Betting on economic recovery

[Billy Cox]

I recently sold my shares of Sprint and bought shares of Citigroup which is trading at a small fraction of its pre-crash price. (something like a 90% discount)

I'm curious if others who got out of the market shortly after the crash have seen fit to get back in.

If the market is any indication, an economic recovery is already under way. What think ye?

[Billie Goodson]

I have been in C for a while now (and loving it right now!). I never really got out of the market, which to me would have been disastrous. While I still haven't fully recovered, my continued participation has me well advanced in getting back to where I was. I have eschewed saying "recovery underway" or "no signs of recovery" because it is very relative to the sectors of the market one considers as indicative. I learned a long time ago from Jim Cramer that stocks are neutral, unlike our losses and gains in them. A treasure today may be a dog tomorrow and likewise, today's dogs are tomorrows treasures. The key is somewhere around controlling losses and greed -- which makes it problematic for us as Americans.

[Ryan Scott]

My only question is why you're just now selling Sprint stock.

[Jim Chabot]

We are seeing signs here, the real estate market seems to be getting a spring boost. Not as big as normal, but better that the last three years of nothing. I have had my house on the market (overpriced) for almost a year now, Saturday we got an offer of 700K, so it's signed up and hopefully gone in 45 days. I had been thinking of renting until, I have built another one, but it looks like I'm going to place a bet on the economy instead. I've found a much cheaper house (325K) and put an offer in on it for 300K, I'm thinking that I can make 30-50K in a year. If the economy is actually picking up. I think it is, I guess we will see.

[Billy Cox]

My only question is why you're just now selling Sprint stock.

I bought some Sprint stock at $3.00 per share a few months ago and I had set a limit order to sell if the price reached or exceeded $4.28 -- more than 40% gain -- and it did last week, however briefly. So the answer to your question is that I didn't have the stock for very long.

[Billy Cox]

We are seeing signs here, the real estate market seems to be getting a spring boost. Not as big as normal, but better that the last three years of nothing. I have had my house on the market (overpriced) for almost a year now, Saturday we got an offer of 700K, so it's signed up and hopefully gone in 45 days. I had been thinking of renting until, I have built another one, but it looks like I'm going to place a bet on the economy instead. I've found a much cheaper house (325K) and put an offer in on it for 300K, I'm thinking that I can make 30-50K in a year. If the economy is actually picking up. I think it is, I guess we will see.

325K goes a long way in the KC housing market...even in the most desirable areas.

[Billy Cox]

I have been in C for a while now (and loving it right now!). I never really got out of the market, which to me would have been disastrous. While I still haven't fully recovered, my continued participation has me well advanced in getting back to where I was. I have eschewed saying "recovery underway" or "no signs of recovery" because it is very relative to the sectors of the market one considers as indicative. I learned a long time ago from Jim Cramer that stocks are neutral, unlike our losses and gains in them. A treasure today may be a dog tomorrow and likewise, today's dogs are tomorrows treasures. The key is somewhere around controlling losses and greed -- which makes it problematic for us as Americans.

I bought in to Citigroup at $4.70 last week, so I haven't gained much yet. Based on my research and my layperson's reading of the market, C is grossly undervalued. They just posted a surprise profit and trading volume has exceeded one billion shares for the last couple of days. It should be a fun ride. :)

[Jim Chabot]

325K goes a long way in the KC housing market...even in the most desirable areas.

Used to be that way here as well. When I started out we were selling new starter homes for $139,900. In the last three years, the lowest I have sold a new house for was $399,700. Before things slowed down, 500K was my starting number, most of my sales were in the 650-800K range.

Way back, I had enough money to have three houses going at once without using a bank. Now I have more money and I can only do one at a time.

[Ryan Scott]

I bought some Sprint stock at $3.00 per share a few months ago and I had set a limit order to sell if the price reached or exceeded $4.28 -- more than 40% gain -- and it did last week, however briefly. So the answer to your question is that I didn't have the stock for very long.

Well that makes more sense.

[Rich Schmidt]

My wife and I never got out of the market. But our money is all in mutual funds, not individual stocks. In fact, we've just continued our practice of having money automatically invested every month, all the way through the roller coaster. So we'll see what happens. :)

I think I've mentioned this before (probably before the NazNet Crash of 2010), but as a Mac user since 2006, I'm really wishing I'd invested in some Apple stock! They now have the 3rd highest market capitalization in the USA, behind only Exxon and Microsoft. They're bigger than Google, bigger than Walmart. They've had an amazing climb...

[Billy Cox]

My wife and I never got out of the market. But our money is all in mutual funds, not individual stocks. In fact, we've just continued our practice of having money automatically invested every month, all the way through the roller coaster. So we'll see what happens. :)

Just over a year ago I rolled a 401K from a former employer into an ETrade IRA. I put most of it into mutual funds, but put about $260 in an individual stock. After a series of lucky picks, that $260 in stock is now worth about $1,900.


I think I've mentioned this before (probably before the NazNet Crash of 2010), but as a Mac user since 2006, I'm really wishing I'd invested in some Apple stock! They now have the 3rd highest market capitalization in the USA, behind only Exxon and Microsoft. They're bigger than Google, bigger than Walmart. They've had an amazing climb...

Yes, Apple is one of those trains that has already left the station...at least for value investors. I perceive an investment in Apple as a bet that Steve Jobs lives a long life, because when he has been absent in the past, the company floundered. Is Apple stock a bubble?? I don't know. The fact that I don't know means I won't be investing in Apple.

[Rich Schmidt]

Yes, Apple is one of those trains that has already left the station...at least for value investors. I perceive an investment in Apple as a bet that Steve Jobs lives a long life, because when he has been absent in the past, the company floundered. Is Apple stock a bubble?? I don't know. The fact that I don't know means I won't be investing in Apple.

And today they passed Microsoft...

Jobs' health and the fear of investing at the top of a bubble are the two things stopping me from going and buying some right now. My guess is that Apple will continue to do well as a business, and their stock will continue to climb... but for how long? How high can a stock climb before enough investors get nervous that the trend reverses? We'll see.... but I probably will be watching from the sidelines, not as an investor.

[Ryan Scott]

And today they passed Microsoft...

Jobs' health and the fear of investing at the top of a bubble are the two things stopping me from going and buying some right now. My guess is that Apple will continue to do well as a business, and their stock will continue to climb... but for how long? How high can a stock climb before enough investors get nervous that the trend reverses? We'll see.... but I probably will be watching from the sidelines, not as an investor.

Apple seems to be creating new markets for themselves with each new invention. They've got a near monopoly on digital music with itunes and they'll soon be the sole distributor of books and newspapers for the ipad. They're going to make all their money of licensing other people's content. It's a brilliant venture.

[Rich Schmidt]

They're going to make all their money of licensing other people's content. It's a brilliant venture.

I'm not sure how much money they actually make from the sale of media on iTunes. I know their App Store (in which they keep 30% of each sale) runs just barely above break-even. I think the vast majority of their profits come from selling the hardware: Macs, iPods, iPhones, and now iPads.

I know I could look up the details online.... but it doesn't matter that much. And regardless, I still agree that "it's a brilliant venture." :)

[Ryan Scott]

I believe I read somewhere that artists and record companies are paid a flat fee for music - which means its all profit after a certain number of sales. Although I think they have had to negotiate special deals with certain artists (the Beatles come to mind).

[Rich Schmidt]

I believe I read somewhere that artists and record companies are paid a flat fee for music - which means its all profit after a certain number of sales. Although I think they have had to negotiate special deals with certain artists (the Beatles come to mind).

Yeah, the Beatles still aren't on iTunes. Apple has to come to licensing agreements with artists and labels just like any other store, and the Beatles have been holdouts, for some reason.

I've never heard of the flat fee you refer to, but some quick Googling found several mentions of how Apple runs iTunes at "a bit over break even." In the end, they make very little from music (and app) sales. They run iTunes to sell us new iPods and iPhones and iPads.

[Ryan Scott]

Yeah, the Beatles still aren't on iTunes. Apple has to come to licensing agreements with artists and labels just like any other store, and the Beatles have been holdouts, for some reason.

I've never heard of the flat fee you refer to, but some quick Googling found several mentions of how Apple runs iTunes at "a bit over break even." In the end, they make very little from music (and app) sales. They run iTunes to sell us new iPods and iPhones and iPads.

It's funny and I don't doubt your sources, it just seems to be the exact opposite of everything I've been reading.

[Rich Schmidt]

It's funny and I don't doubt your sources, it just seems to be the exact opposite of everything I've been reading.

Well, the "a bit over break even" is a quote from Apple's earning's call (probably COO Tim Cook who said it) back in Feb 2010. And I just stumbled across this interesting chart over at http://www.businessinsider.com/chart-of-the-day-in-case-you-had-any-doubts-about-where-apples-revenue-comes-from-2010-4 . Let's see if I can attach it here...

http://static.businessinsider.com/image/4bcf467d7f8b9a3e78980300/sai-chart-apple-revenue-by-segment-march-2010.gif