currency fluctuations (3 Viewers)

[Rutledge]

This in my opinion is exactly what is wrong with the market today.

Some people do, others teach.

The people that do (actually have companies, employing people and making

products) allow themselves to be influenced by those doing neither.

You ask me what I really know about Coca Cola. I know I have received my

initial investment back many times over. I currently enjoy a 33% return on my

original investment yearly, and it has grown to 1,100% of investment.

I'm not going to go into other companies I mentioned because they dwarf

this return by comparison.

If you want to tell people its a good idea to invest through financial planners,

and by mutual funds fine.

Just don't tell them its the only way or they have no chance, thats simply

not true.

As is your 1,000 to 1 odds. Based exactly on what fact? Pure thin air.

One example does not make the case. Over the last 10 years KO has returned -2.2% (including dividends) while the market has been flat. So it has underperformed. Given those results (confirmed in Mstar and Google), Im pretty confident your math as to what your returns have been is incorrect. (KO's performance more recently has been better, but still trails the market over the last decade) Note that I am not offering an opinion as to whether KO is or is not a good investment.

Somebody actually wins the lottery, and some leave Vegas with more money in their pocket than they arrived. Doesnt mean either is a valid or recommended money making endeavor.

If your (geometric or annualized) returns exceed 33% a year /1,100% in total for your other investments as well, you are putting Warren Buffett and every hedge fund in the world to utter shame. You are outperforming every other human being and portfolio manager on the planet, and are unquestionably an investment genius. Given that stocks have been flat to negative over the last 10 years, with some good years here and there, you had to have had some VERY good years before then.

I know you will never believe me, but I can guarantee you that your returns are less than you think. Its just too hard for even the brightest investment managers to beat the market year over year, which has averaged roughly 10% a year for the last 80 years. On average, an equity portfolio should double ever 7 years or so, with compounding. Thus a 1100% return would typically take around 77 years.

Im sure I dont need to discuss how much wealth has been destroyed over the last year. Anyone with exposure to the stock market has lost money, probably more than they ever thought.

 

[Njja]

One example does not make the case. Over the last 10 years KO has returned -2.2% (including dividends) while the market has been flat. So it has underperformed. Given those results (confirmed in Mstar and Google), Im pretty confident your math as to what your returns have been is incorrect. (KO's performance more recently has been better, but still trails the market over the last decade) Note that I am not offering an opinion as to whether KO is or is not a good investment.

Somebody actually wins the lottery, and some leave Vegas with more money in their pocket than they arrived. Doesnt mean either is a valid or recommended money making endeavor.

If your (geometric or annualized) returns exceed 33% a year /1,100% in total for your other investments as well, you are putting Warren Buffett and every hedge fund in the world to utter shame. You are outperforming every other human being and portfolio manager on the planet, and are unquestionably an investment genius. Given that stocks have been flat to negative over the last 10 years, with some good years here and there, you had to have had some VERY good years before then."


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You must be correct, I mean you have the (geometric or annualized) whatever. Let me run and get my slide rule.....perhaps I'm broke!

I mean could a little over $10,000 invested in June of 1986 be earning $3650
in dividens? No it can't be. Could it be worth $110K now......No why thats
impossible......I just read I'm experiencing a negitive return.

I'm not saying I'm putting anyone to shame, comparisons aren't my game.

I've spent years listening to Judith Hong, Neil Cavuto, and other "experts"
and it makes me laugh.

Most of them would have trouble making change for a dollar.

Warren Buffett (who you brought up) sold 23 Million shares of BUD for $60
betting the merger wouldn't go through.

I'm holding mine for the $70, lets see who is correct.

 

[Rutledge]

One example does not make the case. Over the last 10 years KO has returned -2.2% (including dividends) while the market has been flat. So it has underperformed. Given those results (confirmed in Mstar and Google), Im pretty confident your math as to what your returns have been is incorrect. (KO's performance more recently has been better, but still trails the market over the last decade) Note that I am not offering an opinion as to whether KO is or is not a good investment.

Somebody actually wins the lottery, and some leave Vegas with more money in their pocket than they arrived. Doesnt mean either is a valid or recommended money making endeavor.

If your (geometric or annualized) returns exceed 33% a year /1,100% in total for your other investments as well, you are putting Warren Buffett and every hedge fund in the world to utter shame. You are outperforming every other human being and portfolio manager on the planet, and are unquestionably an investment genius. Given that stocks have been flat to negative over the last 10 years, with some good years here and there, you had to have had some VERY good years before then."


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You must be correct, I mean you have the (geometric or annualized) whatever. Let me run and get my slide rule.....perhaps I'm broke!

I mean could a little over $10,000 invested in June of 1986 be earning $3650
in dividens? No it can't be. Could it be worth $110K now......No why thats
impossible......I just read I'm experiencing a negitive return.

I'm not saying I'm putting anyone to shame, comparisons aren't my game.

I've spent years listening to Judith Hong, Neil Cavuto, and other "experts"
and it makes me laugh.

Most of them would have trouble making change for a dollar.

Warren Buffett (who you brought up) sold 23 Million shares of BUD for $60
betting the merger wouldn't go through.

I'm holding mine for the $70, lets see who is correct.

Here is the rough math: $10k invested 22 years ago equal to $110k now is a (roughly) 11.5% annualized return.

Better than the S&P 500 (~7%) over the same time period, but certainly not 33%. Given you were fully invested just over 1 year before the 87 crash, I would have to have a closer look at the in/out cash flows before I could confirm your annual returns.

Your current annual dividend yield is 3.3%. The Dow Jones Ind Avg is yielding 3.8%, and the S&P 500 3.4%.

Why you would laugh at experts puzzles me. Do you also laugh at painters, lawn people, maids and others who perform services you could also do but prefer not to? Do these people not add some incremental value about what the amateur does? Surely painting is a mentally less demanding avocation than investing, yet people still hire others to do it. Strange, no?

Sounds like you are being a bit competitive with Buffett. Keep in mind, he has 23 million shares to consider. If the deal doesnt go thru and the stock falls well below $60, he has major mud on his face - not to mention perhaps possibly HUNDREDS of millions in fewer gains. While you may yet be "right", his considerations are quite a bit more than yours, I presume!, and in such markets as these I wouldnt blame someone for taking a nice profit and moving on. In my experience those who try to eke out every last bit of profit via the highest possible price usually end up getting burned (also true for those trying to "pick a bottom", for that matter).

Surely your portfolio has taking a whacking in the recent turmoil. Anybody who owns stocks has experienced losses. Be careful of stocks bearing large dividends, such as the financials. Div duts are fairly likely as companies seek to conserve cash and reduce outside funding needs.

 

[Njja]

A $10K investment returning $3650 per year is a 3.3% return? And your a

financial planner?

Oh I see, you take the current value of the stock, which has grown from the

initial $10K.

I don't think like that, I invest $10K, and get it back via dividens, to reinvest

in yet another company, thats how I wound up with a variety of companies

and a diversified portfolio.

Your point on Warren Buffett is simply an excuse, he admitted as much

stating that he simply guessed wrong believing even with all his inside

information that the deal would not go through. He admits he left over $200

Million on the table. He still has 17 Million shares but his face is a little red.

I had to make the same decision, did my own research, knew Bud's

largest shareholder was Barclays.......also involved (through a division) in the

financing of the deal. Seemed to me, if the largest shareholder is being paid

a part of the $50 Million fee to secure the debt.....the deal is going through.

So, I'm in, I also enjoy a wonderful dividen, having held the stock for over a

quarter centaury.

No fancy sliderule stuff, or Wharton School logic here......just simple common

sense, and a bit of luck along the way.

This is my last post on the subject, since I'm never going to get any credit

from you.

And you have NO shot with me.

Happy Investing.

 

[Rutledge]

Clearly, it was evident from your first post that I never had "a shot" with you. Ive come across enough D-I-Yers in my career by now to know better. But I do enjoy a good give and take about the subject, perhaps I should have been a lawyer too.

And regardless of what you think about my motiviations, I do believe that my advice as far as employing a very diversified portfolio via use of etfs, funds or other "managed products" is absolutely, by far, the best investment approach for non-professionals.

As someone who comes into frequent contact with a wide array of investors and investment strategies, I have first hand knowledge of how there are a lot more "bad" stories when it comes to people making their own investments. Its not to say one cant lose money my way, or that one always gets "Good" advice from a third party. Of course not. But at a minimum the odds of not experiencing a disaster are higher via a diversified approach, and that is a good thing. IMO, people determined to do it themselves would be better off turning their portfolio over to a vanguard pre-diversified fund based on risk profile or time horizon.

BTW, trading on "insider information" is quite illegal (ask Martha Stewart), so I sincerely doubt Buffet referenced access to such. And regards Barclays, it must have "firewalls" in place to preclude against internal biases. Nevertheless, to purport that a firm would advocate for a deal based soley on a one time fee of $50 million (or whatever) is not realistic. While Im sure some of their investment bankers are for it, their views would not be explicitly known or taken into account by the investment folks. The investment people are concenred with how the deal affects their investment return, of course, both in long term and short term. A one time fee is not a factor.

Call it slide rule or Wharton stuff, its basic math and investment principles. I did all of it with a caculator and the internet. No PhD required.

With your investments in KO and BUD it appears you may like stocks in things you know and are "Consumer Staples". In the current environment, this is probably a safer place than many others, although downside risk exists. For yields, muni bonds are currently carrying very high ones, especially on a tax equivalent basis. However I would not buy individual bonds, as there is some expectation of higher than normal defaults. And certainly GO bonds are preferred over Revenue bonds. With democrats coming to power, investments that can offer protection against higher tax rates may become of much greater interest. Note that munis have been volatile of late, so one needs to be aware they are not behaving in their normal way right now.