quote:

Originally posted by Flash-LB:
I'm trying to save people money and all you're doing is your chicken little act. And, I've never made any claims to my knowledge or lack of it with respect to stocks.

Precious

If they were, they’re a little more undervalued today.

Historically speaking, the S&P 500 P/E is high. To revert to mean, equities fall or earnings rise. The former is more likely in high inflationary, rising interest rate environment.

quote:

Originally posted by grumpy1:

quote:

Originally posted by Abn556:
I only have two thoughts:

1. Its only a loss if you sell.

No a loss still a loss. You need to sell an "unrealized loss" to make it a "realized loss" for tax purposes.

I'm glad someone else like Grumpy1 has a realistic view instead of regurgitating Pablum.

Here's a screenshot of 600 shares I own in RESACA that I bought on June 5, 2006 for $5,112.95 that is still on my account as of May 31, 2022. Does anyone want to lay out the argument that I haven't lost any money yet since I haven't sold it?

quote:

Originally posted by Abn556:

A loss on paper is not a loss unless you make it happen.


+

Nope, you had a loss. An unrealized loss. And then you waited until later gains eliminated your loss. But it was a loss.

quote:

Originally posted by jhe888:
Don't you have to examine the balance sheet and know something about the financial condition of a company to know whether it is undervalues in the market?

Yeah, but I don't invest in individual stocks any more. Worldcom and Enron fixed that for me. Didn't own any Enron mostly because I could not understand exactly how they were supposedly making money but I had some Wordcom and lesson learned for me. I am not suggesting others not buy individual stocks other than it might be a good idea to not have a really large percentage in just one stock but I don'd any more LOL.

I sold a couple stocks this morning in order to prune my risk and to take some profits. I'll sit on that cash for a bit before reinvesting it.

I have another position I could de-risk depending on what I hear/see Wednesday, what I see from the markets potential overreaction to Powell's speech and whether I can sell it at a nice profit and re-buy it again at a bargain price after it falls and ride it up again.

I'd like to see 75-100 basis points on Wednesday so we can start ripping the band aid off but Powell wont do it and we'll get 50 basis points,longer pain and Biden blaming inflation on Putin, Shippers and oil companies.

quote:

Originally posted by Flash-LB:

quote:

Originally posted by Abn556:
I only have two thoughts:

1. Its only a loss if you sell.

2. The only way to convince people to switch from inexpensive oil to expensive green energy is to make oil way more expensive. The irony is that the electric grid is failing at today’s consumption level. See predictions of rolling blackouts during the current heat wave. What do you think will happen if you add the load of recharging commuter cars to that grid? For reference sake, there are roughly 285m cars (includes trucks/SUVs) in the U.S.

+

Nice to see some logical thought in the thread.
This is all true. I know a couple of people who have sold because they're frightened. They've lost significant amounts of money.

People who are petrified of losing money should put it in a savings account or something similar so they won't lose anything.

Yes and no. If the underlying business is still a going concern, eventually it may earn its way out of the hole created by the falling stock price. If the underlying business fails the stock price goes to zero or close enough and you take a total loss even though you never sold.

If you put money in a savings account at 0.02% interest and the government admitted inflation rate is 7% per annum, then you are losing almost seven percent of your purchasing power every year, and that’s if you accept the government’s numbers. Many believe inflation is much higher.

Your main point of not selling out of fear is 100% correct though.

quote:

Originally posted by jhe888:
Don't you have to examine the balance sheet and know something about the financial condition of a company to know whether it is undervalues in the market?

Well, some folks think the only sane way to invest in companies is to study the companies and invest in the companies, ideally outside of the stock market (early stage investments). Those folks would absolutely agree with you.

Other folks feel that mutual funds or other managed products (where it is difficult to track the underlying companies and do the sort of analysis you suggest) are the only way to go with their investments.

Investing is a “You pays your money, you takes your chances.” sort of game. I have to admit that I like the chances better at the individual company level, but that’s just me.

I am perplexed that the thinking is that the Fed can abate inflation substantially with rate hikes though the core problem with inflation appears to be high energy costs which is the result of executive branch polices crippling the petroleum industry which has caused a massive ripple effect of price increases.

Article from this morning. Interesting his view in high quality dividend stocks. The funds I still have are mostly value dividend paying stock funds so I hope he is right.

https://www.markettradingessen...cheap-goldman-sachs/

Stocks ‘still do not look cheap’: Goldman Sachs

A seemingly cheap stock market may not yet be cheap enough given rising risks to corporate profits from red-hot inflation and rising interest rates, Goldman Sachs warns.

“Despite the 18% year to date S&P 500 decline, equity valuations remain far from depressed,” Goldman Sachs Chief U.S. Equity Strategist David Kostin wrote in a new note to clients. “Valuations appear more attractive in the context of interest rates, but still do not look cheap.”

Kostin added that analyst estimates for corporate earnings still look too high while recent news flow from companies has been concerning.

“Valuations dominated investor focus in early 2022, but recent client conversations have centered on risks to EPS estimates, he wrote. “Company announcements have added to these concerns. Just weeks after shares fell by 25% on disappointing 1Q margins, Target cut margin guidance this week as it struggles to manage excess inventory. Investors have also focused on a string of downbeat comments from tech companies. In recent weeks firms including Amazon, Microsoft, and Nvidia have signaled intentions to slow hiring. This development is positive in terms of balancing the labor market but reflects management anxiety about growth and inflation.”

To be sure, the latest spate of economic news has poked a hole in the notion of valuations being attractive despite the market’s pullback.

The Michigan Consumer Sentiment reading tanked 14% in June compared to May, bringing the index to the trough hit in the middle of the 1980 recession, and consumers’ assessments of their personal financial situation worsened about 20%. According to UMich, about 46% of consumers attributed their negative views on their financial situation to high levels of inflation.

The Consumer Price Index, meanwhile, surged 8.6% in May from one year ago. That represented the fastest increase since December 1981.

Economists expect the Federal Reserve to raise interest rates by 50 basis points at its policy meeting this week and signal further aggressive hikes to curb inflation as that would serve as another anchor to stock valuations.

Kostin isn’t entirely bearish on stocks: The strategist views dividend-paying stocks as “particularly attractively valued.”
“Dividend stocks typically outperform in environments of elevated inflation. In addition, dividends currently benefit from the buffer of strong corporate balance sheets,” Kostin wrote.

Several stocks Kostin highlights that have “above average” dividend yields include Morgan Stanley, JP Morgan, Ford, UPS, IBM, Intel, Broadcom and HP.

This message has been edited. Last edited by: grumpy1,

Don't sell your stock on a dip in the market. If you can't afford to ride it for a while, don't buy stocks. If you cannot take the up and down movement of the market, set your stop loss at the point you're comfortable with and take your hit.

If you own blue chip dividend producers, you'll get paid to hold the stock and wait for it to come back. The chances of Chevron losing all its value is almost zero, using CVX only as an example.

You can try hard to make it sound like a paper loss is a real loss, but if you do not press the sell button you only have a theoretical loss. Don't make it a real loss if you don't have to. Just remember who the people are who make money if you sell at a loss. The company behind the stock you sold doesn't make money and you lose money. The brokers make money whether you win or lose. They are working the churn on portfolios and they love days like today.


+

quote:

Originally posted by Abn556:
Don't sell your stock on a dip in the market. If you can't afford to ride it for a while, don't buy stocks. If you cannot take the up and down movement of the market, set your stop loss at the point you're comfortable with and take your hit.

If you own blue chip dividend producers, you'll get paid to hold the stock and wait for it to come back. The chances of Chevron losing all its value is almost zero, using CVX only as an example.

You can try hard to make it sound like a paper loss is a real loss, but if you do not press the sell button you only have a theoretical loss. Don't make it a real loss if you don't have to. Just remember who the people are who make money if you sell at a loss. The company behind the stock you sold doesn't make money and you lose money. The brokers make money whether you win or lose. They are working the churn on portfolios and they love days like today.


+

This isn't a normal dip.They are sending us into a recession to get inflation under control. It's not a stupid move to get out and buy them back lower if that's what people feel is best.

quote:

Originally posted by Rey HRH:

quote:

Originally posted by grumpy1:

quote:

Originally posted by Abn556:
I only have two thoughts:

1. Its only a loss if you sell.

No a loss still a loss. You need to sell an "unrealized loss" to make it a "realized loss" for tax purposes.

I'm glad someone else like Grumpy1 has a realistic view instead of regurgitating Pablum.

Here's a screenshot of 600 shares I own in RESACA that I bought on June 5, 2006 for $5,112.95 that is still on my account as of May 31, 2022. Does anyone want to lay out the argument that I haven't lost any money yet since I haven't sold it?

Looks like Resaca Exploitation went bankrupt in 2012 and all its assets were sold off in 2013. Bankruptcy is not a market fluctuation or a bear market. Its a complete failure of the company. You own 600 shares of expensive toilet paper. I have a box full of shares of stock from a previous employer that went under.

+

quote:

Originally posted by Ackks:

quote:

Originally posted by Abn556:
Don't sell your stock on a dip in the market. If you can't afford to ride it for a while, don't buy stocks. If you cannot take the up and down movement of the market, set your stop loss at the point you're comfortable with and take your hit.

If you own blue chip dividend producers, you'll get paid to hold the stock and wait for it to come back. The chances of Chevron losing all its value is almost zero, using CVX only as an example.

You can try hard to make it sound like a paper loss is a real loss, but if you do not press the sell button you only have a theoretical loss. Don't make it a real loss if you don't have to. Just remember who the people are who make money if you sell at a loss. The company behind the stock you sold doesn't make money and you lose money. The brokers make money whether you win or lose. They are working the churn on portfolios and they love days like today.


+

This isn't a normal dip.They are sending us into a recession to get inflation under control. It's not a stupid move to get out and buy them back lower if that's what people feel is best.

That depends on how much money they can afford to lose and where they are relative to how much time they have left to make up the loss.

+

^^^What makes you think that everyone selling in the current market or contemplating doing so is, or would be selling at a loss? They very likely could be locking in a gain with plans to buy back in at a lower price later. That's NOT stupid by ANY means...

Cost Basis Matters!

quote:

Kostin isn’t entirely bearish on stocks: The strategist views dividend-paying stocks as “particularly attractively valued.”
“Dividend stocks typically outperform in environments of elevated inflation. In addition, dividends currently benefit from the buffer of strong corporate balance sheets,” Kostin wrote.

Dig up any stock market thread since I've been a forum member and you'll see me preach:
1. Dog's of the Dow
2. Dividend Aristocrats

Nothing sexy about them but they beat the indexes year in year out and you get paid 4 times a year. My theory has always been if these stocks go bad everything else is gone, too.

^^^ What NHRACraft says.

Cost basis does matter. Depending on the equity and the reason you might choose to sell a particular stock, lock in the profit where/when appropriate.

In my case, I now have cash, without having to dip into my Cash only position, to buy other Stocks that may present an opportunity over the next 6 months.

One thing I still need to do is to get a $10k I-Bond for my wife. I-Bonds are good place to store cash for the intermediate term.

Every day is a choice to hold or sell. If your investment is negative and you hold, you are locking up the cash. You cannot deploy those funds elsewhere.

If you believe the market is making transitory minor downward corrections, selling could well mean missing the upside on that particular stock in the very near future. That's the mistake many make.

But if you believe the market (and that particular investment) is going to make a significant drop which will persist, selling now means having the cash to deploy into a better prospect, which could be just cash.

Unrealized losses are still losses. The question is would you buy into that investment today at that price?

quote:

Originally posted by Abn556:

quote:

Originally posted by Rey HRH:

quote:

Originally posted by Abn556:
I only have two thoughts:

1. Its only a loss if you sell.

I'm glad someone else like Grumpy1 has a realistic view instead of regurgitating Pablum.

Here's a screenshot of 600 shares I own in RESACA that I bought on June 5, 2006 for $5,112.95 that is still on my account as of May 31, 2022. Does anyone want to lay out the argument that I haven't lost any money yet since I haven't sold it?

Looks like Resaca Exploitation went bankrupt in 2012 and all its assets were sold off in 2013. Bankruptcy is not a market fluctuation or a bear market. Its a complete failure of the company. You own 600 shares of expensive toilet paper. I have a box full of shares of stock from a previous employer that went under.

+

If the stock didn't go bankrupt and just went to a share price of one cent, would you still say "it's only a loss if you sell?" Because I can tell you, it didn't go to zero overnight. Because that's the point: if it's worth less than what you put into it, you lost money whether you sell it or not. "It's only a loss if you sell unless the company is going to go bankrupt" doesn't make for a good qualification because no one is going to put money into a company if they know it's going to go bankrupt.

"It's only a loss if you sell" is a bullshit saying. At any point, the question is: does it still have good prospects of going up more than what you paid for it and are there any other choices with better prospects? If the prospects of it going up is good and there are no better alternatives, then it's rational to accept the current lower price and wait for it to recover. If it's not going to go up and may even possibly go lower, then it would be foolish to keep it on the basis that "it's only a loss if you sell."

Now, do you understand?

quote:

Originally posted by doublesharp:

quote:

Kostin isn’t entirely bearish on stocks: The strategist views dividend-paying stocks as “particularly attractively valued.”
“Dividend stocks typically outperform in environments of elevated inflation. In addition, dividends currently benefit from the buffer of strong corporate balance sheets,” Kostin wrote.

Dig up any stock market thread since I've been a forum member and you'll see me preach:
1. Dog's of the Dow
2. Dividend Aristocrats

Nothing sexy about them but they beat the indexes year in year out and you get paid 4 times a year. My theory has always been if these stocks go bad everything else is gone, too.

Yep, I have always had a majority of my stock fund investments in high quality divendend paying stocks.

One needs to actually check what some of these funds are holding though and just the their top ten list will tell the tale. Some funds sneak in fang stocks to try and jack up their returns but are now dearly paying the price.

I am going to pick up the SCHD - Schwab U.S. Dividend Equity ETF at some point but not yet. Look like stocks are getting beaten down again today after modest early rally quickly has fizzled out. It tracks the Dow Jones U.S. Dividend 100™ Index, has a great track record, yield is just over 3 percent, .06 expense ratio, is outperformimg so far in this bear market, and has limits on how much it can invest in individual stocks and sectors which is important as many value/dividend funds were hammered in 2008 bear market being so overweighted in financials.

Top ten holdings as of today:
MRK MERCK & CO INC
KO COCA-COLA
AMGN AMGEN INC
IBM INTERNATIONAL BUSINESS MACHINES CO
PEP PEPSICO INC
PFE PFIZER INC
VZ VERIZON COMMUNICATIONS INC
HD HOME DEPOT INC
TXN TEXAS INSTRUMENT INC
LMT LOCKHEED MARTIN CORP

https://www.schwabassetmanagement.com/products/schd

https://www.morningstar.com/et...rcx/schd/performance

https://www.etf.com/SCHD#overview

"SCHD is a market-cap-weighted fund whose selection universe only includes firms with a 10-year history of paying dividends. Within that universe, SCHD uses fundamental screens (cash-flow to debt ratio, ROE, dividend yield, and dividend growth rate) to build its portfolio. The objective is to focus on quality companies with sustainable dividends. As such, this approach gives the fund a modest large cap tilt and excludes REITs entirely. Individual securities are capped at 4% and sectors capped at 25% of the portfolio. Its overall composition is reviewed annually, while the portfolio is rebalanced quarterly."