In Which We Speak of Monetary Matters

[Metaliturtle]

Educated betting for sure.  Any predictability is good for the person who predicts correctly.  It's also good to invest like your adviser invests and if they look like they need a sale, they're not investing in a winning strategy. 

[Buster's Uncle]

Yes. The speculation factor.

I actually know a guy who does only that - an old chess crony who's a retired lawyer and day-trades for fun (also greed) with money (I hope) he can afford to lose.

[Metaliturtle]

The taxes on that are murder, I'm hoping he buys and holds a while when he's day trading.

[Buster's Uncle]

He talked about a lot of very quick turnaround (same day) shorting, is all I know.

I really do hope it was only fun money - he seemed to have done real well as an LA labor attorney.

[Rusty Edge]

In the 1990s, when I had less money I had good results with Bill Staton
http://www.amazon.com/Americas-Finest-Companies-Investment-Plan/dp/0786882107

That was based on dividend re-investment plans, before online brokerage. Since then, some of the companies have frowned on small investors, figuring that the cost per share for mailing, etc. is higher, and bought most of them out.

I don't know how his approach weathered the Great Recession, or what his current advice is, but originally the concept was based on buying and holding companies that had long uninterrupted streaks of dividend increases and /or increased earnings per share ( usually these were blue chip/ S&P 500 ). You sell only when a company is disqualified from the newsletter list, or when you need the money.

The beauty of it was that it was designed to work on $50/month, with no brokerage costs after the initial set-up.

He has a website now-
http://www.statonfinancial.com/investing-philosophy/

[Metaliturtle]

If I had a big chunk of money to play in the stock market with right now I'd probably buy into the dividend aristocrats to create a perpetual income machine.

[Yitzi]

Our broker retired. We got a younger guy, same office. He was doing the strategy himself, and recommended it to us. I thought that was interesting, because while my dad was the youngest bank president in the history of the county where I was born, and I was around financial talk much of my life, a lot of financial guys want to sell you the products which make them the most money, rather than the ones they use themselves. The broker  made us( me ) read the book first to understand it. The light bulb turned on for me. Markets are more about expectations than fundamentals.

Longer-term, the expectations will tend to follow the fundamentals, though.  Bubbles can only last so long before they pop...

[Geo]

You can take that to the bank.

[Rusty Edge]

Longer-term, the expectations will tend to follow the fundamentals, though.  Bubbles can only last so long before they pop...

That sounds logical.

Mallach's strategy not only tells you what to buy, but when to sell. But there's a little more to it than riding the speculation wave. It's also as a good a way as any of finding the star performers.  One of our broker chosen basket of 10 or 11 stocks was Haliburton. I detest that rat-[progeny of unmarried parents] defense contractor. I wanted to replace it. Ultimately, we reasoned that we had agreed to let the broker try something and not back-seat drive him. Between that and procrastination, it stayed in the portfolio. As it turns out, that fracking  drilling process was suddenly taking off beyond belief. Who knew?

[Metaliturtle]

Just don't go on a hunting trip with the former VEEP

[Buster's Uncle]

http://alphacentauri2.info/index.php?topic=1417.0

[Rusty Edge]

Morgan makes a good speech.

[Buster's Uncle]

It seemed relevant to the topic...

[Metaliturtle]

I really don't like that guy when he comes up in SMAC..

Anyway back on topic, crazy maths for people who "just can't seem to save" try the 'one more dollar' method.  Works like this:

Week 1 you put $1 into savings.
Week 2 you put $2 into savings.
Week 3 you put $3 etc.

Most working people can find a dollar, and as time goes on you may get creative, but if you stick to it, after a year you have $1378 in savings.

[Buster's Uncle]

A thought in household economics related to that; one day in the late 90s while I was there working a renfair, Mylochka woke up to find her refrigerator not working, irreparably.  Naturally, she was upset.

I said "what have you got in the bank?"  She said "[figure that was lower than ideal, but plenty for this]"  And I said "That's what savings is for; let's go buy a fridge."

(Later some stuff about refilling the savings, instanter, and working on increasing.)