• TalkBass has been independent since 1998. Add your voice.
    Create a free account to reply to discussions, view embedded media, and browse with fewer display ads.
    Join free Log in
    Want zero display ads or expanded classifieds tools? Compare plans.

Beginner Financial Investing.

#41
Joshua said:
Interesting. Assuming safety of principal is a concern, I would think something like VBINX would be ideal. 60% indexed in the US market, 40% indexed in Bonds. Heck, add in a small amount of the REIT and International indexes, and you got yourself a portfolio!

:D



:D

For giggles, I was browsing thru the BH 2006 annual report this morning over coffee. His historical returns are simply staggering, especially considering how much money he is playing with.
Click to expand...

Buffett is great. I love the shareholder letters and the way he runs his company.

If you like Buffett's letters - you may like Marty Whitman's letters and shareholder reports on the Third Avenue funds. He quite clearly lays out the case for the moves that he makes and he has enough integrity to write about what he missed when things don't go well.

With my church - the stock/bond split has consistently been 50/50 up to maybe 60% stocks. The broker we worked with has done a good job with the bond side of the portfolio and we decided to keep that part of the business with him. He was not so good on the stock side.

Because of our social screens (no weapons, tobacco, booze, gambling or porn) we can't buy conventional index funds and what is even worse is that the few Socially Responsible index funds or ETFs out there contain stuff that we can't own (typically brewers or chain restaurants that derive too much of their income from alcohol sales). Therefore, we will be paying 125 basis points for what is essentially a socially scrubbed index - 80% domestic total market and 20% foreign total market. I think there is a business opportunity for Vanguard et al to do custom scrubbed index funds or ETFs for the various denominations since each has a slightly different take on what they want to screen out. They could sell them all day long with fees in the 50 to 75 bp range.

I tried to get folks interested in maybe a 5% of the overall portfolio for a REIT index but couldn't get consensus. I also threw out the idea that if we did have strong sector preferences that we want to overweigh a bit, we could still do that with ETF's in the energy, utilities, telecom since there are no forbidden stocks lurking. This would have had the effect of lowering our overall costs since the fees would have been less than half what we are paying - but again no takers as this is probably too big a step to take all at once.
 
#44
dangnewt said:
It is a pretty cool thread.

FWIW

I had a stop loss kick in on Cemex (CX) last week - I just bought it back at a lower price. CX is a Mexican company that is a (the?) leading supplier of cement in the world. Call me crazy, but I like to be in Mexican cement.
Click to expand...
That's one I've actually looked at! I haven't bought anything in a while, and just sold off my JDS Uniphase, as it is a total dog of a stock. The recent burp in the markets took a bite out of my 401k, but not too bad. It hit everyone I know worse than me! :)
 
#45
Good to see some interest and discussion of more conservative investing strategies !


dangnewt said:
Those are truly SMASHing returns. I admire your skill.
Click to expand...

Thanks, but it's pure fluke.

I too have Cemex. Was racking my brain trying to figure out where I heard of it, then I remembered ... does "Oxford" mean anything to you? Not the school.

You mentioned Tejon. I did very well with that one in the past but no longer hold it. So too with Raynoier, which I think might fit your bill.

======

Sample Portfolio Update

That SGC I sold took a big tumble today, -26%. Some sells go up afterwards, some go down. Better safe than sorry. Glad I locked-in those gains and I won't take a new entry for now as there's better candidates.

Speaking of some going up after selling, on Feb 16th I wrote :

"I'll roll the proceeds plus most of the cash from the last sale of stocks to fund 100 shares of Hammond Power Solutions, HPS-a in Toronto. This is a real company - by which I mean a company with a product, revenues and earnings - with better earnings each quarterly report, and with a quarterly and annual report due shortly I expect it'll do as it normally does and pop up for significant quick gains."

Unforunately on March 1 I sold that position in the sample portfolio at break-even to avoid overexposure in collapsing markets. The nature of this little portfolio is such that to get any stocks of value you have to put out an overweight amount and I didn't like the risk any longer.

Ah well, today the numbers came out and the stock jumped 23% higher than our entry had been. That gain alone would have added almost 10% to the portfolio. So it goes. Rule 1 is to preserve capital and that's what was done in that excercise. Can't trade in hindsight, so moving forward it's time to put the large cash position to work.

Adding 100 shares of MGA, 100 shares of BAY, and 500 shares of PLE, which resultes in :

Code: 
ticker.exchange    # of shares held    price paid    current price   % gain

JNN.v                  100                .92           3.58            289
UNI.v                  100                .36            .57             58
RH.v                   100                .44            .84             91
FRP.v                  200                .32            .90             96
SGN.v                  300                .39            .45             15
MGA.to                 100               5.58          
BAY.v                  100               1.61
PLE.v                  500                .56

Cash $116            Net Gain to date is 79% in 13 months.
 
#47
SMASH said:
Good to see some interest and discussion of more conservative investing strategies !




Thanks, but it's pure fluke.

I too have Cemex. Was racking my brain trying to figure out where I heard of it, then I remembered ... does "Oxford" mean anything to you? Not the school.

You mentioned Tejon. I did very well with that one in the past but no longer hold it. So too with Raynoier, which I think might fit your bill.


[/code]
Click to expand...

Oxford doesn't mean anything to me. Morningstar probably was where I first heard of Cemex.

I poked around Rayonier a bit - that seems more of a purer timber play. They have alder and maple in their Washington forests so as long as bassists have GAS - they'll be able to sell those boards. :D

The things that attracted to me to Tejon and St. Joe were that Marty Whitman of Third Avenue Funds was buying them and they were turning agriculture or forest land into houses and/or businesses in a reasonably environmentally sound and fiscally prudent way. I have faith in St. Joe's management as their CEO was the guy who built Celebration while at Disney. I don't have quite the same warm and fuzzy for Tejon but I can look at a map and see that greater LA is heading straight for it. When will it really pop? Could be a while.

What I really bought was the thesis that Wall Street has trouble at valuing non-income producing assets and that the potentially developable land was worth far more than the market capitalizion that Mr. Market had put on it.


joeyl - I won't pretend to know much about oil and gas and even less about their price movements. However, the only energy play that caught my eye recently was a Morningstar recommendation on Cheniere Energy (LNG) - they are building some LNG facilities in the Gulf of Mexico. To me the value is that they are in the ground and building - since it is a long difficult process to get these permited, I like that they have already gotten past that step and are building.
 
#48
dangnewt said:
joeyl - I won't pretend to know much about oil and gas and even less about their price movements. However, the only energy play that caught my eye recently was a Morningstar recommendation on Cheniere Energy (LNG) - they are building some LNG facilities in the Gulf of Mexico. To me the value is that they are in the ground and building - since it is a long difficult process to get these permited, I like that they have already gotten past that step and are building.
Click to expand...

hmmm, interesting. found the excerpt on it

Cheniere Energy (AMEX:LNG - News)
Business Risk: Above Average
Economic Moat: None
Price/Fair Value Ratio*: 0.55
Consider Buying: $32.50
Consider Selling: $61.50

Backed by a belief that a natural-gas shortage is imminent in the U.S., Cheniere Energy has been making a substantial investment in building liquefied natural gas terminals, including three wholly-owned proposed terminals and a 30% stake in a fourth terminal. While there are more than 20 such terminals proposed in and around the Gulf of Mexico, Analyst Justin Perucki believes that Cheniere is best positioned.

that would be a good return probably in the next year or so depending on how severe the winter is I guess, I don't know much either, just going by normal assumptions
 
#49
joeyl said:
Seems to me that the prices of oil and energy related stocks are dropping a little because of the start of spring, do you guys think that these will go back up in the summer and then again in the winter? I think I am going to jump on Arena Resources (ARD) and Holly (HOC)
Click to expand...


Those look great. Very solid trends in your favour, just beware of an imminent downturn in the markets and sell out should they cross below their trendlines. As with any stock, really, however the energy sector should do well regardless going forward the next few years I believe.

Cheniere I'm neautral on. I'd buy over $30 and possibly short under$25 with tight stops until a trend emerges.

Thanks for these solid suggestions guys.


dangnewt said:
...I poked around Rayonier a bit - that seems more of a purer timber play. They have alder and maple in their Washington forests so as long as bassists have GAS - they'll be able to sell those boards. :D
Click to expand...

Rayonier was primarily a play on the value of their land for me, but I no longer hold it as I am no bullish on land currently. I agree re: Tejon, but sold out of it again per my view on current land (over)value.
 
#50
SMASH said:
Those look great. Very solid trends in your favour, just beware of an imminent downturn in the markets and sell out should they cross below their trendlines. As with any stock, really, however the energy sector should do well regardless going forward the next few years I believe.

Cheniere I'm neautral on. I'd buy over $30 and possibly short under$25 with tight stops until a trend emerges.

Thanks for these solid suggestions guys.
Click to expand...


thanks, I guess we could be bouncing our stock picks around and compare notes. That would be great if this could be our little Talkbass investor's community.
 
#51
joeyl said:
thanks, I guess we could be bouncing our stock picks around and compare notes. That would be great if this could be our little Talkbass investor's community.
Click to expand...

Sure. It can be whatever you wish it to be. Anyone who wants to learn something, can ... or can ask questions.

Uranium jumped to $85/lb recently and rose again to $91/lb this week. That's about a 100% gain since this time last year.

I'm adding 100 shares of RH to the example portfolio. That one has returned huge gains and I believe it's time for it to give even more.

Updated to reflect the buy :

Code: 
ticker.exchange    # of shares held    price paid    current price   % gain

JNN.v                  100                .92           3.30            259
UNI.v                  100                .36            .52             44
RH.v                   100                .44            .85             93
RH.v                   100                .85
FRP.v                  200                .32            .75             63
SGN.v                  300                .39            .47             19
MGA.to                 100               5.58           5.86              5    
BAY.v                  100               1.61           1.56             (3)
PLE.v                  500                .56            .55             (2)

Cash $31            Net Gain to date is 89% in 13.5 months.
 
#53
joeyl said:
uranium IS doing great: I have BHP stocks and they went up almost a dollar yesterday. I guess this could be a long term investment
Click to expand...


Good one. I have BHP too, but it's not a pure uranium play given their diversity.

Diversity can be good if you're hedging your bets, but if you're bullish uranium there are far better (I mean pure uranium) plays that have, and I believe will continue to, far outpaced BHP.
 
#54
I cant believe i missed this thread!

Well i am a real beginner at this whole investing shindig, around Feb 2006, I invested in a few Uranium mining companies, (dennison mines, FRG, UEX etc)...
since then to now, the value has gone up by more then double, really cool :) (Thanks very much Smash!!)

It seems more to me that nuclear energy get's mentioned on mainstream news as an alternative, Just yesterday they had a story on 60 minutes France's nuclear power chief. So perhaps more good news in the future?

What other US uranium companies do you guys think would be a wise investment?
 
#56
bassjamn said:
I cant believe i missed this thread!

Well i am a real beginner at this whole investing shindig, around Feb 2006, I invested in a few Uranium mining companies, (dennison mines, FRG, UEX etc)...
since then to now, the value has gone up by more then double, really cool :) (Thanks very much Smash!!)

It seems more to me that nuclear energy get's mentioned on mainstream news as an alternative, Just yesterday they had a story on 60 minutes France's nuclear power chief. So perhaps more good news in the future?

What other US uranium companies do you guys think would be a wise investment?
Click to expand...

It is profoundly rewarding to hear that someone has been inspired to action based on what I’ve written and has made significant gains from it. Sincere thanks for letting me know that.

I very much appreciate knowing of the dates and sources anyone finds mention of uranium or nuclear energy. I have an active thread dedicated to that, and in the initial post you’ll find extensive links to my commentary on the topic and some specific stocks I like. Have you checked those? http://www.talkbass.com/forum/showthread.php?t=298885

Sadly, there aren’t many US companies that are idea for pure uranium play speculations at present. I can maybe only recommend URRE at this time, but if taking a position in that one be sure to have your stops currently set just below $8.

Right now is not a generally good time for new entries into uranium stocks, due to recent big price spikes on the great news that uranium has recently sold for over $100 - $113 in fact, which is a continuation of a virtually non-stop run from below $10 started a few years ago. It might be currently more prudent to sell small portions as those you are holding are rising so dramatically, if those holdings have started to skew your usual portfolio balance.

Simply, most resource plays are listed in Canada (including many US based or focused resource companies) and given the dire outlook currently for the US economy and Dollar, my best suggestion is to focus on plays listed in Canada or perhaps Australia to diversify out of US holdings.

However, plenty of those foreign-listed stocks are cross-listed on US exchanges so if it has to be a US play that’s an option. It’d be keen if people could perhaps do some research and bring some picks or suggestions to this thread, as that way I can perhaps be made hip to a stock I might not already be aware of.

Might as well do a sample portfolio update.


Code: 
ticker.exchange    # of shares held    price paid    current price   % gain

JNN.v                  100                .92           4.45            384
UNI.v                  100                .36            .56             56
RH.v                   100                .44            .90            105
RH.v                   100                .85            .90              6
FRP.v                  200                .46            .75             63
SGN.v                  300                .39            .52             33
MGA.to                 100               5.58           8.06             44    
BAY.v                  100               1.61           2.00             24
PLE.v                  500                .56            .34            (39)

Cash $31            Net Gain to date is 119% in 14 months.

That’s a new high mark. Nice to see.

One problem - I honestly thought I had posted a sale of PLE back at 50c, but I apparently I neglected to. Odd, I could swear I had logged onto TB to do so when I entered my personal sells on that stock back then. Must have got distracted by the Bass Babes thread or something. Another mistake, some time ago I had said then when I posted new entries I'd list the downside sale level ahead of time but I did not in this case.

On the bright side this goes to show that everyone makes bad habit mistakes at every level, and it also illustrates clearly how important it is to state your tolerance for the downside when buying a stock and to stick to it. Looking at its chart, if anyone cares to, you can easily see why I had figured 50c to be the make/break line, and sure enough … http://www.talkbass.com/forum/showthread.php?t=298885

I risk more irony via bad habits by saying this but … now that we’re “stuck” with it here it seems to me worth holding onto above the 25c line, the longer-term support level which can also plainly be seen in the graph. More likely I’ll flip it here if/when a better play presents itself but for today at least it’s clawing back up a little.

Normally, holding a dog like this while the rest of its sector is rocketing is extremely poor practice. But for now what’s done is done, for good or ill. It at least serves as a great example of what not to do, and once in awhile I deliberately keep such flops in my portfolio (investments of thousand$ reduced to a point that they’re not worth the fees to divest them) as reminders of what such bad habits can lead to.
 
#57
Smash,

There is quite a bit of info in those links, thanks i'll check em...also reminds me i'll have to re-up my talkbass.com membership for lobby access!

lots of info ill check tonight.

I do recall not finding many US companies when i initially invested in 2006, the ones i am in are a few Canadian companies you listed.
I had to do the pink sheet, on the phone broker route instead of doing the usual trades via web interface.

Looks like the US view has not changed much ...oh well :/
 
#58
bassjamn said:
Smash,

There is quite a bit of info in those links, thanks i'll check em...also reminds me i'll have to re-up my talkbass.com membership for lobby access!

lots of info ill check tonight.

I do recall not finding many US companies when i initially invested in 2006, the ones i am in are a few Canadian companies you listed.
I had to do the pink sheet, on the phone broker route instead of doing the usual trades via web interface.

Looks like the US view has not changed much ...oh well :/
Click to expand...



It is changing, rest assured. Look around again, and I think you'll find more US options in the sector this year. If so, please let me know any decent ones you come across?

-------------

Sample portfolio update :

PLE bounced back to the 50c level yesterday (see previous update for background). That's not uncommon, and when a stock goes way past you up or down and comes back, it's best to get rid of it.

That prevents you from holding an Enron you once had major gains on, only to see it fall down to bankruptcy. It also prevents you from holding a dog that lost its support, as did PLE, thinking somehow something has changed. Sometimes it has, and you'll wish you'd held. Far more often you'll be glad you sold or wish you had.

"Fool me twice, shame on me" and "won't get fooled again" are the phrases that come to mind, and with that said we'll sell PLE here at 49c for a 12.5% loss.

That leaves the sample portfolio at another all-time high since inception last February in this thread, currently +133%


Code: 
ticker.exchange    # of shares held    price paid    current price   % gain

JNN.v                  100                .92           4.18            354
UNI.v                  100                .36            .56             56
RH.v                   100                .44           1.05            139
RH.v                   100                .85           1.05             24
FRP.v                  200                .46            .80             74
SGN.v                  300                .39            .55             41
MGA.to                 100               5.58           8.58             54    
BAY.v                  100               1.61           1.86             16

Cash $276            Net Gain to date is 133% in under 14 months.
 
#59
Congrats Joshua. That's a healthy 1-yr. gain for conservative play. Going to get a lot tougher in the coming economy though, IMO.

In the sample portfolio I'm locking in some gains. Out goes JNN.v after a 317% gain since day 1, and out goes MGA.to after a 43% gain in 5 weeks.

Using those proceeds I'll add a holding that I've owned and wanted to add since inception but it didn't fit the constraints of this example. It's gone up five-fold since then, yet it's the least speculative play by far to date I believe as it has products, earnings, and history on its side. HPS-A.to I'd hold that one as long as it stays above $10

Updated, we have :

Code: 
ticker.exchange    # of shares held    price paid    current price   % gain

UNI.v                  100                .36            .57             58
RH.v                   100                .44           1.16            164
RH.v                   100                .85           1.16             36
FRP.v                  200                .46            .75             63
SGN.v                  300                .39            .50             28
BAY.v                  100               1.61           1.83             14
HPS-a.to               100              11.95

Cash $263          Net Gain to date is 123% in under 14 months.
 
#60
Joshua said:
And as always, congrats to you as well. Top notch job all the way. It is clear that you not only have a good eye for value, but that you have the willpower to stay the course. That in itself is probably the most important factor (but picking good investments don't hurt!)...
Click to expand...

Thanks. You've said it well. It's all about the discipline of having a reasonable plan and sticking to it.

One of the sample portfolio holdings which was added on Valentine's Day has turned out to be a sweetheart indeed. The stock had some interesting news after being halted for an entire day today. It's SGN.v and is currently held at a 46% gain in just two months.

It makes for an interesting study of important terms and scenarios so here it is in part :

"Cash Minerals Inc. (TSX VENTURE:CHX) ("Cash Minerals" or the "Company") and Signet Minerals Inc. (TSX VENTURE:SGN) ("Signet") are pleased to jointly announce a transaction whereby Cash Minerals intends to acquire all of the outstanding common shares of Signet in exchange for units of Cash Minerals. Pursuant to the transaction, Signet shareholders will receive one unit of Cash Minerals for each Signet common share held, with each unit being comprised of
0.67 common shares of the Company and one-half of one share purchase warrant, each whole share purchase warrant being exercisable for one common share of Cash Minerals at a price of $1.75 per share for a period of three years from the date of issue."

What this means is that the 300 SGN shares in the sample portfolio will become 201 shares of CHX.v (.67 multiplied by 300 shares). Since CHX is currently at $1.17, that values the SGN shares at 78c which makes for a whopping 106% gain in two months.

But that's not all ! In addition we'd get a half warrant for each share so that's 150 warrants to buy CHX for $1.75 within 3 years of issuance.

A warrant is a right to buy a share at a certain price. Usually you'd pay for a warrant, and some even trade like regular stocks do. The trick is that currently CHX is at $1.17 so there's no way you "excercise" your warrants costing you $1.75 'cause you'd lose on that deal. If CHX is never above $1.75 in three years then your warrants expire and if you'd paid for them you'd lose that money entirely.

Also in that press release, not copied here, is an indication that SGN will retain some of its projects/properties (CHX only wants a select couple that enhances its portfolio) and that SGN management plans to spin those remainders off into a new company owned by existing SGN shareholders. Seems pretty generous, and if I read it right and it actually happens then down the line SGN holders would be issued new shares in a new SGN in addition to the nice premium they got when swapping their old SGN shares for CHX shares per the above quote.

It's rare but it happens sometimes. This is the 2nd company held in the sample portfolio already to get bought out for very generous gains to the shareholders. Lucky !

That's all complicated stuff, but it should make sense if read slowly and carefully. If not, please ask. (I mean anyone reading, since Joshua already knows this stuff).

How this should play out for now, is that if SGN's halt is lifted it should start trading around .67 of CHX (in this case 78c) and maybe even at a premium to that. One could sell outright for the quick gains, or hold on until the deal is done (a few weeks) and get a shot at the warrants too. Risk there is that if CHX goes down - and the market is looking vulnerable - then so too does the value of SGN shares (remember they're now worth .67 CHX shares so the two are tied together unless the deal falls apart).

Not sure what I'll do. I'm not a huge fan of CHX and don't even own it despite it being a uranium play. I think I'll wait it out for the warrants as long as CHX stays over $1.00

Update :

Code: 
ticker.exchange    # of shares held    price paid    current price   % gain

UNI.v                  100                .36            .52             44
RH.v                   100                .44           1.34            205
RH.v                   100                .85           1.34             58
FRP.v                  200                .46            .75             63
SGN.v*                 300                .39            .57             46
BAY.v                  100               1.61           1.69              5
HPS-a.to               100              11.90          11.70             (2)

Cash $263    Net Gain to date is 124% in almost 14 months, a high mark thus far.

* SGN price does not yet reflect the new deal explained above.
 

Latest posts

Top Bottom
Back