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One Stock in Particular - Does Anyone Have an Opinion?

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StockWatcher796
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One Stock in Particular - Does Anyone Have an Opinion?  Reply with quote  

Hello all - I've been reading this board for several weeks and just decided to jump in. Does anybody have any opinion (pro/con) on Marathon Oil? (MRO).
Just curious - I would greatly appreciate anybody's thoughts.

Thanks!
stockwatcher796
Post Sat Jan 04, 2014 9:00 pm
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oldguy
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quote:
any opinion (pro/con) on Marathon Oil? (MRO).


Depends on your goals. If you are a trader - buy and keep for about a yr, it's as good as any, the price is low, the P/E is low. If you a longterm invester and the goal is to build wealth over 30 yrs, not only would I avoid MRO, I'd avoid individual stocks in general.

Here's why - over 30 yrs the generic US market returns an average of 11%/yr. If you narrow your focus to a single sector (such as energy) you will likely to still get 11% over the longterm. If you further narow down to a single major company, you will still get 11% over the full term. But each time you narrow your focus, you are adding new risk - first the risk of a sector shift - and second, the risk of a company failure. Those are uncompnsated risks, the worst kind. You need to take risks to make money - but you want to be compensated for those risks.

MRO took about 25 years to double - the generic stock market (SP500) went up by a factor of 7 during that same time. So for past longterm investers, it has been dismal.
Post Sat Jan 04, 2014 10:58 pm
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StockWatcher796
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Old Guy,

Thanks for your detailed response. What did appeal to me was the low P/E. You said "if you're a trader" - so, if you only keep a stock for a year, is that considered "a trader?"

What do you think of PFE? (long-term) - any thoughts on this stock?

My wife and I have a considerable amount of money in our savings account - it's just sitting there earning nothing. I'm certainly not looking to buy and sell a week later. I just think we can do much better with our cash on hand.

MRO closed a tad under 35 today - some research online, people felt it could be close to 50 by the end of the year.

Would you mind sharing with stocks you feel are great long term picks?

Thanks Oldguy!
Post Sun Jan 05, 2014 1:23 am
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oldguy
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quote:
You said "if you're a trader" - so, if you only keep a stock for a year, is that considered "a trader?"


Yes, IMO.

The Market Index trends ever upward at about 11%/yr over a longterm (20, 25, 30 yrs). But statistically, in a single year, it may go down 40% or up 50%, in other words, it is inappropriate to invest your cash for a year, the outcome cannot be predicted. But over a long period, the market ups & downs statistically average - so if you wanted to invest for 30 yrs in the market index, the probable outcome is that you'll get a AVERAGE of 11%/yr - ie, your money doubles about every 7 years - $10,000 would grow to $220,000.

A trader guesses whether MRO, at 35, will be 50 in a year. An invester expects $35 to be about $800 in 30 yrs - and it doesn't matter whether it goes thru 50 or 20 to get there.

As for your savings - that is the best way to store your shortterm money. Shortterm money storage is savings, CDs, money markets - they are designed to be low risk and to approximately match inflation (so that your purchasing power will be thre if needed).
Post Sun Jan 05, 2014 3:00 am
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coaster
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If you buy any variable-price / market-priced asset with a time horizon of a year you are definitely a trader / speculator and NOT an investor.

If you buy any variable-price / market-priced asset on someone else's say-so without doing your own due diligence and research you are definitely a fool and NOT an investor.

Speculators make a profit roughly 50% of the time; fools virtually never.

Yes, you can definitely do better with your cash; but my opinion (and experience) is that inexperienced investors who ask these types of questions aren't ready for buying individual stocks. I suggest you just dollar-cost average your cash into index funds or ETFs.

When you can decipher a company's 10-Q filing and learn to read between the lines of its annual report, when you can learn to place a value on a company so you can decide whether or not it's a good buy, THEN you can start buying individual stocks.

(And actually I do hope you do, because without individual buyers there would be no indexes, either.)

Best wishes and good luck. Smile

~Tim~
Post Sun Jan 05, 2014 5:22 am
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