Equity Investments

[MandyZ]

Portfolio up about 120% annually since starting in Feb. 09... But I forgot not everyone can handle the risk.

[347Mike]

after 2 penny stock reverse splits this year i'm sticking with just 1 penny stock and hoping for tthe beest.

Maybe you should take the hint and stop messing with penny stocks?

[Broncojohnny]

Usually penny shares should be worth pennies.

[yellowstang]

Just for kicks you can go to this site below and practice investing in stocks. it's free, just set up a Hotmail or Yahoo mail in case they end up spamming you, but so far I have not noticed an increase in my Hotmail activity.

http://www.updown.com/

[Lone Sailor]

Lmfao, take the suggestions from here and be sure to not buy them.

No shit. I'm glad I didn't listen to all the naysayers that said not to invest in Ford stock 2 years ago when they were $2.08 a share. Right now they're at $17.00 a share. Best 4800 shares I ever bought. LULZ

[OldGuysRule]

Portfolio up about 120% annually since starting in Feb. 09... But I forgot not everyone can handle the risk.

What is the alpha and the beta of your portfolio of holdings?

[Broncojohnny]

No shit. I'm glad I didn't listen to all the naysayers that said not to invest in Ford stock 2 years ago when they were $2.08 a share. Right now they're at $17.00 a share. Best 4800 shares I ever bought. LULZ

You obviously made the right call but what you have to understand is that you took on a lot of risk with that position because of Ford's debt situation. You still have some of that risk.

The goal of an investment program should be to minimize that risk and maximize your return. It is easy to get great returns in the market we have had in the past two years and it will probably stay that way for a while. However, in a market that is moving sideways or down, risk like that can lead to a huge loss. And those huge losses will destroy your capital in the long term.

[OldGuysRule]

Rule one of investing... don't lose money.

Everyone can make money in a bull market. It's how much you keep during a bear market that matters.

[Lone Sailor]

You obviously made the right call but what you have to understand is that you took on a lot of risk with that position because of Ford's debt situation. You still have some of that risk.

The goal of an investment program should be to minimize that risk and maximize your return. It is easy to get great returns in the market we have had in the past two years and it will probably stay that way for a while. However, in a market that is moving sideways or down, risk like that can lead to a huge loss. And those huge losses will destroy your capital in the long term.

For sure, there were, and still are risks in Ford stock. I also took into account that the money I was risking was money I had already made on the market via my 401k and having yet to make it to the halfway point in my 401k plan stages that I set up with my advisers, we felt it was a risk worth taking by continuing to lean toward the high risk/high reward type stocks. Once I reach that mid point time frame that we preset then we will taper away from the high risk to the moderate risk/moderate reward, and eventually down to low risk/low reward stocks.

[MandyZ]

What is the alpha and the beta of your portfolio of holdings?

I'll be honest with you - I don't know, and I'm not interested in calculating. All I know is I'm up 260% since Feb. 09 while the S&P is up 170%. I'm not a pro. I just pick companies I respect or think are undervalued and hold for >1 year. I agree we'll have to see what happens through a bear market, but I'm pleased so far and having fun, and to me that's what it's all about.

Oh, and this is not referring to my 401(k). That account is much more boring.

[OldGuysRule]

I'll be honest with you - I don't know, and I'm not interested in calculating. All I know is I'm up 260% since Feb. 09 while the S&P is up 170%. I'm not a pro. I just pick companies I respect or think are undervalued and hold for >1 year. I agree we'll have to see what happens through a bear market, but I'm pleased so far and having fun, and to me that's what it's all about.

Oh, and this is not referring to my 401(k). That account is much more boring.

Boring is good. I'll take my 15% average growth over 30 years now over a highly volatile group of stocks. The three stocks you mentioned all have betas over 3.0.

I'm moving quite a bit of money so I'm very interested in beta and alpha and a few other things.

Good you are having fun. It makes it all the easier.

Just fyi, the S&P 500 isn't up 170% since Jan 09 even if you take the low of 804. Even at its low of 666 in March 2009 you're looking at just a tad over 100% since then.

How do you figure out undervalued? How do you determine your margin of safety and how to do determine when a company went from undervalued to overvalued and its time to sell?

I'm just curious because you talked about "handling the risk" above and then talk about investing in undervalued companies. Typically the value investors invest in such a way risk is minimized.

[MandyZ]

Whoops, sorry for the miscalculation. Anyway... I just rely on intuition. I know that sounds stupid and crazy, but it works for me. For example, Harley-Davidson was trading at $10. Harley is a great brand - so much so that some people get the logo as a tattoo. Bought. Sold at $25 when the P/E started making me nervous. Also, Bank of America was trading at $4. How many people do you know who have a B of A account? Bought. Still holding and waiting to hit about $20-$30. I also try to follow Buffett's ideas about "being greedy when others are fearful and fearful when others are greedy" and not buying into companies I don't understand. Wish I had a more logical explanation for you, but that's how I invest.

[347Mike]

Whoops, sorry for the miscalculation. Anyway... I just rely on intuition. I know that sounds stupid and crazy, but it works for me. For example, Harley-Davidson was trading at $10. Harley is a great brand - so much so that some people get the logo as a tattoo. Bought. Sold at $25 when the P/E started making me nervous. Also, Bank of America was trading at $4. How many people do you know who have a B of A account? Bought. Still holding and waiting to hit about $20-$30. I also try to follow Buffett's ideas about "being greedy when others are fearful and fearful when others are greedy" and not buying into companies I don't understand. Wish I had a more logical explanation for you, but that's how I invest.

I am no expert but have traded quite a bit in the past. With that being said, your strategy in my opinion is not solid or even in that matter, has bad news written all over it. I do not see how you can identify a risk or determine any undervalue by saying "Oh, this looks cheap, and people get tattoos, it looks good, ill buy".

If that is your only investment strategy then it won't work for much longer in my opinion. Everything has gone up over the last 2 years since the "crash", of course you are going to come out positive.

[MandyZ]

I am no expert but have traded quite a bit in the past. With that being said, your strategy in my opinion is not solid or even in that matter, has bad news written all over it. I do not see how you can identify a risk or determine any undervalue by saying "Oh, this looks cheap, and people get tattoos, it looks good, ill buy".

If that is your only investment strategy then it won't work for much longer in my opinion. Everything has gone up over the last 2 years since the "crash", of course you are going to come out positive.

No worries. I look at it all like a game. If the account dropped to $0 this afternoon, I'd just shrug my shoulders and move on.

[talisman]

I've put everything I own in the VCR market. I heard Al talking about how he got his degree in it, so I know I'm going to set for lyfe!