QXatFAT
Topic Author
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Should I Buy Delta Stock?

Thu Jan 25, 2007 9:36 am

Okay so my parents are looking at investing in something else now. My father works for PG&E (Pacific Gas & Electric as an Senior Electrical Engineer) and has hundreds of thousands of dollars worth of stock with PG&E (ticker number PCG). He has 5% of his paycheck go to stocks and when PG&E went into bankrupcy 4 or 5 years ago stock dropped from its $30.00 a share range to $5 a share. So he doubled his % to 10 the whole time it was in bankrupcy and now its up to $46.00 a share. So now he is taking a few hundred thousand dollars out of it and putting it into the bank and putting the other $150,000 into another stock or two (while keeping his %5 in PG&E). My question is, he is letting me help him pick some stocks because he would like me to make some choices and keep the money I make. Kind of a learning thing. I was thinking of buying Delta stock because of it coming out of Ch. 11 in Feb. The stock right now is at $1.10 a share. Should I go for this or not? I know its a risk probably but the airline can only go up if it pulls threw correct? Once I hit a $ amount I like then I will pull out keep my earnings and put back into another stock but what do you all thing? Any other stocks I should think about?
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AirCop
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 10:16 am

Quoting QXatFAT (Thread starter):
. I was thinking of buying Delta stockrnbecause of it coming out of Ch. 11 in Feb. The stock right now is atrn$1.10 a share. Should I go for this or not

Not a smart move if its for retirement income. I would suggest looking at asset allocation, bonds, S&P 500 funds to supplement his retirement pension (guessing PG&E pays a pension). In short, $150,000 is to much money to play (gamble) with retirement approaching.  twocents 
 
bill142
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 11:25 am

I know you might like aviation, but if your in this to make money you might be wise to leave your passion at the door. I've invest in the aviation sector before, I've made money, I've lost money. I personally would be hesitant to invest in a US airline. Although since DL is a take over target and there does appear to be the slight emergence of a trend towards consolidation in the sector. Meaning, there could be some money to be made.

Look at the resources sector.
 
beefstew25
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 11:40 am

Delta management can also choose to make the Delta stock worthless upon emergence from Chap 11. Be careful.
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S12PPL
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 12:57 pm

Does he have a stock broker such as someone at an Edward Jones type company? If so, he's paying them to analize these things. Make him earn his money.
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T773ER
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 1:17 pm

If you want to invest in aerospace, invest in Boeing.
"Fixed fortifications are monuments to the stupidity of man."
 
QXatFAT
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 3:53 pm

Quoting AirCop (Reply 1):
In short, $150,000 is to much money to play (gamble) with retirement approaching.

Well the thing is, all $150,000 would not go into the Delta stock but maybe $50,000 of it. This would be the money he allows me to invest for him on my choice. I am sure the other $100,000 will be going to something he is interested in.

Quoting S12PPL (Reply 4):

Does he have a stock broker such as someone at an Edward Jones type company?

I am not sure. I will ask him and see but I do not think so.

Quoting T773ER (Reply 5):
If you want to invest in aerospace, invest in Boeing.

How has Boeing been doing? Will they only be going up?



Is there any other stocks out there in general that I should be looking at? I was thinking something that will have to do with Valentines day would be good. Like Hallmark or something because of sales.

Thanks everyone for the help. Its a lot of money to be messing with haha
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AeroWesty
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 4:47 pm

Quoting QXatFAT (Reply 6):
maybe $50,000 of it

I can nearly 100% guarantee you that you would end up losing every last dime of it if you bought Delta stock right now. Stock of bankrupt companies gets canceled 99.99% of the time, and there's been no indication Delta plans to issue anything in the newly capitalized company to the current shareholders.

The best money you will ever invest in the stock market would be to buy the study guide for a Series 7 license. It's what stockbrokers need to learn about how all securities work and how to calculate yields. returns, margin and how securities are bought and sold. Last I checked it was about a $50-75 book.

Otherwise, you're better off just taping the stock pages up to the wall and throwing darts at it. It's been proven that method has beaten the stock averages time and again.
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Pope
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RE: Should I Buy Delta Stock?

Thu Jan 25, 2007 11:22 pm

Someone once said, if you want to make millions in the airline industry, you have to start with billions.

Don't get lulled into a false sense of security with the recent airline earnings news. As yourself what those earnings would have looked like if oil were $10/barrel higher and you'd be running in the opposite direction. Then ask yourself if you think oil is going to tend to be higher or lower than it currently is in the future. I think you'll reach your own conclusions.
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T773ER
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 6:38 am

Quoting AeroWesty (Reply 7):
Someone once said, if you want to make millions in the airline industry, you have to start with billions.

It was Richard Branson, he said If you want to become a millionare be a billionare and start an airline.

Quoting QXatFAT (Reply 6):
I was thinking something that will have to do with Valentines day would be good. Like Hallmark or something because of sales.

Not to be mean, but your joking right?

Valenines day will not boost the stock price, stay away from hallmark. And please don't use that kind of logic.

Quoting QXatFAT (Reply 6):
How has Boeing been doing? Will they only be going up?

They were up 33% for the year. It's taken a few hits lately, but it will be going higher. Now would be a good time to invest, and I mean now.

On a side note, Google and L-3 are good picks too.
"Fixed fortifications are monuments to the stupidity of man."
 
EMBQA
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 7:29 am

Quoting QXatFAT (Thread starter):
My father works for PG&E (Pacific Gas & Electric as an Senior Electrical Engineer) and has hundreds of thousands of dollars worth of stock with PG&E (ticker number PCG). He has 5% of his paycheck go to stocks

I'm sure you parents just love the fact that you posted private family business and finances on the internet. I'd also add that if your dad is talking about investing that much money without sound professional advise he is an idiot. Picking a company without sound finance information, tax break information, tax issue information and full investment information is asking for trouble..

Quoting QXatFAT (Thread starter):
Should I go for this or not?

Buying airline stocks has always been a huge risk and rarely pays off. If you can take that same bag of money and dump gas on it and set it ablaze and not care, then go for it because that is what you'll get for buying airline stocks. Delta is a huge-huge risk right now. If they get bought up the stock will all but be worthless. The USAirways-America West deal paid pennies on the dollar.

I have 4 personal investments (soon to add a 5th) along with my 401K. Every month I send each a check as they have DSRP programs. They are all top 50 companies worldwide and I have done very-very well. Each also has a Dividend Reinvestment program which I use.

Quoting T773ER (Reply 9):
They were up 33% for the year. It's taken a few hits lately, but it will be going higher. Now would be a good time to invest, and I mean now.

On a side note, Google and L-3 are good picks too.

If you 'must' play in aviation, Boeing is a good one. Long term projection is very good for them. Google....?? BAD-BAD idea. They are a service company. They do not make, build or produce anything. They offer a free service to the public so how they make money and profits I really don't know. Yes, the stock was hot and went way up, but so did a lot of stocks a few years back during the big IT craze.

[Edited 2007-01-25 23:50:20]
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AirCop
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 8:17 am

Quoting EMBQA (Reply 10):
The USAirways-America West deal paid pennies on the dollar.

Actually if you have America West stock the deal came out okay from 16 up to 40 something, last I looked it 60, didn't stick around for that part of the ride.
 
David L
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 8:26 am

Quoting AirCop (Reply 1):
Not a smart move if its for retirement income.

 checkmark 

Quoting Bill142 (Reply 2):
I know you might like aviation, but if your in this to make money you might be wise to leave your passion at the door.

 checkmark 

Gamble with money you can afford to lose, thoughtfully invest money you're less willing to lose.
 
srbmod
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 8:59 am

You're better off buying scratch-off lottery tickets.

Like what AeroWesty said, more than likely, Delta's current stock will cease to exist once they exit Chapter 11.

If you were to buy any Delta stock, wait until the IPO of the new Delta stock.

Personally, I wouldn't invest too much in stock in any industry that is cyclical.
 
QXatFAT
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 10:46 am

Quoting T773ER (Reply 9):
Valenines day will not boost the stock price, stay away from hallmark. And please don't use that kind of logic.

Well thanks for being such a jurk too  Yeah sure

Well thanks everyone for your imput.
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MaidensGator
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 11:26 am

Quoting QXatFAT (Reply 6):
How has Boeing been doing? Will they only be going up?

When you find the one that will only go up, BUY IT ALL....

[Edited 2007-01-26 03:28:59]
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767Lover
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RE: Should I Buy Delta Stock?

Fri Jan 26, 2007 11:51 am

You might research what Motley Fool and Jim Cramer say about their stocks of choice.

You might look at General Dynamics, which owns Gulfstream, or look at Bombardier.

Also, what timeframe are you looking to actually make a return?
 
AeroWesty
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RE: Should I Buy Delta Stock?

Sat Jan 27, 2007 1:06 am

Quoting EMBQA (Reply 10):
I'm sure you parents just love the fact that you posted private family business and finances on the internet. I'd also add that if your dad is talking about investing that much money without sound professional advise he is an idiot. Picking a company without sound finance information, tax break information, tax issue information and full investment information is asking for trouble.

I've been mulling this response over in my mind for a while, both from a Joe Public point of view, and as being a former stockbroker/financial advisor. We haven't a clue about who QXatFAT is, so it's not like he's taking an advertisement out on the interweb to tout his father's success, and a point of reference for past experience is important to his question. A close friend of mine is a great-grandchild of the founder of a company known in probably every corner of planet earth. Their family's wealth is of course quite substantial, and makes a couple of hundred grand look like pocket change. This friend has no need to ask anyone except the family's money managers for advice. But if you're not in that class, you really do need to indicate if you're talking a couple of grand, or a couple of hundred grand. Did I just reveal any pertinent information about this person over the internet? No.

Not everyone knows how to invest, where to go for advice, and giving some point of reference is important to bring to the party to be sent in the right direction. I think the opportunity QX's dad is giving him is quite unique, and will serve him well in handling his own finances over the years. It takes some cajones to say "I'm thinking about doing this, what do you think about it?", and indicating that his dad is an idiot isn't exactly sound financial advice.

Quoting 767Lover (Reply 16):
You might research what Motley Fool and Jim Cramer say about their stocks of choice.

Excellent advice. Personally, I like the Motley Fool guys better, one reason being that I had some interaction with them when they were just starting out, and I believe that Jim Cramer is a bit hard to follow.

Quoting T773ER (Reply 9):
Not to be mean, but your joking right?

Valenines day will not boost the stock price, stay away from hallmark. And please don't use that kind of logic.



Quoting Srbmod (Reply 13):

Personally, I wouldn't invest too much in stock in any industry that is cyclical.

When I was in my mid-teens, I had a small trust that my father encouraged me to help with its investment decisions. I did well enough that when the age of majority officially changed from 21 to 18, he went to court to have me emancipated in terms of the trust, so I could handle it myself as a reward for the work I did on it.

The first thing I learned was that cyclical stocks is where you make your real money. You just have to time your buys and sells properly, done with research of past performance and future prospects. As an example, I often bought and sold Milton-Bradley, the board game maker, since the price would usually sag mid-year and go up near Christmas, so I'd buy it around June, and sell it around mid-December. The money I made spent just as well as any other money I made. I also used to buy Pan Am stock, and bought it at 2 and sold it at 4 more than a couple of times. That money spent just as well as as any other money I made, too.

Quoting EMBQA (Reply 10):
Each also has a Dividend Reinvestment program which I use.

A little-known, little-used vehicle for wealth-building. You can even buy into DRIPs without going through a broker. This website has more info, but they aren't the only ones offering this service: http://www.directinvesting.com/

And to reiterate, I still believe the best investment one can ever make is to buy the Series 7 book, and read it cover to cover. When I went to study for my license, the first reaction I had was "why don't they tell people about these things? I wish I'd known this stuff years before." The first thing I ask anyone when they ask me for investment advice is for them to take out their last trade confirmation and explain what the codes mean. If they can't tell me in general terms what every code stands for, I direct them to this book. I still haven't found anyone who can even tell me what a principal vs. broker trade is, even though that is fast becoming one of the most-used ways a brokerage uses to cross transactions, and can cost you undue expense.
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Pope
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RE: Should I Buy Delta Stock?

Sat Jan 27, 2007 1:21 am

Quoting AeroWesty (Reply 17):
And to reiterate, I still believe the best investment one can ever make is to buy the Series 7 book, and read it cover to cover.

Can you recommend one of these books?
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David L
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RE: Should I Buy Delta Stock?

Sat Jan 27, 2007 1:30 am

Quoting T773ER (Reply 9):
Valenines day will not boost the stock price, stay away from hallmark.



Quoting AeroWesty (Reply 17):
The first thing I learned was that cyclical stocks is where you make your real money.

Fair enough but, in the Hallmark case above, you wouldn't expect their stock rise shortly after February 14th simply because they sell more cards around then than they do on most other days. You might expect the stock to rise if they sold more Valentine cards than expected.

I appreciate it's not news to you, AeroWesty, but I think that's the point that was being made. As to whether or not Hallmark is a good investment... I haven't a clue.  Smile
 
AeroWesty
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RE: Should I Buy Delta Stock?

Sat Jan 27, 2007 1:50 am

Quoting Pope (Reply 18):
Can you recommend one of these books?

If you search for Series 7 at amazon.com, they have quite a selection. The gold standard of their selection are the ones from Passtrak, which can cost upwards of $175. I don't believe the general investor needs to spend that much, and most of the relevant information can be had in the first one on the list, the prep guide from Compass, that can be had for about $55. It's not important to have the absolutely latest edition with the updated rules, although it's nice if it has it, because how stocks and other investments work and how they are traded, and how the fundamentals are calculated don't change over time, and that's what you really want to learn.

Quoting David L (Reply 19):
Fair enough but, in the Hallmark case above, you wouldn't expect their stock rise shortly after February 14th simply because they sell more cards around then than they do on most other days. You might expect the stock to rise if they sold more Valentine cards than expected.

Correct, I was not trying to advise for or against Hallmark in particular, only point out that opportunities exist, and very good ones at that, in cyclical stocks.
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Pope
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RE: Should I Buy Delta Stock?

Sat Jan 27, 2007 2:13 am

Quoting AeroWesty (Reply 20):
If you search for Series 7 at amazon.com, they have quite a selection. The gold standard of their selection are the ones from Passtrak, which can cost upwards of $175. I don't believe the general investor needs to spend that much, and most of the relevant information can be had in the first one on the list, the prep guide from Compass, that can be had for about $55. It's not important to have the absolutely latest edition with the updated rules, although it's nice if it has it, because how stocks and other investments work and how they are traded, and how the fundamentals are calculated don't change over time, and that's what you really want to learn.

Thanks. I went to Amazon and was a bit overwhelmed because of the selection. I was just looking for some guidance on whether one was better than another.
Hypocrisy. It's the new black for liberals.
 
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STT757
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RE: Should I Buy Delta Stock?

Sun Jan 28, 2007 12:11 am

Honestly the #1 rule to investing (or Sports betting) is to never bet on something you have some kind of emotional interest in or something you like.

Watch Jim Cramer's Mad Money, the guy is a nut but he gets results.

My personal opinion for what it's worth is not to play the stock market but rather invest in real estate, the market is down right now in housing but it's not in all areas. Your almost always better off in the long run with real estate, because in the long run the market will always go up.

Where I live homes that when brand new in 1996 were selling for $300,000 are now selling today for $750,000, the market where I live in Central Jersey has not flattened out like other areas. People who own these houses for 15 years we be able to sell them for over $1 Million.
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EMBQA
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RE: Should I Buy Delta Stock?

Sun Jan 28, 2007 4:53 am

Quoting AeroWesty (Reply 17):
A little-known, little-used vehicle for wealth-building. You can even buy into DRIPs without going through a broker.

Many of the world class companys offer this. If you go to the companies web site, go the the Investor Relations site you will find if they offer this. All five of my personal investments were purchased direct from the comapny without a broker and I roll all my dividends back into the DRIP.
"It's not the size of the dog in the fight, but the size of the fight in the dog"
 
AeroWesty
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RE: Should I Buy Delta Stock?

Sun Jan 28, 2007 5:04 am

Quoting EMBQA (Reply 23):
All five of my personal investments were purchased direct from the comapny without a broker and I roll all my dividends back into the DRIP.

I think you're doing an excellent thing. In my opinion, DRIPs are, for the long-term public investor, the most underutilized and convenient way to build wealth.

It all comes back to the same thing though, which is the first rule a stockbroker goes by: "know your customer". You assess their goals and expectations balanced against the level of risk they want or can handle. For an individual in it for the long-haul, well-run blue chip companies offering DRIPs is without peer.
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EMBQA
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RE: Should I Buy Delta Stock?

Sun Jan 28, 2007 5:35 am

Quoting AeroWesty (Reply 24):
I think you're doing an excellent thing.

Each is also set up for an automatic monthly cash investment. On or around the 25th of each month I have an automatic cash investment go in...
"It's not the size of the dog in the fight, but the size of the fight in the dog"
 
AeroWesty
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RE: Should I Buy Delta Stock?

Sun Jan 28, 2007 5:49 am

Quoting EMBQA (Reply 25):
On or around the 25th of each month I have an automatic cash investment go in.

Before I became a stockbroker and was required not to have any investments outside the brokerage, I did the same with a Janus Fund, I think it was, before I learned about DRIPs. Buying monthly whether the price is high or low helps average one's cost, and gives you a commitment to savings and investing.

Even as someone who used to earn his living from people who avoided what you're doing, I can't fault the smarts behind your strategy one bit. It's diversified and seemingly appropriate for your level of risk and goals. I wish more were as level-headed towards their investments and long-term security as you seem to be.
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fumanchewd
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RE: Should I Buy Delta Stock?

Sun Jan 28, 2007 5:52 am

For some reason I always lose money in stocks but do fairly well with commodities. I do know enough about stocks to know that this is a bad investment. They went chapter 11 for a reason. They may bring things around but they most likely will not.

Quoting S12PPL (Reply 4):
If so, he's paying them to analize these things

 Wow! Wow!

I wonder what that costs and is it on the S&M 500 listing?
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