Stock market tips and experiences

[mact3333]

I have to laugh out loud abit...what you are saying is exactly what all the investing books say...let me ask you this, the fundamentals of MSFT have been great over the past decade and they have increased sales and profits yet the momo players left that stock a decade ago and havent come back...same with INTC and CSCO...so why havent those stock prices gone up to any significant degree over the past decade???

I will tell you why, stock price is only about supply and demand...and if you think your investments are not influenced by the futures market and FOREX you either dont understand this concept or are delusional...

And what you said about money velocity is true but this is only important when there IS excess money supply to begin with...this happens when money is created out of thin air by the Fed's...also happens when loans(i.e.-money) are created out of thin air by the banks...then velocity is important but you cant have velocity without supply...in a fiat society, MONEY=DEBT!!!!!

Keep investing with fundamentals if thats your thing, but dont kid yourself, the reason why it works over the long run is because the Fed's keep expanding the money supply(helps real estate, equities, gold, oil, even your precious watches and pens) and inflation is created...dont believe me, plot of the value of the US Dollar since the fed Reserve Act was enacted in 1913 and plot of the stock mkt(inversely proportional)...value of dollar has gone down by 98% since then.

If the stock mkt was really dependent on earnings, then we would never see co's like TSLA and the 3D printing co's taking off like it is...speculation through stock supply and demand, that is what its about.

Originally Posted by mmahany

All of your investments both tangible or not are part of your "portfolio,” at least in my opinion. By purchasing several homes and renting them out, you’re essentially creating your of REIT. I spoke with a man a while back who told me that he had no reason to invest in the stock market because real estate is doing so well right now. What he failed to realize is that he is most certainly invested in the market as a whole, but he has no diversification. It’s not necessarily a bad approach as long as it matches your risk tolerance and financial goals.

I consider many things I own to be part of my portfolio. Obviously, my mutual fund and equity positions are part of my portfolio. However, I also consider many tangible assets as part of my portfolio as well: Coins, Fountain Pens, Watches, Antiques, and even some of the vehicles I've owned in the past.

All these things can and should be considered part of your portfolio
-Classic Cars
-Watches/Jewelry
-Precious metals and stones
-Real estate
-Artwork
All of these things should be considered as part of your portfolio. They’re simply ways to further diversify your money. Your investment doesn’t necessarily have to have a ticker symbol. To me, an “investment” is anything that has the potential to be bought for less than you can sell it for.

[RandomHero]

Originally Posted by mact3333

I have to laugh out loud abit...what you are saying is exactly what all the investing books say...let me ask you this, the fundamentals of MSFT have been great over the past decade and they have increased sales and profits yet the momo players left that stock a decade ago and havent come back...same with INTC and CSCO...so why havent those stock prices gone up to any significant degree over the past decade???
I don’t agree with some of your opinions, but I managed to refrain from “laughing out loud a bit.” There’s an old proverb that goes a little something like: “If a wise man has an argument with a fool, the fool only rages and laughs, and there is no quiet.”

Since you asked me, I bothered to explain each of the equities you mentioned.

MSFT-It’s a blue chip company. It’s past its growth stage and it’s a value/dividend company now. Microsoft has increased its dividend every year for the past decade. The dividend yield has increased more than 400% over that time period. The dividend itself has increased close to 1000%. It’s a AAA rated company with a price that’s currently up 300% from its 52-week low. In 2009 it was up 59.5%. Currently year to date, its return is beating the market more than 5% and it’s beating the technology industry by more than 10%. I wouldn’t be ashamed of those numbers in the least bit. As of March 31st it’s one of the top 7 dividend stock holdings held in the 15 3-year best total return large-cap mutual funds (risk adjusted).

Simply put- It’s one of the top dividend stocks held by the best mutual funds. I’d say the “big players” are definitely with me on this one.

INTC-Intel paid a 4.2% dividend last year. Its dividend yield has increased around 1300% in the past year. However, Intel has underperformed the market and its industry for the past 1yr,3yr,5yr,and 10yr periods. Its current market cap is roughly half what it was in 2003. Furthermore, its market cap has increased less than 5% over the past 5-years. Its long term debt has increased more than 1300% in the past 10 years and its debt/equity ratio is 1200% higher in that same period. Intel’s sales decreased from 2011-2012 and they have only increased their total sales by about 6% a year on average.

Simply put-I can see plenty of reasons why one shouldn’t own INTC. The “big players” left it for a reason.

CSCO-It’s lost 32% of its market cap over the past 10 years (a good bit to Oracle). Its long-term debt has increased 150% since 2006. Its debt/equity ratio has increased about 11-12%. It has underperformed the market 7 out of the past 10 years and underperformed its industry 4 out of the last 10 years (each time by at least 12%). It’s ROA reached its low point in 2011 and remains near its 2003 levels. There are certainly some positives, but it’s a bland company at this point.

Simply put- It’s not a terrible company to own, but there are certainly better opportunities out there. The “big players” see better opportunities like I do.

I will tell you why, stock price is only about supply and demand...and if you think your investments are not influenced by the futures market and FOREX you either dont understand this concept or are delusional...

I completely agree that stock prices are entirely about supply and demand. Economics in general is about supply and demand and the study of scarcity. I never once said prices were not influenced by those factors. However, what increases demand? To me, a solid company with solid fundamentals is generally going to be in high demand.
Investing is like poker. No one has a crystal ball and can predict the winners, but you do have the ability to control your odds. Fundamental Investing is like playing a pair of aces. You aren’t going to win every time, but statistically speaking, you will win in the long run.
Technical investing is like trying to read your opponent. You ultimately negate what you have in your hand and attempt to read the other person. You’re betting that the other person has a crappy hand and will fold. Your goal is to pick up the pot. The better you are at reading your opponent, the better you will do. There’s nothing wrong with this method, but you better be damn good at knowing when to bluff and when to fold.


And what you said about money velocity is true but this is only important when there IS excess money supply to begin with...this happens when money is created out of thin air by the Fed's...also happens when loans(i.e.-money) are created out of thin air by the banks...then velocity is important but you can’t have velocity without supply...in a fiat society, MONEY=DEBT!!!!!

Not necessarily true. Even if the money supply remains the same, money can still exchange hands and prices can fluctuate. The strongest companies will ultimately survive and the weakest companies will fail. Look at the Big 3 car companies. General Motors and Chrysler both failed during the recession. Their fundamentals failed them. They weren’t prepared for a downturn and when people stopped buying cars, they were forced to take TARP money and then eventually declared bankruptcy. Ford on the other hand was the only one who survived. Their stock price got to an extreme low point, but you can’t ignore the fact that they were the only one of the three who survived.
The point is: Some inflation is a good thing. It promotes spending and growth because it helps increase the velocity of money. If I know that my money is going to be worth less in a year, I have more of a tendency to spend it now. In addition, if I get a slight raise, I might be tempted to go spend money on something I normally wouldn’t buy. I may not have money to buy a $5000 Rolex now, but if I think it’s going to cost $10,000 in a few years, I’ll be more tempted to buy it.
Without inflation there will still be some velocity of money. However, people will be more tempted to save. If I know that that same Rolex is still going to be $5000 in a few years, I’ll probably just save my money now and buy when it makes sense to. On the other hand, if there is no inflation, I’m still going to have to pay my bills, buy groceries, and pay my rent. I still have to spend money on certain things, but I may not spend money on discretionary goods.


Keep investing with fundamentals if thats your thing, but dont kid yourself, the reason why it works over the long run is because the Fed's keep expanding the money supply(helps real estate, equities, gold, oil, even your precious watches and pens) and inflation is created...dont believe me, plot of the value of the US Dollar since the fed Reserve Act was enacted in 1913 and plot of the stock mkt(inversely proportional)...value of dollar has gone down by 98% since then.

As I said, a small bit of inflation promotes spending, growth, and the velocity of money. I don’t disagree with your statement about the valuation of the dollar. That’s another reason why gold is considered a hedge for inflation. The US dollar is arguably closest thing to a central global currency, but gold is better medium of exchange. The FED could technically print as much money as they wanted and the value of the dollar would decrease. However, you can’t make more gold.
Once again, scarcity is what drives markets. If you take away mediums of exchange that have no intrinsic value (paper money, coins, and gold) eventually you’re forced to trade things for the things you need. At one point a cow might have been worth 20 bushels of corn. I don’t need a cow, but if I have 1000 bushels of corn, I can afford to buy that cow. If no one else has corn then I could try and trade 10 bushels of corn for a cow. Eventually, I could have everything I want and charge any price I want as long as I control everything people need to live. Those are called monopolies.
“Only the strong survive” and “The rich get richer and the poor get poorer” may be clichés, but there is a great deal of truth to them. Eventually the biggest and strongest companies will prevail and push out their competitors.

If the stock mkt was really dependent on earnings, then we would never see co's like TSLA and the 3D printing co's taking off like it is...speculation through stock supply and demand, that is what its about.
We saw a SHORT-TERM appreciation of both of those companies. Will they be able to sustain their prices? Time will tell. You’re talking about two companies that have seen rapid growth in a few months. In my previous post I agreed with your point on this matter. Technical analysis is best IN THE SHORT TERM. Fundamental Analysis will prove whether or not those companies can sustain that growth.
Let me ask you a few questions: Why do stock prices generally fluctuate immediately after a company posts its quarterly earnings? What would happen if Tesla suddenly declared bankruptcy tomorrow? Why did Apple’s stock price eventually correct itself?
Fundamentals drive prices in the long run. Technicals drive prices in the short run. Tesla and DDD are hot right now and everyone wants in. Eventually, there is going to be a price point where they run out of steam and you’ll see a big sell off. That’s when the price will correct itself and move to its fair market value.

I bolded my answers again. You're welcome to think I'm a fool. It won't offend me I promise. However, I challenge you to respond objectively rather than subjectively next time. I can tell you are an intelligent person which is why I'm attempting to have a sophisticated conversation with you. If I thought you were a moron, it wouldn't be worth my time. I enjoy talking about this sort of thing, and I am the first to admit that I don't know everything on the matter. However, I'm inclined to believe that I know more than most and I think my opinions are very valid and I always do my best to support them with examples or facts.

[mact3333]

Originally Posted by mmahany

I bolded my answers again. You're welcome to think I'm a fool. It won't offend me I promise. However, I challenge you to respond objectively rather than subjectively next time. I can tell you are an intelligent person which is why I'm attempting to have a sophisticated conversation with you. If I thought you were a moron, it wouldn't be worth my time. I enjoy talking about this sort of thing, and I am the first to admit that I don't know everything on the matter. However, I'm inclined to believe that I know more than most and I think my opinions are very valid and I always do my best to support them with examples or facts.

1. Apologies for 'laughing out loud " comment...abit juvenile...I actually appreciate that you took the time to respond with a thoughtful reply, even if I disagree with some of it....but I do agree with some/many of your points just not all of it.

2. Fundamentals is like playing poker and getting it in with AK vs AJ and thinking you have that person dominated at 70-30 but little do you know that the card are marked...technical analysis assumes and knows there is cheating going on and reacts to unbiased objective data to see the whole picture before it becomes a clear...for many situations, when a clear picture forms its too late.

3. MSFT hasnt beaten the S&P 500 when plotted over 5 and 15 years...sure the dividends are good but real money is made by finding the co's with very high revenue growth in sectors which the public clearly favor for whatever reason...if the story sounds good, people will buy and as you alluded to, supply and demand will move price....MSFT like 35 now, wasnt it 35 like in early 2000?...even from the 3/09 low it hasn't beaten the SPX....but during the 2000's it had good revenue and earnings growth yet price didnt do anything...supply and demand move price!

4. think we are having a "chicken or egg" discussion. I contend that TA can show early signs of waning momentum, it can show big players dumping big volume and at specific price points...sentiment can show when a move is going to be exhausted soon...delta charts can show at which price alot of volume has moved and can show where the "cry uncle" points are.

But I will give you an example how price action in certain sectors can move fundamentals in other sectors that have nothing to do with it...since you brought up cars, lets use that as an example...in 2006-2007, I knew real estate was going to blow up as not only all the classic signs there, but the CDS(credit default swaps) of real estate and MBS were climbing at alarming rates...this was before the general public was alarmed at all........when insurance rates go up, there is increasing risk.

So when the mkts started to selloff in early 08', you knew something was wrong...then shortly after, the banks and their worthless MBS probs started to emerge to the surface...the CDS insurance was worthless cause with over a trillion of CDS at risk, of course nobody was going to be able to collect on anything(ie-AIG).

So, the charts show it first, then the banks implode and then every company starts to slow down as we enter into a recession and debt was being repaid and money supply contracts....credit contracts, no more loans, no more free home equity ATM machines, ...given that 75% of our GDP is consumer spending, car companies had a severe prob, as there were no more buyers...so my point???.. nothing had really changed fundamentally about car co's but it was their exposure to a lack of consumer credit that was the issue...so what I am saying is this, there can be underlying prob's that reading charts whether it is stock price or M3 money supply charts that can give you clues into what might happen to every sector and most companies.....when all stocks go down, it isnt about fundamentals about that specific company, its something more global...MBS's and CDS's doesn't have anything to do with car companies but everything is all inter-connected imho.

I like to pick stocks during a bull market but during bears, I sell them all...I play it safe and use a % of my money to take short positions.

I hope you remember our conversations next spring...cause everything is good now and the fundamentals of many co's are great now...revenues and earnings expanding...but come next year, it will all change...fundamentals wont show this until its too late as stock prices will get decimated way before it will show up in the fundamentals such as revenue, earnings drop.

[r0wr]

Originally Posted by mact3333

3. MSFT hasnt beaten the S&P 500 when plotted over 5 and 15 years...sure the dividends are good but real money is made by finding the co's with very high revenue growth in sectors which the public clearly favor for whatever reason...

Tell that to Buffett

[RandomHero]

Real money is about seeking alpha. No matter what your analysis or risk tolerance is, that's what the best and most educated investors are looking for.

I don't have the time to write a big long lengthy post, but I agree with MOST of what was written.

[mact3333]

Anyone still like my TSLA call around 40????

Over a 100.00 now!

[stylinexpat]

Originally Posted by mact3333

Anyone still like my TSLA call around 40????

Over a 100.00 now!

Good call. You been watching Fannie Mae. FNMA
Recently tripled but if you look at the 10 year chart you will see that it traded at between $60-80 before the collapse. I got a feeling the government wants this one back up there again.

[stylinexpat]

Originally Posted by Inspired

market might reverse here from home sales:

USA New Home Sales MoM for Apr 2.30% vs 1.90% Est; Prior Revised from 1.50% to 3.50%

Around half of the mortgage loans out there have less then 20% equity in the loans so if the government does not back the mortgage lenders you got one big a s s problem coming up. This is why FNMA is in bull mode. The way I see it is that the bubble can burst until the people who owe mortgage loans have enough equity in their home loans.


http://www.reuters.com/article/2013/05/23/markets-mortgages-fed-idUSL2N0E41OB20130523?feedType=RSS&feedName=market sNews&rpc=43

http://www.thestreet.com/story/11933280/1/44-of-homeowners-with-a-mortgage-cant-sell-zillow.html?puc=yahoo&cm_ven=YAHOO

[mact3333]

Wow 0.50 to 4.00 in that time frame?...reminds of me when I bought HealthSouth at 0.16 cents and sold at 2.00!

Originally Posted by stylinexpat

Around half of the mortgage loans out there have less then 20% equity in the loans so if the government does not back the mortgage lenders you got one big a s s problem coming up. This is why FNMA is in bull mode. The way I see it is that the bubble can burst until the people who owe mortgage loans have enough equity in their home loans.


http://www.reuters.com/article/2013/...etsNews&rpc=43

http://www.thestreet.com/story/11933...o&cm_ven=YAHOO

[mact3333]

ES better hold 1645 or things gonna get ugly.

[Hisam135i]

Really interesting times with a positive correlation between USD and SPX!! made a nice trade on short EUR/USD as well as NZD/USD

[stylinexpat]

Originally Posted by Hisam135i

like I said last night dollar pulled back, which supported SPX today. But, I now believe the dollar has some strong support and should come back from here! So, we should see SPX fall with much more momentum later this week or early next week. I am now long USD/CAD so I have my money where my mouth is!

If you are into currencies. I believe USD/YEN will see 110 soon.

[Inspired]

Glad to see you back styline.

Anyone still in TSLA? Way, way overextended.. Look at the weekly. Waiting for my entry for a short. 330% debt, 66% R&D, 93x book value, -3.22 cash flow...

[amanda hor$t]

Originally Posted by stylinexpat

If you are into currencies. I believe USD/YEN will see 110 soon.

[Inspired]

Anyone like GMCR? Looks like its setting up still for a new leg up.

[Inspired]

I really like this setup, ALXN.

[Hisam135i]

Originally Posted by stylinexpat

If you are into currencies. I believe USD/YEN will see 110 soon.

Would you mind providing more insight to your statement, I'm not disagreeing with you, I just would like to see your analysis.

[stylinexpat]

Originally Posted by Hisam135i

Would you mind providing more insight to your statement, I'm not disagreeing with you, I just would like to see your analysis.

YEN went from 140 to under 80 YEN to the USD. Many manufacturers lost huge money over the last few years due to this. Near complete bankruptcy. In order for them to survive and make a profit the YEN has to be between 110-120 or they will lose money. Salaries and cost of living in Japan are high. Government cannot just keep bailing out manufacturers forever and just watch them move their factories abroad.

Chinese Yuan will climb to 6 and maybe even 5.8 then fall hard after stabilizing around those levels like the YEN did around 79 before tanking. Thai Baht climbed a lot too. That should also tank in the future. Will hurt exports otherwise out of Thailand and tourism sector along with foreign investments.

My $.02

[mact3333]

FNMA giveth, FNMA taketh away....one volatile mofo this one.

I said ES has to hold 1645 yesterday....hmmmm.

I have been in csh for a week and will remain there until a see the charts recycle and reset.

[stylinexpat]

Originally Posted by mact3333

FNMA giveth, FNMA taketh away....one volatile mofo this one.

I said ES has to hold 1645 yesterday....hmmmm.

I have been in csh for a week and will remain there until a see the charts recycle and reset.

The government and Fannie Mae basically worked together on this one. Talk about sneaky and dirty but they certainly knew what was up. Basically they issued another 470 million plus shares of which the government took a 80% stake in of the total 5.6 billion common shares of which were available for purchase. Most importantly they bought the at a strike price of $0.00001 per share!!!!
Anyone realize how much money they made when that price was driven up to $5.44 today before tanking??!!!

Normal people go to jail for insider deals but when the government issues its self shares at $.00001 per share we will call it part of a bail out package lol.. This is only what they hold in common shares. Have a look at the article as to what they hold in senior preferred shares as well. I wonder how much they got those at.

http://www.thestreet.com/story/11936...cm_ven=GOOGLEN

[mact3333]

we will either match/approach the all time high or slightly exceed it before a significant pullback...ETA 1 week from now...the fun starts on a intermediate time frame then...

[RandomHero]

It seems the steady decline for Tesla has begun. Down ~7% today and down more than 20% from it's recent high.