cwd Posted February 22, 2005 Report Share Posted February 22, 2005 I'll never offer investment advice to friends again. One of my good windsurfing friends from San Diego is a trust fund kid. Back in 2000 when the market was crashing, I told him he should sell some of his stocks and get into cash. By far, his biggest holding was Sempra Energy, the San Diego utility stock.? He inherited a huge block of this stock from his grandmother. At the time, it was trading at $16 a share, and the company was yielding 5.5%, but they cut their dividend. I told him it was extremely dangerous to have such a high percentage of his holdings in one stock. He said he would never sell any of it, because he had a zero cost basis in the stock and did not want to pay the taxes.? Also, the dividend stream alone, which paid him about $80,000 a year, was sufficient to live on, and he didn't have to touch the dividends from his other stocks (IBM, BMY, SBC, CVX). Luckily, he held the stock. Its more than doubled since then, and he's gained an extra $2.1 million in his net worth......... FWIW.... A friend has only one stock in his portfolio - XOM paid for his two kids education with it and then some... <{POST_SNAPBACK}> According to Prof Shiller 1000d invested in Standard oil of NJ now xom with dividends invested had grown to 1.3 mil at the end of 03. I know several families who have retired on xom and now their kids are finishing it off. <{POST_SNAPBACK}> Make the beginning time 1950 Link to comment Share on other sites More sharing options...
Pee Brain Posted February 22, 2005 Report Share Posted February 22, 2005 I'll never offer investment advice to friends again. One of my good windsurfing friends from San Diego is a trust fund kid. Back in 2000 when the market was crashing, I told him he should sell some of his stocks and get into cash. By far, his biggest holding was Sempra Energy, the San Diego utility stock.? He inherited a huge block of this stock from his grandmother. At the time, it was trading at $16 a share, and the company was yielding 5.5%, but they cut their dividend. I told him it was extremely dangerous to have such a high percentage of his holdings in one stock. He said he would never sell any of it, because he had a zero cost basis in the stock and did not want to pay the taxes.? Also, the dividend stream alone, which paid him about $80,000 a year, was sufficient to live on, and he didn't have to touch the dividends from his other stocks (IBM, BMY, SBC, CVX). Luckily, he held the stock. Its more than doubled since then, and he's gained an extra $2.1 million in his net worth......... FWIW.... A friend has only one stock in his portfolio - XOM paid for his two kids education with it and then some... <{POST_SNAPBACK}> holding only one stock in a portfolio is crazy.... what if it had been enron? or BMY, PFE, etc.... Link to comment Share on other sites More sharing options...
alceringa Posted February 22, 2005 Report Share Posted February 22, 2005 As a young, single woman, my mother in law decided to invest in shares (Circa 1950). She started buying Broken Hill Proprietary (BHP) as it was called back then, adding a few shares every couple of months, year after year, always reinvested dividends and NEVER sold any. Through marriage and raising 5 children, anytime she could save a little money she would just buy a couple more shares. Today, 50+years later, she's got just over a million shares, (ASX issues, not the ADR's.) Only stock she has ever owned and now the dividends are funding her retirement. She always resisted any temptation to take profits, no matter what else happened in her life or at the company. Guess that shows if you're stubborn enough for long enough, you too can win! Link to comment Share on other sites More sharing options...
beardrech Posted February 22, 2005 Report Share Posted February 22, 2005 If any stoolie has not familiarised himself with the possible consequences of a world-wide outbreak of Avian Flue, let him go to the Drudge report now, and then come back and hold my hand as I begin my hourly supplications-- The careening vehicle,Globalization, brakeless,bald tired, and nausea inducing,has,along with the cornucopia of unlimited beneficial imports, attracted a wonderfully diversified buffet of variegated diseases-- The estimated kill,according to the report, if,if it approximates the 1918 flue epidemic, is 180 million dead--did you hear?--180 million world wide; and still we point with pride to our porous borders where, who knows what delicate strains of rosaceous Ebola and industriasl strength tuberculosis are gaining headway. I'm begginning to feel as if I live in an area and nation designed by a grade B Hollywood set designer-- beardrech I got a message the other day:: it read as follows::GOD TO EARTH GOD TO EARTH;TESTING; TESTING TESTING TESTING Link to comment Share on other sites More sharing options...
FeedFool Posted February 22, 2005 Report Share Posted February 22, 2005 Silky_Xlax What we now have is developing nation are able to produce toilet paper at an alarming rate, Speculators are busy attacking dollar and buying developing nation toilet paper, this fundamental change in speculating community has rippling affect. Developing nations are on fast track to prosperity. It is this fuel that is going to help everyone including America. Also keeping up with the Jones mentality is spreading. Population is lot bigger in developing nations not in the western world. Given time inflation is going to eat up those high P/E into low P/E stuff. It all changed in 2002 when fed decided they wanted inflation also commodity cycles kicked in which normally last at least 15 years. I don?t know if you want to waste your time shorting?? Commodity bubble has a long way to go. Since 1929 each recessions has got milder also any drop in indexes will be milder from now on. http://www.capitalstool.com/forums/uploads...-1069628314.gif Silky_Xlax I can?t see how we can get new low. It also means somehow indexes have to spend more time in consolidation mode. Best to look what happen after each crash, I have 2 scenarios for now. It?s best to modify as we move forward and things should get clear as we progress. Meanwhile Commodities will be heading up. Feed, Eventually, I believe, that valuations will prevail. Generally speaking, P/E have reached below 10 before a long-term Secular bear market has ended, say in 1932, 1974, 1982. Not this time - there has been no "Fear And Loathing" of the market. As for prices moving lower - certainly Dow can drop repeatedly. For example in 66-82 bear market, sure, there were spectacular rallies, affording many oppurtunities to make good coin going long. But, at the same time, the Dow lost 1966 = -27% 1969 = -37% 1973-74 = -47% 1976 = -28% So, the market can drop again and again and again.... Also, take a real long view of the action, in E-wave terms. If the drop from 00-02 was A, then, this move from 02 lows is part of B. But, B-wave cannot be 5 part, where as this move clearly is 5 part movement (from Oct-02 lows). Hence, this must be (a) of B. So, not only is a drop of of B pending, but the major C wave is out there somewhere, which could well produce a major low around 4900-5000 in Dow. The problem with E-Wave bears like Prechter is that he expects the crash of (5) of C to occur soon - before he dies of old age. But, it can well occur in 2010 or even 2014. As for this rally off Oct-02 lows, it is clearly 5 wave. By normal calculations, there is a pending target of 1242 - 1260 on SPX remaining - but NOT if this (v) of 5 failure. The distribution pattern in COMP (9 solid distribution days in 6 weeks) and the fact that Dow (a haven of perceived safety) is outperforming COMP, NDX and RUT strongly point to (v) of 5 completion. Lets see - we'll know in a week or so whether SPX breaks above 1218 or drops... <{POST_SNAPBACK}> Link to comment Share on other sites More sharing options...
Jimbo Posted February 22, 2005 Report Share Posted February 22, 2005 STUPIDITY CENTRAL - THE AMAZING CSCO THEFT MACHINE Well, this company has never generated one cent for its shareholders. Allthe cash flow was used to buy back the shares that were diluted by granting options to insiders. It is a surprise that it still trades at 110+B cap. Poor CSCO shareholders and those S&P index fund holders who passively hold this one. To be a CSCO shareholder is to be one of the dumbest animals on planet earth. They deserve all they get. The only value CSCO has as an investment is the potential that their option plan for employees will be canned. Pays no dividend - all the free cash flow goes to the employees. All the value of CSCO as a BUSINESS belongs to the employees NOT the shareholders. The shareholders are gradually realising this - or at least the smartest ones are. The only way it will stop is when the share price gets so low that the Board will insist that the option plan be scaled back and that dividends start being paid, thus restoring some belated and small value to CSCO shares. The funny thing is that in order for VALUE to be restored to CSCO shares the share PRICE has to fall enough to make the Baord act. This is where the fiendish mechanism is so clever - all the free cash flow goes to buy back shares isued to employees thus supporting the share price and thus delaying the day when the share option plan gets canned - a simple but fiendishly clever piece of financial engineering. The key here is understanding the vast VALUE/PRICE gap at the heart of the CSCO conundrum. Ie VALUE OF A CSCO SHARE IS ZERO - ie there is no future cash flow going to existing and continueing shareholders of CSCO. All the free cash flow goes to those shareholders who SELL CSCO shares - eg the employees cashing in ther options loot for shares and then selling the shares ASAP. Only intelligent thing is TO FOLLOW THE MONEY - which is to SELL CSCO shares. PRICE $17 and falling towards zero. The value/price gap is closing inexorborably. Dont know if Chambers will survive - expect he will get the boot. Quite kharmickly funny if you ask me. Link to comment Share on other sites More sharing options...
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