Stock Market 2014

[solo]

What do you guys think of the risk of a major stock market crash in 2014? I seems to me the stock markets(s) have been going up lately but the underlying problems in the US, European, Chinese etc economies have been papered over rather than dealt with properly? I have a modest amount of money invested in stocks/bonds and am thinking about selling it all and just freeze it in a bank account for when I will do my next major trip abroad.

Edit: Also, if anyone could just namedrop a few potentially good marijuana stocks/bonds that would also be appreciated.

 

[Steve9]

What do you guys think of the risk of a major stock market crash in 2014? I seems to me the stock markets(s) have been going up lately but the underlying problems in the US, European, Chinese etc economies have been papered over rather than dealt with properly? I have a modest amount of money invested in stocks/bonds and am thinking about selling it all and just freeze it in a bank account for when I will do my next major trip abroad.

I am expecting a 6-12% pullback within the next 12 months. This is perfectly normal and would be healthy for the market.

In 5 years from now I am expecting the market to be higher.

I would only recommend that you sell some of your stock if you know that you will need to use that money within the next 5 years. For example I would continue to hold something defensive (eg Walmart) and "trim" high flyers (eg Twitter)

 

[Sourcecode]

Edit: Also, if anyone could just namedrop a few potentially good marijuana stocks/bonds that would also be appreciated.

I just talked about marijuana stocks a couple post up

http://marijuanastocks.com/content/list-marijuana-stocks

 

[Veloce]

I wouldn't bank on marijuana stock too much just yet, but that's me. Unless you know a company's performance history, balance sheet, underwriters, equity, don't buy in too much. It's okay to take risks here and there but just because weed is a new industry with tons of potential doesn't mean a company's stock is guaranteed to go anywhere.

My $.02 for 2014 you guys should look into mining corporations. Gold is rock bottom right now so guess who that affects? Mining corporations. This is a tremendous buying opportunity.

 

[Sourcecode]

Sourcecode's
Stock Market Predictions for this year and the future

Youth
First off as said before...What the younger generation latches onto is gonna be the next big stock for the future.
You gotta find out what these rich white girls/kids like
Chipotle has risen almost 1000 percent in 5 year Link

MY prediction is Froyo. Frozen yogurt is already big as it is. In my city we have three shops on the same street and somehow they manage to stay afloat.
I found one company U swirl
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=SWRL
in one year, stocks are up 135 percent. 10 percent in 6 month.

Im currently polling right now with college kids about what their favorite shops and restaurants are. Whatever the kids put money into..financial people should put money into.


Marijuana
I mentioned in my above post that I think weed stocks are gonna go viral in the next year(s)
Colorado legalize. California will soon legalize and Ill put money that Washington state will legalize also.
Theres already companies out with stocks.
one company i got lucky with was CANN

This company's stocks doubled in the last month..even though they are on the decline..I dont see them dropping to or below where they took off.

Cannibis science is also at 350 percent increase in the last 6 months.
I can see these stocks going down a little for the shortterm..but as soon as new weed news comes out..ten bucks say they shoot back up

Here is another list of marijana stock companies you might wanna look into
http://marijuanastocks.com/content/list-marijuana-stocks

http://www.businessinsider.com/colorado-marijuana-tourism-2012-11

http://www.cnbc.com/id/101302088


Private prisons and supporting industries

http://finance.yahoo.com/blogs/daily-ticker/top-5-secrets-private-prison-industry-163005314.html

Everyone wants to hate on the US becoming a police state? why dont you embrace it and profit off it instead
of course theres still alot of info saying that the bubble is over
http://www.fool.com/investing/general/2012/06/28/why-private-prisons-will-lock-up-your-returns.aspx
but I feel like its gonna restart.

CXW and GEO are two big names in private prison industry
http://www.fool.com/quote/nyse/corrections-corporation-of-america/cxw

People are claiming that the economy might get worse soon. When economies go down..people commit more crimes. Someone has to make money off of it.
I would also put money that until more and more states legalize weed..minor offense crimes are gonna stay at the same rates


Brazilian construction industry
Brazil is one of the fastest growing economies right now.
They are rapidly industrializing all theirs shit. We've all seen the pictures of high rise building right next to favelas.
Major money is going into building shit for the world cup...and then 2 years after that..the olympics.
From what news and culture is showing...Brazilians want to get shit done on their own industry.
So why not invest in coal,iron,and steel

http://beta.fool.com/damianillia/20...t-in-these-3-brazilian-steel-companies/35699/

GGB Gerdau S.A
kinda has a shady record..lots of up downs..this year and currently the charts show them on a decline.
They built a bunch of shit..now the money is running dry.
MY thought process is that even though their economy is currently on a slight downward trend,world cup revenue will send these companies back through the roof when they start pumping more money into their infrastructure and the upcoming olympics
UGPA3

Brazil for the long term
Other brazil stocks are
Vale for Iron


My random stock isChina Finance Online Co., Ltd
500 percent on 6 months.
I havent put any research into this company..but they have a good outlook.
I plan to research Chinese companies also..the Chinese dont fuck around with their money.
For the same reason I think its great to invest in brazil, are probably true for China

Right now..the chinese have enough money that they are coming to the US to take advantage of us being poor
http://money.cnn.com/2014/01/20/news/economy/china-tourism-us/


**Disclaimer** I know absolutely nothing about the stock market or life...or death. I threw this post together hastily. You shouldnt trust me with real money at all. This are just random thoughts from my head that my cause you to lose all your money..in fact you should probably short all these companies

 

[Veloce]

My random stock isChina Finance Online Co., Ltd
500 percent on 6 months.
I havent put any research into this company..but they have a good outlook.
I plan to research Chinese companies also..the Chinese dont fuck around with their money.
For the same reason I think its great to invest in brazil, are probably true for China

Right now..the chinese have enough money that they are coming to the US to take advantage of us being poor
http://money.cnn.com/2014/01/20/news/economy/china-tourism-us/


**Disclaimer** I know absolutely nothing about the stock market or life...or death. I threw this post together hastily. You shouldnt trust me with real money at all. This are just random thoughts from my head that my cause you to lose all your money..in fact you should probably short all these companies

Unfortunately you can never tell when a stock is going to jump 500%

Hindsight is 50/50.

I do agree that there are some chinese companies to look at. I'm probably gonna pick up some stock in Xinyauan real estate next month https://www.google.com/finance?q=NYSE:XIN&ei=9YTpUvjGBan_sgf-QQ as I believe it to be pretty grossly undervalued, and pays a nice dividend to boot. They started development in U.S. in '12 and seem to have serious potential.

 

[Steve9]

My $.02 for 2014 you guys should look into mining corporations. Gold is rock bottom right now so guess who that affects? Mining corporations. This is a tremendous buying opportunity.

Im thinking along the same lines. I recently put 4% of my capital into the worlds biggest miner, BHP Billiton - www.bhpbilliton.com

BHP is extremely well diversified with interests in Iron Ore, Copper, Coal, Aluminium, Petroleum, LNG and Potash.

A re-accelerating China and Asia will do wonders for its share price.

 

[TheBulldozer]

Sourcecode, and RVF population at large:

I made a lot of money and then got burned hard by China. There are companies out there being floated on the market that are completely fake.

I actually bought and sold off a company that was completely fake. I made 5x my investment before it went to 0. I also lost all of my money to another fake Chinese company. The problem is, is that you can look all you want at the books and they check out. Hell, there are even companies in America that send people out to China to verify the validity of a company(literally making sure it exists), and you still can't tell. I got burned on a company, Longwei Petroleum, a company whose fake setup was so authentic that they owned factories and machinery that didn't do anything.

tl;dr....be careful touching anything in China. I only touch ETF's these days. Safe, secure, largely guaranteed. Less than 10% of my portfolio is speculative punch card picks.

 

[Veloce]

Sourcecode, and RVF population at large:

tl;dr....be careful touching anything in China. I only touch ETF's these days. Safe, secure, largely guaranteed. Less than 10% of my portfolio is speculative punch card picks.

I typically don't touch micro or nano cap stocks, but I def wouldn't touch one out of China. But then, I don't trade in foreign securities unless it's an ADR.

Funny that you mention it though. I was just talking to an engineer buddy who just got back from China. Says there's the weirdest shit going on there; building massive condo complexes priced at $1mil each that noone can afford just so it'll affect their GDP somehow. I don't even understand how that works or the logic if any behind it but he says there's a lot of that going on. Building shit that's not even getting occupied to show the rest of the world how far ahead they're pulling. Obviously not all construction firms are like this but it's definitely common.

 

[DVY]

Please stay out of Chinese business stock. Maledefined nails it.

The Chinese (communist chinese) have the "Russia complex". Stock market is a way to siphon money from other to their pocket.

Taiwanese generally are more on the up and up. Just my 2c. Its a pure cultural thing.

PS- Taiwan is called Republic of China. China is called People's Republic of China.

 

[Sourcecode]

cool, you don't agree with Chinese stock. everyone (I assume) has heard these stories about China building whole cities with no one living there. You don't need to be an engineer to know that.
of course China does shady business. almost everything in front of you is made in China. that doesn't mean there isn't a lot of money to be made. one could say that these empty city blocks will soon be filled with rural peasants. Or used to bring the cluster fuck crowd of cities like Shanghai to a more manageable degree.
I'm pretty sure China doesn't want super cities like the movie Dredd.
We in America do the same thing. We have massive suburb centers built and no residents to fill them for lack of size or money.


not every company is made to be buy and hold.
speculators still make money. I'm not saying through all your money in one basket.

research your shit. with big risk come big payout..Or great loss.

 

[DVY]

Im thinking of buying MCD, KO, BRK.B and for gambles BP.

I've looked at BHP billiton and might throw in a small percentage there too.

In other news, I've been holding my GLW(Corning stock) through a huge up-swing. I bought it at 12.83. It jumped up to 19 dollars and then back to 17, then up to 17.41. I still think it has good value- management announced a 1-billion dollar repurchase, closing of deal with Samsung, good cash flow. The company is an industrial leader in producing glass and has pretty good margins.

The big IF seems to be how big of glass prices will fall. So far its been very slight declines.

 

[Steve9]

Im thinking of buying MCD, KO, BRK.B and for gambles BP.

BRK.B is a no brainer in my opinion - a bullet proof company, and a conservative investment that should increase in value 8-10% per year.

I also like KO, in fact Im currently thinking of buying KO Jan 2015 $35 call options.

 

[Veloce]

Im thinking of buying MCD, KO, BRK.B and for gambles BP.

I've looked at BHP billiton and might throw in a small percentage there too.

In other news, I've been holding my GLW(Corning stock) through a huge up-swing. I bought it at 12.83. It jumped up to 19 dollars and then back to 17, then up to 17.41. I still think it has good value- management announced a 1-billion dollar repurchase, closing of deal with Samsung, good cash flow. The company is an industrial leader in producing glass and has pretty good margins.

The big IF seems to be how big of glass prices will fall. So far its been very slight declines.

IMO MCD and KO are riskier than BP. I'd also keep pumping into Corning, most of the numbers on that company look good except their EPS growth

 

[Stun]

I have heard Vanguard and Fidelity have the most reliable funds, highest investor satisfaction, etc.

Is this fact or fiction?

Edit: I'm a new investor, complete amateur at this point, having just started on some learning resources

 

[DVY]

@dude3737- KO and MCD are beast companies. Truly world-class business models, great brands that self-adjust for inflation, leverage other peoples money (KO in terms of bottlers and MCD for franchisees), and have a long track-record of performance. They also increase dividends every year.

My thoughts are to buy KO and MCD as a "quasi-bond". At 20 and 17 P/E, its basically like buying a bond that yields 5-5.8% interest and self-adjusts for inflation. Dividends payouts (real money in pocket) is 2.9% (KO) and 3.45% (MCD). Every year they historically pay-out half their earning in dividends and increase dividends regularly.

If you count it this way, its a much better store of value than precious metals as an inflation hedge. I'd venture a guess that if you factored in stock prices of said companies + dividends it would crush gold/silver.

 

[thirty-six]

Quick question for you guys that hold Vanguard ETFs (I've been looking at VOO as part of a portfolio base): Do you have Vanguard accounts, or do you buy them through your different brokerage? I have a Charles Schwab brokerage account and a checking account (the reason I got it, they come as a package) which I just funded to invest with and I see that they advertise commission free trades of their home-brand Schwab ETFs. I've seen that Vanguard ETFs are among the industry's cheapest to own because of very low fees, and I was wondering if this rational applies to everyone who owns them regardless of brokerage house, or if it only applies to customers who hold brokerage accounts with them. I would guess that it wouldn't make sense to put your money into a brokerage just to reap a discount on specific funds, and I wouldn't want that to influence what I buy anyway. I just was hoping someone could chip in their thoughts on this point. I prefer to keep my money in Schwab for simplicity's sake. If we have Scwhab clients on here, too, I'd be happy to hear your opinion of trading with them.

 

[shanefalco]

Quick question for you guys that hold Vanguard ETFs (I've been looking at VOO as part of a portfolio base): Do you have Vanguard accounts, or do you buy them through your different brokerage? I have a Charles Schwab brokerage account and a checking account (the reason I got it, they come as a package) which I just funded to invest with and I see that they advertise commission free trades of their home-brand Schwab ETFs. I've seen that Vanguard ETFs are among the industry's cheapest to own because of very low fees, and I was wondering if this rational applies to everyone who owns them regardless of brokerage house, or if it only applies to customers who hold brokerage accounts with them. I would guess that it wouldn't make sense to put your money into a brokerage just to reap a discount on specific funds, and I wouldn't want that to influence what I buy anyway. I just was hoping someone could chip in their thoughts on this point. I prefer to keep my money in Schwab for simplicity's sake. If we have Scwhab clients on here, too, I'd be happy to hear your opinion of trading with them.

I think your question involves expense ratios. Vanguard ETF's are known for having cheap expense ratios, but as a client of Schwab you might want to look at their brand of ETF's. For example, VTI is the Vanguard ETF for the Total Stock Market. It has a net expense ratio of 0.05%. SCHB is the Schwab ETF for the Total Stock Market, and equivalent fund. It's net expense ratio is 0.04%, cheaper than Vanguard. With the Schwab fund, you also can buy and sell that fund for free, while you'll have to pay Schwab's fee to buy the Vanguard fund. Although the fee is only $8.95, it still adds to your overall cost. Schwab is also known for having a great checking account.

I think you need to examine how you would like to invest (allocation, fund family, etc), and determine the best way to invest that way.

If you would like to stick with Vanguard, TD Ameritrade offers many Vanguard etfs for free and also offers a banking function similar to Schwab's. Fidelity also offers a similar checking account with access to ishares etfs.

 

[shanefalco]

I have heard Vanguard and Fidelity have the most reliable funds, highest investor satisfaction, etc.

Is this fact or fiction?

Edit: I'm a new investor, complete amateur at this point, having just started on some learning resources

See my response to thirty-six for a somewhat answer to your question.

Also, if you are looking for a good book on investing, i suggest reading "Fail-Safe Investing" by Harry Browne or the updated version, "The Permanent Portfolio" by Craig Rowland. Both are great books that gives you a great breakdown of different asset classes.

 

[achromaticmike]

IMO, the two best answers to this question are 1) You don't know and 2) it doesn't matter.

"You don't know" because, although every guy and his brother has a theory on the stock market, it's been shown time and again to be relatively unpredictable in the short run. Eugene Fama demonstrated the randomness of the stock market in his books, as did Burton Malkiel in "A Random Walk Down Wall Street". Fama won the Nobel Prize in economics in 2013.

More importantly, "it doesn't matter" because, while the stock market is relatively unpredictable in the short run, it has been remarkably predictable in the long run: it has averaged close to an annual 10% rate in nearly every decade over the past 100 years. Since many, if not most, of the users of this site appear to be young, they've got a VERY long time horizon. that means they can put the equity piece of their investment portfolio (and equity should be the bulk of it, 70% or more, for young people) in some low-cost index fund that mirrors the S&P 500 and let it sit there for the next 30-40 years. Strategies of asset timing almost invariably fall short of buy-and-hold investment strategies over the long term. Now, if you need that money to buy a house in the next three years, that's different - but that money shouldn't be in equities to begin with.

My personal view is the market is over-valued and the 3% YTD correction we've just seen is the start of a larger correction - perhaps 10% or so. We've gone over 400 days without a serious correction, and that's a long time. But that's just a guess - we really don't know! The market appeared over-valued, based on historical valuation metrics, in the fall of 2012, and I remember a famous investment "guru" who said the get out of the market. Of course, it soared over 30% since then! Just because the market appears irrational or over-valued doesn't mean it can't stay that way for a long time. In any event, the long-term investor is likely to get a return close to 10% per yr and the gyrations in between don't much matter.

This sounds like the financial-theory version of "men rape women because of power";

...of course the American stock market has risen X% a year for a century. You're talking about the rise of a nothing nation to the richest, most prosperous nation in the history of mankind. Does anyone really think that's going to think that's the path America is on for the next 100 years?