Investing Thread (Stocks, Crypto, Real Estate, Whatever)

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DBTrek
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Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by DBTrek » Fri Jan 15, 2021 11:20 am

We could use a thread for people who like to talk trading and markets. I've always been interested in investing, dabbled a bit in my 30's, and now, in my 40's, taking it more seriously. It's a huge topic, and I want to state up front that I've got *no* formal credentials in the field. Everything I've got has been from reading, watching videos, and through actual investing experience.

Anyway, my experience has been in crypto and stocks, so I guess I'll kick things off with some of the things I personally look at when evaluating an investment. Here are three indicators I always check before dumping money into a stock:

1‑Year Return, 3‑Year Return, 5‑Year Return rates - We all know that old saw about how "past performance is no indication of future results", but I like to see that a company has actually made money. I like to see positive numbers on all three of these yearly return numbers, but my investments must be positive on two out of three of them. I see a lot of stocks rated as "Strong Buy" and "Buy" that have NEVER made a positive return, and I never invest in them. Maybe the experts have some secret for knowing when a company will finally start making money, but I'm just a layman. In my book if you've never made money, I'm not giving you any of mine.

Operating Margin - This number reflects a company's operating income as a percent of net sales. Or, in simpler terms, how good company management is at turning a profit. This higher this number, the better. If it's a negative number, DO NOT BUY. When I read this number I look at it as "For every dollar of sales, this is the percentage that is profit". I generally want to see a number over 8% here.

Current Ratio - The "can this company cover its debts in the next three months" number. If the number is over 1, then good news, the company can cover its short term debt. If not - well, I'm not investing in a company that may hit financial hardship in the next three months (Utilities, being subsidized, are an exception). If the number is over 2 that's also a red flag for me, because it means the company has a lot of unutilized short term cash. If I give them even more, it may just sit on top of the pile of the other cash they aren't using. How is that gonna make me money?

There are a couple other things I check too; price-to-cash-flow, payout ratio, dividend yield, etc. But this post is already long enough.

So what about you guys? What are your investing tips/tricks?
"Hey varmints, don't mess with a guy that's riding a buffalo"

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C-Mag
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by C-Mag » Fri Jan 15, 2021 11:28 am

I'm not very involved in traditional money investing. A little retirement, that's it.

I'm invested in land and homesteading, food production, soft metals....... silver and lead.

I NEED Hash to be right about the collapse, I'm wealthy the day after.

So, I'm invested in an economic Apocalypse. Essentially, I'm betting against you.

Probably not the wisest strategy in the world.
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DBTrek
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by DBTrek » Fri Jan 15, 2021 11:40 am

C-Mag wrote:
Fri Jan 15, 2021 11:28 am
I'm not very involved in traditional money investing. A little retirement, that's it.

I'm invested in land and homesteading, food production, soft metals....... silver and lead.

I NEED Hash to be right about the collapse, I'm wealthy the day after.

So, I'm invested in an economic Apocalypse. Essentially, I'm betting against you.

Probably not the wisest strategy in the world.
Nah, I'm invested in ETFs like SLVP which cover silver and other metals, so during the collapse they'll go up. Also still have some crypto, and I always keep my eye on tickers like SRTY which move inverse to the market. So ... if things start crashing hard you can pull your investments (hopefully you have a stop loss order on them so they sell automatically before dropping too far) and invest in an inverse market ETF. Then, the lower the market goes, the richer you get.
;)

There are also options trading strategies for investing in a market collapse, but I haven't dabbled in those yet, so I'm unqualified to speak on them.
"Hey varmints, don't mess with a guy that's riding a buffalo"

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Xenophon
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by Xenophon » Fri Jan 15, 2021 11:53 am

Well, I use Coinbase Earn, and then blow what little money I get from it on snacks or frivolities.

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SuburbanFarmer
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by SuburbanFarmer » Fri Jan 15, 2021 12:05 pm

I’m more or less on the Collapse side of the bet. Gold/silver, land, and food.

I do a bit of options trading - essentially just buying some puts against a company or index when it peaks like crazy.

The only guideline I need is PE ratio and momentum. Ex: TSLA is at a million times its profitability and looks like the top of a ski slope. Buy a couple cheap puts betting that they fall back towards their 50 day moving average, and see what happens. Play money only.
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C-Mag
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by C-Mag » Fri Jan 15, 2021 12:11 pm

DBTrek wrote:
Fri Jan 15, 2021 11:40 am
C-Mag wrote:
Fri Jan 15, 2021 11:28 am
I'm not very involved in traditional money investing. A little retirement, that's it.

I'm invested in land and homesteading, food production, soft metals....... silver and lead.

I NEED Hash to be right about the collapse, I'm wealthy the day after.

So, I'm invested in an economic Apocalypse. Essentially, I'm betting against you.

Probably not the wisest strategy in the world.
Nah, I'm invested in ETFs like SLVP which cover silver and other metals, so during the collapse they'll go up. Also still have some crypto, and I always keep my eye on tickers like SRTY which move inverse to the market. So ... if things start crashing hard you can pull your investments (hopefully you have a stop loss order on them so they sell automatically before dropping too far) and invest in an inverse market ETF. Then, the lower the market goes, the richer you get.
;)

There are also options trading strategies for investing in a market collapse, but I haven't dabbled in those yet, so I'm unqualified to speak on them.

I dont mean to derail this. I'm quite interested in the topic and I'll be lurking and learning
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SuburbanFarmer
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by SuburbanFarmer » Fri Jan 15, 2021 12:28 pm

Whatever you do, never place a ‘market order’ for stocks or options. Essentially ‘give me the current price’. It will be front-run for a percentage every single time.

Always place a Limit order. ‘I’m willing to pay X, and I’ll wait until I get it’.
SJWs are a natural consequence of corporatism.

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DBTrek
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by DBTrek » Fri Jan 15, 2021 12:39 pm

SuburbanFarmer wrote:
Fri Jan 15, 2021 12:28 pm
Whatever you do, never place a ‘market order’ for stocks or options. Essentially ‘give me the current price’. It will be front-run for a percentage every single time.

Always place a Limit order. ‘I’m willing to pay X, and I’ll wait until I get it’.
Truth. Also, "market price" is synonymous with "asking price" ... meaning you're not paying the number you see quoted (last traded price), but the higher, "what sellers want now", price - which is always above the last sale (in addition to whatever percentage the brokerage is gonna take).
Good tip!
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by pineapplemike » Sat Jan 16, 2021 8:40 am

did i just heil hitler
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DBTrek
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Re: Investing Thread (Stocks, Crypto, Real Estate, Whatever)

Post by DBTrek » Sat Jan 16, 2021 12:29 pm

Your purchases are racist.
"Hey varmints, don't mess with a guy that's riding a buffalo"