I have to sell some stock...

[crash]

I'm shamelessly looking for free stock advice here.

I have to sell a little stock to raise some cash for school.
Which of these would you sell?

GE
GM
Bristol-Myers Squibb (BMY)
Schering-Plough (SGP)
BellSouth (BLS???)



SGP seems to have the lowest rating.

Thanks in advance.

crash

[JTrout]

BellSouth, or GM.
Or sell whichever you have the most money in.

[bigpooch]

I would probably sell BLS or GE and keep the pharmas.

I don't think GM is a great stock either, so you can't be
that far off to sell this instead.

[Wildbill]

Depending on how many shares you have and how much money you need, you might be better off selling some calls on these.

[crash]

Under what market circumstances is selling a call better than selling?

Several hundred shares (+/-) of each, don't need much--$10G or so. Low official income (basically 0), so wouldn't have to worry much about cap. gains taxes.

[Zeno]

Sell all the others before dipping into the GE. Hang on to it if you can.

-Zeno

[Wildbill]

Just a matter of what situation you are in. I often sell calls when the stock is running well. Instead of selling it out after a runup, I give it a chance to run a little more with a covered call. If it hits that point I get even more profit. If it goes down I get a little insurance to cover my losses. If the stock isn't running well then obviously selling a call isn't going to do you much good unless you sell a slightly in the money call. Even then, sounds like you probably don't have enough shares to make good use of this strategy.

Do the math and see if you can raise enough selling calls to cover what you need. If you have several hundred shares each and need 10Gs you probably are a little short of what you need, but maybe if you sell calls on all with some close to strike price you might raise enough.

Otherwise just sell the stocks that have run up the most, provided you have held them more than a year.

[Ray Zee]

sell the stock that gives you the best bang for your buck tax wise now or for the future. or throw a dart.

[adios]

Don't know what your tax situation is. I'd sell everyone of em, take out the money you need and take the money that's left and buy SPY. Several reasons for this:

1. Diversificaiton is better i.e. you're taking no specific company risk on by buying SPY.

2. You'll maximize the reward for the amount of risk your taking. It's easily proved mathematically in portfolio theory that company specific risk can be diversified away and that investors are not paid a risk premium on specific company risk.

Just for fun I went through and looked at the betas for each company according to Yahoo. Assuming you have an equal amount of each stock dollar wise, your average beta is .8068. Assuming your holding period is 10 years and your beta reflects your expected return your most effecient portfolio would be 80.68% of your money is SPY with the remainder, 19.32%, in a 10 year Treasury yielding today I believe 4.01%. An effecient portfolio is where you maximize your return for the amount of risk taken. I realize that buying a 10 year Treasury is probably impractical but you get the idea. You may be able to substitute a fund for the treasury that provides the equivilant return and risk or close to it as I don't know about that. By combining the riskless asset with the risky asset in this way provides the most effecient way to acheive your desired return i.e. effecient according to portfolio theory. If the preceding is unappealing do what Ray said because IMO he's right.

[stoxtrader]

Adios - Impressive. Markowitz portfolio theory, and correctly and succinctly applied - from my understanding anyways. I would like to second this post.

otherwise, certainly sell one that is long-term, assuming a gain and that at least one is long-term. If there are still choices to be made, I agree, throw a dart.

[Wildbill]

If one was truly trying to get diversification, they wouldn't buy SPY. The S&P is not cleanly diversified as the index is weighted towards large cap companies and then inside the index it is weighted to the biggest cap companies further. The SPY is far from diversified, for that get a total market index, I forget which symbol that trades under. Or just put the money in a Vanguard total market fund.

[adios]

[ QUOTE ]
If one was truly trying to get diversification, they wouldn't buy SPY.

[/ QUOTE ]

Wrong if you mean diversification in a stock market portfolio. Right if you include the universe of risky assets.

[ QUOTE ]
The S&P is not cleanly diversified as the index is weighted towards large cap companies and then inside the index it is weighted to the biggest cap companies further.

[/ QUOTE ]

Which is what systematic risk inherent in betas is measured by. Betas reflect the risk inherent in the current valuation of the stock market of which SPY is an excellent proxy for.

[ QUOTE ]
The SPY is far from diversified, for that get a total market index, I forget which symbol that trades under.

[/ QUOTE ]

Ok I'll concede that SPY doesn't measure the "market portfolio" of the universe of risky assets in a CAPM sense. However, the measure of risk for stocks, beta, is determined by the variance in the valuation of the stock market as a whole of which SPY is a very good proxy for. If you except beta as a measure of risk then I'm right. The utilization of beta as a measure of risk is open to debate.

[ QUOTE ]
I forget which symbol that trades under. Or just put the money in a Vanguard total market fund.

[/ QUOTE ]

Not sure what total market fund you're referring too. I suspect that it's represents more than just stocks. If that's the case the beta's (the measure of risk) of the stocks mentioned are not derived from this portfolio.

My assumption was that the portfolio of stocks listed by the original poster was an indication of a certain amount of money that he wanted to invest in the stock market with a certain risk-reward profile for the posters stock market investment. In order to achieve the return from this investment that is reflected by the aggregate betas in his portfolio of stocks he would undertake the least amount of risk by what I posted.

In order to achieve the return implied by the posters stock portfolio in a total market portfolio of more risky assets than just stocks, one would have to know the risk premium inherent with this portfolio. I'm not sure of how much data has been collected and how much research has been done to determine such a risk premium. Also I think it's fair to say that what a portfolio of all risky assets should consist of is open to debate. The idea of combining a market portfolio of risky assets with the riskless asset is based upon the fact that the covariance between the two is zero.

[adios]

Thanks. Actually it's based on the Capital Asset Pricing Model CAPM which evolved from the work of Markowitz.

[BadBoyBenny]

[ QUOTE ]
Not sure what total market fund you're referring too. I suspect that it's represents more than just stocks.

[/ QUOTE ]

He probably meant something like and ETF based on the Wilshire 5000. There are some of these out there, but they are still market cap weighted so small caps are under emphasized.

If you really wanted both large and small/mid cap exposure then buying ETFs based on the Russell 2000 along with the Spyders might do the job better.

I don't know if this is really necessary though. The returns of the total market never deviate from the S&P over a long period of time, owning 500 companies pretty nuch eliminates any type of individual company risk, and will cover every industry. Also, I think (but I'm too lazy to research) that the S&P has done a little better over the last 30 or so years than the Russel or Wilshire indexes.

[Senor Choppy]

[ QUOTE ]
I'm shamelessly looking for free stock advice here.

I have to sell a little stock to raise some cash for school.
Which of these would you sell?

GE
GM
Bristol-Myers Squibb (BMY)
Schering-Plough (SGP)
BellSouth (BLS???)



SGP seems to have the lowest rating.

Thanks in advance.

crash


[/ QUOTE ]


Sell either BMY or SGP, if you sell any of the others you're going to have half your $ in drug stocks (unless you own others you didn't mention).

I'm not a huge proponent of diversification, but if you only own a handful of stocks you are risking a lot if you own multiple companies in the same industry.