A mentor who succeeded in mergers and acquisitions, and specialized in reverse mergers told me these two gems regarding investing:
1. Rising tide lifts all boats. You can feel smart while market is moving up.
2. Buy when everyone else is selling. Sell when everyone else is buying.
So, I have started to sell my stocks and leave a lot of the funds in limit buys, or as cash. I will move after a major market correction -- I need 20% to 30% discount on today's high. Bear market is where I will make my wealth, because I am not shorting or doing options yet.. I will let you know, if I get into options.
If some of the stocks have rallied to high, then I'm not buying. Some pundits say that the movers and shakers of the future, will continue to move onto higher prices and that's what it looks like--that those stocks may not go back to lower prices.
However, most of the time, no company is immune from the overall market environment.
For a company to do well in a down market, it would have to have:
1. Products that can be produced even if supply costs or supply chains are pressured.
2. Demand for the products can remain high, even if customers' ability to pay is pressured.
3. Difficult for new competition to rise up and steal business.
4. Price of the goods do not need to be adjusted in a down market.
5. Funds availability is not an issue, borrowing rates are not too high or borrowing too difficult, and reserve funds or liquid assets are available.
6. Employee turnover or lost knowledge isn't an issue.
7. Company is managed well, no excessive spending, no risks to reputation, no legal or financial battles or hurdles.
8. Extra expenses in equipment upgrades, etc. are anticipated and planned for in advance...
And so on.
It is very difficult to analyze a company from the outside in all aspects to determine these factors, much less do it for hundreds of companies and come up with the one that will do well.
Since last week, a few of my investments were downgraded to a hold, so then I sold them, per my rules. Of course, I had to sell them at a higher price than I bought them,which meant I had to wait for market fluctuations. I have not gotten in the market at lows, since I just started investing last month and bulk of my funds only became available to me last week.
Starting my investing hobby when everyone else is buying, and I am coming in at a market high... The risk is more than I like.
Emotional aspect of this is, I am eager to get started and put my money in stuff. I am excited to learn about different opportunities and am too easily swayed by what the "experts" say. I like reading about the stocks that are top gainers and top losers because it is curious to me why.
I wonder about the market volume, top movers... because I wonder if I really can start to anticipate the big fund managers' moves based on experience reading these. I also am interested in the funds that are out there... Certain industries are overtly represented in the markets--like you'd almost never see restaurants.. but you see a ton of financial industry stocks.
I wonder if I can start to recognize the dojis, moving averages crossing each other... etc. I started writing code for my computer to pull data on stocks, to replace my cut and paste, research on the various websites I am doing for each stock, onto Trello. I have a board with the stocks as a card, and moved to various lists and labels.
My lists on Trello so far:
-Rejected at this Time (not my buy range price, volatility, earnings cannot be negative, or not rated buy, or product I don't like such as junk food, cigarettes, etc.) or Sold
-Stocks with Dividends Declared and Ex-Dates Coming Up Next Week
-Street Says Buy, B- or Higher, and Dividend is at least 2% Yield
-Limit Buy(LB) Price Calculated, Queued to Buy
-LB Set, Cash Reserved
(Not bought yet, but ready to go. When the buy happens, I move these to Current holdings, need to set...)
-Current Long Term (LT) Holdings with LS/LB set
-Current Holdings, NEED TO SET LS/LB, and divide between LT/ST
(This is a temporary list for me to set LS for the stocks and LB for if I want to buy more, at what price. Then I move it to the LT or ST lists.)
-Current Short Term (ST) Holdings with LS/LB Set
-Hold Strategy Analysis - A more in depth look at Book Value, EPS, Long term potential, Institutional Investing involvement, Dividends payouts, debt obligations, cash flow, and history
-Stocks with High Dividends
In own category because these may be at hold rating or unrated, but I need to learn more about how they can do such high dividends and what is my tax strategy on them, etc. I like 10%+ dividends payout, or monthly dividends as some of them may have, but they are also not sustainable unless some of them are returning capital invested during down markets.
That means the underlying stock prices will continue to erode over time. Is that really worth it? It depends on my tax liability and how much the stocks will erode. That's why it requires a whole lot more analysis than just looking at the juicy dividends.
After all, getting 12 cents per share per month is nice on a $4 share, but if the share is $2 next year, the math doesn't leave me in a good place.
My Labels on Trello:
I'm only sad that blue is one of my favorite colors... and I have it on stocks that I would never buy.
Why never? Because those are the Coca-Cola, Snapple, Dr. Pepper, Pepsi, Monsanto and companies that sell sugar and chemical-laden crap, cigarettes, and stuff that society does not need, and we all end up paying HUGE medical, mental, societal, and environmental costs that cannot be quantified because of these companies' activities.
No matter how good the price of the stock, they would not sit well on my mind to make money off of. I will not subscribe to the fantasy and propaganda.
We are so good at coming up with excuses and reasons why we do what we do... On a societal level, when we all delude ourselves into lower pay, high cost of education, foods genetically modified to withstand pumping with chemicals, hormones, and pesticides, and believing the illusion of independence of individuals, we get ourselves in debt, lonely, drugged, and on a constant treadmill trying to catch up to an ever receding "American Dream"--each of us believing we are only failing because of our own reasons.
Anyway, that's why I will not invest in certain companies. In my small way, that is how I am watching out for all of our interests.
1. Rising tide lifts all boats. You can feel smart while market is moving up.
2. Buy when everyone else is selling. Sell when everyone else is buying.
So, I have started to sell my stocks and leave a lot of the funds in limit buys, or as cash. I will move after a major market correction -- I need 20% to 30% discount on today's high. Bear market is where I will make my wealth, because I am not shorting or doing options yet.. I will let you know, if I get into options.
If some of the stocks have rallied to high, then I'm not buying. Some pundits say that the movers and shakers of the future, will continue to move onto higher prices and that's what it looks like--that those stocks may not go back to lower prices.
However, most of the time, no company is immune from the overall market environment.
For a company to do well in a down market, it would have to have:
1. Products that can be produced even if supply costs or supply chains are pressured.
2. Demand for the products can remain high, even if customers' ability to pay is pressured.
3. Difficult for new competition to rise up and steal business.
4. Price of the goods do not need to be adjusted in a down market.
5. Funds availability is not an issue, borrowing rates are not too high or borrowing too difficult, and reserve funds or liquid assets are available.
6. Employee turnover or lost knowledge isn't an issue.
7. Company is managed well, no excessive spending, no risks to reputation, no legal or financial battles or hurdles.
8. Extra expenses in equipment upgrades, etc. are anticipated and planned for in advance...
And so on.
It is very difficult to analyze a company from the outside in all aspects to determine these factors, much less do it for hundreds of companies and come up with the one that will do well.
Since last week, a few of my investments were downgraded to a hold, so then I sold them, per my rules. Of course, I had to sell them at a higher price than I bought them,which meant I had to wait for market fluctuations. I have not gotten in the market at lows, since I just started investing last month and bulk of my funds only became available to me last week.
Starting my investing hobby when everyone else is buying, and I am coming in at a market high... The risk is more than I like.
Emotional aspect of this is, I am eager to get started and put my money in stuff. I am excited to learn about different opportunities and am too easily swayed by what the "experts" say. I like reading about the stocks that are top gainers and top losers because it is curious to me why.
I wonder about the market volume, top movers... because I wonder if I really can start to anticipate the big fund managers' moves based on experience reading these. I also am interested in the funds that are out there... Certain industries are overtly represented in the markets--like you'd almost never see restaurants.. but you see a ton of financial industry stocks.
I wonder if I can start to recognize the dojis, moving averages crossing each other... etc. I started writing code for my computer to pull data on stocks, to replace my cut and paste, research on the various websites I am doing for each stock, onto Trello. I have a board with the stocks as a card, and moved to various lists and labels.
My lists on Trello so far:
-Rejected at this Time (not my buy range price, volatility, earnings cannot be negative, or not rated buy, or product I don't like such as junk food, cigarettes, etc.) or Sold
-Stocks with Dividends Declared and Ex-Dates Coming Up Next Week
-Street Says Buy, B- or Higher, and Dividend is at least 2% Yield
-Limit Buy(LB) Price Calculated, Queued to Buy
-LB Set, Cash Reserved
(Not bought yet, but ready to go. When the buy happens, I move these to Current holdings, need to set...)
-Current Long Term (LT) Holdings with LS/LB set
-Current Holdings, NEED TO SET LS/LB, and divide between LT/ST
(This is a temporary list for me to set LS for the stocks and LB for if I want to buy more, at what price. Then I move it to the LT or ST lists.)
-Current Short Term (ST) Holdings with LS/LB Set
-Hold Strategy Analysis - A more in depth look at Book Value, EPS, Long term potential, Institutional Investing involvement, Dividends payouts, debt obligations, cash flow, and history
-Stocks with High Dividends
In own category because these may be at hold rating or unrated, but I need to learn more about how they can do such high dividends and what is my tax strategy on them, etc. I like 10%+ dividends payout, or monthly dividends as some of them may have, but they are also not sustainable unless some of them are returning capital invested during down markets.
That means the underlying stock prices will continue to erode over time. Is that really worth it? It depends on my tax liability and how much the stocks will erode. That's why it requires a whole lot more analysis than just looking at the juicy dividends.
After all, getting 12 cents per share per month is nice on a $4 share, but if the share is $2 next year, the math doesn't leave me in a good place.
My Labels on Trello:
I'm only sad that blue is one of my favorite colors... and I have it on stocks that I would never buy.
Why never? Because those are the Coca-Cola, Snapple, Dr. Pepper, Pepsi, Monsanto and companies that sell sugar and chemical-laden crap, cigarettes, and stuff that society does not need, and we all end up paying HUGE medical, mental, societal, and environmental costs that cannot be quantified because of these companies' activities.
No matter how good the price of the stock, they would not sit well on my mind to make money off of. I will not subscribe to the fantasy and propaganda.
We are so good at coming up with excuses and reasons why we do what we do... On a societal level, when we all delude ourselves into lower pay, high cost of education, foods genetically modified to withstand pumping with chemicals, hormones, and pesticides, and believing the illusion of independence of individuals, we get ourselves in debt, lonely, drugged, and on a constant treadmill trying to catch up to an ever receding "American Dream"--each of us believing we are only failing because of our own reasons.
Anyway, that's why I will not invest in certain companies. In my small way, that is how I am watching out for all of our interests.
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