We’ve all had the idea, even if we’ve never pursued it. We just know we could make money in the
stock market, based on our tech knowledge. We live and breathe tech.
Why not profit from it?This article tells where to start. First, a big disclaimer. You may be
able to
use your knowledge of the tech industry to prosper in the stock market
— but only if you do some careful research. Investing risks your
money!If you don’t do your
homework, you’re just trusting to luck. Here’s where to start
…
Start Small
New to investing? Treat it just like a new programming
project. Start small. Minimize your risk. Learn as you go. If you
really have valuable insights you can profit from them just as
well when you know a lot more, rather than taking big risks before
you’ve educated yourself. Start with the free investing tutorials at Investopedia,
About.com,
and the College
of Business at Illinois.
Get All the Info You Can … Before You Invest
It’s amazing but true. People will pump thousands of dollars
into a stock they’ve spent less time researching than the computer they
buy for
$500. Which risks more?
If you invest in stocks
you’ll be competing with full-time money managers with big
research staffs and lots of resources. Don’t treat it casually unless
that’s how you always
treat your money. Combine in-depth research with your
tech knowledge for the best chance of profits.
These websites
provide investing information and stock research:
—Stock Research Sites—
| Yahoo Finance Stock Research |
SmartMoney |
| Morningstar | The Motley Fool |
| Investopedia | Big Charts |
| WikiWealth | Stock Consultant |
You can pay
for online services like Motley
Fool Premium Advice and Morningstar
Premium Membership but I’m not sure they’re worth it given all the
information
available freely on the web. On the other hand, if a couple hundred
dollar per year subscription
helps you make a single better investment decision, it might pay for
itself.
Forums offer interaction with fellow
investors. Remember that you’ll run into everybody, from experts to
trolls. And lots of front-runners
(people who try to convince you to buy a stock after they’ve bought it,
to run up the price):
—Investing Forums—
| Motley Fool boards |
Market Thoughts |
| Investor’s Business Daily | Yahoo Answers |
| Bogleheads mutual fund orientation) |
Morningstar Forums |
| AI Stock Market (applies AI techniques) |
Online Traders Forum |
Read Annual Reports … and Financials
You don’t invest in a product, you
invest in a company. Technical knowledge alone is not enough for
successful investing. Every
publicly-held company is required to file an annual
report.
Since these reports are legally required to contain certain information
— like competitive threats, company finances, and stock risks —
they’re a
fantastic source of information. If you haven’t read the annual report
prior
to investing in a company, you haven’t done your homework.
Before you invest in a company you must analyze its “financials,” its
financial statistics. You need to understand statistics like forward
P/E, TTM P/E, yield, PEG, p/s, p/b, cash flow,
debt, ROE, debt-to-equity, market cap, and a lot more.
For example, check out the Morningstar
financials for Microsoft Corporation:
If you aren’t comfortable reading these financials, you must learn.
Start here,
here,
and here.
Don’t
Substitute Tech Bigotry for Judgment
Some techies make the mistake of thinking that since they love a
particular technology, everybody will. You must do your homework and
then objectively weigh what
you’ve learned against your tech knowledge.
I have a friend who believed Linux would take over the personal
computer market
because he hated Microsoft. Though he was
fervently convinced of his views, computer
purchasers disagreed. With stocks
you’re predicting what others
will buy. Just because you hold a particular view doesn’t mean
that everyone else will. No matterhow “right” you may be.
Remember, too, that the best product doesn’t always win in the
marketplace. Other factors are at play.
Don’t let emotion drive your
investing. Emotions come into play as you face profits or losses.
Base your buys and sells on facts, knowledge, and research.
Gains and Losses are Relative
To say you made money on a stock means little. Perhaps if you had
invested that money elsewhere you would have made more. The same goes
for losses. Whatever you make or lose is relative to alternative
investments you might have bought instead. So you need to track how
well
you do as an investor. Then
compare your track record to prominent benchmarks like the S&P 500
or Nasdaq. Or to a tech stock benchmark like the Dow
Jones US Technology Index (DJUSTC).
After the
2008 financial collapse,
I had a friend who was furious at his mutual fund because it declined
25% . If he understood investing better, he would have been happy. The
average decline for his fund type
during
that period was about 40%. You get the idea.
Another point about gains and losses: If your stock goes down 10%, it
has to go back up more than 10% for you to break even. For example, say
your stock is worth $100. It goes down 10% so you now have $90. Then
it goes back up 10%. You end up with $99 (not $100). Keep this in
mind if you measure your results by percentage gains and losses. And
don’t forget to subtract trading costs from your numbers!
The Larger Market Overshadows
Everything
Many investors learned this one the hard way during the dot com stock
collapse in
2000-2001. You may have made the smartest tech investing decision ever,
but
if the market as a whole turns south, your stock likely will too.
Very, very few stocks successfully fight an overall market decline.
Consider
your investing time horizon. If the market goes down and drags
your tech stock with it, can you wait long enough for the market to
trend up again? Can your company survive the downturn? Profitable
investing means thinking
about much more than one company. You’ve got to consider the
market as a whole (what investors call the macro-economic factors). For
example, it took years for Oracle’s stock to recover from the dot-com
bubble collapse. Even though Oracle Corp had done nothing wrong. Simply
making
a good bet on Oracle would not have been enough to profit during that
timeframe. You had to account for the overall market direction, too.
Another example: in 1997 southeast Asian stock markets collapsed.
Oracle stock dived by a third in response. But Oracle Corp only made a
small percent of their profits in SE Asia. As they often do, the
markets over-reacted and unduly punished a stock. If you were
savvy enough to spot this over-reaction and bought Oracle right after
the
1997 debacle, you made a big profit in a year or two. The
key was the ability to follow one stock and map its movement onto
overall macro-economic conditions.
Buy Low, Sell High
This simple rule is as basic as it gets. Yet people
violate it all the time. It’s easy to buy a stock when it’s up
because this generates lots of media attention. But you have to make
sure you buy at a lower point than you sell — which is hard
to do if you bought a stock after
everyone got excited about its rise. Momentum
investors buy a stock while it’s rising and then sell it near
its market top. I prefer a value
approach,
looking for an unfairly beaten-down stock and profiting by its comeback
(like Oracle in 1997). Others like growth
stocks
— companies that create value through their growing sales and
earnings, like Google and Amazon.
Whatever approach you choose, you only make money
if you sell a stock for more than you paid for it. The one exception
might be if you make enough in dividends
(money companies pay to their shareholders out of their profits). Tech
stocks that are in their growth phase typically pay no dividends — eg,
Apple, Google, and Amazon. More mature tech stocks pay quarterly
dividends — eg, Microsoft, Intel, and IBM.
Have a Sell Discipline
Knowing when to sell is as important as knowing what to buy and
when. This can be hard when your stock is down, because all of us
find it hard to admit a mistake. Nobody wants to sell a loser they were
sure was a winner. Some people
even
“double down” and buy more of a favorite stock while it declines.
Should the stock continue declining, you’ve now doubled your
losses! Decide when and under what
conditions you’ll sell … even before you buy.
Contrarians Make Money
Manyinvestors do their homework but follow the herd. In investing you have to anticipate
where the herd will go next. Often this means going against the
conventional wisdom — buying a stock that’s at a low while everyone
beats up on it, or betting on a new venture
everyone else thinks will fail. You have to have real go-it-alone guts
to make money
on stocks. It’s the contrarians who are right who make money.
Don’t Invest In Your Employer
Remember the Enron scandal? Lots of unlucky Enron employees lost
both their job and their retirement investments when Enron collapsed.
Diversify. Don’t invest in the stock of
the company you work for. The exception might be if your company’s
stock investment plan matches your monies to
counter-balance the risk. Just consider the risk before you leap.
Understand Taxes
The true measure of what you make
from your investments is an after-tax
number.
Before you invest, you should understand long- versus short- term
capital gains, how to balance gains
with losses, the wash rules, qualified
versus unqualified dividends, how the foreign tax credit affects
dividend income, and more. Tax tutorials to get you started are here, here,
and here.
Start Smarter Than Me
Like many techies I started out investing based on personal insights
and co-workers’ advice. Only over time did I learn
some of the basic
lessons in this article. I hope they prove useful to you. There’s lots
more to say on the subject, so please add your own tech
investing tips with comments.
– – – – – – – – – – – – – – – – – – – – – –
Howard Fosdick (President, FCI) supports
databases and operating systems. He’s had to learn about investing
because as an independent consultant he doesn’t have a corporate
savings or
retirement plan. Read his other articles here or email
him
at contactfci at the domain
name of sbcglobal (period) net.
At the time, I was a poor 20 year old when I told my dad to move money into Apple sitting at 14 dollars a share….He thought I was crazy…
Wow, did you hit the big time! APPL’s at almost 400 now. Please, please, please be my investment advisor!
I bought $2000 in Apple stock at $17 per share. I felt like a genius when I later sold that stock for about $70 per share. 🙁
You Were a genius. Ok you didnt pick the peak, but you made a Good profit.
If all my investments ‘only’ went from 17 – 70 then I would be a happy man! (likely a happy man in a yacht)
As a tech employee, I ended up shunning tech stocks in general for the same reason as avoiding employer stocks; it represents concentration of risk. It’s true that I know less about other industries, but it does leave me more secure in event of tech hiccups (which will happen from time to time.)
That, and I found myself agreeing with Buffet that predicting the next big thing in tech – or even predicting the demise of established players – is harder than buying a very safe company with solid returns and good reason to believe they will continue.
As always, YMMV.
Much better to start up your own tech company. Lots of opportunities in the tech sector.
1. Buy patent troll
2. ???????
3. Profit
Edited 2011-11-08 04:42 UTC
A few years ago when Red Hat was around 18 or 20 I was talking to a friend heavily invested in Visa. I said Red Hat was severely under valued and if I had some money I would invest in Red Hat as I felt it was a sure thing. Visa didn’t change much during that time but Red Hat has doubled since then. Not the craziest return on an investment possible but I was fairly certain it was not a risky investment.
Amateurs like us shouldn’t be giving advice like this article does. It is dangerously negligent because some poor sap might actually take you seriously.
I have learned this much from professionals: Individual people putting money into individual stocks is a game, not an investment. Should you ever find yourself thinking you can beat the market, please quit. You’ve become a gambling addict.
Most funds managers are utterly incompetent. Just by investing in an indexed fund you will outperform 95% of professional funds managers every year.
Anyone who makes just one or two sound investments will vastly outperform the market over a 20-30 year period.
Edited 2011-11-08 05:45 UTC
Additionally many/most people already have a % of their portfolio invested in tech stocks via mutual funds in their 401k, IRA, ESA, etc. For example, SPY (S&P 500 index ETF) is 18% technology sector.
Not sure I’d want more than 20% invested in a single sector, any sector.
There’s really no such thing as a ‘professional’ investor – there are people who will charge you to invest for you, but studies have shown that they are only correct 49% of the time. When flipping a coin is BETTER than using the ‘professional’, it’s time to quit calling them professionals.
Investing in tech companies is a certain way to lose money. Less than 1:1000 tech startups survives 10 years. Most never pay a dividend.
Real money is made by investing in boring household products companies like Coca Cola, Gillette or Proctor & Gamble over long periods of time.
Keep it under the bed
Keep it in Cash
Pay off your Debt
BUT
Don’t invest in tech stocks.
Why? The amount of discresionary spend ($$ left after paying the bills, food etc) is dropping like a stone. Most tech is aimed at this area of spending.
It does not take a Math genius to see why it is silly.
If you really must invest in Tech then please go ahead and do so provided:-
– It is money your could burn
– You don’t expect any return for at least 5 years
– The company is not in Consumer Electronics
Would I invest in Apple? Nope. They are at the top.
Would I invest in IBM? possibly. They are bent on improving shareholder value.
Finally,
Any investment is a risk. So once again, don’t invest unless you could take the money into your back yard and set fire to it. Your investment could crash and burn so any returns are a gift from the heavens.
The article touched on it, but it cannot be overstated, if you cannot be objective you will lose money. A lot of it.
“Buy low and sell high”
“The one exception might be if you make enough in dividends”
No, it’s not the exception, it’s the rule. That is what investing is about.
“Buy low and sell high” is what we call gambling. It’s not an investment, it’s a speculation.
My advise is to stay out of the stock market unless you invest $1 billion minimum.
There are 3 types of actors in the stock market:
* Those who have an industrial project: they buy the stocks to control a company. They sit at the administration board and they have voting rights. They don’t just give away their money like you. They will manipulate the company to their advantage, with directions, merging or break up.
* The arbitrators: The banks. They make their cut in all industrial project and on your back. They control the market place. They have no lag. They know the price of the items they buy and sell before anyone else (before you). If there is money to do they do it before you. They have big server farms with complex algorithms and products like swaps and futures and they don’t take any risk. They have enough money not to take any risk. They can manipulate the prices with their weigh. They always win.
* The speculators like yourself. They gamble on the 2 others types of actors. Mostly they feed them. Some of them are lucky enough to have their interest aligned with a big actor at one time and win some. They are a collection of individual small investors with no real power. They buy thousands of dollars of worthless stock, sometimes up to hundreds of thousands, but they don’t control anything. They loose more often than not.
So if you have money to invest, invest it in a new house with a big swimming pool. That is money you won’t loose. Or lend it to a bank. The safest way to make money is still by working.
Edited 2011-11-08 07:39 UTC
Not *every* way of making money on the stock market involves arbitrage or high frequency trading like your second point suggests. As the comment above said, the best strategy for individuals is long term collecting dividends along the way, not trying to day trade against the banks.
There are TWO ways to gain income from Stocks
1) Dividends – Sadly a lot of US Tech Stocks don’t pay them
2) Increased share price.
Some companies prefer to drive their stock price higher rather than pay dividends. One way for a company to do this is to buy their stock thus removing it from the market. IBM is a classic example here. They have puiblicly said that they will improve shareholder value by stock buybacks. Please note that I’m not tipping them nor do I have any IBM stock, I’m just using them as an example of how a company can improve shareholder value.
I have lot a bundle in Tech Stocks over the years. I’ve also made a bundle. Tech stocks are IMHO just about the most risky field for investments at the moment.
Ok, but here is a counter-example:
Microsoft has spent close to $50 billion on stock repurchase in the last 4 years. What has happened is that during the periods when they repurchased the least amount of stock the stock fell by the largest amounts. Then they bought more and have been able to hold the stock at around current levels. This in spite of their ever-increasing levels of sales and profits, large cash hoard, etc., etc., all of which is supposed to define a stock that will appreciate and provide you with a return on your investment. The dividend has ameliorated losses for those who bought at $30 and above but hasn’t matched those losses, much less overcome them. If you bought lower than that you aren’t in the same hole, but relying on the common wisdom about what drives a stock price is no substitute for research. While this isn’t a hidden point it’s something you won’t spot if you don’t look to see whether a stock is obeying the ‘rules’ that supposedly dictate price appreciation and overall value.
What I’m saying here is that while I agree with your assessment on buying a dividend paying stock there is research to be done on those stocks as well. The MSFT stock discussion boards are full of folks saying what a good buy it is and even more folks saying “I can’t believe this stock is down!” and “The bashers are to blame for [my decision to invest here not paying off]!”
Your point is sound overall. But dividend payers are not all equal either. Do your research. Then refine it with at least a second round of analysis of the top candidates. And as the author says, start small. If you get better at it you will have more money to invest as time passes. If you don’t get better at it you will lose less, even though that is partly because you will have less. (o;)
Your entire post is garbage, but this paragraph is particularly funny. You’ve taken bits of words you’ve heard (“arbitrators” – possibly something to do with arbitrageurs, market makers, HFT, OTC and exchange-traded derivatives) and mashed them all together to produce a pile of nonsense.
And, yes, I say that as someone with five years experience in the industry working as an algorithm developer for a hedge fund.
Thank you for your insight but I think I know what I am talking about. Maybe my post looks garbage to you and maybe it’s because english is not my native language but I think it makes sense.
And yes, I have been working in the financial sector since 2000 if that is important to you. Been using the RFA, swift alliance, merva, fed+ and stuff. Been working for the largest financial actors in the world.
It takes nothing more than a great deal of patience and some common sense to lake money on the stockmarket. Investing is a lifelong process not gambling.
The only shares worth buying are those that provide a dividend. A dividend gives you cashflow to purchase more shares in other companies and expand your portfolio.
A share that doesn’t pay a dividend is totally worthless until it is sold. You could theoretically have a million Apple shares and not have enough money to pay the rent and buy food.
$6000 invested Coca-Cola stock in 1977 is now worth around $1.1 million. Plus it would also also earn about $35,000/year in dividends.
Unless you are upper class you won’t have money to invest, you have debt. Start by paying off your debt.
Don’t gamble with money you don’t have. (though that is what the banks are doing, but you won’t be bailed out).
This is very good advice. Look at your debt’s interest rate. Paying off that debt is like a guaranteed, *tax free* investment that pays that return.
Not everyone has debt. Why? I never spend more than I earn. A philosophy that has served me well and means I am saving the money others I know are spending on debt repayments.
In the UK we have what are called ISAs. These can be either in cash or in shares. Basically, what they are is tax-free savings/investments with a limit on the amount you can put in a year.
With UK interest rates at what can only be described as negligible (1.6%AER vs a 5.1% inflation rate) putting some of your savings into shares seems a viable option.
If you diversify your portfolio a bit you can hopefully make a stable return.
Adurbe,
“Not everyone has debt. Why? I never spend more than I earn. A philosophy that has served me well and means I am saving the money others I know are spending on debt repayments.”
But…have you ever wondered why people have increasing debt in the first place?
Maybe it’s this:
“Median earnings for young men who work full-time have
declined over the course of a generation, falling 10 percent between 1980 and 2010”
Or this:
“Young men with only a high school education are earning 25 percent less today than they did in 1980, a loss of over $10,000”
Or:
“Or this: Young men with at least a bachelor’s degree rose only 1 percent, an increase in earnings of less than $700”
Or:
“Among the population ages 25 to 34, the percentage with jobs is at levels not seen since the early 1980s. For 18 to 24 year-olds, it is lower now than at any time in the past 30 years”
Or:
“Average tuition at public 4-year colleges was $7,600 in the 2010 academic year, up from $2,100 in 1980”
Or:
“Average tuition at private 4-year colleges nearly tripled in a generation, increasing from $9,500 in the 1980 academic year to $27,300 in 2010.”
Or:
“Federal financial aid has shifted from a grant-based to a loan-based system. Today, 36 percent of all federal aid is grant-based, down from 55 percent in 1980”
Or:
“In 1980, the maximum Pell grant covered 69 percent of the costs of a 4-year public college, including room and board. Today, it covers 34 percent”
Or:
“Nearly one in ten undergraduate students leave school with over $40,000 in loans—requiring a typical loan payment of about $460 per month over 10 years.”
Or:
“The share of all young adults without insurance in 2009 was at the highest level since the Census Bureau began tracking insurance coverage in the CPS in 1987.”
Or:
“The share of 25 to 34 year-old households spending more than 30 percent of their income on rent increased from 28 percent in 1980 to 41.3 percent in 2009”
All figures and many more are at this source:
http://www.demos.org/sites/default/files/publications/State-of-Youn…
Edit: To bring this back to the original post, unless you’ve got some very high yield, low risk investments (which is virtually none of them), then fiscally it makes far more sense to pay off debt if you can afford to.
Edited 2011-11-09 04:51 UTC
OK. I’ll bite.
All those “stats” are excrement.
Young peoples net worth is lower exactly BECAUSE they have financed their lifestyles with debt, which was anathema in previous generations.
Nothing more nothing less.
daddio,
“Young peoples net worth is lower exactly BECAUSE they have financed their lifestyles with debt, which was anathema in previous generations.”
All of the debt items above are incurred by “responsible” expenses such as health care, education, and housing. I actually excluded things like credit card debt which might be indicative of irresponsible discretionary spending. This was to illustrate that we are worse off financially even before considering bad financial choices.
I believe credit has done a great deal of harm – it’s basically a form of taxation on the middle class by the rich. The mere availability of credit has driven up home prices to price points where the middle class are dependent upon mortgages to get a home. So, I actually think we’d be better off if credit were outlawed – then the prices would come down to what people could afford.
As it stands, someone like me cannot afford a home without credit and it’s not the result of personal financial irresponsibility.
Take a look at the cost of housing, for example:
http://www.census.gov/hhes/www/housing/census/historic/values.html
The data ranges from 1940 to 2000 (adjusted for inflation in 2000 dollars).
1940 $30,600
1950 $44,600
1960 $58,600
1970 $65,300
1980 $93,400
1990 $101,100
2000 $119,600
Now look at education:
http://inflationdata.com/inflation/Inflation_Articles/Education_Inf…
The graph shows an inflation of 500% since 1985
Next look at health care:
http://www.cbo.gov/ftpdocs/89xx/doc8948/01-31-HealthTestimony.pdf
Figure 1 shows per capita costs increasing 550% (after inflation) from 1965 to 2005
None of these are really “discretionary”, what’s more is that education and health care benefits are shrinking so more of us are paying a larger portion out of pocket than historically.
Lets not forget that employee retirement plans have switched from employer funded pensions with guaranteed payouts, to employee funded 401ks with no guarantees at all. US Social Security is foretasted to fail to meet it’s obligations for my generation who are never-the-less paying into it today.
I don’t know anything about your financial situation or even your age, but I hope you might you might have a little heart and admit that, yeah, it is getting more difficult these days even if you are responsible.
The thing is, we don’t even have a GDP problem, by that metric we’re doing pretty well:
http://www.multpl.com/us-gdp-inflation-adjusted/
The problem is that all the profit has been going to the top.
That means you rent everything. Renting is even worse financially in the long term, especially in the UK because the price of housing is going to increase forever.
spiderman,
“That means you rent everything. Renting is even worse financially in the long term, especially in the UK because the price of housing is going to increase forever.”
Did the UK housing market cash?
My brother in law is some 60k underwater, which means if he sold his house today, he’d still owe the bank another year or two of gross income.
Don’t get me wrong, I’d like to have a home of my own – but it’s not in the cards until I find a much better paying job.
ii 2012 I’d say invest in Apple, except Steve Jobs died. There are no obvious clever investments right now. There’s no companies that stand head and shoulders above others, and no clear idea leaders. Without jobs there’s a 50/50 chance Apple will flush itself within 8 years. Look for a CEO or team that generates a massive level of excitement around the product. Noone is awaiting with awe the next google news announcement because google has matured. Same with Facebook. Apple time will tell what happens there. Tech as an investment is pretty crappy at the moment.
There are no obvious clever investment for 2012 right now but in 2015 it will be obvious. There is never any obvious clever investment for the future. It’s always obvious for the past.
In the US it’s different because you have so much free land. The UK is overcrowded. The housing price will only go up until the next revolution.
Dont forget a mortgage is a Secured debt. If you stop paying your mortgage they force you to sell your house to repay your debt.
Many people in the UK thought like you, the housing market could only go up.
EVERY market can go Down as well as up.
The oil market will always go up and up. This is because oil is finite. The housing market is the same. There are more and more people who want to live in city. The city grows forever. The house market therefore grows forever.
Buy Banking stocks. The government will pick up the tab if something go wrong.
With the marginal reserve system they also always accrue new property. It’s perfect for a safe long term low risk investment.
And they own the world.
http://www.forbes.com/sites/bruceupbin/2011/10/22/the-147-companies…
/satire but true
Something I would suggest for starting small is to invest only in companies who you use or will use or would use (if you had the money).
You are more likely not only do the research on these companies, but also to keep up with how they are doing and not just how the stock price is doing.
Random stock picks perform comparable or better than professionals, and there is not a lot of data to prove that successful traders actually are doing better than random – if you start with a group of a gazillion investors picking stocks at random, some of them are going to look like very good predictors – and some of them might think that they are using their intelligence to be successful.
In any case, if you want to do some financial planning, these are pretty good ideas:
http://www.marketwatch.com/story/dilberts-9-point-financial-plan-wo…
1 Make a will
2 Pay off your credit cards
3 Get term life insurance if you have a family to support
4 Fund your 401k to the maximum
5 Fund your IRA to the maximum
6 Buy a house if you want to live in a house and can afford it
7 Put six months worth of expenses in a money-market account
8 Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9 If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio
“Everything else you may want to do with your money is a bad idea compared to what’s on my one-page summary. You want an annuity? It’s worse. You want a whole life insurance policy? It’s worse. You want to invest in individual stocks? It’s worse. You want a managed mutual fund instead of an index fund? It’s worse. I could go on, but you get the point.”
All these negative comments about investing tell me it’s time to Buy. Just like all the naively positive comments I read back in 2000 among techies told me then it was time to Sell.
Who do you think will handle your financial needs if you don’t learn how to invest? Is your company gonna hand you a retirement package?
You’re on your own these days. Better learn finances.
Edited 2011-11-08 17:04 UTC
Agreed. I see “the crowd” here posting very against tech stocks. That can only mean it’s time to buy. I like HP. They can’t get any more messed up than they are right now and their stock is the lowest in a long while. Good buy.
I picked apple in 2002, I also picked google before the IPO. Had I put $100,000 in, I would be on about $12 million right now. It’s not about gambling, it’s about knowing who has their business under control If someone makes a product you like and will actually use. Invest in them. If they don’t make a product you’d like then they’re probably a bad investment. The real trick is noticing business process. Apple and Google both spend heavily on innovation. In tech that’s pretty key to success. Also being able/willing to bring products to market and release new products. That’s why ultimately Microsoft is a pretty crappy investment. They don’t release new product without heavy integration to office/windows. Whereas Apple will just throw a usable product out, and then integrate it with patches/feature updates. Google throws wild stuff out all the time, then tries to capitalise after the fact. Seems to be working well for both of them. Facebook, is going to be a crap investment because they don’t make any sort of new product outside of Facebook. They’ll waste their billions trying to monetise Facebook by destroying privacy, which will eventually turn their customers against them. Facebook should be looking at using the warchest and cloud platform to leverage other services similar to Google.
Edited 2011-11-08 21:31 UTC
Not all products are a success. Nokia is releasing new products all the time and they invest more money in research than Apple and Google combined but they don’t sell them very well. It’s easy to say what company to invest in after the fact. I can give you a lot of tips like that. In 1985, don’t invest in Commodore. The Amiga is cool but they will fail. Invest in Microsoft and IBM. In 2000, sell and buy Google and Apple. This is easy stuff. Now can you tell us where to invest the money in 2012? Harder, isn’t it? That is the gambling.
Edited 2011-11-09 07:24 UTC