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To build wealth I've been doing real estate but always been curious about the stock market.
Put some funds in the JP Morgan mutual fund in early August. Performed decently but the 1.2% active management fee really annoyed me.
Opened a brokerage account around 2 weeks ago just to see how I would do on my own. Obviously I did some Googling to get the quick and dirty on the stock market. I made the same gains as the mutual funds with 5x less monies. So I just cashed out of the mutual funds and waiting for the funds to enter back into my savings. I don't think I have any special skill to have exceeded the Mutual Fund so easily; it's most likely because (1) it's a crazy Bull market and everything is going up and (2) I had actual stock picks which rise in value much more quickly than the 20 or so ETFs/index funds of the Mutual Fund.
Quick questions guys, do you guys trade very frequently? Does trading a lot create a mess for your accountant at the end of the year? Is it really worth it to trade frequently with the trading fees and short term capital gain tax rates? Are you guys just betting really big to make it all worth it? How many stocks are you guys invested in right now for how much capital?
I have around 10 items right now for my $100k portfolio - 3 ETFs which make up around 40% of the portfolio and the other 7 are stocks. When my mutual funds are cashed out I'd like to add to the portfolio so it's 60% ETF, 15% stocks, and 25% free cash in brokerage account ready to go if needed when I find a stock I really like since I really don't want to be selling of stocks frequently.
Obviously I'm eager to participate fully but it seems lots of fast growers and just companies in general are overpriced and this excessive optimism makes me feel like we are tumbling towards another massive market correction. Looking at the graphs and time periods it seems that way also. I know things are different and our economy is actually strong this time but who knows. I posted some of my analysis on FB to try to start a conversation with others since I have no one to discuss about it but no bites. Hopefully can learn some insights on this thread.
GPRO
It's been up 16% in the past 5 days. But by my calculations the valuation is unjustified so I will pass. In practice this is much more difficult because I'm sure it's going to go up up up up for a period of time before a correction occurs, if any.
SBUX
Earnings up 21.82%
P/E 253.3
1.0194B cash; 2.0481B in long term debt (last year long term debt was 1.2994B so it increased this year, not a good sign)
751.2M shares outstanding = -$1.3694 for each share
"[near the end]...in a growth company, the P/E ratio usually gets bigger, and it may reach absurd and illogical dimensions."
There's already a Starbucks at every block. How much further can Starbucks grow? I'm sure it's a solid company but it cannot possibly keep up with it's P/E ratio.
The counter argument is international growth and also addition more food items to the stores--they recently acquired some food company to help with this implementation.
CMG
The media darling. Pioneer of the "fast-casual" concept. Strong sales. Low debt. What's not to like? The P/E of 59.82. Just like Starbucks, I see Chipotles on every corner already. What's the expansion plan from here on out?
It's clear I already missed the Chipotle party train. Institutional Ownership - 94%. 'nuff said.
Although the P/E ratio is out of this world, at least it is still orbiting Earth. If I can dig up some kind of expansion plan for further aggressive growth I
might take a sip of that Chipotle koolaid.
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