Trump's Election and the Markets

[AsUpRoDiGy]

I nearly sold it 2-3 weeks ago. The reason was funnily enough our nephew was looking at robotic vacuums at home on Amazon and started naming interesting ones and he said "the Roombas cost too much." I started to wonder how many people make that same decision. But i convinced myself not to sell, I was down about 5% on the stock then, over 30 down now obviously. I could average down on it but I've also got a fair amount of the stock already, and I'm not entirely sure it's at the bottom, they had good earnings, and even the guidance was pretty good. If you follow the company they always guide very conservatively.

The last hit was when some short analyst wrote a thesis that Shark and some other lower priced models were going to take tons of market share. Stock tanked. Then reality set in , 2 of those companies settled suits with IRBT agreeing to stop selling because they were infringing patents, a couple of others have some performance issues, and the stock went back up. I am for now feeling the same thing will happen. Plus the company is branching out it's in pool cleaners, gutter cleaning and some other stuff and they're doing digital mapping because they use wifi that I suspect might make them an interesting takeover candidate in the future when someone decides how to utilize all that information on wifi in your house, where the dead spots are etc.

Way down right now but I think longer term they're still the industry leader.

If you already have a fairly large position, then pretty tough to allocate more, unless you have a lot of faith in its potential. I certainly wouldn't buy it right now...the chart indicates it might break its 52 week low of 52.12, which would then be a great buying opportunity. I haven't checked the short report on it, but if there were large short positions on it...then you know the drop was manipulated. Not often you see a stock drop that much with better than expected earnings, so it's bound to make an upward correction.

 

[Covert Rain]

I simply never sell. In it for the long haul. My uncle and father in law have done SOOOOO well in the market. I just do what they tell me to do. Just kidding. I do ask advice but basically they said the same thing. I am young enough to be so jumpy in the market.

 

[Russ Smith]

I simply never sell. In it for the long haul. My uncle and father in law have done SOOOOO well in the market. I just do what they tell me to do. Just kidding. I do ask advice but basically they said the same thing. I am young enough to be so jumpy in the market.

In general buy good stocks and hold is the right approach. I sold Amazon recently because it was so high and hadn't split I started to think the stock price is holding it back from going higher. There's lots of research that indicates when stocks get up over a certain price it can actually limit it going higher because people have this mental thing they don't want to buy 5 shares at 1500 a share they want to buy 75 shares at 100 a share even though the dollar amount is the same. So far it's up a bit since I sold it but my basic idea is if it gets back into the 1000 range, I'd buy it again. Ironically right after I sold it and was regretting it out comes Warren Buffet saying he wishes he could buy more Amazon but he missed the chance at just under 1000 and might not get another chance. he's not talking about them doing a split to get the price back down he's just saying he thinks it was a steal at 1000 and isn't at 1500.

Generally speaking not selling is the way to go, you can't time the markets so you sell to avoid big down days but miss the big up days too. With individual stocks it's a bit easier but still not so much.

One of the stocks that got hit much the way Irobot did, was Shopify. I had it, I was up about 40% and there was a short report that called it essentially a fraud, I didn't believe the report, but I was concerned other people might, so I waited a bit and then sold. So I made 40% and it's now almost triple what I bought it at. Doh!

 

[AZCB34]

What price did you sell Amazon at?

Splits are largely a psychological exercise and little more.

 

[Russ Smith]

What price did you sell Amazon at?

Splits are largely a psychological exercise and little more.

About 1500. I bought at 580, obviously it's now pushing 1600 so I could have made more but I think a drop is inevitable, if not for the whole market.

There's some evidence that says many people simply won't buy a stock that's got a price that high, even if as I said 5 shares at 1500 is the same 2500 shares at 3 dollars, some people just see a price that high and think no way. There's this line of study that says people tend to buy stocks in certain amounts, 100 shares being the most common, and thus over a certain price people don't want to buy that stock because times 100 it's too high. It makes no sense, but there's a lot of evidence that people think that way.I was also somewhat swayed by Buffett's comments he thinks he waited too long and missed the boat on buying Amazon for Berkshire Hathaway. And I have to admit the lack of a dividend.

It's a great stock, if it keeps going up obviously I'll kick myself but I had been considering selling since it crossed 1350 so I held on for quite awhile.

 

[Russ Smith]

Dow plunging today

Everything plunging today, DOW, Nasdaq and S&P all way down.

The one thing Trump had to hang his hat on was the stock market and now he's managing to kill that too.

 

[Dback Jon]

Dow loses 3% today, below 24K

 

[iLLmatiC]

Time to buy. I'm looking at MO, PG, XOM, and O.

 

[Russ Smith]

Time to buy. I'm looking at MO, PG, XOM, and O.

Ordinarily I'd agree time to buy but there's a triple whammy going on right now. Trump's stupid tariffs, the Facebook stuff with Cambridge Analytica, and now McMaster being replaced with a loony who wants wars.

 

[iLLmatiC]

Ordinarily I'd agree time to buy but there's a triple whammy going on right now. Trump's stupid tariffs, the Facebook stuff with Cambridge Analytica, and now McMaster being replaced with a loony who wants wars.

Buy all the way down. I love stuff on sale.

 

[Russ Smith]

Buy all the way down. I love stuff on sale.

I agree I just am a bit nervous this isn't close to the bottom.

On the bright side with interest rates finally going up we can all get out of the market and buy CD's. At 2.05% it only takes a bit over 35 years to double your money!

 

[iLLmatiC]

I agree I just am a bit nervous this isn't close to the bottom.

On the bright side with interest rates finally going up we can all get out of the market and buy CD's. At 2.05% it only takes a bit over 35 years to double your money!

Plenty of blue chip stocks who have consistently raised their dividends for the last 50 years pay more then that right now. I'm looking at you Exxon and proctor and Gamble.

 

[Russ Smith]

Plenty of blue chip stocks who have consistently raised their dividends for the last 50 years pay more then that right now. I'm looking at you Exxon and proctor and Gamble.

Yes I have a bunch of dividend stocks right now too. Of course if the price of the stock goes down the dividend isn't all that great. But I agree they are a good investment. Trump actually changed a rule with REIT's that screwed up one of my dividend stocks and it's not even subject to the change, but the change was so confusing, people started selling the stock and drove the price down before the company could point out the rule change doesn't actually impact them.

Futures are way down, Dow about .75 percent Nasdaq more than that. You can never tell with futures but basically today just when it looked like things were turning around, Trump announced the tariff on China and the Dow fell 300 points in a matter of minutes and killed the rally.

That is the problem with Trump there are so many things going on you can't really know what to worry about next.

 

[iLLmatiC]

I'm focused on building my income stream through dividends. I don't fret over daily fluctuating of share value.

I'm not sure what you mean by "if the price good down the value isn't that great".

I'm buy and hold forever.

 

[Russ Smith]

I'm focused on building my income stream through dividends. I don't fret over daily fluctuating of share value.

I'm not sure what you mean by "if the price good down the value isn't that great".

I'm buy and hold forever.

If you buy the stock at 10 a share because it has a good dividend, and the stock drops to 8, it's doubtful the dividend is enough to make up for the decline in the stock.

100 shares is 1000 bucks. Say the dividend is 3%. At 8 bucks a share you've lost 200 bucks, and it'll take years for the dividend gain to offset that stock value loss. The good thing is generally dividend stocks hold their value better than non dividend stocks.

But it's quite possible to lose money buying Dividend stocks if they go down, like ORC for example. You also need to realize, and you probably do but many don't, that when a stock goes ex dividend, the stock price decreases because they have to cover the payout of the dividend. Lots of people that buy dividend stocks because they hear it's a good idea, panic and sell them when they see a "strange" drop in price for no apparent reason one day, when all it was is the stock went ex dividend.

What you're doing is very likely a good idea you named some very good dividend stocks, I'm just saying it's not as simple as comparing the % of the dividend to the % say a CD is paying, because the CD can't go down in value like the stock can.

 

[Russ Smith]

There has to be some personal benefit to Trump in an inflationary environment, because he's trying his hardest to enact policy that it's across the board inflationary

Yep. Either his buddies are buying ETF's that short the major stock indexes, or they're in some sort of business where interest rates going up benefits them.

Or he's just stupid and doesn't realize what he's doing is a bad thing.

 

[iLLmatiC]

If you buy the stock at 10 a share because it has a good dividend, and the stock drops to 8, it's doubtful the dividend is enough to make up for the decline in the stock.

100 shares is 1000 bucks. Say the dividend is 3%. At 8 bucks a share you've lost 200 bucks, and it'll take years for the dividend gain to offset that stock value loss. The good thing is generally dividend stocks hold their value better than non dividend stocks.

But it's quite possible to lose money buying Dividend stocks if they go down, like ORC for example. You also need to realize, and you probably do but many don't, that when a stock goes ex dividend, the stock price decreases because they have to cover the payout of the dividend. Lots of people that buy dividend stocks because they hear it's a good idea, panic and sell them when they see a "strange" drop in price for no apparent reason one day, when all it was is the stock went ex dividend.

What you're doing is very likely a good idea you named some very good dividend stocks, I'm just saying it's not as simple as comparing the % of the dividend to the % say a CD is paying, because the CD can't go down in value like the stock can.

You only lose money in the stock's value if you sell. I don't intend on selling my blue chips ever. I'm a buy and hold forever.

 

[Russ Smith]

You only lose money in the stock's value if you sell. I don't intend on selling my blue chips ever. I'm a buy and hold forever.

OK I get you now and yes that's correct in theory you're not losing if you never sell. You might be losing value on paper but if you don't sell it's not realized.

 

[iLLmatiC]

If you buy the stock at 10 a share because it has a good dividend, and the stock drops to 8, it's doubtful the dividend is enough to make up for the decline in the stock.

100 shares is 1000 bucks. Say the dividend is 3%. At 8 bucks a share you've lost 200 bucks, and it'll take years for the dividend gain to offset that stock value loss. The good thing is generally dividend stocks hold their value better than non dividend stocks.

But it's quite possible to lose money buying Dividend stocks if they go down, like ORC for example. You also need to realize, and you probably do but many don't, that when a stock goes ex dividend, the stock price decreases because they have to cover the payout of the dividend. Lots of people that buy dividend stocks because they hear it's a good idea, panic and sell them when they see a "strange" drop in price for no apparent reason one day, when all it was is the stock went ex dividend.

What you're doing is very likely a good idea you named some very good dividend stocks, I'm just saying it's not as simple as comparing the % of the dividend to the % say a CD is paying, because the CD can't go down in value like the stock can.

Nor can they go up in value like a stock can. I'm not a speculator or day trader, I'm a long term holder so I don't care about day to day fluctuations. The overall value of the market has gone up over time, I have the historical performance of the stock market on my side.

 

[elindholm]

The overall value of the market has gone up over time, I have the historical performance of the stock market on my side.

Sort of. The historical performance of the stock market also takes into account the increasing value of shares, not just the dividends. In fact capital appreciation gains dwarf dividends for most holdings, over the long term. If you restrict yourself to earnings from dividends ("buy and hold forever"), you probably aren't doing much better than bank CDs, and most likely less well than government bonds.

 

[iLLmatiC]

Sort of. The historical performance of the stock market also takes into account the increasing value of shares, not just the dividends. In fact capital appreciation gains dwarf dividends for most holdings, over the long term. If you restrict yourself to earnings from dividends ("buy and hold forever"), you probably aren't doing much better than bank CDs, and most likely less well than government bonds.

Not really considering the companies I invest in increase their dividends annually.

 

[elindholm]

Not really considering the companies I invest in increase their dividends annually.

And their stock price is flat?

 

[iLLmatiC]

And their stock price is flat?

25 years from now they will be up. I'm building an income stream that will beat inflation and support me into my old age.

 

[ajcardfan]

You only lose money in the stock's value if you sell. I don't intend on selling my blue chips ever. I'm a buy and hold forever.

My I ask:

What is the point of it then? Are you planning to give 100% of it to your heirs?

If not, i would argue it is a ridiculous waste of money to pile it into stocks and not have it do anyone any good other than pointing out how saavy you are and how rich you are.

 

[iLLmatiC]

My I ask:

What is the point of it then? Are you planning to give 100% of it to your heirs?

If not, i would argue it is a ridiculous waste of money to pile it into stocks and not have it do anyone any good other than pointing out how saavy you are and how rich you are.

Of course I plan on passing it down to my daughter.