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  • Avatarvmickel
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    Post count: 9

    I took over our stock portfolio 3 years ago and have only been buying according to your plan which has been excellent for us. My husband just bought T, INTC, MU, and PFE. Can you explain why these purchases were either good or bad choices? I am attempting to get him fully on board with you so he needs explanations…or else he has some “splaining” to do!!

    Sean HymanSean Hyman
    Participant
    Post count: 1831

    With respect to your husband, those are all unwise moves. Those are all overvalued/overdone stocks that will very likely get crushed in the upcoming downturn. There’s not a one of them that I’d suggest.

    T has almost $200 billion worth of debt (which is not terribly far from the size of their overall market cap. So why buy a super-indebted company. High-debt companies can have a hard time in recessions and get pummeled some of the hardest.

    INTC is a solid company, that’s in a bubble…that could be in the midst of popping now. But whether now or later, it will. Additionally, buying tech stocks at the end of a business cycle/expansion and near the top in the market is the worst decision you could make because tech tend to lead on the way up BUT, it also tends to lead on the way down. It’s why so many tech stocks are getting hit so hard, right now, as we speak.

    MU is one of the biggest bubble stocks of our day. It was “a love” of traders in the latest bull rally and will therefore likely be one of the ones crushed in the downturn. Additionally, tech is already forewarning on Coronavirus…everybody from Apple, Samsung, Microsoft, etc. So, that puts INTC and MU with great exposure.

    PFE is a great company but at a horrible price. It will head lower just like the overall market. In fact, it could already be starting its long-term downtrend (too early to say for sure).

    So…there’s not a one of those stocks that would make the cut in our portfolio. Those are all high-risk stocks right now.

    There will come a day (far from now) where INTC and PFE could be values, but they are FAR from that right now. Once the market has crashed out a good bit (much further than what’s already happened), then there will be a time to own them. But that day is not today or even close to it.

    Avatarvmickel
    Participant
    Post count: 9

    Thank you so much for helping me clarifying my position and giving a tutorial as well…much appreciated.

    Sean HymanSean Hyman
    Participant
    Post count: 1831

    You’re welcome. Hope y’all don’t get hurt by those positions. At some point, there will be some general market snap back and it may allow y’all to exit if you decide to.

    Sean HymanSean Hyman
    Participant
    Post count: 1831

    Just curious if your husband kept his positions?

    Avatarvmickel
    Participant
    Post count: 9

    Unfortunately, he did AND he added another $5000.00 to INTC yesterday.

    Sean HymanSean Hyman
    Participant
    Post count: 1831

    Dang. There will be bear market bounces at some point. Hopefully, he’ll consider exiting.

    Sean HymanSean Hyman
    Participant
    Post count: 1831

    Maybe he should look at the chart of Intel in the last two crashes.

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    Sean HymanSean Hyman
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    Post count: 1831

    Hate those stocks he picked are getting hit so far, with likely much more to come.

    Avatarvmickel
    Participant
    Post count: 9

    Yes, those stocks are getting hit. He counters with KHC and BBBY, LPL and the like. I told him last night I was going to cash on everything not in LI as soon as and if they go green. With no trade charges, it’s easy to exit even at close to break even. I remember what you said about possible short term climbs before another drop so I am watching and have set limit orders for his purchases. I don’t think he will do it again.

    Sean HymanSean Hyman
    Participant
    Post count: 1831

    Yeah, the difference being that ours are values and the others are not. The likelihood of those returning vs overvalued stocks are totally different. Plus, some have already made large gains on BBBY twice now.

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