What Did You Buy Today?

[fenders53]

(02-24-2020, 04:44 PM)stockguru Wrote: Here's a question.

I know a lot of you buy 1 share, 2 shares here and there. But lets say you buy Company X at $100 a shares. And then next thing you know it goes up $10 to $110 or even higher. Well you never got that opportunity again to buy more shares are are stuck with 2 shares.  Unless you hold it for 20-25 years your not going to make a dime lol

The question I have is why not start out with 25 or 30 shares and if it were to go down more then you can add a few shares here and there. But at least if goes up 20 or 30 points you make some money.

I learned the hard way. I had bought 15 shares each of V and MA some years back under $100. Then they just ran and I never got an opportunity to add more lol.

The only stocks I will buy 1 or 2 shares of is GOOG or BLK. I own 2 shares of Google and 8 BLK. I will be looking to add more to those names if we keep going down

Your 25 shares may well be the equivalent of somebody else's 1 share, or my 250 shares.  I'm not sure I completely follow your logic. 

I almost always buy 100 shares.  I very recently started some positions I wish I had started long ago, but I know they are way too damned overvalued to get crazy on them now when a dip could be coming (like today or next month for instance).  If I get stuck with 5 or 15 shares of V or TGT because it launched, it's gonna be OK.  

I hope nobody is ever ashamed to tell us they bought $100 worth of this or that today, especially if they tell us why they like the stock.  Our net worth  is not what this place is supposed to be about IMO.  A little diversification never hurts either, even if you are just starting out.

I'm sure I ran a little farther with that than you meant stockguru, but I see no harm in buying slow when commissions are free.

[NilesMike]

MMM only had a yield higher than right now twice in the past 25 years.

7/1996 Stock $ 19.00

2/2009 Stock $ 36.00

Will be buying a full position in AM

[fenders53]

(02-24-2020, 06:41 PM)NilesMike Wrote: MMM only had a yield higher than right now twice in the past 25 years.

7/1996 Stock $ 19.00

2/2009  Stock $ 36.00

Will be buying a full position in AM

I am strongly considering buying MMM a little faster but they very likely have some rough quarters to navigate.  That was occurring before the Superflu happened.  Probably a full on half position for me, so two or three more shares.

(I'm just messing with you Stockguru, you started it lol) 

Seriously though, the market just loves this stock.   It will never get as cheap as it should short of a real recession.  It runs up when anybody paying attention can clearly see they are going to struggle a good while longer.  I have sold puts on most every dip the past year and it flies away every time.  Like 5 times.  No guarantees, but that's as good a sign of a bottom as I need to see.  If it drops to $130 we should double down Mike.  The yield should be extra awesome then lol.

What else is on everyone's radar? Today I mostly laid off the stocks nobody loves the past few months. They will likely be there later. Thinking about nibbling some BABA if the slide continues. One of the few foreign stocks I feel confident will fly soon after the scare has somewhat subsided. Endless supply of US stocks that might be worth a nibble too. When the rebound happens the quality will fly. Sure glad I am not the FED Chief. He is gonna get pressured like he caused this lol. Hope he keeps his courage up. I hope we save the zero rates for a rainy day that will eventually come.

[NilesMike]

Fender-I agree on doubling down @130 but don't think we'll get the chance.

SG- Whatever amount people invest is up to them. 1 share or 1 lot, the concept is the same. A recommendation for those buying the onesie twosies would be just keep buying 1 when you can, regardless of price going up or down. I think with less financial power, dollar cost averaging would be helpful, especially with zero commissions available now.

Good luck to all.

[fenders53]

I don't think MMM 130's are coming either. 140s wouldn't surprise me at all but that's how you completely miss the bus. It seems to have strong support in the low 150s. It will run up 10% in a week yet again when the market settles down. If you want some this is the time to get started on a position. The yield is great right here. Things aren't so bad that the div is in imminent danger for this aristocrat. Most of them are wildly overvalued. We are maybe 30% off the high without looking it up?

[divmenow]

MMM low was $140 but that’s going way back. It had bounced off $150 so we will see if that holds again It’s no longer a growth story and they continue to miss earnings and have warned 6 straight quarters now. With that said it’s good time to nibble but for me I won’t hold long term. I would stay in and try and exit around $170-175. I just dont see this going back to $200. But it’s a nice one to collect the dividend while you wait for a move up. You have to factor in China as well and that isn’t going to get resolved anytime soon.

And no thank you on Six. I got out of Six a while ago with a Decent profit. That one is no longer on my watch list lol

[ChadR]

Stockguru, buying just one or two shares is fine. If a stock has a PE of 20 and a dividend yield of 3% and is selling for $30, isn't that the same as the stock in 2 years selling for $45 but has the same PE of 20 and a dividend yield of 3%. Yes the stock ran up, but it's still basically the same value.

Real example in my portfolio. I purchased some shares of NSC in 2012 for under $62 per share. It's now $203 per share. It's PE is under 20. It's a good value today. If it wasn't already a top 10 holding, I would be buying more. Unless a stock split happens, I hope I don't ever see it at $62 again.

If I buy 2 shares of something and it skyrockets in price to well above fair value, I won't be buying anymore until it is fairly priced. If someone saved up to buy 30 shares, it might skyrocket before they ever bought it. Better to have 2 shares than 0.

[crimsonghost747]

Regarding MMM, it's been on my watchlist for a while and I thought that now after yesterday's carnage it might be a time to take a closer look.
I'm comparing it to HON, as that is the one industrial conglomerate that I currently own so it works as a great benchmark.
This was just a quick comparison, by no means a full in depth thing. Looking at the data from past 5 years.

Both have pretty flat revenue.
Looking at operating income, income from continuing operations and EPS: MMM is pretty flat in all of them whereas HON has a nice upwards trajectory.
HON has been raising dividends 10-15% each year with a payout ratio that has been around 40% constantly.
MMM has been raising 6%-20% while constantly increasing their payout ratio which is currently at 72.6%.

I get that MMM looks cheap since it's essentially at the same price it was 5 years ago and significantly below it's high of almost $260. HON on the other hand may feel expensive since they have gone from $100 to $170 in those 5 years and are only about $10 below their all time high. And this is with two spin offs happening in the recent years.

But in fact they are both trading close to a P/E of 20, so on that metric they are about equally valued.
If MMM does get a lot cheaper then I might jump in for diversification but currently I just don't see why you guys are buying it instead of buying HON. They are essentially the same value but HON has a significantly better track record. The only thing going for MMM is the yield.

[crimsonghost747]

And regarding the buying 1 or 2 shares discussion, well I do see SGs point. It's not about the number, it's about getting left with a tiny position in a stock after it appreciates to a valuation that prevents you from adding more. And for those who don't follow their stocks closely, that is ok. But I personally stay quite active in following my holdings, so I have the seeking alpha news on, I eye through every quarterly report and the earnings call transcript. If I have $200 worth of a stock with 2% yield, that gives me $4 per year, minus tax, for this effort.

This has happened to me a couple of times. Two options really: 1. the stock is still decently valued for the long term in which case I can always buy more once in a while and with time the position will build up. 2. The stock is overvalued so I don't want to add to it anymore, then I just sell and reinvest that money into something different.

So I do prefer to start my positions with a bigger buy. Just to get that position up and running. In general I divide my monthly deposit into 3 parts and buy 3 different companies. These are what I consider to be that small nibbling. Dividend reinvestment generally gives me a 4th nibble per month. But when I start a new position I might do it with a value of 2-4 times the usual nibble. And then keep nibbling on as I see fit.

[fenders53]

Crimson, 

I agree with you on Honeywell.  I already own it.  MMM does offer some diversification.  Pretty much all of my current industrials are tied to aviation or defense.  MMM may be a little too diversified, though I may not be qualified to have a meaningful opinion on this matter.  I'm not so sure they haven't become a little too difficult to manage.  They manufacture a ridiculous amount of SKUs.  How much is too much before at least some small spinoffs are prudent?

I wish to own some MMM in because....
1. See Mikes post above.  
2. It's an aristocrat and a high yielding blue chip, hence it is in MANY ETFs and indexes.  Part of the reason why it is always too expensive, even when they struggle.  Maybe MMM should price closer to $100, but it doesn't, and I don't think most of us will be happy if it ever does because the global economy just got bad.
4.  I've used many of their products in my personal and professional life.  They have MANY very respected brands.  
5. They are headquartered in Minnesota, and/or have major operations near me, like over half of my portfolio.  

You won't find #5 in many investment books lol.  Of course that is not my primary buy decision.  It does however cause a company to be researched at some point, and considered.  A lot of times average Joe factory worker tells me things of importance, that don't make the business news for weeks, if it even makes it then.  MMM doesn't have to be my favorite stock to warrant starting a position.  I don't find it easy to have thirty truly great ideas at all times.

As far as not buying stock a few shares at a time.  Although I have rarely done it before this month, I'll defend the practice to those who wish to do it.  Do you ever buy a stock and then it goes down instead of up?  I'm afraid that does happen to me, sometimes within the hour.  Those are many times I wish I'd bought 25 shares instead of 100 immediately.

It's not for me, be we have folks here that desire a 100 stock portfolio.  They gotta buy something years too late if it's larger purchases only.  And finally, I can think of a long,long list of stocks I'd be pleased to have only bought ten shares of 20 years ago. Like you, I occasionally just sell off a small position, take a profit and call it good.

[crimsonghost747]

(02-25-2020, 04:25 AM)fenders53 Wrote: Do you ever buy a stock and then it goes down instead of up?  

Almost exclusively haha. My timing is terrible, but I know it and I'm ok with it. I know it's my weakness but in the end I don't care if I buy it 2% higher or lower since I'll probably be holding 40+ years. 
You are of course right, it does make the initial entry look bad but then I can always do my nibbling at those lower levels.

[rayray]

(02-24-2020, 05:01 PM)fenders53 Wrote:

(02-24-2020, 04:44 PM)stockguru Wrote: Here's a question.

I know a lot of you buy 1 share, 2 shares here and there. But lets say you buy Company X at $100 a shares. And then next thing you know it goes up $10 to $110 or even higher. Well you never got that opportunity again to buy more shares are are stuck with 2 shares.  Unless you hold it for 20-25 years your not going to make a dime lol

The question I have is why not start out with 25 or 30 shares and if it were to go down more then you can add a few shares here and there. But at least if goes up 20 or 30 points you make some money.

I learned the hard way. I had bought 15 shares each of V and MA some years back under $100. Then they just ran and I never got an opportunity to add more lol.

The only stocks I will buy 1 or 2 shares of is GOOG or BLK. I own 2 shares of Google and 8 BLK. I will be looking to add more to those names if we keep going down

Your 25 shares may well be the equivalent of somebody else's 1 share, or my 250 shares.  I'm not sure I completely follow your logic. 

I almost always buy 100 shares.  I very recently started some positions I wish I had started long ago, but I know they are way too damned overvalued to get crazy on them now when a dip could be coming (like today or next month for instance).  If I get stuck with 5 or 15 shares of V or TGT because it launched, it's gonna be OK.  

I hope nobody is ever ashamed to tell us they bought $100 worth of this or that today, especially if they tell us why they like the stock.  Our net worth  is not what this place is supposed to be about IMO.  A little diversification never hurts either, even if you are just starting out.

I'm sure I ran a little farther with that than you meant stockguru, but I see no harm in buying slow when commissions are free.

Sometimes, I'll buy very few shares just to monitor the stock for future buys. If I really like the stock but view it as overvalued I'll buy say 2 shares then buy more when it becomes fair to undervalued--the only way I'll do this is if I really really want the stock in my portfolio. I would only do this with a free trade, but now with ZERO commission buys it's a moot point...ironically I haven't down this in quite some time.