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poortorich

poortorich
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  • The Little Book of Sideways Markets: A Profitable Read [View article]
    Rich, as David alluded to, its called trend following or momentum investing. Basically, once a stock clears its 52 week high( in some cases, its all time high), all the weak hands have been shaken off and you have no more resistance. Some of the biggest advances in history were achieved AFTER stocks broke through their highs. Bill O Neil's CANSLIM method is based on this. Many stocks form a base (they are consolidating). Then they form a "handle" then there is usually a slight pull back to shake off weak hands. Then the stock advances to new highs. A very important rule is to always limit your losses by putting a stop loss, typically about 8%. Let your winners run and cut your losers. Does it work Y?es it does because there are plenty of people who've made great amounts of money doing this. But it takes discipline. There are other technical ways to trade including looking at chart patterns, using moving averages, etc.So why am i not doing it? Because I have more satisfaction being a long term "owner" of a business. I don't like "timing" the market. I like timing value. One has to do what one feels comfortable with.
    Jan 21, 2011. 12:41 AM | 2 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    Now. Investing in smaller companies. Thats a totally different matter. If not handled properly, it could be like playing with fire. I would not encourage my kids unless they have a deep desire to learn more about investing.
    Jan 21, 2011. 12:07 AM | 2 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    Oh and one more thing. Having a frugal wife who can serve as a role model to the kids helps alot. One caveat though. My wife doesnt know too much about stocks but ive trained her to know that if I die she should never sell the dividend paying stocks in our portfolio and should live off the dividends.
    Jan 20, 2011. 11:58 PM | 6 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    I actually do have one who is a few months away from being a teenager. She actually has to restrain me from spending too much when we goto the mall. She gets it from her mom who is quite frugal. My wife still cuts out coupon if you can believe that. My almost teenager is at a point where she understands what a simple wonderful company like ko is. She also (i hope) understands that a wonderful companies that pay dividends should never be so bc I have been pounding this in her head since she was young. The analogy I give her is of the goose that lays eggs. I tell her that if you are hungry, eat the eggs but dont ever kill the goose. Im hoping my 4y.o.will gain the same understanding but only time will tell. Who knows. Maybe this will all blow up in my face
    Jan 20, 2011. 11:53 PM | 3 Likes Like |Link to Comment
  • The Little Book of Sideways Markets: A Profitable Read [View article]
    I havent read the book yet but you mentioned sell when a stock reaches fair value target. If capital appreciation is the goal, why not let it ride and put a stop loss. More momentum investors, stocks tend to continue to go even higher after hitting new highs.
    Jan 20, 2011. 06:13 PM | 1 Like Like |Link to Comment
  • Are J&J Recalls Turning Off Consumers? [View article]
    Rich

    I was hoping for a deeper more protracted drop.
    Jan 20, 2011. 05:51 PM | Likes Like |Link to Comment
  • Sweet Dividend Yields Found in the Beverage Industry [View article]
    Hans is quite frankly a cash generating machine. Will likely get bought out by KO. It will go head to head with Red Bull around the world for dominance in the energy drink market.
    Jan 20, 2011. 05:47 PM | 1 Like Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    Its very interesting, informative and useful to read how some of you deal with kids and money.
    Jan 20, 2011. 04:53 PM | 4 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    Tom

    Agreed. I think if you can get them involved in investing at a young age, this will make a huge difference. Let them pick stocks etc. Let them see the money increasing at an early age....this becomes fun. If they can be taught how to analyze companies by looking at financial statements by the time they graduate high school, they will be well ahead of the curve.
    Jan 20, 2011. 04:02 PM | 3 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    YoYo and Smart Widow

    I appreciate your thoughts!
    Jan 20, 2011. 03:30 PM | 5 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    FWIW, digging deeper into the rules, the age the control gets transferred is actually 21 in my situation.
    Jan 20, 2011. 03:01 PM | 4 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]

    Thats where financial education comes in. The value of hard work, living below your means, appreciating the hard work of others, knowing the power of compound interest, learning about how companies make money, emphasizing the need to NEVER sell a great company. I ask my child would you rather buy several big macs with 10 dollars or would you want to be an owner of MCDs etc. Basically, all the things i've learned. It all depends on how you teach your kids and what you don't spoil them with. Of course i could do all of this and the kid may still turn out to be irresponsible. In that case, i guess it wouldn't matter at what age they have control over their money.
    Jan 20, 2011. 02:53 PM | 9 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    GMwright

    Great point. So try to maximize #1 and # 3 from my previous post. The only way to maximize #2 is to get a high paying job, have a rich uncle , win the lottery, sue someone, strike a 20+ bagger or the best way, in my opinion is to use other people's money (become a fund manager) :)
    Jan 20, 2011. 01:29 PM | 3 Likes Like |Link to Comment
  • McDonald's: A Fairly Valued Dividend Champion [View article]
    If you place your bets on companies that derive a signficant amount of earnings from many different countries, you will do well over the next 15-20 years. This is a megatrend that is clearly screaming at us right now.
    Jan 20, 2011. 01:04 PM | 3 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    The 3 factors that determine the growth of your money are
    1) rate of return
    2)how much you put in
    3) time

    If you are young, #3 is your best friend. So the point is start investing in dividend paying stocks when you are young. You will get to the promised land if you start young.
    If you are in your 60's or 70's, this may be more difficult and you may need to rely on #1 and #2 even more since time may not be your friend.
    #1 is something you can control if you educate yourself to be a better investor. The difference between a 7% return and a 12-13% return is substantial.
    Jan 20, 2011. 12:43 PM | 5 Likes Like |Link to Comment
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