplane wing works, but that doesn't make flying any less safe.
Strict PP probably would frown on the stable value fund for cash, but it's OK for now
Yes, ideally cash should be 100% Treasuries. But a stable value fund is acceptable (as long as we don't have a national-scale bank run).


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