Some sound advice for this forum....buy and hold!

Question

I have never ventured into this "Investments" area on Covers but I have offered advice on investing in some of the sports threads, along with a few picks here and there over the years. After reading many of the top threads on investing here, I thought I would give my 2 cents.

For the most part, I would avoid investing in penny stocks or gold. Gold is not going to compound over decades like the s&p or Nasdaq exchanges and penny stocks are going to leave you with lint in your pockets 99 times out of 100. Penny stocks have and always be prone to manipulation. That is a fact. Unless you are the one doing the manipulation (and don't mind risking a jail sentence), just leave it alone and save yourself the grief.

My current situation is roughly 8% cash. I have been looking to invest in spots, but have been reluctant as I think we are nearing the end of an incredible bull market. I did buy 300 shares of the VGK (Europe will do well over the next 2 decades) and made a 5% pop in just over 60 days. Basically you could have thrown darts at the Wall Street Journal stock pages since the election and picked up 20% no matter the holding. Unfortunately, the euphoria will not last forever and I anticipate a correction coming in the next 12 months.

With that said, I'm not selling as I believe in the best investment strategy out there...buy and hold.

gambleholic63 · Accepted Answer

I have never ventured into this "Investments" area on Covers but I have offered advice on investing in some of the sports threads, along with a few picks here and there over the years. After reading many of the top threads on investing here, I thought I would give my 2 cents.

For the most part, I would avoid investing in penny stocks or gold. Gold is not going to compound over decades like the s&p or Nasdaq exchanges and penny stocks are going to leave you with lint in your pockets 99 times out of 100. Penny stocks have and always be prone to manipulation. That is a fact. Unless you are the one doing the manipulation (and don't mind risking a jail sentence), just leave it alone and save yourself the grief.

My current situation is roughly 8% cash. I have been looking to invest in spots, but have been reluctant as I think we are nearing the end of an incredible bull market. I did buy 300 shares of the VGK (Europe will do well over the next 2 decades) and made a 5% pop in just over 60 days. Basically you could have thrown darts at the Wall Street Journal stock pages since the election and picked up 20% no matter the holding. Unfortunately, the euphoria will not last forever and I anticipate a correction coming in the next 12 months.

With that said, I'm not selling as I believe in the best investment strategy out there...buy and hold.

gambleholic63 · Answer

So....why "buy and hold"? I don&#x27;t attempt to time the market for 3 basic reasons. 1) You have to sell out at the right time. Warren Buffet himself will tell you he can&#x27;t even do it. If he can&#x27;t, how can I? Anyone that thought the bull was dead in January and picked that time to get out has missed out on a 20-25% upswing. Realistically, that&#x27;s more than any "correction" is likely to wipe out (2008-2009 is unlikely to occur in the lifetime of anyone reading this today). 2) Tax implications. Unless you are trading in a 401k or SEP (or other tax deferred account), you will take a 15% tax hit on your profits. This 15% dramatically constricts the advantages of compounding your investments over time. Trading in a tax deferred account is fine, but still leaves you vulnerable to points 1 &amp; 3. 3) You have to get back in at the right time and this is the MOST DIFFICULT part of the process. When everyone is selling, you need to be buying and that requires a ton of knowledge and nerves of steel. Back in 2009, in a series of purchases, I began buying BOA at $3 a share when talks of "bank nationalization" was the rage. I didn&#x27;t buy into that theory, but only bought 1500 shares. Today, at $27, of course I wish I had bought 10,000 shares but I lacked the confidence to commit such a large amount of money with incomplete information.   So....my advice....summed up. Just buy good stocks and hold them for decades. It&#x27;s a strategy that virtually guarantees success!

gambleholic63 · Answer

Maybe you need more evidence of buy and hold?

In 2004 I invested $3,400 in Google shortly after it's IPO. The IPO was at $85 but no one without connections could buy at that price. I watched it soar during the first few days of trading and finally bought 15 shares at $228. It has since split, so my 30 shares today is now worth $31,200.

Why chase these penny stocks when you can buy solid companies?

TheGoldenGoose · Answer

If you were to chase a few penny stocks please give me a few.

gambleholic63 · Answer

I never chase penny stocks brother. I feel that it is a tremendous hog of time and generally fruitless. I feel that it is wrong to encourage others to get involved in them when ANY patient investor can become a millionaire by buying good companies and being patient.

baseballfanatic · Answer

Some of the most sensible and well-constructed advice in any forum on Covers.Spot on mate.Well done with your successes to date.CheersBF

gambleholic63 · Answer

Thanks fanatic! I posted this after reading post after post about pennies and thought I would post something more useful. Anyone that doubts they can be successful doing it the right way should start by recording the Fast Money show on CNBC everyday. Watch the show, take notes, and then put in the time doing your own research. Anyone can do it! Good luck in all your investments!

TheGoldenGoose · Answer

gamblholic:  I would like to hear you expound on options strategies.  Puts and calls and how they can help strengthen a portfolio.  Surely they are weapons in your investment arsenal.

gambleholic63 · Answer

Unfortunately Goose, my results with playing options are poor and I have left it alone as I have accepted that it's not my game. I told everyone that would listen to short Blue Apron at $10 but didn't even do it myself.

OlDirtyBaztid · Answer

righton with the penny stocks, bro. it&#x27;s for college kids and cab drivers. along with forex. i used to work at the CBOT for a few years selling trading education on futures. because of the volatility, many were drawn into penny stocks... and because it was cheap. that is the equivalent of continuously trying to hit 8 leg parlays. manipulated, as well. OTC anything is risky business in my book. how the hell is anyone able to really know where the bid and ask is with no true indication of volume? you def. hit the nail on the head

JOHNNY_ODAE · Answer

And always pull profits off the table and buy or share with someone you love or like.!! My Dad taught me this in the early 70&#x27;s. Having the most money means nothing if you can&#x27;t enjoy it. You are rewarding hard work and diligence when you pay yourself!! Never saw a armoured car in a funeral line. I totally agree Blue Chips are best but all companies start nowhere near that. And kids 2018 is gonna be a blast!!!

sfg8 · Answer

Good sound advise Gamble ...wish i&#x27;d have followed it back in the 90&#x27;s when i had FDX in the mid $20&#x27;s/ AAPL in the mid teens/ NFLX about $7/// plenty more but u get the idea....add all the SPLITS a few of these companies had i&#x27;d probably have a portfolio  in the $10M- $15M or more range....But sh*t happens and the portfolio not even clse to that level...let&#x27;s see how much longer this market can last...then add up the chips ...

gambleholic63 · Answer

Thanks sfg. Sounds like you have done very well regardless.

In a market where everything is pushing 52 week highs, I really like IBM currently at $154.76 as of closing on Friday. While I am not a believer in Bitcoin at its current lofty levels, the blockchain technology (BCT) it is based on is here to stay. IBM is heavily invested in BCT software and hardware solutions and it the biggest player in the USA. IBM is coming out of a decade long decline that has seen it's stock price decline from $215 in 2008-2009 and remains down roughly 10% for the year.

In the mid 150's you are getting an excellent dividend with a company that is in the 8th inning of a long turnaround plan AND exposure to blockchain technology without worrying if Bitcoin will be the crypto that ends up winning in the end.

Sakis_The_Greek · Answer

gambleholic63Thanks for the insightful thread and posts. I too am a huge believer in BUY and HOLD FOREVER as that strategy has served me well over the years. A very interesting crypto angle on IBM. Question, does it concern you that Berkshire and Buffet unloaded a ton of IBM during calendar year 2017? Are you still bullish on IBM despite that fact.

gambleholic63 · Answer

I can&#x27;t blame Buffet for his impatience. IBM has been a dog. With that said, Buffett is still heavily invested. As I stated, the turnaround is not yet complete and like all investments patience is required. You are collecting a 4 plus percentage dividend with downside protection while you wait. That&#x27;s a good gig!

Sakis_The_Greek · Answer

Thanks for prompt response. Agreed. Did some more digging and some speculate Buffet sold for tax purposes (write-offs) but to your point still holds 35 million some odd shares. It is a solid play for long-term no doubt.

gambleholic63 · Answer

&#xA;IBM is now at $162 going into the close on 1/4. They have been working on this turnaround for nearly a decade and it will happen eventually. Check out the 20 year chart. Check out the dividend (4% while you wait). If you bought at $154.76 you just picked up roughly 5% in a month. Along with my earlier recommendations on this forum (XLF, BAC, VGK, SHPG), IBM is soaring! Let&#x27;s make that $$$$$$.

sfg8 · Answer

Here a BUY&amp; HOLD for everyone GE(General Electric.) I&#x27;ve established a position in the $17.70&#x27;s about a week and a half ago...Still like it in the $18&#x27;s though..Talk about a several year turn around ..this is it ..plus you add in the dividend of about 2.7% this is very low risk imho... I know they&#x27;ve replaced their CEO this past year with plans to divest out of several ares to get into the aerospace/ health care space...both of these areas are in  up trends going forward...along with the dividend i think GE will  have returns in the double digits..in 2018...not sure i&#x27;ll HOLD forever though since i&#x27;m a trader if i can get a nice 30%-50% plus return...I&#x27;m out onto my next play...works for me....Can&#x27;t go broke taking profits is the ol saying...BOL

gambleholic63 · Answer

&#xA;I actually sold my position in GE earlier this year at $28. I had owned the stock for several years and was disappointed in the last 10 quarters followed by reading some bad news in the Wall Street Journal. I never saw the bottom falling out like it did, so I guess I got a little lucky on my timing. I will say that the CNBC crew on Fast Money doesn&#x27;t love it. They just did a 10 minute segment on GE today&#x27;s show. I would say GE is not exploding to the upside anytime soon. They have a long turnaround ahead of them....the 5%&#x2B; dividend is nice though. Getting paid to wait is not the worst style of investment.

gambleholic63 · Answer

I may have to rethink GE. Warren Buffett indicated on CNBC this morning that he might accumulate shares for his fund, Birkshire Hathaway. If that happens, he will singlehandedly drive GE over 21.

sfg8 · Answer

I&#x27;d consider getting back in at these levels Gamble...Alrdy took  about 40-45% haircut last year...worst case i can see is that it&#x27;ll trade in the low $17&#x27;s .( and like u say collect the divvie while you wait) ..i&#x27;d prob look to SELL on a drop below that level though...look for consolidation at that point....imho this is a LOW risk trade at these levels...i think it&#x27;ll get back into the low to mid 20&#x27;s from here...especially if  Uncle Warren starts buying...BOL

gambleholic63 · Answer

With these markets setting new highs every day, it's difficult to analyze what the good buys are....then a week later the result ends up being that everything was a good buy. I'm only about 7% cash, but when things are flying, it seems like more.

The news gets even better today with Wal-Mart increasing it's minimum wage to $11 for all employees. The Trump haters will find it tougher for things to complain about now. Wal-Mart is proving that the new tax reform is going to put more money in the lower and middle classes hands. That will provide a buffer, if not a legitimate boost to consumer spending, which will in turn decrease any chance of a recession popping up in the next 18-24 months.

It appears that Trump has created the "GOLDILOCKS" economy where everyone wins. Stocks are poised to soar even higher!

Slobbasaurus · Answer

Great thread GH63. I like your input.

Regarding Gold itself, I never really bought it outright, but I do own a favorable amount of Gold miner AUY (39% since December) and FSM Silver miner (Up 17%).

Of course, it relies on the price of each PM as well as how each company operates.

Dow over 26,000 at the moment. This could possibly be the biggest bull market in our lifetimes! Loving it.

gambleholic63 · Answer

Slob. This bounceback from yesterday is very impressive. I wasn&#x27;t really concerned to begin with as any correction should be short lived anyway. The market is ripe for a correction, but corrections during non-recessionary times generally don&#x27;t have a lasting effect...instead, they are more likely to have more of a boomerrang effect. With growth above 3% for the first time in well over a decade under Trump, the bigger concern is inflation, which the Fed seems to have under control for the time being.

gambleholic63 · Answer

What a month January has been! Tax reform is fueling increasing wages while corporations are bringing billions back into the USA to invest in America. This is the most glorious bull market of our lifetime. Consumer spending is not going to miss a beat in 2018, and being 72% of GNP tells me that a recession is completely off the table in 2018-2019.

I hesitate to recommend initiating new positions at these levels, but it seems as if this market wants to soar higher. Brokers are taking longer than ever to fill large buy orders due to a lack of sellers.

Some sound advice for this forum....buy and hold!

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