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TheDumbMoney (37.72)

Philip Morris International Crushing Gold

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14

March 13, 2013 – Comments (12) | RELATED TICKERS: PM , GLD , XOM

So for a number of years I have tangled with TMFSincheruna (Christopher Barker) about the merits of gold, in a variety of respects.  I have been a longstanding believer in equities, and that the Fed's actions are not "unprecedented" but are a 1940's redux, that the world will not end, etc.  At one point in early 2010 I told him PM would beat gold.  Since at least once in the intervening time period Mr. Barker has reminded me that GLD was beating PM, I feel I must say that since the beginning of our informal wager, as of now, PM is crushing gold.  It's not even close.  And that's just the stock price of PM, not including the massive dividends, and certainly not including the even greater impact of reinvesting the dividends.  So, right now, I'm winning.  I continue to expect to do so.

As a reminder, all of my CAPS picks are real money, and they are my only stocks that I own.  Checks indicate largest positions.  I note in the comments/notes when I add.  For example, I added to SODA at $28.50/share, so my real return there is much higher than CAPS indicates.  I also added to INTC in such a way that my return there is lower than CAPS indicates.  I added to BRK.B at $67ish, so, etc. 

One other thing to note:  CAPS does not include my ABBV position, because they didn't add it after the split, and by the time I realized that, I decided not to add it on a date totally unconnected with when I acquired it.

Another thing to note:  CAPS is not accurately accounting for the ABT/ABBV split in the ABT stock price.  In reality, that is a strongly outperforming pick for me.  Overall I am doing well vs. the market over the three years I have been on CAPS. 

Last year, my stocks generated almost $1,400 in dividends for me, of which about 30% goes into a non-taxed IRA.  All dividends get reinvested.  I run four DRIP accounts (BDX, LMT, XOM, and UNP -- $50/month).  I pay almost no fees, because these companies pay all or almost all of your DRIP fees.  The XOM position and the PM position (dating to pre-Miller spinoff, pre-Kraft spin-off, pre MO/PM split, when the stock was called MO) are my oldest, dating to 1998.  The rest of my positions are either in my IRA or in my other self-direct stock-accounts. 

I added nothing to XOM other than reinvested dividends from 1998 to 2010, and then in 2010 and 2011 as my CAPS notes reflect, I added a ton to XOM when it was in the high $50s to low $70s around the time of the XTO purchase.  I restarted it as a $50/month DRIP earlier this year.

BAC is actually an option position, note. 

My other CAPS player is a CAPS allstar.  In that one I actually try to play this game, though I have been inactive on it for the past few months, because I just don't have the time.

12 Comments – Post Your Own

#1) On March 13, 2013 at 4:42 PM, Valyooo (99.35) wrote:

PM vs PM (precious metals).  Phillip morris best stock ever

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#2) On March 13, 2013 at 7:27 PM, dragonLZ (99.59) wrote:

Not so fast, Valyooo.

When you picked PM as the best stock in the world back in 2010(in bluebare's post What's The Best Stock in the World), I picked NCT.

Since then, NCT is up 260% while PM is up only 70%.

And these numbers don't even include the dividen yield (NCT's dividend yield 8% vs. PM's 4%)...

          :)

p.s.

The only stock that might be a better stock in the world than NCT is a Nigerian junior gold miner GLDXFSW. Only 6 cents now but I can easily see it at $27 when gold hits $7500 later this spring.

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#3) On March 13, 2013 at 8:00 PM, HarryCarysGhost (99.69) wrote:

The only stock that might be a better stock in the world than NCT is a Nigerian junior gold miner GLDXFSW. Only 6 cents now but I can easily see it at $27 when gold hits $7500 later this spring.

HaHaHaHaHaHaHa!

Thanks dragon, I needed that:)

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#4) On March 13, 2013 at 10:25 PM, Valyooo (99.35) wrote:

Hahahhaha

 

PM best performing stock of last 50 years

 

and I still have 50 years to be right..just because ive been wrong for years doesnt mean im wrong!

 

ok ok, guess who I was being 

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#5) On March 14, 2013 at 12:55 PM, dragonLZ (99.59) wrote:

HCG and Valyooo, I don't see what's so funny.

We'll see who's going to get the last laugh when GLDXFSW eventually does find gold...

Btw. I forgot to congratulate to TheDumbMoney, aka dumberthanafool (one of my favorites), on his great performance.

I always said he's not as dumb as he's portraying himself to be. I think he's just doing it to easier take all of our money (he knows investing is a  zero-sum game. Somebody's got to lose in order for him to make money).

Brilliant.

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#6) On March 14, 2013 at 2:27 PM, TheDumbMoney (37.72) wrote:

Ha, dragon, you give me far too much credit.  My only two goals are: 1) to slightly beat the S&P 500 index over the long-term while taking on as little risk (psychological, and beta, and leverage) as possible and minimizing my costs and taxes as much as possible; 2) keep learning.  

I think there are only two ways for individual hobbyist investors to do well at this game:  1) become an awesome trader like @TraderFlorida on Twitter; or 2) employ time arbitrage by holding quality (not the same as value) stocks for a long, long time, which you buy at reasonable valuations.  

I long-since chose method two because I'm lazy and method one is simply too much effort for a hobbyist who has another full-time job.  By employing method two, I'm not really taking much if any money from others.  Rather, I'm riding above the "churn" while lots of other market participants constantly take a lot of money from each other and incur lots of taxes and transaction costs while doing so.

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#7) On March 14, 2013 at 6:53 PM, HarryCarysGhost (99.69) wrote:

The only stock that might be a better stock in the world than NCT is a Nigerian junior gold miner GLDXFSW. Only 6 cents now but I can easily see it at $27 when gold hits $7500 later this spring.

Hi dragon, I was just laughing at that line, it literally had me laughing out loud. I have no disagreement with anything else you said in this post. Just loved the sarcasm of a nigerian penny stock and gold @ $7,500 by spring.

Cheers and thanks for the laugh.

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#8) On March 14, 2013 at 11:59 PM, dragonLZ (99.59) wrote:

HCG, I'm sorry I forgot to put :) after my "I don't see what's so funny?" sentence so it sounded like I'm being serious.

p.s.

Lately, I've been too sarcastic and have to stop that. I do realize we all make wrong calls, but I was just making fun of the guys who ask questions like: Sinch, what do you think of XXX, a junior miner from XXX (usually a pink sheet stock wort a few cents a share). The funny thing is that even Sinch has never heard of most of them and the guy really knows PM stocks and stuff. 

As for the mention of $7500 figure, that's just my secret gold target I planned on revealing once gold hits $2500, but just couldn't wait any longer to share it with fellow Fools (now I'm being sarcastic again, but had to make Valyooo laugh one more time).

However, that figure was brought up for real as a soon-to-be gold price by some Fools back in 2010 when they were predicting that gold and DOW will soon revert to the historic 1:1 ratio.  

p.s.s.

Also, I just want you to know that every time Visa hits a new high, I think of you. :)

Good luck in the future, HCG. 

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#9) On March 15, 2013 at 12:07 AM, dragonLZ (99.59) wrote:

"My only two goals are: 1) to slightly beat the S&P 500 index over the long-term while taking on as little risk (psychological, and beta, and leverage) as possible and minimizing my costs and taxes as much as possible."

DTAF, first of all, this is more than just a single goal (it's more like 3-in-1 kinda goal).

Secondly, If you can do that, you will be better than 90% of us investors out there (including professional money managers).

Thirdly, I'm pretty sure you can do it. I like your approach to investing and I wish that one day I'll be able to do the stock analysis I saw you doing on a few stocks.

Congrats once again.

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#10) On March 15, 2013 at 2:48 AM, Valyooo (99.35) wrote:

As for the mention of $7500 figure, that's just my secret gold target I planned on revealing once gold hits $2500, but just couldn't wait any longer to share it with fellow Fools (now I'm being sarcastic again, but had to make Valyooo laugh one more time).

 

Hahaha mission accomplished

Dumb Money,

Time arbitrage?  I don't see how it's arbitrage but the term sounds cools haha 

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#11) On March 15, 2013 at 4:42 PM, TheDumbMoney (37.72) wrote:

Hey Valyoo, time arbitrage is a fairly well-known concept in the value investor ghetto see here:

http://www.investopedia.com/terms/t/time-arbitrage.asp#axzz2NdvC0UV4

and

http://www.brightworth.com/assets/docs/Articles/Investments-and-Economy/Time_Arbitrage-_A_Powerful_Edge_for_Ivestors_(graph).pdf 

and

http://www.fool.com/investing/international/2010/10/21/2-words-that-will-crush-wall-street-over-the-next-.aspx

As I use it, I mean holding stocks for the long term.  I belive that is the only advantage I have over institutions and professionals.  Professionally, they have to look to the quarter or the year, whereas I do not.  I think many people, in short, sell their holdings because of short-term reasons (better opportunity this month, year-end-numbers, career risk, quarterly report to fund shareholders), and because of this the long-term value of quality companies gets discounted.  Thus I think it's a fool's errand to trade actively, unless you are actually a trader who knows and applies-well techical principles, which I am not. 

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#12) On March 19, 2013 at 4:52 PM, Valyooo (99.35) wrote:

Oh I see what you mean, never heard the term but I definitely agree with the concept

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