We have a thread that is dedicated to “trading” stocks in short term. I know a lot of individuals on here also believe in the Bogle method of investing. Our have a “lazy man’s” method. I however do feel there is a place for a percentage of your portfolio to be in long term individual stocks.
This thread is started as a place to point out investment opportunities that might pay off 1, 5, or 10 years later. The one issue with starting a thread like this because there is not a lot of turn over in these investments the frequency of posts will not be high. That is OK, it will still be interesting to see how the predictions last over the years.
I will start first. ATT (T) seems like a good entry point for a long term hold.
1)PE of 15.8
2) Forward PE of 11
3) Yield 5.8%, enough cash flow to pay dividend
4) 10 year growth rate of dividend was 3%
5) if net neutrality gets taken away (which seems certain) T benefits
6) ROA of 3.8% with P/B around 1.6
ATT looks like a pretty solid stock… although I would not buy that stock expecting the dividend payment… there is definitely a risk the dividend could be cut at some point.
BRK, White Mountain, Markel?
I have always stayed away from BRK because I don’t know what will happen when Buffet goes, which has to be soon. It is so diversified at this point the only way it beats the market is through their bully pulpit, and I think that might go away with ole’ Warren. I think holding SPY gets you the same long term growth without the problems of Buffet’s demise.
ETA: you like the insurance companies for any particular reason?
No, but they’re basically baby Berkshire models.
IN my opinion I wouldnt buy T right now because:
As paytv gets more expensive and more people cut the cord I think there will be much more losses from thier directv sattellite business
They have limited fiber deployments (even though they claim many cities how much percentagewise of the cities are covered?) and will need to spend alot of money to catch up with cable (either via fiber or 5g or both) especially now that docsis 3.1 will yield gigabit internet over coax.
Thier mobile division keeps suffering subscirber losses to wireless competition from tmobile.
Deploying 5g wireless will cost $$$$$
Longterm its a good pick but I wouldnt buy until all the smoke has cleared from all the stuff I mentioned.
My picks: GOOG, AMZN, MSFT, AAPL, T, VZ
Bit on risky side but i think good value: Macys - because price got rocked, dividend yield is around 8%. I think it is a good entry point.
Remember - while T is losing customer from regular DirecTV - they’re gaining on DirectTV now streaming service. Lower price … but i would think it also cost less to manage streaming service. Basically they’re ready to make the transition & move on to streaming based service. Plus in good position to provide bundled cell/streaming service.
T & VZ are like electric utilities. You get a decent dividend, but slow capital appreciation. They are stocks I would hold while waiting for something else better to come along – then swap out.
One small stock that I’m keeping an eye on is called Trupanion (TRUP). They sell pet insurance, second largest pet insurer next to Nationwide. They operate at a loss until the latest quarter. I don’t like buying a company that barely breaks even, because their margin of error is so low. The valuation seems very high, so maybe I’ll dip my toes in when the stock pulls back. Pet insurance is a sticky product. There are many humans who cannot afford their own health insurance, but would make sure their pets are covered.
I think if I were to hold a stock long term, I would look for a stock that at least will double. It doesn’t mean I’ll turn down a stock that goes up only 30% over 3 years. But if I were to take on an extraordinary risk of owning an individual stock, it has to have the potential to beat the market handily. Else, I might as well just buy an index and go to sleep. Less work, less worry, more time to sleep.
Any stock can double, be it a small cap or big cap. Boeing doubles in the last 14 months, and it’s a Dow component not known for being high tech or sexy.
When looking for big gains, you sometimes have to go against the market. It’s a very difficult thing to do. Yet when you get it right, you can’t stop grinning.
We maxed our retirement accts and started a taxable acct, put 10k into a total stock market fund so far.
What do you guys consider long term? How much do you typically spend on a single stock, 5k-10k?
No more than 5% of your total wealth should be in 1 stock. I also wouldn’t trade less than $2000 because fees will eat up any profit.
Bought about $2000 of T back about a month ago based on this thread, thanks. Sold today, 8% total gain.
I am glad to hear it worked out for you. I would like to run a little math for you so you know exactly what you made. At 8% you sold the $2000 for $2160. So Initial profit was $160. Take out $14 for trade both ways so you are down to $146. Now take out 25% for short term capital gains and you are now down to $109.50 in profit. All of the sudden your 8% profit is down to under 5.5% and I gave you the best rate on trading and didn’t take out any state sales tax.
Don’t get me wrong, I am very happy for you and anytime you can make that % in a month it is great. But now lets look if you had a $100,000 to invest in T. You would have made $8000 gross. Now take out $14 for both ways and 33% for fed short term tax. You are at $5350.xx in net. Almost the same net profit % as the smaller amount even with much higher tax rate.
Now imagine if you were able to do this trade in a tax deferred account instead of a cash account and you can imagine the huge difference.
I know I am rambling but if you are just starting to trade, tax implications are very very important and how much capital you have available is also important. If this is play money than there are no issues here. But if this is money for your retirement realize how fees really eat into your profits if you are an active trader. For most smaller bank rolls the #1 most beneficial thing you can do is max out your tax deferred accounts. And if you do not have a significant amount a whole market low fee etf that you buy and hold is your best option to maximize gains long term vs active trading. If you active trade with a small amount you have to beat the market by a bunch to actually beat the market after fees. And if you are active trading outside a tax deferred account you have to be awesome to beat the market.
I did the trade at fidelity which is a $4.95 commission buy and sell side and I did it inside my Roth.
excellent. I did the post just to educate some of the newer people. I wasn’t picking on you.
Bought CNI same day I sold T. Would have liked to sell today but didn’t want to get a free ride violation. Anyone else getting nervous about a market crash soon? I could see the markets doing well too the new year but after that?
While the other thread is populated with a lot of traders, it certainly is not limited to short term investments. You can invest as little or as much as you want in an individual stock. It should, however, not consist of more than 5% of your overall portfolio. If you have a little bit of money then use a service that lets you buy fractional shares. I can buy 20 stocks with $20, using M1 Finance, for instance.
Long term is typically considered 5 years, though anybody posting their trades is less likely to own anything for that long. My apple and google positions are older than that though.
Rite aid? Possible for long term hold, what are your thoughts?