Stock Market

[John SD]

You could have 2 million in CD's right now and you would starve to death.

I just got notice of a maturing CD in the mail today. $25K deposited in the local bank 3 months ago @ 0.05% = $3.15 interest earned during the 3 month period.

Yes, you read correctly. $25K x 0.05% x 3 months = $3.15 Not even enough to buy a gallon of gas. :yuck: :roll:

Good thing I'll probably have to tap into the CD anyway to pay off Uncle Sam. :roll: :roll: :roll:

.05%??? Never seen anybody pay that little on anything. I'd check and see if it was a mistake. He// I'll pay you .5%.

Nope. No mistake. Actually the renewal notice lists the rate as .0500%, but isn't .05% the same thing? My MM checking account earns .01% :bang:

 

[highgrit]

Cross_7, that's way I live life, minus the borrowing part. When I leave I want to leave owing nobody nothing. I haven't lost
anything in the market for awhile now, can't afford the risk anymore.

 

[John SD]

I couldn't take it anymore. Sold 1/2 of my position in the market this morning. Watching 3-4K a day evaporate on paper over the last 10 or so days can really wear on a guy. I may buy back in at a later point, but it's gonna take awhile for me to "feel good" about it again.

None of my business, but curious what is your plan for your money from here? Bank, land, livestock, machinery, or :idea: ?

 

[millstreaminn]

I couldn't take it anymore. Sold 1/2 of my position in the market this morning. Watching 3-4K a day evaporate on paper over the last 10 or so days can really wear on a guy. I may buy back in at a later point, but it's gonna take awhile for me to "feel good" about it again.

To sound like the typical cattleman. Let the bottom fall out to the tune of 40 grand and sell....wait for it to turn around ....wait a awhile and buy back in. :bang:

From what I've been reading, we haven't seen the bottom of the market yet, nor is it gonna turn around anytime soon. I had just under 1/2 of my portfolio in Boeing and Scorpio Tankers. Market Edge downgraded Boeing to a short sell candidate. I bought 2,000 shares of it between 138.00 and 141.00 a share. Sold 1500 for 123.72 yesterday. You can do the math on that loss... :shock: I'll buy back in, but it will have to get around 112.00 for me to do so. I haven't lost any of my own money yet, just "money on paper" from last year. :roll:

 

[millstreaminn]

I couldn't take it anymore. Sold 1/2 of my position in the market this morning. Watching 3-4K a day evaporate on paper over the last 10 or so days can really wear on a guy. I may buy back in at a later point, but it's gonna take awhile for me to "feel good" about it again.

None of my business, but curious what is your plan for your money from here? Bank, land, livestock, machinery, or :idea: ?

My plan is to keep as much of it as possible! :nod: I'm not a "real" farmer, just a hobby one. Got 10 or so momma cows, 100 acres and all the equipment I need. The rates savings accounts are paying is an insult. My bank has a program if you have 250,000 in a savings account, they will pay you 0% interest, but give you FREE checking!!! :yuck: I'll just keep my money in my Scottrade account. They pay a pittance of interest, but better than my bank. Ultimately I'll put everything back in the market, I just need to take some time off to lick my wounds...

 

[TexasBred]

I quit saving and spend what I make and all I can borrow
I plan on living it up now and never live to be old enough that I can't work

My very good old friend Bill Mc------ had the same thought. He took his retirement up front. He lucked out so to speak. He died at 75yrs old about a week after he officially ran out of money...........I imagine he's laughing his sorry old ass off somewhere. God Bless Him. :tiphat:

Who was the guy that said he hoped the last check he wrote before he died "bounced?" :lol:

 

[Dega Moo]

So what's the thinking now? Moving sideways for a bit or ready to drop like a rock? I've been worried my football forecasting abilities might bleed through to my financial analysis and with the downbeat assessment off this thread, I was squirming a bit. Been happier last several market sessions but still don't see the edge of the woods yet.

Millstreaminn you still happy with your sell decision?

 

[John SD]

Ultimately I'll put everything back in the market, I just need to take some time off to lick my wounds...

Yes, but the point I was trying to make was that your "wounds" on paper were not real life wounds until you sold at a loss and made them reality to you. :hide:

It's the same way if you are listening to the cattle market reports and the price has dropped drastically. So what? Has no real effect on you unless you sell at the low price. Instead of being scared off by low prices, maybe if you have grass/labor to handle more it is an opportunity to buy more at a bargain price? That goes for livestock or stock stock. "Buy low ,sell high"

Do you sell your base cattle herd off every time the market has a "correction"? No, of course not, because it's pretty darn tough to get back in again.

I had to sell my cow herd down drastically in the fall of 2002 because of drought and health reasons. The cattle market at the time was just plain awful. Also sold my small herd of sheep, which was a better market.

Only kept 20 coming 2yr old heifers and 20 heifer calves. And 3 older cows that were bred out of synch with the rest. Good neighbor did chores for me that winter while I was out of commission.

Took me all of 10 yrs to almost build the cow herd back to where I was. It would have taken close to 3X what I got for the cows when I sold them to buy back later.

In 2012 I had to sell again. Permanently this time because of health reasons but at least the market was good. Never did get back into sheep. I miss both the cows and the sheep but don't miss the work. Haying in the summer time is the only "work" I do now. ;-)

IMO, building a quality cattle herd with livestock and building a quality stock portfolio with stock stock are both long term propositions. Still no matter what, some cattle and some stock will get sick or just up and die along the way. Sickness and death are a part of all aspects of life. :2cents: :2cents:

 

[millstreaminn]

Millstreaminn you still happy with your sell decision?

BA is up 4.00 from when I sold, GILD is also up 4.00 :bang: but STNG is down .12 . Only good point in my portfolio is I picked up some TWTR at the bottom of its recent decline. I still have 642 shares of BA, only wished I wouldn't have sold 1,500 when I did. :???:

 

[WalnutCrest]

Ultimately I'll put everything back in the market, I just need to take some time off to lick my wounds...

Yes, but the point I was trying to make was that your "wounds" on paper were not real life wounds until you sold at a loss and made them reality to you. :hide:

It's the same way if you are listening to the cattle market reports and the price has dropped drastically. So what? Has no real effect on you unless you sell at the low price. Instead of being scared off by low prices, maybe if you have grass/labor to handle more it is an opportunity to buy more at a bargain price? That goes for livestock or stock stock. "Buy low ,sell high"

Do you sell your base cattle herd off every time the market has a "correction"? No, of course not, because it's pretty darn tough to get back in again.

I had to sell my cow herd down drastically in the fall of 2002 because of drought and health reasons. The cattle market at the time was just plain awful. Also sold my small herd of sheep, which was a better market.

Only kept 20 coming 2yr old heifers and 20 heifer calves. And 3 older cows that were bred out of synch with the rest. Good neighbor did chores for me that winter while I was out of commission.

Took me all of 10 yrs to almost build the cow herd back to where I was. It would have taken close to 3X what I got for the cows when I sold them to buy back later.

In 2012 I had to sell again. Permanently this time because of health reasons but at least the market was good. Never did get back into sheep. I miss both the cows and the sheep but don't miss the work. Haying in the summer time is the only "work" I do now. ;-)

IMO, building a quality cattle herd with livestock and building a quality stock portfolio with stock stock are both long term propositions. Still no matter what, some cattle and some stock will get sick or just up and die along the way. Sickness and death are a part of all aspects of life. :2cents: :2cents:

As long as its legal to eat beef, there is a floor set by a base-level of demand. There is no such inherent demand for the equity holdings of any company. Anyone want some Enron wallpaper?

Cattle prices will never hit $0.00 / lb. A stock price might.

Animal dying in your pasture = bankrupt company in your portfolio

Unless you're dealing in uber-high end genetics, none of the cattle you (or I) own are going to do what any high-flying stocks do (i.e., go from $10 to $1000 (split adjusted)).

Our cattle are more like a bond portfolio than a stock portfolio, IMO. Actually, they're like a convertible bond with variable rate of annual coupon, where the coupon has a cap and a floor, and the conversion ratios of the bond have variable conversion features (e.g., so that each additional $1 rise in stock price translates to less stock upon conversion than the $1 rise before).

Besides, as I reminded a conspiracy-theory-loving friend of mine recently, if worse comes to worse, I can eat my portfolio. How, exactly, does a gold coin taste?

 

[Caustic Burno]

I always viewed precious metals as the worst invest you can make. It really makes no money
it is a hedge against inflation so if you sell it ten years later it still only buys the value of the dollar on that day.
I would rather have 22 lr stockpiled at least I can barter it in the event of total collapse.
Be real hard to break a couple of dollars off one of those coins to trade.
In the event of collapse it has no value unless someone has worthless money to buy it with.

 

[John SD]

I always viewed precious metals as the worst invest you can make. It really makes no money
it is a hedge against inflation so if you sell it ten years later it still only buys the value of the dollar on that day.
I would rather have 22 lr stockpiled at least I can barter it in the event of total collapse.
Be real hard to break a couple of dollars off one of those coins to trade.
In the event of collapse it has no value unless someone has worthless money to buy it with.

I agree PMs should not be considered an "investment" but are a store of value and a hedge against inflation.

That said, PMs have been universally recognized since the begininng of human civilization as a defined monetary value for trade purposes.

For example, the value of an ounce of gold today would buy approximately a half side of beef. If the value of gold goes down relative to beef it might only buy a quarter of beef. If gold goes up relative to beef, might be able to purchase the full carcass.

I have a check ready to get in the mail today to purchase some uncirulated 2011 American Silver Eagles. I buy 20 at a time and they come in original plastic packaging from the mint.

Bought 2014 Silver Eagles a month ago slightly cheaper. I already have some 2012 issue. Don't have 2013 or 2010 and older. Thinking I may buy a mint package of each year as they become available and fill in the gaps.

Thinking of hiring my cousin to help with haying this summer and reimbursing her time with gold or silver bullion. It's easy to check the value of gold or silver on any given day.

I want to keep my coins as they could eventually have some collector value in addition to the value of the raw gold/silver product.

 

[WalnutCrest]

I always viewed precious metals as the worst invest you can make. It really makes no money
it is a hedge against inflation so if you sell it ten years later it still only buys the value of the dollar on that day.
<snip>

Precious metals (in bullion form) are nothing more than an insurance policy against someone doing something horribly stupid somewhere (as long as that 'somewhere' is sufficiently far away from you) ... and ... there is still a market to sell into (and/or trade into).

I know a guy who started investing in wine for a similar reason ... buy right, and it appreciates ... and if the world falls apart, he can drink himself into oblivion!

 

[John SD]

Cattle prices will never hit $0.00 / lb. A stock price might.

Animal dying in your pasture = bankrupt company in your portfolio

Let me arrange this a bit to get it in better perspective. Animals dying in your pasture = Cattle price of $0.00/lb = bankrupt company in portfolio

I submit that the price of every cow among the 1000s killed in the ugly October 2013 winter storm Atlas hit $0.00

I have heard official estimates at $3B in livestock losses to western SD ranchers. Yes, that is 3 BILLION dollars, with a B.

That $3B is real money that is gone from the economy for good. Most ranchers will somehow survive this, but I'm sure a few won't. And there will be a lot of belt tightening for years to come.

You could say the $0.00value even went negative when you consider ranchers had to either hire pits dug or haul carcasses to burial pits provided by county funds for proper disposal.

I wasn't here to do it but neighbor used my Kubota to load up 10 of his dead cows from my place. He hauled those 20 miles to the nearest county burial site. Same neighbor lost over 40 cows at another pasture.

The neighbor who bought my home place along with my cows lost 40 of them, plus many more in another neighbor's dam. The 2 SILs came out and spent a very long day in a rowboat hooking on to dead cows and fishing them out of the dam. Local backhoe guy dug a pit so they didn't have to transport far.

The neighbor is 70 yrs old and he figures Atlas set them back at least 10 yrs financially. Devastating is a mild word for it.

Rendering trucks came from MN and picked up a lot of carcasses around the county, especially along main roads. But it was only a dent when considering the big picture.

I guess the point I'm trying to make here is that no one should fool themselves into thinking that cattle value can not go to zero in the same way that stock value can. And it's even tougher to look at and deal with.

 

[Caustic Burno]

Again all investment is at risk just like life is a risk from the day you are born.
It is all about risk tolerance.

 

[TexasBred]

I guess the point I'm trying to make here is that no one should fool themselves into thinking that cattle value can not go to zero in the same way that stock value can. And it's even tougher to look at and deal with.

In short you're simply saying their present value is less than you paid for them...cattle, stock or anything else.

 

[WalnutCrest]

Cattle prices will never hit $0.00 / lb. A stock price might.

Animal dying in your pasture = bankrupt company in your portfolio

<snip>

I guess the point I'm trying to make here is that no one should fool themselves into thinking that cattle value can not go to zero in the same way that stock value can. And it's even tougher to look at and deal with.

And, I guess the point I'm making is that once a stock has gone from $20 to $15, you HAVE lost $5 ... even if you haven't sold it. On earlier threads, you claim that you've not lost that $5 because you've not yet sold. If you're not sure if you've lost that $5, ask your banker if he'll use that "not lost" $5 towards your collateral position.

 

[Ryder]

:nod: :nod: :nod:

 

[John SD]

And, I guess the point I'm making is that once a stock has gone from $20 to $15, you HAVE lost $5 ... even if you haven't sold it. On earlier threads, you claim that you've not lost that $5 because you've not yet sold. If you're not sure if you've lost that $5, ask your banker if he'll use that "not lost" $5 towards your collateral position.

OK, so using your example: Buy the stock at $20. It drops to $15.

What happens if you keep the stock, it goes back up to $25 and then sell it?

In the end, now have you lost $5? Or made $5? :idea:

BTW, I'm not considering dividends or dividend reinvestments in this scenario.

I have a TDAmeritrade account and got the Feb statement in today's mail. Turns out I "lost" 11.7% of my portfolio last month. Maybe I'll "gain" next month. Maybe I will "lose" more. I don't know. I don't sweat the month to month ups and downs or I'd be a nervous wreck.

The bottom line is that I've had this account for at least 10 yrs and haven't touched it except to withdraw cash earned from dividends along with some pathetic interest.

Took $1000 cash out last fall. Little pie chart thing says my portfolio is now comprised of 98.7% stocks and 1.3% cash. Got $259.67 in the kitty now and will probably take another $1000 out when it gets to that point. Or I could buy more stock.

Got 8 stocks in this deal consisting of 2 farm/construction equipment mfrs, 2 petroleum companies, and 2 pharmaceutical companies. Drum roll please.... my very best stock is Polaris :banana: :banana: :banana: Hands down beats most anything else I own.

My absolute worst absolute total dog that needs to be put out of its misery in this deal is Tenneco. :bang: :bang: :yuck:

The way I look at it, my banker has no say in what I do so long as I'm using my money and not his. I'm sure banker would like to sell me more "safe" 0.05% CDs instead of a stock. :nod: Now don't get me wrong. I do buy CD's from my local bank, but not for long term. For the most part, any money I won't need within a year goes into stock/mutual fund.

I also have an online savings account offering instant access at http://www.bankoncit.com Pays more on savings than any local bank here does on CDs.

 

[WalnutCrest]

And, I guess the point I'm making is that once a stock has gone from $20 to $15, you HAVE lost $5 ... even if you haven't sold it. On earlier threads, you claim that you've not lost that $5 because you've not yet sold. If you're not sure if you've lost that $5, ask your banker if he'll use that "not lost" $5 towards your collateral position.

OK, so using your example: Buy the stock at $20. It drops to $15.

What happens if you keep the stock, it goes back up to $25 and then sell it?

In the end, now have you lost $5? Or made $5? :idea:

You lost $5 and then you made $10. :idea:

<snip> blah blah blah </snip> [edited for clarity]

Got 8 stocks in this deal consisting of 2 farm/construction equipment mfrs, 2 petroleum companies, and 2 pharmaceutical companies. Drum roll please.... my very best stock is Polaris :banana: :banana: :banana: Hands down beats most anything else I own.

My absolute worst absolute total dog that needs to be put out of its misery in this deal is Tenneco. :bang: :bang: :yuck:

8 > 2 + 2 + 2

?

The way I look at it, my banker has no say in what I do so long as I'm using my money and not his. I'm sure banker would like to sell me more "safe" 0.05% CDs instead of a stock. :nod: Now don't get me wrong. I do buy CD's from my local bank, but not for long term. For the most part, any money I won't need within a year goes into stock/mutual fund.

I also have an online savings account offering instant access at http://www.bankoncit.com Pays more on savings than any local bank here does on CDs.

There are many types of diversification. Most people are dramatically under-diversified. It's quite possible to be adequately diversified (without getting eaten alive by commissions / fees) with a limited portfolio.

I'm not going get into a discussion of behavioral finance, theta decay, gamma trading, imbedded optionality, asymmetrical risk profiles, or time-horizon diversification here.