Investing General Discussion

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Hateyou

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Probably as simple as not wanting to eat the short term capital gains tax. I could see myself doing that, although I can't imagine gambling on credit like that. Yikes.

Yeah that makes no sense. If you have $100k in debt, and you’re up $1mil, or even a measly $300k or $500k, you sell $150k, pay off your debt, set the rest aside for taxes at the end of the year and buy yourself a nice steak dinner to celebrate your win. Keep going with what you still have in the account if you want but take care of the stupid situation you put yourself in at some point.

If he truly was not cashing out to save 7% on taxes of the massive amount of money he could have made he’s even more of an idiot.
 
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Sanrith Descartes

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Probably as simple as not wanting to eat the short term capital gains tax. I could see myself doing that, although I can't imagine gambling on credit like that. Yikes.
With what has been written about this guy, I doubt he has any idea what capital gains taxes are let alone they being an influence on his decision making. Much more likely is "its temporary, they will go back up tomorrow".
 
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Hateyou

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I think I get what you're saying. However lets not pretend that there aren't good reasons to hold for over a year for tax purposes. Granted if you're leveraging like he was you should have different priorities, obviously.

There are very good reasons to hold onto it for tax purposes, but he was not in the position to make it a good reason is all. You hold for tax purposes if you’re financially stable and can let things ride that long.
 
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TJT

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Also, I feel the need to repeat. Never put in more than you're willing to lose.

I only YOLO money in my YOLO account that I made for that explicit purpose. Most of my money is in ETFs. But due to being a diligent skinflint my YOLO account has quite a lot of money these days and continues to grow. Compared to the average normal person who has not invested every single spare penny since they started working at age 16.

The key to growing wealth will always be diligent conservation of money, living below your means, and conservative investment. ETFs should be the bedrock of your accounts for anyone who reads this thread. Period.

But YOLO and options are exciting and definitely have their places. Don't get sucked into shit over your head. If you're feeling super anxious about an investment due to risk and how much it will cost you? You most definitely should not do it.
 
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Hateyou

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One most learn to YOLO in this thread sometimes. I bought 75 shares of it at $85something solely because of that post.

I try to, I don’t really have the cash some of you do, I’m married and kid is in a $900 a month day care, which ended this month!

During that time I chose safer stuff like CAT, MSFT, APPL. They are all 20-50% higher than when I got them so I’m happy with it. Just would’ve been very happy with DOCU. Also, where you been Blazin Blazin ? Don’t let one or two argumentative douches keep you away from this thread please, most of us miss your posts here.
 
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TJT

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I try to, I don’t really have the cash some of you do, I’m married and kid is in a $900 a month day care, which ended this month!

During that time I chose safer stuff like CAT, MSFT, APPL. They are all 20-50% higher than when I got them so I’m happy with it. Just would’ve been very happy with DOCU. Also, where you been Blazin Blazin ? Don’t let one or two argumentative douches keep you away from this thread please, most of us miss your posts here.

Then you're a wise man. Never risk something that might actually be a true negative to the family. I'll be having a kid in the next year or so and the first thing I'm doing is a $300/mo 529.
 

Hateyou

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Also, I feel the need to repeat. Never put in more than you're willing to lose.

I only YOLO money in my YOLO account that I made for that explicit purpose. Most of my money is in ETFs. But due to being a diligent skinflint my YOLO account has quite a lot of money these days and continues to grow. Compared to the average normal person who has not invested every single spare penny since they started working at age 16.

The key to growing wealth will always be diligent conservation of money, living below your means, and conservative investment. ETFs should be the bedrock of your accounts for anyone who reads this thread. Period.

But YOLO and options are exciting and definitely have their places. Don't get sucked into shit over your head. If you're feeling super anxious about an investment due to risk and how much it will cost you? You most definitely should not do it.

Yeah, I agree with this. When I YOLO it’s under $1k. I’ve only really YOLOed two, ARDX and CLSK. I made a couple hundred on each because I only bought ~$600 of each when I did it. CLSK just hit my limit sell yesterday on a big spike it had.

Half of my account I buy things that I won’t mind keeping for years if they don’t do well, and won’t mind dumping tomorrow if they go nuts. The other half is mutual funds, which I will be moving over to ETFs this week or next when I get time to research where to move them. Sanrith has me pointed in the direction, just need to think it through before I pull the trigger.
 
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Hateyou

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Then you're a wise man. Never risk something that might actually be a true negative to the family. I'll be having a kid in the next year or so and the first thing I'm doing is a $300/mo 529.

Yep, good plan. Check out your states 529 plan. Indiana has the best in the country I think. In Indiana, if you put in $5k, you get a flat $1k return on your taxes, so you only have to put $4k in per year after that first year to get $5k. However, I thought it just meant if you live in Indiana and have a 529 that’s how it works, but you have to be enrolled in your states specific 529 plan, so I missed it the first year because I just had a fidelity 529. I will just roll $5k from that to the state specific plan each year to get the cash back. Your states may suck but you never know, just check it if you haven’t and read the details, unlike me.
 
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Aychamo BanBan

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Any of yall ever do a franchise? I was looking at 9round as a possibility. Could get it up and running for about $85,000 including franchise fee.
 

TJT

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Any of yall ever do a franchise? I was looking at 9round as a possibility. Could get it up and running for about $85,000 including franchise fee.

Naww... how do you ensure you have the right people to run it?
 

Hateyou

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Training academy for the owners?

Yep. They are extremely selective about where they go and who is allowed to run it. Their marketing and research team is top notch. I think it takes a couple years of going through their processes before one opens, a friend of a friend looked into it and backed out due to the time commitment she would have to put in just to even be considered, with a good chance of being denied.

That whole process is why every chik fil a you go to is top notch quality and service, they won’t let just any loser open one up and run it.
 

TJT

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If you think about it there's no other way a place like Chik-Fil-A could maintain the level of quality that they do. Every single CFA shop I've ever been in has had customer service so good that it is borderline obnoxious.
 

LachiusTZ

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Yep. They are extremely selective about where they go and who is allowed to run it. Their marketing and research team is top notch. I think it takes a couple years of going through their processes before one opens, a friend of a friend looked into it and backed out due to the time commitment she would have to put in just to even be considered, with a good chance of being denied.

That whole process is why every chik fil a you go to is top notch quality and service, they won’t let just any loser open one up and run it.

They are similar to Harley in where they open as well.

Only so many per X population, has to be X miles from the other one, etc etc.

But they print fucking money.
 
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Kuro

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The Chick-fil-A in our suburban mall has a 3-lane drive through that wraps around the building. It's completely full from 5:30pm to 7:30pm.
 
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Hateyou

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The Chick-fil-A in our suburban mall has a 3-lane drive through that wraps around the building. It's completely full from 5:30pm to 7:30pm.

Yeah every one is like that, it’s nuts. The crazy part is getting through that line is usually faster than short lines at any other fast food places. I’m surprised more places haven’t tried to emulate them, seeing how they outperform every fast food place in money per site.
 
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Furry

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Follow the Chik Fil A model - hire white people.

My chik-fil-a has some black people, but they are all the sunday school dressed up by momma type. It's only got 1 drive through and its a 15 min drive in any direction to another, so is pretty much a traffic war zone all day long. Might be hard to get one, but the owner doesn't have to invest much and gets a cut of the profits, right? I'd be shocked if it's not well into the six figure salary around here.

When I refi'd my house I had to take equity out to even qualify, and I could comfortably afford it. I ended up putting most in the markets and no regrets. Now would I do that on a 20+% credit card? Hell the fuck no.
 

Sanrith Descartes

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I am a huge fan of "give a man a fish, feed him for a day; teach a man to fish, feed him for life". So that being said, i want to expand on my previous post about ETFs and Mutuals. This one is how to take a basic look at a company's financials and what to look at. I am targeting this at people who have zero understanding of accounting or finance. What I am going to show you will equate to how you look at things in your own life. That being cash and debt. I am going to reference the website Marketwatch.com because it doesnt have a paywall. feel free to use any site you want to find this info. Next, I am going to compare two companies in the same sector. This is important. Comparing the financials of a manufacturing company and a bank dont really work well on the surface. They tend to use different metrics. I am going to show you just three different financial metrics. EBITDA, Long-term Debt and Free cash flow. EBITDA stands for Earnings before Interest, Taxes, Depreciation and Amortization. EBITDA is standardized so it makes a pretty consistent metric. So think of EBITDA as profit, Long-term Debt as just that, debt owed to bond holders etc, and Free Cash flow is again just that. Free cash after all debt payments, bills, costs etc have been paid.

Lets look at two big pharma companies. JNJ (Johnson and Johnson) and PFE (Pfizer).
On Marketwatch, search for PFE. Once on the overview, look for the task bar and choose "Financials". You will see three reports (Income Statement, Balance Sheet and Cash Flow Statement). We are looking for one item on each tab.

1594389488855.png


On the income statement, scroll down to the bottom and look for the most recent EBITDA. Note that this also gives you the last 5 years of info, which is great for looking at trends.

1594389687973.png


PFE reported 2019 EBITDA of 20.31 Billion dollars
1594389735335.png


Click to the balance sheet and about halfway down find "long-term debt". it is in the Liabilities and Shareholder Equity section. PFE has 37 billion in long term debt.
1594389855487.png


Finally go to the cash flow statement and all the way at the bottom find the "Free Cash Flow". PFE has 10.41 billion in free cash flows.
1594389940261.png


Now do the same for JNJ and we get 28.56 billion in EBITDA, 27.21 billion in debt and 19.92 billion in free cash.

So comparing the two, JNJ has 7 billion more in earnings (25%) 10 billion less in debt and nearly 10 billion more free cash a year. A common ratio is EBITDA to Long term debt. PFE has a debt ratio of 1.84 and JNJ has a ratio of 0.95.

Forgetting all other variables (products in pipeline, JNJ's diversity into products like soaps, shampoo etc), from a financial health perspective JNJ appears to have a stronger financial picture. Im not saying PFE's is bad, but when you are looking at companies to invest in and comparing two similar companies, this is a good thing to take a look at. These are the types of things that determine which companies survive things like Coronachan and which companies dont.

Good luck.
 
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