My Investing Strategy

[Stunt]

Originally posted by: AccruedExpenditure
EFM says your strategy shouldn't work.

The question now is do you believe in EFM

My strategy...period? Or the blue chips in the US? Remember I am looking to apply this reasoning to Canadian companies.

 

[Descartes]

Originally posted by: Hector13

Originally posted by: Descartes
If it's a cash dividend he will most certainly *not* be ok. You have to hold it for a year to qualify as capital gains and not income, and even if it were not income it would still be up to 15%!

If the stock has an unrealized gain of 5% and you're considering a yield of 5% as well, then the total return would be 10%. That's great, but after taxes it's nowhere near as attractive, especially if you do sell in the short-term.

Again, I would rather invest in tax-exempt bonds than blue chips/large-caps with little upside and high yield.

[edit]Oops, sorry, forgot you're in Canada.[/edit]

I'll say it again... I am nearly positive that to qualify for the 15% dividend tax rate you do not need to hold a stock for 1 year.

For the US it's one year. I don't know about Canada. Note in my post that I acknowledged I forgot he was in Canada. If you're still referring to the US then spend two seconds and look it up for yourself.

In either case, you don't have to tell me that the strategy isn't that great... I already said above that I think it is a bad idea. In fact, I think trying to beat the market through stock selection itself is a bad idea (as is market timing). Trust me, there are many, many very "smart" people who get paid tons of money to do this for a living (with access to much better "research" and technology than you will ever have). If they can't do a good job of consistently beating the market, what makes you think you can?

That's such an annoyingly trite response that I don't know how to respond. For every apathetic that says this you have another who is successful at the market. I make enough in my returns to make me believe that I can. You can choose to acquiesce if you wish.

Seriously, do you honestly believe that you are the only person who has ever thought about investing in companies with low P/Es, good "growth" potential, etc.?

Did I say that? This sounds more like you're upset than talking rationally, because you're getting closer to ad hominem arguments. He asked how I evaluate my securities, and I offered a few of the many dozen ways I might evaluate them. Indeed, these are the most common, most fundamental, and most easily researched.

 

[IHateMyJob2004]

Originally posted by: Stunt

Originally posted by: AccruedExpenditure
EFM says your strategy shouldn't work.

The question now is do you believe in EFM

My strategy period? Or the blue chips in the US? Remember I am looking to apply this reasoning to Canadian companies.

Looking for income is important. But so is a history of annual increases.

What are your investment goals? $1M in 20 years?

If you are younger, you are makign a good move. Just buy high qualtiy stocks with room for growth and you'll be set in 20-30 years. Most young people simply want instant gratification.

Get out excel, make a worksheet with what you can contribute annaully. What inflation is going to be (3-4%?). What you want ot have in 10, 20,30 years. THen figure out what kind of return you need to make. THen figure out how to get that return. And if you are hoping for anything glamorous, you probably should re-evaluate your goals.

After 5 years of investing, I'm finally at the point where making 12-15% annually going forward is a joke to me. I'm shooting for 19%+ annually though. And no, I am not crazy. Nor will I defend my strategy. In short..long term investor + options (naked puts).

 

[Stunt]

Originally posted by: IHateMyJob2004

Originally posted by: Stunt

Originally posted by: AccruedExpenditure
EFM says your strategy shouldn't work.

The question now is do you believe in EFM

My strategy period? Or the blue chips in the US? Remember I am looking to apply this reasoning to Canadian companies.

Looking for income is important. But so is a history of annual increases.

What are your investment goals? $1M in 20 years?

If you are younger, you are makign a good move. Just buy high qualtiy stocks with room for growth and you'll be set in 20-30 years. Most young people simply want instant gratification.

Get out excel, make a worksheet with what you can contribute annaully. What inflation is going to be (3-4%?). What you want ot have in 10, 20,30 years. THen figure out what kind of return you need to make. THen figure out how to get that return. And if you are hoping for anything glamorous, you probably should re-evaluate your goals.

After 5 years of investing, I'm finally at the point where making 12-15% annually going forward is a joke to me. I'm shooting for 19%+ annually though. And no, I am not crazy. Nor will I defend my strategy. In short..long term investor + options (naked puts).

I am currently making ~$60k, I am fresh out of university (only 22) and I am in a position to move up quickly in the company i am at.

I've done a budget and considering my rent is a meager $600/month (elec, sewage, heat, a/c included) I can put away $20,000 a year (after tax) and increasing to more with the salary increases. This is why I am trying to develop something effective and productive.

I don't need the income, but I thought with the low price valuations of respectable canadian companies (based on profit margins/dividends) on a yearly basis could equate to low risk price upside with a cherry on top (2 to 4% dividend).

Whatever that ends up being in 20years i have no idea...haha.
Say yearly salary increases of 3% (lowball, this company has lots of area to move up), 6% return on investments (very lowball, taking into account recessions, most hit 4% a year)...I should have $1.2million, at the age of 40, that ain't bad.

Of course, all that will change with kids and a wife.
Luckily I am single at the moment, and have been able to avoid the commitment

 

[Hector13]

Originally posted by: Descartes

Originally posted by: Hector13
I'll say it again... I am nearly positive that to qualify for the 15% dividend tax rate you do not need to hold a stock for 1 year.

For the US it's one year. I don't know about Canada. Note in my post that I acknowledged I forgot he was in Canada. If you're still referring to the US then spend two seconds and look it up for yourself.

Done and done: http://www.irs.gov/businesses/small/article/0,,id=122523,00.html

Did I say that? This sounds more like you're upset than talking rationally, because you're getting closer to ad hominem arguments. He asked how I evaluate my securities, and I offered a few of the many dozen ways I might evaluate them. Indeed, these are the most common, most fundamental, and most easily researched.

Nowhere did I attack you personally... I may have mocked your startegy, but so what...? This is the internet. Get used to it.

By all means, please continue to try to beat the market. You aren't doing me any harm. In fact, it is the 95% of investors out there who are irrational (and think that they can "beat the market") that allow me to have a good life style and make the type of money that I am lucky enough to make (hint, I work as a portfolio manager for a very large hedgefund -- guess how much I have invested in our strategy... less than 10% of my savings. And that is only cause people like managers who have their "skin in the game" so to speak). Heed my friendly advice if you'd like... otherwise, don't complain if you end up being not so lucky with your investments in the future (trust me; I have desire for you to lose any money... I wish you the best of luck -- I just hope you realize that it is luck and nothing more).

 

[gotsmack]

I remember reading in Forbes a while back that this guy started an fund where he invested in the S&P 500, but threw out airline and steel stocks. That sounds like a good strategy since those two industries usually perform poorly as a whole.

I never liked mutuals because all of the ones worth investing are noramlly closed to new investments or have a high initial investment. ETFs are where its at, but I like picking my own stocks. So far I've broken even after inflation and fees.

I'm going to buy some TIVO tomorrow.

 

[Descartes]

Originally posted by: Hector13

Originally posted by: Descartes

Originally posted by: Hector13
I'll say it again... I am nearly positive that to qualify for the 15% dividend tax rate you do not need to hold a stock for 1 year.

For the US it's one year. I don't know about Canada. Note in my post that I acknowledged I forgot he was in Canada. If you're still referring to the US then spend two seconds and look it up for yourself.

Done and done: http://www.irs.gov/businesses/small/article/0,,id=122523,00.html

Did I say that? This sounds more like you're upset than talking rationally, because you're getting closer to ad hominem arguments. He asked how I evaluate my securities, and I offered a few of the many dozen ways I might evaluate them. Indeed, these are the most common, most fundamental, and most easily researched.

Nowhere did I attack you personally... I may have mocked your startegy, but so what...? This is the internet. Get used to it.

By all means, please continue to try to beat the market. You aren't doing me any harm. In fact, it is the 95% of investors out there who are irrational (and think that they can "beat the market") that allow me to have a good life style and make the type of money that I am lucky enough to make (hint, I work as a portfolio manager for a very large hedgefund -- guess how much I have invested in our strategy... less than 10% of my savings. And that is only cause people like managers who have their "skin in the game" so to speak). Heed my friendly advice if you'd like... otherwise, don't complain if you end up being not so lucky with your investments in the future (trust me; I have desire for you to lose any money... I wish you the best of luck -- I just hope you realize that it is luck and nothing more).

No offense, but your ignorance is astounding. 95% of investors are also just as ignorant. It's calculated risk, and no more. I put over $100k a year that I put to work in the market (in addition to whatever holdings I have), and if you think someone can make that amount of money spending it in a wanton manner you are crazy. I'm no Buffet, but I'm still successful. I do take losses, but on the average I take much greater gains. I don't get the gains that some get from penny plays, but I also sleep well at night.

I definitely call shens on your status as a portfolio manager, especially for a hedge fund. The fact that you consider investment success more about luck than analysis most definitely shows your true colors... green.

 

[AccruedExpenditure]

Originally posted by: Descartes

Originally posted by: Hector13

Originally posted by: Descartes

Originally posted by: Hector13
I'll say it again... I am nearly positive that to qualify for the 15% dividend tax rate you do not need to hold a stock for 1 year.

For the US it's one year. I don't know about Canada. Note in my post that I acknowledged I forgot he was in Canada. If you're still referring to the US then spend two seconds and look it up for yourself.

Done and done: http://www.irs.gov/businesses/small/article/0,,id=122523,00.html

Did I say that? This sounds more like you're upset than talking rationally, because you're getting closer to ad hominem arguments. He asked how I evaluate my securities, and I offered a few of the many dozen ways I might evaluate them. Indeed, these are the most common, most fundamental, and most easily researched.

Nowhere did I attack you personally... I may have mocked your startegy, but so what...? This is the internet. Get used to it.

By all means, please continue to try to beat the market. You aren't doing me any harm. In fact, it is the 95% of investors out there who are irrational (and think that they can "beat the market") that allow me to have a good life style and make the type of money that I am lucky enough to make (hint, I work as a portfolio manager for a very large hedgefund -- guess how much I have invested in our strategy... less than 10% of my savings. And that is only cause people like managers who have their "skin in the game" so to speak). Heed my friendly advice if you'd like... otherwise, don't complain if you end up being not so lucky with your investments in the future (trust me; I have desire for you to lose any money... I wish you the best of luck -- I just hope you realize that it is luck and nothing more).

No offense, but your ignorance is astounding. 95% of investors are also just as ignorant. It's calculated risk, and no more. I put over $100k a year that I put to work in the market (in addition to whatever holdings I have), and if you think someone can make that amount of money spending it in a wanton manner you are crazy. I'm no Buffet, but I'm still successful. I do take losses, but on the average I take much greater gains. I don't get the gains that some get from penny plays, but I also sleep well at night.

I definitely call shens on your status as a portfolio manager, especially for a hedge fund. The fact that you consider investment success more about luck than analysis most definitely shows your true colors... green.

I'm sure this same 95 controls far less than 95 percent of wealth invested in the s. market.

 

[Hector13]

Originally posted by: AccruedExpenditure

Originally posted by: Descartes

Originally posted by: Hector13

Originally posted by: Descartes

Originally posted by: Hector13
I'll say it again... I am nearly positive that to qualify for the 15% dividend tax rate you do not need to hold a stock for 1 year.

For the US it's one year. I don't know about Canada. Note in my post that I acknowledged I forgot he was in Canada. If you're still referring to the US then spend two seconds and look it up for yourself.

Done and done: http://www.irs.gov/businesses/small/article/0,,id=122523,00.html

Did I say that? This sounds more like you're upset than talking rationally, because you're getting closer to ad hominem arguments. He asked how I evaluate my securities, and I offered a few of the many dozen ways I might evaluate them. Indeed, these are the most common, most fundamental, and most easily researched.

Nowhere did I attack you personally... I may have mocked your startegy, but so what...? This is the internet. Get used to it.

By all means, please continue to try to beat the market. You aren't doing me any harm. In fact, it is the 95% of investors out there who are irrational (and think that they can "beat the market") that allow me to have a good life style and make the type of money that I am lucky enough to make (hint, I work as a portfolio manager for a very large hedgefund -- guess how much I have invested in our strategy... less than 10% of my savings. And that is only cause people like managers who have their "skin in the game" so to speak). Heed my friendly advice if you'd like... otherwise, don't complain if you end up being not so lucky with your investments in the future (trust me; I have desire for you to lose any money... I wish you the best of luck -- I just hope you realize that it is luck and nothing more).

No offense, but your ignorance is astounding. 95% of investors are also just as ignorant. It's calculated risk, and no more. I put over $100k a year that I put to work in the market (in addition to whatever holdings I have), and if you think someone can make that amount of money spending it in a wanton manner you are crazy. I'm no Buffet, but I'm still successful. I do take losses, but on the average I take much greater gains. I don't get the gains that some get from penny plays, but I also sleep well at night.

I definitely call shens on your status as a portfolio manager, especially for a hedge fund. The fact that you consider investment success more about luck than analysis most definitely shows your true colors... green.

I'm sure this same 95 controls far less than 95 percent of wealth invested in the s. market.

Actually, one of the beauties of the EMH is it doesn't matter if 95% of the people out there are ignorant... all it takes is one investor with enough capital to take advantage of the rest of them and things will still be "effecient".

 

[Hector13]

Originally posted by: Descartes
No offense, but your ignorance is astounding. 95% of investors are also just as ignorant. It's calculated risk, and no more. I put over $100k a year that I put to work in the market (in addition to whatever holdings I have), and if you think someone can make that amount of money spending it in a wanton manner you are crazy. I'm no Buffet, but I'm still successful. I do take losses, but on the average I take much greater gains. I don't get the gains that some get from penny plays, but I also sleep well at night.

I definitely call shens on your status as a portfolio manager, especially for a hedge fund. The fact that you consider investment success more about luck than analysis most definitely shows your true colors... green.

right... this from the person who was whining about personal attacks earlier. Anyway, you can call "shens" on whatever you'd like if it makes you feel better. What my job is has nothing to do with the topic.

Just remember, if you take 100 investors, 5 of them will produce returns that are statistically better than zero at the 95% confidence interval (by definition). Since there are many, many more than 100 investors out there, by pure luck a lot of them will do well and some will do well for an extended period of time.

Don't confuse luck with skill.

 

[zendari]

One would be crazy to say there is no element of luck involved in the stock market.

 

[Stunt]

Originally posted by: zendari
One would be crazy to say there is no element of luck involved in the stock market.

:thumbsup:

 

[D22]

Interesting read so far...

So if you guys had quite alot of money in the bank and were looking to buy a house around January of 06', what would you put your money in? I am thinking of just investing from Sept - end of the year for a nice 4th quarter run up. You guys seem to have spent alot more time on this subject than I, so what would you all do?

 

[vrbaba]

whats a good places to research mutual funds?

 

[tw1164]

Couldn't you just invest in a dividend fund?

 

[zendari]

Originally posted by: D22
Interesting read so far...

So if you guys had quite alot of money in the bank and were looking to buy a house around January of 06', what would you put your money in? I am thinking of just investing from Sept - end of the year for a nice 4th quarter run up. You guys seem to have spent alot more time on this subject than I, so what would you all do?

Don't get trapped in the housing bubble

If you need money in January for what is an essential purchase, I don't think our aggressive strategies would be the best idea for you. Remember the rule of thumb: Don't invest money you can't afford to lose.

3 month CD rates

 

[Hector13]

Originally posted by: zendari

Originally posted by: D22
Interesting read so far...

So if you guys had quite alot of money in the bank and were looking to buy a house around January of 06', what would you put your money in? I am thinking of just investing from Sept - end of the year for a nice 4th quarter run up. You guys seem to have spent alot more time on this subject than I, so what would you all do?

Don't get trapped in the housing bubble

If you need money in January for what is an essential purchase, I don't think our aggressive strategies would be the best idea for you. Remember the rule of thumb: Don't invest money you can't afford to lose.

3 month CD rates

Absolutely agree... with a 3 month horizon, I wouldn't consider anything other than a CD... if you are worried about housing prices, you can invest this money in a REIT (look for one that invests mostly in residential properties and in the same general geographic region as where you are looking to buy). This will provide you with a bit of a hedge against rising housing prices (of course you will lose money if housing prices fall, but then again you target house will probably be cheaper as well). Again, though, with such a short horizon, this is probably not worth the effort.

 

[everman]

Originally posted by: D22
Interesting read so far...

So if you guys had quite alot of money in the bank and were looking to buy a house around January of 06', what would you put your money in? I am thinking of just investing from Sept - end of the year for a nice 4th quarter run up. You guys seem to have spent alot more time on this subject than I, so what would you all do?

Either a CD, or a money market fund that invests in tax free securities, depending on your tax situation.

 

[D22]

SH!T! Might as well just leave my money in the Paypal money market then...what a lame return though. You guys are right about the money you can't afford to lose comment, but isn't the 4th quarter historically just money in the bank?

 

[Stunt]

Anyone buy Encana?

Up ~20% in a week...