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Originally Posted by reckless
Highnote.... your stock investments seems to be of the speculative variety. Do you think that's the best way to go forward, especially since we are in a generational buying opportunity?
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They are not as speculative as you think. They have fairly sound fundamentals. They are just small companies with low stock prices. So I buy lots of shares. It doesn't take a big move to make 30 or 40 percent.
I bought PACD and CPSS at 3 and 4 dollars a month ago. They are up to 4 and 5 dollars now -- both have about 35% gains.
Also, these small stock trades are what Warren Buffett calls "cigar butts" -- mediocre companies at great prices. You find a cigar butt on the ground and can get one or two puffs for free, you make 50% per year with low risk. Charlie Munger came along and said they're great trades when your capital is limited, but the methodology is not scalable. So now Buffett buys great companies at reasonable prices.
Since I don't have the problem that Buffett has with having so much money it's hard to find places to invest, I can look for cigar butts.
Also, these cigar butts are only a fraction of my portfolio. My core holdings are Berkshire-Hathaway, Philip Morris and Weyerhouser. Those are up 8, 2, and 26 percent since I bought them 2 years ago this month. PM and WY yield about 4% in dividends.
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Originally Posted by reckless
The Trump presidency will prove to be a boom for all stocks, but most definitely very large capitalization companies plus well-entrenched and fiscally sound smaller and mid-cap companies sill truly benefit.
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Trump certainly hasn't hurt the market. But stocks have done very well under Obama, too, as the Fed has kept rates low. When he took office the S&P was at 1350. Today it is at 2225. That is a 65% gain. If Trump can do the same the S&P will be at 3671 in 8 years.
My near term target, based on the indicators I use, is 2350 to 2450 between Jan 2017 and Jan 2018.
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Originally Posted by reckless
Despite the run-up in (most) stock prices since my call on November 2 to begin buying unbelievably cheap common stocks, it's still quite far from being too late to build a long-term portfolio. This bull market has just begun actually.
Good luck.
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My biggest "buy" indicator came back on July 12. I believe we are seeing the continuation of the bull market that was signaled back in July. On July 12, the ratio of the 10 day average of up stocks to down stocks on the NYSE was 2.18 to 1. That signaled huge momentum. It is a very rare indicator. It only happens once every several years. The last time it happened was back in March of 2009 -- just after Obama took office. Ironically, it also happened as he was just about to leave office. I will leave it to others to interpret that as they wish.
There were also signs at the end of June that a bull market was forming when the ratio of advancing volume to declining volume reached 9 to 1. That is big volume to the upside. And for the next 10 days people continued to buy which led to the 2 to 1 up stocks to down stocks ratio.
The trend is your friend.
