patrick.net

My dad had no idea about stocks. I first learned about getting a brokerage account when I was an intern at Intel. Another guy there asked if people wanted to go in with him on a trade so we could all split the commission, which was like $100 at the time. I think three of us bought the stock in the one guy's account and made some money. We had to trust him not just to keep our money, but he proved himself trustworthy.

Then I opened an account and made a few hundred dollars on Catalina Marketing, which was the first to put ads on the back of store receipts. I was hooked.

I remember having to use a payphone from engineering school to trade. No cellphones then. And I'd be excited to get the newspaper to check how my stocks were doing.

Value - is it cheap or expensive?

Patrick says

My dad had no idea about stocks. I first learned about getting a brokerage account when I was an intern at Intel. Another guy there asked if people wanted to go in with him on a trade so we could all split the commission, which was like $100 at the time. I think three of us bought the stock in the one guy's account and made some money. We had to trust him not just to keep our money, but he proved himself trustworthy.

Then I opened an account and made a few hundred dollars on Catalina Marketing, which was the first to put ads on the back of store receipts. I was hooked.

I remember having to use a payphone from engineering school to trade. No cellphones then. And I'd be excited to get the newspaper to check how my stocks were doing.

I have a few friends who say trade. They are ok, they make about 60-80k a year. I learned from them a bit, daytrading strategies are totally different. It’s crazy how specific and precise they are.

Patrick says

BayArea says

A monkey throwing darts at an SP500 list would have performed well over the last decade.

True, there's a saying: "Don't confuse a bull market with your own ability to pick stocks."

Booger says

It must have a dividend if it's an individual stock.

Most of my stocks pay a dividend, but the best one I ever picked doesn't pay one: SHOP That's why I started looking at revenue growth as my main criterion.

Patrick, based on your criteria above, how could you buy SHOP? It had no PE until recently.

@Eman I bought SHOP because I was not impressed with a company I used to work at, a competitor of SHOP which frankly sucks by comparison.

I had the choice to exercise options at the sucky company after quitting, but I knew that they were not going to do well, so I put the money into SHOP instead.

It has gone up 48x since then.

This has made me re-evaluate my trading strategy.

Fortwaynemobile says

daytrading strategies are totally different.

That's because swing trading replaced day trading and works better. In a volatile market anyway. Not too hard to increase the value of some beans enough to buy surf boards and fishing poles.

Patrick says

@Eman I bought SHOP because I was not impressed with a company I used to work at, a competitor of SHOP which frankly sucks by comparison.

I had the choice to exercise options at the sucky company after quitting, but I knew that they were not going to do well, so I put the money into SHOP instead.

It has gone up 48x since then.

This has made me re-evaluate my trading strategy.

If you’re re-evaluating your “trading” strategy, then why establish the above criteria? Wouldn’t that have been more for investing?

Donald says

Patrick says

I look for:

1. consistent earnings growth for the last few years
2. a low p/e ratio like 20 or less (they can have a higher one if they have good growth)
3. a business I understand

I pick the biggest dumpster fires on Wall Street Bets hoping to get rich from the next short squeeze.

What would that be? AMC, CLOV, WISH, ASTS, ICLN, or…..?

AMZN is about to run so is AAPL. AMD is on the verge of breaking out too. 🚀🚀

Patrick says

BayArea says

A monkey throwing darts at an SP500 list would have performed well over the last decade.

True, there's a saying: "Don't confuse a bull market with your own ability to pick stocks."

Booger says

It must have a dividend if it's an individual stock.

Most of my stocks pay a dividend, but the best one I ever picked doesn't pay one: SHOP That's why I started looking at revenue growth as my main criterion.

If I want growth, I buy mutual funds. For retirement, I need a base of dividend paying stocks so that I don't have to sell my growth stocks during bear markets. I have plenty of mutual funds for growth as well. I just think it's prudent to have both.

Donald says

Tell me the stock market is in a bubble without telling me the stock market is in a bubble:

https://twitter.com/i/status/1412080378530066438

I dunno... Has your dogs hair stylist given you a stock tip yet?

Donald says

I am long oil stocks. Thanks to the OPEC meeting today ending in complete chaos, I am going to be a very happy camper when the market opens tomorrow. $100 barrel oil here we come!

The man speaks the truth! Predictions be damned it was a shiite show. I wish I had a stake.

I think they'll start throwing shoes at each other next meeting.

Eman says

If you’re re-evaluating your “trading” strategy, then why establish the above criteria? Wouldn’t that have been more for investing?

I don't really "trade", buying or selling maybe once or twice a year. So trading and investing are about the same thing for me.

Dart board.

I go with index funds. 50% domestic, 25% international, 25% commodities. Max out the 401(k) every year.

Low cost. Dollar cost average. But then again I'm still building the nest egg for retirement and don't need to tap into it yet.

I also kick myself for not venturing into crypto. My buddy was trying to convince me to buy into Etherum back when it was $30.. then again at $300.

GreaterNYCDude says

I go with index funds. 50% domestic, 25% international, 25% commodities. Max out the 401(k) every year.

Low cost. Dollar cost average. But then again I'm still building the nest egg for retirement and don't need to tap into it yet.

I'd stick with this.

Not this at all...
GreaterNYCDude says

I also kick myself for not venturing into crypto. My buddy was trying to convince me to buy into Etherum back when it was $30.. then again at $300.

You'll be the last one out. That's why your buddy was trying to convince you to buy in. Game will be over at some point. All trust lost. You can't time any market.

Maybe trade it I guess, but I wouldn't touch the shit. I have 4x's the retirement funds than 60 year olds do with what you're doing. Don't kick yourself for not getting into a scam. Stay on the path you are, in my opinion.

Donald says

I am long oil stocks. Thanks to the OPEC meeting today ending in complete chaos, I am going to be a very happy camper when the market opens tomorrow. $100 barrel oil here we come!

I bought some oil stocks about 3 weeks before February freeze, as nat gas consumption would skyrocket if weather forecasts would be correct. EXXON went from 45 to 65

Ppl, don't make it so complicated.

Just use one of the 'Dogs of the Dow' or 'Dogs of the S&P500' methods of organizing your blue chips by dividend yield and picking the top ten and re-balancing annually, to use the long term cap loss in your favor.

I do like dogs of dow strategy https://www.dogsofthedow.com/dogyrs.htm

How do u prevent picking dow stocks that might get kicked out of dow. ?
Some of the most iconic companies in U.S. history have been removed from the Dow Jones Industrial Average. They include General Electric, AT&T, Sears, and General Motors.

Rin says

Just use one of the 'Dogs of the Dow' or 'Dogs of the S&P500' methods of organizing your blue chips by dividend yield and picking the top ten and re-balancing annually, to use the long term cap loss in your favor.

In regards to using the LTCL favorably -

Are you just referring to the inevitable production of cap losses that will be produced some years due to annual rebalancing and selling a dog that may have fallen in share price? And using that loss to hopefully offset cap gains from that year (and carry unused losses forward if needed)? Or something more elaborate?

Hircus says

Are you just referring to the inevitable production of cap losses that will be produced some years due to annual rebalancing and selling a dog that may have fallen in share price? And using that loss to hopefully offset cap gains from that year (and carry unused losses forward if needed)? Or something more elaborate?

Pretty much.

KgK one says

How do u prevent picking dow stocks that might get kicked out of dow. ?
Some of the most iconic companies in U.S. history have been removed from the Dow Jones Industrial Average. They include General Electric, AT&T, Sears, and General Motors.

For me, it's the Dogs of the S&P500, not so much the Dow & thus, those stocks, provided they still at least try to maintain dividends, remain, however, I've now sold out my AT&T holdings as they've clearly indicated that they can't maintain their div, moving forward. And I use some 20 stocks, not 10.

So there's fundamental analysis and technical. Most normies stick to fundamental metrics that are not relevant in a virtually negative interest rate world and then trade based on FOMO and risk aversion, i.e. emotions. My advice, find a pro you click with and let them manage your account.

I would give you my technical setup, but your head would explode.

I would tell Dholliday how much I made as a “normie”, but his head might explode 🤑

We're not talking about your crypto clambo......🙌💎🚀🚀

I don’t have any crypto but I have a few shares of GME. I hope I make a few bucks from them.

Anyone have any thoughts on "magic formula investing"? It sounds similar to dogs of the dow in that you sort all stocks by a criteria, pick the top N, and annually rebalance / repick. It supposedly beats the s&p500 too. Its a value stock strategy.

Newsletters ..... right now focused on value stocks, as I believe that there will be a rotation out of growth stocks and into value stocks. Value stocks tend to be the ones that the market does care about, which makes them cheap. It makes them a contrarian play. You need to have a timeline of 3 to 5 years though.

Here are some sectors I am invested in

1. Coal
2. Bulk Dry Goods Shipping companies
3. Self Defense
4. Gold / Silver Miners
5. Agriculture / Fertilizer

Yes, that opportunity in AAPL has come and gone. I don't have a time machine to go back a month and buy AAPL. It MAY have some more room to go up, but what are the odds of AAPL doing another double or triple from here in 3 to 5 years? I would say very low. What about stocks in the sectors that I have listed? If you bother to look up any of the stocks in these sectors, it looks like they are starting to turn the corner after a decade of being monkey hammered by the market. PE ratios are low. Many of these pay dividends. No one is paying attention to these sectors. These are businesses that you can understand. You make money by being positioned in these companies before everyone else realizes that this is the place to be.

Donald says

Value stock appreciation in 3 years: 2%

Growth stock appreciation in 3 years: 265%

I am willing to bet that AAPL is up more in the last month than any value stock will be in an entire year. AAPL just made an all time high as I am writing this, per CNBC.com

Bingo. Go growth and layer on options for income and hedging and that's how you drastically outperform the market. The trick is you have to be OK with volatility.

I guarantee you in 3-5 years AAPL will double again, heck it just went up about 20% in a month, but that's because it was basing for the prior 6 months.

If AAPL doubles I'm buying a boat for my girlfriend.

Donald says

I have had 5,000 shares of Amazon and Moderna since their IPOs and have never received a single dividend payment. Worst investment ever! Imagine all of the dividend payments I could have had if I bought value stocks instead.

Why the fixation on dividends? You have pay taxes on these while you don't pay taxes when company buys back their stock, thus increasing valuation. BRK haven't paid a single red cent in dividends ever - they funnel money into buybacks, which is much more tax-efficient for shareholders.

Donald says

I was being sarcastic in my remark about dividends. I was mocking value stocks.

I see. Sarcasm rarely works on the interwebs. =))

Eric Holder says

I see. Sarcasm rarely works on the interwebs. =))

Sarcasm is often used to illustrate the absurdity of your opponent's argument. The problem on the internet is your opponent thinks you're agreeing with them.

Donald says

Unlike growth stock investors, value stock investors do not need to worry at all about an increase in capital gains taxes.

Value stocks are usually associated with dividends which are subject to short-term capital gains, i.e. income tax. Both growth and value stocks if held for over a year are subject to the same long-term capital gains which federally are 20% then tac on any state tax. If you're talking about buy and hold forever, then both will not pay any taxes, except on dividends.

My favorite tactic is to wait for a big pull back on a fantastic growth name and buy an atm call option a year out aka a LEAP, that way at expiration it's an automatic long-term capital gain, which ironically is lower than the tax rate you'll pay from withdrawals on your IRA.

TonyKulernus says

Newsletters ..... right now focused on value stocks, as I believe that there will be a rotation out of growth stocks and into value stocks. Value stocks tend to be the ones that the market does care about, which makes them cheap. It makes them a contrarian play. You need to have a timeline of 3 to 5 years though.

Here are some sectors I am invested in

1. Coal
2. Bulk Dry Goods Shipping companies
3. Self Defense
4. Gold / Silver Miners
5. Agriculture / Fertilizer

bizarre I thought I wrote this hahaha. I'm all expect Gold / Silver Miners they will set up but more downside with strong dollar. Tech is overvalued and probably going to see some pain with strong dollar until Oct. I just sold some oil ETFS but hoping to get into some Russian oilers. Partially Lukoil & Tatneft increasing reserves, low debt levels low and in 5-10 year will still be producing oil. Russian oilers have been outperforming Western oil majors for the last two years. Value is working great for me - my Uranium positions are 150-300% up. We're having a correction and plan to add in the upcoming months. I own a lot of foreign stock in my IB account - it's great because I don't check it much. Coal is having a nice breakout :P Check out Goehring & Rozencwajg Associates great research!

Interesting .... I also am up 200% on UUUU, and Lukoil was also a recommended stock. AND many of the recommendations are outside of the US. I'll check out what you recommended. My newsletter is called Capitalist Exploits .... so I guess that makes me literally Hitler?

A strong dollar is a negative for commodities and the exchange rate on foreign stocks...