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Day Trader love this kind of stuff (volatility) but they take a lot of money out of the market and make losers out of a lot of small investors & and big boys(mutual Funds) too, who buy and sell at wrong times... Your defense: sell when up, buy when Down....raise your hand if you do...(be truthful now)
Like so much advice on investing, this runs contrary to momentum strategies, or even the Lynch adage of letting winners runs.
Well meaning investment advice it seems is full of contradiction.
Each investor must reconcile often contradictory advice with their own risk temperament, beliefs in future, understanding of a stock/fund's fundamentals. Or, as is often stated on our board, figure out what works for them...to be successful anyway.
Looking back, there have been times when I've been lucky enough to not be scared out of good stocks, funds, and the market. And, other times, unlucky (or dumb) enough to scared out at precisely the wrong time.
The trick I suspect is not to make a habit of the latter!
Having not researched the company much, I guess the question is what was the reason/thesis behind the purchase? Also, for a stock that has a p/e around 10, I'm not getting the short thesis. The stock actually gained slightly in 2008 and the p/e is not out of whack at all in comparison to its 5 year avg.
Also, this stock has a rather small float at 20m shares, which can lead to more volatility.
"Looking back, there have been times when I've been lucky enough to not be scared out of good stocks, funds, and the market. And, other times, unlucky (or dumb) enough to scared out at precisely the wrong time."
The only thing that keeps me from the latter is really owning things that I want to own for years. Otherwise, in the past, I'm too tempted to tweak my portfolio.
"Each investor must reconcile often contradictory advice with their own risk temperament, beliefs in future, understanding of a stock/fund's fundamentals. Or, as is often stated on our board, figure out what works for them...to be successful anyway."
Kudos to Charles!
But woe is he who has no vision, no path, no remembrance of markets past.
"Looking back, there have been times when I've been lucky enough to not be scared out of good stocks, funds, and the market. And, other times, unlucky (or dumb) enough to scared out at precisely the wrong time."
Sounds like the guy who said " I bought too much of my losers, and not enough of my winners".... Some Sound advice...do the opposite
'Traders' are cautioned not to average down. Long term holders (investors) might see drops in prices as an opportunity or as sale pricing. Not always of course, but if you know and understand the company you are dealing with...
Hard for me not to like the financial strength of this company...
I jumped in after 1) all companies in this category (e.g. Tyson) slumped beginning in summer over concerns like Chinese chicken flu, and 2) Sanderson mentioned that "casual dining traffic remains relatively weak" during Investor Day in October, kind of back-fired, causing to the stock to tank 10% in one day.
So, the company seems undervalued to me, currently, probably cause concern on growth. But I think chicken will be meat of choice as population increases, so suspect this issue is temporary.
The company itself appears to have high integrity, virtually no debt, promise of continued efficiency. Does not have strong dividend, yet, but still believe it is in growth mode...and, I get impression they have shareholder interest in mind. They have made a couple special dividend payments. Hopefully, I don't get proven wrong.
You bought with TWO good reasons, Prices down, Staple item (chicken not going away) If you know anything about the skills of the people (management) that run the company ....then...three strikes...YOU WIN
Indeed, contradictory events and advice proliferate everywhere. When making significant decisions, it presents a perplexing problem. It’s always been so. That’s why some very special leaders make the big bucks. Of course, some of these leaders are frauds too. Individuals might be irrational investors but the composite investment population tends to make the marketplace fairly, but not perfectly, efficient. It’s the wisdom of the crowds scenario.
In particular, investment advice often clashes. Folks just see things differently, have competing incentives, divergent timeframes, and disparate goals. What’s true in investing is similarly true on a far broader scale. Even while the industrial revolution was gaining a foothold in the late 17th century in Europe and in the US, we were still burning witches at the stake.
Charles, I fully understand your confusion given the conflicting wisdom offered by the industry in proverb-like form. Here are a few examples: Save for a rainy day, yet, tomorrow will take care of itself. Silence is golden, yet, the squeaky wheel gets the grease. Faint hearts never win, yet, the meek shall inherit the world. And, especially applicable to an investment philosophy, all good things come to he who waits, yet, he who hesitates is lost.
That’s just a small sample of contradictory proverb wisdom that could cause nightmares for a conscientious investor. You get to pick your own poison.
I was a victim to the confused financial and investment advice for a long time. I was an active investor starting in the mid-1950s and continuing until the mid-2000s. I was committed to technical analyses and patiently did my own chart work. I probably was rewarded with near market returns, sometimes a little more and sometimes a little less. In hindsight, any real excess returns were not worth the effort or the worry.
I’m a slow learner. I have morphed into a much more passive investor. With that decision, I’ve reduced my market monitoring and research by about 90%. That’s simply me.
I firmly make a point to not encourage anyone to change their investment style or goals. Stay within your comfort zone; do your own thing. I do like active investors; they keep the markets somewhat efficient and make my life a lot easier.
Over time, many investors trace the same pathway that I finally traveled. Even Warren Buffett seems to endorse this path. The potential to stumble on it is greatly reduced by eliminating the active investing decision dimension that includes a fistful of harmful behavioral biases. Here is a Link to a February, 2014 Morgan Housel article that lists “77 Reasons You’re Awful at Managing Money”:
The good news is that I don’t fall victim to all of them; the bad news is that I am guilty of committing many of these investment sins. A few MFOers are guilty of investment crime Number 1 (my enticement to get you to examine the article). Enjoy the listing.
Again to all, have a terrific Christmas and a Happy New Year.
Save for a rainy day, yet, tomorrow will take care of itself. Silence is golden, yet, the squeaky wheel gets the grease. Faint hearts never win, yet, the meek shall inherit the world. And, especially applicable to an investment philosophy, all good things come to he who waits, yet, he who hesitates is lost.
Thanks for making me feel a little less inadequate!
I used to have a customer who wore a button, that said "sounds like Bull sh-- to me" Seems appropriate for the 77 reasons....Investing is common sense decision making
Here mull this over about pricing and Investing(Decision making): tb
"Accurately knowing yourself as an investor is the foundation of everything—avoiding selling low is the critical ingredient to long-term stock market success, and you should only buy things that you know you would buy more, or at least hold, through 50% declines. If Berkshire Hathaway can decline 50% four times during Buffett’s stewardship, all fluctuations are possible. That’s why I rarely move the discussion on this site beyond Coca-Cola, Johnson & Johnson, Colgate-Palmolive, Chevron, Exxon, and Procter & Gamble—there are companies out there with better growth characteristics, but those firms listed are those that most long-term investors can readily buy more in response to price declines. Getting that part right will change your life because the stock market will actually serve you, and you won’t become one of those statistics mentioned in the Dalbar Study about how typical retail investors only achieved 3-4% returns when the stock market returned 9-10% annual returns." Tim McAleenan Jr. Quote
"Accurately knowing yourself as an investor is the foundation of everything"
A discussed topic here and at FundAlarm for many years.
A personal goal for more than 35 years of investing, to know who you are period; for all things in one's life.
Lack of this mindset is the one tripping stone I have seen too many times for those I know who get whipped around by their emotions from the investment marketplace. We have given the below book; The Millionaire Next Door book, numerous times over the years, as a wedding present; for the young ones, to help them better understand and adjust their spending habits to help allow them to also become investors. As they should have more monies available for investing; all other things being equal. The dollar values/numbers in this book are dated from 1997; but the methodologies and thinking of those who understand the value of money, and how to "adjust" one's spending habits, are timeless.
The Power of Habit book below, is quite new; and helps a person understand the power of habits and changes that are possible to help create a more positive setting for thinking patterns; which translates towards investment decisions, too.
When I was 8yo and got my first paper route my Mother told me I HAD TO put half my profits in a savings account..She said " I may need it some day" So I did.... Know any mothers like that today or any Kids that listen?
@TB, that was way back when the bank would bend over backwards to open a savings account with the $5.00 you had in hand. You probably got a piggy bank from them as well as a bit of education on the benefits of saving.
Now most banks want a huge minimum for an account or they charge you to keep your own money with them. I think Chase us $1500 now or pay $25 a month starting in Jan.
I'm all for saving. It seems the industry plus the low interest rates have killed savings accounts. I'd might check out Charles Schwab to see if they had a cheap option. Their checking accounts are free and no mins. Open a checking account and you get a brokerage account at the same time. The only issue is taxes if the child "makes" too much.
@Charles - to be fair kind of, WFC, BAC, USB and a host of other financial types took nearly identical dives back then and have since recovered mostly. Geez, can you believe you could have had WF for 2 bucks and change? Too scared this one. However, they cut or eliminated their dividends as well which is a cardinal sin in my playbook. It's also why I don't invest in banks on my own period.
Comments
Short % of Float (as of Nov 28, 2014)3: 43.10%
When you have nearly half the float short, I wouldn't be surprised by much.
Roosters are having a fertility problem
http://www.reuters.com/article/2014/07/09/us-chicken-supply-genetics-exclusive-idUSKBN0FE0C820140709
just hard to understand how this company has such high short activity.
But I'm slow.
Your defense: sell when up, buy when Down....raise your hand if you do...(be truthful now)
Well meaning investment advice it seems is full of contradiction.
Each investor must reconcile often contradictory advice with their own risk temperament, beliefs in future, understanding of a stock/fund's fundamentals. Or, as is often stated on our board, figure out what works for them...to be successful anyway.
Looking back, there have been times when I've been lucky enough to not be scared out of good stocks, funds, and the market. And, other times, unlucky (or dumb) enough to scared out at precisely the wrong time.
The trick I suspect is not to make a habit of the latter!
Also, this stock has a rather small float at 20m shares, which can lead to more volatility.
"Looking back, there have been times when I've been lucky enough to not be scared out of good stocks, funds, and the market. And, other times, unlucky (or dumb) enough to scared out at precisely the wrong time."
The only thing that keeps me from the latter is really owning things that I want to own for years. Otherwise, in the past, I'm too tempted to tweak my portfolio.
"Each investor must reconcile often contradictory advice with their own risk temperament, beliefs in future, understanding of a stock/fund's fundamentals. Or, as is often stated on our board, figure out what works for them...to be successful anyway."
Kudos to Charles!
But woe is he who has no vision, no path, no remembrance of markets past.
Sounds like the guy who said " I bought too much of my losers, and not enough of my winners"....
Some Sound advice...do the opposite
Hard for me not to like the financial strength of this company...
I jumped in after 1) all companies in this category (e.g. Tyson) slumped beginning in summer over concerns like Chinese chicken flu, and 2) Sanderson mentioned that "casual dining traffic remains relatively weak" during Investor Day in October, kind of back-fired, causing to the stock to tank 10% in one day.
So, the company seems undervalued to me, currently, probably cause concern on growth. But I think chicken will be meat of choice as population increases, so suspect this issue is temporary.
The company itself appears to have high integrity, virtually no debt, promise of continued efficiency. Does not have strong dividend, yet, but still believe it is in growth mode...and, I get impression they have shareholder interest in mind. They have made a couple special dividend payments. Hopefully, I don't get proven wrong.
@Hank. Thanks man!
@Tampabay. Ha! Time will tell.
@Mark. Precisely, just very hard to do! I suspect that University of Rochester endowment manager thought it knew Kodak pretty well
If you know anything about the skills of the people (management) that run the company ....then...three strikes...YOU WIN
I did same recently with oil.
Whole sector tanked, but oil "not going away."
Honestly, like several of them...APA, HES, XOM...but chose OXY.
Fingers-crossed...a bit of luck always helps.
Indeed, contradictory events and advice proliferate everywhere. When making significant decisions, it presents a perplexing problem. It’s always been so. That’s why some very special leaders make the big bucks. Of course, some of these leaders are frauds too. Individuals might be irrational investors but the composite investment population tends to make the marketplace fairly, but not perfectly, efficient. It’s the wisdom of the crowds scenario.
In particular, investment advice often clashes. Folks just see things differently, have competing incentives, divergent timeframes, and disparate goals. What’s true in investing is similarly true on a far broader scale. Even while the industrial revolution was gaining a foothold in the late 17th century in Europe and in the US, we were still burning witches at the stake.
Charles, I fully understand your confusion given the conflicting wisdom offered by the industry in proverb-like form. Here are a few examples: Save for a rainy day, yet, tomorrow will take care of itself. Silence is golden, yet, the squeaky wheel gets the grease. Faint hearts never win, yet, the meek shall inherit the world. And, especially applicable to an investment philosophy, all good things come to he who waits, yet, he who hesitates is lost.
That’s just a small sample of contradictory proverb wisdom that could cause nightmares for a conscientious investor. You get to pick your own poison.
I was a victim to the confused financial and investment advice for a long time. I was an active investor starting in the mid-1950s and continuing until the mid-2000s. I was committed to technical analyses and patiently did my own chart work. I probably was rewarded with near market returns, sometimes a little more and sometimes a little less. In hindsight, any real excess returns were not worth the effort or the worry.
I’m a slow learner. I have morphed into a much more passive investor. With that decision, I’ve reduced my market monitoring and research by about 90%. That’s simply me.
I firmly make a point to not encourage anyone to change their investment style or goals. Stay within your comfort zone; do your own thing. I do like active investors; they keep the markets somewhat efficient and make my life a lot easier.
Over time, many investors trace the same pathway that I finally traveled. Even Warren Buffett seems to endorse this path. The potential to stumble on it is greatly reduced by eliminating the active investing decision dimension that includes a fistful of harmful behavioral biases. Here is a Link to a February, 2014 Morgan Housel article that lists “77 Reasons You’re Awful at Managing Money”:
http://www.fool.com/investing/general/2014/02/10/77-reasons-youre-awful-at-managing-money.aspx
The good news is that I don’t fall victim to all of them; the bad news is that I am guilty of committing many of these investment sins. A few MFOers are guilty of investment crime Number 1 (my enticement to get you to examine the article). Enjoy the listing.
Again to all, have a terrific Christmas and a Happy New Year.
Regards,
Ted
I love you man.
Beautiful post. Thanks for making me feel a little less inadequate!
c
Seems appropriate for the 77 reasons....Investing is common sense decision making
"Accurately knowing yourself as an investor is the foundation of everything—avoiding selling low is the critical ingredient to long-term stock market success, and you should only buy things that you know you would buy more, or at least hold, through 50% declines. If Berkshire Hathaway can decline 50% four times during Buffett’s stewardship, all fluctuations are possible. That’s why I rarely move the discussion on this site beyond Coca-Cola, Johnson & Johnson, Colgate-Palmolive, Chevron, Exxon, and Procter & Gamble—there are companies out there with better growth characteristics, but those firms listed are those that most long-term investors can readily buy more in response to price declines. Getting that part right will change your life because the stock market will actually serve you, and you won’t become one of those statistics mentioned in the Dalbar Study about how typical retail investors only achieved 3-4% returns when the stock market returned 9-10% annual returns." Tim McAleenan Jr. Quote
A discussed topic here and at FundAlarm for many years.
A personal goal for more than 35 years of investing, to know who you are period; for all things in one's life.
Lack of this mindset is the one tripping stone I have seen too many times for those I know who get whipped around by their emotions from the investment marketplace.
We have given the below book; The Millionaire Next Door book, numerous times over the years, as a wedding present; for the young ones, to help them better understand and adjust their spending habits to help allow them to also become investors. As they should have more monies available for investing; all other things being equal. The dollar values/numbers in this book are dated from 1997; but the methodologies and thinking of those who understand the value of money, and how to "adjust" one's spending habits, are timeless.
The Millionaire Next Door book
The Power of Habit book below, is quite new; and helps a person understand the power of habits and changes that are possible to help create a more positive setting for thinking patterns; which translates towards investment decisions, too.
The Power of Habit book, Charles Duhigg
Both of these books may be purchased via the MFO/Amazon link at this site.
Catch
Know any mothers like that today or any Kids that listen?
Now most banks want a huge minimum for an account or they charge you to keep your own money with them. I think Chase us $1500 now or pay $25 a month starting in Jan.
I'm all for saving. It seems the industry plus the low interest rates have killed savings accounts. I'd might check out Charles Schwab to see if they had a cheap option. Their checking accounts are free and no mins. Open a checking account and you get a brokerage account at the same time. The only issue is taxes if the child "makes" too much.
Wachovia WB...RIP:
Kodak EKDKQ...RIP:
Bear Stearns BSC...RIP:
Lehman Brothers LEH...RIP:
Enron ENE...RIP:
Thanks! Added both books to my queue.
c