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| The Stock Market/Personal Finance Thread http://archive.theskyiscrape.com/viewtopic.php?f=7&t=87462 |
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| Author: | thodoks [ Tue Nov 10, 2009 4:42 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
given2trade wrote: thodoks wrote: So Matt, what kind of economic environment do you foresee in the near- to medium-term? Inflation, deflation, stagnation...what? No. Econ thread. Why? This is pertinent to investment strategy. I'm not asking for a breakdown of monetary policy or what you expect from the next FOMC meeting. |
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| Author: | tyler [ Tue Nov 10, 2009 4:45 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
I'm 15 years from retirement, what mix between real estate, money markets and sticks should I have? Currently at about 50% real estate, 10% money markets and 40% stocks. |
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| Author: | thodoks [ Tue Nov 10, 2009 4:46 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
tyler wrote: I'm 15 years from retirement, what mix between real estate, money markets and sticks should I have? Currently at about 50% real estate, 10% money markets and 40% stocks. I think I've identified the flaw in your current investment strategy. |
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| Author: | tyler [ Tue Nov 10, 2009 4:47 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
thodoks wrote: tyler wrote: I'm 15 years from retirement, what mix between real estate, money markets and sticks should I have? Currently at about 50% real estate, 10% money markets and 40% stocks. I think I've identified the flaw in your current investment strategy. |
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| Author: | given2trade [ Tue Nov 10, 2009 4:49 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
Fine. I think the U.S. is fucked. I can't pinpoint when it will happen but there is no way out of our financial mess. Basically, I look at our finances (U.S. Government) just like I look at a companies. We have a balance sheet and we have an income statement. At some point, we will not have the the revenues (tax receipts) to cover our interest on the debt. I can't pinpoint when that will happen but it is going to happen. 10 years? 20 years? Dunno. When that happens we will see a rapid devaluing of the dollar that will be...painful. So my answer is hyper inflation/stagflation but I don't know when it will happen. It doesn't affect the way I invest. I own good companies that should be able to pass through any inflation so my assets will rise as the U.S. dollar falls. |
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| Author: | given2trade [ Tue Nov 10, 2009 4:52 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
tyler wrote: I'm 15 years from retirement, what mix between real estate, money markets and sticks should I have? Currently at about 50% real estate, 10% money markets and 40% stocks. Unfortunately, this is one of those areas I'm not well versed in. I know it's probably the most important question, too. What I can say is Real Estate and Stocks are so general that you can be in ultra conservative Real Estate or very risk Real Estate (usually leverage is what distinguishes that). I assume that you might be referring to your home in that bucket. Regardless, I have no idea what the proper allocation should be except that as you get closer to retirement you should be almost completely out of stocks and in all fixed income/lower risk assets. |
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| Author: | thodoks [ Tue Nov 10, 2009 4:54 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
given2trade wrote: I own good companies What is your criteria for determining what is (and what isn't) a sound company? How big of a role does their balance sheet play? What are your red flags? |
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| Author: | pnjguy [ Tue Nov 10, 2009 5:08 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
thodoks wrote: given2trade wrote: I own good companies What is your criteria for determining what is (and what isn't) a sound company? How big of a role does their balance sheet play? What are your red flags? Debt Asset Ratio is a good one. |
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| Author: | given2trade [ Tue Nov 10, 2009 5:11 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
thodoks wrote: given2trade wrote: I own good companies What is your criteria for determining what is (and what isn't) a sound company? How big of a role does their balance sheet play? What are your red flags? A difficult question to answer generically. The balance sheet is tremendously important. In the fall of 2008, I owned no companies with any debt. That was an extreme situation and investors were not getting rewarded for taking any kind of risk. Some elements of what makes a company "good": 1) Cash Flow is equal to or greater than Net Income. Cash is king. I care little about economic earnings. I want to see money going into the bank. 2) Good, healthy margins. If revenues decline by 5 of 10 percent, will the company still be profitable? 3) Stable/low vol earnings through an entire cycle. I have little interest in highly cyclical companies, no matter how inexpensive they might be off of "normalized" earnings. 4) Long operating history with a management team that is incentivized with shareholders. Those are two different things. The management team can be new but should not be there to take a paycheck, primarily. Hopefully they will make multiples of their pay in stock/options should things go as planned. 5) RE: balance sheet. When is debt due? What are the balance sheet risks? In normal times, I have no problem with a little debt. You want an optimal capital structure. Some businesses should have debt. However, it's a fine line. |
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| Author: | given2trade [ Tue Nov 10, 2009 5:12 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
The biggest red flag is a company that is producing earnings (economic earnings/net income) but is not producing cash flow. See: Enron http://www.inc.com/magazine/20021201/24916.html |
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| Author: | thodoks [ Tue Nov 10, 2009 5:21 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
given2trade wrote: The balance sheet is tremendously important. In the fall of 2008, I owned no companies with any debt. Dumb question, but is there some sort of repository of firms' balance sheets? I can't just type "companies without debt" into google and expect to find anything meaningful. And there are so many companies out there I wouldn't know where to start. I guess my question is if I held a similar investment strategy, where would I go to start analyzing balance sheets and income statements? |
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| Author: | glorified_version [ Tue Nov 10, 2009 5:22 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
given2trade wrote: Fine. I think the U.S. is fucked. I can't pinpoint when it will happen but there is no way out of our financial mess. Basically, I look at our finances (U.S. Government) just like I look at a companies. We have a balance sheet and we have an income statement. At some point, we will not have the the revenues (tax receipts) to cover our interest on the debt. I can't pinpoint when that will happen but it is going to happen. 10 years? 20 years? Dunno. When that happens we will see a rapid devaluing of the dollar that will be...painful. So my answer is hyper inflation/stagflation but I don't know when it will happen. It doesn't affect the way I invest. I own good companies that should be able to pass through any inflation so my assets will rise as the U.S. dollar falls. lol |
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| Author: | glorified_version [ Tue Nov 10, 2009 5:25 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
"Everybody else is fucked but I'm not because I invest wisely!" I'm glad you can't get laid |
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| Author: | thodoks [ Tue Nov 10, 2009 5:26 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
glorified_version wrote: given2trade wrote: Fine. I think the U.S. is fucked. I can't pinpoint when it will happen but there is no way out of our financial mess. Basically, I look at our finances (U.S. Government) just like I look at a companies. We have a balance sheet and we have an income statement. At some point, we will not have the the revenues (tax receipts) to cover our interest on the debt. I can't pinpoint when that will happen but it is going to happen. 10 years? 20 years? Dunno. When that happens we will see a rapid devaluing of the dollar that will be...painful. So my answer is hyper inflation/stagflation but I don't know when it will happen. It doesn't affect the way I invest. I own good companies that should be able to pass through any inflation so my assets will rise as the U.S. dollar falls. lol Take it to the econ thread |
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| Author: | thodoks [ Tue Nov 10, 2009 5:27 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
glorified_version wrote: "Everybody else is fucked but I'm not because I invest wisely!" I'm glad you can't get laid What's wrong with not wanting to get caught on the wrong side of a monetary meltdown (or meltup, as the case may be)? |
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| Author: | given2trade [ Tue Nov 10, 2009 5:29 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
glorified_version wrote: "Everybody else is fucked but I'm not because I invest wisely!" I'm glad you can't get laid You've ruined enough things in life, please let this thread have a fighting chance. |
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| Author: | thodoks [ Tue Nov 10, 2009 5:31 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
given2trade wrote: glorified_version wrote: "Everybody else is fucked but I'm not because I invest wisely!" I'm glad you can't get laid You've ruined enough things in life, please let this thread have a fighting chance. Sorry for playing along. 
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| Author: | glorified_version [ Tue Nov 10, 2009 5:32 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
thodoks wrote: glorified_version wrote: "Everybody else is fucked but I'm not because I invest wisely!" I'm glad you can't get laid What's wrong with not wanting to get caught on the wrong side of a monetary meltdown (or meltup, as the case may be)? I save but "investing" doesn't really interest me |
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| Author: | given2trade [ Tue Nov 10, 2009 5:32 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
thodoks wrote: given2trade wrote: The balance sheet is tremendously important. In the fall of 2008, I owned no companies with any debt. Dumb question, but is there some sort of repository of firms' balance sheets? I can't just type "companies without debt" into google and expect to find anything meaningful. And there are so many companies out there I wouldn't know where to start. I guess my question is if I held a similar investment strategy, where would I go to start analyzing balance sheets and income statements? This is hard. There are companies that offer screening services where you can put in a gazillion variables and it will pop out a list of companies. None of it is free, however. I'm sure you can find something online that will let you search basic things. Edit: http://www.marketscreen.com/ Something like this. They have a 7 day free trial. The ones institutions use cost $1000+ a month per user. |
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| Author: | pnjguy [ Tue Nov 10, 2009 5:33 pm ] |
| Post subject: | Re: The Stock Market/Personal Finance Thread |
so where's a good place to buy/sell stock/bonds for a beginner.? |
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