Another day, another unprofitable IPO to come to market - Pandora Media ( P ). The sales pitch for these kinds of companies is always about the size of the opportunity. You've got to love that - pay hundreds of times profit estimates today for something that may never come tomorrow! The talking heads will be all over this story today. It really is amazing how valuations work in the tech world. You're actually better off from a valuation standpoint if you don't make any money, because investment bankers can just pull a giant arbitrary number out of thin air and slap it on you.
Amazon ( AMZN ) was one of the few heralded names that continued to see losses post-IPO and eventually found their groove. But for that one Amazon, there are hundreds, if not thousands (pre/post IPO) of tech plays that never reached their supposed potential. The hype comes and goes. Investment bankers are always ready to find the next can't-miss story to shine up for investors.
Looking at today's down action, home improvement names Home Depot ( HD ) and Lowe's ( LOW ) traded lower on a negative analyst call. Financials stumbled, led by J.P. Morgan ( JPM ), Metlife ( MET ), and Prudential ( PRU ). A couple of big movers from yesterday, J.C. Penney ( JCP ) and Lorillard ( LO ) gave back some of yesterday's pop. Oil prices plummeted, hurting names like Chevron ( CVX ), Exxon Mobil ( XOM ), and Schlumberger ( SLB ).
Earlier today, we removed two dividend stocks from our recommended list. We will continue to avoid being complacent when it comes to having the Best Dividend Stocks for investors looking to commit capital to work. Be sure to check out the full article detailing the downgrades if you haven't already.
Public disdain for the stock market is still front and center as you can see from the recent pullback, but the gains continue to be there for the quality dividend plays we have been recommending on our "Best Dividend Stocks" List . Acquiring assets (dividend stocks, real estate w/ positive cash flow, businesses) that produce income are essential if you are going to achieve wealth and financial security. Look at the group of people who you are around on a daily basis. Are they looking for opportunity, or are they sitting there waiting for things to happen? When you talk about investing, do they tell about how many bills they have, but then five minutes later show you their designer handbag? Your peers will have a profound effect on your own mindset. Sometimes you need to branch out and engage with a new set of people who have similar interests. Just something to think about!
Let's wrap up our recap of a series of articles we ran a while back highlighting different investing anecdotes. Here are strategies #21-25.
Investment Strategy Anecdote #21 - "Anything can and will happen in the markets."
Who would have thought we would have seen a General Motors ( GM ) bankruptcy? The stock was a fixture in many dividend portfolios. This event is clear evidence of why you can't just put your portfolio on auto-pilot and think it will manage itself. You should be checking out your holdings at least once a month and make it a goal to put money to work on a consistent basis.
Investment Strategy Anecdote #22 - "The stock market does not follow conventional wisdom."
Boy, I'll say! There will be times that large caps dominate and conservative investing works best, but then there are the go-go times of Internet stocks mania - when companies made no money but had insane valuations. We'll be sure to keep our subscribers on the steadier path to wealth building.
Investment Strategy Anecdote #23 - "There are continual opportunities in the market."
Without question! There are always areas that you can commit new money to, even when the market looks its most scary and volatile. Our recommendations go through numerous checks, so that our best dividend stocks list is always up-to-date for investors considering new capital to put to work.
Investment Strategy Anecdote #24 - "There is way too much information and very little good information."
I have always said this and still do. There are some great services out there, and there is nothing wrong to subscribing to multiple sources, when it comes to stock research. Think of it as an investment in your continuing investing education. Just stay away from the chat rooms and advice from your friends/relatives on "hot" stocks (almost always a penny stock that they hear about from somewhere).
Investment Strategy Anecdote #25 - "The market can be irrational longer than you can be solvent."
This statement refers to investors that take it upon themselves to draw lines in the sand on a particular stock or investing style. There will be times when someone decides to let his/her discipline slip away, which inevitably leads to portfolio blow-ups. Avoid jumping on the margin bandwagon. The lure is there for all, but don't ever play with money that you don't have, or can't get back if you need to.
Thanks for reading, and I'll see you tomorrow! P.S. Please pass this e-mail on to someone you think can use some financial motivation as well as being kept in the financial news loop that could affect them. Thanks again!
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