I bought SIRI years ago because this nutty guy was running around our community screaming at people to buy it. The shares I own now are almost zero cost or perhaps sub zero because I cashed out a few times, I thought I was going to sell it recently but when I looked at things they just won’t quit. They just started putting them in used cars, for example, and it doubled their market penetration! And I still think radio is boring…!
The moral of the story? Find that nutty guy and buy a position in whatever he is screaming about today!
UPDATE: I think in order to be less vague and give readers more inspiration I should give the real data on SIRI, however, I do not want to get in trouble for disclosure as it might be considered advice. I see all these guys with disclosures about their postings are only for inspiration and not intended for advice and so forth but how does that change the message? Actually I was going to disclose the numbers here but will not just suffice it to say my portfolio shows a 1363.99% gain (not realized) as of today 2013-07-16 and I believe I bought it, sold enough to take my cost back plus around a 50% profit and held that…so please find us another nutty village stock screamer!
PS – I have a trailing stop on SIRI and most of my holdings. If it closes below 25% of the highest close I cash it in and lock in my profit, closing the position. In the case of SIRI I would at least leave my original cost invested and consider it a “free” position! Actually I would keep whatever I consider a “full position” based on my diversification model in SIRI and just hold it forever. At this point SIRI’s value is higher than 4 “full position” sizes so that would work out to me grabbing more than 75% of the value and leaving the under 25% there as a position and kind of a tribute to the original holding. I usually never buy any company unless I understand their business and revenue model, market demand and other fundamentals like balance and income sheet and so forth. So whereas I would like to dump all of it coldly on a trailing stop issue on something that I admire as much as SIRI and many others I hold it would suffice to grab everything above a “full position” (at the time of this writing 1-2% of my entire portfolio) and just keep tabs on the business. Also it should be noted that if the stock prices drop more than a certain amount and the fundamentals are strong and the price starts to trend up it is a great time to buy more.
The Vanguard ETF’s have the same expense ratio as the Admiral Shares which are the best expense ratios available for Vanguard funds. The only difference is a) the minimum to open (with Admiral Shares usually $10K per Fund, with ETF cost of 1 share) and b) ETFs have a bit more short term volatility potential. Here is the Portfolio and Percentages to Total in the Portfolio I like:
Stock Symbol & Percentages of Portfolio
VNQ 16% Total 100%
The above Portfolio has bond, total stock and s&p 500 elements with real estate and international combined. I use a spreadsheet and divide the amount I have to invest at any given time by each of the percentages then multiply by the current stock price, the more you invest at one time the closer the numbers come to the exact percentages above, it will not be exact but if you keep investing over time they will become very close. If anyone wants a sample spreadsheet of how this is done just drop me a note and I’ll send you one (specify either xls or ods format). I look at each element and monies invested in the portfolio separately to say it has total market, total international, bond, s&p 500 and real estate exposure. The only controversial part seems to be the bond part whereas some are shying away from bonds and others maintain a bond element even when principal has a slight loss and dividends are very small. In the above scenario the bond portion is 14% and the stock portion is 86%. This would be categorized as very aggressive, others coining the current bond business as bad business would like to do away with the bond element altogether, whereas a Boglehead may keep a much larger bond element (30-50%!). There are portfolios with a higher bond to stock ratio, these may be adjusted to taste of course!
Above ETFs can be purchased, commission free, at http://vanguard.com
I have nothing but praise for the Vanguard folks and for the way the company is run and how business is conducted there. I currently do business with 5 brokers and have done business with as many as 7 at a time in the past and Vanguard is the best in all aspects barring trade prices, however, it should be noted I have traded with companies with a higher and lower trade cost which put a bad taste in my mouth and whereas you can find lower trade costs overall I tend to want to put my business in Vanguard rather then in the other brokerage houses. This goes for now and in the past 5 years as well.
PSS – Total combined expense ratio with respect to above percentages is currently 0.0926% which is slightly lower then the 0.10% of mainstream Vanguard funds and higher then then 0.05% of the Vanguard Index funds, generally speaking. To understand the Effects of Expenses on a Portfolio follow this link for a spreadsheet.
Disclosure: I currently own or have owned all stocks of ticker symbols mentioned. I am usually planing to buy more as soon as I can afford it and/or within the next 72 hours. I do not expect any statements I make to significantly alter the stock price and if it did it would not affect my decision to buy or sell any stocks or funds listed.