Why I shouldn't play the stock market

[THEINCREDIBLEdork]

I bought these at about $3. Went up 10% the next day, been falling ever since.

p.s. plz play farmville

[Dent]

http://www.evemorningreport.themumm....19-12_show.mp3
plz play eve, buy the nitrogen isotopes

[Ugly Bastard]

I don't hate your buy. Hold it for a while if you can afford to. They are working to get into online poker scene. The stat on left side of pokerscout.com may cheer you up.

[THEINCREDIBLEdork]

I bought when they hired that guy from 888. Figured they had hit bottom by that point. I'm going to ride it out, but I kick myself for not selling right away and getting a nice quick $250 profit.

[f3lix]

Some companies are going to make bank with online poker in US. Spread it out and wait.

[THEINCREDIBLEdork]

I'm so speculative and dangerous with my money, how do I protect myself? What rules should I follow?

Luckily, I put a stop order on ZNGA after the original post so if the price dropped again I would save a couple hundred bucks. Ended up losing around 600 on the venture.

After the ZNGA fiasco I decided from now on I will only be investing in Mutual funds. I'm not an economics major. I have no business playing the stock market or trying to be a day trader. I should leave it to the experts and just make sure I keep the management expenses low.

I was really pissed off that after a day when the ZNGA stock closed like 3 points up. Then after trading hours and some bad news, people with connections could trade while the market was closed and save themselves while I was stuck holding my dick able to do nothing until the next day when the stock market opened with the stock 20% down.


However, this mutual fund plan of mine is not foolproof. For some reason I was convinced the stock market would pick up a bit after the election regardless of who won - this was based on no empirical evidence just my hunch. So I trasferred around 10,000 peanuts to my investment account to dump into 2 or 3 mutual funds as soon as I could.

Luckily, it didn't transfer to my investment account soon enough, and it inadvertantly saved me from losing relatively a lot of money as the stock market is tumbling because the lazy black man is still in office.

[DJ FC]

Buy ETFs instead of mutual funds.

[THEINCREDIBLEdork]

Why do you recommend ETF's?

I remember looking into them and deciding to stick with mutual funds, but I can't recall why.

[THEINCREDIBLEdork]

Can you tell me when to put the money in? Do you have the ability to predict a liklihood that the market as a whole will stop going down and start going up?

I don't like to put money in when it's going down because I hate losing money right away. And if I wait too long I put it in too late.

Do you recommend waiting until it is up for a day?

Or is there a way I can relatively small amounts monthly so it evens out like my 401k without paying transacton fees?

Make me rich, DJFC.

[Johnny Richter]

Invest all your money in sugarcane, immediately.

[DJ FC]

Fees on Mutual funds are too high and basically just a ripoff. Running a mutual fund is a joke.

ETFs do basically the same thing, just with stricter rules so the manager can't justify a higher fee structure because he makes no decisions. The best ETFs buy an entire index and track it. SPX tracks the entire S&P 500. It's a pretty good one. PFF tracks preferred shares of blue chips (similar to bonds) and pays out a healthy dividend.

[Ugly Bastard]

+1 to DH's commodities call whether he was bring serious or not.

[Johnny Richter]

Well, the price of agricultural commodities is surely going to increase very soon as a result of the massive drought in the Midwest this summer.

Still, I'm never a big fan of commodities, there's just so many variables to account for.

[ninjaface]

I like to focus my investing on DOT COM...modities.

Do you see what I did there?

[DJ FC]

I own a decent chunk of Iowa farmland. 2-3 year corn, 1 year soybean crop rotation.

[thekremlin]

If anyone cares, here is what I have invested in. For the most part, I'm relatively conservative, and my portfolio doesn't fluctuate that much. I also manage a portfolio for my parents, and am more conservative with their money than I am with my own. So a few of the riskier stocks listed towards the bottom, they're not involved in, but the rest of it, our accounts are pretty similar.

The main thing is, I believe in stocks. I think the main question to ask when investing is, do I want to invest in stocks or bonds... and in this climate, the answer couldn't be more obvious. If you have a lot of wealth, it is legit to own some commodities too, or some other form of inflation hedge, but for most of us that isn't really the case. Outside of that, I think of commodities as speculation, which is fine, but not the same as investing.

I believe in stocks because they're basically pieces of companies, each company made up of people showing up every day and doing their jobs. Nothing fancy, but that's the edge. Over the (very) long term, you expect stocks to pay the same as the time value of money (by definition, I guess), but we're in a climate where money is easy to borrow, so doesn't pay off to lend. So I'm 0% in bonds.

My single largest holding, by far, is and has pretty much always been PFF, which FC mentioned above. It's a fund of preferred shares. The benefit of these shares is that they are the last shares that will go to 0 when a company has severe bankruptcy-type problems. When I first got involved in 2008, these shares were very deflated, because a lot of the holdings are financial stocks. But there was a reduced risk of extreme downside because of the preferred thing, and the dividend yield was ridiculous. Since then, we have come out of the financial crisis and the fund has more than doubled, meaning the yield has more than halved.... but it's still a very sexy 5.75%. Over the past year, it has traded in a very tight range, because the preferred shares start behaving a little more like bonds when we exit the risk zone. There is still the potential for growth, but not a lot. I just like the 5.75%, and it's risk I'm very comfortable with.

I own a lot of stocks that all share pretty much the same profile. Well-established companies across the sectors that pay dividends in the 2.5-5% range, with good cash flows and decent P/Es, and then I kind of pick my favorites from there. (What I tend to do is "get involved and see how it trades," basically own a smaller bit of the stock for a while to make myself follow it, then get into it heavier later.) The stocks in this group are the core: MO (altria), MRK (merck), HSY (hershey), XOM (exxon mobile), KMI (kimber morgan), a few others. I also own a small bit of plain old SPY (ETF on the S+P 500).

The stocks in this group have all done very well because they pay such predictable dividends, and in the climate of the past several years, that's what people want from their money. In addition to the dividends, they've had great growth: in the case of MO, it's pretty much doubled since I've gotten in. (To be fair, just about any stock you owned since the low of the financial crisis will have done well.) MO and MRK are my favorites of the list for what it's worth.

From there, I have some riskier stuff. Bank of America and Citibank were extremely risky a year ago, and still are but they've calmed down. FC has convinced me to be long AMZN. I tried to pick a low on Knight Capital, a trade which has not paid off and I will probably cut it as a 10% loser pretty soon. FC and I both got long Nokia, which paid off really well, although still has some volatility. These last two stocks are trades, rather than investments.

I stay away from superhyped stocks like AAPL and FB, although I do own Qualcomm, which can be very correlated with APPL.

Hope this was all helpful.

[THEINCREDIBLEdork]

Thank you.

[Johnny Richter]

It seems like you guys like having a good dividend from your investments what with the preferred shares and all.

It's probably worth mentioning that Obama is going to remove the special dividend tax rates and tax dividends as ordinary income, which is a complete fuck in the asshole. Although it won't affect you Londonfags, it is something to consider for the Americanfags.

[f3lix]

I do not have faith in the stock market with Bam Bam in his second term.

[DJ FC]

Originally Posted by Dirty Harry

It's probably worth mentioning that Obama is going to remove the special dividend tax rates and tax dividends as ordinary income, which is a complete fuck in the asshole. Although it won't affect you Londonfags, it is something to consider for the Americanfags.

Why won't it affect us?

[Johnny Richter]

It will affect you on all your American stocks, I think.

[DJ FC]

Originally Posted by Dirty Harry

It will affect you on all your American stocks, I think.

Affects us on everything. America is a modern day slaver.