Are You Still In?

[ed6713]

In answer to the original question - yes, we are still in. In fact we never completely got out. Has been an interesting few years. Now the questions is when to shift and what to shift into. We're starting to approach the age when we will have to do minimum distributions.

 

Barb

We're in a similar position. Started the RMD's this year. I've shifted the emphasis of our investments to preservation of capital. We've reached the point where if we took a really big hit it would be difficult to recover. My very modest goal is to earn 5% to 6%/year on our portfolio. Given that we are only taking the minimum of the RMD, that should work just fine.

VWINX a Vanguard fund, is among my personal favorites.

 

https://personal.vanguard.com/us/funds/snapshot?FundId=0027&FundIntExt=INT

 

Now if we could only go back to the days where CD's were paying 15% plus a free toaster. But without a 17% rate of inflation.

 

Take care:

Ed

[Barbaraok]

That's one of the funds we're looking at - we've been with Vanguard since the mid 80s.

 

Barb

[Jim Gell]

I can't get excited about VWINX only because it is so heavily weighted in bonds. It's been a good fund, but looking forward I feel it may take a beating if/when interest rates go up. It just seems improbable rates can remain this low too much longer. But I have been thinking that for a couple years now. When the music does stop, I don't think I want to be in bonds at all. It's contrary to most profesional advice but I have always held much less in bonds than "appropriate" for my age. I am reducing my holdings in bonds as I feel we are getting closer to the Fed allowing interest rates to normalize. I also count my defined benefit pension as taking the place of bonds to help balance my portfolio.

 

Again, let me say, I am an amature at this. If anyone can steer me in a better direction, I am all ears.

 

Jim

[TheDuke]

As far as I am concerned, the only 2 things you need to know about investing is the superbowl winner and the length of skirts.

If an AFL (before the merger) team wins the superbowl the stocks go down. Baltimore won this year and it is an old NFL (Cleveland) team so stocks will go up.

The shorter the skirts the higher the market goes. Is it only my eyesight that makes it seem they are really short right now?

By the way, I have some land to sell you but only sight unseen.

[Jack Mayer]

Jim, I'm pretty much aligned with your thinking. I'm almost totally out of bonds, and certainly I would never go into a long bond. There are some short term bond funds with the ability to "maneuver" that might be OK right now but in general I'm not keen on any bonds at the moment.

[RV_]

Since I won't be eligible to draw early SS until May 2014, RMDs and other rules are new to me. We aren't needing income beyond my retirement but only because we worked to have a paid for place forever, which is exactly as long as whichever of us two drops last.

Then what the kids do with it is irrelevant to us. Our dreams are no more theirs, than our parents dreams were ours. We have exceeded them, and our kids have exceeded us, well one of two, and the other is a good man.

[ed6713]

Might

I can't get excited about VWINX only because it is so heavily weighted in bonds. It's been a good fund, but looking forward I feel it may take a beating if/when interest rates go up. It just seems improbable rates can remain this low too much longer.

Jim

Pick your favorite guru, of course, but the consensus seems to be that we will continue to see very low rates through 2014.

I agree with you. Some day bonds will take a hit just like gold has done recently. All investments need to be reviewed on a continuing basis and your personal asset allocation reworked if appropriate.

Personally, I rarely invest more then about 10% of my funds in any stock, mutual fund, etc. but I am making an exception here. VWINX represents 20% of my portfolio.

My 10% rule pretty much protects me from taking a major hit. If I lost 50% of a 10% investment, life would go on. Might be drinking a Bud rather then a Heikenen but I'd manage.

 

These are the Average annual returns for this fund:

1 year 3 year 5 year 10 year since 07/1970

Wellesley Income Fund Inv 11.54% 10.71% 8.29% 7.63% 10.23%

 

This time period represents the entire spectrum of the economy for the last 43 years. Quite impressive in my opinion. Since I'm a long haul investor, I don't really focus on todays headlines. A great 10 year and 43 year result impress me more then the current crop of talking heads.

 

As always, YMMV

 

ed

Edited May 13, 2013 by ed ed

[Ron]

Regarding RMDs; there is a tax law that may not be widely known. Current tax law allows the direct contribution of withdrawals from IRAs to qualified charities, up to a maximum of $100K/yr. These direct contributions may be applied against your RMD and are not taxed. For those blessed with more assets and/or income than they need and are of a mind to donate part of their assets to their favorite charities this can be a very effective way to do so. One can also use this as a portfolio rebalancing tool by donating assets that have realized the highest appreciation and have become overweight in your portfolio.

http://www.irs.gov/Retirement-Plans/Charitable-Donations-from-IRAs-for-2012-and-2013

[RV_]

What a ride!

Today I thought to sell a little less than half of my shares if Tesla goes above 100. I put in a sell order at 2pm when it had fallen from 86 to 83. I went on two computer calls and got home at five and it had gone to 87.80 at close. I decided that it had a longer way to go before I sell any and cancelled the sell at 100 order. An hour later it hit 90.01 after hours, and I expect it to go over 100 and more very soon.

 

I was almost swayed by security fallback advice to take some off the table. Especially some of the anti Tesla articles that were pretty desperate to try to paint a bleak picture out of their fear they are wrong and all of us are right. I wasn't listening to my inner voice. I believe that we are in for at least two Wow factor announcements in the next few days to weeks. I believe we will hear about remarkable numbers of supercharger stations already installed across the country. Then I expect to hear about a dramatic increase in range capabilities one right after the other.

 

I won't stray from my long view and hold position without more than echoes of past regrets of others in the few articles still trying to try to make others fearful. Regardless it won't pay if I don't play. Watch the next week. Then the next few after that. I am now at about 400% up on my investment. I believe things are just getting started rally wise.

Edited May 14, 2013 by RV

[RV_]

I got a couple of pms asking for more perspective on shorts and the mechanics of a "Short Squeeze." This short article explains it very well, and in particular why, with Musk owning more than 24%, and not selling a single share, and the shorts now with roughly 24%, and the longs like me encouraged to stay the course as the squeeze tightens, panic mode is setting in as the shorts become desperate to cover their bets and return the shares they "borrowed."

http://seekingalpha.com/article/1433051-tesla-100-coming-very-very-soon?source=yahoo

 

If you want a guide to view this rare classic short squeeze knowledgably, that article does the trick succinctly.

Edited May 14, 2013 by RV

[etwo4788]

BRO DEREK....

 

A couple of days ago I sent an email to you..... Re V3 Solar..... Did you read it yet?

 

E-Sis

[RV_]

E-Sis!

Yep got it but worked all day yesterday in the hot sun helping my son till his weeds under and redo his landscaping around his house in preparation for selling it in the fall. This morning was my morning to catch up on the five or six emails waiting for me to answer.

 

But a related story. We were picking up topsoil and landscape timbers when we saw a Tesla Model S parked in front of a waffle house! The owner was in it and I tapped on the window and asked if I could look at it. He said yes and asked me to sit in the passenger seat. I was blubbering I think because I was so excited to actually experience one. I told him I was an investor in the company. He then asked something I never expected nor would ask. He asked me to drive it. I asked if he was serious. He said sure, as he had mentioned he was a chemistry professor at LSUS when we introduced ourselves, and I had mentioned I was an alumni as I went to school after I was active duty. He said he always liked to take special care of his military students, and told me to swap places. I drove it, accelerated it, turned and pulled some Gs in it.

 

My first impression was that inside it was so understated because of the lack of instrument clusters and traditional driver dash. It was all on the touch screen which seemed much larger than 17" inside a car. It was smooth and tastefully spare. I could not even open the door by myself, he had to use the remote to pop them out to pull. The interior was just right. Not ostentatious, not bare so much as being there to move us.

 

The acceleration was amazing, silent, and the Air Conditioner sounded loud even though it was only a whisper in the absence of all the noises and herky jerky motions we took to represent powerful engines until we drive this car. The bouncy front rising, body torqueing, wheels peeling rubber, center of gravity shifting all are absent. It dawned on me that the low center of gravity and absence of engine sounds were a new standard. The absence of the smells of fuels and oils was also apparent. It was both more powerful than the '66 427 Sting Ray my friend had and would almost twist when power shifting.

 

It was the most powerful thing I had ever driven. I owned a Porsche 911 Targa, the first with the K jetronic fuel injection system many years ago. It had the same kind of power without too much noise. But the tuned exhaust was meant to be heard.

 

This was like a Leer jet on takeoff minus any noise and bounce, just the sheer speed like being shot out of a slingshot. The acceleration is unlike anything I ever felt.

 

He has no issues with it or range anxiety. He is just enjoying it daily. I gotta get one of the first consumer models in a couple of years, and in the meantime I will get an Electric Smart, maybe this September when they become available.

 

The silent electric powered automobile is inevitable. The genie has been let out of the bottle. The ride is as smoother than any luxury car today, yet as responsive and nimble handling as any super car. Except for wind they are silent. I don't hear any whine but my high freqs are gone from 20 years of running firing ranges and shooting in the military. So there may be some sounds I can't hear.

 

I was starstruck, by an inanimate object. I swapped emails and numbers with him. He could have gotten options and didn't.

 

I am still grinning! At the product I helped bring along, and the stock as it rises again, already up four dollars from opening. No I have no sell orders. Maybe later but not now.

[etwo4788]

What a beautiful description of your exciting ride/drive in a real honest to goodness Tesla EV! Thanks for sharing!

 

Looking forward to receiving your response to my email....no hurry at all. Glad to be back in touch!

 

Hugs, E-Sis

[RV_]

OK I had to play a bit but I figured out how many shares it would take to get back my original investment in Tesla, plus $5k profit. Man I got to keep 3/4ths of my shares in play! The articles are all saying that the Model S is the New Prius as that car had initial skepticism about price. But the high gas prices in 2003 caused the Prius to sell like hotcakes compared to the naysayers predictions of doom. Here is an article from the investing and market perspective from a guy who worked internally for Toyota in 2003 -2004 as a spreadsheet jockey in market research. He compares the initial market reaction to the Prius as an insider and how it accelerated through the next ten years to become a top ten seller in the US despite price.

http://www.minyanville.com/sectors/consumer/articles/The-Tesla-Model-S-is-the/5/16/2013/id/49843?camp=syndication&medium=portals&from=yahoo

 

I have driven the Model S, if one has not, or lumps it in with the Volt Hybrid or poor performance low range economy class cars, at full size sedan prices, like the Leaf, they have no clue. And until I drove it, honestly, neither did I! MY decision to sell a tiny block was in no way any worry on my part. My income is such that a tax credit would do m e no good unless I make a profit, and since I want a Smart Electric with the Tesla drivetrain/system, and can drive one in September when they arrive for sale in Dallas, I decided to take off enough for that and leave the bulk of my shares to ride to the top.

 

I told you all that this was my first time buying an individual stock, as I do Funds for the pro managers at USAA for my savings and have gotten around 6% with them averaged out.

 

Anyway, amateur that I am, I was astounded that my offer was snatched up within a second! As I made the change and then checked back to the original page and it was there before I could click! So what am I doing with it? At .3% interest in savings and all other not liquid, it will sit in my account ready in case I get a buy opportunity at a lower price. I have seen Tesla rise and drop 20 bucks in a week. If it does not drop and makes predicted 100-200 prices, then I will take that money and buy my Smart Electric for my first EV. But I will be first to admit a lot can change in four months. Space X might IPO. I have enough cash to do even more than I did originally with Tesla available now.

 

I now understand the feeling of taking a big profit and the original investment off the table and still play with a lot of the house's money.

[RV_]

Wow! And I thought I did well? I am in some pretty exalted company.

This very short article from the WSJ Market Watch.

 

Who bought Tesla ahead of the massive short squeeze?

http://blogs.marketwatch.com/thetell/2013/05/16/who-bought-tesla-ahead-of-the-massive-short-squeeze/

 

[RV_]

OK I am playing with their money now and still own a lot of shares by my standards. This has not been an exercise, nor a play investment on paper. I have detailed all of my information and sources from 2011 when Cindona started this thread. I had no experience in investing in individual stocks. Still only have one. I wish we still had the posts here from 2005 because that was the only time in my life before Tesla that I was going to put 30k in Apple at $55 when they announced they were going to Intel chipsets and boards. So just knowing the company, and the technology and seeing where it would lead has twice overcome all the expertise in in vesting of all but those of us who saw it before anybody else did. That is not luck. I am staying in with my remaining majority of my shares with Tesla.

 

I am not gloating. I saw it and told everyone here what would happen and when and it did. None of it was a secret. That it was executed so well and on time surprised a lot of folks. That I am excited anyway is no surprise to me either. I said that until I sold I did not make or lose money. I took out just enough to say I got my original investment and only an additional 25% more of it back to leave as many shares as possible in play, and will continue the fun ride with Elon and friends. I have almost the price of a Model S left in at today's close of 92. Then when it IPOs, SpaceX! Solar City never got me excited as Tesla or Space X, but it has already done well and now has financing for their installations.

http://money.cnn.com/2013/05/16/investing/solar-city-goldman/index.html?source=yahoo_quote

 

It would be beginners luck if I hadn't said the same thing in 2005 about Apple, even if I did chicken out. If I ever feel this strongly I will likely do it again. SpaceX is the only one right now that interests me and Musk retains ownership outright.

Edited May 17, 2013 by RV

[Jack Mayer]

So Derek, since you are thinking of the electric smart do you know what the range will be in it? The Tesla range is impressive. But my understanding of the smart range is that it is very limited...

[RV_]

Jack,

I will test drive it and may not like it regardless of range. I understand it gets 107 mpge, but only 69-79 miles of range. I will also check out if that is a median or best stretch figure. My daily round trips are rarely more than 50-75 miles total. If Tesla tanks again between now and then I may be using the money to buy more stock. I am looking for real world reports before I get to actually buying. Gas EPA mileage estimates never were what I got. I am not committed. But I am in the market for another new car, and may just end up with a last gasser until the consumer priced Tesla comes along in three years or so. They are also talking buying the car for $17k or so and leasing the battery for $99 a month. Or the car can be leased for $199.00 total per month. Again, I am looking for immediate gratification and won't be at a job 8 hours a day with a possible outlet to charge while I work, it may not be the car for me. But it will be for many. I am also downsizing my truck. For the first time since early 1997 I will not have a Dodge/Cummins diesel truck. But I no longer tow, and a small weekender can be towed with a gas half ton. I really don't need the hauling capability past a short bed half ton anymore. And gas is still much cheaper.

[RV_]

Here's a good article from Bloomberg from last Tuesday with the latest on pricing and leasing the Smart ED.

http://www.bloomberg.com/article/2013-05-14/aEn2xcNwuqRE.html

Edited May 17, 2013 by RV

[RV_]

I hope somebody read my post #419 and read the link I posted there yesterday about Solar City getting financing from Goldman Sachs for installs. It was at 35 bucks after a 9% bump. Today when everybody else read it, it went from 35 to 45 a share. Like a dummy I missed the fact that I had my original investment with Tesla, plus $5k over that amount so I can say I made a profit regardless, and could have made over $10k overnight had I parked it there, instead of letting it sit as a cash balance overnight in my investment.

 

I made a great decision to sell a small piece and keep most of my Tesla stock as it is stable at 90-91 now.

[Neo/Russ]

Derek,

 

Did you read this story? http://blogs.wsj.com/moneybeat/2013/05/17/one-man-bets-it-all-on-tesla/?mod=e2fb

 

Another success story like yours.

 

Russ

[RV_]

Wow!

Thanks Russ. No, I had not read it but I know how he feels. We feel the same way about Tesla. Very much did the same except I used money other than main funds. Lots of us out there helping a little each to help make it happen.

[Neo/Russ]

Derek, Here's another one for your upcoming book: "How I made my fortune investing in Tesla" .......Russ Tesla pays off $465 million U.S. loan nine years early

Justin Hyde

By Justin Hyde | Motoramic – 5 hours ago

 

Elon Musk may not be Tony Stark, but he's doing a credible impersonation of Lee Iacocca.

 

The co-founder of Tesla Motors set another milestone for his electric car company today by making a final $451.8 million payment on the $465 million loan from the U.S. government — nine years earlier than scheduled. The massive payment came courtesy of a stock offering last week that raised $1 billion for the California automaker, made possible after it revealed its first quarterly profit. The move makes Tesla the only automaker to have paid back its Department of Energy loan in full — yet another talking point for Musk's EV drive.

 

Now comes the hard part.

 

It's fair to point out that other automakers received far larger loans from the Advanced Technology Vehicle Manufacturing program; Ford borrowed $5.9 billion, while Nissan took $1.4 billion, both for modernizing plants and vehicles to build hybrid and electric vehicles. It's equally fair to note both have far more resources than Tesla to pay back those loans and attempt to reap a similar victory lap to the one Iacocca made after paying off Chrysler's bailout early in 1983.

 

Tesla's pay-off marks a rare bit of good news for the Department of Energy program, which has seen its loans to Fisker and an Indiana start-up end in shuttered companies. When it was made in 2010, the loan gave Tesla credibility among private investors, something rival EV startups which couldn't get such backing were never able to generate.

 

“I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate,” Musk said in a statement. “I hope we did you proud.”

Whatever goodwill Musk can generate from paying the loan early will be needed on the hard road ahead; fighting to sell Teslas without dealers, raising revenues to make up for EV credits that added more than $60 million in the first quarter and developing the Model X SUV due late in 2014 and other models. Musk has already warned that Tesla won't make a profit this quarter, and other luxury automakers have begun to take note of his success. Running an automaker is like managing a nuclear reactor; it's a powerful machine at full strength, but a few small mistakes can lead to a meltdown. Just ask Lee Iacocca.

 

Edited May 23, 2013 by Russ Barnes

[RV_]

Wow!

Thanks Russ! I made a lot but no fortune!

 

Musk also announced that there will be Model S sedans at half the price within 4-5 years. That in addition to the expected announcement of 500 or 100 mile ranges next. We know at least 500 but that announcement got stopped because of a breakthrough of some sort. I bet he announces Metal Air battery tech but we will see in the next month. I also expect him to announce a vastly larger free charging system already across the US on at least one East-West Coast to Coast route, and one North-South on each Coast within the next six months. This is happening. A by product will be a faster than expected decrease in demand for gasoline and diesel in the private markets. In turn that should drop the price for RV fuels. If not then we are being taken for another ride, and know what? I know a lot of folks that will believe their press.

 

Musk is already the enemy of the anti Obama movement. You know the folks who are for business and enterprise as long as it does not create competition for them? Now I will say another thing many here will not believe and chalk up top my being a greenie which I am not! I am a greedy and tired of 4 dollar fuels from oil that are artificially priced.

[RV_]

Cindona,

When Tesla was down you asked me about it. It closed at $110.33 and went to $111.80 after hours today. Whatcha think?

 

The short squeeze ratchets up. I hope none of my friends here shorted it. I never doubted, and drops were just buying opportunities. The fourth US car company has arrived and EVs are here to stay!

 

Next be ready for those charging station surprise announcements soon, as well as 500 mile or more ranges.

Edited May 29, 2013 by RV