- Oct 10, 2005
- 21,569
- 12,405
For the Webull users:
OFFICIAL STOCK MARKET AND ECONOMY THREAD VOL. A NEW CHAPTER
- Thread in 'General' Thread starter Started by johnnyredstorm,
- Start date
- Jul 13, 2005
- 35,392
- 27,009
wtf GME reached 492 literally 30 min ago?
- Sep 4, 2020
- 583
- 783
Now that it seems this thread is getting a bit of attention, I would like to share my investment philosophy and portfolio distribution.
First and foremost, Return on Invested Capital is a key metric for me. A definition and basic link: “Return on invested capital (ROIC) is a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. The return on invested capital ratio gives a sense of how well a company is using its money to generate returns.”
https://www.investopedia.com/terms/r/returnoninvestmentcapital
I also look at companies crushing on Net Margin or, “The percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue.”
https://investinganswers.com/dictionary/n/net-margin
Fundamentals are important – I like when companies have boatloads of cash. Taking a quick look at the three key financial statements of any company before you invest is probably a safe bet. Income Statement, Balance Sheet and Cash Flows. I would explain each but there is plenty on the internet. Google these statements and watch short YouTube videos.
A P/E Ratio in the ballpark of 10-15. “The price to earnings ratio (PE Ratio) is the measure of the share price relative to the annual net income earned by the firm per share. PE ratio shows current investor demand for a company share. A high PE ratio generally indicates increased demand because investors anticipate earnings growth in the future.”
https://ycharts.com/glossary/terms/pe_ratio.
You want to look for Market Share, both current and future. This is sometimes called a company’s Moat or, “A distinct advantage a company has over its competitors which allows it to protect its market share and profitability. It is often an advantage that is difficult to mimic or duplicate (brand identity, patents) and thus creates an effective barrier against competition from other firms.”
https://www.investopedia.com/terms/e/economicmoat
You also want to look for companies that are at the front edge of an emerging market, typically based on themes, e.g. COVID happens, TDOC and ZM emerge as the wave of the future. Some examples of overall themes in America are an aging population, green energy, and the shift to digital media consumption.
And lastly, you want to find the right entry price. For me, I create financial models that discount future cash flows and that is simply too cumbersome for the average trader. A simple way to look at this is if the stock nails what I talked about previously, look at its current price relative to its all-time high price. If you see something greater than 10% it is worth investigation. If you see something greater than 20% you want to focus your attention. Anything greater than 30% you might want to ask yourself was there an artificial run-up or draw-down that is impacting this stock’s price. Then determine if you think the runway for the company is at least 5 years.
My main portfolio has 10 stocks in it: GOOG, AAPL, FB, MSFT, EW, UNH, EVER, JNJ, BA and PYPL. This does not mean you should go and buy these stocks right now. Although I do think you would be ok doing this, it will not net you the type of returns that some emerging players will into the future. I entered these companies years ago. I hold them. I also carry puts on the S&P and Nasdaq, but that might be a bit much for now. In short, I have less gained the last few years because I bet that the market might fail. My investment approach was crafted by reading books and having a lowkey idol that ran a successful fund.
I also have a highly speculative portfolio and a solid emerging portfolio. I play with this money and never take it too seriously. I make about the same in each. I do not recommend doing that if you are just starting out. My final portfolio is a 401k type that I allocate 50% in a common index and 50% in large caps.
A few final points - put money into VOO or a similar ETF and just keep doing it, no matter the amount. Try Acorns on Moderately Aggressive for this if you don’t want to buy a single stock. Don’t sell when **** hits the fan if you are younger than 50. It would take a catastrophe for you to not recoup. Always keep cash on hand to go in on something solid. If that means selling stagnant gainers, so be it.
Best wishes.
First and foremost, Return on Invested Capital is a key metric for me. A definition and basic link: “Return on invested capital (ROIC) is a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. The return on invested capital ratio gives a sense of how well a company is using its money to generate returns.”
https://www.investopedia.com/terms/r/returnoninvestmentcapital
I also look at companies crushing on Net Margin or, “The percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue.”
https://investinganswers.com/dictionary/n/net-margin
Fundamentals are important – I like when companies have boatloads of cash. Taking a quick look at the three key financial statements of any company before you invest is probably a safe bet. Income Statement, Balance Sheet and Cash Flows. I would explain each but there is plenty on the internet. Google these statements and watch short YouTube videos.
A P/E Ratio in the ballpark of 10-15. “The price to earnings ratio (PE Ratio) is the measure of the share price relative to the annual net income earned by the firm per share. PE ratio shows current investor demand for a company share. A high PE ratio generally indicates increased demand because investors anticipate earnings growth in the future.”
https://ycharts.com/glossary/terms/pe_ratio.
You want to look for Market Share, both current and future. This is sometimes called a company’s Moat or, “A distinct advantage a company has over its competitors which allows it to protect its market share and profitability. It is often an advantage that is difficult to mimic or duplicate (brand identity, patents) and thus creates an effective barrier against competition from other firms.”
https://www.investopedia.com/terms/e/economicmoat
You also want to look for companies that are at the front edge of an emerging market, typically based on themes, e.g. COVID happens, TDOC and ZM emerge as the wave of the future. Some examples of overall themes in America are an aging population, green energy, and the shift to digital media consumption.
And lastly, you want to find the right entry price. For me, I create financial models that discount future cash flows and that is simply too cumbersome for the average trader. A simple way to look at this is if the stock nails what I talked about previously, look at its current price relative to its all-time high price. If you see something greater than 10% it is worth investigation. If you see something greater than 20% you want to focus your attention. Anything greater than 30% you might want to ask yourself was there an artificial run-up or draw-down that is impacting this stock’s price. Then determine if you think the runway for the company is at least 5 years.
My main portfolio has 10 stocks in it: GOOG, AAPL, FB, MSFT, EW, UNH, EVER, JNJ, BA and PYPL. This does not mean you should go and buy these stocks right now. Although I do think you would be ok doing this, it will not net you the type of returns that some emerging players will into the future. I entered these companies years ago. I hold them. I also carry puts on the S&P and Nasdaq, but that might be a bit much for now. In short, I have less gained the last few years because I bet that the market might fail. My investment approach was crafted by reading books and having a lowkey idol that ran a successful fund.
I also have a highly speculative portfolio and a solid emerging portfolio. I play with this money and never take it too seriously. I make about the same in each. I do not recommend doing that if you are just starting out. My final portfolio is a 401k type that I allocate 50% in a common index and 50% in large caps.
A few final points - put money into VOO or a similar ETF and just keep doing it, no matter the amount. Try Acorns on Moderately Aggressive for this if you don’t want to buy a single stock. Don’t sell when **** hits the fan if you are younger than 50. It would take a catastrophe for you to not recoup. Always keep cash on hand to go in on something solid. If that means selling stagnant gainers, so be it.
Best wishes.
Last edited:
kilroythedon
Supporter
- Feb 20, 2013
- 23,187
- 22,079
Jesus my fiancé is gonna kill me when she finds out what I have in this lol
- Oct 10, 2005
- 21,569
- 12,405
- Feb 4, 2012
- 14,173
- 6,430
- Jul 13, 2005
- 35,392
- 27,009
- Jan 30, 2007
- 23,381
- 6,002
What's so funny about this is the fairytale, story 'robinhood'. A guy, who takes from the RICH, and gives to the POOR.
- Oct 28, 2006
- 12,456
- 9,502
TLDR; BUY EVERYTHING AND HOLD
- Oct 13, 2001
- 160,862
- 142,720
Best attitude to have. If something happens, cool but the expectation that something WILL happen is very optimistic.
- Jan 22, 2015
- 9,995
- 3,286
- Sep 28, 2004
- 13,924
- 5,900
So everyone who had shares by end of day Tuesday , you’re still making money. If you bought yesterday, each one of the ones I posted, you are bag holding. It’s all timing folks. Same with gme. Low today was $130. Up 100% for those who bought super low.
Rh is funny though. They didint care about me when my ITM call option dropped like a rock (with bad news). And the loss/gain potential was 800% within seconds. There was no halt for that. Now they care about market volatility?
Rh is funny though. They didint care about me when my ITM call option dropped like a rock (with bad news). And the loss/gain potential was 800% within seconds. There was no halt for that. Now they care about market volatility?
- Sep 28, 2004
- 13,924
- 5,900
Rh has a slight $509 candlestick around 9:20 premarket.
aepps20
Supporter
- Feb 8, 2004
- 42,549
- 90,787
Meth is TOAST.
- Jul 20, 2012
- 4,439
- 4,653
- Jan 30, 2007
- 23,381
- 6,002
Lol, chill b, you sounding like a stock patriot.
- Oct 13, 2001
- 160,862
- 142,720
More so asking, I am seeing different opinions online about WEBULL.
I use ElectricTrading
- Jul 13, 2005
- 35,392
- 27,009
Tomorrow is gonna be wild though.
- Dec 23, 2009
- 30,338
- 21,883
IBRK is going to get buried after this Petterfy interview on CNBC 
- Jan 3, 2013
- 29,390
- 27,904
if it ever was a case for #stopthesteal tho
- Jan 30, 2007
- 23,381
- 6,002
Stocking up on my old loves, LB and HEAR.
- Jan 4, 2014
- 9,103
- 13,913
Might not be the thread to ask but how are y’all dividing up contributions between 401k and a Roth IRA? Do you contribute more to one over the other?
- May 3, 2009
- 10,295
- 26,720
antidope
Supporter
- Jan 2, 2012
- 63,513
- 68,037
I just switched to maxing out my Roth from a traditional this year. IMO Roth is better in the long term, but it's way more expensive to do so. I stayed with traditional until I felt like I could afford to do it with a Roth
- Nov 17, 2013
- 1,198
- 1,025
The man is still holding
And yet all I see in here is a bunch of paper handed punks.
Glory awaits the diamond handed.
