What is your current investment strategy?
Does not seem to be a good time to hold cash with interest rates dropping. Munis about the best to look at now in that regard. Have done some selective stock market buys after recent drops (BA) but not a great amount.
Was discussing this with DW, I said maybe I should ‘invest’ in a few more tools like a telehandler and big track hoe. She pretty much nixed that idea as they would only be ‘toys’ vs put to business use as I’m only DIY. She wondered what 3 big boxes were that came last week – 60 or so 289″ sanding belts that I have not built a sander for yet, oh well…. <G>
DW’s biggest fear is for me to die in a plane crash or heart attack and what would she do with all the junk.
Commodities are probably near a peak, so not a good idea with that.
If I was in Boss Hog’s IL area or northtern ND I’d likely buy some farmland although that has increased dramatically also.
So, what’cha doing with any extra assets these days?
–besides sending a few checks to BT’ers????
Replies
If I get some, I'll let you know.
Bob's next test date: 12/10/07
Junkhound
you don't give enough info for someone to give a good answer. It sounds like you are asking not what to invest in but what to do with extra cash?
Do you have all credit cards, car loans paid off, boat etc?
Do you have some cash ( 3+ months of income) set aside for the what if, I get hurt and wind up in the hospital for a week and can't work for a month?
Do you have a ira set up or sep or is your 401 fully funded?
Do you need or have a term life policy?
Is your house paid for?
Beyond that where you put it is how it is invested (ex you have an ira do you buy stock or mutual funds?)
A back hoe is not an investment unless you use it almost daily to generate income, lay sewer lines, move gain to feed the milk cows so you increase production.
If everything above is cared for I would go for mutual funds, or buy land in a increasing market one that has bottomed out. But in the long haul a fund that has a 10 year record of 10% + gains will do you best. Remember retirement account are where to shelter money still need to invest it some where.
Wallyo
"Do you have all credit cards, car loans paid off, boat etc?"Do you know Junkhound?
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I think that maybe a good etf tied to S&P 500 would work again.
It appears that the market may have hit it's low.
here's my uninformed theory
inflation will screw ALL savers and MOST investors
so ... if you have a guaranteed ability to service a loan borrow at low interest rates against your assets
then buy more assets
assets will increase with the rate of inflation or better
make sure they are not in areas subject to general economy malaise
ie: buy things that the wealthy consumer will always want, that are becomming scarcer... like waterfront & waterview property
even in economic downturns, special assets retain their value and increase in value faster than the general rat of inflation
watch out for loan instruments and institutions that can call the loan, so you don't have to have a forced sale in a down market
also look into uranium & gold...... green may be the latest & greatest, but the only thing that will solve our energy needs is nuclearMike Smith Rhode Island : Design / Build / Repair / Restore
Most all of that great thoughts
I'd adjust the part on uranium. As a commodity it will go up, but not as the sole solution for America's energy needs.
Reson is that we have to compete against china to buy it and keep bidding the price up. America does not have enough for itself.
But Coal is something we have scads of, enough fopr over 200 years, and we can export it to china also, benefiting both out energy needs and cash flow.
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I agree about the coal, with little addition, find a way to use it without causing acid rain. This has become a large problem in the Adirondeck moun., which is less than 35 miles from me.
I've got the solution.Catch the rain. Filter the acid out. Put the acid in a bottle and sell it to brick cleaners. Bob's next test date: 12/10/07
we have lakes full of it around here. Got a big filter?
coal is not the only source of that problem, but the fact is, that they do now have the technology to burn coal clean. Most of the emissions problems are in old systems.
Coal is responsible for the generation of about 53-54% of America's electricity today, but that is a growing share, and they an not build new plants without burning clean. 'course what we sell to china does get used i the old dirty ways.
where I see a geater obstacle to coal - other than its image - is htat as they begin employing more CTL to provide coal oil for deisel in transportation, they need to use a lot of water, another resource that is seeing limited supply now.
Lessee, do I heat my home, or irrigate my food supply....????
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I guess that would mean a resurgance in pop. of NE states. Yesany of the states along the great lakes. After all with all the snow we get, we have plenty of good clean water!
"But Coal is something we have scads of, enough fopr over 200 years, and we can export it to china also, benefiting both out energy needs and cash flow."
How much do you know about that ?
I dont know enough but I know a little .
I know Ar has a coal fired plant . I know we were the suspected home of another one. The residents fought it hard.
I dont know where the coal is comming from now but I know we have a bunch of it in Ar.
When I was young coal was a big deal. Before that it was bigger. All of the towns here were coal mining towns . We even have a town here called Coal Hill. Its in our county. In our county we have a bunch of small townships that have coal as their primary history. Lots of old folks here got paid black lung benifits. We still have the evidence of our coal history in forms of strip mines and dug ones that tunnel. Goverment has spent a huge amount of money to recover the land . [take it back to before] I think they now make companies do it from the cost of the coal operation. That made us quit doing it . Shut us down entirely but I know we still have coal. Its very costly to recover the land but its pretty easy to get the coal . It wrecks the land or did ours. Ruins it for any other use .
Im ignorant about whats done now since we dont do it here anymore.
Tim
Edited 4/14/2008 1:08 pm by Mooney
What do I know?Not that much personally, but I read a lot from investment articles, then when I find interesting concepts, I do further research on my own before buying and sign up for push info also.I also lived not far from a coal plant in CO. They made electricity there from coal out of the strip mine. Moving across the landscape by degrees, the process was to take the topsoil off and use it for recovery on the section just previously worked out, then strip the coal taking it directly to the burn stockpile in trucks. Machinery handled the coal so no need for black lung such as is common underground in soft rock.The recovered land looked like a park, seeded, planed, irrigated....
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What do you think about Simpson Manufacturing? (SSD). The Housing market crash is old news, so you could make the argument that's priced in by now.
One big hurricane or EQ and It'll be on everyone's radar.
k
I think good of it. They make money in a poor market so profits will grow quite well when their customers come back. They also have the Simpson Duravent and a couple fireplace/wood stove lines so they benefit from higher energy while people install more wood stoves.The PE is a a little high if that counts with you, but the price is adjusting back down, so there may be a good buy time soon if you see housing coming back soon. On the plus side, they have essentially no debt and a practically locked market monopoly on what they sell giving them a broad moat.I own some and will buy more when I am convinced the housing is ready to turn around. Same thing on timber stocks. i'm waiting and maybe the market will treat me to a deal.
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theres always BRK - A
or B.
"What's an Arkansas flush?......It's a small revolver and any five cards."
got both...
i wish i had parked the whole thing in A & B
with folio i can buy $2 worth or $2000 worth or $200,000 worth
Mike Smith Rhode Island : Design / Build / Repair / Restore
build a shed?
"If I was in Boss Hog's IL area or northtern ND I'd likely buy some farmland although that has increased dramatically also. "
I sure wouldn't. A couple of years ago you could buy prime farm land for $3,000 an acre. High crop prices have everyone scrambling to buy it, and prices have basically doubled. There's talk of prime stuff going for $8,000 an acre.
That's great as long as crop prices stay up. But what goes up must come down. I figure that's gonna be true of both land prices and grain prices.
Thanks for the update. Thought that getting onto 4k was high, had not looked for a few months, went thru the 4K level pretty quick!.
This is sooo much of a personal situation.
Most of us at your age are stuffing the 401 k. Over that, the deferred comp plan.
But AFAIR, you got your pension issues solved, so the usual focus upon the income producing assets diminishes. Therefore, I interpret your question as, "Where can I get future capital gains?"
In all my years of stock breaking, financial planning, and hustling on my own, the absolute best source of information to answer that question (which you do understand is more of predicting the future - not real accurate) is the Quilt Chart that AG Edwards (now Wachovia) licenses from another data provider that I don't know right now.
In your question, you've mentioned 5 different asset classes (or subsectors thereof). This Quilt Chart compares the annual performance of these five and another 6 or 7. 11 or 12 in total. Each asset class is assigned a different colored box, say 1/2" square within a rectanglar grid 12 high by 20 or so wide. Within the box is printed the asset class's return for the year, which is represented by a column of blocks.
So what you have in a column is all 11 boxes stacked by the best return on top, lowest on bottom for a given year. The column to it's right is the following year, also stacked according to return. 20 columns representing 20 years. As one can imagine, you end up with a pattern of blocks that looks like a hand made quilt.
Most people would look at it and say (or think) this is a random representation of colored blocks and not see patterns.
Ooooo, but study those blocks and the patterns within and maybe compare with your recollection of the effects of recessions, elections, democrats, republicans, international quibbles, good times, housing booms, and then your guidance of which asset class is more likely to evolve over the near future becomes clearer.
For instance, the chart shows several years running that some asset classes dominate - such as real estate over the years from 02 to 05, small stocks from '99 to 00, large from whatever, I don't have the chart in front of me right now. But the few years following the long dominance, they are at the bottom of the pile. And likewise, those that live at the bottom for an extended period will sooner or later find themselves on top.
My most recent examination of this chart was a month ago or so. To me, coupled with the elections and recession, very short term, high quality long bonds will do well as rates continue to decline. And sometime within the next year, small and mid cap stocks should start leading the way out of the market's doldrums followed by junk bonds. Large caps will follow with a bit lower , but still decent return. Internationals will still have the wind to their backs as the dollar is not showing any signs of stability. Real estate still has a period of time to go on the bottom.
You BA may have some sideways to down movement until you can get that 787 out the door. When the chairman's job is threatened and layoffs are talked due to the delay, that may be the time to buy.
As to the Quilt Chart, if you have an AGE broker, ask him for a copy. He should be able to email you one. If not, call one of their offices and ask for the BOD (broker of the day). Be prepared to give him your address and such so he can mail one and his business card to you. Or ask him to help you interpret it. If he can't, keep the chart and find someone else who can. Or study it yourself. It isn't rocket science.
They do update the chart every three months so you can see how this year is turning out on the most recent version probably just now hitting the brokers.
Thanks for the quilt info.
DW has done most all the stock market stuff for the last 15 years or so, will pass the info on to her.
BA was a great buy a few years ago at 30, sold much on the way up at 70. Wanted to sell a bunch last Qct. also was a'feared I might get hit with insider trading charges.
ethics sux sometimes.
You have an opinion on timber?CUT, RYN, PCL???
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None other than my desire to see it go lower before I build...
DW's biggest fear is for me to die in a plane crash or heart attack and what would she do with all the junk.
I've heard that. Mostly convertible to cash, and yours probably knows who to call for advice. Certainly mine does.
Land has been best for me, but around here I haven't much clue as to market value anymore. Apparently neither does the assessor. Prices are everywhere. Have yet to find a Realtor who can explain it. The principles are clear, it's the practice that seems cloudy.
I tied up some cash in longish-term fixed rate awhile back. Best performers are sub-prime mortgages, privately held, low LTV. Not something readily available.
Munis are what I'd be looking at. Unless a real estate investment pops up that makes sense. They're always out there, if you can recognize them.
I generally buy machinery to avoid paying income tax. Currently holding non-appreciating land partly 'cause I avoid reinvestment decisions. But I also don't expect our area to have a very long period of lack of appreciation. Appreciation/tax liability is generally a greater concern.
Tough life having surplus, eh?
PAHS Designer/Builder- Bury it!
They quit making land a long time ago. Depending on what it is, you don't have to have it anywhere nearby.
I'm thinking you and Sphere must have taken all the coarse grade belts.
Click here for access to the Woodshed Tavern
Even without bank CD interest rates lower than inflation, the exchange value of the U.S. dollar is dropping like a stone. One way to protect your "cash" assets is to move them out of the USD and into other currencies that are more stable. I like EverBank because they permit easy, online transfer of dollars into other currencies, and the accounts are still FDIC insured. Last Fall we diversified our dollars into Swiss francs and New Zealand dollars. Both are up over 10%-15% against the USD even with the 1% buy/sell fee the bank charges to convert.
As far as commodities go, don't be so sure they are at a peak. China and India are growing rapidly and their demand for oil, farm products, and metals is still rising. The law of supply and demand still works, and empty warehouses are not a sign that we are in a bubble for commodities. Look at the price of rice and wheat over the past six months, and oil is headed for $120/bbl. Part of that is due to the falling value of the USD, and part is due to increased demand from Asia.
TJK
Good call, I like that you moved your cash out of the dollar.. it's going to take bigger and bigger hits. Post Vietnam American went into an inflation frenzy and America is very likely to do the same.. indications are that she already has.. Since we are now 9 trillion dollars in debt and haven't balanced the budget in 7 years. It will be a very long time before other nations see America as a solid place to invest.
I recently closed out my stock market holdings and I think I hit right at the top of the bubble.. Many people are like me taking retirement funds out to make ends meet.. terrible practice except every other option is worse for me right now. ..
Long term investments are land.. but location, location, location, even on farm land! I wouldn't be looking at crop land because much of that has already started to appreciate.. Instead I'd look at smaller farmsteds. Ex dairy farms no longer in production, small farmsteads with maybe 15/30 acres and a home etc.. Low rents will pay the taxes and maybe provide a slight return and then as the currant housing crisis abates the land can be broken up into building lots for maximum return..
America has a population over 300 million I forget when we'll hit 350 or 400 million but I do know that some babyboomers will like to retire to their own little place in the country.
Investing in land is probably a good bet over the long term. As you say our population is going up and farm acreage will only increase in value in coming years. Residential and commercial RE will probably be in the dumper for 5-10 years, similar to what happened the early '90s after the last bubble burst.The downside of land is it's not very liquid. Changing politics and personal circumstances could force an owner to sell at an unfavorable price. Desperate local governments might raise property taxes sky high and force a sale through that route.
TJK
That's why the old realitors axium of location, location, location! Is so important..
You need a spot that is, interesting, worthwhile and has the potential for growth.
Look between major cities.. Maybe not immediately adjacent to the interconnecting freeways, far enough way from them so it's not possible to be overwhelmed by traffic. But not so far away as to make access to major roads difficult..
You need land that maybe once was used as a dairy farm but with the growth of massive operations no longer viable as a dairy farm and too small for crops.. Flat land is boring and difficult to make private. Hilly or wooded land can be broken up into small farmsteds to be used by Babyboomers with a desire to have a simpler rural life.. But not so large as to be threat.
Now is the time to buy.. a small down payment will leverage a decent plot of land and the right piece isn't ever going to be cheaper.. Not with the coming inflation.. put a renter in the house to collect enough to cover costs hopefully or take as a cash flow loss for right now if your income stream justifies it..
When the market is ready for a decent score (probably less than the 10 years you are forecasting due to population growth) you'll be ideally positioned to capitilize on that growth..
Too much cash ?
Wellllllll If it's burning a hole in your pocket, I know where you can unload about ten thousand dollars of it.
;o)
Life is what happens when you would rather be finishing your own house.
Wow!
It took 15 posts to come to the reply which instantly popped into my mind, except of course the recipient was different and I would not have imposed a $10K cap.
I'm not proud, I'll take any and all excess cash. :-)
Jim
Never underestimate the value of a sharp pencil or good light.
First thing I thought too, like "Left over brownies", no such thing.
Joe H
Edited 4/9/2008 5:59 pm by JoeH
Ya guys did not read the last line of the OP
-besides sending a few checks to BT'ers????
I ain't takin no check, send cash.
Just talked to realtor an hour ago, bought 10 acres we looked at 2 weeks ago.
I talked to a retired farmer in Iowa last summer at a wedding. he said corn acres had gone from $4500 to $6500.
Also saw 3 new JD combines heading west on Hwy 40 few weeks ago. Where too I don't know, is AZ corn country?
Joe H
From OP:
>So, what'cha doing with any extra assets these days?
--besides sending a few checks to BT'ers????<
But that statement insinuates that someone might be sending checks -- I want to be in line for any piece of the action I can get! And I am not fussy, I'll take a check.
Just like all the customers who ask for something for free - "If you don't ask - you'll never get it!"
Might as well try.............
Of course, I probably won't need any of the spare cash floating around - I bought a PowerBall ticket - $22.6 million cash after taxes.
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It's nice to live and hope!
Jim
Never underestimate the value of a sharp pencil or good light.
the lottery is a tax for people who are bad at math
> a PowerBall ticket < ----- "a" is the operative word.
It's nice to live and hope.
JimNever underestimate the value of a sharp pencil or good light.
>>>the lottery is a tax for people who are bad at mathfor POOR people who are really bad at math.
Check ???I'll take a money order.Or direct deposit.Or even PayPal... Just go to paypal and deposit ten grand to luka .at. lukasmountain.com !!=0);o)he he he
Life is what happens when you would rather be finishing your own house.
I just want enough to pay off all my bills.No better way to survive a recession than to go into it with all your bills paid off.
Life is what happens when you would rather be finishing your own house.
<No better way to survive a recession than to go into it with all your bills paid off.>
Yeah, but if "the worst investment now is the US doller", shouldn't US dollar debt be the best investment?
Forrest - trying to justify the fine Italian car
"eah, but if "the worst investment now is the US doller", shouldn't US dollar debt be the best investment?"I could be wrong - it happens often enough according to the wife - but here is my take on that...Say you buy dollar debt by loaning me money at about 8% to be paid back in about eight years. That means that if you loaned me ten thousand bucks, I will owe you twenty thousand at the time the loan is due.Sounds pretty good until you stop to think about what you can buy with that ten grand now and whether you will really be able to buy the same goods with twenty grand in eight years.If we have recessionary deflation, you might be fine.
I'd bet against ti though. Eight years ago, I was paying about a fourth as much for gas as I did today. My utilities bill was about half what it is now. My ferry tickets have more than doubled in price. My home has tripled in value. Price of steel has about tripled.
The only things I can think of that have been stable or gone down in price are small items that are now imported.All that in a period while the USD has been considered good and sable or at least a world standard in currency, but the way it is devaluing now vs other currencies, any commodity prices USD will be heading for the sky in terms of what it costs to buy
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i follow, what i hear you saying is that commodities should continue to head up.
if that is the case commodities futures should be in for a good run. if you can properly time the out, then you are in!
i have come to the same conclusion, it seems that U.S. dollar debt is an excellent investment right now.
there is certainly no incentive to save, since the value of the dollar is headed down.
the thing that occurs to me is that whatever seems to be a good investment will be run up considerably as it becomes popular and more and more money is invested. (just what has happened with gold).
IF one has the cash flow to support the debt service, I agree 100%. Paying off depreciated debt way in the future with discounted dollars makes much sense in an inflationary enviroment.
You should remove credit cards from that equation.Unless you have used the credit cards to buy a piece of peoperty...Credit cards are usually used for the everyday things of life.When you buy a bag of groceries with a credit card, those groceries will be long gone, while you are still paying for them. Where's the long term investment in that ?Also, if you can only afford the minimum payments, then in the long run, that 10 thousand dollars isn't going to cost you 20 thousand. It'll cost a lot more than that.Certain kinds of debt may be worth going into a recession with. But credit card debt is not.
Life is what happens when you would rather be finishing your own house.
Luka
It's too rough to do away with credit cards.. they are required to rent cars and buy mail order (well, internet ordered) stuff.
What I did is paid off my credit cards and switched to a debit card.. I have access to a banker at my credit union and a simple phone call will recharge my debit card from my bank account..
Credit cards can be used to buy things with too as long as you get one of those interest free cards and actually pay them off. I have several really high limit interest free cards so if I run into a situation I can make my own loan and before the payment is due have it financed.
Believe it or not such transactions actually increase my credit score..
Don't for god's sake plan on paying off thses zero percent cards and fail to pay them off!
They quickly revert back to 24 or even 28% interest rate..
>When you buy a bag of groceries with a credit card, those groceries will be long gone, while you are still paying for them.<
That all depends on how you manage the credit card. I buy many groceries with a credit card, along with gasoline, building materials, etc.
In my case, the groceries are gone, the gasoline burned, the materials paid for by customers before I pay for them. I work on the bank's money as much as possible.
I am the credit card customer that banks hate - paid in full on the due date -- every month. The bank still makes their fee from the merchants, but no finance charges from me - I can't afford it!
Jim Never underestimate the value of a sharp pencil or good light.
Exactly.You are not carrying 10 thousand dollars worth of debt on credit cards, planning to take ten years to pay them off.The debt everyone is talking about being a "good investment", is apples and oranges compared to ten thou in credit card debt.
Life is what happens when you would rather be finishing your own house.
You couldnt pay me to hold cash right now. The dollar is dropping like a stone. Every penny (and then some) is in real estate and other misc investments.
Cashflow is king. A million bucks is a million bucks. A million dollars in assets turns cashflow which will escalate with the dollar drop and keep you liquid (theoretically).
"Commodities are probably near a peak"
Jim Rogers and his pal Soros are probably two of the most sucessful investors of modern times, both very astute when it comes to seeing global trends.
Jim says that the worst asset in the world today is the depreciating American dollar. He touts Commodities and commodity companies.
I am diversified but overweight in Commodity companies, energy plays, tech as connected to energy and health care, and infrastructure/engineering.
CBI, JEC, DRYS, CMI, MTW, FLO, WFR
BA, ATI, PCP, MT, LLL, LMT
ARAY, VOLC, ISRG, LIFC, XRAY
BHP, FCX, CHK, BTU, EWC, PRNEX
I notice that this first quarter, some of the primary companies reporting big gains in earnings are in the food supply chain all the way from tractors and fertilizer to larger grocery stores and the food processing mills.
POT, MON
I go in and out of GLD and SLV depending on the trendline. Wouldn't hurt to put some on GLD right now while you decide
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Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
I hope that I've learned to invest in things i have some control over or at least some concept of...
just my take on things... we are pumping cash into india and china... taking these countries and people from ox carts, cooking fires and oil lamps to cars, trucks, microwaves, and light bulbs... the added demands on what it takes to have these things IMHO is what is pushing most all raw material prices up...
copper, alum, steel, coal & oil... just to name a few... my best friend in the scrap metal biz can't find enough ways to spend what he's make'n and is floored by what overseas buyers are offering for his business...
I've always looked at anything that will cash flow... but all these that I have and have had require my time and energy... I'm maxed out on both... I still have one pawnshop and all i keep telling them is BUY Scrap gold... don't let any get out the door period...
My wife also fears that if something were to happen to me what would she do with my junk... which is just part of the issue she doesn't even know where alot of it is... I have told her don't get ride of or sell anything without asking A B or C (names of friends that know) what it is and what it's worth... if it gets too be too much... just take the insurance money and give the "stuff" away (i sold one shopping center where i had 6300sf of warehouse) of my "stuff" that i have 90 days to get rid of move or lose... 6300 of 16ft tall pallet rack front to back without space for another pallet... am i sick or what... should be pretty telling to get it empty...
sorry to hear your problem of too much cash :)
p
guns, ammo, and liquor -
some posts double the meaning of your tag line ya know.;)
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Im not giving you advice just some information.
If you believe your real estate market has crashed or close to the bottom, then real estate might be your answer.
Thats where real money is made or lost in properties. Yes its a gamble but I believe it can be a calculated one. As smart as you are it shouldnt be a problem.
Tim
The real estate market in the urban growth boundary Seattle area has dropped only maybe 10% in the last 18 months, but still 2x what it was just 5 years ago, long way to drop yet IMHO. About 100X what it was 30 years ago for raw buildable land. Property taxes here now make holding land an iffy situation, those have increased about 70X also in the same time period.
I continue to get 2-3 letters a month from developers offering to buy what land I alaready have, both in King and Lewis col WA, so figure it is far from the bottom here.
Well, read your own post Im replying to again .
Then read Mikes.
I only buy raw land I can afford to hold or it has to be used or flipped.
Ive got some residential lots that came with houses I bought for starters. I went to the bank and asked for the loan to be based on the lots the houses were sitting on so that what I wanted appraised. Extra 1/2 acre here , additional lot there , and one house was sitting on 4 lots kinda thing. I bought some land at a tax sale for my own use and didnt want to sell it but its gaining value fast . I paid 775.00 for it and they tell me its worth 10,000 since it borders the national forrest . I can afford to hold it since what I paid for it .
Youre gonna have to forget that 30 years ago stuff . Its a downer to think about and keeps us from thinking ahead. IMO.
I want property I cant afford to keep to make its own way so I rent it . It pays its way and increases in value . Raw land is tricky and is an aligator cause all it does is eat up lawnmowers and time. I mow three parcels already where I dont hang my hat. Gets old and its too expensive to hire mowed.
Two of the best raw land deals I know are storage buildings and RV parks . Once you invest the money to buy and set up you can get both ran for free rent .They need to be on the same land. The buildings are diposable years down the road if you need to sell the land. Not much difference in an rv park. Theres not much there to lose or insure.
Tim
I went and ate suppper and kinda left that last post a little rough.
No an RV park and storage buildings arent raw land but if you run the numbers on commercial land it is because it will pay out much better than raw land would not . Confusing ? Kinda is till ya run the numbers . Then it makes sense.
If commercial land is worth enough the buildings and plumbing in the ground is nothing . One way to figgure it .
Another way is like a mobile home park Im not suggesting but its the same kinda math. You buy a tract of land for 100,000 dollars . You put 50 grand worth of equipment and trailers on it . The trailers you put on it will make the full payment on a 15 yr note. You can actually give the trailers away in 10 years if someone wants the land for a shopping center , school , factory, etc. The extra lots that rent are profit for holding it . One free trailer runs the park. Another free space keeps it mowed by a retired person that wants somthing to do while living there.
Tim
Investing into the colleges of my kids choice. One, the girl, chose psychology, and has graduated, but the tuition /loans keep rolling in. Her twin brother has at least another semester for his dual major of Computer/Electrical engineering. Here again, all my cash dollars are invested in what I hope will someday be my retirement plan : ^) As my daughter once said, 'Obese probability' translated: Fat chance.
On the good news front, I bought into TransOcean (RIG) a few years back at $30, and it's now at $148. Of course, my truck gets 9 mpg, which eats up that cap gains in no time.
"I am the master of my fate, I am the captain of my soul." Invictus, by Henley.
If you enjoy following the markets, open an account with an online brokerage, stay in cash and make occasional short-term trades when a COMPELLING opportunity comes along.
NEVER worry about missing an opportunity - there will always be others.
ALWAYS worry about losing capital - if a trade doesn't go your way get out fast while the loss is small, and live to trade another day.
Forget buying and holding for now.
Do not invest in mutual funds - EVER!
"Do not invest in mutual funds - EVER!"
You do realize that comments like that give us cause in itself to dismiss your "advice."
What in the world could possibly induce you to make such a comment?
Several reasons.1. Management fees (ongoing)
2. Purchase/redemption fees
3. Most funds are over-diversified. Diversification, at a certain point, does nothing but dilute the profits made by the fund's stronger holdings.
4. In the case of very large funds, the fund manager can not build a large position in a particular stock without driving the price up in front of him, or sell a position without driving the price down. An individual investor, however, can get in and out of a stock without causing so much as a ripple.
And YOU think your costs will be lower, your research better, and your timing vastly superior?
Pass some of that smoke over here.
No doubt the costs are lower.If by research you mean the fundamentals of a company (its financials, growth prospects, etc), then no - my research is not better. But then again, I seldom own a given stock for more than a few days at a time. My timing is not perfect. Almost impossible to pick the exact bottoms and tops. But I do have the advantage of being able to get in and out quickly. I can take my money off the table entirely while the markets are tanking, then buy back in at lower prices. Sure beats watching your fund portfolio drop 20% or more, listening to a speech from your sales rep about "staying the course", and waiting for things to turn around.
I've heard so many guys shoot that line of ####.
Let's get to the bottomline. Post copies of your Sch D's since '01. Prove to us you got these "skills."
'Cause you're having your bluff called.
Not going to post copies of my Sch D's, because I'm not here to prove anything. Nor do I claim to have any special "skills". All I'm saying is that there is a time to be in a stock (or the market in general), and a time to be out (or to be going short). Most mutual funds just can't do that. In this investment climate it pays to think more like a trader, and less like an investor. Spend some time learning how to read charts and recognize trading patterns. An easy place to start would be a website like Americanbulls.com
Stick with your day job. Someone's got you bamboozled.
+Do you have stop loss orders on everything you buy, or rely on always 'being in touch' ??
Lost $60K in one day (1987) when I wuz in a closed meeting all day and no way to check on the market..........
Before that, once traded 10X in a year what the portfolio was worth, the broker loved me, but quit that game in '87.
junkhound,,
I'm glad I'm not the only one hurt in 1987..
I only followed the markets in a general way since I had a broker who had turned $90,000.00 into around a million in about 16 months. I was with a customer all morning from before the markets oppened.. when I came out and heard what had happened I spent the afternoon and evening trying desperately to reach my broker..
He called me late that night with the information it had all gone in a few hours..
I generally play smallcap resource stocks, which are quite volatile. I always use stop loss orders, unless I'm actually watching the trading,
and I set them very tight below my buy price. If I do buy, it's typically because I expect the stock to jump that day (for example, a bounce after an over-reaction to bad news).If I'm wrong I get out fast, even if it means a small loss.
trim... where do you trade ?
online , right ?
what is the fee structure ?Mike Smith Rhode Island : Design / Build / Repair / Restore
MikeI'm in Canada, and trade online.My fee structure is a flat $9.95 per trade. Much lower than using a broker. I have free access to various research tools, plus 1000 free level 2 quotes per month (these show you the current bids and asks, several levels up and down, in real time).Stockhouse.com is free, and I use it to scan for company news releases. They also have bulletin boards for each US and Canadian stock (but take what you read there with a grain of salt).The resource I use the most is stockcharts.com. I pay $29.95(US) per month to get real-time charting, which gives me the current bid/ask prices in real time and can show me price and volume week to week, day to day, or minute to minute. Also has tutorials and a resource library on how to read charts and use technical indicators. It costs $10 less if you don't want the real-time option.Good luck
trim.. ever look at Folio fn ?
flat annual fee, you can deal in fractional shares
https://www.foliofn.com/servlets/ProcessAction?identifier=default_home&click1=Home
here's their pricing plan
https://www.foliofn.com/servlets/ProcessAction?identifier=Pricing&click1=Products_Pricing
i've been with them since 2001... before that i paid more in broker's fees than i ever made in the marketMike Smith Rhode Island : Design / Build / Repair / Restore
Allow me to translate some of the business slang:
"Small cap resouce stocks" means the Vancouver Exchange which is very similar to the US's Pink Sheets. Which means no rules. Anything goes. No reporting is expected of the company, no regulators, could be no company. But it trades. On rumors. Seriously. These companies could have gone bankrupt years earlier. But the stock still trades because someone didn't amend the registration for the state incorporated within.
"$9.99 per trade" means you're getting hosed. 1, No accountablity. Your foolish trades are your own business. You go without a trained broker willing to say, "Are you really sure you want to do THAT?" 2, Real brokers have a fee based trading system. For instance, my best client used to pay $0.00 per trade. He paid an annual fee which I could heavily discount if conditions indicated. Those conditions were between me and the client. (As a result, his trades were pennies.) Which means the PITA clients never heard about the program.
"Trading online" means gambling. 1, Online brokers have a business model focusing upon the transactions and the efficiency thereof. Their "research" involves buying someone else's worn out, used, and out of date data. They buy it at the cheepest price possible - somewhat like that roofer being talked about that doesn't come back. Real research, the stuff really valuable, goes to those understanding it's value, application and willingness to pay for it. Just like the best contractors.
"1,000 free level 2 quotes!" This is provided by real brokers to all of their good clients - Free. No limit. Oh, but wait - can your online broker get to talk with the floor trader hisself to get an idea of the mood of the floor? There are so many other things I could bring up, but hopefully you get the idea.
I love that commercial about the guy so excited about making his first online trade. He had just bought something on the Hong Kong exchange. "That's China!" He proudly says. Absolutely not a word about the suitability or rationality going into the trade. "It's China!" This is what's being sold - the experience of making a trade all by yourself, not whether it has merit.
Really, online brokers are a godsend to real brokers. Frankly, there are quite a number of people that have absolutely no concept of the business world, how things work, or the strategies involved. Many of those people are soooo quick to blame the broker and his "outrageous fees" instead of questioning the stupid course of action they just undertook. Getting rid of those troublemakers and sending them off to E-trade was the best thing that could have happened to the business. Two reasons: the hassle factor was gone, and 2, their crazy trades provided an opportunity for the professionals to unload some of their mistakes. Simply start a rumor on one of the online blogs...
Notice E-Trade is having serious capitalization problems? And other onliners are merging? Methinks the business model upon which it is based has flaws.
And to our resident know-it-all about finance, his claims about mutual funds are laughingly inaccurate. There are many excellent funds outperforming the indexes.
And I just love those guys that "don't have to prove" anything. They inherited the absolute wisdom necessary. I've yet to see one of these "know everythings" be willing to post or share his results. I find that in itself says it all.
Edited 4/15/2008 3:45 pm ET by peteshlagor
uhhhh, pete...
did you mean to address that to me ?Mike Smith Rhode Island : Design / Build / Repair / Restore
Only an FYI regarding the topic. But not directly.
Have a nice day.
on the subject of asset classes -http://www.moneymorning.com/2008/04/15/jim-rogers-chinas-economic-advance-is-all-but-unstoppable/
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Hey Pete,I thought for a second that you might be a broker who reads the FHB forum as a hobby. But then you would have known there hasn't been a "Vancouver Exchange" for almost 10 years now.In fact I trade on the Toronto Exchange, sometimes the Toronto Venture exchange. A step up from the pink sheets I would say.Active trading is not gambling. It seems to me that long-term investors are the gamblers, riding some stock into basement because their broker - or their broker's favourite analyst - believes in the company.Yes, small cap resource stocks trade on rumors. Everything does. In light of the sub-prime and related "mishaps", I'm a bit skeptical of company fundamentals, government regulation, and "real research". I remember when Nortel Networks went down the toilet. There were brokers and analysts pumping it right to the end. Nortel was a large holding in many Canadian mutual funds as well, and they couldn't have unloaded in time if they wanted to. As you say, there are many mutual funds outperforming the indexes. But that's like saying that a lot of builders pass their framing inspections. THEY'RE SUPPOSED TO.Like I said before Pete, I'm not offering anybody advice (much less trying to sell it). I'd just rather make my own investment mistakes than pay a broker to make them for me. Saves me getting pi$$ed off, you know?.
"I'm not offering anybody advice "I think what set off this whole thing with Pete is that you did indeed offer advice and it was not good advice for a lot of people.Your advice was to never ever invest with mutual fundsThen you went on the say that the right way to invest was through trading like you do.I often do similarly to you but also have a bulk in mutuals that do me well. Fact is, most people do not have the skills and knowledge nor the time committment it takes to be an active trader
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
You said it well!
I learnt something today.
True the Vancouver stock exchange merged, but with the Alberta exchange in 1999. This was called the Canadian Venture Exchange. It then later came under the management of the Toronto Exchange, but as the "Junior Market." Separate from the "Senior Market" defining the "real companies."
Today, one can still pull quotes and enter orders using the suffix, ".v" following the symbol.
In speaking with an actual NASDAQ trader, he tells me the "Junior" exchange still trades under the same reputation as I earlier described.
But you are correct, the actual Vancouver exchange is defunct. Whether it's a step up from the Pink Sheets is a matter of opinion.
But only a reckless and foolish broker would EVER recommend either place for normal investors.
trimguy,
I've followed your statement and arguements with a great deal of interest.
Part of what you say is absolutly true and some is wrong.
What is true is most fund managers underperform the market. Numbers vary a great deal from 95% to 80% depending on exactly what your criteria is.. the 95% number is based on a 5 year average and the 80% based on an annual trend..
So based on that Mutual funds do risk underperforming.
However!
and this is a major however,
The average private investor does worse!
It's like my mother used to tell me about all the money she won in Vegas and at various casinos around the country that sent private jets to pick her up.. She always told me about her winnings but a few years after she inherited 15 million dollars from her last husband she was sitting in her living room trying to figure out how to live on her social secuirity. She'd lost it all in just a few years..
I went into the market in 1986 and by Oct of 1987 I'd made nearly a million dollars. I went to work just to provide some balance to my life. It's a good thing too.. Because I lost it all in a couple of hours in the crash of 1987.
When I went back into the market I did so with a clear understanding of the game involved.. I decided that since 95% or 80 % of the professional fund managers couldn't beat the DOW why not buy the Dow? Nominal management fees, and the"gold" standard that few pros manage to beat.. I also bought SPY (standard and poors) for a little diversity and Had a realestate fund. as a way of buying a little diversity.
These were all to be my retirement.. In the end I paced the market and since I started buying in 1998 I bought at near the top of the market.. Today while the market is fractionally higher, adjusted for inflation I lost overall. I've been forced to liquidate due to my prolonged unemployment.
22 years of investing and I haven't kept up with inflation.
The odds of beating the market is pretty slim the odds of tieing the market is only fractionly greater..
buy land
and get the mineral rights.
"What's an Arkansas flush?......It's a small revolver and any five cards."
Edited 4/14/2008 11:03 pm by intrepidcat