Shopping List | Individual stocks

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SteveDB
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Shopping List | Individual stocks

Post by SteveDB »

Beside trackers. Do you have any specific stock that you are tracking in this market decline to buy at bargain prices?
runner3081
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Re: Shopping List | Individual stocks

Post by runner3081 »

Nope, don't market time. Just buy the usual amounts/intervals, regardless of price.
rockstar
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Re: Shopping List | Individual stocks

Post by rockstar »

I track a few. CVNA is a great example of a company that makes no money with a huge valuation. I also like BX for PE. And MO for an alternative for income. I don't own any of them, and I have no plans to buy anything right now.
Last edited by rockstar on Thu Jan 27, 2022 12:54 pm, edited 1 time in total.
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burritoLover
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Re: Shopping List | Individual stocks

Post by burritoLover »

You are looking for r/wallstreetbets. This is Bogleheads.
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Taylor Larimore
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Re: Shopping List | Individual stocks

Post by Taylor Larimore »

SteveDB wrote: Thu Jan 27, 2022 12:17 pm Beside trackers. Do you have any specific stock that you are tracking in this market decline to buy at bargain prices?
SteveDB:

The Boglehead Philosophy is to avoid speculating in individual stocks. Read this:

viewtopic.php?f=10&t=157391

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Attempting to build an investment program around a handful of individual securities is, for all but the most exceptional investors, a fool's errand."
"Simplicity is the master key to financial success." -- Jack Bogle
secondopinion
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Re: Shopping List | Individual stocks

Post by secondopinion »

SteveDB wrote: Thu Jan 27, 2022 12:17 pm Beside trackers. Do you have any specific stock that you are tracking in this market decline to buy at bargain prices?
No. I only buy stocks that I think might give great long-term gains. If I have to wait for a 20%, 30%, or even 50% drop for it to make sense, then it is questionable that the stock choice is good.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
gougou
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Re: Shopping List | Individual stocks

Post by gougou »

LEN.B is getting really cheap.

And of course all those oil stocks that I already own, PBR.A, ET, MPLX. But they actually went up a lot recently so I’m not exactly buying them in a market decline…
The sillier the market’s behavior, the greater the opportunity for the business like investor.
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arcticpineapplecorp.
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Re: Shopping List | Individual stocks

Post by arcticpineapplecorp. »

I suggest you start here: Getting Started

If after reading that, you still want to pick individual stocks you'll be an active manager. So consider the following regarding active management:

Image

Image

Image
Four out of every seven common stocks that have appeared in the CRSP database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills...

Individual common stocks tend to have rather short lives. The median time that a stock is
listed on the CRSP database between 1926 and 2016 is seven-and-a-half years.

https://papers.ssrn.com/sol3/papers.cfm ... id=2900447
Image

you'll need to be a market timing guru to beat the stock market like these people (whoops, none of them beat the market despite being a guru):

Image

gotta have dinner now, that's all i've got time for. but there's so much more.

what do you think now?
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
secondopinion
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Re: Shopping List | Individual stocks

Post by secondopinion »

arcticpineapplecorp. wrote: Thu Jan 27, 2022 4:59 pm I suggest you start here: Getting Started

If after reading that, you still want to pick individual stocks consider the following:

Image

Image

Image
Four out of every seven common stocks that have appeared in the CRSP database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills...

Individual common stocks tend to have rather short lives. The median time that a stock is
listed on the CRSP database between 1926 and 2016 is seven-and-a-half years.

https://papers.ssrn.com/sol3/papers.cfm ... id=2900447
Image

you'll need to be a market timing guru to beat the stock market like these people (whoops, none of them beat the market despite being a guru):

Image

gotta have dinner now, that's all i've got time for. but there's so much more.

what do you think now?
Although I agree most people cannot pick stock well, there are many flaws with the post item.

"Stock Picking Skill...":
- No numerical context; no statistical meaning. Throwing statistical words might get the layman's respect, but it gets the expert's brush away when it is done wrong or incompletely.

"Evidence of a Lack of Stock Picking Skill Among Fund Managers":
- The footnote mentions returns are adjusted? What does that mean? Let alone what "Statistically Significant Positive Alpha" is (giving t-stat is a nice try but there is no context)? Without the actual statistics given, this is "junk statistics".

"Survivors and Winners of S&P Stocks":
- Were there any mergers, buyouts, or go private companies (they would have "not survived" yet they did hopefully)? If so, did those companies beat or not beat the market?
- Who buy the stocks in the S&P 500 at random? Some companies are the high-fliers, some are the slow and steady, and some are scraping the bottom; you get investors for all types of companies but they normally do not overlap. Their results will differ from the chart.
- And not many hold a company for 40 years?

With the CRSP database quote:
- Median is used here for life span. Given that the database is filled mostly by smaller companies (by count), that is highly slanted towards small-cap realities. The lifespan is much longer than this in the larger-cap; I could pick 10 stocks where most likely at least 9 of 10 would last at least 7 1/2 years. Large cap realities are not well reflected here.
- Again, since small-caps dominate the analysis, we cannot suppose that the 4 out of 7 less than one-month treasury lifetime returns is still true of large cap or even mid cap stocks being picked.
- Is that market-cap when they do the collective returns? Most people do equal weight or risk-adjusted when they pick stocks. And lifetime returns again? How many people are holding a stock regardless of what the state of the company is? The small cap investors sell after the stock becomes large; the large cap investors sell when the company is no longer large. Only a select few will ever hold a company from start to finish.
- Got to love the swapping of medians, summarization, market-capping, and such. They do not form a well constructed argument.

"The Ten Largest Bankruptcies":
- Unless you happen to be sector focused and be unlucky; this has little to do with the argument. I guess picking 3 companies in the same sector as the portfolio is a bad idea...

"Forecast Accuracy":
- 74% to beat the market? You just have to be right enough on your right forecasts and not as wrong on your wrong forecasts to beat the market. Percentages really have nothing to do with it.

What matters is if one knows how to pick stocks right for their risk-return profile; they will get what they intend if they do. Outperforming the market is only one metric, so both the pickers and non-pickers need to get over that. Otherwise, it is like throwing darts to expect outperformance.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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arcticpineapplecorp.
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Re: Shopping List | Individual stocks

Post by arcticpineapplecorp. »

secondopinion wrote: Thu Jan 27, 2022 6:21 pm Although I agree most people cannot pick stock well, there are many flaws with the post item.

"Stock Picking Skill...":
- No numerical context; no statistical meaning. Throwing statistical words might get the layman's respect, but it gets the expert's brush away when it is done wrong or incompletely.
you are free to read the two papers that are cited. There have been other studies that show it's very rare to actually have stock picking skill as opposed to luck. Mauboussin has published on it. Larry Swedroe wrote an entire book on the incredible shrinking alpha and so on. Unless the OP thinks he has real ability/skill, then he needs to understand if he gets a good outcome is was due to nothing more than luck. You should never confuse outcome with strategy. Luck runs out eventually. If the OP has skill, wouldn't he be a hedge fund manager? Wouldn't you?
secondopinion wrote: Thu Jan 27, 2022 6:21 pm "Evidence of a Lack of Stock Picking Skill Among Fund Managers":
- The footnote mentions returns are adjusted? What does that mean? Let alone what "Statistically Significant Positive Alpha" is (giving t-stat is a nice try but there is no context)? Without the actual statistics given, this is "junk statistics".
not sure what's hard to understand here. Of the many different types of funds studied, hardly any fund actually generated any alpha. So if you're going to pick small cap stocks for example, to pick from your "shopping list", you've got to beat the small cap index, otherwise what was the point? Even if you do beat the small cap index, did you do it in risk adjusted returns? Doubtful. Here's another source to back up the claim: you can go to SPIVA and see for yourself: https://www.spglobal.com/spdji/en/resea ... hts/spiva/

if you need more here's another:
Image

source: https://oncoursefp.com//images/Vectors% ... 0final.pdf

it doesn't say no one doesn't ever beat the index. it says it's not likely and even if it occurs, the longer you have at it, the less likely that becomes. Does the OP think he can actually beat the benchmark he's going for? If not, what's the point of trying when the return of the index is there for the taking?
secondopinion wrote: Thu Jan 27, 2022 6:21 pm "Survivors and Winners of S&P Stocks":
- Were there any mergers, buyouts, or go private companies (they would have "not survived" yet they did hopefully)? If so, did those companies beat or not beat the market?
- Who buy the stocks in the S&P 500 at random? Some companies are the high-fliers, some are the slow and steady, and some are scraping the bottom; you get investors for all types of companies but they normally do not overlap. Their results will differ from the chart.
- And not many hold a company for 40 years?
The point is that if the OP is picking stocks, he may lose due to companies going out of business, being bought out, bankruptcy (reorganization) etc. If he doesn't hold stocks long, then he'll be making up his shopping list very often, won't he? Yearly shopping list? Weekly shopping list? Daily?
secondopinion wrote: Thu Jan 27, 2022 6:21 pm With the CRSP database quote:
- Median is used here for life span. Given that the database is filled mostly by smaller companies (by count), that is highly slanted towards small-cap realities. The lifespan is much longer than this in the larger-cap; I could pick 10 stocks where most likely at least 9 of 10 would last at least 7 1/2 years. Large cap realities are not well reflected here.
- Again, since small-caps dominate the analysis, we cannot suppose that the 4 out of 7 less than one-month treasury lifetime returns is still true of large cap or even mid cap stocks being picked.
- Is that market-cap when they do the collective returns? Most people do equal weight or risk-adjusted when they pick stocks. And lifetime returns again? How many people are holding a stock regardless of what the state of the company is? The small cap investors sell after the stock becomes large; the large cap investors sell when the company is no longer large. Only a select few will ever hold a company from start to finish.
- Got to love the swapping of medians, summarization, market-capping, and such. They do not form a well constructed argument.
if you want to disagree with Bessembinder's study, fine. But the fact is that 4% of the companies since 1926-2017 he showed have created the value of the stock market. If you missed holding any of that 4% (then, as now when very few of tech stocks have created the value in the market recently) you'd have had worse returns than the market. Feeling lucky?
secondopinion wrote: Thu Jan 27, 2022 6:21 pm "The Ten Largest Bankruptcies":
- Unless you happen to be sector focused and be unlucky; this has little to do with the argument. I guess picking 3 companies in the same sector as the portfolio is a bad idea...
this has nothing to do with sector focused. this shows that you never know which companies are going to go through bankruptcy and if they do (even if they reorg. like GM did in 2009) you're out. GM's reorg. had little to no effect on those that owned the entire market.
secondopinion wrote: Thu Jan 27, 2022 6:21 pm "Forecast Accuracy":
- 74% to beat the market? You just have to be right enough on your right forecasts and not as wrong on your wrong forecasts to beat the market. Percentages really have nothing to do with it.
Again, if you want to argue with William Sharpe who did the study that's fine. You obviously know more than a nobel laureate I guess. Point is none of those gurus beat the market did they? No. So their predictions weren't good enough. Will the OP's predictions be good enough? If not, what's the point if the return of the market is there for the taking?

you can read more here:
https://www.ifa.com/pdfs/index-funds-12 ... estors.pdf
secondopinion wrote: Thu Jan 27, 2022 6:21 pm What matters is if one knows how to pick stocks right for their risk-return profile; they will get what they intend if they do. Outperforming the market is only one metric, so both the pickers and non-pickers need to get over that. Otherwise, it is like throwing darts to expect outperformance.
Somehow I doubt whether the OP is interested in picking stocks right for his risk-return profile. He's looking to beat the market, but doesn't know how. If he knew how, he wouldn't be asking random strangers on the internet which stocks to pick. He would understand that if anyone actually knew (which they don't and can't) why would they tell him?

For the OP I strongly encourage you to read this before you go down the path of active management:
https://www.ifa.com/pdfs/index-funds-12 ... estors.pdf
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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pahkcah
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Re: Shopping List | Individual stocks

Post by pahkcah »

burritoLover wrote: Thu Jan 27, 2022 12:48 pm You are looking for r/wallstreetbets. This is Bogleheads.
Not WSB, should be checking out r/stocks and r/investing, but I wouldn't know anything about them. :wink:
000
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Re: Shopping List | Individual stocks

Post by 000 »

Although I might make some tweaks to current holdings I have no plans to buy individual stocks during this mini-correction. I think it would make more sense to increase idiosyncratic risk after a large decline where individual issues might move away from fundamental value due to panic selling of the broad market, and I won't know what I want to buy until that happens.
secondopinion
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Re: Shopping List | Individual stocks

Post by secondopinion »

arcticpineapplecorp. wrote: Thu Jan 27, 2022 7:11 pm ... [omitted to keep the post small] ...
Most funds have to follow rules; they also have some conflict of interest due to fees.

Compare the Dow versus the S&P 500 versus the total market. Even some stock pickers can do decent too (and for how long has the Dow been existent?)

If you are going to change the index if the portfolio deviates sharply from the total market or S&P 500, then I question the comparison; there are not many indexes for those with unusual approaches.

I probably not know more than William Sharpe, but there is missing information here.

If the OP want to play with fire, I wish them luck.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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