Interesting article here that predicts gold prices will slide while large gains can be made with certain currencies in Asia. They say go heavy on stocks but from developed rather than emerging markets.
Cohen at Goldman Sachs says it’s a bull market. Again. Problem is Cohen is a cheerleader with one outlook for the market – positive. I was shocked when she started urging for caution after Lehman went under.
If you think we’re in a bull market then fine – start buying. But I wouldn’t take Cohen’s word for it.
Interesting article here on Buffet, his travel agent, and how he is more likely to buy US companies than foreign ones right now.
Berkshire’s Class A stock lost 32% in 2008, but the company reported a profit of almost $5 billion. Also with so much of it’s business (2/3) in insurance and utilities it’s not a bad call for uncertain times – if you still trust Buffet after he invested in ConocoPhillips when gas prices were at an all-time high. That cost Berkshire a billion or two.
Stock picks featured on Mad Money don’t live up to the host’s hype. That’s the theme of this Cramer-bashing article.
According the this article, they’re just following the pack:OTHER CAREFUL, HONEST EXAMINATIONS of the CNBC star showed the same underperformance — including several independent studies by finance researchers, and a 2007 review by Barron’s that found the only way to reliably profit from Cramer’s stock picks was to short them (see “Shorting Cramer,” Aug. 20, 2007).
GE is down to under $11. I bought $1000 worth when it was $19 thinking I’d double my money; however, it looks to have backfired on me. I’m confident that it will recover, but it gets quite depressing seeing you kids’ first car fund (about 10 years off) dwindle away. I’m considering dumping another $1K into it.
Answer: Although the CEO says the dividend is safe, and we’re currently looking at 11% or so yield, I think there’s a bit too much risk w/ GE’s financial business. It’s not out of the realm of possibility that GE will need a bailout that will crush shareholders. And given the discount that some stocks are selling at I really think there are much better buys out there.
I think CSCO is a fantastic company that is taking advantage of the recession nicely to build out their business cheaply. They are a global leader in communications which will only become more integral in the upcoming years. They have some serious growth potential and are a safe stock given their phenomenal balance sheet and huge cash flow.
FSLR is has the best solar technology on the market. They have a great balance sheet and will most likely achieve price-parity first. I really think this one is going to the moon and now is a great time to get in.
Lastly, Alcoa (AA) has gotten absolutely crushed thanks to a perfect storm of plunging commodoties prices and a massive drop of in their business. The stock has gotten absolutely pummeled — just check out a 10 year chart. They will be back and if you can wait it out, you should see a phenomenal return on this.
So those are just 3 quick ones that I really like for the long term. In order of most potential, Id rank them as: FSLR, CSCO, AA. In terms of safest, Id rank them CSCO, AA, FSLR.
Question: I was wondering if anyone had any suggestions as to the best online site to use to begin investing. I’m not looking to use a broker but rather make my own decisions and see how I could do because I find myself getting increasingly more interested in the markets and would like to start to get a feel for them. Preferably a site with smaller commissions and an abundance of technical information would be best. Thanks for your input.
Also, I believe RIMM, the company who makes blackberries, is due for a big drop in the near future for more reasons besides the iPhone and wondered if anyone had any input on that.
Answer 1: You just want to buy and sell stock shares? Or do you want to invest in bonds and the money market? Have you ever done it before? Do you have a nice amount of money to play with? If the answer to either of those questions is “no,” I don’t know if you should just dive in.
Do you currently invest in a 401(k), 403(b), or IRA? If so, what about those investments leave you unsatisfied? If you’re just interested in learning and experiencing more about stocks and stock prices, you can find out the holdings in your retirement account and watch those.
If you want to learn by doing, but don’t want to risk anything, you can buy and sell shares of stock with play money at Investopedia.com. It’s a great learning resource.
I am curious what others who invest and follow the market are investing in or liking these days. I will mention a few of my own and would like to hear your ideas.
1) I know it has become a joke but I have Apple. It has been fantastic. I am not buying any more because with the stock price going up as much as it has, it has become too big a portion of my portfolio to add more. I have sold some and of course been sorry. I have never seen a company hitting on all cylinders like that company is. I am holding my shares and occasionally writing covered calls.
2) Devon Energy this is a good oil and gas producer. Of course it has done well with the energy complex but it has the wild card of the potentially enormous discovery in the Gulf. It holds a 25% stake in what might be another Prudoe Bay. Of course we had a thread on this earlier. In any case the big money has been made there although I think there is more. I actually lightened up my energy holdings a few days ago, selling my energy share mutual funds in my IRA.
3) Two financials
a)CSE a beaten down financial. It has not suffered major credit losses but it’s stock price got down to $10 where it was yielding over 20% on it’s dividend. I bought at 10.6 and it is now over $15. The yield is still very good. They announced plans to buy the branches of Fremont Investment and Loan. I know that company from my days in the banking industry. They are high priced deposits but cheaper than repo agreements or other collateralized agreements used and certainly more stable. This is a case where I kind of caught a falling knife, which I don’t recommend but it has worked out.
b) USB a very well run bank out of Portland. They have largely escaped the blood in the financial industry. They have a dividend yield of 5%. I have owned shares for 8 years and bought more today.
We have a complaint about how Disney is trying to maximize profits by making more employees go without health insurance. Ethics aside, is Disney a good investment now?
This article claims that DIS has a wide moat. It’s tough for new competitors to enter the animation market.
I love moats, though as with with Ebay that doesn’t always mean short term success. Disney ought to continue making money (regardless of how well it does cheating employees out of health insurance benefits) but will it outperform the broader market? I’m not counting on it.
MVL stock might see a little boost if Iron Man continues to rake in big bucks. This is the first film financed by Marvel so its relative success has a bigger impact on MVL profits than previous films.
However, a successful Iron Man may already be priced into MVL stock so there’s no saying for sure if the stock will see a sudden jump.
Question:
I’m not an experienced stock trader by any means, but I do follow the markets somewhat. Just want to get some input from those in the know. About 10 or so years ago my father in law bought my wife 100 shares of WalMart at around $50 as an investment. The stock has languished since then – it’s been stuck in the mid-to-high 40s for as long as I can remember. It’s at 48.82 as of 2:43 pm today.
Analysts have long looked down upon its practice of building stores too close to each other and thus cannibalizing each other’s sales, leading to a decline in sales growth in existing stores. In addition, they’ve had to pull out of a few foreign markets for lackluster sales. And there’s the issue of WalMart getting a lot of bad press because of the union and health care issues.
We basically don’t take this stock into account in our financial planning, so I’m thinking that I wouldn’t mind being a little bit risky in trying to take that money out of a languishing stock and making it grow.
Does anyone in the know foresee a turnaround for WalMart stock? Or should I bail and park the money in something like biotech, or in a commercial REIT?
Unprofessional advice:
1. If you’re satisfied with you less than 2% dividend yield then hold on. If not, sell it and gamble on a stock that might grow (or not) or put it into a CD for 5%. Or you can sell it and go to Vegas. I am not a financial advisor, but there is no way anybody here can advise you without doing a review of your financial picture. I would discuss it with a broker or financial planner.
2. The stock has done nothing to warrant any loyalty. It has been underperforming the market since 2002, and underperforming its peers since 2003. The bottom line is all that counts, so sell it and buy something better.
3. I would have sold it a long ago. When a mass retailer gets that big… and has a giant target painted on them from every direction…. imo it’s time to look elswhere.
4. I sold it a while back. It’s actually down from about $67 in 2000. Wish I had dumped it all then. You’ve got a stock that will give you a small capital loss if you sell, and a dividend well below what a money market account would provide. It’s PE is well below what it was in 2000, but the market doesn’t want to value it higher.
I’d beware of REITS given the current real estate woes, but it seems to make sense for you to sell the WMT. It might be worth parking it in a MMF until you get clear signals that real estate is turning back around and then buying a REIT.
5. Short term, it’s a pig. Long term could be very different. Wal-Mart has screwed the pooch recently with their merchadise selections, forgetting who their real customer is. That screw up will be rectified. They have also bailed out of some unprofitable grocery store activities in Europe.
On the other side of the coin, they have the lowest cost, most efficient distribution model in the retail business along with the economies of massive scale and a corporate culture that values hard work and thrift in operating the business.
They have the grocery industry sh!tt!ing in their drawers from coast to coast.
They are getting into banking for their legions of customers who are underserved or not served at all by traditional banks.
Sooner or later the socialists and the unions will realize that they can’t drive Wal-Mart out of business.
And unlike their near-disaster in Europe, their Asian expansion seems to be going very well.
This is a powerhouse operation going through some relatively down times.
It’s tough to make any money churning stocks, but there are times when you just have to say “enough is enough.” Bottom line is that it depends on your patience and tolerance. They could be a high flyer again somewhere down the pike.
6. I just sold mine 2 weeks ago. With only 100 shares, upside is limited. There are many options available– ie one of the energy ETFs, or EMC, a data storage play about to spin off a very hot property, VMWare. Its selling over 19 now, upside range to 25 with the spin off; fundamentals also look good for a longer term investment. Many, many choices for you.
Anyway, I like EMC because of their RSA acquisition, and VMWare’s positioning in the whole server-virtualization market that’s red hot right now, means they’re poised to make a run.
Some will argue it’s too late for EMC. Two months ago, when it was 13-14 would have been the right time.
7. I seriously reccommend investing it all (and more if you have) in SPY or QQQQ….If your not familiar with investing, all they are, are microcosms of the market itself. The SPY is a microcosm of the S&P 500 (Top 500 Stocks) its basically a veryyyyyyyyyyyy small slice of each piled into this one stock the moves with the market….and if your familiar with the market, it avg about 12% increase per year….from last june to this past june, it made 21% so that approx. how much you would have made had you owned this ETF (exchange traded fund its called, but its basically a stock)….The QQQQ is the same thing about 1/3 of the price and is a microcosm of the Down Jones Industrial (again 30 top, blue chip stocks). These are both safe slow upward moving investments you wont have to worry about. GL with your investing.
8. I read a nice article on Garmin GRMN back in Feb saying that GPS was going to be in everything. Bought some at $49. Bought some more a couple weeks ago a $69. It hit $82 today. This stock could be going for a while.
I hate the WalMart stock and have hated it for years. Their low cost model works because they can generate enormous inventory turnover in their big box stores but that only works if they are not cannibalizing their stores. With today’s excess retail space, WalMart is moving to 150,000 sq foot stores which are even more dependent on foot traffic. Personally, and I’m not advocating that you sell, but I believe those bigger stores will ultimately lead to diseconomies of scale as they won’t be able to drive enough traffic through those stores to cover their fixed overhead.
WalMart made the mistake of trying to be a growth stock after their lifecycle passed them by. Opening up new stores is fine when you’re the only game in town, but they are going up against other retailers that have spent years learning how to combat WalMart.
If consumer spending turns down like I expect, WalMart will get crushed by their fixed overhead.
9. I’d sell. This is a company that’s too big to growm much. So either it’s a value play or it’s a sell. The PE is relatively low, and they may have some valuable real estate so you might consider it as a value play. Frankly I don’t bother with that kind of research so I have no idea if its real estate is under valued according to the stock price.
What to do with the money is another question and I’m not sure you sad how many shares we’re talking about. A commercial REIT sounds like a fine idea especially if you need it to diversify. I like having some REITs, precious metals, and other stocks that don’t normally follow the broader market…