Wednesday, September 24, 2008

Doing Something Stupid

Does anybody buy stocks directly? Or, does everyone today–at least us lumps down here in the middle-class do so strictly through Pensions, 401Ks, mutual funds as to ensure enough diversity?

When employed by a big REIT in another life, I occasionally received paltry stock awards which I sold almost immediately with the idea being I don’t want my income and my investments coming out of the same basket. Likewise, I’ve only ever invested through the two of the three listed above to keep said basket as diversified as possible.

I’m sure it’s a terrible idea but I’m sorely tempted to jump at a few with the market as low as it is.

I think I’ve heard that on average over the last 60 years that when the market comes our of recession (and I know technically until we have two quarters of negative growth we aren’t really there yet...just a slowdown), the first 12 months of recovery have averaged in excess of 25% to the good. I know that trying to time the market is also nuts but a little dollar cost averaging doesn't seem too out of order. Much safer to pick some more funds but how fun to pick a winner or two.


Stephanie said...

I've got a little bit of Oracle stock that I bought when I thought it was dirt cheap, and then some more that I bought when it got cheaper, and then some more that I bought when it finally was dirt cheap. Overall, the total has outpaced inflation, but hasn't outperformed my index funds. But I've got some cash in my Keogh, so now would be a good time to go shopping. See something good?

Scooter said...

Even though I have a degree in finance, I don't pretend to have the time or inclination (or understanding) to analyze the financials of individual companies so I rely on sources I trust for that. Then I take those recommendations and try to link them with companies I have personal experience with.

One such source that I follow was really into Pixar about 10 years ago and Marvel about 8 years ago. I, or my nieces, had great experiences with those companies...nieces with Pixar and me with Marvel. I really regret not pulling the trigger back then. Think Nemo and Fantastic Four and Lion King and Iron Man and Cars and Spiderman.

Today: The same source is saying Netflix has great financials and though I don't do the Netflix thing, everybody I know who does biz with Netflix loves the company. I know they recently had a hiccough with their system but their customers that I know say the glitch was handled well. The seem to be Blockbuster in about 1988.


Stephanie said...

Love, love, love Netflix. Especially for the documentaries.

Scooter said...

Confirming my anecdotal research though one of my sources is my baby sister whose judgment I trust completely.