Investment advice

Rex · Post by **Rex** » Wed Sep 21, 2016 7:59 pm

I'm not such a prude that I would ever tell someone not to buy a lottery ticket.

wlu_lax6 · Post by **wlu_lax6** » Wed Sep 21, 2016 8:11 pm

and while the topic of fees is coming up. Educate yourself. One of the things I am responsible for is this fine tool that Consumer Reports and other financial writers really like.

www.finra.org/fundanalyzer

HaulCitgo · Post by **HaulCitgo** » Wed Sep 21, 2016 10:05 pm

Anybody got hard asset ideas? Of course real estate but I'm thinking more like gasoline or guns. Don't like either of those ideas but you could stockpile something. Not a main investment vehicle but to diversify. I could stand to buy a decent shelter somewhere and stash assets. Hope this doesn't make me some sort of hoarder.

A_B · Post by **A_B** » Thu Sep 22, 2016 8:33 am

Hoarding guns makes you a cultist. Hoarding gas makes you a terrorist!

WHY DO YOU HATE AMERICA?

mister d · Post by **mister d** » Thu Sep 22, 2016 8:43 am

HaulCitgo wrote:Anybody got hard asset ideas? Of course real estate but I'm thinking more like gasoline or guns. Don't like either of those ideas but you could stockpile something. Not a main investment vehicle but to diversify. I could stand to buy a decent shelter somewhere and stash assets. Hope this doesn't make me some sort of hoarder.

Howard has always preached real estate / home ownership so that's the direction I went.

Post by **Sabo** » Thu Sep 22, 2016 9:11 am

HaulCitgo wrote:Anybody got hard asset ideas? Of course real estate but I'm thinking more like gasoline or guns. Don't like either of those ideas but you could stockpile something. Not a main investment vehicle but to diversify. I could stand to buy a decent shelter somewhere and stash assets. Hope this doesn't make me some sort of hoarder.

I wouldn't stockpile guns because they rarely appreciate in value. But stockpiling ammo could be a gold mine for when the SHTF.

Post by **brian** » Thu Sep 22, 2016 9:17 am

HaulCitgo wrote:Anybody got hard asset ideas? Of course real estate but I'm thinking more like gasoline or guns. Don't like either of those ideas but you could stockpile something. Not a main investment vehicle but to diversify. I could stand to buy a decent shelter somewhere and stash assets. Hope this doesn't make me some sort of hoarder.

Wouldn't gold be the best hard asset? Especially if there is ever any kind of massive social breakdown.

The Sybian · Post by **The Sybian** » Thu Sep 22, 2016 10:35 am

Sabo wrote: I wouldn't stockpile guns because they rarely appreciate in value. But stockpiling ammo could be a gold mine for when the SHTF.

Ammo is a great idea. Come December and January, the NRA and gun nuts will freak people out that Obama is going to take all the ammo so he can stay in power and make it easier to defeat the civilian uprising. WOLVERINES! The inevitable rush to stock up on ammo will leave the shelves empty. You can step in and turn a quick profit.

Long term, Glenn Beck told me "survival seeds" are the best investment you can make.

A_B · Post by **A_B** » Thu Sep 22, 2016 10:38 am

The Sybian wrote:
Sabo wrote: I wouldn't stockpile guns because they rarely appreciate in value. But stockpiling ammo could be a gold mine for when the SHTF.
Ammo is a great idea. Come December and January, the NRA and gun nuts will freak people out that Obama is going to take all the ammo so he can stay in power and make it easier to defeat the civilian uprising. WOLVERINES! The inevitable rush to stock up on ammo will leave the shelves empty. You can step in and turn a quick profit.

Long term, Glenn Beck told me "survival seeds" are the best investment you can make.

So long as you're willing to be selling ammo illegally that is.

DC47 · Post by **DC47** » Fri Sep 23, 2016 2:40 am

The Sybian wrote:
Shirley wrote:From LinkedIn, it looks like that company is over 15 years old and has fewer than 10 employees. Maybe they are juuuuuust now getting to the fun part of the hockey stick.
I've learned a ton working for a company through their IPO. The major lesson, the market reactions bear almost no relation to reality. I get daily Google alert updates, which is mostly market analyst updates, countless ratings systems, and target prices by all the rating companies. Changes in all these ratings don't tie very closely to the reality of the business or price of the stock. The stock opened at 16, and immediately skyrocketed, topping out at 38. Sweet, I maxed out my Employee Stock Purchase Program discounted buy in. I'm watching my contributions triple in value! This is the greatest! All but one "expert" raved about my company, set high target prices from the beginning, and kept raising them. The one guy trashed the company at first, then wrote several pieces saying the market over valued the stock, the business is shaky... He finally admitted he was the only person down on the stock, and that he was wrong. explaining why my company was such a great investment.

Very soon after this guy changed his outlook, the price tanked. Despite destroying expectations in every category, increasing rate of growth/profits and how much we beat targets by every quarter, and outpacing all competitors, the bottom fell out. Our health insurance expenses were over projections for one quarter, due to 3 employees having expensive medical issues in the same quarter. Medical expenses were below projections for the year, just missed one quarter. Within minutes after the earnings call, the after-market trading saw the price of the stock instantly drop $9. WTF? The following quarter, all economic aspects continued grow by a larger percentage than the previous quarter, but medical expenses were higher than projected. Not even a significant amount. Stock went down to $11. Again, WTF??? The stock slowly crept back into the $20s, then we had a major fuckup that got some embarrassing press, and a $1 million dollar penalty from a government agency. The stock price continued to rise.

The entire system is a fucking scam. Our executives have made fucking fortunes. Every decision is geared towards making the numbers at earning calls look good with much less thought to the overall health of the company. I get an update every time an executive or board member sells shares, and they just keep selling off millions of dollars of shares. A couple left the company, so they didn't give a fuck about the long term. Drive up the price, sell off the stocks, jump ship without a care in the world about the future of the company.

So Shirley, my advice, don't gamble any money you would be upset if you lost. Throw in whatever you feel comfortable losing and buy the lottery ticket. Hey, you never know.

It might be interesting for you to look back at our discussion when you began this dialogue. I'm curious as to what I said in 2015 that you would now consider wrong.

DC47 · Post by **DC47** » Fri Sep 23, 2016 2:46 am

Johnnie wrote:This is the closest thing to a "Do you guys invest in stocks?" thread, so here it goes:

My supervisee likes to play around with stocks and whatnot and he showed me one of the ones he invested in. It's this company called StrikeForce (SFOR) that makes a security app for mobile devices.

Right now the stock is a penny stock that debuted at .0001 and is currently sitting at .0093. It's been consistently going up slowly over the last couple months. He has nearly 1.3 million shares. My interest in peaked for sure. He's done his research and the stock is expected to go up. He showed me this stock when it was around .0004.

I kinda feel like buying a bunch of this stock right now. He bought his through USAA. Is that the best way to get this? I'm just wondering. What do you guys think?

Sweet. It's gone up to all of .0093 and it's 'expected to go up.' Probably by experts no less.

The difference between this investment idea and lottery tickets is that the poor odds of the latter are typically specified by a government entity. If you enjoy playing zero-information gambling games like slot machines, then you might enjoy this kind of investment. As long as you know that's what you are doing, and you don't have hopes for anything other than a random return (that is, your knowledge/ability plays no part in the result), with a strongly negative bias.

The Sybian · Post by **The Sybian** » Fri Sep 23, 2016 12:40 pm

DC47 wrote: It might be interesting for you to look back at our discussion when you began this dialogue. I'm curious as to what I said in 2015 that you would now consider wrong.

Absolutely. I thought about the advice you and Howard gave me throughout the process. I'll go back through and analyze your advice. I don't regret any of the money I put in, but I reduced my contribution from the maximum to the minimum when the stock had risen pretty high just before the price setting date. We get to purchase at a discounted rate set by the lower of the price on the first day or last day of the six month period. I still feel this is a better investment than investing in any random individual stock. I am still way ahead in the game, even with the stocks purchased above the current market price. I remember you saying that it's dangerous to invest in your own company, because you think you know how your company is performing, but don't know the big picture only the executives know. The health insurance issue is the perfect example. I knew our sales team was growing and they were destroying expectations, I knew client retention was well above target, but I had no idea about the health insurance issue. I also didn't know that an insignificant metric would put the stock into a free fall.

Even if I lose money in the end, it will be well worth it for the education I've gotten in the stock market.

DC47 · Post by **DC47** » Sat Sep 24, 2016 12:40 am

I still feel this is a better investment than investing in any random individual stock.

This can be true and at the same time investing a large percentage of your assets in your employer's stock can still be a bad move. That's because the alternative you pose is not a very good idea either.

It's good that you at least partially realize that your knowledge based on working at your company is only a small part of the relevant picture. You should also realize that 1) major investors know everything you know, plus more about the operations of the firm, and this is fully priced into the stock price (and thus no actual advantage to you); and 2) a large portion of investment returns have nothing to do with the success or failure of firms.

Learning is good. But learning by making mistakes is a lot more expensive that finding credible sources of knowledge and rapidly climbing the investing learning curve in this way. I have lost many millions of dollars through investing. For both myself and others. I have many regrets over my own process up the learning curve, and I have always studied hard. Still, there were things that were right there for me to understand that I could only grasp after making a serious, costly mistake.

The Sybian · Post by **The Sybian** » Sat Sep 24, 2016 7:29 pm

DC47 wrote:
I still feel this is a better investment than investing in any random individual stock.
This can be true and at the same time investing a large percentage of your assets in your employer's stock can still be a bad move. That's because the alternative you pose is not a very good idea either.

It's good that you at least partially realize that your knowledge based on working at your company is only a small part of the relevant picture. You should also realize that 1) major investors know everything you know, plus more about the operations of the firm, and this is fully priced into the stock price (and thus no actual advantage to you); and 2) a large portion of investment returns have nothing to do with the success or failure of firms.

Learning is good. But learning by making mistakes is a lot more expensive that finding credible sources of knowledge and rapidly climbing the investing learning curve in this way. I have lost many millions of dollars through investing. For both myself and others. I have many regrets over my own process up the learning curve, and I have always studied hard. Still, there were things that were right there for me to understand that I could only grasp after making a serious, costly mistake.

I would never bet on a random stock, just saying that I felt like the discounted price and ability to buy with pre-tax income made it worthwhile. The stock purchase comes directly out of my paycheck, so it probably keeps me from spending as much, and it is money I can afford to gamble with. The most important thing I learned, which I already believed, is that the whole system is fucked up, and the people who control the game make billions at everyone else's expense.

Post by **brian** » Sat Sep 24, 2016 8:46 pm

You're wasting your time responding.

DC47 · Post by **DC47** » Sun Sep 25, 2016 2:03 am

The Sybian wrote:I would never bet on a random stock, just saying that I felt like the discounted price and ability to buy with pre-tax income made it worthwhile. The stock purchase comes directly out of my paycheck, so it probably keeps me from spending as much, and it is money I can afford to gamble with. The most important thing I learned, which I already believed, is that the whole system is fucked up, and the people who control the game make billions at everyone else's expense.

The game can have some partially rigged elements without the entire investing world being a losing experience for the 99.9% who are not part of the elite. Some of the peasants will win by chance. Others -- a very small number -- will figure out how to game a gamed system. Just not in the same way that the guys at Goldman Sachs do.

I'm quite cynical on the nature of the investing world, but I'd say you are comparing your company stock option with the strawman of a totally corrupt system. Then you may be choosing an option that has too much risk for the reward, even after considering the discount and tax status.

If you're actually doing this in moderation, it's not a big deal. But I'd define this as investing in company stock (or equivalent) with no more than the value of 5-10% of your total assets whatever the type (e.g., include real estate) and whatever the location (e.g., tax-sheltered accounts labelled as 'retirement' and 'education.') I'd go lower in this range to the extent that you have other elements of your financial plan that are somewhat risky (e.g., health, number of dependents, nature of spouse's career, expected role in supporting parents versus inheriting from them).

Just my opinion.

The Sybian · Post by **The Sybian** » Sun Sep 25, 2016 9:02 pm

DC47 wrote:
The Sybian wrote:I would never bet on a random stock, just saying that I felt like the discounted price and ability to buy with pre-tax income made it worthwhile. The stock purchase comes directly out of my paycheck, so it probably keeps me from spending as much, and it is money I can afford to gamble with. The most important thing I learned, which I already believed, is that the whole system is fucked up, and the people who control the game make billions at everyone else's expense.
The game can have some partially rigged elements without the entire investing world being a losing experience for the 99.9% who are not part of the elite. Some of the peasants will win by chance. Others -- a very small number -- will figure out how to game a gamed system. Just not in the same way that the guys at Goldman Sachs do.

I'm quite cynical on the nature of the investing world, but I'd say you are comparing your company stock option with the strawman of a totally corrupt system. Then you may be choosing an option that has too much risk for the reward, even after considering the discount and tax status.

If you're actually doing this in moderation, it's not a big deal. But I'd define this as investing in company stock (or equivalent) with no more than the value of 5-10% of your total assets whatever the type (e.g., include real estate) and whatever the location (e.g., tax-sheltered accounts labelled as 'retirement' and 'education.') I'd go lower in this range to the extent that you have other elements of your financial plan that are somewhat risky (e.g., health, number of dependents, nature of spouse's career, expected role in supporting parents versus inheriting from them).

Just my opinion.

The maximum allowable under IRS regs is way below the 5% threshold. I would never put anywhere near 5-10% of my assets in any stock. It's pure discretionary funds that I treat as if it doesn't exist. It's just less money directly deposited in my checking account, so it's like it never existed, and I have a discretionary pool of stocks on the side if I need to pay for renovations or something. The way I view it is forced savings, as I feel like I am earning less. If I lose on the investment, whatever I walk away with is money I may have spent anyways.

DC47 · Post by **DC47** » Mon Sep 26, 2016 3:19 am

I don't think the IRS can regulate any rule having to do with investing under a certain percentage of total assets. They have no way of assessing total assets of an individual, as far as I know. I've dealt with several cases where people had way over 10% of total assets in company securities, purchased via a program like you described.

Note that I'm talking about the cumulative total investment in company securities. Not just the amount that is invested monthly (or in some other period) as part of a program.

The Sybian · Post by **The Sybian** » Mon Sep 26, 2016 10:37 am

DC47 wrote:I don't think the IRS can regulate any rule having to do with investing under a certain percentage of total assets. They have no way of assessing total assets of an individual, as far as I know. I've dealt with several cases where people had way over 10% of total assets in company securities, purchased via a program like you described.

Note that I'm talking about the cumulative total investment in company securities. Not just the amount that is invested monthly (or in some other period) as part of a program.

I meant the regulation capping the amount of discounted pre-tax shares a company can offer an employee through an Employee Stock Purchase Program. There is absolutely no reason for me to even consider purchasing non-discounted shares outside of payroll deductions.

DC47 · Post by **DC47** » Tue Sep 27, 2016 7:38 pm

My suggested 5-10% limit is your percentage of total assets. It includes company securities in any form, in any type of account, regardless of discount. If you are higher than this you are taking a lot of risk, due to the correlation between your career prospects and the stock return of the firm.

In my experience, most people say "there is no real correlation." However, history shows it's actually quite strong. Especially on the negative end of firm outcomes.

People tend to think they are exceptions, and also that recent past history predicts the future. They also under-estimate the size of the ends of the bell curve. Further, everyone loves what they perceive to be a sale (e.g., stock at a discount to current market value). These cognitive biases lead people to take more risk than they should by over-investing in company securities.

sancarlos · Post by **sancarlos** » Fri Dec 22, 2017 8:50 pm

This isn’t advice, as per the thread title. Just shaking my head in amazement. A little more than two years ago my company got acquired and a ton of us got axed, including me. Whatever stock we held in our company got converted to shares of the new company, which was at ~$19 at the time. Today, their share price closed at over $90. I’m glad I kept some shares! (But I don’t have enough to change my life or anything).

It is ticker XPO if you are interested. (I’m going to dump my shares after the first of the year.)

Johnnie · Post by **Johnnie** » Wed Oct 31, 2018 11:27 pm

So my TSP, Roth IRA, and Index Fund accounts have shot way down collectively this final quarter.

But I get an extra $75 a month because of the tax cut this year.

Thanks, Trump!

The Sybian · Post by **The Sybian** » Thu Nov 01, 2018 11:17 am

Johnnie wrote: ↑Wed Oct 31, 2018 11:27 pm So my TSP, Roth IRA, and Index Fund accounts have shot way down collectively this final quarter.

But I get an extra $75 a month because of the tax cut this year.

Thanks, Trump!

The real bitch of the tax cuts, is people see their extra $2/pay period before midterms, and won't realize they get fucked on deductions until the Spring. And if the Dems take the House, they will probably blame that on the Dems.

Gunpowder · Post by **Gunpowder** » Thu Nov 01, 2018 12:50 pm

I mis-timed this shit by a fuckin' day. Different between making about $20K and losing a few thousand. Motherfuckers.

Actually I guess it's better to say I got a bit antsy and closed out some put options a day early (or in the case of Tilray about 5 damn minutes too early).

Brontoburglar · Post by **Brontoburglar** » Thu Nov 01, 2018 12:52 pm

My 401K rate of return is -5.42 percent this year wooooooooooooooooooooo

at least the company match makes up for that but ... fuck

Post by **Sabo** » Thu Nov 01, 2018 12:55 pm

Brontoburglar wrote: ↑Thu Nov 01, 2018 12:52 pm My 401K rate of return is -5.42 percent this year wooooooooooooooooooooo

at least the company match makes up for that but ... fuck

I had a similar rate of return recently, but it's rebounded a bit so it's only down -1.64 percent.

But hey, I saw a Mercedes-Benz SUV yesterday with a "IAMJGALT" license plate, so I guess that makes up for it.

mister d · Post by **mister d** » Thu Nov 01, 2018 1:17 pm

I find its best not to look because I just barely stay on the good side of "don't try to beat the market" versus "you're totally smart enough to beat the market".

The Sybian · Post by **The Sybian** » Thu Nov 01, 2018 3:48 pm

I never look at my 401K. I have Thrift Savings Plan (federal govt employee retirement plan) that I haven't looked at in 12 years. I probably should, because I have no damned idea what the value of that account is. I probably should monitor the Thrift Savings, because you can move allocations between various strategies. I do check my company's stock price most days, just because it's interesting to follow. It's so untethered from reality, it's a joke.

mister d · Post by **mister d** » Thu Nov 01, 2018 3:49 pm

The Sybian wrote: ↑Thu Nov 01, 2018 3:48 pmIt's so untethered from reality, it's a joke.

Off to go do some insider trading!

Johnnie · Post by **Johnnie** » Thu Nov 01, 2018 4:02 pm

The Sybian wrote: ↑Thu Nov 01, 2018 11:17 am
Johnnie wrote: ↑Wed Oct 31, 2018 11:27 pm So my TSP, Roth IRA, and Index Fund accounts have shot way down collectively this final quarter.

But I get an extra $75 a month because of the tax cut this year.

Thanks, Trump!
The real bitch of the tax cuts, is people see their extra $2/pay period before midterms, and won't realize they get fucked on deductions until the Spring. And if the Dems take the House, they will probably blame that on the Dems.

I'm also looking forward to doing my taxes now that I own a house. My only saving grace for this year, however, might be the fact that I was in a tax free zone for 5 months so I might not get as fucked as others come tax time.

mister d · Post by **mister d** » Thu Nov 01, 2018 4:13 pm

I don't think you'd be affected by the new legislation unless what I'd expect of Arizona property taxes is way off. If anything you might not have enough taxes + mortgage interest to itemize.

Johnnie · Post by **Johnnie** » Thu Nov 01, 2018 4:23 pm

Well in that case I'm probably good. New Mexico is notably cheap for property tax and I've only been making mortgage payments since August.

We'll see if my payments fluctuate next year once my upgrades are done.

A_B · Post by **A_B** » Thu Nov 01, 2018 4:55 pm

Yeah I think most people won’t be itemizing next year.

Gunpowder · Post by **Gunpowder** » Tue Sep 03, 2019 3:51 pm

Probably more of a random thought but this looks awfully similar to me:

Great depression was over a shorter timeframe but still.

The Sybian · Post by **The Sybian** » Tue Sep 03, 2019 9:19 pm

The Sybian wrote: ↑Fri Sep 23, 2016 12:40 pm
DC47 wrote: It might be interesting for you to look back at our discussion when you began this dialogue. I'm curious as to what I said in 2015 that you would now consider wrong.
Absolutely. I thought about the advice you and Howard gave me throughout the process. I'll go back through and analyze your advice. I don't regret any of the money I put in, but I reduced my contribution from the maximum to the minimum when the stock had risen pretty high just before the price setting date. We get to purchase at a discounted rate set by the lower of the price on the first day or last day of the six month period. I still feel this is a better investment than investing in any random individual stock. I am still way ahead in the game, even with the stocks purchased above the current market price. I remember you saying that it's dangerous to invest in your own company, because you think you know how your company is performing, but don't know the big picture only the executives know. The health insurance issue is the perfect example. I knew our sales team was growing and they were destroying expectations, I knew client retention was well above target, but I had no idea about the health insurance issue. I also didn't know that an insignificant metric would put the stock into a free fall.

Even if I lose money in the end, it will be well worth it for the education I've gotten in the stock market.

Well shit, this was a trip to go back and read... Not sure why we kept talking past each other. My experiment was extremely educational, interesting, and kind of fun. When the shares hit what I thought was surely a high, I sold half my shares and bought a new car with just the profits. I dropped to the minimum purchase amount, but the price went up another $30+. Not complaining at all. Initial buy-in at $13, stock hit it's high mark at $77 a couple weeks ago. With the price being set at the lower price of 2 dates (plus 15% discount) at the start and end of each 6 month cycle, most I ever paid was $40/share. Still can't understand how this could be a bad idea, especially since, as I said 10 times, it was a negligible investment taken from my paycheck that I don't miss. If I lost the entire amount, it wouldn't have changed my life, as I treat the money as if I don't have it. It's kind of like my 401K, but I can sell the shares 1 year after purchase without penalty. Maybe I wasn't clear that my annual purchase was less than 1% of my total wealth. I don't care how stupid or naive I am (and I fully know I have zero insider knowledge, they stress that constantly), buying a discounted stock with money I would otherwise spend or put in a savings account was a low risk I was willing to lose for the education and fun of following my company as it went public.

Post by **brian** » Tue Sep 03, 2019 9:52 pm

Stick to the pink sheets.

The Sybian · Post by **The Sybian** » Tue Sep 03, 2019 9:59 pm

brian wrote: ↑Tue Sep 03, 2019 9:52 pm Stick to the pink sheets.

guaranteed millions!

Rex · Post by **Rex** » Tue Sep 03, 2019 10:30 pm

Sabo wrote: ↑Thu Sep 22, 2016 9:11 am
HaulCitgo wrote:Anybody got hard asset ideas? Of course real estate but I'm thinking more like gasoline or guns. Don't like either of those ideas but you could stockpile something. Not a main investment vehicle but to diversify. I could stand to buy a decent shelter somewhere and stash assets. Hope this doesn't make me some sort of hoarder.
I wouldn't stockpile guns because they rarely appreciate in value. But stockpiling ammo could be a gold mine for when the SHTF.

Who’s rollin’ in cash tonight on Sabo’s advice?

EnochRoot · Post by **EnochRoot** » Tue Sep 03, 2019 10:33 pm

Little Boy Blue - He got shot at school!

HaulCitgo · Post by **HaulCitgo** » Tue Sep 17, 2019 3:23 pm

Very definitely interested in rotating out of my way overweight stock portfolio with mostly large cap type mutual funds. Bought a lot of this stuff in the early 00s through recession. Obviously lots and lots of green with most everything up over 100%

Question... is there anyway to change at least some of this into conservative or counter type investments, cash, bonds, treasury type investments without incurring massive capital gains tax liability? Answer seems to be no and somehow I am basically stuck in these investments but better to ask yall then be down the 40% that the economy is begging for.