The stock market

[Mike Sixel]

It's why, if you don't need the money anytime soon, it really does not matter all that much what happens......now, needing it over the next few years, it matters to me.

[Brock Beauchamp]

 

It's why, if you don't need the money anytime soon, it really does not matter all that much what happens......now, needing it over the next few years, it matters to me.

Absolutely. Different strategies for different needs.

[glunn]

I would advise caution in the near term.  I have been told by a credible source that the S&P is likely to dip below 1,600 this year.

[Brock Beauchamp]

I would advise caution in the near term. I have been told by a credible source that the S&P is likely to dip below 1,600 this year.

Yeah, I think rough times are on the horizon, which is why 85-90% of my 2015 investments went into dividend stocks. I'll make money while the market stumbles around.

[Mike Sixel]

I would advise caution in the near term.  I have been told by a credible source that the S&P is likely to dip below 1,600 this year.

No one credible can predict with accuracy like that. Sure, it will happen at some point , then the bears can say I told you so, like they always do.

[Brock Beauchamp]

No one credible can predict with accuracy like that. Sure, it will happen at some point , then the bears can say I told you so, like they always do.

A fair rebuttal. One can't go a week without hearing a Chicken Little voice an opinion. Sooner or later one of them will be right.

 

I still don't have a lot of faith in the short-term market, though.

[Mike Sixel]

 

A fair rebuttal. One can't go a week without hearing a Chicken Little voice an opinion. Sooner or later one of them will be right.

I still don't have a lot of faith in the short-term market, though.

 

oh, I agree with that. But, who would have said, "the price of oil is going to drop, and that's going to cause a huge dip in the market"? 

[Willihammer]

 

Yeah, almost all my stocks are back in the black, if only slightly.

 

Except Tesla. I've taken a beating on Tesla, though I suspected that could happen going into the stock. Between their aggressive expansion and plummeting oil prices, they're in a difficult spot in the short- to mid-term.

 

But Tesla is a ten year stock for me so whatever.

Speak of the devil, TSLA up almost 24% since Mar 4. Early reports, sounds like the Model 3 is a hit.

 

I've seen a few Teslas on the road (the roadster is an eye grabber). As I understand it, the Model 3 released yesterday has a $35k price tag with 215 mile range, I do think we are approaching the breakeven point where it might actually make sense to buy one, esp. with green/tax incentives.

 

But, Tesla has so much ground to make up, they still haven't turned a profit. With so many automakers who dwarf Tesla, how many sales can there be in its future?

 

Example- One rumor I found interesting was that as an alternative to imposing multi-billion dollar penalties on VW, some states were considering capping non-electric or hybrid sales as a compromise, thereby incentivizing VW to expand its green lineup. I would have to think if VW focused on battery powered vehicles they could undercut TSLA easily, no?

[Brock Beauchamp]

 

Speak of the devil, TSLA up almost 24% since Mar 4. Early reports, sounds like the Model 3 is a hit.

 

I've seen a few Teslas on the road (the roadster is an eye grabber). As I understand it, the Model 3 released yesterday has a $35k price tag with 215 mile range, I do think we are approaching the breakeven point where it might actually make sense to buy one, esp. with green/tax incentives.

 

But, Tesla has so much ground to make up, they still haven't turned a profit. With so many automakers who dwarf Tesla, how many sales can there be in its future?

 

Example- One rumor I found interesting was that as an alternative to imposing multi-billion dollar penalties on VW, some states were considering capping non-electric or hybrid sales as a compromise, thereby incentivizing VW to expand its green lineup. I would have to think if VW focused on battery powered vehicles they could undercut TSLA easily, no?

Actually, no. Tesla's big leg up right now is the Gigafactory. They're planning to cut battery costs by 30% once that factory is up and running (probably later this year, early 2017 at the latest). It will be the largest battery producer in the world and no one else is close.

 

It will take years for another manufacturer to catch up to Tesla in what is the most expensive and cumbersome aspect of electric vehicles. A company like VW can surely undercut Tesla here and there in aspects of general vehicle production but it won't erase the gap from 30% cheaper batteries.

[Mike Sixel]

REALLY wanted to buy TSLA options before the last earnings announcement......could have nearly tripled my money. Coward.

 

My cousin said that at one point, more than 700 people were in line in Scottsdale to order a new Tesla yesterday. He did.

[Brock Beauchamp]

 

REALLY wanted to buy TSLA options before the last earnings announcement......could have nearly tripled my money. Coward.

 

My cousin said that at one point, more than 700 people were in line in Scottsdale to order a new Tesla yesterday. He did.

Yeah, I was short on cash when they tanked a few months ago... Pretty irritated that market crash happened at the wrong time for me. I wanted to invest heavily in several stocks.

 

Tesla's Model 3 preorders from yesterday alone were worth ~$5b in future sales. Yowza.

[Willihammer]

That is a good day at the office.

I had no idea about the Gigafactory, its pretty cool that the little guy might have the production advantage. But, if I bought, I would get an ulcer. TSLA sure is fun to follow though.

[Brock Beauchamp]

Tesla preorders are up to $7.5b in less than 24 hours.

 

At this point, I'm beginning to question how on earth they will deliver in these numbers.

[Brock Beauchamp]

 

I had no idea about the Gigafactory, its pretty cool that the little guy might have the production advantage.

The factory is insane.

 

It's going to have one of the largest footprints of any building in the world.

 

http://i1.wp.com/evobsession.com/wp-content/uploads/2014/09/How-Big-is-the-Tesla-Gigafactory.png?w=1512

[Willihammer]

 

The factory is insane.

 

It's going to have one of the largest footprints of any building in the world.

 

http://i1.wp.com/evobsession.com/wp-content/uploads/2014/09/How-Big-is-the-Tesla-Gigafactory.png?w=1512

If my math is right, $7.5b on a $35k car means 214k units.

The factory is supposed to produce half a million cars/year?

So, big as that is, they  might need another one pretty soon.

[Brock Beauchamp]

 

If my math is right, $7.5b on a $35k car means 214k units.

The factory is supposed to produce half a million cars/year?

So, big as that is, they  might need another one pretty soon.

AFAIK, that factory is *only* for battery production. I don't believe they actually build cars at that location, though I could be wrong.

 

Also, I don't know if that $7.5b is based on expected average sale price or a flat $35k. Obviously, many of those Model 3 preorders will be considerably more expensive than $35k once various luxury packages are added to the purchases.

[Mike Sixel]

If they could keep the quality, and seriously ramp up production (thereby dropping costs), I'd be in.

 

Best car I've ever been in, and I don' really care about cars all that much.

[Willihammer]

NFLX is finally done grandfathering its old customers into the $7.99 rate, which was a steal. Now everyone is going to pay $9.99, which is still a bargain IMO.

[Mike Sixel]

TSLA.....not so good.

 

NVIDIA.....I keep adding more stock, and it keeps going up.

 

I have around 100K from the house sale, which I'd like to keep relatively safe, but still have invested. There are not, with these interest rates, many options.......wish I had bought munis 2 weeks ago....

[Brock Beauchamp]

 

TSLA.....not so good.

 

NVIDIA.....I keep adding more stock, and it keeps going up.

 

I have around 100K from the house sale, which I'd like to keep relatively safe, but still have invested. There are not, with these interest rates, many options.......wish I had bought munis 2 weeks ago....

I have some serious reservations about Tesla and I'm glad I invested a moderate amount (about $3k). I fear they could easily fall prey to being a victim of their own success. I was hoping the Model 3 would garner about 100k, maybe 150k, preorders.

 

That's a promising number that doesn't involve insane ramping of production... But 400k? Jesus, what's the likelihood of Tesla delivering that number in a timely fashion? What's the likelihood the cars will be QUALITY when they ship the first 50, or even 100, thousand?

 

I'm nervous they've bitten off more than they can chew.

[Vanimal46]

This is out of curiosity, and feel free not to answer if you don't want to. Do you guys invest on your own? Or hire a financial adviser help you out? 

[Mike Sixel]

I can't see them delivering that many, if they do, the price is much too low right now.....but I have doubts.

 

I keep trying to figure out the 100K.......If I had bought munis 2 weeks ago, I'd be happier right now. I really want to invest it in a REIT or three.....but I can't get myself to pull the trigger on any decision.

[Mike Sixel]

 

This is out of curiosity, and feel free not to answer if you don't want to. Do you guys invest on your own? Or hire a financial adviser help you out? 

 

Both. 

 

I pay for Motely Fool's stock advisor. It has more than paid for itself. But, that's just written advice, I still make up my own mind.

I also have an adviser helping with some retirement items, but I also use them because they gave me access to a cheap loan to help start my wife's business.

 

Realistically? Most people should do the following:

invest the max in retirement, in index type funds

Make sure they have 5-10K in cash available for emergencies

Invest the rest in things they know about, but probably just in funds. Most people aren't patient enough to stick to an individual stock.

 

That said, if you have money to risk, gambling it in the stock market can be profitable (or not), and I will keep doing it (and encouraging my sons to do so also).

[Vanimal46]

I will look into Motely Fool's stock advisor. At this point I've relied 100% on our family financial advisor to handle my portfolio. I haven't had any complaints as she's increased the portfolio by 25-30% for the last 5 years. This year with the way the stock market has shaped up, I don't think I'll be getting to the 25% benchmark... Unless AAPL or Google takes off again.

[Brock Beauchamp]

 

I can't see them delivering that many, if they do, the price is much too low right now.....but I have doubts.

I have more than doubts, I'd put 3:1 odds they can't deliver 400,000 quality vehicles in a 24 month period, much less a 12 or 18 month period.

 

I'm in Tesla for the long haul so I'm more interested in controlled growth than I am an explosion in their stock price... Because explosions are often followed by implosions as the company spirals out of control.

[Mike Sixel]

you have made 25% every year? that's insane.

 

Don't switch, and send me your picks!

[gunnarthor]

 

This is out of curiosity, and feel free not to answer if you don't want to. Do you guys invest on your own? Or hire a financial adviser help you out? 

Bit of both.  We have an investment account with one of the big banks so we can get free reports on all sorts of stocks and have a guy there to talk about possible investments but he never initiates anything.  It's usually us saying "is X good" and him usually giving us paperwork to decide for ourselves. Generally, we like dividend stocks but we're not that diverse.  We tend to invest in 'safe' stocks - big banks, John Deere, index funds - but will occasionally make a 10% bet on a lesser stock.  

 

Mike's advice is pretty solid.  My wife and I both max our 401k/pension accounts and put a crap load of our paychecks into two different savings accounts - a short term one for vacations/new car etc and the longterm investment account.  I also think it makes sense to put some money in a 529 for your child's college if you can afford it but others disagree.

 

In the investment account, a solid portion should be an index fund - ours is a vanguard fund that tracks the S&P 500.  The general rule is your age should be X percent in index funds so if you are 30 and have 100k hidden away, 30K should be in index funds.  But we have about 7 or 8 stocks we've held for years.  When we buy stocks, we tend to hold them longterm.  Generally that works but it did mean we got killed in 08 with the bank stocks.  We had a lot of citi and wachovia.  -sigh-

[Vanimal46]

I don't know how she's done it, and maybe the 25% figure is too high, but without looking it up, I'm confident it's been a 20-30% growth every year. I've given her full reign to make trades, buy and sell anything that will keep the portfolio growing.... Usually have a call every quarter to see if anything's changed with short-term purchases like housing, cars, etc... Since I'm young in my mid-20's, it's a fairly aggressive strategy where I'd say 75% is tied into stocks. 

[Mike Sixel]

If I had small kids (and I think I typed this upthread).....

 

I'd buy a duplex or three with some other investors, create an LLC to hold the assets, and gift a portion to my children every year. That way, they have an asset they can either get rent from to pay for college, or sell. It is PROBABLY more risky than a 529, but I hated that the 529 was tied to college/education. 

 

Heck, I am considering doing that right now, and several of us are trying to figure out if we are going to do this.

[Willihammer]

I don't know how she's done it, and maybe the 25% figure is too high, but without looking it up, I'm confident it's been a 20-30% growth every year. I've given her full reign to make trades, buy and sell anything that will keep the portfolio growing.... Usually have a call every quarter to see if anything's changed with short-term purchases like housing, cars, etc... Since I'm young in my mid-20's, it's a fairly aggressive strategy where I'd say 75% is tied into stocks.

That's awesome you've gotten that kind of return but a 5-year sample size for one portfolio is way too small to judge someone smarter than the market. Most research on the topic suggests on average you will underperform the broader market after expenses, on any kind of meaningful sample size (25+ years) with an advisor.

Even a guy like Warren Buffet, its debatable whether he possesses any actual skill or is just the anomaly way out on the bell curve who has gotten extremely lucky for the last 50+ years.

Edited July 7, 2016 by Willihammer