A little thank you to Warren Buffet

[Prison Bitch]

That profit you made of the sale of that stock? You, you didn't build that!

[Chief Pote]

Originally Posted by Prison Bitch

That profit you made of the sale of that stock? You, you didn't build that!

I don't think anyone can understand your post.

[houstonwhodat]

Originally Posted by ChiefButthurt

I don't think anyone can understand your post.

I understand it.

Obama sucks and is the devil.

[Rain Man]

Originally Posted by Prison Bitch

That profit you made of the sale of that stock? You, you didn't build that!

That's the part I'm most excited about.

[Cannibal]

Originally Posted by Prison Bitch

That profit you made of the sale of that stock? You, you didn't build that!

Queer.

[Demonpenz]

I would stay away from Geno's stock. That shit is going to go down like a East Buch freshman.

[Demonpenz]

Originally Posted by Demonpenz

I would stay away from Geno's stock. That shit is going to go down like a East Buch freshman.

nailed it 2013 DP!

[Amnorix]

Originally Posted by Rain Man

Blammo. I sold out my initial $5,000 worth, left the profit in, and I now have $1,200 of free Heinz ketchup stock for two months of investment.

Why leave the $1,200 at risk chasing the last few pennies on the spread between the current price and the purchase price? If the deal tanks for any reason at all, your $1,200 is going to evaporate fast.

The only guys left in the game at this point should be the arbitrageurs. You're basically betting $1,200 to make, what? About a buck? Current stock price is $72.49 and Buffet's purchase price is $72.50 and you own like 80 shares if my math adds up.

If you have to pay separate transaction costs for each sale then you're really being silly.

IMHO, next time, take the money and run Lebowski.


EDIT: Sorry, don't mean to be Debbie Downer -- congrats! It's certainly a very sweet moment of victory.

[Rain Man]

Originally Posted by Amnorix

Why leave the $1,200 at risk chasing the last few pennies on the spread between the current price and the purchase price? If the deal tanks for any reason at all, your $1,200 is going to evaporate fast.

The only guys left in the game at this point should be the arbitrageurs. You're basically betting $1,200 to make, what? About a buck? Current stock price is $72.49 and Buffet's purchase price is $72.50 and you own like 80 shares if my math adds up.

If you have to pay separate transaction costs for each sale then you're really being silly.

IMHO, next time, take the money and run Lebowski.


EDIT: Sorry, don't mean to be Debbie Downer -- congrats! It's certainly a very sweet moment of victory.

I'm going to explain, and you'll likely laugh at me.

In 1991 and 1992, I bought Dell stock twice when it was a very young company. I was living in Austin at the time, and it wasn't a lot of money, but I was a poor grad student. Both times, I doubled my money, sold out, and thought I was a genius. However, if I hadn't sold, that $4,000 in stock would've been worth $250,000 by the end of the 90s. I was standing in the middle of a gold mine, and I walked out. It. Kills. Me.

So now I have a strategy, and I stick to it religiously. I buy stock in lumps of $4,000 or $5,000. When I get to the point where I've made 20%, I sell out my original share and leave the profit in. That way, if the stock goes down I haven't lost any of my principal, and if the stock goes all Dell I'll still get the upside, albeit in a smaller dose. But I won't completely miss the boat.

I've been using this system for about 6 or 7 years now. The result is that I'm slowly building my own mutual fund of dividend-paying stocks with growth potential that I've hand-picked. It disseminates my risk but also gives me enough concentration that I have the potential to beat the market significantly.

[Amnorix]

Originally Posted by Rain Man

I'm going to explain, and you'll likely laugh at me.

In 1991 and 1992, I bought Dell stock twice when it was a very young company. I was living in Austin at the time, and it wasn't a lot of money, but I was a poor grad student at the time. Both times, I doubled my money, sold out, and thought I was a genius. However, if I hadn't sold, that $4,000 in stock would've been worth $250,000 by the end of the 90s. I was standing in the middle of a gold mine, and I walked out. It. Kills. Me.

So now I have a strategy, and I stick to it religiously. I buy stock in lumps of $4,000 or $5,000. When I get to the point where I've made 20%, I sell out my original share and leave the profit in. That way, if the stock goes down I haven't lost any of my principal, and if the stock goes all Dell I'll still get the upside, albeit in a smaller dose. But I won't completely miss the boat.

I've been using this system for about 6 or 7 years now. The result is that I'm slowly building my own mutual fund of dividend-paying stocks with growth potential that I've hand-picked. It disseminates my risk but also gives me enough concentration that I have the potential to beat the market significantly.

Your philosophy is perfectly fine and I don't laugh at you at all, but in cases like this you're basically risking $1,200 for no good reason at all.

There's precisely TWO things that can happen here with Heinz. ONLY TWO.

1. deal closes. You make a buck more than you would have if you'd sold now.

2. the deal doesn't close, and the stock tanks. That second part isn't speculation. If the deal doesn't close FOR ANY REASON the stock will tank.


Given that, you can buy the shares back cheaper if the deal doesn't close so you don't miss your Dell opportunity. Of course, Heinz is to young electronic growth stock what Cassel is to young growing quarterbacks, but I digress...

So yeah, I think you need a small carve-out from your normal rule, and you can even include the caveat that you will buy back in with profits if the deal tanks.

[Rain Man]

Originally Posted by Amnorix

Your philosophy is perfectly fine and I don't laugh at you at all, but in cases like this you're basically risking $1,200 for no good reason at all.

There's precisely TWO things that can happen here with Heinz. ONLY TWO.

1. deal closes. You make a buck more than you would have if you'd sold now.

2. the deal doesn't close, and the stock tanks. That second part isn't speculation. If the deal doesn't close FOR ANY REASON the stock will tank.


Given that, you can buy the shares back cheaper if the deal doesn't close so you don't miss your Dell opportunity. Of course, Heinz is to young electronic growth stock what Cassel is to young growing quarterbacks, but I digress...

So yeah, I think you need a small carve-out from your normal rule, and you can even include the caveat that you will buy back in with profits if the deal tanks.

This is a good point. It's a very unusual situation to have a stock jump 20% in one day. I'm wavering. But I don't know, man. The key to having a system is to stick to the system.

[Amnorix]

Originally Posted by Rain Man

So now I have a strategy, and I stick to it religiously. I buy stock in lumps of $4,000 or $5,000. When I get to the point where I've made 20%, I sell out my original share and leave the profit in. That way, if the stock goes down I haven't lost any of my principal, and if the stock goes all Dell I'll still get the upside, albeit in a smaller dose. But I won't completely miss the boat.

I've been using this system for about 6 or 7 years now. The result is that I'm slowly building my own mutual fund of dividend-paying stocks with growth potential that I've hand-picked. It disseminates my risk but also gives me enough concentration that I have the potential to beat the market significantly.

So when do you sell the rest? Whatever is left after you sell and make your money back and have the "free shares" sitting around?

[Rain Man]

Originally Posted by Amnorix

So when do you sell the rest? Whatever is left after you sell and make your money back and have the "free shares" sitting around?

So far, I don't. I sow the seeds of financial growth like Johnny Capitalseed, and let them flourish.

It's been hard to evaluate my system so far because of the turmoil in the markets. I've had a few stocks that have plummeted and a few that continued to grow quite well. I'm not sure that I'm really getting a different performance than an index fund, but it's much more fun.

[Amnorix]

Originally Posted by Rain Man

So now I have a strategy, and I stick to it religiously. I buy stock in lumps of $4,000 or $5,000. When I get to the point where I've made 20%, I sell out my original share and leave the profit in. That way, if the stock goes down I haven't lost any of my principal, and if the stock goes all Dell I'll still get the upside, albeit in a smaller dose. But I won't completely miss the boat.

So question -- do you stick to this even when the 20% increase is within the first year, such that it's a short term capital gain and you're paying taxes at ordinary income rates?

If so, brutal. Don't think I can handle that.

[Rain Man]

Originally Posted by Amnorix

So question -- do you stick to this even when the 20% increase is within the first year, such that it's a short term capital gain and you're paying taxes at ordinary income rates?

If so, brutal. Don't think I can handle that.

Actually, I've only bought stocks within my IRA, so I haven't had to worry about the tax implications. On my liquid cash I've just done very, very conservative mutual funds with a goal of beating a money market return.