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Old 06-04-2009, 04:21 PM   #201
Huck Cheever
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Re: General investing questions, newbie queries and thoughts megathread

interesting. thanks again
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Old 06-04-2009, 07:15 PM   #202
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Re: General investing questions, newbie queries and thoughts megathread

ok, I am using an online trading site, and I was talking to my dad about doing taxes. he doesnt invest anything big, a small amount just for fun. But I will have to get a print out of every buy and sell, go through it all, list the buying of all the diff times i bought the share, do all this other junk for the tax man.'


is this standard?
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Old 06-04-2009, 07:17 PM   #203
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Re: General investing questions, newbie queries and thoughts megathread

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Heh, I was looking at ATW today and it looks pretty good in terms of numbers. However, I don't like trying to pick individual drilling stocks because of variance (oil price and stuff going wrong). I don't know enough about the industry to pick between ATW and DO (for an example of another good looking driller) so if I want exposure I'd look for an oil fund of some sort. FWIW, ATW looks overbought according to the RSI and I think there are better value prospects.

I decided to buy TRN and NRG. Both came up in the same value screen, and look better to me both in terms of numbers. I also think TRN has a nice selection of business areas with NRG being a pretty solid industry - power is always needed.

I also bought IGNT and put trailing sell stops in on ARAY and ISRG today (these are based mostly on tips from a friend who follows the medical sector closely and has a good record).

I am very new at trading so help me here. I invested alot of my $ in atw to see how things go, take a gamble. I also bought NE today which is in the same field. Should I diversify more in the same field of stocks?

And what should I be looking for when you say numbers?
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Old 06-05-2009, 01:52 AM   #204
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Re: General investing questions, newbie queries and thoughts megathread

Educational Development Corp. (EDUC) - They are the only United States trade publisher of Usborne children's books, based in England. There are two divisions - one of which is based on independent "consultants" (multi-level marketing type stuff) who distribute the books at book showings in people's homes and fairs and the other is direct marketing to stores.

They have a 64% gross profit margin. Most of their profits go to SGA expenses; however, they've had steadily increasing sales, net income, and EPS over the last 10 years. They've got a buttload of assets compared to liabilities. They also issued an annual dividend of .40/share just last month. Seems like they don't know what to do with their cash.

EDUC just seems like a solid company, but they are only priced at $5.87/share. Is there something I'm not getting? Maybe their EPS should be higher?
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Old 06-05-2009, 11:09 AM   #205
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Re: General investing questions, newbie queries and thoughts megathread

how do you value a share buyback?
walmart just announced a 15B share buyback, the market cap is currently about 200B with share price of about 50.50 before announcement.

15B is about 7.5% of their stock. I wouldn't expect the stock to go up this much, but how would you go about valuing a share buy back?
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Old 06-05-2009, 12:35 PM   #206
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Re: General investing questions, newbie queries and thoughts megathread

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Educational Development Corp. (EDUC) - They are the only United States trade publisher of Usborne children's books, based in England. There are two divisions - one of which is based on independent "consultants" (multi-level marketing type stuff) who distribute the books at book showings in people's homes and fairs and the other is direct marketing to stores.

They have a 64% gross profit margin. Most of their profits go to SGA expenses; however, they've had steadily increasing sales, net income, and EPS over the last 10 years. They've got a buttload of assets compared to liabilities. They also issued an annual dividend of .40/share just last month. Seems like they don't know what to do with their cash.

EDUC just seems like a solid company, but they are only priced at $5.87/share. Is there something I'm not getting? Maybe their EPS should be higher?
I just took a cursory glance at this, it doesn't scream super-cheap at me but I wouldn't call it expensive. It's a very illiquid microcap stock but their earnings seem stable, their balance sheet looks healthy. They haven't been growing at all though over the last 5 or 6 years, but it's not priced like some super-crazy growth stock.
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Old 06-05-2009, 03:15 PM   #207
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Re: General investing questions, newbie queries and thoughts megathread

Another question:

I have the majority of my money sitting in a bank savings account, which I get a higher interest rate since my mother works for the bank. It's something like 2.63% or so. I also have a good bit of money in mutual funds that went through a financial advisor at the bank that my mom works at. And then I have a Roth IRA at Fidelity that I started myself in '04 and it is not fully funded based on full contributions dating back to '04, but has a bunch of money just sitting in cash.

Here is my question:

My mutual funds are basically like a passive portfolio. The money was put in there on an estimate of sitting there for 5-10 years, but that doesn't mean I'm going to take the money out after that time period. It has only been about 1 to 1.5 years now.

My IRA through Fidelity charges me almost $20 per transaction so I feel like my investments should be those that are defensive and can sit there for the next 45 years given that it's a retirement account.

I used to have an account with Scottrade, which is $7/transaction. I'm thinking about using a chunk of money from my bank savings account to fund my account with Scottrade and start another portfolio where the fees aren't going to bite into my returns. This portfolio would be based on my own research so as Benjamin Graham would say, it would be based on aggressive and/or "enterprising" investing.

Any advice on what I should do? I can't take the money out of my IRA anymore and the $20 really hurts when it comes down to it. At the same time, I already have a defensive portfolio. I'm thinking maybe have those mutual funds, then have my IRA for index funds, and then use Scottrade for my own active investing.
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Old 06-05-2009, 03:23 PM   #208
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Re: General investing questions, newbie queries and thoughts megathread

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I also have a good bit of money in mutual funds that went through a financial advisor at the bank that my mom works at.
This sounds like a pretty horrible idea. Maybe too late to turn it around, but if someone came to me and said "i'm gonna buy mutual funds through a bank financial advisor" I'd say lolnothatsretarded

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Any advice on what I should do?
I don't think anyone can really give a good answer to this without knowing how much you have where, where you live, how much you earn now, how much you expect earn in the future, how old you are and what your goals for the future are.
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Old 06-05-2009, 03:34 PM   #209
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Re: General investing questions, newbie queries and thoughts megathread

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This sounds like a pretty horrible idea. Maybe too late to turn it around, but if someone came to me and said "i'm gonna buy mutual funds through a bank financial advisor" I'd say lolnothatsretarded
Yeah I posted about it when I first did it and everyone said it was stupid. I left the money in there and I'm actually up even though the market has been shat over the last year.


Quote:
I don't think anyone can really give a good answer to this without knowing how much you have where, where you live, how much you earn now, how much you expect earn in the future, how old you are and what your goals for the future are.
I have a full-time job, which being single and living at home, I'm saving a ton of money. I paid off my car, no more school loans, and basically just riding it out. I'm turning 26 in 10 days. I'm possibly going to be looking for another job soon, but right now for what I do, by 2012 I will be making ~$51k/yr after I top out over the next 3 years if I stay in my current job.

Right now I'm laying low to see what the future is going to bring. I was planning on funding a new Scottrade account with $10k and do my own research on investments.
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Old 06-05-2009, 03:42 PM   #210
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Re: General investing questions, newbie queries and thoughts megathread

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I left the money in there and I'm actually up even though the market has been shat over the last year.
that doesn't mean it wasn't totally stupid. most likely it still was a bad idea.

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Right now I'm laying low to see what the future is going to bring. I was planning on funding a new Scottrade account with $10k and do my own research on investments.
i would do that. or zecco which is free for the first 10 trades / month is good too.
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Old 06-05-2009, 03:46 PM   #211
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Re: General investing questions, newbie queries and thoughts megathread

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i would do that. or zecco which is free for the first 10 trades / month is good too.
I looked up Zecco. It says they are free if you maintain a $25k balance or make 25 trades/month, which I won't be doing. Otherwise, it is $4.50.

I've always liked Scottrade with their local branches so I'll probably go back to them.
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Old 06-05-2009, 06:22 PM   #212
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Re: General investing questions, newbie queries and thoughts megathread

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I just took a cursory glance at this, it doesn't scream super-cheap at me but I wouldn't call it expensive. It's a very illiquid microcap stock but their earnings seem stable, their balance sheet looks healthy. They haven't been growing at all though over the last 5 or 6 years, but it's not priced like some super-crazy growth stock.
Yeah you're right. After I posted about this company, I went back and reread a section of the Intelligent Investor (which I just finished last night for the first time after owning the book for like 4 years) and read the criteria that Graham looks for. I realized the "Growth Prospects" weren't there and that probably has a lot to do with the low price.
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Old 06-05-2009, 06:36 PM   #213
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Re: General investing questions, newbie queries and thoughts megathread

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Originally Posted by durkadurka33 View Post
...then you didn't understand that what I withdraw MUST go into canadian...or else I can't pay bills with it!
So what are you asking? If you MUST convert it to canadian, you don't seem to have much of an option?
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Old 06-05-2009, 11:27 PM   #214
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Re: General investing questions, newbie queries and thoughts megathread

Forgive me for the noob question, but I'm really lost with this stuff. I have 10k I won't be touching for another year or two. What should I be doing with it? I'm not looking for any risk/hassle, just somewhere to put it that will turn it into $10,400 or something like that. Some CD? Some bank account?
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Old 06-05-2009, 11:51 PM   #215
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Re: General investing questions, newbie queries and thoughts megathread

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how do you value a share buyback?
walmart just announced a 15B share buyback, the market cap is currently about 200B with share price of about 50.50 before announcement.

15B is about 7.5% of their stock. I wouldn't expect the stock to go up this much, but how would you go about valuing a share buy back?
You simply remove the amount of float while keeping the market cap the same.

100m float, market cap of $1b = $10/share

Buyback of 10m shares:
90m float, market cap of $1b = $11.11/share
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Old 06-06-2009, 12:02 AM   #216
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Re: General investing questions, newbie queries and thoughts megathread

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Forgive me for the noob question, but I'm really lost with this stuff. I have 10k I won't be touching for another year or two. What should I be doing with it? I'm not looking for any risk/hassle, just somewhere to put it that will turn it into $10,400 or something like that. Some CD? Some bank account?
Check your bank and see what their rates are on Certificates of Deposit (CD). They are a safe and easy place to store your money if you don't need it.
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Old 06-06-2009, 03:34 AM   #217
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Re: General investing questions, newbie queries and thoughts megathread

This is very basic, but I'm trying to understand Book Value.

I understand it as (Shareholder's Equity - Intangible Assets) / Shares Outstanding.

Now, when I do this for a couple companies, I get a Book Value of like $1.07 when the current stock price is upwards of around $12. I tried it on a few companies that Buffett owns and on one company I get a Book Value of around $3.** when the current stock price is nearly $50.

Can someone clarify this?
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Old 06-07-2009, 08:52 AM   #218
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Re: General investing questions, newbie queries and thoughts megathread

I have a few noob questions regarding put options. I'm familiar with the concepts, but don't have any experience trading them. If you hold a put option that's in the money on its expiration day, is the standard play to exercise the option or do you get the same or better value by just selling your contracts on the options market? Is there normally sufficient liquidity to sell options on their expiration day?

How about if your option expires when it's in the money - does your broker automatically exercise the option for you or is this dependent on which broker you're using? When you exercise an option, is everything taken care of automatically so that you don't need to be concerned with actually purchasing the underlying security itself? Are you expected to cover the cost of the security at market value before you can exercise the option to resell it at the strike price?
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Old 06-07-2009, 09:17 AM   #219
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Re: General investing questions, newbie queries and thoughts megathread

In most (99%) cases it's better to sell an option that's in the money as there is always some premium attached to it. In some cases, like an illiquid market, you can't get sell the option for an adequate price and it's better to hold the option.

Normally your broker will exercise the option when it's in the money and take care of everything. Remember that if you exercise a put option you will be short that security the following monday if you didn't own the underlying.
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Old 06-08-2009, 11:12 PM   #220
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Re: General investing questions, newbie queries and thoughts megathread

n00b question/thought

a company like GM is obviously in the basement right now (trading somewhere near a dollar/share i think)

if the government is willing to go to great lengths to revive this company, isn't it inevitable that the stock will rise significantly once they rise out of bankruptcy?
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Old 06-08-2009, 11:18 PM   #221
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Re: General investing questions, newbie queries and thoughts megathread

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n00b question/thought

a company like GM is obviously in the basement right now (trading somewhere near a dollar/share i think)

if the government is willing to go to great lengths to revive this company, isn't it inevitable that the stock will rise significantly once they rise out of bankruptcy?
The government won't revive GM without taking a stake itself and wiping out shareholders or at the very least severely diluting them.
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Old 06-08-2009, 11:36 PM   #222
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Re: General investing questions, newbie queries and thoughts megathread

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The government won't revive GM without taking a stake itself and wiping out shareholders or at the very least severely diluting them.
and after that............maybe. GM and the American auto industry in general have a lot of competition these days. Fall behind much and you might as well play taps.

Oh wait...
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Old 06-08-2009, 11:50 PM   #223
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Re: General investing questions, newbie queries and thoughts megathread

Didn't GM trade debt for stock to the Government? Please correct me if I'm wrong, but as I understood it, that was the reason that Obama was implementing stipulations on what, and how they produced their new vehicles......as well as having a lot to do with the killing of the Pontiac branch of GM
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Old 06-09-2009, 07:56 PM   #224
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Re: General investing questions, newbie queries and thoughts megathread

Ok how do taxes work with this.

My dad says everytime I buy and sell it has to be recorded and at the end of the year I have to go through all this, write everything down and do a bunch of ****.

Shouldnt I just be able to write the losses/gains and go from there. why should I have to go through pages and write out bought at, # sold, gain/losses etc.

How do people go about this.


and NE anyone? stock looked good, but i am a noob. I have ATW and NE now.


Any good books on stock trading and how its done properly and make some cash. I am not a big reader, never really read a book, but I may want to start reading more about trading and how to make some $, where to start etc. Right now I am picking randomly trying to make some $ since stocks are so low. Or any websites I should read often?
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Old 06-09-2009, 08:14 PM   #225
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Re: General investing questions, newbie queries and thoughts megathread

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So what are you asking? If you MUST convert it to canadian, you don't seem to have much of an option?
Well, did you read my original question?

I asked what ppl thought the USD vs CAD would do in the coming 1-2 months given the runup of the CAD...because I can either withdraw now at .90 (which I did) or keep it online and use funds from a LOC @ 5.25%. Homeboy was responding to my question with what seemed an impossible alternative for me which I think he gave because he didn't understand that I withdraw $x/month for living expenses.
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