Mdawgs Investments
Quote: billryanA wise man once said he had no idea if the next 100 point swing of the market would be up or down, but he absolutely knew which way the next 100 percent swing would go and that was always up.
It's a real shame schools don't teach this stuff.
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You sound like a Realtor. I never met a Realtor who said "this is not the time to buy."
Quote: AlanMendelsonQuote: billryanA wise man once said he had no idea if the next 100 point swing of the market would be up or down, but he absolutely knew which way the next 100 percent swing would go and that was always up.
It's a real shame schools don't teach this stuff.
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You sound like a Realtor. I never met a Realtor who said "this is not the time to buy."
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Except MDawg has been consistent. He has stated ad nauseum to just buy industry leaders like TSLA, AMZN, AAPL and hold them. And repeats that thought when they are ‘on sale’. I just checked all my stuff. I haven’t been following it closely as I’ve been having too much fun with the Sportsbook stuff. But to summarize, I ‘feel’ like I am down a ton, but from Jan 1 total value of everything is just down 4%. And that includes me living off of the ‘everything’. I’m about to lose $$$ as I have Baylor in a bunch of bets….
Quote: AlanMendelsonQuote: billryanA wise man once said he had no idea if the next 100 point swing of the market would be up or down, but he absolutely knew which way the next 100 percent swing would go and that was always up.
It's a real shame schools don't teach this stuff.
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You sound like a Realtor. I never met a Realtor who said "this is not the time to buy."
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Put 15% of your salary into the market before you see it. Forget about it and live on the 85%. Invest weekly or monthly, in good times and bad and the highs and lows of the market won't matter. There may be some who can time the market well but I've never tried it.
Once I got where I wanted to be, I reduced my stock exposure quite a bit. I only own one individual stock these days, and I have far more money invested in comics than I do in stocks overall. I'd been living off my ATT dividends since I left NY so selling that off was tough.
There is no bad time to invest and no better present for a kid than someone buying them shares of stock.
Those are pretty strong words.Quote: MDawg
All that fear that the market was going to crash. Or that it would be "years" before a given stock recovered. 🥴 And your quaint honour [or opinions] turn to dust....
I will repeat: the time to invest in the market is whenever you have the money to do so. If you can't stomach its inevitable ups and downs you should just stick your cash in a mattress, you're not fit to lick the underside of the boots of true investors and traders.
Can you specify why you think this VERY MATURE bull market is going to continue much longer? Or is it just the realtor mentality of "now is a great time to buy before prices go up even more"
Here are a few reasons that I think it won't: 1) At around 2.0, the market cap to GDP ratio is much higher than it's ever been...about 50% higher than the 2000 tech bubble. Even Warren Buffet, who rarely opines on general market levels, commented that buying stocks at valuation of 2.0 is "playing with fire". 2) Inflation is escalating very fast, and high inflation normally depresses stock valuations big time. Just look at the stock market of the 1970s. Ultra-low interest rates and inflation are probably the reason the market is currently so high. 3) Uncertainty in Ukraine/Russia/Europe will probably last a while, which will likely effect the market negatively
Incidentally, I would advise a young person to continue investing with every paycheck, just like I did. Over the long term the high/low purchase prices net out on small purchases. But if you're not so young and heavily invested in the market, I would advise selling a considerable chunk right now. Not everything, but reduce exposure materially. Sell what you'd like to live on over the next ten years. Now is a great time to lock in some of the incredible profits made...especially in the last 3-5 years.
15 years from now we'll know which move was better.
In hindsight the markets have been strong. But since the early 1970s I've seen the meltdowns too. And not just in stocks: I've seen the roller coaster rides in hard assets, gold, real estate and income investments including bonds.
Buy and hold only works with a long time horizon. It doesnt work if you're nearing retirement or you intend to cash out to buy a house or pay a college tuition bill.
Beware blanket statements. All investment decisions are unique, personal decisions.
Let me repeat that: all investment decisions are unique, personal decisions.
Very long. Like 20 years or moreQuote: AlanMendelson
Buy and hold only works with a long time horizon.
Quote: Ace2Very long. Like 20 years or moreQuote: AlanMendelson
Buy and hold only works with a long time horizon.
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I think that's fair. Some might suggest ten years.
Financial planners often use a 100% pie or a 110% pie. The pie represents your distribution of assets.
I like the 100% for its simplicity.
Subtract your age from 100 and the remainder is the percentage of your assets that should be in stocks.
100% - 50 = 50% in stocks
100% - 65 = 35% in stocks
The balance is mostly guaranteed assets such as CDs or treasuries. Munis have lost their guarantee label.
Performance was so bad in the first period mainly due to high inflation, which brought valuation ratios way down. High inflation seems to be coming again now.
Performance was so bad in the second period because valuations got way way too high in 1999. Current valuations are about 50% higher than 1999
However, stocks are going to keep going up. Reason: because I say so
That last comment can be filed with my 28 roll minimum claim
Quote: billryanI'm not sure how a person can watch the Dow grow from under 1,000 to over 30,000 in their lifetime and argue against the market not always going up, but perhaps its the glass half full argument.
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Good question.
First of all, only a small percentage of Americans actually invest in the stock market directly.
Many have a stake in the market thru pensions and IRAs but few are independent direct investors.
It's like cryptocurrency today. Few direct holders of it.
Back when the Dow cracked 1000 stock ownership was like crypto ownership today.
If I recall direct crypto ownership today is only about 5%. Stock direct ownership today is only about 50%.
But I'm going to check those numbers now...
Edited....
I was close. 53% of American families own stock but only 15% directly own stock.
4% of families own crypto.
So for about half of American families, long term vs short term in the stock market is meaningless because they're out of the market.
Anyway, crying over the fact that stocks aren't doubling in a matter of months just shows inordinate expectations. Now, Ace2 you are def not crying (others in this thread might have been), but still, I think what you're asking is why will markets keep going up? They will keep going up because there are no other viable investments for the average person other than real estate and many are shut out of the real estate market while most anyone today, especially with the advent of something like RobinHood, is able to invest in stocks. People have to put their money somewhere.
I'd think that real estate might drop when people decide to cash out, sell their homes, for reasons other than forced moves, job relocations, etc. That might create excessive supply versus demand. But as far as stocks, as soon as enough sell, enough buyers swoop in to bring the prices back up, just the way it has been for many years now. Why fight it, just join it.
The VERY long term trend is obviously up but is most definitely not "always going up". As I previously posted, just in the last 50 or so years there have been two periods lasting well over a decade (combined over half of that time period) when stock appreciation was zero or negative. In those periods you would have crushed stock returns just by owning risk free CDs. The market is cyclical.Quote: billryanI'm not sure how a person can watch the Dow grow from under 1,000 to over 30,000 in their lifetime and argue against the market not always going up, but perhaps its the glass half full argument.
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So yeah, if you're fresh out of college with a fifty year investing horizon, just keep averaging in and don't even look at prices. Different advice for people with a shorter horizon that will soon start spending their savings
The stock market is the only way to build wealth beyond working or starting a business. It’s not something that needs your focus, like real estate.
If you want to protect your wealth…I’d simply go with an index fund (S&P). If you want to build wealth, I don’t recommend diversification. Tough enough picking 2-3 winners. I don’t know anyone who can pick 8-10.
I still think tech is the way to go.
TSLA, Apple, Amazon, GOOG
Amazon and GOOG will both split 20-1 in a couple months. I love splits. Buffet doesn’t like them…but his reasons are self involved.
I agree with you on SPY, it's my core holding. Mutual and hedge funds can't beat it long term so why pay someone to underperform what you can get for free (almost)
Tech is great until it isn't...look at the dot-com bubble. Buffet isn't much of a tech investor because no one has any idea where those markets/companies will be in ten years, not even the people that run them. It's a crapshoot. Buffet bets on guaranteed winners over the long term
Quote: Ace2I've never owned real estate as an investment but if I ever did I would definitely use a property management company. I have zero interest in dealing with tenants or collecting rent. I've looked at a few homes as potential investments but the net return was only about 5% per year, and this was a few years ago before prices went up 75% (I'd estimate rents up 20%). The net return would have to be at least 8% for me to consider it since it's such an illiquid investment
I agree with you on SPY, it's my core holding. Mutual and hedge funds can't beat it long term so why pay someone to underperform what you can get for free (almost)
Tech is great until it isn't...look at the dot-com bubble. Buffet isn't much of a tech investor because no one has any idea where those markets/companies will be in ten years, not even the people that run them. It's a crapshoot. Buffet bets on guaranteed winners over the long term
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Some of Buffet's biggest bets have been on himself.
I was holding my breath till my partners agreed to sell it.
We scored a profit. One year later our buyer filed for bankruptcy.
Seriously, if someone is convinced that the stock market is going to go down, why not short it?
Quote: Ace2I've never owned real estate as an investment but if I ever did I would definitely use a property management company. I have zero interest in dealing with tenants or collecting rent. I've looked at a few homes as potential investments but the net return was only about 5% per year, and this was a few years ago before prices went up 75% (I'd estimate rents up 20%). The net return would have to be at least 8% for me to consider it since it's such an illiquid investment
I agree with you on SPY, it's my core holding. Mutual and hedge funds can't beat it long term so why pay someone to underperform what you can get for free (almost)
Tech is great until it isn't...look at the dot-com bubble. Buffet isn't much of a tech investor because no one has any idea where those markets/companies will be in ten years, not even the people that run them. It's a crapshoot. Buffet bets on guaranteed winners over the long term
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Warrens biggest holding is Apple. It dwarfs anything else he owns. He has stated he wishes he could own the entire company.
While he was never a tech guy…he has admitted that he made mistakes not investing in more tech. I also believe he owns some Amazon.
Warren likes profits and dividends. Dividends aren’t a big part of tech.
Quote: AlanMendelsonI had real estate as an investment. A four story apartment building on First Avenue at 79th Street in Manhattan. Restaurant and dry cleaner and florist on the first floor.
I was holding my breath till my partners agreed to sell it.
We scored a profit. One year later our buyer filed for bankruptcy.
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The negative on real estate is that it usually needs more of your time than people would like to devote. Warren Buffet says he really wasn’t a real estate guy because it required too much of his management time.
Quote: TDVegasQuote: AlanMendelsonI had real estate as an investment. A four story apartment building on First Avenue at 79th Street in Manhattan. Restaurant and dry cleaner and florist on the first floor.
I was holding my breath till my partners agreed to sell it.
We scored a profit. One year later our buyer filed for bankruptcy.
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The negative on real estate is that it usually needs more of your time than people would like to devote. Warren Buffet says he really wasn’t a real estate guy because it required too much of his management time.
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I own some land that is a passive investment where I get paid not to farm on it, and a good bit of commercial property thru REITs. I've never been big on single-family homes, either to own my own or as rental properties. I'm very interested in fractional ownership but haven't found the right situation yet.
Good point. I haven't read BRK financial reports in quite a while and did not realize that was such a large position.Quote: TDVegas
Warrens biggest holding is Apple. It dwarfs anything else he owns. He has stated he wishes he could own the entire company.
You can never be 100% convinced of anything in the market. I've never shorted anything and never will since it's a short term play...I'm a long-term investor. What you can do is reduce your stock holdings when so many factors indicate it's severely overvalued.Quote: MDawgOver time even just the S&P 500 has outperformed real estate, when you factor in property taxes and repairs/maintenance. Actually, other than in extraordinary times (during which real estate might be an even better investment than the stock market) the reasons real estate is a great investment - the #2 investment behind the stock market - are primarily due to the depreciation and mortgage interest deductions.
Seriously, if someone is convinced that the stock market is going to go down, why not short it?
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Regarding real estate, I've found that people really overestimate their "profit" on selling a primary residence. They buy a home for $500k and sell for a million 15 years later and think they made a half million, which would only be 4.7% per year anyway. But deduct the property taxes, expenses and capital improvements made over that period and they actually lost money. And the mortgage deduction is worth nothing to most homeowners since even with a $600k mortgage, most married tax filers are still better off taking the standard deduction.
Quote: Ace2Good point. I haven't read BRK financial reports in quite a while and did not realize that was such a large position.Quote: TDVegas
Warrens biggest holding is Apple. It dwarfs anything else he owns. He has stated he wishes he could own the entire company.
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He owns about 5%…stock gains over the years have turned it into a $150 billion holding. His largest by far. Market cap of Berkshire is around $750 billion. He allows his managers to sell a little bit here and there to fund other acquisitions.
Quote: TDVegasQuote: AlanMendelsonI had real estate as an investment. A four story apartment building on First Avenue at 79th Street in Manhattan. Restaurant and dry cleaner and florist on the first floor.
I was holding my breath till my partners agreed to sell it.
We scored a profit. One year later our buyer filed for bankruptcy.
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The negative on real estate is that it usually needs more of your time than people would like to devote. Warren Buffet says he really wasn’t a real estate guy because it required too much of his management time.
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I do not understand how owning real estate takes up much time. Pay your taxes once a year and you should be done. Now, if you are trying to rent out a property it is completely different. Just buy a vacant piece of land, pay your taxes, and hold it.
You could have bought Manhattan in New York for around $1000 in todays dollars.
Quote: DRichQuote: TDVegasQuote: AlanMendelsonI had real estate as an investment. A four story apartment building on First Avenue at 79th Street in Manhattan. Restaurant and dry cleaner and florist on the first floor.
I was holding my breath till my partners agreed to sell it.
We scored a profit. One year later our buyer filed for bankruptcy.
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The negative on real estate is that it usually needs more of your time than people would like to devote. Warren Buffet says he really wasn’t a real estate guy because it required too much of his management time.
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I do not understand how owning real estate takes up much time. Pay your taxes once a year and you should be done. Now, if you are trying to rent out a property it is completely different. Just buy a vacant piece of land, pay your taxes, and hold it.
You could have bought Manhattan in New York for around $1000 in todays dollars.
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You've never been a landlord. There are repairs, maintenance, complaints, inspections, contracts, showings, and bills. Want more?
We were renovating apartments with the goal of raising rent. The renovations needed management too.
How about negotiating the rent for a billboard on one side of the building?
Quote: AlanMendelsonQuote: DRichQuote: TDVegasQuote: AlanMendelsonI had real estate as an investment. A four story apartment building on First Avenue at 79th Street in Manhattan. Restaurant and dry cleaner and florist on the first floor.
I was holding my breath till my partners agreed to sell it.
We scored a profit. One year later our buyer filed for bankruptcy.
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The negative on real estate is that it usually needs more of your time than people would like to devote. Warren Buffet says he really wasn’t a real estate guy because it required too much of his management time.
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I do not understand how owning real estate takes up much time. Pay your taxes once a year and you should be done. Now, if you are trying to rent out a property it is completely different. Just buy a vacant piece of land, pay your taxes, and hold it.
You could have bought Manhattan in New York for around $1000 in todays dollars.
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You've never been a landlord. There are repairs, maintenance, complaints, inspections, contracts, showings, and bills. Want more?
We were renovating apartments with the goal of raising rent. The renovations needed management too.
How about negotiating the rent for a billboard on one side of the building?
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Actually I have been a landlord and it sucks. That is why I said to just buy land and hold it. Don't try and rent anything out. Don't buy any building or housing unit because it will require work. You are conflating owning land with investment properties.
Quote: DRichQuote: TDVegasQuote: AlanMendelsonI had real estate as an investment. A four story apartment building on First Avenue at 79th Street in Manhattan. Restaurant and dry cleaner and florist on the first floor.
I was holding my breath till my partners agreed to sell it.
We scored a profit. One year later our buyer filed for bankruptcy.
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The negative on real estate is that it usually needs more of your time than people would like to devote. Warren Buffet says he really wasn’t a real estate guy because it required too much of his management time.
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I do not understand how owning real estate takes up much time. Pay your taxes once a year and you should be done. Now, if you are trying to rent out a property it is completely different. Just buy a vacant piece of land, pay your taxes, and hold it.
You could have bought Manhattan in New York for around $1000 in todays dollars.
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Because we aren’t talking about real estate in the same way. I’m not talking about (and neither is Buffet) speculating on property value increasing and selling and making money…we are talking about income generating real estate. Whether that’s a home, a condo, a two family, a small retail center for the average guy to rent out or for someone like him, office buildings, malls that generate income, cash flow.
No. Paraphrasing you, I prefer playing Don't Pass with max odds...where at least I get free drinksQuote: AlanMendelsonAce have you ever tried selling puts on stocks you want to own? Selling covered calls on stocks you own to generate income during flat or falling markets?
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Also, I don't want to own any stocks. Very people have the time and skill to properly analyze companies and their markets enough to select them and invest
I'm mostly in SPY.
TSLA doing well.
Quote: billryanYou don't own any stocks but you are heavy on SPY?
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Correct. Like 95% of my holdings
I do have relatively small positions in a couple stocks that have huge unrealized gains (one of which is BRK). I would have sold them but they are in taxable accounts. The SPY sales I made in January were in tax deferred accounts
I see individual stock investors sort of like mutual/hedge fund managers in that they don't even beat the S&P over the long run. Occasionally they pick some big winners, which subsidize their many losers. And, like fishermen and gamblers, you only hear them talk about the big wins
Quote: Ace2MDawg, I don't see SPY as risk adverse at all.
I see individual stock investors sort of like mutual/hedge fund managers in that they don't even beat the S&P over the long run. Occasionally they pick some big winners, which subsidize their many losers. And, like fishermen and gamblers, you only hear them talk about the big wins
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Spot on about mutual/hedge money managers. They make their money on profit AND fees. Hence, they win for themselves, regardless.
Buffet is always banging the drum that these guys are basically a scam and you don’t need them. Invest in an index fund.
His $1 million wager with a hedge fund guy was ended early because the guy knew he could never catch up with the gains that buffets index fund achieved.
This is why he also goes against the idea of a diversified stock portfolio of individual stocks. Of the 10, some winners, some losers, 1 big loser, 1 big winner. Hamster on a wheel.
Quote: MDawgAs expected we have some up and down today.
TSLA doing well.
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I see the major indices as of a bit ago were down around 1%. I have 5 portfolios that I expected all to be down, around 0.6% to 0.8% because I do own some bonds in each account. But one of the accounts was solidly in the green! I own Allegheny (Y) in it, and BRK as well. BRK is buying Y at a huge increase from its close on Friday, and BRK is also going up on that news. Why did I buy Y? Because at one point I decided to buy every stock that is a single letter.....
Quote: AlanMendelsonFor most people mutual funds and index funds are the way to go for proper diversification.
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Mutual funds and index funds give you diversification within the stock market. That's not really being diversified. It's a good start.
Quote: billryanQuote: AlanMendelsonFor most people mutual funds and index funds are the way to go for proper diversification.
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Mutual funds and index funds give you diversification within the stock market. That's not really being diversified. It's a good start.
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Good point. A financial planner would say, as an example, this is the diversification you should have...
50% stocks
25% bonds
5% crypto
5% precious metals
5% comic books (inserted as a compliment to BillyRyan)
5% real estate
5% cash
To diversify your 50% in stocks, just buy IYY. It is the total stock market ETF.
Quote: AlanMendelsonFor most people mutual funds and index funds are the way to go for proper diversification.
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Mutual funds and index funds give you diversification within the stock market. That's not really being diversified but it is a good start.
My problem with funds is that while it is easy to study a stock, it's almost impossible to study a fund.
Quote: billryanQuote: AlanMendelsonFor most people mutual funds and index funds are the way to go for proper diversification.
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Mutual funds and index funds give you diversification within the stock market. That's not really being diversified but it is a good start.
My problem with funds is that while it is easy to study a stock, it's almost impossible to study a fund.
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I need to tell the story about Texas Vanguard.
Back in the late 1970s EF Hutton's Newark, NJ office was pushing Texas Vanguard as a hot junior oil stock with huge proven reserves. The brokers were calling clients telling them that there was "news pending" for an announcement about the proven reserves.
I was one of those clients. I was also an Assignment Editor at CBS News and two feet from my desk were the teletype machines for all of the major news services.
I knew that "news pending" meant a delay of only minutes. But Hutton's brokers over the course of several days kept calling clients about the news that was being held up but would be reported "any minute now."
Meanwhile this $2 stock was at $14-16.
There I am, an Assignment Editor for CBS News and I'm thinking... this sounds fishy.
So I called the HQ of Texas Vanguard.
Me: Hello, can I have shareholder relations?
Operator: Huh?
Me: shareholder relations. I have some questions. I'm a shareholder.
Operator: just a moment sir.
Less than 30 seconds later...
Man: hello, can I help you?
Me: hi, is this shareholder relations?
Man: well, you might say so. Im the chairman and president.
Me. (After some small talk...) do you have news pending about proven reserves?
Man: proven reserves? Sir, we haven't drilled our first well yet.
I said thank you, hung up, called my broker and said "don't say a word and sell all my stock right now."
The next day Texas Vanguard was down to $6 and the SEC was investigating the Newark office of EF Hutton.
So much for individual stocks.
LOL
Apple
Tesla
Amazon
GOOG.
On fire today. Go, baby. Go.
On Amazon and Google. I love splits. I know many don’t like splits and would rather see it go like Berkshire. Not me. I love splits. Loved it when Apple did it, when MSFT was doing it during the Gates reign. If you catch it right…that doubling, 3x, 5x, 20x of shares can have magical appreciation going forward. My only regret is not sticking with all Apple thru Jobs sickness and subsequent death. Hindsight. Questions were there about Apples leadership and future innovation. Nevertheless, Cook has done a marvelous job.
