How Crazy Am I?

[BISCUT]

Ok, so I'm a cop with higher education and entering 13th of 20 year to pension. Looking to hit law school my last 3 years.

I have 120k or so ready to go on about 170k bill depending upon where I go. There are 14 law schools reachable to me from Hartford CT to NJ.

I spend a long time researching investments for the last 4 months and really what a difficult choice the markets are right now (at least for me). Short of it, I made a decision to drop 90k or 11500ish shares of Alcoa (AA). Bought at 7.80 even.

First day, today made $796 YA!!! I'm laughing!! BUT how insane am I??? It sure feels it. All my other investments are in International mutual, S&P 500 Mutual, and stable domestic. These are also long term 10+ and beyond investments. The Alcoa is meant to be growth and is a 1-3year max term.

Wide open for criticism, would like to hear others comments. This is not an issue I'd discuss with friends or co-workers.

 

[TechnoLoGs]

Originally Posted By: BISCUT
Ok, so I'm a cop with higher education and entering 13th of 20 year to pension. Looking to hit law school my last 3 years.

I have 120k or so ready to go on about 170k bill depending upon where I go. There are 14 law schools reachable to me from Hartford CT to NJ.

I spend a long time researching investments for the last 4 months and really what a difficult choice the markets are right now (at least for me). Short of it, I made a decision to drop 90k or 11500ish shares of Alcoa (AA). Bought at 7.80 even.

First day, today made $796 YA!!! I'm laughing!! BUT how insane am I??? It sure feels it. All my other investments are in International mutual, S&P 500 Mutual, and stable domestic. These are also long term 10+ and beyond investments. The Alcoa is meant to be growth and is a 1-3year max term.

Wide open for criticism, would like to hear others comments. This is not an issue I'd discuss with friends or co-workers.


Teach me Master!

I want to follow this pursuit, so to speak. I want to make money.

Legal hustles are ALWAYS good!

 

[dishdude]

Alcoa seems to be majorly undervalued right now, but I would never own that much of one stock, just way too much exposure for me.

 

[oldhp]

You don't need the stock market if you can save 120K in 13yrs on a cops salary.

 

[Kool1]

Law school is something I pursued in my later years. There was one cop and one parole officer in my class. Both decent people and I believe both eventually passed the State Bar according to rumors from others in the class. Unfortunately I did not pass the State Bar and after two trys I gave up. I kept a career partially in the automotive field and am finally retired. I think the key to success is hard work and perseverance. Keep up your determination and you will succeed.

 

[Astro14]

Crazy.

I keep individual stocks to about 5% of portfolio.

You've got 75% in one stock....very high exposure to the risk inherent in one company, and in one sector.

Further, you're 4 years from needing the money...that's short term. Any market downturn and you've got no time to recover those losses.

 

[Dave Hess]

Diversify your money.

Its very tuff for new law school grads with no real world experience.

 

[Falken]

I actually think you are going to do well with it.

The better the developing markets do the more jets they want to purchase, requiring aluminum.

Countries like China will always do better as they have cheap labor and can compete and grow.

 

[gfh77665]

I now go for dividend payers. Check out AMLP. Dividends PLUS diversity PLUS growth.

http://etfs.morningstar.com/quote?t=AMLP

 

[BISCUT]

Thank you for the comments. I realize their is a glut of aluminum out there right now due to massive declines of manufacturing requiring AL since 2008. Alcoa upstream markets have done well and the company has innovated heavily into recycling as well. Downstream, I believe anyway, will pick up with rolled AL orders for defense industry, airline industry, etc... Not many orders for passenger jets have been filled since 2008. Sooner or later these orders will pick up. There are only 3 other serious competitiors to Alcoa and the main one (Chinese) was recently slapped down pretty hard.

Time will tell! I'm staying positive but obviously concerned.

1) Cops in many areas, like here in my area of NY get paid well. I have no complaint about my compensation whatsoever. I knew it going in and the benefits promised are still remaining.

2) Law school is tough no doubt, and I would rather not do criminal at all! But if I had to I could easily make 100k doing 1080B (state paid MUTT attorney as we call it) and it's sure not taxing!

3) My first job was 12 years old on a farm....that was hard work! Set the tome for the rest of my life.

Thanks again for hearing my rants!

 

[99Saturn]

Just my $.02. But why don't you diversify across a list like the DOW 30, perhaps a handful or two. I'm not predicting that the sky is falling on AA or it's going to be the next greatest thing since sliced bread, but you will likely achieve similar results with a handful of companies and cut your risk substantially since your return won't be tied to any one stock.

Look at BAC, C, JPM, CAT, DE, CSCO, HD,INTC, MRK, PFE, T, VZ, UNH, Walmart, CVS, ESRX, SBUX, BRK.B...

You'll trim your risk with some assortment of the above and (likely) have similar results - not professing any one of the above is the best or worst.

 

[The_Jeff]

There's more aluminum in cars now. Boss' dodge truck has aluminum lower control arms, and they have "Alcoa" cast right into them.

 

[bradepb]

Originally Posted By: Astro14
Crazy.

I keep individual stocks to about 5% of portfolio.

You've got 75% in one stock....very high exposure to the risk inherent in one company, and in one sector.

Further, you're 4 years from needing the money...that's short term. Any market downturn and you've got no time to recover those losses.


This. Any financial planner will tell you that's way to much percentage wise in one investment. Think of Enron, GM etc. you could lose most everything!

 

[Schmoe]

I was going to say....that's a lot of cash in one pot. I'd diversify more. I know, you hate watching the stocks go up and your not racking in the bucks, but patient investors all know that's how it goes. Hindsight is always 20/20, however, that is really low for Alcoa. They have been historically strong and may take off like a bat out of _ell here pretty soon. With the Fed's playing the market like a yo-yo with we're going to pull out soon, or we're not pulling out soon, there's is no way to "feel" how the markets will move. I think we've jumped to quick, too soon and a correction is coming. thought that happened last week, but the market has been full of surprises as of late. Unprecedented I'd say at the least, hence, the more spookier I feel about the whold stock market situation. Just one piece of bad news...BAM...stocks go down.
Don't know your age, but a lawyer later on life? Hate to say it, but I know a bunch of lawyers that aren't making close to what I make as a humble (about to be furloughed) federal government employee.....

 

[BISCUT]

Originally Posted By: 99Saturn
Just my $.02. But why don't you diversify across a list like the DOW 30, perhaps a handful or two. I'm not predicting that the sky is falling on AA or it's going to be the next greatest thing since sliced bread, but you will likely achieve similar results with a handful of companies and cut your risk substantially since your return won't be tied to any one stock.

Look at BAC, C, JPM, CAT, DE, CSCO, HD,INTC, MRK, PFE, T, VZ, UNH, Walmart, CVS, ESRX, SBUX, BRK.B...

You'll trim your risk with some assortment of the above and (likely) have similar results - not professing any one of the above is the best or worst.


Excellent advice; my retirement funds are well diversified and spread throughout various sectors. I do balance every january as well. I will look into some of the above tickers though.

 

[BISCUT]

Originally Posted By: bradepb
Originally Posted By: Astro14
Crazy.

I keep individual stocks to about 5% of portfolio.

You've got 75% in one stock....very high exposure to the risk inherent in one company, and in one sector.

Further, you're 4 years from needing the money...that's short term. Any market downturn and you've got no time to recover those losses.


This. Any financial planner will tell you that's way to much percentage wise in one investment. Think of Enron, GM etc. you could lose most everything!


Enron and GM in fact were 2 companies that crossed my mind heavily. Enron is completely different situation than Alcoa. My BIGGEST fear with Alcoa was their albatross that is unionized labor. That is why GM historically was a useless stock. Chinese competitor swooping into Brasil especially does concern me in an upsweep. But I still feel Alcoa can get through that as their quality is, at least at this point, excellent.

 

[BISCUT]

Originally Posted By: Schmoe
I was going to say....that's a lot of cash in one pot. I'd diversify more. I know, you hate watching the stocks go up and your not racking in the bucks, but patient investors all know that's how it goes. Hindsight is always 20/20, however, that is really low for Alcoa. They have been historically strong and may take off like a bat out of _ell here pretty soon. With the Fed's playing the market like a yo-yo with we're going to pull out soon, or we're not pulling out soon, there's is no way to "feel" how the markets will move. I think we've jumped to quick, too soon and a correction is coming. thought that happened last week, but the market has been full of surprises as of late. Unprecedented I'd say at the least, hence, the more spookier I feel about the whold stock market situation. Just one piece of bad news...BAM...stocks go down.
Don't know your age, but a lawyer later on life? Hate to say it, but I know a bunch of lawyers that aren't making close to what I make as a humble (about to be furloughed) federal government employee.....


I will be retired at 47. decent pension, NO medical costs for entire family. I have many friends, my best friend for instance, who are attorneys. If I cant swing a decent firm, and there are lots within reahc of me (White Plains/NYC) I don't have to make 250k a year to be financially stable. My friend does! Overhead is big for him abd he has to take care of his parents as well.

There is also the fact that I am very much a worker and lawyer is a skill you can use on a part time basis into your 70's with ease. I couldn't very much sit around and do nothing.

 

[Vikas]

OK, I going to be a [censored] but how does a cop retire at 47?

 

[dishdude]

Originally Posted By: Vikas
OK, I going to be a [censored] but how does a cop retire at 47?


They put their 20 years in, retire and then get another job while collecting their pension.

 

[BISCUT]

Originally Posted By: dishdude
Originally Posted By: Vikas
OK, I going to be a [censored] but how does a cop retire at 47?


They put their 20 years in, retire and then get another job while collecting their pension.


Bingo...except NY broke so new cops, outside NYC retire 22 years and NYC I believe is 23 years.