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Talking stocks, trading, and investing in general

Discussion in 'Business, Careers & Education' started by mikeman, Feb 2, 2011.

  1. stimulacra

    stimulacra Senior member

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    If my bonds decline in value due to rising interest rates, they do increase in yield during that same period, which I view to be a good thing if you're investing for the long term. If I were holding individual bonds till maturity it would be pretty much the same effect except I wouldn't be aware of any intrinsic decline in “net asset value” in the mean time.

    There is a good argument for holding cash (Harry Browne's “Permanent Portfolio” has its appeal). For me it's probably psychological. Cash sitting in my tax advantaged accounts I don't consider “invested” or meaningfully deployed.

    Even if I deploy it into an out of favor at the moment asset class (Bonds, TIPS, International, etc…), I feel confident any of those would outperform cash over the long term.
     
  2. stimulacra

    stimulacra Senior member

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    Last edited: Feb 14, 2017
    1 person likes this.
  3. otc

    otc Senior member

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    TSLA is just going higher and higher...
     
  4. idfnl

    idfnl Senior member

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    It wouldn't be a big spread either way, but I would err on the side of what the flexibility of cash gives you.
     
  5. Piobaire

    Piobaire Senior member

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    Okay, we're about to see a pullback. I just rounded the odometer again to some triple zeros so it's bound to drop now.
     
  6. jbarwick

    jbarwick Senior member

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    This may make you feel better...blah blah blah historic returns something something future returns

    [​IMG]
     
    Last edited: Feb 14, 2017
  7. Master-Classter

    Master-Classter Senior member

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    Buying AAPL last year under $100 was a no brainer, if anything I regret not getting more. I think everything I bought around 90-95 I sold around 105-110. I did get caught buying a lot around $120 when it did a temp pop post market on their report and then ended up dropping back down to $105 ish, but have been holding since. Sold off about 1/3 now at $133, and am holding.... they're definitely going to $150+ by year end when the new phone launches and Xmas hits but I'm just not sure if the next quarter or two will see a pullback? On the one hand there's the repatriation of the cash thing, but then there's moving production to India, Trump doing something crazy, etc.... I took some money off the table for now.


    BMY was down pretty hard but it seems to be coming up for air. Heard there was some obscure rumor with GILD, so a few more % and I'm ready to trim. Sub 50 I'm happy buying more again.

    HIMX had a 12% jump today.... I'm reading that it might have been a short squeeze so I'm tempted to sell everything I bought around 5-5.2 at 6 now and then either rebuy if it drops or let the rest ride if it keeps going up. Just thought about it and set the order for 6.2, so if there's a bit more momentum up I'll trim about 20% off.

    BKD dropped but I'm holding out for the $20-24/share buyout possibility

    Totally sold early on a few, damn. BIIB, REGN, missed out on at least another $15/share if only I'd waited like another week. Still made something on the quick flips though.
     
  8. idfnl

    idfnl Senior member

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    A couple of weeks ago you acknowledged that you trade too much. AAPL should have taught you a lesson, now at all time highs. And here you are selling it when you think they will be at 150 in the near future? And they pay you to wait with a dividend? It just doesn't make sense. I wouldn't dream of selling my shares right now.

    In your last paragraph you're talking about selling early on other stuff. Maybe you should go to a casino once a week and get the gambling out of your system? If you look at your holdings and compare them to their value if you would've held, I would have a hard time seeing how you have come in ahead.

    You should have a compelling reason to buy or sell something, for example I dumped SBUX recently... I don't like the space as much anymore, I think the public is growing tired of their products. I see growing competition, etc. Held it for 4 years. Your reasoning often seems to be "made a few bucks", it's misguided because you're ignoring the long term story.
     
    Last edited: Feb 15, 2017
    1 person likes this.
  9. the shah

    the shah Senior member

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    BMY underwent a reorg back in Sept or October, powered by the good people at BCG. They seem to be moving toward much more siloed departments that can operative independently and potentially be sold off at some point. Not sure what that translates to in terms of market performance...
     
  10. idfnl

    idfnl Senior member

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    What the hell just happened? Everything bio and pharma suddenly went red. Did Trump tweet?
     
    Last edited: Feb 16, 2017
  11. the shah

    the shah Senior member

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    what do you mean ? GSK, Merck, JNJ, Roche, Novartis ... all seem to be fine
     
  12. idfnl

    idfnl Senior member

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    BIB HALO EPZM BMY ZTS and more all took a nose dive, suddenly and together.
     
  13. lawyerdad

    lawyerdad Senior member

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    I'm a bit confused here, although that may just reflect my relative (wiggle word for "near total") ignorance about the mechanics of bond funds.

    If you're holding individual bonds and interest rates go up, while the average yield of bonds (that is, the entire market universe) increases, the yields of the individual bonds (generally speaking) don't go up. The price of a bond you already hold likely goes down and you don't get any yield upside. Definitely a bad thing, no?
    I'd think with a bond fund the impact may be diluted, but I would have thought the same dynamic applies to at least a certain extent. New bonds acquired by the fund may have higher yields that could bump up the fund's overall yield going forward, but they presumably will be acquired at a price driven by that higher yield. Not sure how that helps the pre-existing fund assets that you own a slice of. That's not to say that it doesn't make sense to stay invested for the long haul, but the interest rate/yield bump would seem to be clear bad news (perhaps not of great magnitude, but still in an absolute sense) for an existing position. Am I missing something?
     
    Last edited: Feb 16, 2017
    1 person likes this.
  14. stimulacra

    stimulacra Senior member

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    Let me clarify, by individual bonds, I meant an ongoing ladder of bonds, which would be what I would try to replicate in lieu of a bond fund. As old bonds in the ladder mature, they’re replaced by new issue.

    Some people seem to prefer holding actual bonds because they are guaranteed their original principal back along with the interest payments, where as the same amount invested in a bond fund would fluctuate in value day to day… they’re ignoring the value of bonds on the secondary market.

    If I’m buying $10k/year of U.S. Treasuries as part of a ladder or investing the same amount in VUSUX, I think psychologically they would be two very different experiences for the average investor but at the end of the day I think they have pretty similar returns.

    To IDFNL's point, if I switched my 25% allocation to cash, it would be probably be more simpler and definitely more versatile. For me though, I would get an itchy trigger finger during market rallies and more inclined to chase performance.

    Bonds help me keep FOMO at bay and stay the course in terms of asset allocation and investment strategy. For others it might be cash, gold, dividends or REITs, I'm always open to hearing new perspectives on the issue.

    At least I want to avoid panic moves like this guy:
    http://bit.ly/2kpY46S
     
  15. lawyerdad

    lawyerdad Senior member

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    Makes sense. Yes, if you have an ongoing "ladder" investment strategy, I take your point, since it's a strategy that anticipates and incorporates volatility. Thanks for the clarification.

    And LOL at the Roth guy. (Or more to the point, I guess, No Roth Guy.)
     
  16. idfnl

    idfnl Senior member

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    Ya so we're in emotion territory. Which I relate to. My biggest fault as a trader is my willingness to hold dogshit for it to come back. Red, to me, is a failure and unfortunately I fight it.

    I've gotten better... for example dumping RH was a step. 5 years ago I would have held it until 2020. There are better options. Which is my point. The flexibility of cash is much better in your situation. If you can evolve as an investor and hold that trigger, there will be points that are so obvious you have to invest, for example when I bought BAC at 5 and still hold it now at 24. It will happen.... not today investing into all time highs. But I would suggest staying in cash or you're going to be the last cuck in bonds wishing you weren't.
     
  17. gettoasty

    gettoasty Senior member

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    The Roth guy is a troll. How can someone be so blind when the answer is unanimous.

    On the other hand, someone who is trying to help him should really provide him steps to take (i.e. Step 1, Step 2, Step 3, etc.). Much easier to follow and will make more sense as he is trying to learn something new.

    Give the guy a workflow!


    I started seeing the price slip in my bond portfolio beginning Q3/Q4 when the interest rate increase became inevitable in December and immediately switched to cash. The rest of the holdings in large/small cap value stock funds I left alone. I think it was just a coincidence that the market received the Trump Bump so far. Wasn't sure if that was the best move at the time but in hindsight I'm glad I made the decision.
     
  18. Piobaire

    Piobaire Senior member

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    As of yesterday I'm "rich." :)
     
    2 people like this.
  19. brokencycle

    brokencycle Senior member

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    You can finally afford an unexpected $200 bill?
     
    1 person likes this.
  20. MSchapiro

    MSchapiro Senior member

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    I do not believe bond funds have the same characteristics as a ladder of bonds. The nature of adding and liquidating bonds mean that capital losses or gains are realized on an ongoing basis.

    Holding a ladder of bonds would mean you take no capital loss when you receive the capital back at the end. There is no single cash out event in a bond fund, you are selling a portfolio of bonds at the current market price.
     

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