I am very new to the board and I am enjoying the process of learning to invest. I wasn’t planning on posting so soon but I had an interesting phone call yesterday. I was solicited on the phone by the Templeton Inv. Grp to consoder trading in gasoline options.
I have absolutely no experience in this area and thought I would query the board. Please feel free to offer your experience in gasoline options and or Templeton.
Please feel free to offer your experience in gasoline options and or Templeton.
If they call back hang up on them.
Stick with what you know, maybe GOOG, FB, ULTA, PCLN…
Shares and maybe learn about leap options.
Works for most of us.
JT
I have absolutely no experience in this area
You answered your own question!
Seriously, I completely agree with JT. I have had way better results not only
but even
For more on this, if you’re interested:
http://discussion.fool.com/quotit39s-so-cheapquot-is-not-an-inve…
Welcome to the board.
Bear
Hi again, Eyelise17.
“I was solicited on the phone…”
That’s the first warning bell for me. I don’t think any purveyor of “safe” investments has ever tried to reach me by telephone. Telephone allows for a “hard sell”. The fact that you were contacted with a “cold call” signals “Strike One!” to me.
Now, “Templeton” is a well-respected name in the investment community. Sir John Templeton was an investor of some renown and he eventually merged his company into Franklin Resources, which is now called Franklin Templeton. Since you didn’t mention “Franklin”, I would assume that you are NOT dealing with the respected firm, but instead with a group trying to leverage the reputation of a respected name. That’s “Strike Two!” for me, but I’m making assumptions.
“… trading in gasoline options.”
I’m pretty sure Saul touches on options in his Knowledgebase. Have you read it yet, Eyelise17? Although it is probably obvious by now that he and I have different portfolio strategies, I respect his approach and agree that much of what he says is in his knowledge base is solid, wise, heart-felt advice. Try to find and read his take on options, but I’ll give you mine too. Options are like a power tool. If you’re an experienced craftsman, power tools are great. In the wrong hands, they allow irreparable damage to be inflicted quickly. In general, with options, your outcome requires that you properly assess the direction that an underlying security will take (or, in this case, commodity) AND the timeframe within which such a move will happen. Getting either right is difficult. Getting both right is arguably a matter of chance. The commodities markets are dominated by “insiders”. These people/organizations work in the industry and have a huge informational advantage compared to you. “Strike Three!”
To switch metaphors, the deck is stacked against you here. Your cold caller does not - at least to my mind - have your best interests at heart. Run the other way!
If at some point you want to learn about options, I’d suggest a subscription to Motley Fool Options. It is a relatively new service, as TMF - for the longest time - did not advocate options. They have a good learning section called “Options University”. I’ve read some of it and it seems well done (I’m not an options user myself, but I do understand the basic mechanics). But I’d look at options as an “advanced strategy”. Depending on where you are, you might want to concentrate on mastering the basics first.
Just my two cents.
Thanks and best wishes,
TMFDatabaseBob (no options positions, although I anticipate that - sometime in the next ten years - I’ll carve off a small section of my portfolio into a separate account and follow Motley Fool Options with that separate account; have I ever said anything before about “shiny new objects”?)
See my holdings here: http://my.fool.com/profile/TMFDatabasebob/info.aspx
Peace on Earth
I am enjoying the process of learning to invest. I wasn’t planning on posting so soon but I had an interesting phone call yesterday. I was solicited on the phone by the Templeton Inv. Grp to consoder trading in gasoline options. I have absolutely no experience in this area…
They should be ashamed of themselves soliciting a newbie investor to TRADE GASOLINE OPTIONS! My God! Who are they kidding!
Saul
The guys at the other end of the phone are probably setup like this:
I would suggest newbies are their target market.
35 years ago I was solicited by a local broker to invest in El Paso Natural Gas options. It was a cold call to my dental office. He was very persuasive and genuinely seemed to have my best interest at heart. All I needed to do was give him $10,000 and within a few months I could expect to double or triple my money! After all the oil patch was exploding with activity and stories of fortunes being made in a short period of time.
I was naive and very green to investing at the time. Well, as you can probably guess, within a few months my investment went to zero.
In hindsight, it was probably the best thing that could have happened to me. Entrusting a stranger with my hard earned money and seeing it disappear so quickly has protected me from ever being tempted to be so foolish again.
Bottom line, we all have investment scars we could share with newbies. We all started from the same place of ignorance and the confidence of youth. However, it gives me a great sense of satisfaction to see my investments in individual stocks over the decades enable my wife and I to enjoy a great lifestyle and to enter retirement with a peace of mind.
Thanks to all who share on this board. We are all better for it.
Jim
I have to assume this was not the real Franklin Templeton outfit but some disreputable entity borrowing the name for credibility.
But I will say it: this investor is manifestly not ready for the market. He is a greenhorn garnished with naiivity, wide open to all kinds of peril. Nor is this board the place for him at all.
He should on no account invest himself until he has read about value investing in depth and understands at least 30 terms and ratios used in fundamental analysis. The usual starting point is every one of Buffett’s letters to shareholders. At least a year’s work on the whole subject of value investing in equities. A dummy portfolio could be ‘invested’ in for fun meanwhile.
This is the dangerous stage of the market when it looks easy.
“I was solicited on the phone…”
That’s the first warning bell for me.
I couldn’t agree more. I dismiss all unsolicited requests as suspicious, and not worthy of my time. This includes at home solicitations for driveway sealant, roofing inspections, gutter work, painting, window cleaning, pest inspection, weed treatment…
Need I go on?
Nearly all solicitations require an action that disallows due diligence and comparison shopping.
But a random anonymous phone call? My action is to immediately hang up (assuming I even answered the call, which is rare if the caller isn’t expected or in my contacts list).
Run. Run fast. Run far.
I agree I am definitely green but honestly had no intention in investing in options, just curious as to the validity of this salesperson’s pitch and others like him. I am receiving more and more all the time.
I have had a financial adviser managing my investments for over twenty years. Over time I have acquired a foundation of knowledge on which to build. In fact I even started with Common Sense Investing one of the definitive books on value investing. I enjoy whatever I can find written by Jack Bogle. I also stream Bloomberg, Fox business, and the Wharton school.
I thought an interactive investing community would be a great addition to the process of edification. I’m a little surprised you feel I don’t belong on the board.
Hi Eyelise17.
Perhaps I shouldn’t speak for the poster who suggested you “don’t belong”. I don’t recall the exact wording that was used, but I think I do understand where that person was coming from. I think that person was trying to protect you from pain and loss, so I think (s)he was coming from a good place, even if the opinion was expressed a bit harshly. I hope any offense you took is mitigated by recognizing that person was concerned for your welfare.
For me, I don’t agree that you don’t belong - please accept my warm welcome - but let me try to summarize the thinking.
Saul is an advanced, experienced investor and his strategies have a straightforward component, but contain many subtleties. Maybe I’m generalizing my thoughts across too many people, but I think that many of the very experienced investors on this board understand the basics of what he does and could replicate those, if we wanted. I think that the more difficult component is the re-balancing and re-evaluating that Saul does. I think the “don’t belong” poster was concerned that an inexperienced investor would experience real difficulty trying to replicate Saul’s results and suffer frustration and loss in the process.
Furthermore, there is likely a recognition on that poster’s part that “temperament” is at least as important as “intelligence” and “knowledge” in investing. The types of stocks that Saul prefers are probably a bit more volatile than the market overall. These are not the “Procter & Gamble” or "Johnson & Johnson"s of the world. A severe downturn in a stock you’ve purchased is a disheartening event! “Temperament” is what prevents an emotional reaction to that event (whether greed or fear is the driving emotion). Only after “temperament” has been applied can “intelligence” and “knowledge” be used to attempt to discern the appropriate response. Even further, you’ve probably noted that my recent posts here have tried to distinguish “process” and “outcome”. Experienced investors realize that good process tilts the likelihood of a good outcome in your favor, but good process ENSURES nothing. Or, more specifically, it doesn’t ensure a good outcome. At best, you can hope that good process will yield more good outcomes than bad outcomes, or at least that the magnitude of your good outcomes will more than offset the bad outcomes.
As I often do when I encounter a new person posting, I try to listen for their voice and not just read their words. In your “voice”, Eyelise17, I hear intelligence, common sense, and intellectual curiosity. I also hear a good dose of caution. Because of those qualities, I DO think you belong. But I think you’ll need to continually apply ALL those qualities as you learn on this board and then - increasingly over time - share what you’ve learned with the board both as a way of testing it, and as a way of helping those following in your footsteps. NONE of us started out as experienced investors. At best, we had mentors who got us up to speed quickly. Through this board, Saul has offered himself up as a mentor. I think the broad range of investors who choose to listen and interact here says something about the depth of knowledge he’s bringing to the table.
So, while I agree that novices need to tread carefully when learning and trying to apply Saul’s methodology, I think “don’t belong” is far too strong. Instead, I think that novices need to recognize that there are underlying fundamental skills that need to be attained before trying to become the next Saul. These include: understanding the mechanics of investment, understanding what resources are available to investors to learn more about the companies that interest them, and trying to develop the temperament needed to be successful. If others can think of fundamental skills that I’ve omitted, please chime in - I didn’t give that list a ton of thought.
Another approach novices might want to take - when approaching any new investment strategy, not just Saul’s - is to work with the strategy on paper for a while, or using only very small sums of money.
Anyway, let me shut down this post before it gets too big and unfocused. I hope it has been helpful.
Thanks and best wishes,
TMFDatabaseBob (long: PG)
See my holdings here: http://my.fool.com/profile/TMFDatabasebob/info.aspx
Peace on Earth
TMFDatabaseBob,
Thank you for your thoughtful response, sage advice for sure. I do understand where Selna is coming from and plan to proceed cautiously.
I have had a morningstar account for several years and have 4 personal “paper” portfolios which I follow. I created a wide moat, ETF index, mutual fund, and just recently “short” stock. I’m trying to decide where my efforts are best suited considering of the amnt of time I can devote, level of comfort in terms of risk, and obviously returns.
I have found the discussions on the board valuable educational tool. I’m glad I joined the community.