| |
| |
|
Investing Information |
|
|
|
Finding the Perfect Company
The perfect company - it's the holy grail of the investment world. The company that will make its initial investment hundreds of times over. It's what everyone shoots for. To have bought Microsoft when it first went public... It's how fortunes are made. What does make "the perfect company"? The search for the perfect company is not the pursuit of day-traders or market insiders. They're looking for quick and dirty returns. High speed, high risk, high stress. No, the perfect company is more along the lines of what an individual investor - like you or I - would look for. I don't want to have to have my hand on my mouse until the closing bell just to make sure I don't lose my shirt. I want to buy a position in a company and know that regardless of what happens today or tomorrow, eight months from now, my portfolio will be worth more than today. I'm not talking about a laissez-faire approach to investing - far from it. What I'm talking about does take a time investment as well, in research, understanding the ins and outs of a company, but one that will be paid off in spades. That's an approach that I've taken seriously (guess what, we're talking about money here), and that I feel makes the market less of a gamble. It's also a mantra that has gotten me yields in the double digits over the Dow to date in a markedly tough year. So, you may be asking, "What is the perfect company? What traits should it have?" One of the most important things - in my opinion - about investing in a company is the feeling that you're a partner. It's essential to know the company inside and out. Be aware of all their products, as well as all of their numbers. Above all, you should be excited in the company you're investing in. If not, what's the point? Your gut is an important part of investing. If you're portfolio doesn't get you going, you might as well be gambling in Vegas. At least you'd get comped. In the perfect company, fundamentals are, well, fundamental. It's so important to familiarize yourself with the annual and quarterly reports (the 10-K is your friend) and listen to quarterly conference calls (both can be done online, very easily. Check out the company's investor relations site to learn more). Remember, you're not banking on market psychology, you're focusing on profits. No matter what happens to a company, if they've got juicy profits, their share price WILL go up. There's no two ways about it. Make sure that the company is making money and you will be too. Emotion has a natural part in this. If you're loving a company, it can be expected that you'll be blinded by that fact when it comes time to sell. One remedy for this is defining a reasonable sell point before you even buy. All too often people watch their positions go up past their expectations only to see them fall back down below what they bought for. Have a look at analyst estimates as well as other factors (after following the market for a little while, it becomes sort of instinctual) to try and determine a price to sell at no matter what. Just as importantly, don't forget to reevaluate frequently. Things change, you don't want to miss out on huge gains or look toward a share price the stock will never get to. News and economic factors will influence things, change you're estimates appropriately. Just as you should reevaluate your sell point for a stock, you should often reevaluate your position in the company itself. While a company may have been exciting and ideal for you when you purchased their stock, things change. Maybe the product line you though would take off didn't. Maybe their visionary CEO retired. Maybe something just doesn't feel right. Ambivalence has no place in this game. Don't be afraid to speak your mind on the company's business, either. You're an owner, however small, and have an obligation to protect your investment. While you might not have the same clout or voting ability as an institutional investor, or anyone who measures their equity in percentages of the company, but sometimes, making your points known makes all the difference. Lobby to those powerful holders of the company as well as other individual investors. (We'll have more on making your piece heard in an upcoming issue). If you want to try your hand at speculative, technical trading, this isn't the method for you. If, however, you want to shoot for a combination of excitement and profit, you may want to look into this a bit. It's worked for me. If you're a seasoned investor, or a newbie willing to learn (through methods that don't require money initially) you may find this to be a particularly rewarding idea. Jonas Elmerraji is the founder and editor of growFolio, the world's first free online investment and business magazine. Issues are available online at http://www.growfolio.com
MORE RESOURCES:
Investing - Google News |
|
|
|
RELATED ARTICLES
Investing and Understanding What You Buy "There is nothing more frightful than ignorance in action!" Johann Wolfgang von Goethe (1749 - 1832)I don't really know how cars actually work. Not really! I know how to drive them, but if you asked me how they work, I would not really know how to definitely explain it. Overbought/Oversold Has your broker ever told you that a stock is "overbought" or "oversold"? He probably went on the explain that the stock you own (I hope you didn't) had gone down so far that it now was oversold and due for a rally. He might also have encouraged you to buy an equal amount to "dollar cost average" your position so that when ("if"- he didn't say that, I did)) it did go back up you could "get out even". Choosing A Financial Advisor With so many financial advisors trying to woo you with their qualifications and experience, how do find one you can trust your finances with? 'Trust' is the keyword here, as you will depend on him/her for your future financial security. A good financial advisor can help you determine which investments are best suited for you, based on your financial goals. Investigate Before You Invest "Through wisdom is a house built. And by understanding it is established. Issuing Warrants to Investors When raising capital for a business venture, warrants are a common form of equity that is given to investors. A warrant is like an option - it gives the holder the right to buy a security at a fixed or formulaic price, which is known as the "exercise" or "strike" price. How to Use Annual Report There are many steps in calculating the fair value of a company. However, before we even do that, it is imperative to know how a company earns its profit. Short Term Savings Products When you invest, it simply means that you are putting your funds in products, in this case short-term savings vehicles, which will allow you to reap high financial rewards.Here is a list of the more common short term savings products you should consider investing in. Seven Investment Terms Everyone Should Know For those who have never given their financial future a second thought, the term "Financial Planning" could be a scary one. Investments can be a smart way to invest money for your future, but it can be confusing for those who have no experience in the financial business. Are You An Investment Dummy Like Me? I am good at a few things. I can certainly market well and I consult with others about how to bring more attention to their products and services on the internet for a living. Your Portfolio and "Old Ironsides" The USS Constitution first ventured into the waters in 1798. From there she became an icon of durability and success. Can Using Sales Leaseback Method of Investment Property Acquisition Reduce Risk? Sales Leaseback compared to traditional property investmentCan a Sales Leaseback arrangement make investing in Orlando investment properties more safe and reliable?Yes. Providing a guaranteed rental amount each month is the safest and most reliable way to realize a return on your investment. The Key Ingredient To Increase Preconstruction Profits By Over $20,000 One of the greatest preconstruction investing issues that I hear from individual investors is that they can't get access to what they believe are good projects. Regardless if the preconstruction project is a beach condo, a townhouse, a single family home, or even land investment, individuals are finding that many restrictions are being placed on them by developers. The Truth About Real Estate Investing - Is It Right For You? You have probably been hearing, seeing and reading that real estate investing is the best thing since sliced bread. There are many late night cable television infomercials spewing out sales pitches for courses that teach you how to buy residential real estate no money down or for next to nothing. Trading Systems A trading system consists of a set of rules for viewing markets and making trades. The advantages of trading systems can be hidden when they become associated with trading platforms involving trade order submission and processing. Bankers in Denial Denial is a ubiquitous psychological defense mechanism. It involves the repression of bad news, unpleasant information, and anxiety-inducing experiences. The Three Legged Stool My paternal grandparents were born near Lake Como, Italy. My grandfather learned how to farm, and he did just that until he died chopping wood at age 88. Investing Psychology Today Requires All Traders to Awaken Their Speculator Minds Stock trading strategies are as rampant today, as they were during the Great Bull Market. Yet, can you truly master the stock market like so many investing books propose?Consider this: When you can't even trust the financial reports of analysts, and the company bean counters that feed them with data, how can you? What's needed are robust, stock trading strategies; the type that enables you to think above the crowd, but not apart from them! The kind of strategies in touch with your speculator mind response!Witness the Enron fiasco. Investing In Sons Business Could Cause A Real Family Feud Q: My youngest son wants to borrow $5,000 to start his own business. My wife is afraid to tell him no. Press Release Scams and Successes: Reading Between the Lines Press releases are a means through which companies can keep the public up to date regarding their recent affairs. It is the duty of every public company to keep its investors and indirectly potential investors aware of what is going on in the company. Asset Location - Increase Investing Returns & Reduce Your Taxes Location - Once the holy grail only for real estate investors is fast becoming the mantra for every stock, bond, and mutual fund investor. Experts and studies now recognize managing asset location is second only to asset allocation in determining the success of your investment returns.
|
| home | site map |
| © 2006 |
