Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Hog's Gone Fishin]

Great video here, gonna make my daughter watch .

[Peter Gibbons]

Originally Posted by Hog's Gone Fishin

Great video here, gonna make my daughter watch .

If you can get your daughter to do this than you’re a better man than me. Mine is resistant to any suggestion I may have for her.

[chiefnchopper]

I live in a college town. Junkers close to campus rent for $1000-1200 / month. Probably could buy one for 100-120K. Not sure if it's worth it or not. The house would most likely see its fair share of parties, sex and rock and roll.

[diqlix]

Originally Posted by chiefnchopper

Just been maxing the Roth IRA each year. Anyone own rental houses? Are you getting a higher return from your rental(s) than an average year of the S&P 500 returns (9%)?

What's your Roth IRA through? Vanguard? My annualized returns shows 10.7% which is disappointing to your 30% but I also have 10% bond and some international stocks. Thinking I may just switch over to Vanguard and do the S&P 500 though.

I was a landlord for many years.

My father-in-law owned 6 rental homes.

Good friend owns over a dozen.

If you want to learn more about it, Bigger Pockets forum is a great resource.

But here’s the quick summary. They make money sloooowly.

People rarely calculate their profits from rentals properly.

They don’t include depreciation, taxes, utilities, repairs, damage caused by the renter, insurance, mortgage or heloc, applicant costs, credit report costs, credit card transaction fees, vacancies, court fees, attorneys, etc.

If you profit $300+ per month on a rental, you’re in the TOP end of landlords.

Many people average around $100 to $150 true profit per rental per month.

I can think of many other things I’d rather invest $100k into.

[Rain Man]

Originally Posted by Ninerfan11

Anyone into ARK? Cathie Wood is the new thing.

I bought some after reading about it here, and it's done really well. I have only a very small amount, but it's on my buy list whenever the market has a down day.

[kstater]

Originally Posted by chiefnchopper

I live in a college town. Junkers close to campus rent for $1000-1200 / month. Probably could buy one for 100-120K. Not sure if it's worth it or not. The house would most likely see its fair share of parties, sex and rock and roll.

Originally Posted by daquix

I was a landlord for many years.

My father-in-law owned 6 rental homes.

Good friend owns over a dozen.

If you want to learn more about it, Bigger Pockets forum is a great resource.

But here’s the quick summary. They make money sloooowly.

People rarely calculate their profits from rentals properly.

They don’t include depreciation, taxes, utilities, repairs, damage caused by the renter, insurance, mortgage or heloc, applicant costs, credit report costs, credit card transaction fees, vacancies, court fees, attorneys, etc.

If you profit $300+ per month on a rental, you’re in the TOP end of landlords.

Many people average around $100 to $150 true profit per rental per month.

I can think of many other things I’d rather invest $100k into.

My wife has bugged me for years to look in to getting a rental, I just don’t see it. I look at it more of a volume thing to make money. The only upside is having the assets IMO.

[Rain Man]

Originally Posted by kstater

My wife has bugged me for years to look in to getting a rental, I just don’t see it. I look at it more of a volume thing to make money. The only upside is having the assets IMO.

I think the big advantage of rentals is wealth building more than income. If you've got years to do it, you buy rentals and make relatively low profits off of them for 20 years until they're paid off, and then at that point you start getting rich (or you sell them and get the bulk of your return that way).

I think the hard part of rentals is that they're a long term game, so you have to have investing capital when you're under 40 to really benefit from them. I wanted to do it at that age, but didn't have the capital.

[Rain Man]

Okay, here's my story of 2020.

My return: 11.7 percent.
Family return: 16.4 percent. (My wife beat me handily on investing this year.)

Okay, a bunch of you guys will make fun of me for my performance, and probably rightfully so. I underperformed. Let's see what happened. (I'm only looking at my investments here and not my wife's.)

Top 10 holdings and 2020 returns (including dividends). These are about 30 percent of my holdings.

Cash & Equivalent 0.26% (9 percent of holdings as a safety feature)
GOOG 28.12% (Google)
AMZN 71.60% (Amazon)
MSFT 39.49% (Microsoft)
MPW 9.77% (Medical property REIT)
TSM 83.21% (Semiconductor manufacturer)
TTWO 70.21% (Video game company)
FTANX 9.20% (Very conservative investment fund - mostly a safety anchor)
TSLA 720.07% (Tesla - yay!)
ATCO -18.57% (Shipping line)

If you look at my top 10 holdings, it looks like I was in line for a fantastic year. I had six huge winners and only one loser, and the median return was about 35 percent. If you average them with TSLA in there, you get up to a mean return of 101 percent. That, my friends, would be a great year.

My top ten full-year performers of the year were as follows.

TSLA 720% (Tesla)
EDUC 153% (Children's book company)
SLP 152% (Pharmaceutical software)
EDIT 138% (Gene editing)
ALB 104% (Industrial chemicals - big in lithium)
TSM 83% (Semiconductor manufacturer)
FVE 77% (Senior living)
AAPL 77% (Apple)
QCOM 73% (Internet 5G player)
AMZN 72% (Amazon)

Okay, this is still looking good, because 3 of my top 10 performers are in my 10 largest holdings. Three others are also pretty big in my portfolio. This is looking good.

I got smart and went on a buying spree this year while prices were down, so I also scored big on a number of stocks that I only held for part of the year.

ZM 170.90% (Zoom - videoconferencing)
MRNA 170.15% (Moderna - Covid vaccine))
NVAX 82.91% (Novavax - Covid vaccine)
CGNX 68.52% (Robotics/automation)
WAB 47.53% (Mostly train parts)
ENPH 45.18% (Solar stuff)
FANUY 35.72% (Robotics/automation)
KLAC 29.24% (Infrastructure to Manufacture Semiconductors)
SQ 29.21% (Square)
ARKK 27.51% (Innovation ETF)

So I smoked my mid-year buying spree. Home runs all over the place, and I only had a couple of losers. These are mostly very small holdings that I'm continuing to buy on dips. If you added them all up, though, they'd be my fourth-largest holding.

So what happened? Let's look at my biggest losers of the year.

CUK -51% (Cruise line)
TWO -46% (Real Estate REIT)
RMCF -43% (Retail)
RCL -40% (Cruise line)
BP -40% (Oil)
EPR -39% (Real Estate REIT)
CLI -38% (Real Estate REIT)
RDS.A -37% (Oil)
GPMT -37% (Real Estate REIT)
BA -36% (Aerospace)

And as a bonus, the next two on the list were:
COP -35% (Oil)
PSX -33% (Oil)

I think I see a pattern here.

Most of these were mid-sized holdings for me, but PSX was easily a top-ten holding at the beginning of the year. Not any more after those losses.

I liked the REITs for dividends and figured they were safe bets, but the pandemic beat them senseless. And I had cruise lines and oil going into 2020 because I figured they'd tend to move in opposite directions and give me stability (in a normal economy). But the covid beat up the cruise lines at the same time that the Russians and OPEC beat up oil. Losses of this magnitude were hard to overcome.

So overall, this was a year of volatility. I had some enormous wins and some enormous losses. In the big scheme of things. a 16.4 percent return is good, and even an 11.7 percent return is good. But I rue the missed opportunity to do even better.

I'm going to hang onto the cruise lines and the REITs. They'll eventually come back, I think. The oil companies kept their great dividends, which is nice, but I've started selling them down a bit and swallowing big losses. I hate that. I always viewed them as being pretty safe, but not any more.

[Hog's Gone Fishin]

Rainman, you're well diversified and thats how you win. Good job!

[KCUnited]

Can someone explain, in an average CPer level lingo, year end tax strategy on investments?

I keep reading about markets being down at year end due to profit taking or other strategic sell offs and would like to better understand.

[Buehler445]

Originally Posted by kstater

My wife has bugged me for years to look in to getting a rental, I just don’t see it. I look at it more of a volume thing to make money. The only upside is having the assets IMO.

I’ve looked around at some at there is money to be made. IF you’re around to do the work. It doesn’t take anything to replace an outlet but you’re going to get wrecked if you have to hire it done.

You either need to do it or have the volume to hire a guy.

AND

People suck. So you need to factor in your tolerance for ****ery.

Originally Posted by KCUnited

Can someone explain, in an average CPer level lingo, year end tax strategy on investments?

I keep reading about markets being down at year end due to profit taking or other strategic sell offs and would like to better understand.

I don’t pay too much attention to tax strategy on investments because I intend to hold them.

If you’re selling enough stock mid-year, and you’re OK with it in terms of your portfolio balance, you can sell your losers and create capital loss to offset your capital gain. I can’t imagine there is enough volume of that to move anything. In grains, short term traders usually get out ahead of holidays and this is a long one so I’d be more inclined to believe that.

Also, some mutual funds have set rules on what they can hold in terms of % of value. So if a fund had Tesla stock but only 25% of their value can be Tech stocks then they have to dump some Tesla.

I think that’s what’s going on. Don’t take that as gospel but that’s how I understand it.

[scho63]

Originally Posted by Rain Man

Okay, here's my story of 2020.

My return: 11.7 percent.
Family return: 16.4 percent. (My wife beat me handily on investing this year.)

Did any of your REITs cut their dividend?
I would take all the dividends from them and do auto reinvest to lower your cost basis.

[Buehler445]

Originally Posted by scho63

Did any of your REITs cut their dividend?
I would take all the dividends from them and do auto reinvest to lower your cost basis.

So what you're saying is when they re-invest the dividend the price is higher so it's best to take it in cash and buy back later?

Am I understanding that right?

[diqlix]

Originally Posted by Rain Man

Okay, here's my story of 2020.

My return: 11.7 percent.
Family return: 16.4 percent. (My wife beat me handily on investing this year.)

Okay, a bunch of you guys will make fun of me for my performance, and probably rightfully so. I underperformed. Let's see what happened. (I'm only looking at my investments here and not my wife's.)

Top 10 holdings and 2020 returns (including dividends). These are about 30 percent of my holdings.

Cash & Equivalent 0.26% (9 percent of holdings as a safety feature)
GOOG 28.12% (Google)
AMZN 71.60% (Amazon)
MSFT 39.49% (Microsoft)
MPW 9.77% (Medical property REIT)
TSM 83.21% (Semiconductor manufacturer)
TTWO 70.21% (Video game company)
FTANX 9.20% (Very conservative investment fund - mostly a safety anchor)
TSLA 720.07% (Tesla - yay!)
ATCO -18.57% (Shipping line)

If you look at my top 10 holdings, it looks like I was in line for a fantastic year. I had six huge winners and only one loser, and the median return was about 35 percent. If you average them with TSLA in there, you get up to a mean return of 101 percent. That, my friends, would be a great year.

My top ten full-year performers of the year were as follows.

TSLA 720% (Tesla)
EDUC 153% (Children's book company)
SLP 152% (Pharmaceutical software)
EDIT 138% (Gene editing)
ALB 104% (Industrial chemicals - big in lithium)
TSM 83% (Semiconductor manufacturer)
FVE 77% (Senior living)
AAPL 77% (Apple)
QCOM 73% (Internet 5G player)
AMZN 72% (Amazon)

Okay, this is still looking good, because 3 of my top 10 performers are in my 10 largest holdings. Three others are also pretty big in my portfolio. This is looking good.

I got smart and went on a buying spree this year while prices were down, so I also scored big on a number of stocks that I only held for part of the year.

ZM 170.90% (Zoom - videoconferencing)
MRNA 170.15% (Moderna - Covid vaccine))
NVAX 82.91% (Novavax - Covid vaccine)
CGNX 68.52% (Robotics/automation)
WAB 47.53% (Mostly train parts)
ENPH 45.18% (Solar stuff)
FANUY 35.72% (Robotics/automation)
KLAC 29.24% (Infrastructure to Manufacture Semiconductors)
SQ 29.21% (Square)
ARKK 27.51% (Innovation ETF)

So I smoked my mid-year buying spree. Home runs all over the place, and I only had a couple of losers. These are mostly very small holdings that I'm continuing to buy on dips. If you added them all up, though, they'd be my fourth-largest holding.

So what happened? Let's look at my biggest losers of the year.

CUK -51% (Cruise line)
TWO -46% (Real Estate REIT)
RMCF -43% (Retail)
RCL -40% (Cruise line)
BP -40% (Oil)
EPR -39% (Real Estate REIT)
CLI -38% (Real Estate REIT)
RDS.A -37% (Oil)
GPMT -37% (Real Estate REIT)
BA -36% (Aerospace)

And as a bonus, the next two on the list were:
COP -35% (Oil)
PSX -33% (Oil)

I think I see a pattern here.

Most of these were mid-sized holdings for me, but PSX was easily a top-ten holding at the beginning of the year. Not any more after those losses.

I liked the REITs for dividends and figured they were safe bets, but the pandemic beat them senseless. And I had cruise lines and oil going into 2020 because I figured they'd tend to move in opposite directions and give me stability (in a normal economy). But the covid beat up the cruise lines at the same time that the Russians and OPEC beat up oil. Losses of this magnitude were hard to overcome.

So overall, this was a year of volatility. I had some enormous wins and some enormous losses. In the big scheme of things. a 16.4 percent return is good, and even an 11.7 percent return is good. But I rue the missed opportunity to do even better.

I'm going to hang onto the cruise lines and the REITs. They'll eventually come back, I think. The oil companies kept their great dividends, which is nice, but I've started selling them down a bit and swallowing big losses. I hate that. I always viewed them as being pretty safe, but not any more.

Seems like you stick with mainly the big boys / popular companies.

[In58men]

Thoughts on Dogecoin?

After Elon’s tweet I’m tempted to invest.