Stock advice
- Thread starter measureman
- Start date
- Status
The 4% rule is,
Your holdings in any one stock should not exceed 4% of your total investment assets. So if you have a $100k portfolio, only $4000 should be in one stock.
I’ve gone over before and there are other factors too. If you work for the company you may be encouraged to hold more.
The idea is to not have all your eggs in one basket. You never know what the future brings and we’ve just had a good example of that in the last several months.
Employees of CNBC held large amounts of GE which is their partner in the organization. GE was well diversified and a huge company. All was good until it wasn’t. This chart tells the story. Click on ALL.
https://www.cnbc.com/quotes/?symbol=GE
Hah! I can agree. HLX decided to issue senior notes. Woot. Took a 10% plummet overnight. I dont believe in all that "macd" and "cup and handle" BS, but a lot of people were bemoaning that a perfect plotted cup and handle got reversed by this. I never bought into the tea leaves deal, as stuff trades on feelings not random patterns, etc. Imo, but a lot of people were shocked.
Ok I definitely do not follow the 4% rule. I stay very focused on 5-10 companies on a 40 company watch list day trade mostly. I only day trade medium to low risk companies that i would be happy holding long. In the time i was typing this i just got a dip on holly frontier for example. It will probably resell today or tomorrow for like $200 gain.
- Joined
- Feb 27, 2019
- Messages
- 631
Investing is an art as much as a science, but the majority of people investing who do not have any financial education are really doing not much more than gambling.
The average "investor" does this:
- Compares the current stock price against its 52-week high.
- Looks at the actual price per share without any regard to market cap or EPS (e.g. concluding Apple at $450 is a better/cheaper/smarter buy than Google at $1,500 because it's a third of the price)
Now that investing has become more accessible through low cost platforms, the FOMO crowd (average people who know very little) have pushed common stocks far beyond any feasible valuation, so much that value investing is almost impossible anymore. Everyone pretty much now just buys the rumour and hopes to exit before the stock crashes off a cliff. Its also a reason why short positions held have been higher than ever before.
Quite frankly, if you don't have a professional financial background you really have no business forming an opinion on a company's financial statements. A few youtube videos or audiobooks are not substitutes either.
It will be a very interesting future.
The average "investor" does this:
- Compares the current stock price against its 52-week high.
- Looks at the actual price per share without any regard to market cap or EPS (e.g. concluding Apple at $450 is a better/cheaper/smarter buy than Google at $1,500 because it's a third of the price)
Now that investing has become more accessible through low cost platforms, the FOMO crowd (average people who know very little) have pushed common stocks far beyond any feasible valuation, so much that value investing is almost impossible anymore. Everyone pretty much now just buys the rumour and hopes to exit before the stock crashes off a cliff. Its also a reason why short positions held have been higher than ever before.
Quite frankly, if you don't have a professional financial background you really have no business forming an opinion on a company's financial statements. A few youtube videos or audiobooks are not substitutes either.
It will be a very interesting future.
Quote:
” Quite frankly, if you don't have a professional financial background you really have no business forming an opinion on a company's financial statements. “
Lots of companies have fluffed their financial statements and 10-K reports. How much fudging takes place every quarter to meet their earnings expectations from Wall Street ?
That reminds me of CEO Albert Dunlap.... aka Rambo in Pinstripes. Every company he ran into the ground with zero care of the employees loosing their jobs and company going bankrupt.
https://en.wikipedia.org/wiki/Albert_J._Dunlap
I agree the average investor just stick to basic ETFs for the long run. But a little bit of well thought out risk taking does pay off (no pun intended). Some say it’s trying to time the market..... others call it speculation. I call it the “voices” in my head telling me when to buy / sell. I’m no professional, just using some common sense.
” Quite frankly, if you don't have a professional financial background you really have no business forming an opinion on a company's financial statements. “
Lots of companies have fluffed their financial statements and 10-K reports. How much fudging takes place every quarter to meet their earnings expectations from Wall Street ?
That reminds me of CEO Albert Dunlap.... aka Rambo in Pinstripes. Every company he ran into the ground with zero care of the employees loosing their jobs and company going bankrupt.
https://en.wikipedia.org/wiki/Albert_J._Dunlap
I agree the average investor just stick to basic ETFs for the long run. But a little bit of well thought out risk taking does pay off (no pun intended). Some say it’s trying to time the market..... others call it speculation. I call it the “voices” in my head telling me when to buy / sell. I’m no professional, just using some common sense.
Last edited:
I thought the 4% rule was that you could retire and never run out of money if you don't withdraw more than 4% of your money each year.
I've got to keep my mouth shut. Been killing it these last few years just by being in mutual funds. I suppose it could have been much better if I had picked some stocks. Or worse. Happy where I'm at now though, this year was a real nail-biter
Yes, that's another 4% rule.
"One frequently used rule of thumb for retirement spending is known as the 4% rule. It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation."
In times of inflation, the 4% retirement rule may not be a good strategy.
My NAK stock as of today.
5 year up 437 %
1 year up 146 %
3 months up 78 %
1 week up 18 %
1 day up 14 %
I think I'm good here.
5 year up 437 %
1 year up 146 %
3 months up 78 %
1 week up 18 %
1 day up 14 %
I think I'm good here.
- Joined
- Feb 27, 2019
- Messages
- 631
Easy to cherry pick peaks. If you bought it in Feb 2017 you'd never have recovered your money.
You started this thread in late July.
The majority of the gains above aren’t yours. You’re up for a few weeks, and you have yet to realize any actual gain.
You’re far from good.
Yeah, looking at the peaks verses when it was purchased is different.
OT: I do believe after the election the market will take another hit....
- Joined
- Feb 27, 2019
- Messages
- 631
As long as Trump gets elected we'll be fine. Which he will be.
I first bought this stock in Dec 2016.
And have bought a lot at under a $1.00 so I'm averaged out at $1.07.
As of today I'm up I'm up $859.00 total to date.
But my question has always been what others think of the stock,not my investment strategy.
And have bought a lot at under a $1.00 so I'm averaged out at $1.07.
As of today I'm up I'm up $859.00 total to date.
But my question has always been what others think of the stock,not my investment strategy.
It's a dog.
Without more details, it's hard to even say if you beat the S&P 500. From December 2016 to about now, it's up over 40%.
If you had gone into one of the core main stocks out there, Facebook, Apple, Amazon, Microsoft, Google, you might have done much better.
Your stock selections are an inextricable part of your strategy. So, comments on your strategy are germane.
I’m glad you’ve made money, but honestly, $800?
In three plus years?
That humming nose we hear is Jack Bogle spinning at 6000 rpm, close to redlining
Yep. Saint Jack.
“Common Sense on Mutual Funds” opened my eyes about thirty years ago.
Now, $800 is “noise” in daily market fluctuation. I wouldn’t even notice a change of $800. Even 100 times amount that is still just minor market variation in a portfolio consisting, primarily, of low cost mutual funds, including some with Vanguard.
Thank you Mr. Bogle.
Very well said.
I also tend to not notice the “noise” in the market. Being widely diversified has its benefits. A lot of people brag about their huge gains but those same people are very quiet when the markets reverse course. As for me, I sleep well at night.
- Status
Similar threads
