Investments Trade Log

[George the original one]

Fed is still boxed in. They need to raise rates in order to have a tool for the future, but the other reasons for raising rates aren't quite in place. Market reaction will be negative regardless of which route is taken because "doom, gloom" vs. "they did it too early and we're screwed".

[Chad]

The Fed can still use QE. Though, I'm not worried about the US economy at all. The market may go down, but the US market looks ok. Especially, with cheap oil.

Market reaction will be negative regardless of which route is taken because "doom, gloom" vs. "they did it too early and we're screwed".

That's kind of my feeling too. People are just looking for a way to make anything bad.

[jennypenny]

I'm really looking at some nice dividend payers right now (XOM, CAT, DE, PG, etc.).

Last week, a trader friend made a strong case for going long PG, and that was at last week's price. You could always put in a low bid--at least below $70, if not $69--and see what happens.

[Chad]

Yeah, I'm leaning towards something like that. In the short-term it has some stuff to work through with the big brand reorganization, but in the long run the brand reorganization probably helps them grow a little. So, collect the almost 4% dividend and wait a year or two for price appreciation. Kind of the same story with all those dividend stocks.

[banker22]

I think the dividend growth investing method is solid...but I just have a hard time getting comfortable with something as risky as equities for just a 4% return (assuming no appreciation). In the long-ish run it is pretty safe to assume appreciation, especially of these solid, defensive consumer stocks...although some have said they are overvalued relative to other sectors as people have generally been flocking to safety since 2009, and the baby boomers are retiring and parking all of their money in these kinds of stocks.

[Chad]

@banker22

The difference is in how we evaluate risk. I don't see much risk in these equities, as I plan to hold a long time and I don't plan on only owning 5 of these companies. If DE, PG, XOM, CAT, etc. goes under it probably won't matter where my money is stored. The real danger is buying a Kodak, but I think the big downsides in these instances are avoidable in most cases.

[banker22]

How many do you think is minimum for solid diversification? 15?

[vexed87]

@banker22, if we are still talking value investing, technically the more the better! You eventually need to compromise on the number you hold as keeping tabs on all your securities and understanding their business models and analysing their prospects gets more challenging and time consuming as you add more to the portfolio.

Most texts on value investing I have read consider 20 securities to be diverse 'enough' but who knows what the magic number is. There are other factors to consider too. Are you splitting your captial equally between shares or are you putting larger bets on better odds? The Dhando investor covers this well if you haven't read it, I strongly recommend that book. The intelligent investor is also a good read, but more involved, it's a bit dated, but still relevant.

Spread within specific industries will also have an impact, say 3 in oil, 3 in mining, 5 in blue chip etc would behave differently to spreading more thinly or concentrating more heavily within respective industries, hence generally the rule of the more the better. I wouldn't worry too much about having a specific number at any one time, ensure you are always build up to it. Obviously don't put 100% of your capital in one stock until you have found your second, third and fourth etc, rather dip in gently. i.e. 1/20th etc etc.

[jennypenny]

Is ARP really at a 40% yield??

Did anyone bite on ARP? Up almost 25% and kept the div.

[jennypenny]

I was pleased with my results this week until I saw that Taleb's fund made a BILLION on Monday.

Guess I still have a lot to learn.

[jennypenny]

COP and SN tripped and sold today while I was out. Still have SLCA. Wondering if tomorrow will be a little hairy since today was the end of the month.

[jennypenny]

Did everyone place their bets?

[jennypenny]

I got lucky that my limit orders on COP and SN triggered yesterday. I did better on COP, but at least I made money on both.

I'm considering SLV and GLD. I'm starting to think the Fed will raise rates sooner rather than later because (1) no unofficial chatter to pump up the market; (2) I'm not sure it would move the market drastically; and (3) the longer they wait, the closer they get to the election.

[Freedom_2018]

Some BRKB for the mid/long term. Letting Mr. Buffet & Co do the heavy lifting.

[bryan]

Some BRKB for the mid/long term. Letting Mr. Buffet & Co do the heavy lifting.

Don't like brkb with the AXP or IBM..

Better than the guys at FAIRX though.

[George the original one]

OK, I'm finally buying back into the market. Bought GOOD and OHI and PG today.

[jennypenny]

Are we taking bets on whether there will be a rate hike? I'll say yes, but only because I think if they don't now, they never will.

[Dragline]

I'd guess "no". But I am not sure how significant it will be, because if they say "no" it will likely be more of a "not now, but maybe in a couple months".

[Chad]

I'm in Dragline's camp. In reality it won't matter much except to the psychology of the investors. The amounts are going to be so small (.25%) and so infrequent (they are adamant the raises won't always come one right after the other) they won't make a material difference for a while.

[almostthere]

I am hoping for yes, b/c I am ready to see how the chips fall for long term bonds, emerging markets bonds/currencies, and cefs. The uncertainty in these areas has been intense.