Rick Ferri says to put aside something for "Bingo Money"

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michoco911
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by michoco911 » Thu Mar 26, 2020 10:18 am

birdog wrote:
Thu Mar 26, 2020 3:54 am
That’s great if you are able to do that and not be tempted to let it grow to a larger part of your portfolio. My IPS says, that due to past performance, I’m no longer allowed to buy an individual stock. I think my IPS is so mean but it says it’s just being strict because it loves me.
Yes it can be tempting thats why i took a conservative approach.
The amount i can trade with is a fixed amount written on my IPS. It allows me to take action because i cannot stand still all the time but without deviating my main course and asset allocation of my major investment (60/40 international stocks and bonds).

To make it more controlled and interesting, each 6 months i lock gains that i made from the trades and add them to my quarterly contribution of stocks/bonds hence bringing back the amount of trading to its initial number set in my IPS.

If i take big hits and lose the money, its over i am no more allowed to stock picking. I will be out of this game and will continue only with quarterly investments based on my AA.

So far it is fine for me. I am sticking to it, it is fun and i made 30% profit on that amount last year (can be luck as well).
This year i am down but i am fine with it.
30% VWRD 30% VUSD 40% AGGG until further notice

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birdog
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by birdog » Thu Mar 26, 2020 10:34 am

michoco911 wrote:
Thu Mar 26, 2020 10:18 am
birdog wrote:
Thu Mar 26, 2020 3:54 am
That’s great if you are able to do that and not be tempted to let it grow to a larger part of your portfolio. My IPS says, that due to past performance, I’m no longer allowed to buy an individual stock. I think my IPS is so mean but it says it’s just being strict because it loves me.
Yes it can be tempting thats why i took a conservative approach.
The amount i can trade with is a fixed amount written on my IPS. It allows me to take action because i cannot stand still all the time but without deviating my main course and asset allocation of my major investment (60/40 international stocks and bonds).

To make it more controlled and interesting, each 6 months i lock gains that i made from the trades and add them to my quarterly contribution of stocks/bonds hence bringing back the amount of trading to its initial number set in my IPS.

If i take big hits and lose the money, its over i am no more allowed to stock picking. I will be out of this game and will continue only with quarterly investments based on my AA.

So far it is fine for me. I am sticking to it, it is fun and i made 30% profit on that amount last year (can be luck as well).
This year i am down but i am fine with it.
Sounds very reasonable. And fun too. Some people can drink a beer (trade) or two. I'm afraid if I have one, I'll be an alcoholic (trader) again.

MnD
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by MnD » Thu Mar 26, 2020 10:50 am

michaeljc70 wrote:
Thu Mar 26, 2020 9:11 am
MnD wrote:
Thu Mar 26, 2020 8:52 am
michaeljc70 wrote:
Thu Mar 26, 2020 8:40 am
MnD wrote:
Thu Mar 26, 2020 8:32 am
michaeljc70 wrote:
Thu Mar 26, 2020 8:08 am


I haven't even looked at it now as I really stick to my 3 fund portfolio, but in the financial crisis I made good $$$ on bonds of GM and Ford. I bought for pennies on the dollar. You have more protection than the stock (which garners no protection really) if they file for bankruptcy protection (which GM did). I still made good money on the GM bonds.
By the time of 08/09 my individual stock fund was a few percent of portfolio and i ascribed to the bingo money mentality.
I did the same on GM bonds but given that it took years to get the money back with all the warrants and other bondholder recovery steps that wound through bankruptcy court I calculated that by the time I "made" that good money, my overall returns were roughly the same as having those funds in an index fund. My other bingo play was buying Wachovia for next to nothing on a bet that they would be taken over retaining some shareholder value. Again that happened and I ended up with shares of Wells Fargo which recovered and I calculated that by the time I sold Wells I would have made _more_ money having put the initial investment in a stock index fund.

So that was the end to bingo money and this time there will be no bingo. I consider myself a good investor and my "plan" worked out in terms of the fundamentals (bondholder recovery for GM and retention of some shareholder value for Wachovia) unlike many other bingo players. But at the end of the day overall that money would have made more money in a stock index fund.
I sold the bonds at multiple of what I paid on the open market. I didn't wait for any warrants or any of that. I only owned the bonds a few months.
I'd be curious what your cost and sale dates and prices were.
In my recollection the bonds went more or less straight down until bankruptcy and then stayed down and then not long after that stopped trading.
It's good you had a sales window but I would have been all over that. Was not looking to be a long-term holder of old GM! :mrgreen:
Here are some of them (there were many trades):

Image

The gains do not include the interest paid to me (outside of a sale).
Cool!
I didn't recall a window like that - and I'm too lazy to dig up when I bought to see if I could have also taken advantage of it.
Mine were 4 different bonds/convertibles on the way down - the last couple being real close to the bottom.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.

new2bogle
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by new2bogle » Thu Mar 26, 2020 10:55 am

I am generally too chickensh!t to buy individual stocks - I can't stand to lose money. Which is why I didn't pick up BA when it was down big time last week.

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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Slapshot » Thu Mar 26, 2020 11:00 am

Back a few years ago, I got fed up with the meager returns of MM funds and online banks, so I decided to take a little out and start putting it in big dividend paying stocks, things like REITs, BDCs, utilities, etc. I figured if I could just break even or go down slightly in price, I would still be way ahead of what I would have made in the bank. Up until a month ago, I had achieved a 10% capital gain on top of all the dividends. But the recent crash has put a damper on that. So I did a bit of TLH, and in the past few days have seen huge increases in the prices. So I'm hoping that down the road, I'll be back to even while still picking up the dividends. Of course, if there are big dividend cuts, that would hurt. If I lose, I lose. As Rick says, it's "bingo money."
This time, like all times, is the best of times if we but know what to do with it.

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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by GCD » Sat Mar 28, 2020 12:29 am

boglehooligan wrote:
Wed Mar 25, 2020 1:32 pm
Curious to know what stocks (or Bingo money) you currently hold? :beer
None. Which is not to say that I don't blow money on frivolous things, I just don't do it picking individual stocks. It's not fun to me like bourbon, books, bullets or other things I'm not allowed to post about.

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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by afan » Sat Mar 28, 2020 8:36 am

One can get all the excitement of mindless speculating by doing pretend trades. Convince yourself that some stock is going up, record the price, then pretend to buy call options on it. Use all the pretend leverage you want.

As it plays out, you can check your losses daily.
All the fun and no risk of losing real money.
Real money goes into a 3 fund portfolio.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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ruralavalon
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by ruralavalon » Sat Mar 28, 2020 12:31 pm

I waste money buying good coffee, my main luxury.

We used to buy Kona coffee from Greenwell Farms, now we buy from Peets Coffee.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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geerhardusvos
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by geerhardusvos » Sat Mar 28, 2020 4:25 pm

Sidney wrote:
Wed Mar 25, 2020 1:38 pm
I don't play games with money.
+1
VTSAX and chill

Northern Flicker
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Northern Flicker » Sat Mar 28, 2020 4:36 pm

Agreed. I think this may be reasonable for someone who just cannot resist the urge to make active decisions regularly, to protect the majority of their assets from the potential damage.

But if you are not one of those people, it will just cause you to spend alot of your time down in the weeds dealing with a small sliver of your assets, instead of managing the big picture strategically.
Risk provides no guarantee of return.

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galeno
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by galeno » Sat Mar 28, 2020 5:34 pm

I'm always tempted to put 5% of port as bingo money. Then I remind myself that I'm NOW playing tennis against the Williams sisters. Not my friends and neighbors in the early 2000s. Then I decide not to do it.

We became Bogleheads in 2006. But from 1995-2005 (11 yr) our 80% equity allocation was ALL bingo money. Our real CAGR for that period was 14.1% with a GSD of 27.4%. To compare let's use 100% VTI (US stocks) over that time period. Real CAGR of 9.2% with a GSD of 19.9%.

It was super stressful dealing with the 2000-2002 bear as I rebalanced to 80% stocks 3 years in a row. It took 7 years to get back to (nominal) par port value at the end of 1999.

I picked cheap growth stocks with good financials and sorted by 1 year momentum. I used these easy steps.

1. MC > $150 M
2. Good financials
3. PEG < 1.5
4. Pick the 16 stocks with the best momentum over the last year.
5. Rinse and repeat every January

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JonnyDVM
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by JonnyDVM » Sun Mar 29, 2020 1:34 pm

as9 wrote:
Wed Mar 25, 2020 6:23 pm
Honestly would rather gamble on sports.

The only individual stocks I own are in Robinhood and WeBull from their free stock promotions (combined value ~$100).
What sports are you able to gamble on right now ??? All I’ve been watching is Paw Patrol and those outcomes are all fixed.
It’s not “just the flu”. Stop saying that. It’s really annoying. -me

RIMDBogle
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by RIMDBogle » Sun Mar 29, 2020 2:41 pm

Good to see this topic. I am thinking this part as Core & explore port, where explore can be BINGO piece.

What is your opinion for the following in BINGO (EXPLORE) part of portfolio?

ETFs to Consider: U.S. Global Jets ETF (JETS)

Financial Select Sector SPDR Fund (XLF)

Fidelity MSCI Information Technology Index (FTEC)

Vanguard Energy ETF (VDE)

Vanguard Health Care ETF (VHT)

Vanguard Information Technology ETF (VGT)

Thanks for sharing.

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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by SeeMoe » Sun Mar 29, 2020 2:59 pm

Good Q. Rick. We have cash on hand and over $100k in our Credit Union accounts for “Bingo” time eventualities in the coming days and months ahead. Beside a well stocked abode. Using 4 sheets of TP per day , and cleaning selves the Arab way with water douches too. Eat less of everything for a just in case scenario if this lock-down continues into the summer months...
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}

Atilla
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Atilla » Sun Mar 29, 2020 3:05 pm

The cool thing now with basically nobody charging commission is you can buy a single stock of whatever and see what happens to it. :sharebeer

Consider it a replacement to sports betting.
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timboktoo
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by timboktoo » Sun Mar 29, 2020 3:08 pm

I wish that I had a character that was capable of speculating with some fun money. I've tried to buy individual stocks in the past with small amounts of money, but I always feel like I made a mistake immediately after pulling the trigger and have sold them every time a few days later. I can't seem to stomach the risks of individual stocks.

Even the Boglehead hedge fund contest had me checking the results multiple times a day at work for a few weeks and feeling anxiety about my place. Clearly, these are the results of a mild anxiety disorder :) I very rarely check my retirement portfolio. Individual stocks are definitely not for me.

That said, if you do have extra money and you enjoy speculating with it, then do it! It really sounds like it could be fun and challenging. Just don't do it with any money that you need. And certainly don't get a big head about it. Early success can be dangerous. The people I know who take active investing seriously have returns which were dwarfed by those of us who invest passively. It's a loser's game in the long run.

- Tim

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ruralavalon
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by ruralavalon » Sun Mar 29, 2020 3:37 pm

RIMDBogle wrote:
Sun Mar 29, 2020 2:41 pm
Good to see this topic. I am thinking this part as Core & explore port, where explore can be BINGO piece.

What is your opinion for the following in BINGO (EXPLORE) part of portfolio?

ETFs to Consider: U.S. Global Jets ETF (JETS)

Financial Select Sector SPDR Fund (XLF)

Fidelity MSCI Information Technology Index (FTEC)

Vanguard Energy ETF (VDE)

Vanguard Health Care ETF (VHT)

Vanguard Information Technology ETF (VGT)

Thanks for sharing.
To explore the basement? JETS minus 50.64% YTD.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Bama12
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Bama12 » Sun Mar 29, 2020 6:31 pm

I have made very good this month with my bingo money.

Dockpp
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Dockpp » Sun Mar 29, 2020 10:54 pm

SPDR's XOP

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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by jnet2000 » Mon Mar 30, 2020 7:27 am

ruralavalon wrote:
Sat Mar 28, 2020 12:31 pm
I waste money buying good coffee, my main luxury.

We used to buy Kona coffee from Greenwell Farms, now we buy from Peets Coffee.
:happy love Green Well Farms coffee☕.
"You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing" Warren Buffet

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Toons
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Toons » Mon Mar 30, 2020 8:19 am

I would rather go camping
:mrgreen:
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Redlion
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Redlion » Mon Mar 30, 2020 8:45 am

I applied Investors Daily concept for Investing in Stocks for for a few years, Big Mistake.

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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by Nowizard » Mon Mar 30, 2020 9:13 am

I don't call it play money but call it "Scratch the itch" money. Some of us don't have the discipline to stay the course or not be tempted to make moves on occasion that are ill-advised or, frankly, do not want to be that analytical in numerous other areas. Occasional stocks are purchased, usually maybe once every three years for various reasons. Bought Amazon, for example, a couple of years ago. While planfully reducing stock/bond allocation over the past six months, have bought two stocks since the crisis began, more Amazon and Intuitive Surgical. I watch them much more than major investments and enjoy seeing the "black" number. A diversion that has always been enjoyed while generally following more common investment recommendations. William James, a pragmatic philosopher/psychologist said, in more eloquent terms, "If it works, do it." It does for us, so we do it.

Tim

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ruralavalon
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by ruralavalon » Mon Mar 30, 2020 11:44 am

jnet2000 wrote:
Mon Mar 30, 2020 7:27 am
ruralavalon wrote:
Sat Mar 28, 2020 12:31 pm
I waste money buying good coffee, my main luxury.

We used to buy Kona coffee from Greenwell Farms, now we buy from Peets Coffee.
:happy love Green Well Farms coffee☕.
I like the coffee icon, ☕.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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galeno
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by galeno » Mon Mar 30, 2020 1:54 pm

If I were to designate 5% of port to "bingo money" I'd buy these 10 stocks.

BA (Boeing)
OXY (Occidental Petroleum)
CCL (Carnival Cruise)
PK (Park Hotels)
KHC (Kraft Heinz)
AAL (American Airlines)
PVH (Pierre Cardian)
DIS (Disney)
SBUX (Starbucks)
JD (JD.com / Chinese)

bluquark
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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by bluquark » Mon Mar 30, 2020 2:14 pm

afan wrote:
Sat Mar 28, 2020 8:36 am
One can get all the excitement of mindless speculating by doing pretend trades. Convince yourself that some stock is going up, record the price, then pretend to buy call options on it. Use all the pretend leverage you want.
Is there a "fake brokerage" service anyone recommends for this? Ideally one supporting options? (Sure it's possible to manually do the simulation in a spreadsheet, but that sounds tedious.)

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Re: Rick Ferri says to put aside something for "Bingo Money"

Post by ochotona » Mon Mar 30, 2020 2:57 pm

I just got some XOP today, for 9.5 cents on the Dollar relative to its all time high. We shall see.
Peter W., MBA, CRPC

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