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Stock Purchase Philiosophy Everyone's reasons for buying a specific company's stock may be different, than another person's, or they may be the same. It is not anyone's job to demean another's decisions why they think the stock they buy is unwise. That said, I sometimes winder why a specific stock is mentioned that I wouldn't touch with a ten foot pole. A friend of mine uses a paid manager - the 1% fee kind - to manage his seven-figure portfolio. He has little interest in their machinations but he regularly tells me that his account is at all time highs. Today he told me they bought a significant amount of Cintas for his account. I looked at it but it wasn't a company that would even appear on my radar nor would I likely buy it. But I cannot dispute their results. I mention this as a prelude to how I approach buying. Now, I have somewhat an advantage in that I have no spouse or dependents so what I do affects only me. People with dependents may not consider that advantageous but it allows me to take more risk than someone who has to think about other people down the road. I have another advantage in that I have no debt, I have long term care insurance, and unless there is an apocalypse, will never run out of money. In the case of the latter, if there IS an apocalypse I won't be in it alone. So that gives me a lot of leeway in accepting risk in my choices. I am not a trader; occasionally I will buy a small (very small) position in a highly speculative stock and flip it quickly. I did that recently with RBLX. I made a little bit of money and could have made more if I'd waited a few weeks to sell, but I was just happy with the short term gain. But if I buy say, a larger position in a company it's because I have conducted enough research to satisfy me that it has long term potential. I don't really care (much) if the price goes down 10, 15, 25 or 30 percent if the fundamentals of the company haven't changed to cause the drop. Markets will do what markets will do, and I have been around long enough to know I have no control over them as much as would like to think my 200 shares will make a difference. I don't care about charts or RISI or Bollinger bands. Maybe I would do better if I did, but I have no interest in learning about it, or reading about it. All I care about are earnings, competitors, potential government actions, and analyst ratings. WHAT? you say? Analyst ratings? What do they know? Well - a heck of a lot more than I do. It's their job, and they have access to more information than the common investor. They talk to the company executives, have immediate access to news, can analyze historical data much easier than I, and are paid to do the job. Now, I can disagree when some idiot analyst downgrades a company I own (what does he/she know, I know better), or jump for joy when they upgrade one (they are a genius like me!) Not long ago, when the market as a whole had dropped a few percent, some of the companies I have dropped also REGI had lost nearly 50% off it's high from just a couple months earlier. RUN was lower than (unwittingly told that I) purchased it. ZS was below my cost. I held on to LMT. Today each of them (and others) above what I paid - some quite a bit higher. Short term prices do not bother me - nor should they bother anyone else! When CSX fell a bit lower than my original price - I added more. If I'm down a couple hundred bucks on a stock that comprises .005% of the total - so what? A year ago Municipal CEFs were down - by a lot - people were saying how terrible an investment they were, they would never recover, all the states/municipalities were going to default because of COVID, yada yada yada. I kept each and every one and added to some when the dividends built up enough cash. Today the account is at an all time high, articles suggest that muni bonds will do well in a higher tax environment - and the yield across all ten CEFs is just shy of 5% - tax free. Had I listened to doom and gloom on here I might have liquidated the account. But I knew better than to do that. Again, each person's philosophy is different. Whatever works for them - and they are happy with the results, no matter what the timing is - should be celebrated, not castigated. |
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Msg # | Subject | Author | Recs | Date Posted |
34045 | Re: Stock Purchase Philiosophy | MarkfromReston | 1 | 6/13/2021 12:58:06 AM |
34054 | Re: Stock Purchase Philiosophy | bankbuyer | 0 | 6/13/2021 9:57:33 AM |
34069 | Re: Stock Purchase Philiosophy | Palestone | 2 | 6/13/2021 10:40:38 PM |