My Investing Strategy

[flyonwall]

I guess I need to apologize as it seems that my questions came across as trolling according to the admin of this site who I PM'd. That was not my purpose at all and I guess I should have explained a bit more about my philosophy before jumping in with questions.

I'm still young (early 20s) and just beginning to learn how to invest. For my long term investments, I have 80% in index funds with low fees. I am taking 20% to experiment with picking stocks on my own to better understand how it's done and see if I can get pretty good at predicting longer term trends. I think there is the potential to earn a lot and keep from losing a lot if those trends can be leveraged.

As an example, with a bit of thought, one could see that the Internet would hurt the bottom lines of magazines, newspapers and bookstores. Also that companies like Blockbuster would not fair well.

As I see trends that others may not consider a trend, I'm looking for companies that would benefit from it. Many of these might seem controversial and what seems to have gotten me in trouble here, but that is why not everyone is seeing it as a trend in my opinion. I have mad ea choice on which way I'm betting the trend will go (gay marriage will be allowed for anyone who wants it, climate change is real, and marijuana will be made legal. I'm asking the questions to see if there are relationships to these that I may not have considered so I can do some more research on those that I haven't, and why I'm asking the questions that I am.

I think this is a helpful exercise because if you can better learn how different industries are connected that may not appear to be connected, there will be a good opportunity to make money as others won't see it. Maybe I'm naive since I'm still young and learning, but it seems a good strategy to me. If you don't think it is, then I'd love to hear why not.

[Petunia 100]

I don't find your questions trollish, I just have nothing to add. I have no confidence in my ability to pick stocks, so I stick with broad index funds.

Best of luck to you with your strategy.

[corn18]

You're going to need a lot bigger pool of responders than you can get on here. And there are too many like minded folks on here to get a good sampling. Just seems pointless to ask. I happen to agree with you on all of them except the climate change won't happen fast enough to matter.

Tom

[WDELTA]

I actually like the things you've brought up. I think weed being legalized in a few states will soon follow with the whole nation within 10 or so years, someone has to fill that demand. I'm heavily invested in Altria group (for dividend reasons) but I'm hoping that they acquire a ton of the smaller marijuana companies so they can market joints like they do cigarettes. Keep asking your questions in less trollish ways because I think some of your ideas could have some merit.

After following this forum at least three times a week (although rarely posting) for almost four years most people are conventional when it comes to investing, but keep thinking that way with a small portion of your investments and maybe it will pay off.

[flyonwall]

You're going to need a lot bigger pool of responders than you can get on here. And there are too many like minded folks on here to get a good sampling. Just seems pointless to ask. I happen to agree with you on all of them except the climate change won't happen fast enough to matter.

Tom

Why would I need a lot of responders? I'm looking for ideas that I can then research and decide if it makes sense that they fit with my future trend thoughts. I'm not looking for consensus, just ideas that maybe I had not seen of the trend and companies complimenting one another.

[corn18]

Got it.

Near term: Amazon. I don't go to the store anymore. I ordered something the other day for $0.99 + free shipping. I ordered a new charger for my daughter's laptop Thurs afternoon and had it Friday afternoon. Paid $7.99 + free shipping. This is changing everything.

Mid term-Long term: 3D printing. This is going to revolutionize everything from manufacturing, medicine, retail, you name it. It is possible to print an iphone. Or a kidney. I could order something off of Amazon and print it on my desk. Kindof like those replicators from Star Trek.

Long term: anything related to old people. There are lots of them and going to be many more. Not sure what about them will be growing or profitable, but they will be a large part of our population.

Tom

[KTP]

The problem I have with Amazon is I can't see them making any real money until they put everyone out of business and raise prices quite a bit. Free shipping on a $0.99 item isn't going to get them to profit.

[disneysteve]

The problem I have with Amazon is I can't see them making any real money until they put everyone out of business and raise prices quite a bit. Free shipping on a $0.99 item isn't going to get them to profit.

I have often wondered about that. I love Amazon and use it regularly but I don't know how some of the sellers make money. I've bought iPhone accessories on Amazon that were shipped from China and I paid under $2 with free shipping. I know Amazon takes a cut so how could the seller possibly make more than a few cents? The item, a padded shipping envelope, the postage, and the Amazon commission.

Of course, Amazon makes their money no matter what, even if the seller is selling at a loss, Amazon gets their cut.

[rennigade]

http://www.bogleheads.org/

Visit these guys and ask the same questions...see what they say. These guys are pretty good at anything related to investments.

[corn18]

The problem I have with Amazon is I can't see them making any real money until they put everyone out of business and raise prices quite a bit. Free shipping on a $0.99 item isn't going to get them to profit.

They make money selling Amazon stuff on Amazon. They started with books, then added videos and now have an extensive product offering.

The new bit where all the $0.99 and free shipping stuff comes from is from the Amazon Marketplace. Amazon charges someone to sell on their site. No skin off Amazon's profits if someone decides to sell stuff for $0.99 and free shipping. This is the Ebay model.

They also have the "Fullfilled by Amazon" which is Amazon selling someone else's merchandise as Amazon. This is different from the Amazon marketplace as Amazon is selling it, not the actual retailer.

2013 was the first year where Amazon Marketplace and Fullfilled by Amazon sales exceeded the Amazon sales. So that is expanding quickly.

Walmart and Sears have adopted the same model for their online sales. Wal-Mart now sells stuff online from suppliers that don't get brick and mortar shelf space. Amazon is leading this market and it will go as Amazon goes.

[autoxer]

The problem I have with Amazon is I can't see them making any real money until they put everyone out of business and raise prices quite a bit. Free shipping on a $0.99 item isn't going to get them to profit.

They may have some loss leaders, but I don't think they NEED to put others out of business and raise prices to make money. They have much less overhead than brick and mortar retail stores, so they don't have to raise the price as high to come out with a profit. The sales margin on individual items at brick and mortar stores might be shockingly high, but that is where it needs to be for the overall gross profit, because they have higher labor costs, building heat light and power, taxes and insurance.

Recognizing a trend is fairly easy, but betting on the winner is much more difficult. One example I think will really stir things up in the banking industry is cryptocurrency. Bitcoin is leading the charge, but there are a dozen others attempting the same thing. Will that turn out the same way the music sharing industry did? Where Napster led the charge, got shut down and others popped up in it's place, like Pandora or Spotify. It's hard to bet on any single one, but it is clear that some big change is coming.

[snafu]

for aggressive investors... New meds are coming to market faster than ever. Illnesses that were deadly have effective treatment and are exported world wide. I see the figures for eating out changing dramatically but investors must be nimble to buy shares as it grows, get out when it loses favour with newer, more appealing to new graduates.

I'm of the opinion that bank stock has a way to go if they can remember their fiduciary duty. While it got smacked hard yesterday, auto stock should be ready to run, people want new cars, they view those more than five years ago as ancient. All those cars smashed in the recent snow/ice escalated desire from owners and their 'keep up with the Jones' neighbours . I thought there should be an ETF for world wide autos. In China it's everyone's dream to own a car!

[YolandoAmaya]

I really like the points you've introduced up. I think weed being legalized in a very few states will soon follow with the entire country within 10 years, someone has to fill that requirement. Keep asking your queries in less trollish ways simply because I believe some of your suggestions could have some worthiness.