or Connect
Styleforum › Forums › Culture › Business, Careers & Education › Talking stocks, trading, and investing in general
New Posts  All Forums:Forum Nav:

Talking stocks, trading, and investing in general - Page 571

post #8551 of 11190
Quote:
Originally Posted by SkinnyGoomba View Post

I have a bachelor's in finance, I don't feel I need an FA's assistance.

You're posting in the stock picking thread....the advice is not necessarily inaccurate, but a little off putting when posted in th stock picking thread.

I have compared to funds at a similar degree of risk, individual stocks better achieve what I want.

I didn't mean it to be off-putting and it was meant to be a genuine question.

Also the thread isn't titled to imply it's just about stock picking as "Talking stocks, trading, and investing in general" says.
post #8552 of 11190
Ok, so then to answer your question more completely;

I own stocks rather than funds because I'm choosing exactly what I want to own instead of buying groupings. I do so at the risk that the S&P will outpace me, that is true, however I earn more dividend income than I would if I owned an S&P index.

There are dividend based funds, certainly, but they're not as targeted as I want to be, on the whole I own less than 30 different companies, that is about the absolute bare minimum that a fund would hold and most hold many more.

I also like to buy stuff that wouldn't normally fit my profile, which would not be found in focused funds. For instance a large cap dividend growth fund is not going to include stuff like Church and Dwight, it pays about a 1.5% dividend, but I like the company and so I own it....currently I'm over 100% in cap gains on it, but it's something I would not own if I had a focused fund.....unless I wanted a mid cap growth fund...then I would own a small % of it. I own it because in 20 years it could be a P&G.

I can also own stuff like BAC which is not very appealing in regard to the dividend, but I own it on speculation that they will raise the dividend to fit in with their peers.

Funds are also behaving the opposite of what I want, most are not going to be staking themselves into stuff like large cap oil producers, but I want to continue holding those positions.

So, a fund that would fit me, is a mostly large cap dividend growth fund that makes seemingly odd purchases on a whim.
post #8553 of 11190
That makes perfect sense SG. I only made my comment to stir the pot a bit.

My best friend works in finance and he and I have talked about this (he doesn't own a single individual stock). The broader topic was where you want to allocate time. We're both single and work pretty hard - the ironic exception being recently when I've had time to post snide comments on SF.

You've always come across as a smart guy and congrats on the home.
post #8554 of 11190
Quote:
Originally Posted by ramuman View Post

That makes perfect sense SG. I only made my comment to stir the pot a bit.

My best friend works in finance and he and I have talked about this (he doesn't own a single individual stock). The broader topic was where you want to allocate time. We're both single and work pretty hard - the ironic exception being recently when I've had time to post snide comments on SF.

You've always come across as a smart guy and congrats on the home.

I have a friend that tries to argue to the death that index funds are the only thing worth investing in. It annoys me to no end.
post #8555 of 11190
Quote:
Originally Posted by OmniscientCause View Post

I have a friend that tries to argue to the death that index funds are the only thing worth investing in. It annoys me to no end.

I think in a vacuum, your friend's arguement would be a silly pitch, without addressing the alternatives.

In Goomba's case, he wants to be an active part of his equities and the dividends are likely solid. I should clarify that I'm not against individual stocks, but I let other people do it for me.

I was just saying that there are other investment ideas out there as well, that can win out organically as well.
post #8556 of 11190
Looks like we're ending the year in the red.

icon_gu_b_slayer[1].gif
post #8557 of 11190
All I see is an opportunity to lower my average cost!


Er... and take advantage of capital losses..... shog[1].gif
post #8558 of 11190
Quote:
Originally Posted by ramuman View Post
  Warning: Spoiler! (Click to show)
I am curious as to individual stock purchases. So there's this well-known notion in just about anything, people brag about the wins and are relatively quieter about the losses.

The Warren Buffet example comes up as an example of how an individual investor can win. It's a great one - but him and Munger did way more in the backend. They invested in a multitude of ventures, worked hand in hand with CEOs, etc.

They didn't make billions just buying Coca Cola stock or sitting in front of the login screen to e*trade.

I view the market as being an efficient market fundamentally if you average it over time. It also has several forcing functions. Public idiocy is one (and the one that has led to nearly every major crash), beating insider information is next to impossible if you're not an insider. Beating a few kids with physics/math/CS/engineering backgrounds that have access to lot of computing power and Goldman put them close to an exchange to reduce latency - also next to impossible. And etc.

That's my take. I don't have much spare time to figure out if some horizontal spread works out given IV and TV across that time span or what not.

I only own one individual stock - TSLA - and primarily because I loved the company, but it was pure luck on my part they ended up where they are. Everything else liquid is managed by someone.

My curiosity on this comes from friends that recommend stocks to me. Sometimes they're right and sometimes they're wrong. You look at it over time and you think the investments would have done equally in something passively managed while you worked on higher order things.

/Devil's advocate

 

I read a fictional short story not too long ago: 

 

A trader and an economist are walking down the street. The trader sees a $20 bill on the floor and tries to tell the economist. The economist refuses to look and says "nonsense, if there was a $20 bill on the floor someone would have already picked it up". The trader leans down to pick it up and they go on their way.

 

 

In general I buy individual stocks to add high risk/high reward stocks to my portfolio and because I believe that Modern Portfolio Theory is only true in the long term. Leveraging myself to invest at the efficient frontier doesn't seem particularly practical. Instead the majority of my investments are in index funds, with a trading portfolio for fun and a considerable amount of equity in the company I work for (where I feel I have a unique inside view into their competitive advantage and the equity valuation is low for the industry). For individual stocks I have to believe I have a certain competitive advantage for it to be worth investing in. Either I have a time horizon advantage (being young and waiting for oil stocks to recover) or a minor informational advantage (scanning mid caps/small caps with my Reuters terminal to find companies who have a price that is behaving irrationally).

 

Practically having been trading for a while I can say that there are market inefficiencies that pop up from time to time and can be taken advantage of (i.e. why do two REITs with the materially same portfolio drastically differ in price one day), although I doubt I could out perform the market full time on a macro level. 

post #8559 of 11190
anyone have any tech stock pics they are on the fence about that want a DCF done? I need to pitch a new stock in the next 4-6 weeks but want to get most of the grunt work out of the way this week while im still on break so I dont have to do it during the semester....

limit for my fund is market cap of 100M but anything less then 10B is a tough sell to the other members.

Current holdings:
MSFT
AAPL
ATVI
CTSH

Would want to add a holding so even better if doesnt do something the above does.

Companies Ive been mulling over the last few months:
SAP
WDAY
SYMC
post #8560 of 11190
Quote:
Originally Posted by OmniscientCause View Post

anyone have any tech stock pics they are on the fence about that want a DCF done? I need to pitch a new stock in the next 4-6 weeks but want to get most of the grunt work out of the way this week while im still on break so I dont have to do it during the semester....

limit for my fund is market cap of 100M but anything less then 10B is a tough sell to the other members.

Current holdings:
MSFT
AAPL
ATVI
CTSH

Would want to add a holding so even better if doesnt do something the above does.

Companies Ive been mulling over the last few months:
SAP
WDAY
SYMC

There aren't that many compelling DCF based valuations I have seen out there recently. TRN is an interesting one, but only $4B. WSTC is interesting as I am unsure why the market assumes such low future growth.

 

Generally when looking to model a company I will search the whole US market for negative implied 5yr EPS growth (Thomson Reuters Starmine provides this statistic), since it is somewhat rare for a company to be losing a large chunk of its profitability in the next few years. I usually get a list of about 200 names and it's easy enough to figure out which are distressed and which the market isn't being that rational. The big money is usually made in the mid caps though. IBM, for instance, hasn't been a winner despite free cash flow and a negative EPS implied by its price.

post #8561 of 11190
Quote:
Originally Posted by MSchapiro View Post

There aren't that many compelling DCF based valuations I have seen out there recently. TRN is an interesting one, but only $4B. WSTC is interesting as I am unsure why the market assumes such low future growth.

Generally when looking to model a company I will search the whole US market for negative implied 5yr EPS growth (Thomson Reuters Starmine provides this statistic), since it is somewhat rare for a company to be losing a large chunk of its profitability in the next few years. I usually get a list of about 200 names and it's easy enough to figure out which are distressed and which the market isn't being that rational. The big money is usually made in the mid caps though. IBM, for instance, hasn't been a winner despite free cash flow and a negative EPS implied by its price.

I agree with this...I'll add those companies to the list for sure though, thanks and let me know if you think of any others.
post #8562 of 11190
Quote:
Originally Posted by OmniscientCause View Post

anyone have any tech stock pics they are on the fence about that want a DCF done? I need to pitch a new stock in the next 4-6 weeks but want to get most of the grunt work out of the way this week while im still on break so I dont have to do it during the semester....

limit for my fund is market cap of 100M but anything less then 10B is a tough sell to the other members.

Current holdings:
MSFT
AAPL
ATVI
CTSH

Would want to add a holding so even better if doesnt do something the above does.

Companies Ive been mulling over the last few months:
SAP
WDAY
SYMC

 

DCF for FB, AMZN, NFLX, GOOG.  Just for jiggles.

post #8563 of 11190
I mean the only one in that list id consider is fb and know that it's tough to model because I sat in on a pitch last year where the analyst couldn't get it to be a buy and she was really smart. I'm also bullish in the short run on oculus rift.

We hold Google but I don't cover it. S&p doesn't classify amzn as tech unfortunately.

Nflx might be good but I don't know enough about where he cable market is going to even consider it. Also tough to build a model and try to quantify the price of an algorithm, which aside from licensing is the only thing that separates them from a competitor.

I'll read some research reports tomorrow to see if it's worth doing.
post #8564 of 11190
Great start to 2016.

Amazing.
post #8565 of 11190
I think trump says it best.

http://youtu.be/RDrfE9I8_hs
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: Business, Careers & Education
Styleforum › Forums › Culture › Business, Careers & Education › Talking stocks, trading, and investing in general