Sign me up for a suit and tie.

Well, I did it. As of yesterday, I am a bonafide stock trader.

I’ve been meaning to get into it for a long time now, but only just recently sat down with some books to figure it out. I’ve been devouring about a book per night, including stuff from the Motley Fool and Investing for Dummies.

I’ve spent the last few days – except for the 7 hours of Harry-devouring – obsessively calculating the financial analysis specs on roughly 50 different companies. Some like Toyota, that I had thought would be great investments, turn out to have really poor profit margins. Some like Ebay, that I thought wouldn’t have great returns, have truly stellar track records and financials.

I put each company through several calculations.

1) compared them to the S&P 500 for the last quarter, year, 5 years, and 10 years.

2) I went through all their balance and income sheets for the last year and calculated their:

– Gross profit margin

– Net profit margin

– Earnings growth

– sales growth

– cash to debt

– “Foolish” flow ratio (from the Motley Fool)

I also had to consider other rules, like: Are they the leader in their field? And do they market repeatable purchases?

I assigned them a number of points from 0-2 based on whether they fit the rule poorly, neutrally, or well, added up the total points, and invested in those companies, which turned out to be:

Apple

Google

Ebay

Amazon

Chipotle

At like one share per company, it’s a tiny little portfolio still, but what better way to get my feet wet?

I’m trying so hard not to obsess over the numbers and the amount they go up or down (and down) each day; these are meant to be long-term investments, after all. I’m going to permit myself a recap and summary of their gains and losses no more than once per month, which – if it’s flattering – I’ll share with y’all. -grin-

One Response to “Sign me up for a suit and tie.”

  1. Anonymous Says:

    is there ANYTHING you can’t do?
    It’s great you are involved in this–financial security, or at least understanding the new money lingo.
    Way to go!

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