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David Crosetti
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I was born and raised in California. I worked in the family business for a number of years and then decided to spread my wings and try working for someone else. My first significant job was with Frito Lay. After a stint in the salty snack business, I transitioned to the beverage industry,... More
  • Investing For Success: Having A Plan 58 comments
    Oct 14, 2013 6:26 PM

    In a recent article by author, Regarded Solutions, "Do Not Let Bad Habits Derail Your Retirement," the author makes some very interesting points and food for thought.

    He says that investors might have more success if they can remember to avoid certain behaviors that he calls "habits."

    Regarded Solutions warns against:

    Fear, greed, getting married to a stock, and not taking profits when applicable.

    The commentary was very interesting and seemed to indicate that there were a lot of newer investors visiting the article and leaving their comments. My own thoughts on some of these comments has to do with how so many new investors often have some very simplistic methods and practices when it comes to investing. I wrote a comment of my own and would like to share it here.

    I said:

    Way to many people, from the commentary they share on these threads take a very simplistic approach to investing their money.

    Dividend Growth stocks, obviously have to have "dividend growth" and an accelerated dividend growth rate must mean that the company is a candidate for a purchase.

    Not.

    Other people focus on PE and believe that a particular stock is a buy, because the PE is below 8 (or some other arbitrary number).

    Not.

    Some people believe that a company that pays an 8% or better yield must be something they need to own. I mean, at an 8% yield, look at how that particular stock can increase their portfolio's overall yield point.

    Not.

    It has become somewhat concerning to me about the number of people who invest in the market and who have absolutely no idea how the market works, how to value companies, or even what their short term and long term goals are.

    In much the same way as people in the 70's and 80's were buying real estate, "because it can't lose" were left holding the bag when they thought that real estate (single family homes) would have the same dynamics in the 2000-2013 time period as they did in the 70's and 80's.

    For many people, as you point out, perhaps having a financial advisor might be a very good idea. For those who don't like that idea (a new heresy coming), they might consider Index funds or mutual funds that invest in equities.

    Investing in individual stocks is not a game. It's a job. Especially when you have a portfolio that has reached critical mass (that is 100k or more from my perspective.

    While I don't agonize over my portfolios every day, I do pay attention to them on a regular basis, but my primary activity is looking for stocks that make sense as additions to my own portfolios.

    I have a mission statement for my stock portfolio "business." I have a set of objectives to help me execute that mission statement. I spend a lot of time investigating stock opportunities and look at individual stocks as they might apply toward my mission statement and my objectives.

    That comes with time and experience. It really is a little more complicated than what some people think and those who take the view that stock market investing is "easy" or it's like "finding money in the streets" are in for a very rude awakening.

    Dave

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Comments (58)
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  • slash32is4
    , contributor
    Comments (260) | Send Message
     
    for those that invested in 09 when there wasn't much risk it has been easy... now is when it gets hard...
    14 Oct 2013, 06:35 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » Slash:

     

    It never really has been easy. When you consider the fear that many people had about the market in 2009, a lot of folks were late coming back to the party.

     

    Focus on revenue growth and earnings growth. Let the rest kind of take care of itself.

     

    Dave
    14 Oct 2013, 07:14 PM Reply Like
  • prgette
    , contributor
    Comments (114) | Send Message
     
    Again, thanks for sharing your thoughts. You're one of the authors on Seeeking Alpha that have made an incalculable difference in the (investment) lives of many independent investors.
    14 Oct 2013, 07:30 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » P:

     

    Thanks for saying so! I really appreciate it. I think of myself as Joe Average. Just with a lot of experience (some good/some bad). If I can help anyone be a better investor, then I've served my purpose.

     

    Dave
    14 Oct 2013, 07:48 PM Reply Like
  • Bob Wells
    , contributor
    Comments (7746) | Send Message
     
    Dave

     

    Very nicely said my friend. Like you I believe every investor needs a portfolio business plan spelling out their goals and the criteria under which they both buy and sell. Don't gamble with your future.

     

    Bob
    14 Oct 2013, 08:28 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » Bob:

     

    I look at my retirement portfolio as a business. I really do. While I still have a job, my real job is manager of that portfolio. I am constantly looking for "new employees" in the form of new companies to add to my business and I look to turn revenue and earnings every year.

     

    Don't gamble with the future is right.

     

    Dave
    14 Oct 2013, 09:44 PM Reply Like
  • as10675
    , contributor
    Comments (3535) | Send Message
     
    I believe that having a plan is important and for the last four years most investors could probably follow their plan. Sticking to the plan in hard financial market times is a real challenge.

     

    When the stomach kicks in and the market is heading sharply down most will panic, and a panic results most times in a major sell of the investments.

     

    For a real world example in the 2008 down draft, if you consider my contributions to savings and combined market losses my portfolio lost (delta value) approximately $213,500. All stocks had losses including the "Single Best Investment Stocks".

     

    As an 'investor', what does your plan tell you to do in a sharp market downturn and what will you really do when the event happens?

     

    as10675
    14 Oct 2013, 11:55 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » AS:

     

    Yours is a very good question. The reason that it is a very good question is that I've tried to answer it 4 times and have not had an answer that totally satisfied me. Thank you for asking it, though.

     

    I am a dividend growth investor. I am trying to create an income stream through dividends and plan to use that dividend stream to support me in retirement. The plan does not call for selling shares of my various holdings, but leaving them intact for their being passed along to my survivors.

     

    Now, the other thing is that I have been investing since 1984. My largest holdings are KO (where I worked), PG, CL, KMB, and JNJ. These 5 companies, over the years have gone up in price and down in price, but the dividend income from these companies has always gone up--without any glitches.

     

    A lot of DG investors look at their YOC. I don't. I do look at my stock "cost basis" though. My KO shares have a cost basis of under $2 a share. The other 4 holdings are similar to KO in terms of cost basis.

     

    Now, if I were an investor that was looking for capital gains, selling all 5 of these stocks today might be the best move I could ever make. I would have locked in my profits and I would have a significant amount of money available to me. But, I wouldn't own the income stream anymore unless I go about replacing it with a new batch of companies.

     

    A decline in value is a scary thing for a lot of people. They will sell at the worst time possible. Human nature tells us to run away from danger. But you have to have the confidence to stay the course.

     

    Dave
    15 Oct 2013, 07:24 AM Reply Like
  • Ckent323
    , contributor
    Comments (1272) | Send Message
     
    David,

     

    I resonate with your comments.

     

    I read what some commentators write and wince because there are some that seem to indicate a shallow understanding of the business the company is in let alone what goes into the valuation of the business. Worse I sometimes get the sense some of these folks are not doing any serious research or due diligence but totally or nearly totally leveraging off of what others are doing. Yikes!

     

    Regards,

     

    Craig
    14 Oct 2013, 08:43 PM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    Unless you love spending time with Edgar, you're probably relying on others' work. The problem lies with who you rely on and how much you're willing to take their word for.
    14 Oct 2013, 09:01 PM Reply Like
  • Ckent323
    , contributor
    Comments (1272) | Send Message
     
    User,

     

    By others I meant relying on other commentators (and pundits like Cramer). ;-)

     

    There are plenty of folks (and companies) who sell their analysis, advice and/or tools some of which is worth buying and using (e.g M*, valueline, D4L reports, FASTGraphs and etc).

     

    Regards,

     

    Craig
    14 Oct 2013, 09:51 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » Craig:

     

    Like you, some of the comments just make my skin crawl. I'm not the brightest bulb on the tree, but I know enough that when I need help, I get it.

     

    I can do that in a number of different ways. I could hire help (I have a tax guy and an estate lawyer). I could study the issues more and take the time to learn about something BEFORE I make a mistake.

     

    Once you have been doing this for a while, you realize that you've made every possible mistake that you could have made. When you try to explain what went wrong to someone who has not had the same experience, sometimes it's like talking to a post.

     

    I know that before I understood that I was a DG investor, I used to argue with just about anyone who was a proponent of the strategy. Then one day it occurred to me to just "shut up" and read articles and ponder what was being said. That's when I had my "ah-ha" moment. That's when I realized that I was doing exactly what these DGI's were doing but just didn't realize that we were on the same page. Instead, I had to be critical.

     

    It's kind of like eating sushi for the first time. You're thinking, "this is not a good idea." Then you try one and say, "hey, this isn't bad." Before you know it, you've graduated from California rolls to octopus.

     

    But you have to be open minded.

     

    Dave
    14 Oct 2013, 09:52 PM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    There are varying degrees, the raw earnings numbers on your brockerage's site being at one end and a random SA commentator at the other (probably where Cramer resides too). Where you thing M*, Fast Graphs, Ned Davis... falls is a matter of opinion and degree. I personally have no problem looking at the analysis my broker provides me when considering any security, but I'm happy to let them do some of that work for me.
    14 Oct 2013, 09:55 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » User:

     

    I tend to have a pretty simple approach to investing. I look for companies that are priced at a value to intrinsic worth. That doesn't translate to "the price" but it translates to the potential revenue and earnings potential of a company. The price is somewhat secondary to the process.

     

    I like dividends to be at least 5 years running. I like them to have increased every year and I like them to increase at a rate that is larger than inflation.

     

    Simple.

     

    Now every now and then you come across a company that just stands out and the only metric that it has is value relative to it's future growth potential. A screen tends to give you a list of stocks that meet specific metrics. That doesn't mean that every stock that appears on the screen is a good one.

     

    Where the "rubber meets the road" is when you have to dig into the fundamentals and see what's actually under the hood.

     

    I tend to avoid articles that discuss specific stocks (unless the stock is one I own). So, I don't care much for "Why You Need To Own XYZ!" or "ABC Might Double From Here!" I am more interested in the strategic part of stock analysis and finding value.

     

    Dave
    14 Oct 2013, 09:59 PM Reply Like
  • DAG Investments
    , contributor
    Comments (4132) | Send Message
     
    Very well said, David. Indeed, individuals who buy stocks to jump on the bandwagon they've heard so much about and try to "find money in the streets"; are much better served by index funds, or better yet, financial advisers who decide if index funds are most appropriate. While it's certainly noble to try, unfortunately, it's rarely possible to save people from themselves so it seems that all one can do is offer information and hope that it's put to good use. There are lots of gamblers in the sock market and, as long as they're adults gambling with their own money, I suppose they have as much right to be there as those of us who take a more deliberate approach. Sometimes I just wish we had a separate market for those folks. lol
    14 Oct 2013, 09:28 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » Dag:

     

    I would agree that there is nothing wrong with Index funds for new investors or people starting out. They provide low cost, the opportunity to invest money on a regular basis, and you are buying a basket of stocks (diversification).

     

    For the longest time, I used to be a mutual fund guy. But I found I was spending as much time investigating funds as I did investigating individual stocks.

     

    The other thing about funds, for me, was that I was letting someone else drive the car. That's the reason I don't like roller coasters. There is no steering wheel and I am not in control of the ride.

     

    Dave
    14 Oct 2013, 10:02 PM Reply Like
  • DAG Investments
    , contributor
    Comments (4132) | Send Message
     
    Oh, I completely agree, David. Some of us just aren't cut out to be passengers. I only have a few tiny mut-fund positions laying around somewhere from many years ago, but I doubt I'll ever buy a fund of any type again. I was just referring to the many investors who are unwilling or unable to put in the real work required to invest in individual stocks, which in my humble opinion, is the vast majority. I'm not criticizing those people though ... I can only manage my own portfolios because I'm semi early retired, and much like you described, consider it an actual job.
    14 Oct 2013, 10:23 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » DAG:

     

    I agree with you. Successful investing is not a hobby. It's a job. I spend hours at it every week. Now, I love doing it so I don't look at it the same way that I look at my "real" job.

     

    Dave
    15 Oct 2013, 07:28 AM Reply Like
  • HackFab
    , contributor
    Comments (1277) | Send Message
     
    "For the longest time, I used to be a mutual fund guy. But I found I was spending as much time investigating funds as I did investigating individual stocks."

     

    Yep, me too.

     

    Funny thing, all those mutual funds never produced the $X000.00 (and growing) quarterly income that my dividend pay stocks do.

     

    Thanks for the early morning read!
    16 Oct 2013, 09:01 AM Reply Like
  • gfmn2000
    , contributor
    Comments (944) | Send Message
     
    >>>>new investors often have some very simplistic methods and practices when it comes to investing.<<<...

     

    Dave,

     

    Very true. As an example look up the recent confusion about the Twitter IPO and Tweeter stock symbols. Some folk's research doesn't even include getting the correct symbol.
    14 Oct 2013, 10:18 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » 2000:

     

    Sometimes getting help is a good idea. I started to repair the deck on my house. It's huge. After a couple of hours, it occurred to me that this was going to be one of those 4-6 week projects.

     

    So I called a couple of deck companies, got some bids and hired one of the companies to come out and fix the deck. They came in on Friday and were done Saturday afternoon. All the old planks were gone, the lattice replaced, the deck is done. In two days.

     

    My time is worth more than the price I paid to have the job done right, by guys with the proper tools, the know-how, and the physical stamina to do the job right.

     

    Dave
    15 Oct 2013, 07:34 AM Reply Like
  • dividendbonanza
    , contributor
    Comments (482) | Send Message
     
    Dave,

     

    I wonder if we are seeing more new investors coming around because the market has come so far since March 9, 2009. As is often pointed out, many jump in when the market is hitting highs and then panic when the storm comes.

     

    I too consider this my "business". I am 4+ years from "retiring" from my "real job". Some days I want to change this to 4+ minutes. Anyway, when the time comes, I look forward to having more time to spend with this business. It is work, but it is also enjoyable and rewarding.

     

    I also like spending time with our grandkids getting them grounded in investing. Something about teaching a person to fish.

     

    I know you are an inspiration to many younger readers as they can see your real life experiences and the results of many years of learning and applying what you learn and then sharing freely with others.
    14 Oct 2013, 10:25 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » Div:

     

    I think that there are a lot of people coming to the market because of the growth in the markets. I think that as an investor, days like we've had lately might be good days to look at getting things rebalanced in your own portfolio.

     

    Getting my kids interested in the stock market was a great idea. They aren't as passionate about investing as I am, but they have learned valuable concepts from their involvement in the market with other investments.

     

    My grandfather got me hooked when he gave me as stock certificate for 100 shares of Bank of America back when I was 15 or 16 years old. I put it in a frame and hung it on the wall. He was a dividend guy who supplemented his income from his rental properties with dividends.

     

    He came to America in 1900. He and a couple of buddies opened up a small company making pasta. They called it The Oakland Macaroni Company. They catered to immigrant Italians. He sold his interest in the company when he was 40 years old and then spent the next 45 years of his life, enjoying his life.

     

    Dave
    15 Oct 2013, 07:49 AM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    There are a lot of people coming in because bond yields are atrocious, CDs are paying rounding errors, and if they planned in the 70s, and 80s to retire now, the lack of fixed income vehicles that can preform at levels even a fraction of what they assumed pushes them heavier into stocks.
    15 Oct 2013, 08:28 AM Reply Like
  • maybenot
    , contributor
    Comments (6601) | Send Message
     
    Dave -- thanks for the reminder.

     

    I like this from your comment above:

     

    "Focus on revenue growth and earnings growth. Let the rest kind of take care of itself."

     

    Every time I have veered from that in the past I usually got bit.

     

    Oh sure, payout may be nice, P/E may be wonderful, moat may be a sure thing, and DGR may be sweet.

     

    But -- EPS & Rev better be growing at a nice, steady pace.

     

    Thanks again.
    14 Oct 2013, 11:07 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » May:

     

    We get hung up on things that may or may not be relevant. I mean, there are plenty of companies that you can call up in a screen with PE's below 10. But they have negative revenues and earnings. Are they good investments?

     

    You can call up companies and discover that their debt to equity is "high." But, relative to what? Their industry? The market as a whole?

     

    Each of the components of stock screening that we use are just a point of reference. We need to ask, "what does this metric MEAN, relative to this company?"

     

    I recently purchased a company TAL International (TAL). They lease and sell shipping containers. Their debt load is "high" according to some people. But, look at the business model and their debt begins to make sense.

     

    You can grow earnings without increasing revenue (cutting costs). You can increase revenue and have declining earnings (this is a red flag that needs to be investigated). Or you can be increasing revenues AND increasing earnings (the best of both worlds).

     

    All the other stuff? I'm not so sure.

     

    Dave
    15 Oct 2013, 07:57 AM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    in this market I'm working on the assumption, PE below 8 or yield above 5 (for a c-corp) are signals that the market thinks there is something seriously wrong with a company. That may be wrong, but I'll never understand why people's first filter (be it low PE or high yield) is to include risky companies
    15 Oct 2013, 08:31 AM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » User:

     

    True. When you run a screen with the usual metrics, it does not give you a list of great companies. It just gives you a list of companies that meet the criteria that you have input.

     

    Now the trick is "digging through the dirt" to find your pieces of gold.

     

    Sometimes you have to dig through a lot of dirt before the shiny stuff shows up.

     

    Dave
    15 Oct 2013, 08:55 AM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    my starting point is never a screen. I fall back on the buy what you know as a starting point. I follow that up with looking at financials and analyast reports, and throw most away and move some to a watch list (I've given up buying at the moment and am just accumulating cash and cost averaging into ETFs- If I'm wrong about this being the middle of a bull market, it may cost me some money, but rates are as low as they can go, the fed is propping the market, washington is broken- I'm saying this in a non partisan way, unemployment is atrocious and the rest of the world is faltering too). this approach leaves me light on some sectors, but that's what etfs are for, it also means that I'm not trying to figure out if the FDA will approve a random micro cap's new wart therapy
    15 Oct 2013, 09:02 AM Reply Like
  • OKAY Stocks
    , contributor
    Comments (10) | Send Message
     
    100 % correct
    Like you say : 'That comes with time and experience. It really is a little more complicated than what some people think and those who take the view that stock market investing is "easy" or it's like "finding money in the streets" are in for a very rude awakening.'
    15 Oct 2013, 03:20 PM Reply Like
  • David Crosetti
    , contributor
    Comments (13521) | Send Message
     
    Author’s reply » Stocks:

     

    I think we've all been there at one time or another. Getting burned is a good way to learn a solid lesson. Making money is hard work. If it was easy, then everyone would be rich.

     

    Dave
    15 Oct 2013, 03:22 PM Reply Like
  • Robert Allan Schwartz
    , contributor
    Comments (20697) | Send Message
     
    "Getting burned is a good way to learn a solid lesson."

     

    Making good decisions comes from experience.
    Experience comes from making bad decisions.
    15 Oct 2013, 03:45 PM Reply Like
  • Miz Magic DiviDogs
    , contributor
    Comments (5148) | Send Message
     
    Once you've done the groundwork and picked out your companies, THEN making money is easy -- when you can just sit back and watch the dividends show up like clockwork! :)

     

    If you're reinvesting into good companies, then it's even easier. Like magic, almost. ;>

     

    Miz Magic
    15 Oct 2013, 04:22 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    " you can just sit back and watch the dividends show up like clockwork! :)"

     

    Miz, It's 1:30 PM, Do you know where your dividends are?
    15 Oct 2013, 04:28 PM Reply Like
  • Robert Allan Schwartz
    , contributor
    Comments (20697) | Send Message
     
    "It's 1:30 PM, Do you know where your dividends are?"

     

    In my checking account. They arrived this morning. :-)
    15 Oct 2013, 04:32 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    RAS,

     

    Ameritrade never credits dividends from foreign-based companies or ADRs in the morning. Occasionally it's during the trading session, but most often after the close.
    15 Oct 2013, 04:37 PM Reply Like
  • Miz Magic DiviDogs
    , contributor
    Comments (5148) | Send Message
     
    LOL, G!

     

    Mine usually show up in Scottrade at 12:01 am on the day they're due. It takes another day for the information to show up in my account history, but the money shows up just after the stroke of midnight! :)

     

    Just like magic!

     

    Miz
    15 Oct 2013, 05:00 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Miz,

     

    Ameritrade doesn't keep such a magically precise schedule.

     

    I'm still unhappy with their new web-based upgrade. None of the new features are very exciting, and several of the old ones I use most often either require more keystrokes or aren't working as smoothly as before.

     

    The new site's been up several days and I still can't link to the home page without everything locking up. The options chain window also loses connectivity when I change pages or switch from one account to another.

     

    I'm giving them a few days to work out the kinks. If things don't improve, I'll become a permantly disgruntled customer.
    15 Oct 2013, 05:21 PM Reply Like
  • Miz Magic DiviDogs
    , contributor
    Comments (5148) | Send Message
     
    Ugh, G. Sorry to hear that. :(

     

    So far, Scottrade's upgrades have been seamless. (Probably ought not to say that too loudly.) I only have one quibble with Scottrade lately, and that's because just recently when you go to log in, you can't just hit the Enter key after typing your password, you have to click on the separate login key with your mouse. Can't even tab to it, since the tab is considered a character as part of your password. I wrote to tell them about it, haven't heard back yet.

     

    On the upside, SA has fixed the Portfolios so they don't continuously revert to the News page. Yay!

     

    Miz
    15 Oct 2013, 05:40 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Miz,

     

    I've been with Ameritrade for more than a decade. Their website was truly primitive back then with few tools. It's gotten a lot better over the years, but they'd better not test my loyalty...

     

    It's such a pain to change brokers though. I have all my accounts linked together and have numerous of watch lists set up, I'd have to do that all over again.
    15 Oct 2013, 05:58 PM Reply Like
  • Miz Magic DiviDogs
    , contributor
    Comments (5148) | Send Message
     
    I hear that. I had actually started with Ameritrade back in 1999 and switched over to Scottrade in 2011. I could never get their statements to match my spreadsheets, and couldn't figure out where some extra fees came from and finally gave up. The other thing I like about Scottrade is that they have a local office I can walk into if need be. I've been very happy with Scottrade so far.

     

    Miz
    15 Oct 2013, 06:37 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Miz,

     

    I've never used Scottrade. I've had accounts with E*trade, Schwab, Fidelity, and Discover (yes, Discover had an online brokerage a few years ago).
    15 Oct 2013, 06:51 PM Reply Like
  • Miz Magic DiviDogs
    , contributor
    Comments (5148) | Send Message
     
    That's right, I'd forgotten that Discover had one. So you've just about tried them all except the easiest one. LOL!

     

    By the way, Scottrade fixed the Login problem this afternoon. I'm betting it was a change to accommodate mobile apps and they didn't realize how it affected some of us dinosaurs who still used a keyboard and a mouse! I told them exactly that, too. ;>

     

    Miz
    15 Oct 2013, 10:34 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Miz,

     

    I avoided Scottrade because they didn't have the best reputation for tools or convenience and also were well behind the curve in option-trading (I use calls and puts extensively). On the plus side, they're cheap and have that helicopter...

     

    Anyone have any experience using Interactive Brokers? They seem to get good ratings from Barrons and the like..
    16 Oct 2013, 01:13 PM Reply Like
  • HackFab
    , contributor
    Comments (1277) | Send Message
     
    "I avoided Scottrade because they didn't have the best reputation for tools or convenience and also were well behind the curve in option-trading"

     

    I've got an Options First account through Scottrade. I moved my taxable account there, because when it was a regular Scottrade account, I couldn't sell puts. Covered or naked. It's not the best platform. I particularly hate that I can't download any transaction directly or indirectly into my Quicken account, because trades are cleared through Apex Clearing.

     

    I may move to another brokerage because of that reason, and I've expressed that to the folks at Options First.
    17 Oct 2013, 12:54 AM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Hackfab,

     

    Not being able to sell options is a big nonstarter with me.

     

    I don't use Quicken, but Ameritrade does let you download transactions into Turbotax. It's not the great advantage it might seem however since it doesn't work seamlessly, and also requires a good deal of data massaging afterwards, and that negates any convenience.
    17 Oct 2013, 10:38 AM Reply Like
  • HackFab
    , contributor
    Comments (1277) | Send Message
     
    I can download the year end information into TurboTax from Options First. It's the day to day transactions, etc., that I can't do. I'm a bit anal about my bookkeeping, and I'm not happy with Options First because of that reason.
    17 Oct 2013, 11:48 AM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Hackfab,

     

    I'm anal about my daily transactions as well. That's why I still use the old, tried and true method of keeping my own records in Word files.
    17 Oct 2013, 11:52 AM Reply Like
  • HackFab
    , contributor
    Comments (1277) | Send Message
     
    Not to hijack Dave's article, but the nice thing about Quicken is that I can go back and set the dates and see where I was at the start of the month, and at the end of the month. I can do this for as long as I've had the account set up in the software. AND if the institution automatically updates the account information. Otherwise, I need to do it either daily or on the first and the last day of the month.

     

    At my age that is borderline for asking too much....
    17 Oct 2013, 11:57 AM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Hackfab,

     

    Dave won''t mind if we hijack his blog, especially if you send him some bourbon and one of those fine cigars in your pic...

     

    I hear you about auto updates being a time saver, however, I've yet to be convinced the brokers will do a good job tracking stock basis.

     

    Ameritrade seems to have difficulty figuring out the new adjusted basis after spinoffs, possibly because there are several ways to calculate it per the IRS? I dunno.

     

    Entities that issue K-1s like MLPs are also well beyond the scope of automated basis-figuring. I find it easier to keep my own records.
    17 Oct 2013, 12:41 PM Reply Like
  • HackFab
    , contributor
    Comments (1277) | Send Message
     
    Since the IRS gets the infomation from the brokerage houses the same as we do, I am not one to argue with them. Like Vegas where the house always wins, in most cases, so does the IRS.
    17 Oct 2013, 12:59 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    Hackfab,

     

    You bring up an interesting point. I sold some MLPs last year, and when I downloaded the Ameritrade transactions into turbotax, some entries wound up on the wrong fm 8949. Then when I later downloaded individual MLP data (from taxpackagesupport.com) , I got double entries for the same transaction on fm 8949.

     

    It was a royal pain trying to correct this and get the right info on the right form. The IRS will indeed be on my case if the numbers/totals don't match. I ended up deleting the auto downloads and inputting the data myself.
    17 Oct 2013, 01:18 PM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    the sad thing is, Ameritrade will still end up submitting the wrong numbers to the IRS at the end of the year
    17 Oct 2013, 01:21 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    User,

     

    "Ameritrade will still end up submitting the wrong numbers to the IRS at the end of the year "

     

    Yes, that could well happen, and it's a frightening thought, especially if you get audited don't have the paper trail to prove your case.
    17 Oct 2013, 01:40 PM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    I pay an accountant to do my taxes, it's sleep at night money to me. They refuse to file anything without proper documentation, which usually means me just finding the more 'official' form or receipt. At the end of the day, I'm pretty confident that I have documentation to support everything I file with the IRS. I could just use turbo tax, but I think I'd get lazy with documents and that could come back to bite me.
    17 Oct 2013, 01:56 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    User,

     

    I used to do my own car maintenance, but when cars became too complex, I started using a mechanic.

     

    Doing my own tax return hasn't yet become difficult enough that I need an accountant. The tax code keeps growing in strange and mysterious ways however, and I can see the day when an accountant might be necesssary.
    17 Oct 2013, 02:06 PM Reply Like
  • User 6707651
    , contributor
    Comments (999) | Send Message
     
    My wife has an ownership stake in her company's holding company. That was the point where an accountant became necessary. Less of a 'can I do it' than a 'do I want to deal with it' but the sleep at night aspect is worth it
    17 Oct 2013, 02:09 PM Reply Like
  • Giorgio il Buffone
    , contributor
    Comments (8223) | Send Message
     
    User,

     

    Yep, it's advisable in your situation to hire a professional. It's like me and cars, a man's got to know his limitations.
    17 Oct 2013, 02:14 PM Reply Like
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