squiffy
12-19-2003, 02:13 PM
Just looking back at my picks in 2003. Again, I share this information to give you an idea of my investing style and approach. It's not for everybody. I enjoy reading about your picks and reasons behind them, what worked and what didn't.
Made $14,186.01 on MCD McDonald's in 2003. Not on paper. All stocks shares sold already. Some of it was in my IRA Retirement Account with Ameritrade so that will be tax deferred until I withdraw it at age whatever it is. BUt it is nice, if you earn a profit, to be able to keep reinvesting it for 30-40 years without paying any tax on it. So you should always try to max out your retirement account if you can.
When I was a lawyer working in private firms, I tried to max out my retirement account. Back then it was probably an 8K max contribution or so. Now I think it is up to 10 or 11 K or so.
Then when I left the law firms, I could roll over the 401K account into an IRA with Vanguard and later with Ameritrade.
So I like the idea of starting with a 401K contribution, because those contributions can be large. Then rolling over into an IRA if you leave a job, because then you have control over who holds the IRA. The big problem with 401Ks is that you have to use the investment options provided by the employer and they generally don't provide for investing in individual stocks.
Only 1 of about 7-8 employers I have been with has offered individual stock trading, with Charles Schwab. But Schwab charges something outrageous like $30 per trade.
(I am averaging trading costs into the price as I don't have separate figures for the cost of each trade, just the total amount of money taken out of my account)
9/3/02 BUY 855 MCD at 18.01 (15,403.00)
10/22/02 SELL 855 MCD at 19.44 (16,626.80
profit $1223.80
12/5/02 BUY 500 MCD at 17.86 (8930.99)
12/9/02 BUY 500 MCD at 17.40 (8700.99)
12/17/02 BUY 600 MCD at 15.77 (9460.99)
6/23/03 SELL 500 MCD at 22.10 (11,053.49) profit 2122.50
6/23/03 SELL 1100 MCD at 22.11 (24,330.87) profit 6168.89
8/19/03 BUY 2000 MCD at 21.80 ($43,810.99)
8/27/03 SELL 2000 MCD at 22.60 ($45,206.89) profit $1595.90
Lessons?
Should have bought more MCD at the lowest prices. But when a stock drops $3 below the price you first bought it, it's scary as hell. Even if you think the stock will eventually recover. I was sure MCD would recover. But what if it took 2-3 years? A nightmare.
It is better to divide up your money into say 10 blocks of 10K or 20K and buy in gradually. But it is always impossible to know when exactly to buy in. I usually wait for say an 8-10% drop on bad news that sounds temporary. But the problem is it could still drop another 5-10%. That's always the risk you take.
Going from 15 to 22 in MCD is roughly a 30-40% return over a 6 month period. And again, I was confident MCD would not go bankrupt. They were an outstanding company, but all burger companies were low, as surprisingly people were eating out less, even eating less fast food astonishingly. MCD posted their first negative quarter in history I believe, which is the perfect time to buy. You know it is almost impossible for MCD to go bankrupt. I figured the mad cow scare would eventually die down, though there is always a risk that it could turn into a big problem. BUt you have to take some risk if you want profit.
My thing is to try to reduce the downside risk, while still keeping enough upside.
going from 18 to 22 in MCD was 20% in 6 months. Again that is the kind of modest return I am shooting for. 10% to 20% over 6 months or a year. This is not 25% in one day. And it is not STARBUCKS or AMAZON going from 1 to 200.
But Amazon has never made a profit. MCD makes billions of dollars in sales each year (if I remember correctly) and hundreds of millions of dollars in solid profit. It has about 30,000 worldwide outlets.
So I was sure I could get a 10% return, EVENTUALLY, without going broke.
So if we are discussing a particular stock pick, this is typical of the kind of play I am shooting for.
I realize there are many ways to skin a cat and other people have different approaches. But this approach works for me.
Made $14,186.01 on MCD McDonald's in 2003. Not on paper. All stocks shares sold already. Some of it was in my IRA Retirement Account with Ameritrade so that will be tax deferred until I withdraw it at age whatever it is. BUt it is nice, if you earn a profit, to be able to keep reinvesting it for 30-40 years without paying any tax on it. So you should always try to max out your retirement account if you can.
When I was a lawyer working in private firms, I tried to max out my retirement account. Back then it was probably an 8K max contribution or so. Now I think it is up to 10 or 11 K or so.
Then when I left the law firms, I could roll over the 401K account into an IRA with Vanguard and later with Ameritrade.
So I like the idea of starting with a 401K contribution, because those contributions can be large. Then rolling over into an IRA if you leave a job, because then you have control over who holds the IRA. The big problem with 401Ks is that you have to use the investment options provided by the employer and they generally don't provide for investing in individual stocks.
Only 1 of about 7-8 employers I have been with has offered individual stock trading, with Charles Schwab. But Schwab charges something outrageous like $30 per trade.
(I am averaging trading costs into the price as I don't have separate figures for the cost of each trade, just the total amount of money taken out of my account)
9/3/02 BUY 855 MCD at 18.01 (15,403.00)
10/22/02 SELL 855 MCD at 19.44 (16,626.80
profit $1223.80
12/5/02 BUY 500 MCD at 17.86 (8930.99)
12/9/02 BUY 500 MCD at 17.40 (8700.99)
12/17/02 BUY 600 MCD at 15.77 (9460.99)
6/23/03 SELL 500 MCD at 22.10 (11,053.49) profit 2122.50
6/23/03 SELL 1100 MCD at 22.11 (24,330.87) profit 6168.89
8/19/03 BUY 2000 MCD at 21.80 ($43,810.99)
8/27/03 SELL 2000 MCD at 22.60 ($45,206.89) profit $1595.90
Lessons?
Should have bought more MCD at the lowest prices. But when a stock drops $3 below the price you first bought it, it's scary as hell. Even if you think the stock will eventually recover. I was sure MCD would recover. But what if it took 2-3 years? A nightmare.
It is better to divide up your money into say 10 blocks of 10K or 20K and buy in gradually. But it is always impossible to know when exactly to buy in. I usually wait for say an 8-10% drop on bad news that sounds temporary. But the problem is it could still drop another 5-10%. That's always the risk you take.
Going from 15 to 22 in MCD is roughly a 30-40% return over a 6 month period. And again, I was confident MCD would not go bankrupt. They were an outstanding company, but all burger companies were low, as surprisingly people were eating out less, even eating less fast food astonishingly. MCD posted their first negative quarter in history I believe, which is the perfect time to buy. You know it is almost impossible for MCD to go bankrupt. I figured the mad cow scare would eventually die down, though there is always a risk that it could turn into a big problem. BUt you have to take some risk if you want profit.
My thing is to try to reduce the downside risk, while still keeping enough upside.
going from 18 to 22 in MCD was 20% in 6 months. Again that is the kind of modest return I am shooting for. 10% to 20% over 6 months or a year. This is not 25% in one day. And it is not STARBUCKS or AMAZON going from 1 to 200.
But Amazon has never made a profit. MCD makes billions of dollars in sales each year (if I remember correctly) and hundreds of millions of dollars in solid profit. It has about 30,000 worldwide outlets.
So I was sure I could get a 10% return, EVENTUALLY, without going broke.
So if we are discussing a particular stock pick, this is typical of the kind of play I am shooting for.
I realize there are many ways to skin a cat and other people have different approaches. But this approach works for me.