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InvisibleFerris
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Altria, Phillip Morris, and Cigarettes
    #8463792 - 05/30/08 01:35 PM (15 years, 7 months ago)

So, as you should all know, Altria has always been a solid choice for a consumer staple stock (and in case you didn't know, they just split their International stock and Domestic US stock MO/PM respectively).

Well, this moron has this to say, and everything I know makes me want to call him an idiot, but I was wondering if there might be a shred of truth to what he says.  What do you think?

Quote:

Everyone is so freakin' obsessed with how Altira Group is going to clobber the market in the next year because they were 50$ more than now just recently. I don't care about all of that stuff about how this dang stock is undervalued and will go up by 100% or something stupid like that. Altira Group isn't under valued now, it was simply just hugely over valued before! This stock might go up in the long term but I'm dubious. This stock is a risk! I had this stock once and do you know how much I made off of it in a month? 1.13%. And I bought it at 22 freakin' dollars! Altira Group has been and will continue to be over valued. Not because of it's price anymore but because of it's certain "potenial". I say you guys are loony. This stock probably will go up but it's not going to be by 100%. This is why maybe my target price is what it is; because Altira group can't do nothin'. They're a smoking company to and do you think that Obama is going to put up with that when he win's the election? Oh, I'm sure that he can't ban it but he'll definitely make a dent sending Altira Group plunging like a diver into a pool. They'll go up for you if you buy them at the right time but man, it's a huge risk!




My immediate comebacks would be that A, it's a recession and people smoke in a recession; and that B, luxury taxes are regressive, which is usually a conservative policy (but maybe he's right in some other aspect?).

BTW, my e-stocks are up 12% since I started them April 1 :grin:


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Invisiblememes
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Re: Altria, Phillip Morris, and Cigarettes [Re: Ferris]
    #8463991 - 05/30/08 02:38 PM (15 years, 7 months ago)

I dont' know much about the stock market - but based off the quality and content of his sentences... I wouldn't worry too much about it. Educated people can usually get the point across in much better manner than he attempted.

I'm about to start my investing journey here in the next couple weeks. I've been interning and will be generating ~$3,000 worth of income this summer. I plan on investing almost all of it.

Any recommendation on where I should open my account?


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InvisibleFerris
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Re: Altria, Phillip Morris, and Cigarettes [Re: memes]
    #8464012 - 05/30/08 02:44 PM (15 years, 7 months ago)

I'm probably the wrong person to ask to be honest. I just started paying attention to investment in hopes that I might one day have some money to invest (I do have a couple real stocks and bonds, nothing much).

I started an account on updown.com so I can get a handle on the market without losing real money. My longterm is doing great, but my day-trading account didn't do so hot, but I started a new one and it's progressing nicely so far.

If you don't want to spend the time learning your way around, maybe you should look at a mutual fund (or some other collective investment scheme), mixed with like a cd, or bond or something that you can just throw your money at and expect a certain return. Once you build up a nice stockpile of mula, look into real estate


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Invisiblememes
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Re: Altria, Phillip Morris, and Cigarettes [Re: Ferris]
    #8464034 - 05/30/08 02:51 PM (15 years, 7 months ago)

yeah - I was leaning towards mutual funds since I don't have the time to actively manage a portfolio.


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OnlinegeokillsA
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Re: Altria, Phillip Morris, and Cigarettes [Re: Ferris]
    #8465208 - 05/30/08 07:58 PM (15 years, 7 months ago)

I don't use tobacco, but I own shares in both Altria (MO) and Philip Morris (PM).  As for the quote you provided from the "moron", I just can't wrap my head around investors like him, who would scoff at a 1.13% monthly gain - as if any stock that doesn't catapult overnight isn't worth one's time! 
LOL, he can be as reckless as he wants... it ain't my money!  :flowstone:

A 1.13% monthly return is better than 13.5% annually (not even considering the robust dividends both of these stocks pay out), which is damn good for any company, let alone a company flush with cash, no debt, an addicted customer base, a handsome and stable cash dividend, pricing power (MO just raised the price of domestic cigarettes by 9 cents a pack), and significant opportunities to take market share overseas (for the PM side of things). 

While Mr. "moron" is probably correct that companies like this aren't likely to show you huge gains, he is totally neglecting to consider risk/reward ratios.  Though the reward on a stock like Altria and Philip Morris may not be as great as the reward on high growth stocks such as First Solar (FSLR) and Potash (POT), the risk is also significantly less that those high growth names, which can literally cause one to lose their shirt if they are not responsible and diversified. 

I contend that a diversified portfolio needs stable, steady income dividend paying stocks such as MO and PM.  Contrary to the paranoia about Obama adversely affecting cigarette companies, I don't think Obama is going to have any affect on these stocks.  If he were talkin' about healthcare stocks, I'd sing a different tune, as Obama will probably create some commotion akin to Hillary's socialized healthcare plan, and that can indeed move a stock... but a cigarette stock?  Not bloody likely!

Incidently, if you are interested in more analysis pertaining to my holdings in PM and/or MO, search this forum for posts containing the word "Altria" or "Philip Morris" by geokills, you will receive numerous entries from my Stocks thread where I detail every buy and sell investment decision I make.  I also tried to make the first post in that thread good for outlining a strategy for beginning investors.  Your mileage may vary...

To meams: open up an IRA, a Roth IRA if possible.  You'd be a fool not to, as the tax advantages are free and the account itself will otherwise be no different than a regular investment account without the tax benefit.


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Invisiblememes
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Re: Altria, Phillip Morris, and Cigarettes [Re: geokills]
    #8465495 - 05/30/08 09:02 PM (15 years, 7 months ago)

I was planning on opening a Roth IRA, but I ran into a hurdle.

The Internship i'm at right now doesn't officially pay me - it gives me a $300 'stipend' per week. I haven't filled out any tax forms, and I know you can only put wages into a Roth IRA. If i can still do it - then i will, but i'm going off the assumption that my money isn't applicable


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InvisibleFerris
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Re: Altria, Phillip Morris, and Cigarettes [Re: geokills]
    #8465530 - 05/30/08 09:11 PM (15 years, 7 months ago)

Thanks for the detailed answer Geokills :thumbup:

I'm off to the search function.

I already scoured through the stocks thread a couple months ago, but I think it may be worth a re-read as I think I may have failed to retain some of that monolith of a thread :doh:


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InvisiblePrisoner#1
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Re: Altria, Phillip Morris, and Cigarettes [Re: geokills]
    #8467598 - 05/31/08 02:52 PM (15 years, 7 months ago)

Quote:

geokills said:
considering the robust dividends both of these stocks pay out





look into having your dividends payed in stock, watch how your portfolio grows


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OnlinegeokillsA
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Re: Altria, Phillip Morris, and Cigarettes [Re: Prisoner#1]
    #8468076 - 05/31/08 05:19 PM (15 years, 7 months ago)

Dividend reinvestment, indeed.  :thumbup:

In almost all cases, that is the way to go; and my own portfolio is setup to automatically re-invest all eligible dividends received.

So far as your contributions to the Roth IRA - are you sure that you have to use "wages" to contribute?
That seems a little weird, but I'll admit I don't know everything there is to know about this stuff.
If you could provide a source regarding your concern, I would appreciate checking it out!

I just implemented an electronic fund transfer from my bank account, to my IRA account at Ameritrade... twice!
I was never asked to provide information regarding where that money came from?


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InvisibleVeritas
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Re: Altria, Phillip Morris, and Cigarettes [Re: geokills]
    #8468101 - 05/31/08 05:28 PM (15 years, 7 months ago)

Your contribution to a Roth IRA is limited by the amount of taxable compensation you've received.

Quote:

Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. It also includes commissions, self-employment income, and taxable alimony and separate maintenance payments.

...

If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of:

* $4,000 ($5,000 if you are age 50 or older), or
* Your taxable compensation.
IRS.gov





Those who have no taxable compensation, or whose income exceeds the annually-establshed upper limit, may not contribute to a Roth IRA


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