Gyroscopic Investing

I think I would go with MMM.

MediumTex wrote:

Bob wrote: I would agree with MT.  My choice is also ExxonMobil. Bought my first 30 shares in 1982 and have been adding to it ever since.  I add to my position at least quarterly through XOM's DRIP plan.  Makes up a substantial portion of my VP.

Some people might be surprised at the number of employees at companies like ExxonMobil who have 100% of their 401(k) accounts invested in company stock.

In some ways that's crazy, and in other ways it sort of makes sense if you happen to work at one of the companies we have listed in this thread so far.

Unless it's money you can afford to lose, 100% of your 401K in company stock is always crazy, regardless of the company.  I know many people who have been burned to a crisp (lost their life savings at the same time they lost their job) by doing this - and I'm not talking about companies like Enron, but rather the blue-est of blue chips exactly like the companies mentioned in this thread.

MediumTex wrote: If you took all of the stocks that have been and will be listed in this thread and put together a portfolio consisting of 50% those stocks and 50% 10 year treasuries and rebalanced it annually, I believe most people would be pleased with the results.  That's just my intuition.

I was thinking along similar lines.
(1) I can do without gold altogether, but I am happy to hold it in the pp because, well, Harry Browne is smarter than I am.
(2) I wouldn't want to be in all stocks at this stage in life (early forties).
(3) Though I use an index for the pp, I have 50-60 individual stocks, most of which have served me well. All the analysis at bogleheads, all the anti-dividend info from Larry Swedroe et al, and all the king's men cannot persuade me to get rid of these shares once and for all.  If the pp constitutes my core, and if I grow the pp rather than the vp, I don't see much harm in holding onto these great stocks plus five- and ten-year notes.

One difference:

A sprinkling of stocks that I would not buy if they were the one stock I would consider buying and holding for life: DDD, IRBT, TSLA, DGI (formerly GeoEye). Why not? As long as it remains a sprinkling.

Ad Orientem wrote:
In recent years Jack Bogle has moved away from his 1% in bonds for every year of your age rule. He has instead been telling people to just put 50% in a total bond index fund and the other 50% in a total stock index fund, and rebalance at 60/40 forever. Barring an SHTF I think that would work pretty well over time.

Has anyone here back tested this against 4XHBPP ? Sounds attractive, especially lately.

Mdraf wrote:

Ad Orientem wrote:
In recent years Jack Bogle has moved away from his 1% in bonds for every year of your age rule. He has instead been telling people to just put 50% in a total bond index fund and the other 50% in a total stock index fund, and rebalance at 60/40 forever. Barring an SHTF I think that would work pretty well over time.

Has anyone here back tested this against 4XHBPP ? Sounds attractive, especially lately.

This is the basic Boglehead portfolio.  It's a great strategy, except for it doesn't hold gold, and it tends to be more volatile than the PP.

In 2008 it wound up losing around 15%, and I think at its lowest that year was around a 20% loss.

Over the last 3 years it's returned around 37%.  The PP has returned around 24% over that same time.

Yeah. Nothing wrong with it, but it has a definite tilt toward prosperity and falling interest rates. High inflation, true deflation, or rising rates are not kind to it. And because it lacks any flight-to-safety assets, it isn't as able to profit from calamity as the PP is.

I think it was just a few weeks ago that we were all saying that the stock market had feet of clay, was broken, etc. And maybe it still is.
As tempting as it sometimes may feel to jump ship, I'll stick with the pp.

Of course, since my vp is still more than 1/2 of everything, my (pp + vp) is still currently 50% stocks despite the pp having only 25-34% in stocks. So, I'm wide open to a huge drawdown if the market plunges and takes P.Morris Int'l, McDonald's, Pepsi, Lockheed, Apple, Chevron and Exxon with it.

"I know many people who have been burned to a crisp (lost their life savings at the same time they lost their job) by doing this - and I'm not talking about companies like Enron, but rather the blue-est of blue chips exactly like the companies mentioned in this thread."


Are they all angry?

Reub wrote: "I know many people who have been burned to a crisp (lost their life savings at the same time they lost their job) by doing this - and I'm not talking about companies like Enron, but rather the blue-est of blue chips exactly like the companies mentioned in this thread."

Are they all angry?

To me, you have to know what you are doing.  By that I mean:

1. The company has to be a really quality company to start with.  No banks and no paradigm shifters like Enron.
2. The company really needs to pay a nice dividend and have a history of increasing the dividend. 
3. You must be patient and not depend upon the stock to pay the bills today or fund an emergency.

If you can satisfy these three things, you can do okay with a single stock, including employer stock, though it's still very risky of course.

The single stock for life exercise is, however, a nice way of clarifying your thinking about what you really look for in a stock.

You know what keeps Google executives up at night, and then haunts their dreams when they finally fall asleep?

Amazon.

I'm a gambling man, so I'm gonna pick Amazon for my one stock.  As a direct marketing guy, I can tell you that there is so much that Amazon is doing RIGHT.  Usually when a company gets to be that size, they screw everything up.  But Amazon still moves with the savvy of a small cap and their marketing is superb.  They are dominating the future of books (kindle platform) and their physical warehouse distribution centers make fulfillment so lightning fast, it is hard to see how anybody else could compete with them.

Coffee wrote: ...
Amazon.

I'm a gambling man, so I'm gonna pick Amazon for my one stock. 
...

As a consumer, I love Amazon for too many reasons to list here.
Also, they're evil enough to some to be given serious consideration in this thread.
Even so, don't they usually lose money? If so, you really are a gambling man.

dualstow wrote:

Coffee wrote: ...
Amazon.

I'm a gambling man, so I'm gonna pick Amazon for my one stock. 
...

As a consumer, I love Amazon for too many reasons to list here.
Also, they're evil enough to some to be given serious consideration in this thread.
Even so, don't they usually lose money? If so, you really are a gambling man.

Time will tell if it's actually "losing" money or investing money.  I think Bezos understands the nature of a public company and is a visionary in the sense that he is positioning Amazon now for future domination.  My conjecture is that one day Wall Street will wake up and realize that Amazon affects every aspect of our lives. 

As an internet marketer, I'm in a position to see that Amazon's programs are run 1000X more efficiently than Google.  But at the end of the day... it's still a gamble.

MediumTex wrote:

AdamA wrote:

dualstow wrote: Chevron / CVX
Domestic or International, that is MO or PM?

International, I think.

When you watch a loved one die from lung cancer, it makes you realize what a great investment tobacco companies are.  Tobacco use will kill you, but people just can't stop doing it.  What's amazing is that it's legal.

A tobacco company is as close to a pure play on heroin as you will find in the stock market.

The only real risk is an unfavorable regulatory climate.

My dad died of lung cancer in 2005 and I've had MO in my mom's account for several years now.  It's been a great investment.  Up 50% from when she bought it and juicy dividends all along the way.

Isn't smoking down 40%?

Coffee wrote: Isn't smoking down 40%?

Smoking seems to be going strong overseas.
It doesn't seem to be waning where I live either, except of course where it's banned. As for the stats, it may very well be down in the US, but not in China, Russia or South America. Well, it does appear to be down in Brazil- I just checked.

Edit: here's a map. Interesting!
http://www.washingtonpost.com/blogs/wor ... y-country/

Do people overseas smoke our cigarettes? I was kind of under the impression that there were national (or regional?) brands?

But what do I know... I've never smoked a whole cigarette!

Coffee wrote: Do people overseas smoke our cigarettes? I was kind of under the impression that there were national (or regional?) brands?

But what do I know... I've never smoked a whole cigarette!

There are regional ones. My favorite (name of) one is Long Life in China. :-) Despite competition with local cigs, and despite the black market, brands like Marlboro do very well overseas. I know this because I read the annual reports. Very colorful, lots of young people smiling with no signs of stained teeth nor health problems.

Coffee wrote:

dualstow wrote:

Coffee wrote: ...
Amazon.

I'm a gambling man, so I'm gonna pick Amazon for my one stock. 
...

As a consumer, I love Amazon for too many reasons to list here.
Also, they're evil enough to some to be given serious consideration in this thread.
Even so, don't they usually lose money? If so, you really are a gambling man.

Time will tell if it's actually "losing" money or investing money.  I think Bezos understands the nature of a public company and is a visionary in the sense that he is positioning Amazon now for future domination.  My conjecture is that one day Wall Street will wake up and realize that Amazon affects every aspect of our lives. 

As an internet marketer, I'm in a position to see that Amazon's programs are run 1000X more efficiently than Google.  But at the end of the day... it's still a gamble.

Isn't enormous future growth already priced into the stock?

Doesn't it trade at a P/E between 150 and 300 most of the time (when it has any earnings at all, of course).

I love Amazon.  I just don't know about a stock with a P/E that high.  If its P/E came down to only five times that of Apple, it would lose over half of its value and still look pretty expensive.

MediumTex wrote: If you took all of the stocks that have been and will be listed in this thread and put together a portfolio consisting of 50% those stocks and 50% 10 year treasuries and rebalanced it annually, I believe most people would be pleased with the results.  That's just my intuition.

Okay...it had to be asked: Should the 50% stock sleeve be equal-weighted or should weights be assigned based on the number of votes each stock receives on the thread?

MediumTex wrote:

Coffee wrote:

dualstow wrote: As a consumer, I love Amazon for too many reasons to list here.
Also, they're evil enough to some to be given serious consideration in this thread.
Even so, don't they usually lose money? If so, you really are a gambling man.

Time will tell if it's actually "losing" money or investing money.  I think Bezos understands the nature of a public company and is a visionary in the sense that he is positioning Amazon now for future domination.  My conjecture is that one day Wall Street will wake up and realize that Amazon affects every aspect of our lives. 

As an internet marketer, I'm in a position to see that Amazon's programs are run 1000X more efficiently than Google.  But at the end of the day... it's still a gamble.

Isn't enormous future growth already priced into the stock?

Doesn't it trade at a P/E between 150 and 300 most of the time (when it has any earnings at all, of course).

I love Amazon.  I just don't know about a stock with a P/E that high.  If its P/E came down to only five times that of Apple, it would lose over half of its value and still look pretty expensive.

You might have a point. 

http://tech.fortune.cnn.com/2012/11/03/ ... les-is-13/

If Amazon declared bankruptcy, analysts would declare this a sign of "a reversal in key expense trends" and the stock would trade up 3%. AMZN should be a $14 stock. AAPL should be $700 stock. The world has gone mad.

From one of the comments on the linked article. Amazon is something that defies logic. It reminds me of the great RCA mania.

Ad Orientem wrote:

If Amazon declared bankruptcy, analysts would declare this a sign of "a reversal in key expense trends" and the stock would trade up 3%. AMZN should be a $14 stock. AAPL should be $700 stock. The world has gone mad.

From one of the comments on the linked article. Amazon is something that defies logic. It reminds me of the great RCA mania.

I wouldn't touch Amazon stock with a 10 foot pole.

From where I sit, the thing that Amazon is best at is destroying brick and mortar business models.

It's also very very good at filling orders and getting them to you quickly.

I don't know how you make money doing any of that, but apparently investors think that it will turn into huge profits at some point.

MediumTex wrote: It's also very very good at filling orders and getting them to you quickly.

I don't know how you make money doing any of that, but apparently investors think that it will turn into huge profits at some point.

You offer what seems like the worst job on the planet doing so, of course:
http://blogs.tnr.com/article/114077/oba ... sign-times#

CEF.

Wow, that's a disturbing article, PointedStick.

Another good stock would be Aqua America (WTR).