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TMFLegendPhoenix (34.02)

I'm not looking for a friend, I'm looking for a Jedi master.

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August 09, 2011 – Comments (10)

I am an investing novice and what I've found here at The Motley Fool has really made me excited about investing.  My idea for starting a blog is that this will be a good way to document my growth as an investor while creating a vehicle for getting veteran advice and criticism regarding my thoughts.  I figure the worst-case scenario (if I manage to keep up and write something every week) is no one will comment or even notice my blog. In that case I'll have nothing less than an investment diary documenting my thoughts of why I had purchased each stock when I did.  The best case scenario would be for this blog to initiate a rich discussion about the stocks I'm most interested in.

The theme I've come up with for this blog is "stock of the week" where I pick one stock per week and write my ideas about why I bought that particular stock at that point in time.  I have a feeling that the stock market during the next several weeks (possibly months) is going to be a wild ride. Rather than wait for the market to rebound or try to anticipate when the "best" time to buy is, I've decided to take a portion of my investment budget and every Friday purchase stock from one company, then hold on tight.  I have a good number of stocks on my watchlist across several industries and I'm adding new stocks every day.  Although, if the same good opportunity presents itself week after week, I may spend my investing allowance on buying the same company in consecutive weeks.

Whether I learn something from this experience or simply document each foolish move I make through this journey, my hope is this blog will be a fun experience for me and anyone who happens to read it.  There are two things I should point out about myself: first, I am a nerd.  I like nerdy things and my goal is to bring a nerd-twist to my analysis.  Second (and more importantly) when it comes to investing, I am a novice, noob, newbie, rookie, tenderfoot.  You should not regard my posts as advice or recommendations, but I encourage you to post advice, thoughts, criticism, ideas, words of wisdom or any help you're willing to give.

10 Comments – Post Your Own

#1) On August 09, 2011 at 2:20 AM, KommanderKhaos (71.64) wrote:

A Jedi master? You may want to hook up with Alstry!  Heh. That's a joke, btw.You'll want to stay in a galaxy far, far away from him. :p

Anyway, it sounds like you have a good plan there, just taking it slowly and learning as much as possible about all of your possible investment options. I tend to be careful like that too, and that has helped me out as an investor. I like the part about holding tight too, because that psychological aspect of investing (if you're a buy and hold investor, which it sounds like you're planning to be) is huge. You've got to have a calm demeanor, a steady hand, and sometimes (times like these for example) nerves of steel as your portfolio takes a royal beating. I try as best as possible just to emotionally let that go and not sweat it, because A) there is not a damn thing I can do about the stock market tanking, and B) because I still believe in the fundamental validity of the companies which I've invested in and know for a fact that they will be back, and in the meantime I've got the dividends being reinvested so the shares are accruing at a greater rate as these stocks remain on sale. So I don't worry about it. I find investing to be a great hobby, and an extremely rewarding one both financially and in terms of knowledge gained. I am constantly learning, and no matter how much I might learn, I am continually amazed at how little I actually know, and so the process will continue onward as long as I'm around. 

At any rate, if that's your picure, then yes you are a true member of sub-genus Dorkus Malorkus, but that's cool. Some of my best friends are dorks. :) Just be proud of who you are (and it sounds like you are), and best wishes with your investing. 

Cheers!

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#2) On August 09, 2011 at 3:31 AM, TMFLegendPhoenix (34.02) wrote:

I don't actually know the guy in the photo, I posted it because it captures the spirit of the kind of guy whom I'd consider "cool."  Basically I'm a star wars geek.  Not to the point where I've ever been to a convention nor have I outfitted my car to look like a land speeder nor did I suggest to my wife that we have a theme wedding.  But I can pretty much recite the entire dialog from "Did you hear that? They shut down the main reactor." all the way through the lyrics of "YubNub" (both in Ewok and English translation).  Sometimes I think my wife would have rather suffered through a Star Wars wedding than to have to watch episodes IV, V and VI with me for the rest of her life.

Thanks for the response.  I'll try to have my first post up tomorrow so you can see what I'm thinking about... It's going to be pretty Dorkus Malorkus.

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#3) On August 09, 2011 at 4:11 AM, shamapant (78.17) wrote:

Great idea, I would be careful about investing in too many different companies though. Diversification is good in some situations but overdiversification just neutralizes your wins. 

 

Good luck! 

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#4) On August 09, 2011 at 9:09 AM, TMFLegendPhoenix (34.02) wrote:

thank you for the advice, shampant.  and i see your point:  owning every stock in the s&p 500, it would make it difficult to outperform the s&p 500.  if i knew the market was going to be strong and stay strong, i probably would have put the entire alotment into one company that i really believe in and pulled the trigger.  but i get the feeling the market is going to be crazy and that a lot of great companies can be purchased for a bargain.  so my thesis is to spread out my time and money to ease the potential feelings of "i bought to early" or "i missed out on a great opportunity".

roughly how many different companies would you consider a good number?

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#5) On August 09, 2011 at 9:16 AM, Valyooo (99.43) wrote:

One great thing about CAPS is that people here are legitimately interested in lending a helping hand.

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#6) On August 09, 2011 at 9:36 AM, TMFBabo (100.00) wrote:

There are many great things about this post.

1. I love the idea of averaging into your best ideas. Fretting about getting in at the bottom and out at the top is likely to cause a lot of undue heartache. The thing investors should really worry about paying good prices for their stocks and selling at or past fair value.

2. I second the idea of an investment journal. I've started to keep one and it really helps keep things in perspective. Better yet, you can look back and see what you did and why you don't want to do those things anymore.

3. The most important thing is that hopefully, your investment process improves over time. The only way to do that is to get roll your sleeves up and get your hands dirty, of course. I think it'll happen faster since you're doing that. With time, you'll be able to process more information faster, as you learn a little more about different companies, industries, valuation methods, etc. as you go.

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#7) On August 10, 2011 at 11:06 AM, chk999 (99.97) wrote:

TMFBabo hits the nail on the head. And I want to add, read, read, read and read somemore. 

Make a list of the classic investing books and read them. My list would start with:

The Intelligent Investor - Ben Graham

One Up On Wall Street - Peter Lynch

Common Stocks, Uncommon Profits - Phil Fisher

Reminiscenses Of A Stock Operator - Edwin Lefevre 

 

Read these and you will find they lead you in a bunch of useful directions. 

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#8) On August 10, 2011 at 11:51 AM, TMFLegendPhoenix (34.02) wrote:

Thanks for the list, chk999.  I've read "One Up On Wall Street" and I  thought it was great.  I'd like to re-read it, in fact I just asked my wife to get an audio copy so we can listen to it during our long road trip this weekend. 

I'll order the other books you mentioned and start working on those.

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#9) On August 10, 2011 at 2:45 PM, dollarvaluemenu (38.30) wrote:

My advice would be to look for stocks of companies that famous mobster Jabba The Hut would like. Companies of casinos, pawn shops, check cashing stores, race tracks, real estate, horse tracks, resorts, "gentlemens" clubs, etc..They are simple businesses that are usually cheap value wise and if bought at the right time can really yield some nice profits. Leave the Cloud Computer, Semi Conductor, Data Storage, and other high flying companies to others. Go for the value oriented, simple, "Mafia" type of companies. Jabba would be proud.

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#10) On August 10, 2011 at 3:57 PM, TMFLegendPhoenix (34.02) wrote:

Ya koo tocha ka poonoo nee sok nyee.

there's a sin fund called VICEX that focuses on mostly booze, smokes, gambling and guns. 

i have had my eye on Altria, Diageo and Fortune Brands.  I'll seek out a few more Jabba-friendly companies to see what other potential opportunities are out there.

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