Should I have stuck with those old stocks…? Let’s See.
July 18, 2008 | Posted by InvestorBlogger | Comments Off
Just occasionally in the heat of compulsive decision making, one loses the grand perspective! Really. In 1998, I started trading in the US stock market, I still remember the trepidation and fear that accompanied my first online stock purchases. In those days, I was a Motley Fool reader and bought some suggested stocks based on their ideas. It was a fairly decent portfolio that I purchased for about $8357.84.
Today, I was going through records today of my first stock purchases and here is what I bought in 1998…
The first column is the number of stocks, the stock symbol, the price I paid, the trading cost and the total costs.
| 18 | GM | 56.5625 | 9.99 | -1028.12 |
| 11 | JPM | 86 | 9.99 | -955.99 |
| 14 | MMM | 70.1875 | 0 | -982.63 |
| 23 | MO | 42.6875 | 9.99 | -991.8 |
| 10 | DELL | 58.5 | 9.99 | -594.99 |
| 10 | DELL | 59.6875 | 9.99 | -606.87 |
| 14 | ATHM | 73.2344 | 9.99 | -1035.27 |
| 25 | CAT | 42.4375 | 9.99 | -1070.93 |
| 25 | IP | 43.25 | 9.99 | -1091.24 |
| Total | -$8357.84 |
I don’t know how I would have fared in the long run otherwise as I had to sell my stocks then repurchased others… I’m pretty sure my track record isn’t that good. But let’s see if I had just forgotten them for 10 years. What would they be worth now?
The list: ups and downs!
ATHM is now worth $0 … ah, those tech stocks. Can anyone remember what happened to ATHM? I sold out before taking a small loss. I noted that price, because I can’t remember what happened to them after that. All prices are calculated at today’s rates (obviously volatile).
The first column is the number of stocks, the stock symbol, the current price per stock, the total accured dividends, and the total value of the purchase as of today.
| 18 | GM | $13.14 | $590.90 | $827.42 |
| 33 | JPM | $39.94 | $460.02 | $1,778.04 |
| 28 | MMM | $68.49 | $420.56 | $2,338.28 |
| 23 | MO | $20.46 | $2,265.94 | $2,736.52 |
| 40 | DELL | $24.41 | $0.00 | $976.40 |
| 28 | ATHM | $31.75 | $0.00 | $889.00 |
| 50 | CAT | $71.15 | $432.00 | $3,989.50 |
| 25 | IP | $23.21 | $262.50 | $842.75 |
| Total Purchases | $14,377.91 | |||
Overall, if I had done nothing in the past ten years, I’d have made over $6,000 on just those stocks, including splits, dividends and spin-offs. If you look at the stocks, you’ll see that that there is a HUGE divergence of performance over the past ten years,
Would I have beaten the Dow Jones?
As it so happens, the DIA ETF started trading the same quarter, so I’m able to track the performance of buying this ETF. (In fact, I did buy it at one point.) Anyway, using a notional monthly average, I’d have been able to buy 106 shares in DIA in 1998. Adding dividends to the total, I’d have made $14,286.68 in those years, so I’d have beaten the stock market but not by much!
Sobering Reality
In reality, I bought and sold more stocks than I remember, I rode the bubble and the coming collapse. Then I failed to sell as stocks tumbled. I then lost ‘interest’ and just sat there stuck in the headlights. Since 2003, I’ve been pursuing a more dividend focused story than ever, and today’s research really shows that dividends would have accounted for over 30% of the total gains! That’s not to be sneezed at.
I’ll be detailing much more after the blog’s reorganization… yes, I’ll be having a stock blog! Stay tuned.
Any stock stories to share?… do drop by!
This story has been edited three times for inappropriate formating, replacing/removing the chosen Flickr images (not properly licensed) and tidying up formatting.
Dow stocks: General Electric
July 18, 2008 | Posted by InvestorBlogger | Comments Off
This is the second in my series on stocks in the Dow Jones 30. We’ll be adding more in the coming months, as we seek to expand stock coverage on InvestorBlogger. These articles are being provided by our wonderful team of writers headed by Anuj.
General Electric (NYSE: GE), founded in 1878, has always looked for new ways to grow, not only enrich its coffers and its stockholders’ but to improve the lives of its customers. Consequently, the company has expanded over the years from manufacturing the first light bulbs to providing energy and more. In the 1930’s, GE began making home appliances as well as financing the consumers that bought the goods. Over the years the company has diversified its holdings so that today it’s one of the biggest and most versatile conglomerations in the world. 
The first thing most investors look for, besides a steady bottom line profit, is whether a business provides a temporary service or a lasting demand. Many businesses start, grow, profit and sink out of sight in as little as a year. Companies that supply a steady or increasing need, however, are usually worthy of consideration when an investor is looking for a good return. General Electric has expanded its interests to include not only consumer necessities like water systems, window air conditioners, home electronics and surveillance systems but commercial products such as medical imaging equipment, plant turbines and jet engines. Over the last century, GE has developed into a company that provides goods and services that the world is unable or unwilling to do without, insuring a steady growth of both size and income.
Lately, however, General Electric stock has seen a fairly steady decline. Nearly every stock on the market has headed down in the past few months, though, due in large part to skittish investors and the cost of oil. While you may not think it’s a good time to buy stocks that are losing value, the basic idea of the stock market has always been to buy low and sell high. This makes it a very good time, theoretically, to buy GE stock and sit on it until values begin to rise once more.
Stocks such as General Electric will eventually recover, in part because their very existence is tied into the sort of products that are essential to modern life. People will always need power, clean water, climate control, medical tests and ways to travel. GE provides all of that and more. It’s inevitable that the company will recover from the present bear market and anyone buying GE stock at its current low price will likely be very happy with their decision in the future.
On a personal note: I used to own GE for a few years, or at least I thought I did! I would have like to own GE but never bought it! Oh, well.
Would you buy Home Depot (HD) at these prices?
July 15, 2008 | Posted by InvestorBlogger | Comments Off
The current housing market may be wreaking havoc on the stock exchange and everyone working in the real estate industry, but home improvement stores such as Home Depot could possibly turn a nice profit from it. The housing bubble is in the process of a remarkably loud pop as it bursts, scattering its financial debris over nearly every type of business. Home Depot stocks have been under increasing pressure during the past year, losing nearly a quarter of their value. This may lead a wary investor to wonder if it’s too risky to invest in Home Depot.
As with any investment, one must figure out whether the risk of buying Home Depot stock will be less or greater than the reward. Since it’s inception in 1984, Home Depot has had an average return of over twenty eight percent; it’s one of a decreasing number of stocks that has rewarded its investors for the high risk they’ve taken. However, most of its growth occurred early as it opened stores in every major city of the country and grew rapidly with the demand for its goods and services.
Although the market doesn’t favor many stocks at the moment, Home Depot is still considered an attractive investment since its current price is much less than it’s expected to make over the lifetime of the corporation. The company’s earnings have proven steady over the past twenty-odd years and a 14% increase is expected over the next five. This is a very important figure to consider when deciding whether to buy a stock. Another is the rating of the stock, where it is on a scale of conservative to aggressive. Home Depot is nearly in the middle, leaning more toward the conservative end which makes it a very good risk when you consider past performance.
Home Depot looks for steady profits over the next few years, even though they are influenced by economic swings. Perhaps that is also a good sign; as the housing market stumbles and fails, homeowners are choosing to stay where they are rather than buy new houses. Companies such as Home Depot are seeing an increase in remodeling materials sales and a higher demand for installation services than ever before. As the demand from commercial builders wanes, consumer purchases are steadily increasing. So, while its initial growth spurt is behind it, Home Depot seems to be a safe and profitable investment for the future.
So, with a current PE of a little over 10, does it make sense to invest now or not?
Disclaimer - InvestorBlogger does not currently own this stock, though he did briefly own it and lost money on it during the dotcom bust years ago! He is currently considering investing in some of the Dow Stocks especially with the current sale… and is waiting for an opportune entry point. Any suggestions? Article was provided by Anuj and his team of writers.
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