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Stock investment

and btw, that Ponzi scheme, just earned me 300 bucks today. I bought at 39k and it just hit over 43k.

Back when G.W. Bush made the announcement that he was going to put this country on a path to a hydrogen economy I had already invested (in 1999) in Ballard Power Systems, an early Hydrogen fuel cell manufacturer.
That one speech boosted Ballard's value and I immediately cashed out with $1300 and purchased a used minivan.

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Today the stock price is a fraction of its former worth, almost a penny stock, you might say.
Be very careful with crypto, as it is not even a physical product.
 
Well, my son has convinced me to dabble in the stock market, even if it is just a little. I am looking over a few stocks. Do any of you invest in under 5-dollar stocks? Why or why not? Penny stocks?

I have been looking at 3...one is over 5 the other 2 under 5. AMC, SNDL and KRBP. I have thought about some others, but not sure if I should stick to a few or buy small in several different ones

First of all, let me define a couple of terms for you. The first one is "speculation." Think of speculation like making a bet in a casino. It can be a bet with short odds, a bet with longer odds, or a moon shot. As you've noted, penny stocks are generally understood to be stocks with a market value under $5.00. This could be for any number of reasons, but they're often of a more speculative nature, either because they represent companies "down on their luck," so to speak, or they're small and thinly traded. Some of them don't actively trade on an exchange. You have to buy them "over the counter" (OTC) from a broker that makes a market in those securities by holding stock in its own account.

The second term is "investing." Investing is putting money into something that, over time, is likely to make you money; most if not all of the financial risk is removed from the equation. To answer your question, I try to invest and avoid speculation, so I don't buy penny stocks. I mean, you can make money speculating, just as you can make money if you bet on the Don't Pass in craps and the shooter rolls snake eyes on the come out roll. But the odds of rolling that number are 35-1 against you and you get even money if the number rolls. If the object is to make money why do that when you can buy stock in the casino, especially since almost every bet they take will be in your favor?

Basically, in order to make money in the long run, you need to improve your odds of winning. To do that, my individual stock portfolio is comprised of large, high quality, domestically-traded companies. I can get good, audited stats on them, and they're liquid, with a small "spread" between what a seller is asking and what a buyer is willing to pay. Also, it's easier to get general information on them, such as business and expansion plans, government regulatory issues, and so forth. I take a quantitative approach, using stock screens on my broker's website with certain parameters entered. Mainly, I want to know how much the company earns for each dollar of market value as well as its return on invested capital. (Continued)
 
All of the companies you've mentioned are "speculations." AMC is what's been called a "meme" stock. It was basically trumpeted on a Reddit user group called "wallstreetbets." At one point it was close to going bankrupt due to high debt levels and the pandemic, but wallstreetbets users bid the price up and it was able to recapitalize itself by issuing new stock. It was last profitable in the 2nd quarter of 2019 and has shown cumulative losses of more than $40.00 per share since then. I think I'll pass. Cannabis stocks were all the rage when several states and Canada legalized marijuana. I would place them in what is sometimes called the "fad" category. Fads come and go, and so do fad stocks. Another example of fad stocks would be companies in the 3d printer and solar industries. SNDL, to my knowledge, has never shown a profit. But here's the thing: sometimes when the fad fades good companies are thrown out with the bad. There might be opportunity here, but I would stick to quality companies, or perhaps consider a derivative investment (invest in the shovel company instead of the gold mine). The final company you mentioned, KRBP, was in danger of being delisted from NASDAQ for not filing its financials in a timely manner, never a good sign.

If you insist on investing in penny stocks, just understand that, thanks to thin markets, it's populated with charlatans who are looking to "pump and dump" particular stocks, hoping to drive up the price and then unload their positions to "greater fools" whom they hope are left holding the bag. So like investing in a ponzi scheme, timing is everything. Since successfully timing a stock trade is difficult if not impossible to do consistently compared to just holding a position, that's another reason I avoid them.

I'm not advising anyone to invest in particular companies, but these are examples of companies I currently own: Amgen (AMGN), Applied Materials (AMAT), Bristol-Myers Squibb (BMY), Cisco Systems (CSCO), Dick's Sporting Goods (DKS), eBay (EBAY), Intel (INTC), Qualcomm (QCOM) and Visa (V). All of them are profitable and can be acquired at reasonable prices. From the examples, you can see that I'm finding value in medical/drug stocks, retail, financial payments/services, and select, so-called "old tech" as opposed to some of the high-flying "new economy" technology companies in areas such as cloud computing.

Good luck, and happy speculating! ;)
 
oh, I certainly won't throw money at it that I cannot. We have set it at 10% of earnings. I am learning. I know the market closed down, but some of the stocks were still up.
I agree about the higher-priced stocks being more difficult to have very many shares of.
What do you think about Cannabis stocks?

That was more true years ago when you paid brokerage fees based on whole shares and how many you bought. For example, in order to get the best price on an order you had to buy in "round lots" of 100 shares. If you bought less than that it was considered an "odd lot" and you paid a higher price for the market maker to fill the order. Today, many stocks trade in the hundreds or even thousands of dollars, but you can still easily buy them. For example, Charles Schwab has a tool called "Schwab Slices" in which you can invest as little as $5.00 in an S&P 500 stock with no commission. So you could, if you want, buy $5.00 worth of Amazon, whose current price is more than $3,300 per share. If you exclude companies like this you're tossing out a lot of potential, high-quality investments.
 
Right now is not a good time to invest in the stock market. High valuations ( p/e) and what is expected to be a rising interest rate environment.

The averages are skewed by a few huge technology companies with market values in the trillions. I'm still finding value here, but I invest in a market of stocks and not the stock market. For example, I recently bought shares in West Fraser Timber Co., which is the largest lumber manufacturer in North America and has a P/E of--get this--3. Even if timber prices crash this thing should still make money because it just turns logs into boards.
 
All of the companies you've mentioned are "speculations." AMC is what's been called a "meme" stock. It was basically trumpeted on a Reddit user group called "wallstreetbets." At one point it was close to going bankrupt due to high debt levels and the pandemic, but wallstreetbets users bid the price up and it was able to recapitalize itself by issuing new stock. It was last profitable in the 2nd quarter of 2019 and has shown cumulative losses of more than $40.00 per share since then. I think I'll pass. Cannabis stocks were all the rage when several states and Canada legalized marijuana. I would place them in what is sometimes called the "fad" category. Fads come and go, and so do fad stocks. Another example of fad stocks would be companies in the 3d printer and solar industries. SNDL, to my knowledge, has never shown a profit. But here's the thing: sometimes when the fad fades good companies are thrown out with the bad. There might be opportunity here, but I would stick to quality companies, or perhaps consider a derivative investment (invest in the shovel company instead of the gold mine). The final company you mentioned, KRBP, was in danger of being delisted from NASDAQ for not filing its financials in a timely manner, never a good sign.

If you insist on investing in penny stocks, just understand that, thanks to thin markets, it's populated with charlatans who are looking to "pump and dump" particular stocks, hoping to drive up the price and then unload their positions to "greater fools" whom they hope are left holding the bag. So like investing in a ponzi scheme, timing is everything. Since successfully timing a stock trade is difficult if not impossible to do consistently compared to just holding a position, that's another reason I avoid them.

I'm not advising anyone to invest in particular companies, but these are examples of companies I currently own: Amgen (AMGN), Applied Materials (AMAT), Bristol-Myers Squibb (BMY), Cisco Systems (CSCO), Dick's Sporting Goods (DKS), eBay (EBAY), Intel (INTC), Qualcomm (QCOM) and Visa (V). All of them are profitable and can be acquired at reasonable prices. From the examples, you can see that I'm finding value in medical/drug stocks, retail, financial payments/services, and select, so-called "old tech" as opposed to some of the high-flying "new economy" technology companies in areas such as cloud computing.

Good luck, and happy speculating! ;)
Investing in Cannabis stocks is more an I believe in this market and less about the money. Crypto is about making money short-term and quickly. Toyota and a couple of others are more long-term for me. I bought VTI, but I am still not super convinced by it. I think the interest rate issue may be affecting it in an adverse way, so over the next 2 years, I will wait and see.
 
That was more true years ago when you paid brokerage fees based on whole shares and how many you bought. For example, in order to get the best price on an order you had to buy in "round lots" of 100 shares. If you bought less than that it was considered an "odd lot" and you paid a higher price for the market maker to fill the order. Today, many stocks trade in the hundreds or even thousands of dollars, but you can still easily buy them. For example, Charles Schwab has a tool called "Schwab Slices" in which you can invest as little as $5.00 in an S&P 500 stock with no commission. So you could, if you want, buy $5.00 worth of Amazon, whose current price is more than $3,300 per share. If you exclude companies like this you're tossing out a lot of potential, high-quality investments.
Yes, it closed at 3302. It is up by quite a bit today
 
Yes, it closed at 3302. It is up by quite a bit today

The point I was trying to make is the purchase price of the stock itself is not really relevant today for exchange-traded stocks, because these high-priced stocks are available to anyone due to the ability to buy fractional shares with no commission. Years ago that wasn’t the case. Often companies would split their shares when they rose to a historically high level because they wanted to maintain their appeal and make their shares more affordable to a broader range of retail customers, who were viewed as long-term investors. Splits have become more of a rarity in recent years.

So by removing high-priced stocks from your investment universe you’re basically not considering companies that have been successful at earning money and increasing value. That’s a mistake, in my humble opinion, and often made by novice investors. Yes, a ten cent move on a fifty cent stock is a larger percentage on the price than it is for a $100.00 stock, but the challenge would be taking advantage of it due to the lack of liquidity and the consequent spread between bid and asked prices. The other would be timing a successful sale.

The thing you need to look at is how much is the company earning or likely to earn over time relative to that price. The company I mentioned earlier, West Fraser Timber Co., is priced at about $97 and earned almost $22 per share over the preceding twelve months. It’s expected to earn about thirty-three cents on the dollar in the coming year, which is an insane return on your investment. That’s money the company can use to reduce debt (which it’s done), invest in new saw mills (which it’s also done), and return to investors in the form of stock buybacks and dividends (ditto). Now, I’m not advising anyone to buy this thing, because there is risk, such as the recent flooding we saw in British Columbia as well as volatility in timber prices. I’m only mentioning it to illustrate my point
 
Investing in Cannabis stocks is more an I believe in this market and less about the money. Crypto is about making money short-term and quickly. Toyota and a couple of others are more long-term for me. I bought VTI, but I am still not super convinced by it. I think the interest rate issue may be affecting it in an adverse way, so over the next 2 years, I will wait and see.

No Rivian or Tesla, eh? 😉

Toyota is actually an interesting company. Until recently, Japan did not embrace the EV revolution the way China, the U.S., and Europe have because the Japanese have an electricity problem. They relied for years on nuclear power generation, but with the Fukushima disaster they closed much of their nuclear generating capacity and moved to a reliance on fossil fuels. Consequently, companies like Toyota continued to embrace investment in internal combustion engine technology under the belief that EVs would be slower to be adopted than what now appears to be the case.

But now I think the Japanese are waking up to the competitive threat and starting to push the technology as a means to compete internationally. Domestic EV investment, however, will depend on increasing renewable electric generating capacity. Thus the country is hedging its bets.

So Toyota, the company that helped pioneer hybrid technology, is investing at least $35 billion in EVs over the next few years in a plan to produce about 3.5 million EVs by 2030. Should be fun to see if they can pull it off. If history is any guide, they will. They recently dethroned GM in the U.S. in total vehicle sales.
 
No Rivian or Tesla, eh? 😉

Toyota is actually an interesting company. Until recently, Japan did not embrace the EV revolution the way China, the U.S., and Europe have because the Japanese have an electricity problem. They relied for years on nuclear power generation, but with the Fukushima disaster they closed much of their nuclear generating capacity and moved to a reliance on fossil fuels. Consequently, companies like Toyota continued to embrace investment in internal combustion engine technology under the belief that EVs would be slower to be adopted than what now appears to be the case.

But now I think the Japanese are waking up to the competitive threat and starting to push the technology as a means to compete internationally. Domestic EV investment, however, will depend on increasing renewable electric generating capacity. Thus the country is hedging its bets.

So Toyota, the company that helped pioneer hybrid technology, is investing at least $35 billion in EVs over the next few years in a plan to produce about 3.5 million EVs by 2030. Should be fun to see if they can pull it off. If history is any guide, they will. They recently dethroned GM in the U.S. in total vehicle sales.


Toyota has the money to pull it off.

They will be bringing out solid state batteries in 2025 in hybrids, which could be the real game changer for EVs

Toyota being the sales leader in the US is more due to the chip shortage effecting GM far more than Toyota. Allowing Toyota to produce a lot more than GM
 
Be very careful with crypto, as it is not even a physical product.

Mentally, I have a hard time justifying an investment in crypto. By way of example, I’ve always been the sort of person who wants to own physical media like Blu Ray discs, vinyl records, and CDs. I do buy digital medial, but normally it’s in conjunction with the purchase of a physical format as well. I have no illusion that the bits of data in my Movies Anywhere or iTunes account have any monetary value whatsoever. Like crypto, they have utility, but are they worth anything? It doesn’t appear so. Of course, back in 2013 a small crypto stake could have made me a millionaire. Even a few short years ago you could buy a Bitcoin for just a few hundred dollars. Unreal.

But the problem I have today with cryto is figuring out what it’s worth, because there is nothing supporting it other than what a buyer is willing to pay for it. As with all investment assets, that’s been supported with cheap central bank money, and an argument could be made that crypto exhibits elements of a financial bubble. The nature of the crypto market is the sort of thing that could produce a complete wipeout in a relatively short period of time, say, if a major exchange goes bankrupt or halts trading due to an order imbalance. Regulation of this industry is still in its infancy, and some large exchanges operate outside of U.S. and European regulatory purview. So this is definitely a case of buyer beware. At least with stocks I can make an argument that they have inherent value and can somewhat determine what that value is.
 
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The point I was trying to make is the purchase price of the stock itself is not really relevant today for exchange-traded stocks, because these high-priced stocks are available to anyone due to the ability to buy fractional shares with no commission. Years ago that wasn’t the case. Often companies would split their shares when they rose to a historically high level because they wanted to maintain their appeal and make their shares more affordable to a broader range of retail customers, who were viewed as long-term investors. Splits have become more of a rarity in recent years.

So by removing high-priced stocks from your investment universe you’re basically not considering companies that have been successful at earning money and increasing value. That’s a mistake, in my humble opinion, and often made by novice investors. Yes, a ten cent move on a fifty cent stock is a larger percentage on the price than it is for a $100.00 stock, but the challenge would be taking advantage of it due to the lack of liquidity and the consequent spread between bid and asked prices. The other would be timing a successful sale.

The thing you need to look at is how much is the company earning or likely to earn over time relative to that price. The company I mentioned earlier, West Fraser Timber Co., is priced at about $97 and earned almost $22 per share over the preceding twelve months. It’s expected to earn about thirty-three cents on the dollar in the coming year, which is an insane return on your investment. That’s money the company can use to reduce debt (which it’s done), invest in new saw mills (which it’s also done), and return to investors in the form of stock buybacks and dividends (ditto). Now, I’m not advising anyone to buy this thing, because there is risk, such as the recent flooding we saw in British Columbia as well as volatility in timber prices. I’m only mentioning it to illustrate my point
How worth it is it though to buy just a fraction instead of the entire piece? Clearly you make more if you buy a whole instead of a section. I get that you also lose more if it goes the other way. I am learning a lot about the dips and reading the charts, but sometimes it doesn't always go as predicted. For instance Bitcoin, everyone was saying it was going to go down to 30k and t never made it that far down and now it is back up in the 43, 44k range. They are saying if it breaks 44k it will go back up to the 60s.
My favorite right now though is Toyota, it is showing me what rally means. Hopefully, it goes all the way up, because I have invested more in that stock than the others.
 
How worth it is it though to buy just a fraction instead of the entire piece? Clearly you make more if you buy a whole instead of a section. I get that you also lose more if it goes the other way. I am learning a lot about the dips and reading the charts, but sometimes it doesn't always go as predicted. For instance Bitcoin, everyone was saying it was going to go down to 30k and t never made it that far down and now it is back up in the 43, 44k range. They are saying if it breaks 44k it will go back up to the 60s.
My favorite right now though is Toyota, it is showing me what rally means. Hopefully, it goes all the way up, because I have invested more in that stock than the others.

When it comes to price appreciation or loss, it doesn’t matter whether you own a fraction of a share or a whole number of shares. If the stock value increases by one third, your investment will increase by one third. So if Amazon stock is at $3,000, you invest $1,000 for a third of a share, and Amazon goes to $4,000 your investment will now be worth $1,333.33. Obviosly, the more you invest the more you stand to make or lose, but the ratios stay the same.
 
How worth it is it though to buy just a fraction instead of the entire piece? Clearly you make more if you buy a whole instead of a section. I get that you also lose more if it goes the other way. I am learning a lot about the dips and reading the charts, but sometimes it doesn't always go as predicted. For instance Bitcoin, everyone was saying it was going to go down to 30k and t never made it that far down and now it is back up in the 43, 44k range. They are saying if it breaks 44k it will go back up to the 60s.
My favorite right now though is Toyota, it is showing me what rally means. Hopefully, it goes all the way up, because I have invested more in that stock than the others.

First of all, not everyone was saying that, and even if they were they really wouldn’t know what they’re talking about because NO ONE knows with any degree of certainty where the price of Bitcoin is going. What we do know is our Federal Reserve will be reducing stimulus and there really is nothing to base any price of Bitcoin on other than current market demand for it.
 
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