dfwmustangs market watch stock market game #3

[slow99]

My company's 401k has shit for options unless you buy the company stock which I buy 100% of. While they say that's not a good idea it has proven to be a very good choice over the 30 years history of the employees I work with. Yes it has its ups and downs but ultimately it is better then the other options. On top of that it pays dividends which have been a pretty decent chunk of change at times.

Do not do that. Please diversify that out to an index or something. Your options almost certainly include some S&P indices.

[snacksnack]

Do not do that. Please diversify that out to an index or something. Your options almost certainly include some S&P indices.

Yeah I know But the history has proven otherwise. I Cant see any reason to do otherwise at the moment.

[Nash B.]

Yeah I know But the history has proven otherwise. I Cant see any reason to do otherwise at the moment.

#1 reason:

http://www.dfwmustangs.net/forums/showpost.php?p=1264337&postcount=16

[jyro]

Great advice there from Slow99.
I tried to keep the game as it was previously, we can't see each others stocks
password to join ---- cowhidesrock

[Shorty]

I'd probably be on the verge of a nervous breakdown if my 401k was 100% invested in a single company.

[jyro]

age makes a difference

I'd probably be on the verge of a nervous breakdown if my 401k was 100% invested in a single company.

For someone young, <30, they have enough time to makeup mistakes. Someone like me, >65, I can't screw around with losing a lot, I have to diversify to hopefully prevent lots of losses.

Joe, congrads on the Fannymay find and thanks for sharing. I would have never belived it if I hadn't seen it. I'm just trying to do the best I can.
The next week should be interesting.

[1carcrazyguy]

So you think Fannie will be a good long play?

Anyone buying in on MAT during this dip?


We need an investment forum on this board!!!!

[95ragtop]

So I am just an amateur at this and might get flamed for the way I have invested but here it goes:

I found out about the company before the run up to 5.44 last May. I bought and held through that and continued to buy more as the price went down. At one point, I was looking at the stock with a price of 1.01 and I was -$12,000. I believed that the company was wronged and that the mortgage crisis was not their fault and would continue to hold the company.

I know people say diversify, but I went all in on this. I believe that the company will eventually be given back to the shareholders and will reissue dividends and once again be on the NYSE. I have an average price around $1.7 and have been holding approximately 8 months.

[slow99]

For someone young, <30, they have enough time to makeup mistakes. Someone like me, >65, I can't screw around with losing a lot, I have to diversify to hopefully prevent lots of losses.

Joe, congrads on the Fannymay find and thanks for sharing. I would have never belived it if I hadn't seen it. I'm just trying to do the best I can.
The next week should be interesting.

You're referencing a high (even 100%) allocation to equities, which is completely fine for a younger person. There's a huge difference in having an allocation that's heavily tilted to public equities and being 100% allocated to a single stock. That's absurd, even for a young person.

Another thing I'd like to clarify is "long" versus "short" when discussing investing positions. I see members here refer to long and short holdings meaning the timeframe they'll be held. That is not what long and short means in investing jargon.

"Long" something means you own it in the traditional sense we all think about - you purchased a position and you will benefit if that position increases in value. To exit a long position you will sell the stock and your position will be flat. A "long" position is referred to as bullish - you benefit when the asset appreciates.

"Short" a position means the exact opposite of the "long" described above. When you are "short" a position, you sell something you do not own and buy it back to make yourself flat at a later date. It's the traditional trade in reverse order - you sell something first then hope to buy it back later at a lower price. To exit a short position you will buy back the stock you sold (and did not own). A "short" position is referred to as bearish - you benefit when the asset declines in value.

It's important to communicate your intentions properly; it's more important that you understand what others are relaying to you when they're explaining their positions so that you don't get confused. "Long" and "short" does not mean the amount of time you plan on holding a security; it means what I outlined above.

[snacksnack]

Is this your profession slow? I want to go take some sort of an investing class to educate myself on this stuff now that I find it fun and Interesting.

[slow99]

Is this your profession slow?

Yes.

[jyro]

question

as interest rates rise will the price of fnma go up?

[95ragtop]

Yes, they will but the company is currently under government control, so all profits go to the treasury and no dividends are being issued.

[Broncojohnny]

as interest rates rise will the price of fnma go up?

It is a bit more complicated than a direct correlation since as rates rise the number of mortgages will fall. Right now apps are at a 14 year low because of the modest increase in rates over the last year.

[95ragtop]

Damn Jyro's up 29% today.