Stocks, Investing and Retirement Accounts
- Thread starter Ludacris
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So, had to post this after all my phone related posts. A thought of my own, from back about the time Apple announce the 5c.
Traditionally Apple products are coming, there's buzz for months, stocks soar, the product is announced, stocks soar, the product sells, stocks soar.
Not this year, not a ton of buzz up until maybe a month before launch of 5s and 5c, even then not nearly the amount of buzz as before. Stocks hold even, ups and downs. New products are announced, stocks go down. Product launches and sells, stocks still go down.
Is Apple the new Microsoft? When I saw the price go down after the announcement I made a comment to a neutral party that stocks going down when a new product is announced reminded me of another company I knew (MS of course), they laughed and said they'd thought of that immediately, but hadn't wanted to say anything...
Traditionally Apple products are coming, there's buzz for months, stocks soar, the product is announced, stocks soar, the product sells, stocks soar.
Not this year, not a ton of buzz up until maybe a month before launch of 5s and 5c, even then not nearly the amount of buzz as before. Stocks hold even, ups and downs. New products are announced, stocks go down. Product launches and sells, stocks still go down.
Is Apple the new Microsoft? When I saw the price go down after the announcement I made a comment to a neutral party that stocks going down when a new product is announced reminded me of another company I knew (MS of course), they laughed and said they'd thought of that immediately, but hadn't wanted to say anything...
I was looking at Stratasys and it's stock, it keeps roller coasting on the upward trend. I believe they will be a major player and stay that way in the future. I think many companies are going to them for contracts. It's so tempting to want to invest just in them, but then again, anything can happen, some other company could come in and have a better business strategy then Stratasys, causing a slow downward fall. Will Stratasys be the Amazon or Blackberry?
So I just realized that this thread existed..... I have to say that I love buying and selling stocks. I have been in the stock market for about 16 months now using my retirement IRA as capital for my portfolio. I briefly read what others have written in the past and have a few comments. First, What drives a stocks price? From what I have noticed it is two things: Market Capital (usually is around the same value as enterprise value) and shares outstanding. The trick is to find a company that has very few shares outstanding and is currently growing capital at a healthy pace. If you will notice, a stock that has a million shares outstanding and has a market capital of 1 billion dollars will have a share price of $1,000 per share every time. No matter the company. This ratio is true to all stocks. So a stock trading at $40 a share has well over a million shares outstanding and/or less than a billion dollars of market capital. This idea is all relative to the company. Take AAPL for example. AAPL has approximately 900 million shares outstanding, but their market capital is 505 billion dollars. Hence, 505 divided by 0.9 (converted millions to billions) gives us a share price of approximately $550. Compare that to Priceline.com, who has a market capital of just 60 billion dollars however, with only 51 million shares outstanding and trading at a higher price point because of it ($1,100/share). Given this, when finding stocks to invest in, I look first at shares outstanding and secondly at a company's ability to increase their market capital through sales/revenue. Currently, I like these stocks:
BWLD (Buffalo Wild Wings)- Shares outstanding 19 million. Current Market cap of 2.7 billion. I like this company because they are growing, growing, growing and not adding to their outstanding shares. Last quarter they announced they are expanding internationally. Beer, Sports, Food, and good looking waitresses.
QIWI- Russian credit card/money transfer company. 52 Million shares outstanding. 2.4 Billion Market Cap. This company has found a way to corner how Russians use money and credit cards. Read up about them. Again, they are growing, growing, growing.
YNDX- Yandex is the primary Russian and Eastern Europe search engine. Besides that, they are getting involved in other avenues such as payment services. I get the feeling that they are trying to be "the Russian Google." 325 Million shares outstanding ( a little too high for my liking...but....) Market Cap 12 Billion and growing.
So those are my thoughts.
BWLD (Buffalo Wild Wings)- Shares outstanding 19 million. Current Market cap of 2.7 billion. I like this company because they are growing, growing, growing and not adding to their outstanding shares. Last quarter they announced they are expanding internationally. Beer, Sports, Food, and good looking waitresses.
QIWI- Russian credit card/money transfer company. 52 Million shares outstanding. 2.4 Billion Market Cap. This company has found a way to corner how Russians use money and credit cards. Read up about them. Again, they are growing, growing, growing.
YNDX- Yandex is the primary Russian and Eastern Europe search engine. Besides that, they are getting involved in other avenues such as payment services. I get the feeling that they are trying to be "the Russian Google." 325 Million shares outstanding ( a little too high for my liking...but....) Market Cap 12 Billion and growing.
So those are my thoughts.
I would also like to add a thought in regards to the question about the number of shares a person can buy when a stock price is really high, like Google @ over $1,000. Don't think about it as number of shares! Think about it as amount of money invested in a company with a % return on your investment. What sounds better, 10 shares of a company, or $10,000 invested in a company? In the case of Google, they're the same thing. Apply that idea when investing. ~ I'm investing $10,000 and selling when I have a 20% gain~ That's the plan. So what if it's 10 shares or 500. It's still $10,000 invested. Also, you never "lose" or "gain" money until you sell. So if you invest in a company and the share price drops by 50%, you haven't lost any money. Your stocks have only depreciated in value. Stick with them, they may increase in value again. That being said, sometimes you have to take a loss on one company if you have a one to jump in on another.
That is exactly the way to think about it. You must think in terms of percentages, it doesn't matter the amount. I'm going to be heading more towards dividend growth I think. Nothing flashy, just tried and true blue chip companies that have withstood the test of time. 3-6 percent dividend yield plus whatever gains the stock happens to make. Kind of like planting fruit bearing trees. Start off with a small amount but build up to an orchard. I do wish that there would be a market correction soon though so we can start buying at a discount.