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BTW, if you want water....one of the stocks/ETFs I bought a couple years ago and forgot I owned was $PHO. Looks like I'm up about 50% in it.
If I had as many stocks as you, it would cut into my golfing time. As it is, I lose track of all my investments, which sometimes works out well. Can't tell ya how often I totally forget I own something then is spikes up and I'm pleasantly surprised. In fact, over the last couple of years, if I had just left everything alone I'd probably be up more than I am. I keep finding that selling is a mistake.
On the other hand, in spite of my concerns, I probably hold less cash than I ever have. I need to free up some cash as we've been discussing a river cruise around Europe.
Derf, Gladstone has farms in 15 states, so not everything is in California. Having all that banked water in California ($1.5 billion) could turn out be an 'ace in the hole', considering the frequent droughts out there.
I know what you mean though, and previously had decided to not get back into Gladstone. But the chart setup suggests the bottom is in, so as a 'turnaround' I figure what the heck. Plus it's only 20 shares :o)
These turnaround stocks are the only real risky areas in my portfolio, and currently only 11 of them (out of 216 stocks). It's mostly just to keep things interesting, and to practice the ability to accurately identify chart bottoms. I also have 1 small biotech, but only a $342 investment, so won't lose too much sleep there if it doesn't work out.
Btw. your pick LNC is up nice, and has cleared the 50 MA, so a good sign. I'm still not crazy about the chart, but if it can clear 35 then the 2023-24 uptrend is re-confirmed. First needs to get above 32 and 33 resistance. I thought the chart looked like it was rolling over, so seems risky, especially since the longer term chart is so horrendous. But I don't know anything about the company's fundamentals. The recent revenue growth is 56%, and earnings growth was 75%, so that part looks great.
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I like the idea of $LAND, but they continually lose money. They raise the dividend annually, but not enough to matter. Looks like they spiked due to Covid.
I'd say its trading now around its fair market value.
I have a couple fraternity brothers in California, and owning land there is a nightmare they tell me. Spot one endangered moth and the land becomes useless.
Derf, Btw, speaking of REITS, I recently got back into the farmland REIT Gladstone Land (LAND) as a turnaround. I had some during the big run up several years ago, but luckily took profits before the big plunge. Now it looks like it could be ready to recover.
In addition to 112,000 acrea of farmland (168 farms), they own 49,000 acre-feet of banked water in California worth approximately $1.5 billion, so not bad for a market cap a little over $500 mil. Most of their 168 farms grow produce, which is more profitable than row crops -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175093420
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Derf, Thanks. That sounds like a great approach, investing with a friend who is experienced in real estate investing and management. Warehouses have been one of the better REIT subsectors, and as you said, they have many advantages over residential and office space.
In the early 1990s I looked into buying an office building with 6 suites, which would have been a great investment. The tenants were a dentist, an eye doctor, a title company, insurance broker, and several others. I knew hardly anything about managing properties, but planned to move into the dental suite when its lease was up, and the other 5 suites would produce steady income. Seemed like a great idea, but the ADA - 'American with Disabilities Act' had just been passed, so the risk was having to put in ramps, wheelchair accessible bathrooms, etc. So I didn't buy the property, but later it turned out that existing structures were not required to make those changes to comply with the ADA. That building was in a great location and only $365 K, so a big mistake not buying it.
One current idea is to get a condo at the NJ shore, which is only an hour or so away, so that probably makes the most sense. They aren't cheap, but I could get a smaller one. One of my friends from school bought a shore place several years ago and lives there all year.
You mentioned undeveloped land, but that seems like a highly specialized area, with land use restrictions getting stricter all the time. Some people I talked to said that if you have raw land, it's best to develop it now before the laws change. A comparatively safe way to get undeveloped land is as part of a home purchase, say a property on 3, 5, 10 acres. Even then though, the risk is that a portion gets characterized as a protected 'wetland', and then can't be developed, subdivided, etc.
I guess there's always REITS, though as you said, they move with the broader stock market, so not really the most effective diversification tool. I have some (below), but am still underweight the sector. It was flat / down for several years, then had the big bounce before I could get back in, but still own some -
Cavco Industries (CVCO) - Factory built homes (3 Bil)
Cube Smart (CUBE) - Self storage facilities REIT (12 Bil)
D.R. Horton (DHI) - Residential home construction (61 Bil)
Extra Space Storage (EXR) - Self storage facilities REIT (38 Bil)
Gladstone Land (LAND) - Farmland REIT (528 mil)
iShares US Home Construction ETF (ITB) (0.4%)
NVR Inc (NVR) - Residential home construction (28 Bil)
SPDR Real Estate Select ETF (XLRE) (0.10%)
STAG Industrial (STAG) - Industrial properties REIT (8 Bil)
Lamar Advertising (LAMR) - Roadside advertising billboards REIT (13 Bil)
PulteGroup (PHM) - Residential home construction (27 Bil)
Real Estate Sector -
https://investorshub.advfn.com/Real-Estate-Sector-Ideas-25809
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I had to go back and see if I still owned it. (still don't know how you keep track of all your stocks).....
If I remember correctly, when I bought $SMG, I had determined they definitely had a season to own it based on history and a time to be out. Looks like I sold it in July for a 2.32% loss. I did get a couple dividends out of it, so subtract those from the loss.
They were starting to lose money and I'm never a fan of owning stocks with negative earnings.
I see, if I had held it, I'd be profitable now, but I'm hoping I moved that money to something that has made more.
Looks like it tends to bottom in October, so maybe worth it to you, but not to me.
Good post and questions.
OK, so since real estate is out of my realm of expertise, I've got a buddy who, it seems, every thing he touches turns to gold. He has owned houses, strip shopping centers, and now garages and warehouses. He has told me, he will never do residential again due to the constant calls from renters about broken and leaking this and that. He also explained its almost as bad with the offices he rents.
So, it's small garages and small warehouses. Nothing to break and all or any expenses are theirs to deal with. They never seem to miss their rent and insurance is reasonably cheap. I told him I'd go in on whatever he wanted, (I wanted to rent my golf instructor indoor space, but he vetoed that).
He told me to give him $1.5 million and I did. Now I'm a silent partner so not the one to ask about particulars.
If you're looking for a REIT, I know there's $NNN. $O would be another. $ADC and $WPC as well. I don't any of these, but you can check them out. Problem is, it's still stock market and not really real estate....however, it's also liquid. Let me know if you discover any good ones.
Moving along, if you're a believer that one day there will be an economic apocalypse, then land is the answer. Probably further away from the city the better. Plenty of that in Texas, not so sure for you in PA.
Problem there is, you need to keep it insured and it produces no revenue (unless you're like us in Texas with oil and gas rights)...not to mention many here use it to for deer leases.
When I first started buying real estate, I requested oil and mineral rights. The realtors all thought I was crazy, but I figured, "hey, this is Texas, who knows?" Every place was happy to include it in the contract. Weird thing is, I've sold the properties, and now they are doing this fracking gas drilling and finding all sorts of pockets around us, and oddly, I still own the mineral rights! I get surprise checks regularly and every 2 years they have to pay me a large chunk. Talk about happy accidents!
Anyway, long answer to your question, but I have one more.....
We were in Philly last year fr a ball game, and wanted to find the best Philly cheesesteak (so far the best I had found was in Eureka, CA)....anyway, I did a poll online and everyone had a different opinion. I mean how can there not be one accepted best?? We ended up going to Delassandros, which turned out to be great! Not a fan of cheese whiz and I went to Pat's the last time in Philly and was unimpressed.....
So, you're favorite is...........?
Derf, Just curious if you are still long Scotts Miracle-Gro? I remember you mentioned it back in late Feb, and chart-wise it looks like the bottom is likely in. I had some a few years back in 2020 when it was zooming, but just recently got back in with a small position as a turnaround.
While SMG has the big cannabis angle to it via its Hawthorne unit, it also has the original lawn care business, so has some diversity. While net income is still negative (per Yahoo Finance), and the debt level is on the high side (2.8 bil) compared to the current 4 bil market cap, the cash flow is positive by over 1 bil, and the PEG is only 0.4. The short position is still high, 13.6% of the float, but revenues were 3.5 bil, up 8%. But this data is from Yahoo Finance, so it might be slightly dated.
Anyway, the chart is what got me re-interested in the stock. It formed a quasi- ascending triangle over the last 2 years, and has put in a series of higher lows. So I figure it might finally be time for a long position as a turnaround, though could take patience due to the cannabis connection. The relatively high debt / mkt cap ratio will improve quickly once the stock moves higher.
In the very near term it left a bearish candlestick today, so might need a near term pullback. But after that the upside target should be 76 and then 80, which is the key resistance area of the ascending triangle. Once through that the Wall Street traders should take notice, and the 13% short position could start covering. Should be interesting.
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Derf, >> triple net <<
Just curious if you are owning commercial properties, or residential, and is it directly or via pooled private equity, a REIT, etc? Thanks.
Like you, I'm not much into the maintenance and hassles of owning real estate, but I realize that as a 'hard asset', these properties will be one of the safer places to be when / if the US dollar gets into big trouble (ie 'Debt Bomb'). Around here (Phila suburbs), residential real estate is up around 50% in just a few years, which really means that the value of the US dollar has dropped tremendously in purchasing power. While inflation has cooled for now, what happens as the $35 trillion US debt continues on its rapid path to $45 and then $50 trillion? I'm thinking that real estate might be one of the only ways to maintain one's wealth.
Bonds certainly won't. Buffett said that bonds "are among the most dangerous of assets", and that "bonds should come with a warning label". He also noted that - “Over the past century these instruments (bonds) have destroyed the purchasing power of investors in many countries, even as these holders continued to receive timely payments of interest and principal.”
Anyway, just curious to get your take on the best ways to add real estate to one's holdings. Thanks :o)
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I'd go to the dentist far more if she was working on me!
I told the dentist my issue last time, and he just kinda ignored it. He's a golf buddy, so I guess I need to reiterate my pain.
Probably the gums as I have some receding. I'd trade ya stock advice for dental work.
BTW, how is there not painless dentistry by now?
Derf, Btw, with your molar and sensitivity to cold -
First, did the cold sensitivity start all at once, or was it more gradual? If all at once, the cause is often a cracked filling, which is usually easy to see by the dentist. But if the filling looks fine, then the cause is likely a crack / fracture line in the tooth itself. These are pretty common, but not always visible since it will be under an existing filling, and since the fracture line is usually perpendicular to the x-ray beam, it will not be visible on an x-ray. The only way to know for sure is to remove the existing filling, and look for the fracture line.
Shallow fracture lines are not uncommon, but if they get deeper the cold sensitivity increases, and if the fracture gets too close to the tooth's pulp chamber, the pulp can become inflamed (and the cold sensitivity ends, but sensitivity to heat begins). Eventually the pulp can degenerate, and the throbbing begins, and then it's root canal time. But a fracture line can remain stable for years, and sensitivity resolves as the tooth creates a layer of 'reparative dentin' that protects the pulp.
Another common cause of cold sensitivity occurs after the gums recede with age, which exposes the root surfaces (which lack protective enamel). Then with abrasion / wear from toothbrushing, cold sensitivity occurs. This is easy to determine by the dentist, so in your case it sounds like a fracture line is more likely.
There are numerous de-sensitizing toothpastes on the market, so that should help. If your symptoms morph into heat sensitivity, that would be a bad sign, indicating the fracture line has deepened and the pulp of the tooth is becoming inflamed, so the dreaded root canal is looming. Then a crown, and a large dental bill that will help the dentist make the payments on his new beach house, lol. But hopefully they will have a friendly assistant :o)
(As you can tell, I have WAY too much free time on my hands..)
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I agree with you for all the same reasons, but figured since you quote him often......it's very tough to mirror what he does considering it doesn't get reported for a while. He really has a very unfair advantage
Derf, Good point about the estate tax exemption reverting back to the pre-Trump level. More and more people will be affected, after the big inflationary surge in home prices, etc. My dad passed away in 2020, and his estate was under the limit, but a sizable number of families will lose a bundle if the exemption reverts back to the previous amount -
>>> on January 1, 2026, the exemption is scheduled to automatically reset (or sunset) to $5,000,000, indexed to inflation (approximately $7,000,000), unless Congress acts prior to then. <<<
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Derf, >> BRK <<
I own some of the same stocks found in Berkshire, but don't actually own BRK itself. I always figured Buffett wouldn't be around too much longer, but here he is at 94 and still at it. I don't have as much confidence in the new guys yet (Weschler, Combs), and also wonder about potential tax problems there might be for Berkshire shareholders after Buffett is gone (?) There's also the possibility that as a conglomerate, Berkshire is broken up after Buffett is out of the picture. The conglomerate structure has worked well for Buffett, especially since the insurance side provides lots of 'float' cash to invest, but conglomerates can be unwieldy and are viewed as worth more when broken up.
Another reason I haven't owned BRK is that I don't understand the attraction of some of the holdings. The 'Oracle' obviously knows what he's doing, but some of the holdings aren't 'steady' enough looking (chart-wise). Owning a select group of his stocks, as I do, also has risks since he periodically trims positions or sells them outright, which can tank the stock when the stock sale is announced later. I decided to hold on to numerous of these anyway, even after he sells, since the long term chart is so great (AON, MMC, MCO, COST).
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The way I'm reading the new unrealized gains tax, sounds a lot like what Florida tried with their intangible tax, but that was repealed.
Of course the larger fear is on the Estate Tax, which will sunset in 2025. If Dems in office, I have a great fear this will be vastly reduced. I remember when it was $600k. It's currently $13.61 million.
Derf, >> taxable account will get a stepped up cost basis <<
Let's hope that doesn't change anytime soon. They are already talking about taxing unrealized capital gains for the 'wealthy', and the way the US 'debt bomb' is going ($35 trillion and climbing fast), the trend could be toward confiscatory taxation of estates. Luckily the politicians don't want their own assets taxed, so that should slow down the process.
Fwiw, I'm figuring that when the US debt approaches $50 trillion, something is likely to 'break'. Probably a crisis in the US dollar, as other countries shift into alternatives, like gold and the new gold-linked BRICS currency. So the incentive for us investors will be to gradually transition into more hard assets, and fewer bonds.
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I'm curious, do you own BRK? If not, why?
Darn, I was hoping for the stripper.
In reality, what you are doing is fine. You want to be hands on and it gives you as you said, "a hobby". My dad used to sit around all day watching CNBC to root his stocks on. He'd never sell, but he seemed to get enjoyment by watching them scroll across the screen.
Sorry to hear about the losses, but it sounds like, (unlike 98% of the mullets here), you learned from your mistakes. And that's good!
Actually, I've never ever been a fan of real estate. It's not very liquid and the expenses are high. However, when crazy inflation hit recently, it made sense to buy tangible goods for cash. But I think triple net is the only way to go. I don't want someone calling me to repair stuff.
Now, a question for you....I've got this molar in back that the cold just kills, but my dentist can't seem to locate the issue....what do you suggest?
Derf, >> INTC <<
That could be an interesting contrarian long term turnaround play, or a shorter term oversold bounce play. I don't know a lot about the sector, but Intel has obviously missed the boat in a big way to produce such a collapse in the stock. For 'deep' turnarounds I figure you need to know the sector pretty well (work in that field, etc). The other approach is to go with a stock that has only dropped moderately, and thus has a high % chance of resuming its winning ways.
I remember Buffett was asked about turnarounds, and he said the problem is they almost never turn around. So I've been sticking more to relative 'contrarian value', and then only with small investments.
For exposure to the semiconductor sector, I've been using the 'usual suspects' --
Semiconductors -
iShares Semiconductor ETF (SOXX) - (0.35%)
Analog Devices (ADI) - Data converter products, semicond (90 Bil)
Broadcom (AVGO) - Semiconductor devices (508 Bil)
KLA Corp (KLAC) - Solutions for semiconductor and electronics industries (76 Bil)
Monolithic Power Systems (MPWR) Semiconductor + electronics solns (29 Bil)
Nvidia (NVDA) - Graphics processing semiconductors (1.8 Tril)
Onto Innovation (ONTO) - Optical tech for semicond + advanced packaging devices (9 Bil)
https://investorshub.advfn.com/Elite-Stocks-38031
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Derf, >> 20 year old stripper in Taiwan <<
Bingo, how did you guess? :o) But no, actually a 69 year old retired DDS / DMD. In the early days I bungled my investment results by being too aggressive and cavalier (biotech, etc), but then got serious and spent a year learning TA / Charts at the Stockcharts.com 'chart school', and eventually developed the current strategy, which so far has been working well. Stocks are 30% of the portfolio, so fairly low, but seems about right for retirement.
The tax side / capital gains hasn't been a problem yet since I still have some loss carryforwards from the 'bad old days'. Hence the tendency has been to take profits quickly. But buy / hold is where the real growth and profits are, so the challenge has been finding a way to 'stay the course'.
It sounds like you have a wide variety of investments. You mentioned triple net real estate, and having exposure to hard assets seems like a great idea. I currently only have a condo, which is great in retirement, but with inflation and the growing US 'debt bomb', it seems wise to get more exposure to hard asset inflation hedges.
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A 10-15 year chart is a loooong time. I'll give you credit for patience. However, if a stock isn't paying a dividend and you are just buying and holding, how does it ever end??
I used to use Woolworth's as a great example of a stock that was either great or terrible, depending on when you bought. Currently, $TPL is that stock. I guess right now, if you held long term you'd be ok, but had you been buying and selling at the right time, it could be one of your greatest stocks ever. (I guess the same could be said for SMCI right now).
It seems to me you are just saying you buy a stock, keep it....then buy another stock and keep it....I guess if you have unlimited money come in, you can do this, but again I'd ask....is this just to pass on to someone else when you're gone? In this case, forget the ROTH. A taxable account will get a stepped up cost basis.
Derf, On the fundamental analysis side, while us I-Hubbers have limited abilities compared to a Buffett or a professional money manager, I always do a cursory examination of the company's 'numbers', using data from Yahoo Finance. This only takes a few minutes, and includes -
Market Cap
PE
PEG
Margins
ROA / ROE
Cash / Debt
Dividend
Payout %
Shorts
Cash Flow
Revenue
Rev Growth
Net Income
Earnings Growth
Any clunkers that stand out (high debt, negative margins, shorts, etc) are noted, and too many red flags will nix the idea of owning the stock. But some sectors tend to have screwy looking numbers (finance, REITS), so these can be disregarded in the analysis. For example, REITS sometimes have a payout ratio over 100%, finance stocks often have screwy looking numbers, some industries (distributors) tend to have low margins, but high revenues, capital intensive industries can have higher debt, etc.
But for me, the trajectory and steadiness of the 10-15 year is the most important criteria for a long term buy/hold stock, assuming the 'numbers' look OK. Usually if the numbers are bad, then the chart will also not be great, which makes sense. A nice 10-15 chart is the fastest way to judge the nature of the company's business (growth or cyclical), quality of management, steadiness of earnings, etc. Some of these great companies have high valuations though (Cintas, Costco), too high for Buffett's valuation criteria, but I keep some of them in the portfolio even after Buffett has reduced his stake.
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Also, I must mention, unless you are doing all your trading in a ROTH, you must be creating some sort of tax nightmare for your accountant.
BTW, I'd disagree with this statement below....
I guess.
I don't know anything about you, other than you seem to enjoy researching and following stocks.
You may be a 20 year old stripper in Taiwan, or you may be an 85 year old real estate mogul in Atlanta. So, it is beyond me to try to guess your ultimate goal. I just think, for most people, you are making it too tough, just to get average returns.
You could just as easily buy mutual funds since you are buying S&P 500 stocks, THEN buying the S&P 500. If it were me, at the very least I'd be looking into the equal weighted S&P ($RSP).
You didn't mention your annual returns, but I would be curious as to whether your strategy is working. If you are gaining huge returns, what you are doing is a hobby.
Are you seeking growth? Are you looking to leave a legacy for others? Does income matter to you? Obviously you are not risk averse, but do you also buy fixed income? Does diversification to you just mean many sectors?
Personally, I own stocks, mutual funds, muni bonds, variable annuities...and a bit of real estate of which I lack the knowledge to handle properly. Currently I'm seeking out triple net properties.
Derf, >> going to see mutual fund like returns <<
Yes, that's true. Having 200 stocks likely means returns will be similar to the S+P 500. But having so many stocks makes it almost impossible to sell everything at the first sign of trouble, which has always been my problem (nervous nellie). Bailing out after the profits start to build up is another problem that this approach solves. So to 'stay the course', I made it too cumbersome to sell.
So having 200 stocks is mainly a psychological tactic, but only for 1/2 of the stock allocation. The other 1/2 is in the S+P 500, which can be sold off easily if needed, or adjusted depending upon market conditions. So there is a nice balance, which so far has been working.
Another reason to have 200 stocks is the 'collecting' aspect. Some people have been bitten by the 'collecting bug' (coins, stamps, records, etc), so stocks are just one more category to collect. Another reason to have so many stocks is that there are so many great long term stocks out there. My main screening tool is the trajectory and steadiness of the 10-15 year chart, and there are dozens and dozens of stocks that qualify. Add in 10 or so turnarounds, and voila, you soon have 215 stocks. It's also a fun and interesting hobby if you are retired with too much free time. But whatever works. Every investor is different.
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Derf, >> ULTA <<
As a turnaround candidate, I had initially rejected it since the chart had broken key support. But then the news came that Berkshire had taken a position in ULTA (most likely Weschler, not Buffett), so I decided to get a small position. Sure enough, the 'Berkshire effect' kicked in, and the stock is now back above that broken support level. So far so good, ULTA also has a pretty nice long term chart, which is a plus since it raises the odds of a return to the long term uptrend.
As for the fundamental analysis of the company's numbers and business prospects, I'll defer to Berkshire / Weschler's superior knowledge. Also, articles I've read on the company make it sound like the company's setbacks are temporary. So I figure what the heck, a small position makes sense.
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BTW, you had asked what I've been buying, I added quite a bit of $INTC in August around $19. Not sure what my target price is though. Basically, I bought a bunch to lower my cost per share based on my buys back in 2018.