The next big thing......

[Mdhaas]

So what is the next big area of investment?  housing, tech stocks, agriculture? 

[allagash]

low cost, pre-paid phone cards......no.....really:

http://stockcharts.com/h-sc/ui?s=IDT&p=D&st=2009-08-08&en=(today)&id=p92745801415

personally...ain't too big on the micro cap arena.....(thanks to rookie).

a percentage performance analysis of the 100 components of the Nasdaq 100 is a nice revealing study....I like looking at +50 day for better longer term trend indication.  Barchart has some nice tools for accomplishing that.

-Mike
http://www.youtube.com/watch?v=vYWFKRYVYn8

[Hoosier4life2005]

omg... lookie there!  nice find!

[allagash]

nice find!

e y e  c a n d y......

gotta have a p l a n.....

-Mike

[Hoosier4life2005]

I could see why pre paid phones are having alot of success.

I HATE cell phone companys.  Since the government is taking everything over, I REALLY wish they would take them over too.  I despise cell phone companys.  Biggest crooks ever.

[allagash]

Back to the question at hand....

I like mining the stock splits area of Yahoo Finance for companies and possible sector trends....

>Yahoo Finance
>>Investing
>>>Stocks
>>>>Financial Calendars
>>>>>Stock Splits

Back in the hay day of the housing boom era....circa 2003, etc....national homebuilders and regional banks, (not to mention Countrywide), were stock splitting like crazy.

Baidu this past May.....10 for 1 ratio?.....don't see that very often.

Deckers must be what's in right now...that "gotta have" Aeropostale.

-Mike
>great book....Learn To Earn by Lynch

[hammertime]

The prepaid phone cards sound like they may be the hot tip.  Appreciate the info!!   

[rookieNYC]

I think investments are based on what $ u have available to put...Many people play penny stocks because they have little to no money...Meanwhile statistically penny stocks are the worst possible place to invest...total garbage...Its quite evident that the more capital the investor has the less risky they like their investment to be...The get rich mentality and the stay rich mentality is worlds apart..

I think the next big thing is irrelevant...You have to invest in things you fully understand...Investing outside of that will almost guarantee a lashing...Anyone that I know that is successful and self made did it within their area of expertise...Explore what u know and understand and invest there...I know people who never invested in the equity markets and are worth size...I know people who made size in business only to lose it in the equity markets because they don't understand the risk involved in the markets..Ive said it numerous times here...Any capital involved in the markets is %100 exposed to risk...Point blank..I love the mortgage business more than I ever thought possible...But it takes huge amounts of capital to make size money...I still believe more than ever in real estate..we are in gloom and doom times but in the years to come that will change...Contrarian investing is the only real way to make wealth...Buying what's hot is a recipe for disaster..

[allagash]

As usual….great post rookie…

Hammer….you’ll note that I went on to say that the pre-paid phone card ticker was eye candy….in other words…..steer clear.

As rookie has pointed out to me in the past….whether it’s using leverage or messing around with penny stuff like this….it’s a good way to get your fingers chopped off.

There’s a great lure for individual stock picking….but I like the smoothness of etfs….and even those can turn on a dime.

Ok…..a pick?....something like Family Dollar Stores, (FDO), makes a lot more sense to me.  The US consumer has been squeezed big time…..and is pinching every penny…..rummaging through dollar store racks.

But I’d never touch it unless I had a precise means for determining entries and exits….that’s just me.  Not the greatest trading volume either….

I focus on what I know and keep refining it….Be an expert.

Moving at a snail’s pace with my stock stuff….mind your peas and cues….fierce competitors in the equities arena.

-Mike
p.s. I will say this....something's going on with Express Scripts.....have seen multiple stock splits for the past few years.....

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTUyMzR8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

[jmd_forest]

I believe rookie is right on. I was lucky enough (the harder I worked the luckier I got) to sell a successful business I thoroughly understood near the top of the market in 2005 and "retire" with low seven figures. Despite advice from several financial adviser to invest in a diversified portfolio of mutual funds I bucked the advice and stayed in cash. Thank God I did or my nest egg would be down by around 2M. I simply couldn't understand how buying something I didn't understand and couldn't control at the highest price it had ever been made good sense. I still don't understand what is whipsawing the market up and down today.

In the 5 years since I retired I purchased several (3) SFHs for cash at large discounts to ARV and rehabbed them and now get around a 10% COC return on the rent alone. I understand how real estate/landlording works. One of my problems is that even in this market and in my area I find VERY few deals worth buying. The other is that cash investments are paying almost nothing right now. I make 100+ times  more off the monthly rent I collect (around 8% of my total nest egg) than then entire cash balance. If prices dropped 40% MORE in my area I'd still be in the green from equity alone if I had to sell.

Cash wasn't "so" bad at 3.x% tax free but at less than 1.25% taxable I'm glad my wife chose to keep working. It saves us over $15K/yr in health insurance costs alone.

A financial advisor will tell you that you can not get bigger returns without bigger risk but its not their money they're risking.

jmd_forest

[rookieNYC]

I still don't understand what is whipsawing the market up and down today.

Uncertainty...

And thank you for the compliment...I still remember you and I talking about where to put the money etc..You made the best decision..Congrats...

nest egg would be down by around 2M.

And thats probably based on the markets current levels..That figure would probably be double or more if you sold into the blood bath we had...

This is why sometimes I feel out of place giving newbies advice..My situation and jmd forest's are very different from the person looking to start out..I too sold a very large portion of a franchise co I owned in 2006,a portion I bought for a fraction of what I sold it for when the co was in its infancy...The offer was too good to pass up and had I not sold my portion would be worth %50-%70 less right now..One line that sticks in my head every day of my life is "sell when you can not when you have to".This is why I never buy whats hot...I like to sell whats hot....And "you never go broke taking profit"...This is my point about investing in what you know..Look at Sam Zell...He sold some huge office/industrial park at the height of the RE bubble,why?...Because he was smart..No..Because the offer was more than he could reasonably say no to..I was doing some reading about his theories and by no means is one man perfect but he did say every time you decline an offer you are essentially buying at that price...And he is right..When the offer came in for my portion of the franchise I knew I would never buy it at that price so I had to take the offer...Now I routinely buy and sell portions of the same franchise for pennies on the dollar in comparison to what I sold it for..Stick to what you know,know your market place..Know your competition...Know what the intrinsic value is of what you own..Have your exit strategies mapped out *everyday*...Business and business climates change very quickly..Stay ahead of the curve and know what the future market will be for your business..I knew that my franchise was being eaten alive by competition but others were cheerleaders while I was selling...Now 5 years later the co IMHO is a few more years away from bankruptcy...Never get complacent...

According to Zell, private equity firms awash with capital were able to benefit from "preposterous" leverage and offer premium prices to publicly held real estate firms. Zell said he considered a deal like that a "Godfather offer" because no publicly held company could responsibly refuse. Indeed, in February, Zell sold his flagship business, Equity Office Products (EOP), and its portfolio of 540 prime office buildings to the Blackstone Group for $39 billion. At the time, it was the largest private equity deal ever completed. Zell predicted that markets will soon stabilize, although they will become more risk averse and less leveraged than in recent years. "Today, you would never be able to replicate the Blackstone deal."

When we had the opportunity to sell Equity Office a year ago, I made the decision to sell, not based on the crowds and not based on euphoria, somebody made me an offer that I couldn't understand, and I thought it was a godfather offer.  I am a CEO or Chairman of a publicly held company and I have an absolute responsibility to respond when I think somebody has made an offer that I think is beyond my own analysis of the future."

A ton of the money I made from various deals came from refinance money and private equity...Thats why you have to take the money when its being dangled infront of your face when the offer is good....

[furnishedowner]

Great quotes--"When an offer comes in and you wouldn't BUY IT AT THAT PRICE--then you have to take the offer".

"When you DECLINE the offer, you are essentially buying at that price."

"Explore what you know and understand and invest there."

Furnishedowner

[amcgovern]

Well, if you're really talking about the NEXT big thing, I'd say nanotech, A.I. and Robotics.

[fdjake]

I believe the equity markets have eaten their young.  They spent the last 30 years SELLING the CONCEPT to the baby boomers...That concept was deceptively simple.
LET US invest your money FOR YOU because investing is hard.  Use our MUTUAL FUNDS to make it simple.  Send us your money every month and we can make you all MILLIONAIRES with simple compounding interest.

The REALITY for the majority of people is the complete OPPOSITE of that PROMISE.
Those "average yearly interest rates" they were told would be 7 to 8% turns out to be a LOSS or at BEST NO RETURN.....ZERO....NOTHING made on DECADES of savings.

WATCH......We will see a point in time when an entire GENERATION realizes they have NOTHING for their retirement.  The interesting part for US????

OUR generation will WATCH as the boomers WORK TILL THEY DIE and we will understand at that point that the stock market, as currently utilized by the HERD is a LOSERS GAME.

The REALITY of successful investing is EXACTLY the OPPOSITE of the UTTER BULLSH*T
We get sold....UNDERSTAND an industry or a company, LEARN that business, and then INVEST REAL MONEY when that industry falls out of favor.  But to do this, you need to be capable of doing what every other person considers INSANE.

Jimmy Rogers said it better than I can....

"DIVERSIFICATION is for people that don't know what they're doing.  Ted Turner wasn't diversified, Sam Zell wasn't diversified, Bill Gates wasn't diversified...They all had the majority of their wealth in ONE ENTITY."

My feeling is that the stock market is on the verge of a MASSIVE exodus...The truly wealthy will ALWAYS get excellent advice, and will always have a portion of that wealth IN the market....But that money isn't what has driven the stock market for the last 30 years...THE DRIVER has been the 401k money being funneled into these markets every day.....As public perception of the REALITY of investing starts effecting REAL PEOPLE and their REAL RETIREMENTS the options will change because what we have NOW is snake oil.

[jfpen]

I believe the equity markets have eaten their young.  They spent the last 30 years SELLING the CONCEPT to the baby boomers...That concept was deceptively simple.
LET US invest your money FOR YOU because investing is hard.  Use our MUTUAL FUNDS to make it simple.  Send us your money every month and we can make you all MILLIONAIRES with simple compounding interest.

The REALITY for the majority of people is the complete OPPOSITE of that PROMISE.
Those "average yearly interest rates" they were told would be 7 to 8% turns out to be a LOSS or at BEST NO RETURN.....ZERO....NOTHING made on DECADES of savings.

WATCH......We will see a point in time when an entire GENERATION realizes they have NOTHING for their retirement.  The interesting part for US????

OUR generation will WATCH as the boomers WORK TILL THEY DIE and we will understand at that point that the stock market, as currently utilized by the HERD is a LOSERS GAME.

The REALITY of successful investing is EXACTLY the OPPOSITE of the UTTER BULLSH*T
We get sold....UNDERSTAND an industry or a company, LEARN that business, and then INVEST REAL MONEY when that industry falls out of favor.  But to do this, you need to be capable of doing what every other person considers INSANE.

Jimmy Rogers said it better than I can....

"DIVERSIFICATION is for people that don't know what they're doing.  Ted Turner wasn't diversified, Sam Zell wasn't diversified, Bill Gates wasn't diversified...They all had the majority of their wealth in ONE ENTITY."

My feeling is that the stock market is on the verge of a MASSIVE exodus...The truly wealthy will ALWAYS get excellent advice, and will always have a portion of that wealth IN the market....But that money isn't what has driven the stock market for the last 30 years...THE DRIVER has been the 401k money being funneled into these markets every day.....As public perception of the REALITY of investing starts effecting REAL PEOPLE and their REAL RETIREMENTS the options will change because what we have NOW is snake oil.

fdjake,
         I agree.  In fact, what you say is already happening. I read an article that polled new college graduates. They don't view the stock market as a safe place to invest, even over time! They are watching their parents' plans for retirement disintegrate before their eyes.  Additionally, many people have liquidated their 401K's for hardship reasons. Mutual funds' cash on hand is at extremely low levels (3.4%). The masses are just about "All In" while the savvy investors are mostly in cash ready to capitalize on opportunities that may arise. It's going to be interesting to see how this plays out.

JP