WWII 019: GuruFocus.com, Why Stocks Follow Oil, Using Student Loans to Play the Stock Market, Fixing Social Security

In this episode, I shine the light on my favorite investing information website GuruFocus.com.

Main Topic:

GuruFocus.com is one of the main websites I use in my investment process. The site is focused around two primary things: Company fundamentals, and Guru activities.

This website makes it so easy to coattail off of Guru investors. Most of the information it provides in a few seconds would take days of research to do yourself, so the true value is the time savings.

There is plenty of free information available on the site, and some really excellent functionality and info that is behind a pay wall.

For more, listen to the podcast.​

Technology is nothing. What's important is that you have a faith in people, that they're basically good and smart, and if you give them tools, they'll do wonderful things with them."

Steve Jobs

Ask JB:

Why do stocks typically follow oil prices? (self.investing_discussion)

submitted 6 days ago by trellow

I heard a comment on bloomberg news today that stock prices usually trend with oil prices. Is this typically true, and what is the reasoning behind this? Also are there industries that do not follow this trend?

Even though tuition is paid for, should I take advantage of low interest, deferred, federal student loans? (self.investing_discussion)

submitted 10 days ago * by GodFather0326

Hey guys and gals, first post here so let's get to it.

I’m young, and painfully aware that I “don’t know everything about everything, or much about anything.” I’m posting this to get feedback from older, more experienced, and smarter investors than I.

I'm wondering if it’s a good idea to take advantage of federal and private student and VA loans that are deferred until 6 - 9 months after you graduate?

I qualify for 100% of my Post 9/11 GI benefits, will be working part-time, etc, etc.

But let's say that on top of that, my freshman year I borrow roughly $50,000.00 in deferred federal student loans (current IR's are about 4.69%) with a grace period of 6 months after graduation.)

The plan is to invest this capital into various opportunities that, after much deliberation and analysis, should grow at about 9 - 12% per year.

But for the sake of the argument let's say that I play it safe and dump it all into an ETF that tracks the S&P 500 index. Something like SPY.

Historically, The SPY ETF's (and S&P 500) growth rate is roughly 8 -10% per year. We're going to go conservative here and adjust that to a constant 7 – 8.5% just in case. Did I mention that the SPY ETF pays a quarterly dividend? (2.02% or $4.34/share annually) Dividends that I intend to DRIP right back into the SPY to compound this financial momentum.

(Conservative) Estimates of growth from years 1 - 4:

1st year: 50,000 x 8.5% = $54,250.00 + annual dividend payment of $986.00

2nd year: $55,286.00 x 7.6% = $59,487.00 + Dividends of $1,066.00

3rd year $60,552.00 x 8.8% = $65,880 + Dividends of $1,127.00

4th year: $67,007.00 x 7.0% = $71,697.00 + Dividends of $1,215.00

Total: $72,912.00

Repayment option A: Upon graduation I would sell my position and repay the loan before the interest rates or payments were activated. Netting me a cool $22,912.00

Repayment option B: Make monthly payments on the loan with my extra income to widdle it down before graduation. The logic behind this is getting and investing 50k NOW vs saving and investing 50k over 4 or 5 years. I'm thinking about the Time Value of Money here.

This growth is ONLY from the $50,000.00 loan and does not include my existing position in the SPY ETF or any other investment I am part of.

On top of this, the extra income I make from my GI bill benefits and part time work will be saved and invested (estimated around +$2,500.00/month x 8 school months = $10,000.00 per year) into stocks, options, and other securities that I deem beneficial to my portfolio.

non-school months will be spent studying abroad or at an internship. This has been factored in and budgeted for

What do you think? What have I not accounted for? What obvious financial truth have I ignored or missed or am simply not aware of? Please leave your feedback below with valid points as to why it’s a good or bad idea as well as other suggestions to wisely invest during my early twenties (Please don’t say TSP. That’s taken care of.) Any and all advice is much appreciated!

Do you have a burning question on investing you would like answered? Click the button below to send it to me and I will answer it on the podcast!

News:

http://www.barrons.com/articles/can-we-fix-social-security-1474093224

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About the Author

Jeremy Scott Bailey is an investor, author, entrepreneur and host of the "What Works In Investing?" podcast now available on iTunes. He is founder and Chief Investment Officer of Burgeón Group, Inc. an investment advisory firm that provides portfolio management services to families and individuals.

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