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      08-31-2014, 09:41 PM   #2553
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Originally Posted by jasonn View Post

I don't think I have any special skill to have exceeded the Mutual Fund so easily; it's most likely because (1) it's a crazy Bull market and everything is going up and (2) I had actual stock picks which rise in value much more quickly than the 20 or so ETFs/index funds of the Mutual Fund.

Quick questions guys, do you guys trade very frequently? Does trading a lot create a mess for your accountant at the end of the year? Is it really worth it to trade frequently with the trading fees and short term capital gain tax rates? Are you guys just betting really big to make it all worth it? How many stocks are you guys invested in right now for how much capital?
You are essentially buying high beta stocks (stocks with more octane than the overall market). This works until it doesn't, and when it doesn't these stocks pull back HARD

here's the formula for long term investment success: own a basket of high quality companies. At least 20. This is roughly the minimum for diversification. Don't trade them unless you have a thoroughly researched method for doing so.

You can save yourself the trouble of picking those companies by buying an ETF or fund. If it sounds like back to square 1, it is. Trading stocks successfully isn't easy. Use limited capital during your learning process to avoid costly mistakes. Learning process takes many years of consistent study and experience. MANY YEARS. There are no shortcuts. good luck!

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      09-01-2014, 01:00 AM   #2554
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Originally Posted by MrPrena View Post
I think you did okay for transferring your fund to discount brokerage. You will be way ahead, because brokerage account will charge $6-12 per trade. Other junk accounts will charge 1-2.5ish%.

Yes, you are correct on bull market. Right now it is easy money due to heavy increase in MS (QE activities). If we see discount rate goes up, I think dividend stock w/ low beta will be ones to watch.
Even McDonald Cheeseburger went up average of 50% from dollar menu. I think real estate and securities investment(s) should do better than McDonald Cheeseburger increase.

1. I trade as often as once a week? I trade as short as once a year. I usually keep 3-4 stock per holding. I do this for a living (and some other types of investments), and I just cannot miss. In terms of trade, I did about 90% gain ratio. It is not because I am good, but because of this long bull market. I do good during the bear market too, but I do not do as good when dP/dt is near zero.

2. If you know what you are doing, it is worth trading frequently. Even on a short technical trade, I think of it as buying a business. I study harder than buying a small sandwich shop. It is least little more transparent than owning a small business. It is also liquid relative to small business. Only downside from owning private equities or private small buisiness is , there is little to no income. (mainly cap gain, or short term gain).

3. If I am sure, I bet more $. I invested 100% of my available fund on few stocks I was 99.9999% sure. It was DDS, S, AMD in the past. It did all well.
However, I had to get a part time job and increase my etail to get my cash flow going.
It paid off great, but we were living like a bum. Imagine holding decent amount of $ on portfolio, and living like a bum for years. It was hard, but the capital gain was well worth it for me at least.
My advice is not to go too deep. Why bet the farm or ranch even if you are 99% sure.

Cap gain tax isn't too bad, but short term investment income tax sucks.

4. I usually do my own taxes, and it is easier electronically. It can download all the data from your brokerage house, and you can do the rest. If I do it manually, it will take 3 pages of Schedule D-1.

5. Currently, I only hold 3 stocks. I am going to buy some options for other stock I am looking at right now. If you diversify too much, it is actually worse for portfolio (if you search U of MI diversification studies, and I agree). Although I do this full time, but I just can't do full detail analysis on 20 stocks.

6. The capital isn't as important as change in % rate gain relative to change in time. I would rather have $2000 on my account and have an exponentially faster rate of growth than have $20,000,000 and a slow ass rate of gain.
However, having 20mil will be easier by diversifying into different vehicles of investments (such as some fixed incomes, securities, commercial real estate, etc) and less speculative/risk than having 2000 with anticipating huge gain to make money.

7. SBUX, GPRO, and CMG is stocks i do not have, and won't buy near future.
CMG has a good business line. I was eating CMG for lunch since 1997 (since it came to Denver first). I like CMG, because they are fast. That is it.
They are faster than any other quality fast foods. By looking at the PE, you are already paying for 5yr future growth on CMG.

SBUX..... I do like SBUX coffee, but I just don't like the rate of growth on same store sales.

GPRO- I think I WILL BE WRONG on this due to this being a cult stock with huge followers, but they only sell camera and its' accessories.
Thanks MrPrena for outlining your thoughts. Haha, I wasn't sure if you were serious about the 50% gain / McDonalds cheeseburger example until I read further and you mentioned getting a 90% gain. Wow, to be able to shrug off a 50% increase and make it look like a poor result is really something. For me, I'd be extremely pleased with a 10% gain in the stock market. Real estate wise, on my various holdings, I'm looking at between 8-25% annual return on my down payment after debt servicing, without considering the rise in property value. You are certainly in a completely different league. My best performer is half of what you consider to be a poor performance.

If I am distilling your post correctly, it is better to bet big on a few stocks that you are very confident in; once you know what you are doing of course and have thoroughly researched the companies.





Quote:
Originally Posted by Ben2k9 View Post
You are essentially buying high beta stocks (stocks with more octane than the overall market). This works until it doesn't, and when it doesn't these stocks pull back HARD

here's the formula for long term investment success: own a basket of high quality companies. At least 20. This is roughly the minimum for diversification. Don't trade them unless you have a thoroughly researched method for doing so.

You can save yourself the trouble of picking those companies by buying an ETF or fund. If it sounds like back to square 1, it is. Trading stocks successfully isn't easy. Use limited capital during your learning process to avoid costly mistakes. Learning process takes many years of consistent study and experience. MANY YEARS. There are no shortcuts. good luck!

Thank you Ben2k9 for your forewarnings. I have taken them to heart. I don't mind putting all of my designated stock funds in an ETF. I might reserve 5-10% to have some fun. Just wondering, how long do you think this bull market will last?

I am not sure how you ascertained that I was purchasing high beta stocks, but I will have to take another look at those companies. I was careful to purchase companies with, among other factors, low debt, low institutional ownership, increase in earnings each year for 5 years, and a low-ish P/E. Today is the first I have heard of the term "beta", which both you and MrPrena had mentioned, so I appreciate the introduction to a term representing a stock's volatility, a variable, I'm sure among many, that I had not considered previously.
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      09-01-2014, 01:50 AM   #2555
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Sorry for misunderstanding.
I meant 90% as 9/10 trade has been all gains since 2006.
Don't give me too much credit for it during 2007-2009. I had to bag hold few stocks till it was on positive side.

edit to add:
Yeah, Beta is basically a "multiples" of risk volatility.
Depends on which school (Econ or Finance), they will approach you with capm systemetic risk, or basically a scaler multiple of risk respect to change in indices.
For an good example would be if "beta" is 2, and the stock is in S&P500. If S&P500 went up 5% in 1month, you should "expect" the stock to go up 10%. If it went up lower than 2% , it didn't do good.
If S&P500 went up 5% and if your stock went up 8%, you actually did not beat the market.
Here are basic models which some "finance for dummies" classes teaches.
http://quant.stackexchange.com/quest...-line-straight
http://www.fundmanagersoftware.com/h...lculation.html
http://www.fundmanagersoftware.com/h...lculation.html
http://www.finquiz.com/blog/2013/04/...h-derivatives/
http://www.columbia.edu/~ks20/FE-Not...Notes-CAPM.pdf




Quote:
In terms of trade, I did about 90% gain ratio.

Quote:
Originally Posted by jasonn View Post
Thanks MrPrena for outlining your thoughts. Haha, I wasn't sure if you were serious about the 50% gain / McDonalds cheeseburger example until I read further and you mentioned getting a 90% gain. Wow, to be able to shrug off a 50% increase and make it look like a poor result is really something. For me, I'd be extremely pleased with a 10% gain in the stock market. Real estate wise, on my various holdings, I'm looking at between 8-25% annual return on my down payment after debt servicing, without considering the rise in property value. You are certainly in a completely different league. My best performer is half of what you consider to be a poor performance.

If I am distilling your post correctly, it is better to bet big on a few stocks that you are very confident in; once you know what you are doing of course and have thoroughly researched the companies.
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      09-01-2014, 12:21 PM   #2556
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Originally Posted by MrPrena View Post
Sorry for misunderstanding.
I meant 90% as 9/10 trade has been all gains since 2006.
Don't give me too much credit for it during 2007-2009. I had to bag hold few stocks till it was on positive side.

edit to add:
Yeah, Beta is basically a "multiples" of risk volatility.
Depends on which school (Econ or Finance), they will approach you with capm systemetic risk, or basically a scaler multiple of risk respect to change in indices.
For an good example would be if "beta" is 2, and the stock is in S&P500. If S&P500 went up 5% in 1month, you should "expect" the stock to go up 10%. If it went up lower than 2% , it didn't do good.
If S&P500 went up 5% and if your stock went up 8%, you actually did not beat the market.
Here are basic models which some "finance for dummies" classes teaches.
http://quant.stackexchange.com/quest...-line-straight
http://www.fundmanagersoftware.com/h...lculation.html
http://www.fundmanagersoftware.com/h...lculation.html
http://www.finquiz.com/blog/2013/04/...h-derivatives/
http://www.columbia.edu/~ks20/FE-Not...Notes-CAPM.pdf
Thanks again MrPrena; I checked out all of those finance for dummies links and it's gibberish to me currently hahaha.

For your example, the stock increase of 8% technically still did better than the S&P 5%; it's just that for the risk you took, it should have done better right?
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      09-01-2014, 12:29 PM   #2557
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Well, if beta was 1 and S&P500 gain was 5%, 8% gain on one specific stock is consider beating the market.

Well, if beta was 2 and S&P500 gain was 5%, 8% gain on one specific stock is not consider beating the market. You took 2x the risk than the index/indices market. Therefore you should have 2x more gain.



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Originally Posted by jasonn View Post
Thanks again MrPrena; I checked out all of those finance for dummies links and it's gibberish to me currently hahaha.

For your example, the stock increase of 8% technically still did better than the S&P 5%; it's just that for the risk you took, it should have done better right?
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      09-01-2014, 12:39 PM   #2558
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Originally Posted by MrPrena View Post
Well, if beta was 1 and S&P500 gain was 5%, 8% gain on one specific stock is consider beating the market.

Well, if beta was 2 and S&P500 gain was 5%, 8% gain on one specific stock is not consider beating the market. You took 2x the risk than the index/indices market. Therefore you should have 2x more gain.

gotcha,

I just looked at my stocks' betas, they are all below 1 except two which are 1.18 and 1.09. Those are also the only two in the red currently.
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      09-01-2014, 12:42 PM   #2559
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Hey so my next question is if anyone here ever buy stocks based on acquisition announcements.

Like recently:

the Amazon acquisition of Twitch

the Burger King acquisition of Tim Hortons

the potential Activision acquisition of Take-Two

if you do buy, do you typically buy the company that is being acquired? or both? or?

many thanks as always.
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      09-01-2014, 09:44 PM   #2560
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Quote:
Originally Posted by jasonn View Post
Hey so my next question is if anyone here ever buy stocks based on acquisition announcements.

Like recently:

the Amazon acquisition of Twitch

the Burger King acquisition of Tim Hortons

the potential Activision acquisition of Take-Two

if you do buy, do you typically buy the company that is being acquired? or both? or?

many thanks as always.
You buy before the news comes out. Twitch was also never a public company so you couldn't have bought it.
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      09-01-2014, 11:03 PM   #2561
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M&A behaves very similar to Ricardian Trade Model.

MOST of the time, smaller companies who are getting acquired or merged together gains. HOWEVER,,,,,,,,,,,,,,,, when the company pays about < ~28% premium, it is actually not a premium. If you look at M&A or LBOs, it is usually just giving tax premium to the share holders.

CASE EX (again example): You bought TTWO for $5/sr few mo ago, and you want to keep that for a year to just pay the Capital gains tax. Mo after you purchased TTWO, ATVI offered $7/sr. WHen the merger finalize in 5mo (again ex), you only held the stock for ~6month. It means, you have to pay investment income taxes (not cap gain taxes). The premium ATVI gave to shareholder are mainly going to IRS' pocket. You basically didn't make too much $$ as you wanted.



Quote:
Originally Posted by jasonn View Post
Hey so my next question is if anyone here ever buy stocks based on acquisition announcements.

Like recently:

the Amazon acquisition of Twitch

the Burger King acquisition of Tim Hortons

the potential Activision acquisition of Take-Two

if you do buy, do you typically buy the company that is being acquired? or both? or?

many thanks as always.
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      09-03-2014, 02:49 AM   #2562
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Sprint....
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      09-03-2014, 01:45 PM   #2563
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Originally Posted by MrPrena View Post
M&A behaves very similar to Ricardian Trade Model.

MOST of the time, smaller companies who are getting acquired or merged together gains. HOWEVER,,,,,,,,,,,,,,,, when the company pays about < ~28% premium, it is actually not a premium. If you look at M&A or LBOs, it is usually just giving tax premium to the share holders.

CASE EX (again example): You bought TTWO for $5/sr few mo ago, and you want to keep that for a year to just pay the Capital gains tax. Mo after you purchased TTWO, ATVI offered $7/sr. WHen the merger finalize in 5mo (again ex), you only held the stock for ~6month. It means, you have to pay investment income taxes (not cap gain taxes). The premium ATVI gave to shareholder are mainly going to IRS' pocket. You basically didn't make too much $$ as you wanted.
Thank you very much again MrPrena. Very insightful and helpful. Much appreciated.


Quote:
Originally Posted by MrPrena View Post
Sprint....
haha lost a lot on AAPL today...if it drops more --> time to buy?
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      09-03-2014, 02:06 PM   #2564
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AAPL could be entering a downtrend, however with its event this week, this could just be noise.
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      09-04-2014, 03:05 AM   #2565
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I couldn't get in on a price I wanted, but bought AMD on Wed for under 3.80 across all my acct.
122mil shares traded on Thurs up 2.36% on a huge down day.
2.36% gain isn't much, but 122mil traded.... Something is up.

3.91 0.09(2.36%) Jul 31, 4:00PM EDT
Volume: 112,163,796
Avg Vol (3m): 28,437,200
Held AMD for about 35days, and ~11% is all I got...
I need to wait till OCT for this one to move.

http://finance.yahoo.com/q/op?s=AMD&m=2014-10
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      09-04-2014, 02:53 PM   #2566
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Quote:
Originally Posted by MrPrena View Post
Well, if beta was 1 and S&P500 gain was 5%, 8% gain on one specific stock is consider beating the market.

Well, if beta was 2 and S&P500 gain was 5%, 8% gain on one specific stock is not consider beating the market. You took 2x the risk than the index/indices market. Therefore you should have 2x more gain.

A lot more to it than that. For example: what if the R-Squared were .10?

Quote:
Originally Posted by jasonn View Post
gotcha,

I just looked at my stocks' betas, they are all below 1 except two which are 1.18 and 1.09. Those are also the only two in the red currently.
A perfect example of why a beta measurement, by itself, is of little to no significance to the educated investor.
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      09-04-2014, 02:57 PM   #2567
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A lot more to it than that. For example: what if the R-Squared were .10?

A perfect example of why a beta measurement, by itself, is of little to no significance to the educated investor.
NOW, we are talking to real technical trader here.
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      09-11-2014, 01:58 PM   #2568
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Sprint....
Sprint .....
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      09-11-2014, 09:48 PM   #2569
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Have you guys been taking up positions in MSFT? I've been giving you the heads-up for weeks now!
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      09-12-2014, 03:15 PM   #2570
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I knew AMD will see a dip, before pre-earning run up. Just that -2.9% today on no news kinda makes me unhappy. 4% gain in 1mo on AMD during historical bull market is just stupid. Even people who has no idea about stock invested in GPRO, TSLA, and FB made more than I did (comparing only to AMD) Still gonna hold till Mid OCT.

If there is no spike during OCT, AMG for AMD campaign is a bust.

Sprint was another free giveaway from the wall street (just like Twitter purchased before world cup this year).
Of course Iphone6 will support triband.
Of course Sprint will be agressive with pricing after they decided not to go with Acquiring TMUS.




Quote:
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My wife wants a C63AMG. Thankfully she doesn't care if it is non blk ser.
We are calling the AMG campaign a.

AMD for AMG

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      09-12-2014, 03:24 PM   #2571
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Looking for SLV to have a strong flush to the $15s. I'd go long only on a sell-climax. SPX is in a short term downtrend.
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      09-15-2014, 01:15 PM   #2572
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UGH! Anyone else seeing heavy selling in their stocks? The fund managers are selling some of their high growth holdings and taking profits to raise capital for the impending Alibaba IPO on Friday. My Facebook shares have fallen 5% so far today!
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      09-15-2014, 05:09 PM   #2573
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UGH! Anyone else seeing heavy selling in their stocks? The fund managers are selling some of their high growth holdings and taking profits to raise capital for the impending Alibaba IPO on Friday. My Facebook shares have fallen 5% so far today!
I got hit hard with AMZN.

I'm going to pick up some FB when it hits 70/72.

Also Netflix although I haven't determined an entry point for that one yet.

LUV is singlehandly keeping my entire portfolio in the green
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      09-15-2014, 06:07 PM   #2574
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Tech got sold off pretty hard today. Might've been because of the alibaba ipo coming soon.
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