Stocks/Investment Thread

• dlazz

  I invest in cocaine and whores
• gut

  I Wear Pants;1535390 wrote:You an do well with individual stocks it's just best to not try to be someone who is constantly buying and selling, you'll lose your shirt. If you're interested in stocks buy to hold, buy what you know and use like Buffet. If you're not going to do that you're much better off investing in something else.

  A "buy and hold" strategy with a diversified portfolio is basically the same as buying an S&P ETF. Yes, you can make money on individual picks, but for novices especially that is almost always just luck. The problem with "buy what you know" is most people aren't Buffet, and don't know enough companies/sectors to avoid an overly concentrated portfolio. If you want to set aside 5% of your portfolio to pick individual names in a sector or two you know, then fine, but that should not be a core part of your strategy.
  
  80% of returns is asset allocation - sectors, countries, asset (stocks, bonds, commodities, etc), the old adage that a "strong tide lifts all boats". You'll do better identifying trends/themes and taking a macro approach to overweight various sectors via ETF's and mutual funds (where ETF's don't offer the specific exposure you want).
  
  And, yeah, you don't need to use ETF's or mutual funds if you have enough money, time and expertise to buy 30-40 stocks in amounts large enough such that trading fees are trivial.
• queencitybuckeye

  dlazz;1535427 wrote:I invest in cocaine and whores

  and waste the rest.
• sleeper

  

  Mulva;1535355 wrote:Tech companies rarely use GAAP, so an accounting class wouldn't be especially helpful.

  Please tell the SEC if you know of any publicly traded tech companies that don't use GAAP. You still don't have a clue that revenue and profit are different.
• I Wear Pants

  gut;1535430 wrote:A "buy and hold" strategy with a diversified portfolio is basically the same as buying an S&P ETF. Yes, you can make money on individual picks, but for novices especially that is almost always just luck. The problem with "buy what you know" is most people aren't Buffet, and don't know enough companies/sectors to avoid an overly concentrated portfolio. If you want to set aside 5% of your portfolio to pick individual names in a sector or two you know, then fine, but that should not be a core part of your strategy.
  
  80% of returns is asset allocation - sectors, countries, asset (stocks, bonds, commodities, etc), the old adage that a "strong tide lifts all boats". You'll do better identifying trends/themes and taking a macro approach to overweight various sectors via ETF's and mutual funds (where ETF's don't offer the specific exposure you want).
  
  And, yeah, you don't need to use ETF's or mutual funds if you have enough money, time and expertise to buy 30-40 stocks in amounts large enough such that trading fees are trivial.

  I agree with this, I wouldn't and wouldn't suggest people do all or most of their investing in individual stocks, just wouldn't discourage them from doing some either if they wanted to.
• I Wear Pants

  sleeper;1535438 wrote:Please tell the SEC if you know of any publicly traded tech companies that don't use GAAP. You still don't have a clue that revenue and profit are different.

  Yeah, public companies are required to use GAAP for their 10-ks right? Otherwise the whole idea wouldn't work since each company would pick their own way of doing things to look best.
• sleeper

  

  I Wear Pants;1535452 wrote:Yeah, public companies are required to use GAAP for their 10-ks right? Otherwise the whole idea wouldn't work since each company would pick their own way of doing things to look best.

  Yup.
• Sonofanump

  The only single stock I own outside of the mutuals is the company I work for, and only because I have stock options at 10 year old prices that can be obtained with interest free loans. No interest in playing the market daily on single fliers.
• Mulva

  

  Pick6;1535362 wrote:following GAAP or not, your definition of "making money" is flawed. They still have to have a set of books using GAAP for reporting, though.
  
  The fact that Twitter uses some non-GAAP and still posts a loss is sad.

  I thought
  

  Mulva;1535289 wrote:They made about 35 billion pennies last year. They just spent more of them.

  made it pretty clear that I was referring to revenue and not profit, but maybe not. It was a smartass comment as much as anything, but I definitely think you have to differentiate Twitter from a company like Snapchat, which has no revenue but still got a $3 billion offer. Operating in the red obviously isn't a good thing, but Twitter's revenue has been increasing pretty exponentially since 2010, and I believe they're projected to hit the billion mark next year. They haven't exited the growth stage and plateaued, so I think it's oversimplifying things to act like the stock is doomed (not saying you did).
  

  I Wear Pants;1535452 wrote:Yeah, public companies are required to use GAAP for their 10-ks right? Otherwise the whole idea wouldn't work since each company would pick their own way of doing things to look best.

  That's actually pretty much what I was referring to. They pimp the non-GAAP numbers when making pitches to investors/Wall Street. I thought it was relevant, since the thread is about is investing/Twitter's IPO. I didn't make what I meant clear though, so that was my bad. The only reason I thought of it at all is because of this article from a couple days ago:
  
  http://www.forbes.com/sites/jeffbercovici/2013/11/11/these-20-tech-firms-report-the-most-fictional-earnings/
  
  Does it make sense to do it that way/does anybody actually buy into it? I honestly have no idea. But it's a pretty standard practice to make a company look better, especially in the tech sector.
  
  Twitter example from last week:
  
  http://online.wsj.com/news/articles/SB10001424052702303309504579188352607330632
• I Wear Pants

  I've never talked to anyone that knew enough about investing to want in on IPOs that wouldn't look at 10-k/GAAP data.