BajaNomad - More Baja Retirement Help

More Baja Retirement Help

Osprey - 10-23-2008 at 07:05 AM

Well before you head down here for retirement you need to get your ducks in a row. Here's how to line them up.

Stock Market advice for future Baja Retirees

FOR BEGINNERS

HOW TO DO STOCKS

For you newbies, I have good news. You are entering the exciting world of stocks with no bad habits. The playing field, for you, is dead-bang level. Nobody out there, smart, lucky, rich or poor, professionals or weekenders has an edge on you. You watch T.V. -- you've seen what has happened in the Market recently! Folks, we have far more losers than winners.

So all those know-it-all Wall Street suits are starting over with their toe on the same line with you....they have some awful baggage. The data stored, in random order, in their computers, briefcases, in their crowded craniums rivals the volume of the Library of Congress. They have been considering the GNP, the FED, the CPI, P/E's, IPO's. They have quarterly earnings reports, anticipated profit prognostications, sector potential graphs, performance charts, merger forecasts, government-forced splits, hostile takeover potential. And what do you have? YOU HAVE ME.

Before we can begin to begin we must define some technical terms. Study the following Glossary until you can use the terms at a c-cktail party after way too many rum and cokes.

GLOSSARY

BONDS These are interest bearing debentures you buy when the United States is at war. (If you're any kind of an American)

COMMODITIES These are hold-overs from the distant past. When the East India Tea Company practically ruled the world there was non-stop trading in comestibles. In other words, things we eat and drink. I don't deal in or recommend Commodities because to make any real money you must buy or sell in lots of hundreds of metric tons of STUFF THAT CAN SPOIL.

DAY TRADERS Self-explanatory. People who trade stock during the day. We are all day traders. Who would you trade stock with at night, some guy in a bar? Come on.

EMERGING COMPANIES The name is not self-explanatory. These are family owned businesses, fifty or maybe a hundred years old. The founder, Ole Lester, the plodding workaholic is long dead. His son, Fester, is all played out. The kids want money NOW. They have been told by many, many well-read family members that it is better to go public than to sell. Since we can't bring Lester or Fester back from the dead to make this thing work again, and since none of kids knows siccum about making widgets the old way then we should approach the whole thing with caution.

THE FED FEDERAL EXPRESS This has been a reliable indicator for the market. The more packages shipped, the more money people are spending (and, of course, the adverse).

GNP GREAT NATIONAL PRODUCTS America makes great national products and the more we make the more stocks go up.

ED BERNANKE MY BARBER

IPO'S INITIAL PUBLIC OFFERING. It's the first sight of a new product or service they have been advertising, teasing you with over the last few months. Everybody is crazy to see the newest whatzit, the fastest zipit, the new Line Of, the new Concept Of. When it hits the shelf at Walmart or Radio Shack and it disappears in less than an hour, everybody wants to buy stock in the company that makes the thing.

LEVERAGE BLACKMAIL The author advises against any illegal activity.

P/E ` An antiquated term which meant Price to Earnings Ratio. The term is no longer used by people in the market; it was replaced by the New Economy value criteria that deals primarily with the technical concepts of Charm and Keepability.

SEC SECURITY EXCHANGE COMMISSION Nothing is free anymore. This is the fee you must pay, the commission they charge you to exchange your securities with others. They don't really earn the money. You want to sell, the other guy wants to buy, why should they get a commission?

SYNECDOCHE A figure of speech by which a more inclusive term is used for a less inclusive term. This word has nothing to do with stocks but I think it's a really neat word -- if you use it with brokers they might begin to believe you're a geek -- at least they'll take more notice of you, your orders.

THE BASIC PLAN

1. Long-haul and Short-haul explained. Financial advisors have always asked their clients "are you going to be in the market for the Long-haul or the Short-haul?" By Long-haul they mean past your demise. Short-haul means you plan to lose the money over the next seven weeks. It's a silly question when you consider that if you buy stocks and never sell them, only your heirs will find any use for them. They won't know whether to keep them or sell them. You may be beginners but you are no dummies --- you don't want to leave the stocks to your kids and you don't want to lose all your money in the next few weeks, SO YOUR ANSWER WOULD BE MEDIUM-HAUL. The whole thing is moot anyway because if you bought this book (or stole it) YOU WILL NO LONGER NEED A FINANCIAL ADVISOR.

2. Brand New Stock. This stock has never been offered for sale before. Oliver somebody, I forget the last name, who, by the way might have a been a member of The Original Stock Exchange in New Hampshire or someplace once said "Be not the first by whom the new is tried nor be the last to cast the old aside." Real good advice. If the stock seems to skyrocket the first day why not wait a few weeks, see how it does then. Once you've bought a whole block of it and it starts to plummet, then hold on but sell before it hits what I call the HAMTV, Has A Minus Trading Value.

3. Researching Stock. This is really where the Michelin meets the macadam. Absolutely indispensable to the process.

A. Performance Evaluation

Allow yourself the time and latitude for this in-depth investigative technique. Go to the Rescue Mission or Homeless Shelter in the largest city near your home. Take a half gallon of cheap red wine. Wear a suit, shine your shoes. Ask to talk to "The Director". Tell him you are doing some research, you want to talk to one of his or her clients. Just say "The Market" or "Traders." When he points out a handful of scruffy panhandlers near the door, pick one. With a friendly smile and the offer of the wine you'll be able to learn the stock symbols, company names, brokers, prices, the whole history of transactions that led the poor unfortunate fellow to this place. ** (See footnote)

B. Affinity

Once you've found a stock you're interested in, yet undecided, see if you can find out who owns shares of the stock. I have no idea how you might go about this. Maybe bribe some brokers to get a look at their transaction slips. Maybe ask around in Market Chat Rooms. If you can find people who already own the stock you can ask them "how's it going, with the stock, you know?" Ask yourself "who are these people, where do they come from?"

C. Satisfaction Survey

When you know the products or services the company you are interested in provides, go ask the buyers. It's easier than you might think. Go see your aunt. Take her shopping, point out the products. Has she ever said a kind word about anything you can remember? See. So if you can pin her down, find out about one or two things she actually buys, even after b-tching about the price, the old days, inflation, the country going to hell, etc. you'll have the blessing of the most discriminating buyer, a critical product evaluation with a very broad and credible base.

Some of you may now be forming intelligent questions about what you have just learned. You're like little Meerkats looking for a cobra. Your big question now might be "Tech or No Tech." On this subject the battle lines have been drawn for some time. One of my loyal assistants, we'll call her Valerie, Valerie Schlotzky, who wishes to remain anonymous, paid more than $200 of my hard earned dollars to a waiter at The Peac-ck Grill, here in Manhattan, (there was a rumor of hoof and mouth meat at McD's), for a booth next to Warren Buffet and Bill Gates to record their luncheon conversation. I have edited the tape, deleting ONLY THE OBJECTIONABLE LANGUAGE.

WARREN: ... unintelligible, grunt, snort .."you don't know bleep. I told you before, Boy Wonder, that the Feds were going to eat your lunch."
BILL: "There will be no bleeping split. If I have to, I'll have some of those judges moved to bleeping Arkansas. I might blind-transfer some MS stock to their personal trading accounts. Let them explain that to their cronies."
WARREN: "You really are a bleephead. How in blue-eyed bleep did you ever amass so bleeping much money?"
BILL: "I reinvented the world. While you were alternately napping and keeping the doors open for Sears and Acme Buggywhips I was showing all of you the way to the future."
WARREN: "October pork belly futures look better than yours. You just lost, if I'm not mistaken, skitty six bizzillion sheckles in about three trading days. There should be a special DOW category for your stuff -- Dream Stock. Invisible, intangible, wonder what I got stock."
BILL: "Oh yeah...."

So, as you can see, HIGH TECH STOCKS might not be a good investment AT THIS TIME.

4. TIMING IS EVERYTHING

Now for the two big questions. WHEN SHOULD YOU BUY STOCKS? In the morning, when you're fresh.
WHEN SHOULD YOU SELL? After your nap. You'll be relaxed, able to concentrate, the kids won't be home from school yet, you'll be sober. It all makes sense.

5. THE "PORTFOLIO"

OfficeMax has the best portfolios for the money. You can get the real fancy ones, faux gator, but you don't need to be a show off. It doesn't have to be very fat either. You're not actually going to keep stock certificates in there, just Journal clippings, this book, some cookies.

DON'T BE AFRAID. NOW, GET OUT THERE AND TRADE!!!

**(footnote)
You don't have to stop here. The poor soul might tell you where to find his ex-wife, who is probably working in a sleazy diner somewhere in Alabama. She could be persuaded to tell you about some cash still stashed in the mansion they had to sell at Cape Snotty or someplace. A bonus -- you could go for a nice reward from the companies looking for the mission guy or his ex and/or break in, see if you could find the cash in the big old house on the beach. Just a thought.

vandenberg - 10-23-2008 at 08:22 AM

:lol:

Use certificates around your tomato plants to keep the weeds from growing.
Cheaper then plastic. :no:

jorgie - 10-23-2008 at 08:32 AM

you forgot " Mark to Market "......the Enron method....spurned by Wall Street ......until they all used it.
Not the smartest guys in the room, wiseguys as in Mafia

Udo - 10-23-2008 at 07:59 PM

Quote:

[qouote]Thanks for the heads up on all the financial gobbledygook, Jorge. Now I know how my why 401K lost almost $50,000.00US since January. Another thing...now I know I'm in it for the mid-haul and more than likely I won't see much of my money.
In the other retirement post, I'm going along with Wingnut and have a gigantic yard sale after I see what is left when I sell my stuff on e-bay. All I'm bringing to La Paz/Cabo is the RV, a car, my fishing gear and the kayak. I plan on camping out near Osprey so I can learn his fishing tricks, and we can inspire each other and write books.
SOMETHING TO LOOK FORWARD TO!

[Edited on 10-24-2008 by udowinkler]