Wednesday, June 30, 2010

The Risks & Advantages of IPO Market

What is IPO Market?

IPO stands for Initial Public Offerings. In the stock market, IPO is basically a company who just went public and new to the Stock Market. There are much profound risks involved in investing in a new company. There are many reasons why IPO is high-risk investment. But lately, I found IPO market to be the jewelry found in the mud that could worth millions.

When I think about investing, I think about short term investing with Profit. I have found that making profit in the IPO market is like taking a candy from a baby. Recently, the automotive Company Tesla Motor Inc. went public and it started with $17 per share on its first day. When the market closed for Tesla Motor Inc. it’s per share price soared from $17 to $27 in a single day. There is whole profit of $10 from each share I have bought.

I have been very lucky that Tesla Motor Inc. is well-known and very favorable company in the automotive industry because of their innovative technology of electric sports cars.

Nevertheless, investing in the IPO market is probably one of the highest risks you will take in the stock market. They are new to the market and no one's knows much about them and they could fail at any moment.

With my new experience in the IPO market, I personally believe that it should be short-term quick profit investment. As the market knows more about those companies in the IPO, the price of each share levels out in time.

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Message from David Neubert the Master!!!

I added Microsoft (MSFT) to my personal portfolio today.

With the market getting cheap again there are quite a few "boring" stocks trading at good prices. Microsoft (MSFT)--yes, Microsoft--is one of those stocks. The company has made the transition from a super growth company of the late 90's to a stogy old industrial conglomerate. (I think you can call software "industrial" nowadays).

Two things are happening to Microsoft: one, profits are slowly growing with the economy; and two, the stock has fallen again as all eyes (and money) turn to fashionable companies like Apple (AAPL).

Microsoft Price of Profit is down to 11 times profits. [see attached for definition of POP] and it has a decent dividend yield of 2.1% which is about 20 times the 0.1% I'm earning in my savings account.

If you've been watching my value portfolio you can see the following Microsoft trades under the transactions menu. If you have any problems finding transactions let me know and send a message to "Feedback."

MSFT TRADES
August of 2009 bought 681 shares at $24.39
December 2009 sold 681 shares at $29.61
May 2010 bought 373 shares at $26.77
June 29th bought 450 $23.82

NEUBIE AXIOM #1:
You'll make more money off gems found in the mud than those in the jewelry store.

PERSONAL DISCLOSURE:
I own MSFT in my personal account in an amount greater than shown in my value portfolio. I own AAPL. I have both Apple Computers and PC's. I own a Playstation 3 (Sony), a Wii (Nintendo) and a DS (Nintendo). I am planning to buy an Xbox (Microsoft) soon - for research purposes of course.

Disclaimer:
My opinions are not necessarily shared by Kapitall, and they are not in any way to be considered investment advice. Do not rely on watching my trade notifications; they are not always timely, which may compromise their accuracy. In general, I try to enter trades as I perform them, but it can sometimes take up to a few days for me to do so. I do not always write a note as to why I buy or sell, so do not rely on receiving a message from me to indicate if I've traded in my portfolio. Holdings represented in the portfolio attached often represent only part of my entire holding in that stock.

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Link to Apple vs Microsoft POP.

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Tuesday, June 29, 2010

Great Articles to Read!!!

These are great 4 articles you must read!!!

1)"The Most Trusted Companies For Privacy"

2)"RFID Microchips: The Future Of The Internet, Or A Privacy Nightmare?"

3)"You Don't Know These Companies, But They Probably Know You"

4)"Targeted Ads: When Will Consumers Start Freaking Out?"

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How Technologies Changed Us and the Economy

It is really amazing to think about how much our lives have changed because of companies like Apple, Google and Microsoft. They change the world by creating machines and computers to make our daily lives easier and yet difficult for the older generations to adapt into the new informational age. As for me, technologies made my generation the first generation to grow up with personal computers, iPod, and the internet. As for us, young adults, it's very hard for us to realize how much technologies have changed the world.

For the past decade, consumer & industrial technologies have grown exponentially and created the informational age of the 21st century. Brain power and IT skills replaced the muscle power of hard working Americans from the factories to the streets.

Jobs in America have become scarce as we use software to do the simplest tasks; making us much more dependent on technologies. Some say that the innovation and technological advances free workers to perform other tasks and create new industries, new jobs and more goods and services for consumers to enjoy but recently, this dream have failed with the recent downfall of our economy. Many more Americans became jobless and poor. Yet we still find the money to buy new iPhone, PC, Mac or iPod.

Because of our recent downfall of our economy and rapid increase in unemployment rate, it made me think about how our economy would be different, if the assembly line workers never got replaced by machines or the accountant who never got replaced by Quick Book Pro. Personally, I believe unemployment rate would be much lower than today's 9.3%.

However, the world possesses a large inventory of inventions to help plant the seeds of tomorrow's industries. The challenges for the United States lie in training workers for the jobs that will be created as these industries grow and in encouraging entrepreneurs to take the risks and endure the hardships and challenges associated with creating new and better products for the marketplace.

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Monday, June 28, 2010

What Is Dividend Yield?

There are two ways you can make money from investing in Stock Market: Capital Gains and Dividend Yield. Capital gains occur when a stock price appreciates in value meaning that you can sell each share at the appreciated price to make profit. One might ask, "how can I make money when stocks are down?" The answer is Dividend Yield.

So what is dividend yield?

Dividend Yield is how much "x" company will pay you every year for being loyal investor to the company. For example, "Procter & Gamble" has dividend yield of 3.2%, which means that they will pay 3.2% to you, the investor, for each dollar you have invested to Procter & Gamble. Many companies like Apple, Ford and Google have 0% dividend yield!!! Why? For companies like Apple & Google have 0% dividend yield because they think that they can put that money into better use such as research for new & better technology than paying the investor dividend yield. In case of Ford, they want to keep their profit for safety net in case the car industry runs flat like in the recent downfall of our economy. Another reason is dividend yield is taxed at a very high rate. Company pays tax to the government for their profit at about 15% for dividend yield then us the investors pay another tax for receiving dividend yield. So dividend yield is being taxed almost twice which means that it is almost not worth to receive dividend yield.

From my analysis and David Neubert's expertise, there are three reasons why Company doesn't want to pay dividend yield:
- Tax
- Safety
- Re-investment.

If you are a long-term investor, dividend yield is the best possible scenario because dividend yield is never affected by the economy.

As for those who are looking for short-term profit, Capital Gains is the solution.

-Sugarsuren Byambasuren

Disclaimer:
I DO NOT own any position in the listed securities. My opinions are not necessarily shared by Kapitall, and they are not in any way to be considered investment advice.

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Lesson #1 From the Master

Today, declares the end of my first week as a Summer Investor. Investing in the stock market has been hell for me this week. It’s been only a week and my portfolio is already down $4,000.

This first week, I have been fortunate enough to have David Neubert as my mentor. He took a look at my portfolio and asked me why I had 2 shares of Comcast and 300 shares of Ford Motor Company? And my answer was I don’t know. I simply bought 300 shares of Ford because from KAPITALL.COM, it showed me that Ford had more than 90% return per year.

It was then when David gave me my first ever Investing Advice. The lesson number 1 is don't ever buy stocks by limiting yourself to the amount of shares but limit yourself to how much money you want to spend. With this lesson, it lowers the risk of spending more than what you want to spend and also buying excessive amounts of shares, which someone like me wouldn't need much of. I learned that the perspective I had was not the one Investment Tycoon should have. Don't ever look at how many shares you want but look at how much you want to spend. With new experiences, come new lessons.

-Sugarsuren Byambasuren

Disclaimer:
I DO NOT own any position in the listed securities. My opinions are not necessarily shared by Kapitall, and they are not in any way to be considered investment advice.

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Thursday, June 24, 2010

Why KAPITALL?

Recently, I got the opportunity to try out new revolutionary website called, 'kapitall.com'. At first, I did not know what to expect from this site. All I knew was that this was just a free online investing platform.

When I first saw the word, FREE. My first impression was that this site is a Joke. WHY? Well, we all know that in a Capitalist society, nothing is free. When something is FREE there is always a catch where you have to remain in membership for two years, fill out thousands of surveys or as simply as putting our credit card information for something that is supposed to be FREE. Do you see the Irony in our society? Well, I do.

But KAPITALL.COM was nothing like what I expected from FREE online-based investing platform. The first main menu looked polished and well designed. I could definitely tell KAPITALL designers have put lot of time making this website. Even though Kapitall is in BETA phase, kapitall.com felt like this was the IT product.

So I decided to sign up since, it was free to use and join because of my cheap personality and curiosity to get my hands on anything that is new and cool looking. Kapitall was definitely perfect match for my personality.

After I signed up to use Kapitall, I thought to myself, "Why I'm I doing trying this website even though I have no interest in being Stock Market Tycoon?" Well, simply it was just because it was free and I had lot of time on my hands since school is out for the summer but don't forget my cheapness.

Prior to my experience at kapitall, there were only two words that I knew that had something to do with investing which are Wall & Street. Put them together, you end up with Wall Street. How can a person like me who is very cheap, immigrant and have no prior knowledge about investing can use this website for my advantage?

I have the perfect answer, Kapitall is very easy, simple to use and most important, you learn to be better investor. I felt like I was holding my first Wii controller for the first time ever and trying to play golf. That is how simple and easy it felt to me.

After I signed up to use Kapitall, I created my first practice portfolio with fake $10,000 in it. I never held that much amount of money in my life at once, from all my excitement, I felt as if my increasingly overwhelming cheapness was gone for good. I hustled to buy as much stocks of my favorite brand as I could. I went on to buy 100 shares of NIKE, 50 shares of Apple, 300 shares of my favorite car manufacturer Ford then it went on and on with all the company, brand and manufacturer I could think of at the moment.

After few moments of investing, I have spent all my $10,000 and I was holding as much shares I could possibly buy with my fake money. After few moments of sheer excitement, I calmed myself down and I could not believe what I have just done. I couldn't believe my eyes that I was the owner of my favorite brands. I felt like I could do anything in the world because I bought the companies that I dreamed of working there to get employee complimentary goods like free shoes from NIKE.

It was then I realized the potential for KAPITALL. I highly recommend all my viewers to use this website as a learning tool and possibly as your own private Broker.

Enjoy my friends!!!!


-Sugarsuren Byambasuren



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