dfreder371

I know a lot of you are new and young here.

No one expects you to be able to coherently read a corporate balance sheet. Shit, I'm 52, and I can't figure them out.

But you should be able to evaluate RESULTS. So I'm gonna post these factual numbers from my year end 401(k) sheet for FY 2003.

Illinois Tool Works (ITW)

4th quarter: Gain: 11.26%

Year to date and one year average: 31.15%

3 year average: 13.65%

5 year average: 9.05%

10 year average: 17.11%

As an alternate, another component of my 401(k), Evergreen Special Values Fund:

4th quarter gain: 14.65%

Year to date, and one year average: 35.65%

3 year average: 14.41%

5 year average: 14.41%

10 year average: 14.97%

My question to you: Would you buy ITW right now? Realize, you can't make much money unless you own a lot of shares of one particular stock. The value of stocks go up as the price goes up, but the potential and the risk rises also as the cost goes down, but that makes the right to own more shares go up. Interesting question.

You should obtain charting information on itw and evergreen before attempting to answer the question.

As I work for ITW, I get access to these stocks and mutual funds for free. No broker fees.

Class is in session kids. Learn from your elders. We've already figured every possible way to lose money.

Scrib

I hope you're not saying that the above is a balance sheet???

Debt to Equity, EBITDA, Acid Test... All key factors to evaluating a company. And the list goes on.

Then of course there's the sector evaluation...

Market trends. Long term outlook…




And I SO disagree with this statement. I've never once owned any one particular stock/mutual fund in large quantities, yet I've been able to make plenty of money even in a down turning economy. Buying large amounts of stock is really setting yourself up for a HUGE letdown, especially if you're not diversified.

*cough* Enron *cough*

Scrib

ITW is a hold. It's trading at almost 22x it's 2004 earnings, which is about $82/share.


Firstcall and S&P data seem to follow this.

IMHO, not a buy.

dallison

i am up 31.8% for 2003 with my 401k

dfreder371

Scrib: What I was trying to describe was an example.

Hey, I work for ITW, but I'm not cheer leading, and I did ask a generalizied question. The point here is to LEARN.

Scrib forced my hand early, but, no harm done. Maybe, it is a good thing.

Let's look at the points. ITW, has not turned in a negative result, at any point. Neither did the mutual fund I posted.

Does this mean you should buy ITW?

Here is when stocks gets dicey. You want to bet on a winner, right?

I'd say no, do not buy ITW. The stock price, today, is pretty high, when it retracts to say, $65, yes, buy,

Silver™

[pompous ass alert]

And why are you trying to give us advice Dave?

After losing money on stocks in Motorola, Intel, Silicone Storage and a bunch of others, I finally picked a good one.
http://www.acura-cl.com/forums/showt...hreadid=122212

How many winners have you had?

[/pompous ass alert]

dfreder371

Siver: Why are you trying to posioning a good intent? We're trying to start an investor forum here.

Personal instances of gains and losses matter to help the board members out.

BTW, and I am sure you are unhappy to hear this, but I made an extra 10K in the stock market last year, XYBR.

If you doubt me, I will be happy to fax you the transaction.

$9,000 gain on a 7,688 risk, and it's in the bank.

Feeling like a jackass yet?

Silver™

I am not poisoning this forum

I am:

a: pointing out that you are a pompous ass.

b: that you admittedly suck at the stock market. so it is rather funny that you come here like you are gonna give all of us lessons

And good for you that you made money on XYBR (a penny stock), the problem for you though is that you lost money on all those other stocks

So please spare us from you attempts to educate us, since it would seem from your past performances that you are the one in need of some lessons

1killercls

Scrib

Just because a company hasn't gone into the red recently doesn't mean it's a buy.

The stock is right at the analyst's 12 month high right now. 22x 2004 earnings. It's NOT a buy Dave.

Why would I buy something that just lost 25% of it's value if it were to happen? You original question asked about today. And I say no. Do I get a cookie???

Slimey

Pass me some over here...

Davediego

its a huge risk to place all your money in one stock, and you certainly dont need a large # of shares to make money. the stock market is all about PERCENTAGES. if you buy 10 shares of a stock at $20, and it goes to $40, how much lower of a percentage have you made than if you would have bought 1000 shares?

if you guys really want to learn check out www.clearstation.com and go through their tutorial/learning section

Jonesi

Isn't the point of buying stocks to keep it diversified ? Why would you want all your money in one stock ?

Dom418

What exactly do you do at ITW that qualifies you to give this kind of advice??

dfreder371

OK, let's clear some things up here. Davediego, you have a perfectly valid point. 10 shares of xyz at $20 per share goes to $40, you've made 100% profit, but, what you have made is $200.

If you did this through a regular broker, he is gonna charge you about $50 to get in, and $50 to get out. OOPS! There went 50% of your profit.

And now there is the Feds to answer to. They want 16% of what is left. Net profit now is about $84. Still, this is not bad percentage wise, 42 percent profit. Say you held the stock for 366 days so you qualify for the low tax rate.

But, what does $84 buy? One week of grocries? Three tanks of gas? To me, that isn't worth the risk, the hassel of dealing with the brokers, and the federal tax papers.

But, you get the idea. People participating in this forum are doing a very correct thing. I have openly stated that I roughly understand the stock market, but don't understand bonds.

And the futures markets is a place where you can lose "some, all or more than all of your original investment". Yikes!

And I am here because I need to learn from you guys too.

And Eric, did you not see I said do NOT buy ITW right now? It is too high, agreeing with you. Still, its made me a buncha money over 15 years. Good LONG TERM hold.

I advocated for people to check the charts of their choice, on a long term downtrend, but starting up, that, coupled with positive research for future products.

The stock market works on basically two factors: fear and greed. Think about that for a while.

dfreder371

Jonesi and Dom:

Jonesi: you are 100% correct. Diversify. My 401(k) is split into two diversifications. That is hardly diversifying, but on the other hand, you can get so diversified that you can't properly manage your holdings. The point is to make good picks, not necessarily a lot of them, there is no guarantee in "alot".

This is why mutual funds exist. They spread the risk for you. But, if you invested in a mutual fund that was heavy in the dot.com in 1991 or so, prepare to lose your ass. Mutual funds are no guarantee. You have to look everything over, and actively manage it. Something stellar this year may be the market dog in the next year.

Dom: Absolutely nothing qualifies me to give this advice. All I can say is that because ITW stock comes to me through payroll deductions, and no cost to me, I have put away close to $100,000 in 14 years on that stock only. When you work for a public company, you become pretty aware of the stock price.

It's been good to me, to say the least.

To more accurately answer your question, damn near nothing qualifies anybody to give stock advice, including my stock broker. Opinions are like assholes. Everybody has one. This forum segment is a DISCUSSION, nothing more.

Davediego

$50 per trade? thats pretty harsh. I get $5 trades from a regular broker (although I'm hooked up because my uncle is a VP) and i pay $11 per online trade. also theres different periods of time where the tax will lower, i believe one of them is 3 months. yes taxes and commission are a bitch, but you don't need 10k to get started in the market. $200 is a bit low but $1000 is an adequate amount to start with and "learn the ropes"