A little thank you to Warren Buffet

[Halfcan]

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. 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.

Great advice!

[Rain Man]

Okay, I got my $5,000 back and I just put $2,000 into Carnival Cruise stock. It's down 5% in two days, and all they have to do is fix the engine and hose the ship down. I bought a smidgen of Carnival stock last year after that ship tipped over in Italy, and have made 33% on it in 13 months.

[rageeumr]

Originally Posted by ChiefButthurt

I know, sometimes I just want to get aggressive and find that lucky stock. Maybe it doesn't exist right now.

Keep your eyes open, and try to stick to what you know. Buffet famously avoids most tech stocks (and subsequently avoided the dot-com bubble in the early 2000's) because he says he doesn't understand the companies well enough to invest in them. I work in construction, and the majority of my projects are in healthcare. I spend a decent amount of my time in hospitals and talking to hospital executives.

Back in 2009, I looked at all the mandates hospitals were facing (and incentives they were receiving) to go to electronic medical records and upgrade their information systems.

There just happens to be a local company (Cerner) that is in that market. Not only did it present a unique opportunity to root for a local company, I knew a few people who worked there and it seemed to be a very solidly run organization.

I bought about as much Cerner stock as I could afford at that time. As of today, it's up 167%.

That situation is unique in that it all lined up so nicely for me, but it's an example of understanding what you're buying. If you don't know the company, you're not really investing. You're gambling.

[Hammock Parties]

If Rain Man was a cat he would be this cat.

[Rain Man]

Originally Posted by GoWalrus

If Rain Man was a cat he would be this cat.

I aspire to be that cat. He looks like he's really got life under control.

[Buck]

Hell yeah. All that ketchup would go great on a Cheeseburger in Paradise. Love Buffet

[ptlyon]

Originally Posted by Buck

Hell yeah. All that ketchup would go great on a Cheeseburger in Paradise. Love Buffet

Only mustard, no ketchup

[DaKCMan AP]

My 401k are all packaged funds setup through the program.

My roth is where I play with my selected mutual funds & stocks. I wish I could put more than the $5-5.5k per year in there because there are several companies I'd like to invest in. Right now I don't want to do that with my non-retirement accounts.

[suds79]

We own Berkshire as a long term investment. Like it.

[rageeumr]

Originally Posted by suds79

We own Berkshire as a long term investment. Like it.

A or B share? If A, are you looking for a new drinking buddy?

[suds79]

Originally Posted by rageeumr

A or B share? If A, are you looking for a new drinking buddy?

Hell I'd buy you a drink gladly if it was A.... It's B.

[Nickel D]

Is it "ketchup" or "catsup"? And how could there be such a huge disparity in the spelling of this tomato-based condiment?

[teedubya]

I bought $5000 of the stock MJNA after the elections... when Colorado made marijuana legal. Bought it at $0.128 per share. Today, it's around $0.45 a share. :-D

[Rain Man]

In total, I've executed this system with 38 stocks. My outcomes are:

Fully executed (meaning that I bought, made 20%, and pulled out the original, leaving only the profits):

7 stocks - Less than the original purchase price (-70%, -10%, -5%, -20%, -1%, -35%, -10%)

2 stocks - Above the original purchase price, but by less than 20%

12 stocks - Continued growing above and beyond the 20% (30%, 50%, 25%, 200%, 470%, 25%, 100%, 110%, 125%, 40%, 30%, 70%)

I think my "sowing seeds strategy has worked here. While I've had a few that tanked, I've also been riding some really good winners.


Not fully executed (meaning I bought the stock, but it hasn't appreciated by 20% yet)

8 stocks - Less than the purchase price
4 stocks - Above the purchase price, but by less than 20%

The eight dogs are hurting me. These are stocks that I bought and immediately lost money on. I've been waiting on them to recover, but several of them were stocks I bought before the crash and they just didn't recover over the past couple of years.

In a few instances, I've doubled down and bought more stock if I see an opportunity. This is where watching my list has paid off:


1 stock - Less than the purchase price
0 stocks - Above the purchase price, but by less than 20%
4 stocks - Above the purchase price by more than 20% (330%, 350%, 50%, 30%)

[DaKCMan AP]

Originally Posted by Rain Man

In total, I've executed this system with 38 stocks. My outcomes are:

Fully executed (meaning that I bought, made 20%, and pulled out the original, leaving only the profits):

7 stocks - Less than the original purchase price (-70%, -10%, -5%, -20%, -1%, -35%, -10%)


2 stocks - Above the original purchase price, but by less than 20%

12 stocks - Continued growing above and beyond the 20% (30%, 50%, 25%, 200%, 470%, 25%, 100%, 110%, 125%, 40%, 30%, 70%)

I think my "sowing seeds strategy has worked here. While I've had a few that tanked, I've also been riding some really good winners.

Are the returns listed the return on the 20% non-principal investment (i.e. what you left in there after pulling out your principal)? Do they include the original 20% gain or are they the performance after the initial 20% return?

Originally Posted by Rain Man

In a few instances, I've doubled down and bought more stock if I see an opportunity. This is where watching my list has paid off:


1 stock - Less than the purchase price
0 stocks - Above the purchase price, but by less than 20%
4 stocks - Above the purchase price by more than 20% (330%, 350%, 50%, 30%)

At what point did you double-down?