Introduction to the Board

  • Posted: 12 October 2010 04:31 PM

    I just wanted to introduce myself to the Board as I hope to be here for a long, long time. I was glad to stumble across this site and get away from the Yahoo message board. As a former investor in thinly traded, small-cap stocks, the Shorts and Spammers left you alone on Yahoo and you could have some real intelligent dialogue there. But that?s obviously not the case with Yahoo AAPL?.

    A little background on myself. I am very late to the Apple party. I just got in a few months ago at ~$250 (although I was lucky enough to get a few hundred shares at $200 during the Flash Crash). I started stock investing back in 2003 when I grew tired of seeing my mutual funds underperform the averages and rob me blind with fees. So at the age of 30 I decided to ?go for broke? and I put most of my funds, about $40k, into a single small-cap stock.  I figured if you wanted big returns, you had to be in small-caps because the large caps were too widely followed and too huge already to really move the needle much.

    Got lucky on my first stock with a triple. Then hit a few doubles right after that. 2003-2007 was a very good time for stocks. So in a little over 4 years I turned about $40k into just north of $1M. It sure was a fun ride but also, as you can imagine, a little nerve wracking. It?s a lot easier to let $40k ride on one stock. A little harder to do it with $500k. But I wanted to retire early and I knew I wouldn?t do it by throwing it all into index funds. My strategy was to hold for one year, hope for a double and sell as soon as you had a LT gain. I would start researching stocks about 3 months in advance and literally look at hundreds of companies. Lot of monotony doing that much research, but it was my hobby, and fun as long as you kept winning.

    Then came 2008. A horrible stock pick coupled with the crash turned my $1M into about $150k. Not a fun time. Luckily I eventually recovered to about $900k in early 2010 and that brings me to AAPL. I abandoned my small cap ?double in a year or bust? strategy and decided to go large cap for stability. Lowered my expectations to 25% per year and my plan was to diversify to 10 stocks. Researched north of 500 stocks and the only one I felt comfortable investing in (in this climate) was Apple. So I am ?all in? once again.

    Sure wish I hadn?t ignored large caps for those years. Would have been nice to have spent a few minutes researching AAPL back in 2003 or 2004. But I sure am glad I found it now. I know I am stating the obvious but I can?t believe the fundamentals of this stock. It?s like it was manufactured out of thin air as ?the perfect stock?. My stock picking criteria are all centered around high cash/cash flow, low debt, good margins, low PEG and industry leadership. AAPL is perfect in every one of those categories.

    So initially I thought I would just be here for a year or so until $350. Then I?d start the whole process over again. But the more I know about the company, the more I think I am done picking stocks for a while. I would need $2,000/share to retire in 10 years. Not sure if AAPL can hit that, but I sure think it could hit $1,000 in about 4 years and get me half way there.

    Looking forward to the ride up with all of you.

    JRay

         
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    Posted: 12 October 2010 04:43 PM #1

    JRay - 12 October 2010 07:31 PM

    I would need $2,000/share to retire in 10 years. Not sure if AAPL can hit that, but I sure think it could hit $1,000 in about 4 years and get me half way there.

    Looking forward to the ride up with all of you.

    JRay

    Good luck!

    I think $2000 in ten years could happen and $1000 in four years is very likely.

    Welcome.

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    The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. — Steve Jobs

         
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    Posted: 12 October 2010 04:54 PM #2

    Welcome to the AFB.

    Discussion in the unwashed horde of the Yahoo message boards….,,  well, ... I’m sure most of the AFB has tried it.

    You’ll see a variety of threads, except the types we escaped from at Yahoo.  Intraday, technicals, fundamentals, anecdotal as well as commentary about Wall Street analysts.

    Cheers to your added insight.

         
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    Posted: 12 October 2010 05:42 PM #3

    JRay - 12 October 2010 07:31 PM

    ... Sure wish I hadn?t ignored large caps for those years. Would have been nice to have spent a few minutes researching AAPL back in 2003 or 2004. But I sure am glad I found it now. I know I am stating the obvious but I can?t believe the fundamentals of this stock. It?s like it was manufactured out of thin air as ?the perfect stock?. My stock picking criteria are all centered around high cash/cash flow, low debt, good margins, low PEG and industry leadership. AAPL is perfect in every one of those categories.

    So initially I thought I would just be here for a year or so until $350. Then I?d start the whole process over again. But the more I know about the company, the more I think I am done picking stocks for a while. I would need $2,000/share to retire in 10 years. Not sure if AAPL can hit that, but I sure think it could hit $1,000 in about 4 years and get me half way there.

    Looking forward to the ride up with all of you.

    JRay

    You can literally sleep through the next few years for AAPL.  So, now that you’ve plenty of time to do research, please tell me which small cap stocks can turn $40k to $1mil in four years.  I’ve $40k waiting grin.

    As to another poster’s comment that options can make $ faster,  he forgot to mention that it also means lose $ very fast too.  Theoretically, one should be able to turn $10k into a million bucks trading AAPL options, however so far, I mess out so often that, current YTD is only 20%.

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    Posted: 12 October 2010 05:50 PM #4

    WOw, note to all future forum members. This is how you join the forum.

    Well done JR, who shot JR? LOL

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    Posted: 12 October 2010 06:05 PM #5

    mbeauch - 12 October 2010 08:50 PM

      ... who shot JR? LOL

    He sounds too young to be aware of who is JR :-x.

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    Posted: 12 October 2010 06:56 PM #6

    JRay - 12 October 2010 07:31 PM

    ...
    Lowered my expectations to 25% per year and my plan was to diversify to 10 stocks. Researched north of 500 stocks and the only one I felt comfortable investing in (in this climate) was Apple. So I am ?all in? once again.
    ...

    Wow, just wow. I’ve only been in Apple since 2007 (with most contributed in 2008-2010 at a mix of prices) and in a similar situation as you (starting from a small base… I’m in my late 20’s). From time to time, I also look for other opportunities since I’m nervous to be so criminally non-diversified. And yet, there’s nothing that convinces me as much as Apple. Of course, I never researched even 50 stocks thoroughly, let alone 500. This statement resonated deeply.

    Welcome, and looking forward to the ride. Our first stop: Oct 18 earnings. :cool:

         
  • Posted: 12 October 2010 07:25 PM #7

    mbeauch - 12 October 2010 08:50 PM

    WOw, note to all future forum members. This is how you join the forum.

    Well done JR, who shot JR? LOL

    Seconded!  I copied this post the other day and sent it out to my always nervous extended family.  I could have written it myself as I’ve been all in since 2004 when I sold the business, large house, cars and anything else I could lay my hands on.  (kept the kids and the wife)  I had had enough of the office furniture business and decided to retire even though financially I probably had no right to consider (let alone execute) it.  Long story short…,the only thing that made it work was Apple and I don’t have any plans to change my 100 percent allocation in the near future.  The only caveat I would pass on to you is the same one I’ve told everybody.  If you decide to invest long term in AAPL, don’t watch because it ain’t pretty. 

    I wrote elsewhere that I heard Jim Rogers say that the way rich people got rich was they put all their eggs in one basket and then watched that basket very very carefully.  That?s been my investing approach. Unorthodox to be sure and flying in the face of Modern Portfolio Theory. I know someday things will stabilise and AAPL will no longer be growing by leaps but I believe that someday is several years away. I know the few down side risks to AAPL but the past 2 years has taught all of us that there is no such thing as certainty, that the strategies of even the wisest investors don?t always work. You pays your money and yous takes yer choice. Watching AAPL very carefully is what I do and part of that involves reading and occasionally responding at this board. I?m invested in AAPL long and try not to get too freaked out by the stock?s gyrations due to the shorts and those who buy and sell based on what Jim Cramer and others of this ilk say.

    As for the risk factors associated with being so narrowly focused…, I must confess that I’ve never understood what all the hubbub is about.  For years our net worth was primarily invested in my business and there wasn’t any question but that Apples growth prospects were brighter.  Most of my family works for a large multinational and I’m quite certain that their financial future is pinned pretty closely to how it performs.  My point here is that being committed to one company isn’t as out of the ordinary as it might seem.

    Good luck to all of us and welcome.

    Bill

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  • Posted: 12 October 2010 07:55 PM #8

    Welcome.  I’ve been basically all-in in AAPL since 2003.  I’ve gone to cash at times, and I’ve bought calls, but basically I’m here forever.  Bill’s right.  It ain’t pretty to watch sometimes, and sometimes it takes an ice water transfusion to stay calm.  But I’m up about 4000% these days. Enjoy the ride with us for the next few years.

         
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    Posted: 12 October 2010 07:59 PM #9

    BillH - 12 October 2010 10:25 PM
    mbeauch - 12 October 2010 08:50 PM

    WOw, note to all future forum members. This is how you join the forum.

    Well done JR, who shot JR? LOL

    Seconded!  I copied this post the other day and sent it out to my always nervous extended family.  I could have written it myself as I’ve been all in since 2004 when I sold the business, large house, cars and anything else I could lay my hands on.  (kept the kids and the wife)  I had had enough of the office furniture business and decided to retire even though financially I probably had no right to consider (let alone execute) it.  Long story short…,the only thing that made it work was Apple and I don’t have any plans to change my 100 percent allocation in the near future.  The only caveat I would pass on to you is the same one I’ve told everybody.  If you decide to invest long term in AAPL, don’t watch because it ain’t pretty. 

    I wrote elsewhere that I heard Jim Rogers say that the way rich people got rich was they put all their eggs in one basket and then watched that basket very very carefully.  That?s been my investing approach. Unorthodox to be sure and flying in the face of Modern Portfolio Theory. I know someday things will stabilise and AAPL will no longer be growing by leaps but I believe that someday is several years away. I know the few down side risks to AAPL but the past 2 years has taught all of us that there is no such thing as certainty, that the strategies of even the wisest investors don?t always work. You pays your money and yous takes yer choice. Watching AAPL very carefully is what I do and part of that involves reading and occasionally responding at this board. I?m invested in AAPL long and try not to get too freaked out by the stock?s gyrations due to the shorts and those who buy and sell based on what Jim Cramer and others of this ilk say.

    As for the risk factors associated with being so narrowly focused…, I must confess that I’ve never understood what all the hubbub is about.  For years our net worth was primarily invested in my business and there wasn’t any question but that Apples growth prospects were brighter.  Most of my family works for a large multinational and I’m quite certain that their financial future is pinned pretty closely to how it performs.  My point here is that being committed to one company isn’t as out of the ordinary as it might seem.

    Good luck to all of us and welcome.

    Bill

    I love that quote. It’s funny that you say don’t watch but the quote says to watch very very carefully :-D

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    The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. — Steve Jobs

         
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    Posted: 12 October 2010 08:05 PM #10

    Unique - 12 October 2010 10:59 PM

    Welcome.  I?ve been basically all-in in AAPL since 2003.  I?ve gone to cash at times, and I?ve bought calls, but basically I?m here forever.  Bill?s right.  It ain?t pretty to watch sometimes, and sometimes it takes an ice water transfusion to stay calm.  But I?m up about 4000% these days. Enjoy the ride with us for the next few years.

    I wish I got in that earlier, 4000%. Umm..I’m far away from that still.

    He is not the only one enjoying these obscene return.  At least a dozen of AFBers (your sincerely has only 3000%) have those return too.  The highest being more than 2000x :bugeyed:, he invested via LEAPS calls and sometimes front-months calls, no common shares.  Very simple and effective.

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  • Posted: 12 October 2010 08:06 PM #11

    Apple II+ - 12 October 2010 10:59 PM

    I love that quote. It’s funny that you say don’t watch but the quote says to watch very very carefully :-D

    Just for the record I advise them not to watch.  Me?  I’m shallow and easily amused so I find this all very entertaining.  :-D

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    I don’t mind being wrong…,I just hate being wrong so FAST!

         
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    Posted: 12 October 2010 08:09 PM #12

    If I remember right, Snipus turned a modest investment into a private plane.

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  • Posted: 12 October 2010 09:43 PM #13

    Unique - 12 October 2010 07:55 PM

    Just curious, are you doing stock options too? I say this because it’s a faster way to make a large profit :D

    Always been curious but never taken the time to learn the Option game. Probably because I’m a little leery of that possibility to lose everything I guess. Also hear a lot about the manipulation of share price near option expiration. But thats probably BS like most “manipulation” talk…

    Anyway, now that I’m planning to hold for a while, I guess I have time to learn a new trick or two. Any books or websites that have a good beginners guide?

    JRay

         
  • Posted: 12 October 2010 09:59 PM #14

    Mace - 12 October 2010 08:42 PM

    JRayYou can literally sleep through the next few years for AAPL.  So, now that you’ve plenty of time to do research, please tell me which small cap stocks can turn $40k to $1mil in four years.  I’ve $40k waiting grin.

    I’ll be the first to admit that I got REALLY lucky with my first few stock picks. First one was a contract manufacturer named Nam Tai Electronics (NTE). If you remember, right around 2003, anything associated with China was on fire. Sort of like .com of late 90’s. It had some good earnings growth and this was before people started looking at contract manufacturers like lousy commoditized businesses (which they are). Anyway, Bought it at like 11 or 12 or something. And right after that it zoomed to over 40. Pure luck but I netted a triple out of it. Not a bad way to start out.

    Next was a drug testing company named SFBC International. Another double. After I sold it ran into trouble and then got bought out.

    Diodes (DIOD) - Great comapny. Boring discrete/analog semi company. Superb management. Another double. Still own some for sentimental reasons.

    Then I broke from small caps. Probably because I had some serious $$ to play with at this point. All in to HP. No, not that one. Helmerich & Payne. Contract driller for natural gas. Bought in the low 20’s at a 5 PE. Got out at 45 or so. Then it ran over 70….:(  Another company with outstanding management. If NG ever recovers, may go back there again.

    And that’s how I made my first million. Of course I then turned it into $150k over the next year, but that’s another story…..

    JRay

    [ Edited: 12 October 2010 10:02 PM by JRay ]      
  • Posted: 12 October 2010 11:36 PM #15

    Well, time to introduce myself.
    I am close to 50.I invest only in dividend paying stocks, and they must pay monthly.I have either reits or oil and gas trusts.
    The people from Canada know what I am talking about.(I am Canadian)
    The reason is, I am not able to work a 9-5 job because of a disability I have. I do own a business which I run myself, no other employees.
    I invest for income, so as much as I like AAPL, I will only sell puts and pocket the premium.By the way, I bought my first aapl product 18 months ago, an i pod.
    I really enjoy this forum and all the people that contribute, and I thank everybody for that.