Stock-Age: Stocks, Options and Dividends oh my!

So I'm thinking of buying Nintendo.

This is their last financial report:
http://www.nintendo.co.jp/ir/pdf/2011/110728e.pdf

As you can see on page 4 they have approximately 1,040 trillion yen in cash and short term investments. Their market cap is 1,7 trillion yen according to bloomberg (http://www.bloomberg.com/apps/quote?ticker=7974:JP).

This means you get the business for 1,74 - 1,040 = 0,7 trillion yen, which in dollars is $9,08 billion. This makes Nintendo less valuable than Activision Blizzard (which has an enterprise value of 10.22B according to yahoo finance).

(Please correct me if I'm wrong in my calculations)

What do you guys think?

PS: Ah shit I didn't see you were already discussing Nintendo.
 
Javaman said:
Why would you hang on to your stinkers and sell the winners? That's backwards.
Click to expand...

How do you make money from the stock market (dividends not included) if you only sell stocks you've lost money on?

Large Professor said:
So I'm thinking of buying Nintendo.

This is their last financial report:
http://www.nintendo.co.jp/ir/pdf/2011/110728e.pdf

As you can see on page 4 they have approximately 1,040 trillion yen in cash and short term investments. Their market cap is 1,7 trillion yen according to bloomberg (http://www.bloomberg.com/apps/quote?ticker=7974:JP).

This means you get the business for 1,74 - 1,040 = 0,7 trillion yen, which in dollars is $9,08 billion. This makes Nintendo less valuable than Activision Blizzard (which has an enterprise value of 10.22B according to yahoo finance).

(Please correct me if I'm wrong in my calculations)

What do you guys think?

PS: Ah shit I didn't see you were already discussing Nintendo.
Click to expand...

Wait, you think someone will buy Nintendo out?
 
Absolutely not.

But it's a way of valuing a business: subtract the cash (and cash equivalents) and add the debt to the market cap.

Suppose I had 22 billion laying around, I could buy Nintendo, then give their cash back to me, and in the end the company would have cost me only 9,08B.
 
Jazz Pharmaceuticals up 15% today!!! And they are still considered a cheap buy by many.

Another down day, only stock that has saved me. Earnings reports are killing the market.
 
Couple stocks are starting to look cheap if Congress can get its act together. Illinois Tool Works under $50 seems pretty juicy. Pretty ridiculous that they are down about 10% after raising full year guidance, even if they slightly missed this quarter. Guess it's a bad time to miss earnings. Waste Management is looking pretty cheap, too. Same with ADP. Wish I had a lot of money sitting around atm =/
 
StMeph said:
I feel like that's a bad way to view your money. Studies have shown that people tend to be willing to risk more when it's money they've won from the house, but I wouldn't consider it the house's money -- it's *my* money.

Let's be generous and say you're up 100% on a position. If you sell half of it to recoup your initial investment, but the remainder of the investment tanks in value to near 0, you didn't not lose anything, you did in fact lose money. It was yours -- you had it -- but instead of being up 100% on that position, you broke even after commissions.

Obviously risk exists everywhere, and there's no guarantee to what would have happened if you did/didn't move your money, but it's about the way you perceive that risk. Just because you're re-investing gains shouldn't change your tolerance for risk.

As for buying other stocks cheaply, that's just something you have to balance in your portfolio. Is exiting your position to invest elsewhere a better play? Does the projected growth now no longer justify the risk? Are you doing it to diversify? Those are legitimate reasons. Doing it because it's "free money" is bound to lead to suboptimal decisions, because you're not treating gains like your money. It is totally your money.
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I mean you make good points I think maybe I just came off wrong. I mean i would always buy a stock where I believed in the fundamentals of the company and can see potential growth.


However, for example lets say I'm up 100% in Nintendo. With everything going on in the economy right now I think its going to bring down stocks...no matter how good the company. I have no free cash either but I would like to buy

1. More Nintendo
2. Another stock who i believe will go up

If it were me...I would sell 50% of my nintendo shares to recoup my original investment. Then I would buy more stock in Nintendo as prices go down.

This is of course if you:

1. dont have free cash
2. think the market is going to go down

I'm not saying just sell half and play with the houses money..."Oh well no big deal if I lose it". Im just saying you could be smart about it and free up some cash and use it to buy more as stocks go lower.
 
The markets are swinging wildly today. DJI started +120 and now we are -120.

A debt deal may have been reached, but investors are not optimistic.
 
So, I am leaving Raymond James via transferring my entire portfolio to my Vanguard account. This comes after RJ wants to charge me $450 to sell a stock worth ~$8,000... they also charged me close to that to purchase said stock several years ago. They said this $450 was already a 10% reduction from the cost it would have been since I've been a client for several years.

It's safe to say, I've been getting rooked for no good reason. In their email, they stated that their expertise and experience is where these extra costs come from, but unfortunately for me, I've never used them for anything more than simple buying/selling. Total joke. There's a fee to close my account of course too, but fuck it, I'm paying $40/year anyway just to have the "privilege" of keeping an account with them.

I'm sitting here pissed the fuck off that I wasted so much money for so many years.

To greener grass!
 
I just started an account with Fidelity today, and my intention is to put a decent lump of money that has been sitting in my savings account (I still have a nice backup, this isn't everything) into an index fund for hopefully a few years.

But uhhhhhhhhhhhhh.... should I try to wait out this debt ceiling tom foolery?

PRESUMABLY if the vote passes tonight, the market should mostly be relatively in the clear, right?

Nothing like joining the exciting world of stocks like putting a bunch in and suddenly having the market dive 40 points.
 
meltingparappa said:
I just started an account with Fidelity today, and my intention is to put a decent lump of money that has been sitting in my savings account (I still have a nice backup, this isn't everything) into an index fund for hopefully a few years.

But uhhhhhhhhhhhhh.... should I try to wait out this debt ceiling tom foolery?

PRESUMABLY if the vote passes tonight, the market should mostly be relatively in the clear, right?

Nothing like joining the exciting world of stocks like putting a bunch in and suddenly having the market dive 40 points.
Click to expand...

It's a tough time to buy right now. We're looking at a potential short-term sell-off or big run-up, but who knows which it'll be. Timing the market is generally a bad plan though, but you can buy in slowly over time. So, instead of spending $10,000 on one fund today, spend $2,000 today, $2,000 in another week (or month or whatever time frame), then another $2,000 and so on... it's a well-known investment strategy known as Dollar-Cost-Averaging.

Basically, if you have a fund you're really interested in, go ahead and buy it, just don't feel obligated to use 100% of your investment money at once.
 
What? They were charging you hundreds of dollars to buy/sell stocks??
 
SlipperySlope said:
All us holders... let's have a group therapy session. Things are going to be rough the next 12 months. The Bears will be winning.
Click to expand...
Perhaps. I think stocks will continue to be very volatile. I continue to add on these large dips. If it doesn't come back immediately then my dividends just reinvest at a better rate. Corporate profits remaining high should continue to support bad economics as we drift along.
 
Ether_Snake said:
What? They were charging you hundreds of dollars to buy/sell stocks??
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COOL in specific was terrible because they charge more per share traded, and I bought a ton of shares around $1.00. Most transactions were sub-$100, but still way too expensive.
 
StMeph said:
So be a bear. Act on your convictions.
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I don't have what it takes to short stocks and what not to be a bear. I'm a buyer and holder.

My goal right now is to wait until the markets drop below 10K, then start buying. I lightened up some in the last 6 months (some by choice, some because the company got bought). I'm currently at a 25:75 cash:stock ratio.
 
So, I've submitted the forms to Vangaurd to transfer from Raymond James and Associates. Expensive fucks.

Considering selling a few of my modest winners in the 20-60% gain range and hold on to that money to buy some attractive stocks as the market (potentially?) continues to drop. On the other hand, I'm considering selling everything I own and putting it all into VWEAX, having the dividends auto-reinvest, and retiring at 50.

Tempting.

EDIT: Yeah... gold is a beast.
 
Large Professor said:
I sold at $1615 Thursday because I was expecting some kind of relief rally after a debt deal. Bad timing..
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i sold my silver and gold etfs on monday thinking the same. i swapped into equities, thinking they would bounce higher on the deal, whether it was good or not. obviously so far i've been wrong. i did make money on the metals, but lost a good bit today.

i'm trying to think how i could have forseen the market dropping today, other than just being a total contrarian and getting lucky. so far i got nothin...

sometimes it really does feel like wild gambling.
 
Bought $4K worth of IAU yesterday expecting the market to scoff at the 'debt deal'. Currently up 2% on the investment.

Other interesting stocks ..

GLD - up $3.80 --- 2.41%
SLV - up $1.53 --- 4%

Not sure when the commodity market will get back to normal levels.

Also .. yesterday was the perfect day to buy FAZ, made 8% today. Highly volatile ETF that has made and lost me a lot of money.
 
snack said:
It sure has. I'm waiting the market to rebound. C'mon...
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Might be some time. The debt deal does nothing for unemployment. As long as we get lackluster reports on job growth, the market will continue to go down.
 
Large Professor said:
I sold at $1615 Thursday because I was expecting some kind of relief rally after a debt deal. Bad timing..
Click to expand...

Gold at $1657 an ounce now and silver at $40.70. The debt ceiling going up means that QE3 is on the way, and that means higher prices for gold and silver. I feel sorry for those of you that sold, the boom is just about to happen and it seems like some of you checked out early. The stock market is bombing while precious metals continue their climb, and expect more of the same with precious metals. When QE3 hits stocks will probably jump back up until we get our true economic collapse, time will tell, but the metals are a sure bet right now, and central banks are stockpiling gold.
 
I bought GLD at 150 (tracks the price of gold, so it's currently at 161) and am planning to hold it for a year, regardless of how it moves.

For the rest, I expect oil to fall as I've said many times over the past few months, because oil is choking economic recovery, and it doesn't have to go as high as it once did to hurt because the economy is already weak. The recent attempts to lower oil prices by tapping reserves was an indication that governments know this is a problem, but in a parallel universe where they actually try to restart the economy they would have prevented anyone from buying only to hoard it and sell it when prices go back up, which is preventing oil prices from falling as much as they should, and they would invest seriously in renewable energy and infrastructure.

So I don't plan to do much, I don't want to purchase much again, I have little faith in the economy because the fundamental issues remain entirely there. Western governments are hoping that austerity measures will help make them more competitive but unless we see a dramatic rise in wages, standard of living and the yuan, in China it won't be enough and we'll just have anemic growth or none at all. And since they are not spending on renewable energy and infrastructure, we are basically all playing the waiting game with no job creation in sight nor an escape from what is shackling the economy.

At least I'm glad I sold a lot of stuff over the past few months, but I regret not having sold more aggressively as I had told myself I would.

I gotta follow my instincts more.
 
Market Update:

Asia:
Nikkei: -2.11%
Hang Seng: -1.91%
ASX 200: -2.27%

Europe:
FTSE: -1.08%
DAX: -0.82%

US:
Previous Close
DJIA: -2.19%
Nasdaq: -2.75%
S&P: -2.56%

Futures:
DJIA: +0.42%
Nasdaq: +0.44%
S&P: +0.52%

Hold on to your gold and silver investments. We're in for a bumpy ride.
 
unomas said:
Gold at $1657 an ounce now and silver at $40.70. The debt ceiling going up means that QE3 is on the way, and that means higher prices for gold and silver. I feel sorry for those of you that sold, the boom is just about to happen and it seems like some of you checked out early. The stock market is bombing while precious metals continue their climb, and expect more of the same with precious metals. When QE3 hits stocks will probably jump back up until we get our true economic collapse, time will tell, but the metals are a sure bet right now, and central banks are stockpiling gold.
Click to expand...

I think you're right. I just bought back my position (and missed about 4% of the gold rally).

I'm still heavily interested in Nintendo though. I hope it will drop further.
 
SlipperySlope said:
I don't have what it takes to short stocks and what not to be a bear. I'm a buyer and holder.

My goal right now is to wait until the markets drop below 10K, then start buying. I lightened up some in the last 6 months (some by choice, some because the company got bought). I'm currently at a 25:75 cash:stock ratio.
Click to expand...

Shorting is extremely risky, and if you aren't interested in handling that kind of risk, you can be a bear by trading options. Put options are effectively the same bet as shorting without the same loss potential.
 
Large Professor said:
You're using a lot of leverage or?
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Yep invest 200k instead of the 100k, losing a few thousand throws margin calls.

Market rebounded and I'm alright, as it keeps doing, but I'm pretty sure the bottom hasn't been rached.
 
I don't like how volatile UBI has been. Seems like investors have little confidence in the company. They are almost in the 4 euros. Seems a bit excessively low, they weren't at such levels since 2004. In 2004, they were releasing Prince of Persia: The Warrior Within. Ubisoft HAS to be worth more today than it did back then.
 
Large Professor said:
I think you're right. I just bought back my position (and missed about 4% of the gold rally).

I'm still heavily interested in Nintendo though. I hope it will drop further.
Click to expand...

Yeah, I think Nintendo will continue to drop quite a bit, with the 3DS pricecut and the Wii losing it's steam the numbers seem to be down.

I'm glad you bought back in on gold, we raised the debt ceiling, and no country in their right mind is going to continue to buy our bonds knowing the crisis we're in; so ultimately QE3 is the only choice, and I wouldn't be shocked to see it "announced" within the next month or so. At this point I can't believe that people would bypass gold and silver, the central banks loading up on gold should tell everyone that they know the price of gold is going to continue to rise, and that's why they're buying it by the truckload.

When QE3 hits we could see a spike back in the market though until things really fall apart.
 
Some of you seem to have low risk tolerance. Maybe you should choose funds that perform worse long term but fluctuate less in purchasing power? May be better than buying mid-high and selling low constantly.

Absolute worst case save for nuclear war is the United States defaults in a few years with very bad decisions on what to cut and who to tax. Your portfolio shouldn't be more than 50% domestic. Markets globally go down about 40-70%. But in 10-15 years they'll be back to their 9% average annualized interest (or 6% real return). I'm not feeling any pressure from this. If I have a job in this scenario like I did in 2008, I'll increase my rate of investment in stocks and ride the inevitable wave.

But this isn't likely. If the US keeps being reckless they'll get downgraded before debt can exceed 150% GDP and the US will continue to be less of the global economic pie.
 
Large Professor said:
A lot of stocks are down huge time.

This is ugly.
Click to expand...

QE3 in 3....2.....1.....

Physical metals are the only way right now, the stock market is anything but a sure bet in this type of economic environment.
 
Scott32020 said:
Silver down over $1 now though :(
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It's actually down almost $3 in the last hour which is just a joke, and that's why it's best to own physical and not paper in the metals markets. Gold will maintain a solid position no matter what, the central banks aren't loading up on it because they think it will tank, gold will rise from this. The other markets like Asia will pick up the slack this evening and buy in at these prices. It doesn't help though that Italy is having major problems right now.

Also, this will be an excuse for QE3, I guarantee it. They will say see look, if we don't pump money into the system it will fail, but in the end it will only make things worse. Collapse is imminent, maybe not immediately, but it's definitely coming.
 
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