I think you did okay for transferring your fund to discount brokerage. You will be way ahead, because brokerage account will charge $6-12 per trade. Other junk accounts will charge 1-2.5ish%.
Yes, you are correct on bull market. Right now it is easy money due to heavy increase in MS (QE activities). If we see discount rate goes up, I think dividend stock w/ low beta will be ones to watch.
Even McDonald Cheeseburger went up average of 50% from dollar menu. I think real estate and securities investment(s) should do better than McDonald Cheeseburger increase.
1. I trade as often as once a week? I trade as short as once a year. I usually keep 3-4 stock per holding. I do this for a living (and some other types of investments), and I just cannot miss. In terms of trade, I did about 90% gain ratio. It is not because I am good, but because of this long bull market. I do good during the bear market too, but I do not do as good when dP/dt is near zero.
2. If you know what you are doing, it is worth trading frequently. Even on a short technical trade, I think of it as buying a business. I study harder than buying a small sandwich shop. It is least little more transparent than owning a small business. It is also liquid relative to small business. Only downside from owning private equities or private small buisiness is , there is little to no income. (mainly cap gain, or short term gain).
3. If I am sure, I bet more $. I invested 100% of my available fund on few stocks I was 99.9999% sure. It was DDS, S, AMD in the past. It did all well.
However, I had to get a part time job and increase my etail to get my cash flow going.
It paid off great, but we were living like a bum. Imagine holding decent amount of $ on portfolio, and living like a bum for years. It was hard, but the capital gain was well worth it for me at least.
My advice is not to go too deep. Why bet the farm or ranch even if you are 99% sure.
Cap gain tax isn't too bad, but short term investment income tax sucks.
4. I usually do my own taxes, and it is easier electronically. It can download all the data from your brokerage house, and you can do the rest. If I do it manually, it will take 3 pages of Schedule D-1.
5. Currently, I only hold 3 stocks. I am going to buy some options for other stock I am looking at right now. If you diversify too much, it is actually worse for portfolio (if you search U of MI diversification studies, and I agree). Although I do this full time, but I just can't do
full detail analysis on 20 stocks.
6. The capital isn't as important as change in % rate gain relative to change in time. I would rather have $2000 on my account and have an exponentially faster rate of growth than have $20,000,000 and a slow ass rate of gain.
However, having 20mil will be easier by diversifying into different vehicles of investments (such as some fixed incomes, securities, commercial real estate, etc) and less speculative/risk than having 2000 with anticipating huge gain to make money.
7. SBUX, GPRO, and CMG is stocks i do not have, and won't buy near future.
CMG has a good business line. I was eating CMG for lunch since 1997 (since it came to Denver first). I like CMG, because they are fast. That is it.
They are faster than any other quality fast foods. By looking at the PE, you are already paying for 5yr future growth on CMG.
SBUX..... I do like SBUX coffee, but I just don't like the rate of growth on same store sales.
GPRO- I think I WILL BE WRONG on this due to this being a cult stock with huge followers, but they only sell camera and its' accessories.
Quote:
Originally Posted by jasonn
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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