Comments on: Review: Payback Time

By: KittyBoarder

KittyBoarder — Mon, 22 Feb 2010 19:33:15 +0000

I have quite a bit concern with these methods
1) Sounds like you will have to “time the market” to find the right time to buy when it’s on-sale.
2) Stock pile on one stock is risky.It’s like putting your eggs in one basket. Stockpile on lots and lots stocks will require a lot of money, so this may not work for a lot of people.

Call me old fashioned.. I still like the idea of dollar averaging my money into index funds and stay away from stock picking..

By: deRuiter

deRuiter — Mon, 22 Feb 2010 11:59:43 +0000

#4 Very clever remark Mule Skinner, you’re correct! I have all my stocks (any discount broker will do this, Schwab, TDAmeritrade, NEVER USE A NON DISCOUTN BROKER) designated as a DRIP account, both the regular brokerage account and the ROTH brokerage account. A DRIP is a “dividend reinvestment program.” It means any dividend a stock throws off is immediately reinvested (at no charge) in more of the same stock. So each quarter, if you have a stock, instead of a bit of cash (the dividend) added to your account, you get a fraction of a the same stock. If you have 10 different stocks, each one has a little bit more each quarter. And you earn dividends on each portion of a stock from then on. Buy 25 shares of a stock which pays dividends. At the end of the quarter you have 25 and a fraction, eventually 26+, 27+. I often buy and sell the same stocks. Not a day trader, but I buy them low and sell them high. To make life easy, if I have accumulated, through DRIP, 1 1/2 shares, my 25 stocks have become 26 1/2. When I sell, I sell the 25 shares. I keep the odd bit, WHICH KEEPS COLLECTING DIVIDENDS, as my place holder. ONLY DO THIS IF YOU ANTICIPATE BUYING THIS STOCK AGAIN! At a glance I know exactly at what price that stock was bought and at what price I sold. because the brokerage company company keeps this record for me on the statement page through the ownership of this one and a fraction stock. When I see that stock has dropped (I sell when high) I investigate and if I still like the stock, I buy it low. If you are happy with a stock and keep it a long time, those DRIPs every quarter give you more of the stock AT NO COMISSION COST, it’s the magic of compound interest! A DRIP account costs nothing to set up or to maintain.

By: Mule Skinner

Mule Skinner — Mon, 22 Feb 2010 03:39:24 +0000

How much money has Phil Town made in stocks? As opposed to books about making money in stocks . . .

Perhaps he is altruistic; or maybe he just likes writing books; but I generally think that if someone has a method that works he probably doesn’t need to write books.

By: Moby Homemaker

Moby Homemaker — Mon, 22 Feb 2010 01:40:03 +0000

How the wealthy use down to go up…on “Jimmy Kimmel Live” this week Shia LeBeouf mentioned that he made an investment recently of $20,000 in what he said he was advised were “value stocks” –good companies at low prices. He said to date (during the time he made the new “Wall Street” movie) he is already up $400,000+.

By: KC

KC — Sun, 21 Feb 2010 22:13:49 +0000

I need to read these two books because this sounds a lot like the way I already invest. I’ve been an investor for 15 years (I’m 36 and had my first 401k at 21). In those 15 years the stocks I’ve held throughout that time have seen very little growth other than some respectable dividends. However about 10 years ago I figured out a lot of the stocks I own (common companies like MCD and XOM) go up and down. Clearly I should be buying when they are (at least) at 52 week lows (I prefer a 3 yr low if I can get it). But maybe I shouldn’t buy and hold – maybe I should sell when they reach 52 week highs? This strategy is the only reason I have any gains to show over my investing lifetime.

People will probably want to know “how do you know its at a high or a low?” My answer is you never know for sure, but you get a feeling for it after a while, especially when you pay close attention to your stock and what the sector is doing. You won’t always hit the high or low on the head but you get close.

I know most people on this blog believe this is nonsense and, yes, I know studies have shown that buy and hold works over the long term. I’ve read everything by and about John Bogle, I respect his opinion, but I’m going with what I know has worked for me – buy low, sell high. There is room in your portfolio for this strategy if you have time – I wouldn’t recommend it for your entire portfolio, but there is room for more active trading if you have the time and inclination.

By: Money Reasons

Money Reasons — Sun, 21 Feb 2010 22:08:18 +0000

I listened to Rule #1, and while it was interesting, especially the use of the bollinger bands and other tools to predict the market movement… Most of it can be read in about 10 other financial books. While “Rule #1″ was a good read, if you look at most of the stocks that were focused on, I don’t think many are going that well today.

Still it a good book to read. It definitely has more meat to it versus the other books out there. And I think the author really does a good job of presenting this cases with solid examples.

I’ll look forward to reading this new book he has!