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Ask a Stupid Question…

Have an investment-related question, and embarrassed to not know the answer? A question about what the heck Stock Gumshoe does? Today's your lucky day!

Have a question in mind that you think is so dumb you’re embarrassed to ask it?  That’s what we’re here for today!

This bonus post was inspired by a reader who wanted to know “where to ask a dumb question” here on Stock Gumshoe… and while his question was not actually stupid, and I’m happy to see questions pop up in our comment threads anywhere on the site, I thought it would be a great idea to open the floor and be more welcoming for the shy, the embarrassed, or, yes, even the uninformed.

So this is a no-judgement zone… smart people do things we’d call “dumb” all the time: Warren Buffett didn’t invest in Google in 2004, Albert Einstein married his cousin, and I just had to go back and double check that I didn’t call him Alfred Einstein (which I’ve done before, in print).  So if you have that question that you can’t ask your stockbroker or your brother-in-law or Twitter without feeling like a dummy, let ‘er rip by submitting it below.  I’ll be nice… and we might all learn something.

And yes, the SEC is always watching, so I must remind you that I can’t give personal investment advice… but I’ll try to share whatever opinion or answers I can provide to any investment-related question you’ve got, though if we end up with a lot of them it might take me a little while to answer thoughtfully.

So please, let your questions fly using the friendly little comment box below… and thanks for being the best readers in cyberspace!

(I will moderate the discussion just to make sure we don’t get too much profanity or offensive stuff, or personal attacks, but I’ll use a light hand — you can be mean to me if you like, just don’t be mean to any other participants.)

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Mike
Mike
May 18, 2018 10:32 am

Does anyone know if Dr. Singh Options is a scam

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William D Edwards
Member
William D Edwards
May 18, 2018 12:37 pm
Reply to  Mike

The broker will love you. Complex option charges. But the way I understood the webinars, he does all the work. Adjustments etc. he can say he has a great success rate, but how much does he lose when he does?

vtb250
vtb250
May 18, 2018 10:36 am

Awesome idea. I still don’t get crypto currency. Is there an idiots guide out there?

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Des
Guest
Des
May 18, 2018 2:28 pm
Reply to  vtb250

There is a podcast, Invest Like The Best, that has several crypto episodes. It is really informative but will (probably) require multiple listens.

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Bradley short
Member
Bradley short
May 18, 2018 10:40 am

Zach Scheidt teasing a marijuana stock that “could” be an investment target for Anheuser Busch. Any ideas which one?/

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Stevo
Member
Stevo
May 18, 2018 12:12 pm
Reply to  Bradley short

Yes! This would be Hiku. Started by former Google executive Alan Gertner. Alan ‘s business model is a triple threat as he will have growers, accessories, and retail outlets.

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Rinascimento
May 18, 2018 12:20 pm
Reply to  Bradley short

I guess it is Canopy

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oregon don
oregon don
May 18, 2018 2:01 pm
Reply to  Rinascimento

or Aurora, they just became bigger than Canopy

steveflick
May 19, 2018 9:45 pm
Reply to  Bradley short

Yes, Travis of Stock Gumshoe just had a discussion May 18, 2018 “Friday File: “Anheuser-Busch has their sights on one specific microcap marijuana company.” and as stevo says it is HIKU. suggest read more of Travis article.

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Paul
Member
Paul
May 18, 2018 10:40 am

Are SRB’s gonna take over the Dollar
Somewhere around July 1st 2018?

Is Gold going down?

Is the US dollar done as world currency?

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Chet
Guest
Chet
May 18, 2018 10:41 am

Zacks stock services is always teasing their highly rated stock pics – and for exorbitant fees. Have you investigated these gems or not enough clues? Or maybe you did already and I missed it?
Thanks

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toff
toff
May 19, 2018 4:04 am
Reply to  Chet

If you would like Travis to investigate a teaser, just send it to him and request he takes a look,. ilovestockspam@gmail.com. Since there are thousands of people writing though, and only one lovable Travis with his cranky Thinkolator, don’t hold your breath.

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neel99
neel99
May 18, 2018 10:42 am

So you sold 1/2 position of FB at $155 when it broke your stop loss point. Now FB is heading to where it was, are you adding it back?

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SQuinn
May 18, 2018 10:43 am

I am age 66, on SS, no savings, 0 risk tolerance, just inherited $200k. Does an ATHENE non-spousal inherited IRA/annuity make sense?

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Hugh R.
Guest
Hugh R.
May 18, 2018 12:37 pm
Reply to  SQuinn

If you have not done so go to a local Fidelity, Schwab, Merrill Lynch, Morgan Stanley or UBS PLEASE visit them first. They will put together an actual plan first before you buy something with a 7 to 12 year surrender charge that pays a high commission. Talk to someone who is a CFP and is acting as a fiduciary.

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THOMAS BLAKE
THOMAS BLAKE
May 18, 2018 2:46 pm
Reply to  SQuinn

Go to Fidelity or Schwab local office – they are the best!

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retiredrancher
May 18, 2018 10:44 am

How many employees do you have

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maracana
maracana
May 18, 2018 10:46 am

Hi there ! I always wondered if real investors use CFDs for other than hedging. I know you trade stocks and options, but never CFDs… why?

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Rinascimento
May 18, 2018 12:24 pm
Reply to  maracana

Here is a dump question. What is CFD?

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hunter007
May 18, 2018 10:48 am

What is the meaning of love? Kidding Travis. Thanks for all of your research and helpful information.

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mhkjunaid
Irregular
mhkjunaid
May 18, 2018 10:50 am

Hi, Can you recommend the competitive UK stockbrokers for the international markets?

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William D Edwards
Member
William D Edwards
May 18, 2018 12:42 pm
Reply to  mhkjunaid

Check out https://youtu.be/L7G0OfJUON8
Anton kreil talks about a few he uses. You tube video that is eye opening.

biotechsucks
biotechsucks
May 18, 2018 1:17 pm
Reply to  mhkjunaid

Hi. I’ve been through this pain (I live in the UK). Had an account with DeGiro and SVS and in the end transffered the whole portfolio to Interactive Brokers and never looked back. The only slight down side is higher fees on penny stocks. On the other hand my portfolio currently is all in US stocks so can’t comment on transactions in other markets.

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Bruce
Bruce
May 18, 2018 10:51 am

What is the best medium term trending up indicator for stocks? For example, some say new 52 week highs are actually a good trending up signals.

toff
toff
May 19, 2018 4:10 am
Reply to  Bruce

You can find lots of opinions out there, but in reality no one knows the future. No one.

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jeremiahberndt
May 20, 2018 3:31 pm
Reply to  Bruce

Some “experts” will say RSI, others Moving Averages, another making new highs. There are many ways to invest or trade and interpret that technical and fundamental data. It is probably most helpful to find what makes the most sense to you.

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fiftyone
fiftyone
May 18, 2018 10:51 am

Hello Travis,
I would like to know what is your personal opinion on the possibility of a new, accepted, international currency (like SDR if you wish) as a solution to the huge amount of debt most countries carry today? Do you think it should be supported by gold?
Thank you

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fiftyone
fiftyone
May 18, 2018 1:58 pm

Thank you Travis.

If I am allowed one more “dumb” question: do you believe Deutsche Bank could be the trigger for the next financial crisis? Would they “allow” it to happen?

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fiftyone
fiftyone
May 22, 2018 1:50 pm

Wouldn’t you say Germany, France, Italy, Spain and all the rest did just that (except for the gold backing)?
As for China I would say they do not have to give up control because they will be probably among the few countries dictating the conditions.

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pavioconrad
Member
pavioconrad
May 18, 2018 10:52 am

What is it I’ve always wanted to know?

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c rood
Member
c rood
May 18, 2018 10:53 am

what referrcense sources do you use for your incredibly thorough reports?

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chris
Member
chris
May 18, 2018 10:54 am

Thanks Travis, I love your information. What is the best time to buy and sell high dividend stocks. Just to capture the dividend?

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Martin Johnson
May 18, 2018 10:54 am

I’d like to learn more about the good, bad, ugly of buying straight calls in this mkt, ie, XLE.

jeremiahberndt
May 20, 2018 3:39 pm
Reply to  Martin Johnson

This is a copy of a response from Travis from a recent question regarding options. I think it’s as good an explanation as any.

Hopefully it’s helpful.

“”Options provide leverage, and you get more leverage if you buy a riskier bet — sometimes it’s best to think of it by using examples.

What happens if IQ goes to $40 in December? You could buy 100 shares for $2,000 and double it if that’s the case, or buy one $15 call option for $750 and more than triple it to $2,500 (of, if you commit a similar amount of capital, buy three call options for $2,250 and that becomes $7,500). If you buy the December $22.50s for $3.80 that’s $380 turning into $1,750 or $2,280 into $10,500.

Assuming you’re right about where IQ is going, of course — the $15s also have less risk because they’re “in the money” right now so could be exercised and be worth something if they expired today… not $7.50, but at least a little over $5 since IQ is over $20. If IQ drops to $18, then the holder of the stock at $20 loses 10%… the holder of the $15 option loses roughly 50%, and the holders of those $20, $25 etc. options lose 100%. So the risk goes up the price curve as well.

But it’s also important to keep in mind the total capital at risk. The appeal of an out-of-the-money option is that you can get leverage to the underlying stock with less of a commitment if you’re wrong, and with more leverage, so you can get a similar return by putting less capital at risk if you’re right. It’s just that the odds of you being right get worse as the strike price gets higher — IQ is more likely to be at $20 in six months than it is to be at $30 or $40, just because guesses about the future have to start with something and the only thing we really know is that it’s at $20 now. Buying in-the-money call options means there’s less chance of a 100% loss, but less leverage than an out of the money option… and still a much higher chance of a 100% loss than if you’d invested in the stock itself.

You can get into all the “greeks” when analyzing options, but if you’re speculating on a particular stock going up or down I think it’s more sensible to think about a few different good and bad scenarios and estimate what your gains or losses would be — not just in percentage terms, but as a total capital commitment. When buying call options, the odds of a 100% loss are very, very high, so it’s very important to keep in mind exactly how much cash you commit to a position.”

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Martin
May 20, 2018 4:29 pm
Reply to  jeremiahberndt

This was my question to Travis, and his response above:
Ok, here the first dumb question. I deal in puts and calls mostly calls and I’m sure I’m missing something lets take IQ Dec calls for example, I’m only going to use the ask price.
7.50 Dec 15
6.00 Dec 17.50
4.70 Dec 20.00
3.80 Dec 22.50
3.20 Dec 25.00
Obviously the Dec 15 at 7.50 is the cheapest and closet to being in the money. Why would you buy any of the others ?

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savethemanatee
savethemanatee
May 18, 2018 10:55 am

I’m curious to know your opinion on fixed income investments (bonds, etc.). What portion of your portfolio is devoted to such holdings? How would you split up fixed income investments? My wife recently inherited a professionally-managed portfolio, and the fixed-income portion was split up roughly: 35% intermediate-term bonds, 25% munis, 15% developed-market world bonds; 12% high-yield corporate bonds; 3% emerging market bonds, and 10% in a fund classified by Morningstar as “non-traditional bonds,” and seems to be mostly a mix of corporate bonds and mortgage-backed securities. What are your thoughts on this split? Do you (or would you) also incorporate funds containing other asset classes, such as preferreds, convertables, senior loans, or a utility/infrastructure fund that pays monthly dividends? I’ve never held much fixed income before, and have to decide whether to massage the percentages of these holdings or sell them all. Thanks!

Bonus question: Can AlanH return? 🙂

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jminges
Irregular
jminges
May 18, 2018 1:39 pm
Reply to  savethemanatee

There is insufficient information to answer this question. It depends upon where the bonds are held, ie: retirement fund vs taxable account, your age and need for a steady income vs. capital gains, your risk tolerance, your tax situation, the relative risk and rates of return in each of the bond classes, the possibility of rising interest rates in the economy generally, and the inflation rate.
For example, if a bond yields 4%, and is taxable both state and federal, and inflation is at the Fed’s 2% rate, it is possible that your real return may be close to zero after taxes, inflation, and rising interest rates.
The real question is the percentage allocation between stocks, bonds, and real estate. Don’t overlook the value of your home in creating your asset plan. In my case, at the age of 74, in excellent health, with a still working wife, and limited expenses, my assets are primarily in stocks and high dividend stocks, especially REITs. Less than 25% is in fixed income. My rationale is due to rising interest rates, dividend increases on my holdings, and the fact that over time, the stock market returns will beat bond returns. Bear in mind that the S&P also currently yields about 2% in income which is taxed at a lower dividend rate.
There are many services that will help you with this decision. I use the website Seeking Alpha.com for analysis of dividend stocks, Stock Gumshoe for common sense analysis, and Motley Fool Stock Advisor for general stock selection. I use Schwab as my broker. They can provide excellent advice on managing your portfolio and setting up an estate plan. Their fixed income service is also good, with access to almost any bond.
Good luck. I hope this is helpful. I’ve been in investments for 55 years, both managing large university endowments and on my own. Experience has taught me that if you get the asset allocation right, the individual stock or bond selection has less of an impact on your final returns.

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savethemanatee
savethemanatee
May 19, 2018 2:40 pm
Reply to  jminges

Thanks. Those are great points about the real rate of return, especially as interest rates are expected to rise. As a hedge against a sudden market correction, it may be better to hold cash than a low-rate intermediate term bond fund. I will have to give this more thought.

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Larry
Guest
Larry
May 18, 2018 10:55 am

I own 60 different stocks.A few where I have a gain in value I would like to sell and use the proceeds to purchase other stocks.Is there any way to do this and avoid,or defer, the capital gains tax I will owe?
Also,if I can find smeone who owns the stocks I want to buy.can I swap some stocks with him/her and achieve an exchange where no tax is due?

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Ravi Rana
Ravi Rana
May 18, 2018 10:55 am

What are top 10 share to buy in 2018?

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