F13 Investment Challenge

[Sutro]

The light of victory begins shining tomorrow.

Media stocks FTW.

-Sutro

[Nebu]

The light of victory begins shining tomorrow.

Media stocks FTW.

-Sutro

Ah, the beauty that is untarnished enthusiasm. 

[cmlancas]

Uhm. I don't know if I broke the game or not, but I show myself at $250k someodd. Someone told me I made a bad decision, but I wonder if I broke the game because I have 10,000 shares of JAVAD when I should only have 2500.



Edit: In the name of fairness, I won't move on this stock until the month is up. It's not right that I broke the game. Anyway, I'm still whipping ya'll either way. :)

[Krakrok]

Maybe the game can't handle reverse splits so it gave you 1 to 4 instead of 4 to 1. Metagamer!

[cmlancas]

No, I see what happened. When the 1:4 split happened and transferred to JAVAD, the game never applied the 1:4 split. Effectively, it gave me 7500 free shares at 20.x a share.

[lamaros]

USBE is going to go up according to my stateside source. However he's not to be trusted.

[Ookii]

No, I see what happened. When the 1:4 split happened and transferred to JAVAD, the game never applied the 1:4 split. Effectively, it gave me 7500 free shares at 20.x a share.

[Sky]

This has been an interesting exercise and I learned a few things about the market I didn't know before.

It has also cemented my opinion that the stock market is fucking retarded and responsible for a lot of the problems in our country today.

Sold off all my stocks, not sure I'll buy new stuff. Not pouting because my stocks tanked, I don't really give a shit. It's just that I'm getting sickened by the idea that the best way to make money is to run contrary to any common sense. Citi gets fucked, I make bank shorting them. Oil prices go up, oil companies make bank (how many industries turn more profit when their raw materials get more expensive and their facilities lower in production??). ML and MS get caught with their hand in the cookie jar, exposing safe investors to subprime debt and despite the dollar tanking...still make money.

It's disgusting. I'll stay broke and happy.

[Viin]

Yah, I've always hated what the stock market does to companies. I mean, any company where the original founders do not own a controlling stake in the company are completely at the mercy of the "masses" who own their stock. How is that a good way to run a business?

But, it's not going away anytime soon.. I think I'll limit my stock play to my 401k.

[Ookii]

I can't figure this out:

So what's a business worth to an owner? It all comes down to cold, hard cash. And you can generate cash either via ongoing business operations or through asset sales. Your job as an investor is to figure out the cash-generating potential of a company and whether management can deliver on that potential.

Back-of-the-envelope valuations
Let's use an example. Motley Fool Inside Value recommendation Coca-Cola (NYSE: KO) has earned about $5.5 billion in year-to-date cash flow from operations, and it's spent about $1 billion on capital expenditures. That comes out to around $6.5 billion in free cash flow. Based on the current share price, if you wanted to buy the entire company, you'd have to pay about $140 billion.

As the sole owner of Coca-Cola, you could pay yourself the entire $6.5 billion in free cash flow every year, for a yield of about 4.6% on your investment. Of course, that 4.6% will almost certainly grow, given Coca-Cola's competitive advantages, and you could possibly find other assets that could be sold or would generate additional cash in the future. However, this is a quick and dirty way of deciding whether Coca-Cola's shares are worth further study.

Although there's a lot more to it, learning to think like an owner and valuing a company based on its cash-generating potential can be the most important first step that Fools make in becoming better investors.

I don't get what this all means, specifically the part in bold.  Is that the interest rate on the money if you were to keep it in the bank?  Are they trying to say that money will generate a lot more money merely on interest, and this is a good thing that shows the company will keep rolling in the cash?

The way they word the article it looks like they're making Coke out to be a good investment.

Link if you want it

[cmlancas]

I think the best way to play the market in these games is to seek out stocks at the low point of the sin(x)/cos(x) graph and buy accordingly. I don't even know what half the fucking companies do, nor do I care.

If your stocks aren't doing so well this week, just hold onto them until next week... and so on and so forth.

[Merusk]

Ooki:

No, that 4.6% is the revenue generated per year divided by the cost of owning the company.   SO: if you owned Coke in whole, you'd be making 4.6% of your money back each year, if things stay the way they exsist right now.

What they're saying is, buying Coke looks good if you think they can make that same money each year, or increase the amount made in the years following.

Like they said, it's a very quick and dirty way of deciding things that ignores a lot of other bits of investing knowledge.  I guess that you can ignore them when investing in a megacorp like Coke, because those are typically long-term investments and things that would cause it to crubmle will destroy the lesser of us long before it destroys the megacorp.

[cmlancas]

Since I have some time today to catass to victory while I'm inbetween classes, I'll give some forecasts for those of you who are in the red significantly using the stocks in some portfolios:

Two caveats: Blue chips tend to follow the market more closely than smaller $5-15 non-blue chips. I hesitate to make predictions on blue chips because one blue chip can rattle another even if it has nothing to do with the other company. See today's market performance and Wal-Mart. And the second, I'm by no means an expert. I'm not a savvy investor, nor do I have the money to play anything else except my 401k (Which currently is on pace for a 12.6% growth this year (woot!)). Take these suggestions at your own risk.

1) Sutro's Portfolio: PRM (Primedia Incorporated): $8.00/share; This stock has stayed dormant for a little while close to it's 52 week low (arguably due to the bank concerns); It doesn't have any negative PR lately; I moved on this and am looking at a target selling price of anywhere from $8.50 to $9.00/share.

2) Phildo's Portfolio: HAL (Halliburton Company): $36.75/share; This stock looks to be on a small downswing, so it is a riskier buy at this point; Looking at this in the short term, however, one may see a target selling price at $37.00 to $38.00/share.

3) Nebu's Portfolio: YHOO (Yahoo! Incorporated): $25.75/share; This stock is looking to make a big upswing; It just received good news in a PR report, making investors happy; I'd put a target selling price at around $27.00 to $29.00. This stock should be owned by everyone on here -- Yahoo! (even as a tech stock) is a steal at $25.75.

4) GD's Portfolio: HAS (Hasbro Incorporated): $26.75/share; This stock isn't as hot as YHOO, but one could easily make another .50/share on it; I'd put a target selling price at about $27.25 or $27.50; Note that this stock will be highly influenced by the market, much like HAL.

5) Ookii's Portfolio: CSCO (Cisco Systems, Incorporated): $29.50/share; This stock should be a mover much like YHOO -- the 1mo has it on the upswing pretty nicely; I'd put a selling price at about $31.00 or so.

I've spent all my capital on a few of these stocks, so I might do some later after I make my sell orders.

Cheers, and I hope this helps everyone get away from the 

[Ookii]

How about this:

92% of companies with PEG ratios of less than 1 beat the market over three years.

http://www.fool.com/investing/value/2006/04/06/how-useful-is-the-peg-ratio.aspx

Can't get better than that.  Also http://cap.fool.com looks worth checking out.

[Sky]

The light of victory begins shining tomorrow.

Media stocks FTW.

-Sutro

Ah, the beauty that is untarnished enthusiasm. 

-Nebu

FIFY


-Sky

[Nebu]

Since I have some time today to catass to victory while I'm inbetween classes, I'll give some forecasts for those of you who are in the red significantly using the stocks in some portfolios:

Thanks for the thoughts.  I'm ready to concede victory to you.  Your portfolio is going nuts.  It's downright impressive.

[Grand Design]

Ahahahaha.

Schild is a sneaky bastid.

I tried to be a smartass and sign my post as 'K a a' - sans the spaces.

 

[Ookii]

Oh they fixed the JAVAD debacle, now he's only beating us by a slightly unreasonable percentage, as opposed to a absolutely unreasonable amount.

[Nebu]

Let the fight for second place commence!

[cmlancas]

For those of you that took my advice today:

At 1000 shares a pop,

PRM(8.14-8.00) = .14 * 1000 = $140.00  or 1.72%
HAL(37.45-36.75 = .70 * 1000 = $700.00 or 1.87%
YHOO(26.10-25.75 = .35 * 1000 = $350.00  or 1.34%
HAS(26.90-26.75) = .15 * 1000 = $150.00  or 0.56% (Note that I said it wasn't as hot as the others.)
CSCO(30.14-29.50) = .64 * 1000 = $640.00  or 2.12%

Not too shabby for one day's work. Personally, I bought PRM, YHOO and CSCO. I should've moved on HAL I suppose as well, though.

I think the next thing like this I post, I will show some stocks to short for some variation.

[Viin]

That's what I get for selling my AAPL stock *grumble* I knew I should have held on to it and wait for it to rebound more. Grr.

[Ookii]

For those of you that took my advice today:

At 1000 shares a pop,

PRM(8.14-8.00) = .14 * 1000 = $140.00  or 1.72%
HAL(37.45-36.75 = .70 * 1000 = $700.00 or 1.87%
YHOO(26.10-25.75 = .35 * 1000 = $350.00  or 1.34%
HAS(26.90-26.75) = .15 * 1000 = $150.00  or 0.56% (Note that I said it wasn't as hot as the others.)
CSCO(30.14-29.50) = .64 * 1000 = $640.00  or 2.12%

Not too shabby for one day's work. Personally, I bought PRM, YHOO and CSCO. I should've moved on HAL I suppose as well, though.

I think the next thing like this I post, I will show some stocks to short for some variation.

So how'd you figure all of that out?  The market did rally today so most stocks went up, but it seems like you actually know what you're doing in general.  Do you do like Warren Buffet and value a company yourself before seeing its stock price?

[Krakrok]

Or you could have bought ETFC and made 40%. Think I might jump on that tomorrow as it might move bigger than the VMWare I'm in now.

[cmlancas]

Stocks generally resemble this . If you look at all of the graphs with possibly the exception of HAS, you'll notice most of those are at the bottom of that curve, heading toward an upward swing. Ookii is right in his criticism that I didn't outperform the market, but we'll see how today goes. If I'd have written that report at 6:00 yesterday morning, I'd have done much better; most of those stocks had over 4-8% gains yesterday (which would have outperformed the market significantly).

ETFC looks really volatile. Good luck! 

[Krakrok]

The 20 minute trade delay is pretty lame. Even if I had been up at 6:30 I wouldn't have been able to blow it out at that price.

[schild]

I am so getting in on the next one of these.

[Sky]

You should still get in, it's running until the end of the year. Hell, you'll start ahead of most of the pack ;)

[Grand Design]

You can get in on it now - it's open until the game ends.

Actually, it would probably be better to get in now considering we all took a punch last week.

Except for cmlancas, who can see into the future and shit.

[stray]

I'll join too.

[schild]

I can't be arsed to pay attention to it over the next few weeks, too many games. Also, more of those charts plz.

[stray]

Eh, this is not easy when thinking short term... But it is more fun though. 

Here goes nothing. Hope I don't get my ass kicked too soon.

[cmlancas]

I got smoked today because IKEA opened in Orlando. I missed most of my target prices today and lost out on a chance to make 3% today. More holding onto my stocks then, I guess.

Bleh. But IKEA is fun. I spent $416.24 and decorated my entire apartment! 

[Sutro]

Bizarrely, WPO shat the bed today when the news on it was positive. Centerpoint gains outsize profits and climbs by .08. 

I do think, though, that Primedia is due two more days of upward mobility before it's dump time.

[Phildo]

I got smoked today because IKEA opened in Orlando. I missed most of my target prices today and lost out on a chance to make 3% today. More holding onto my stocks then, I guess.

Bleh. But IKEA is fun. I spent $416.24 and decorated my entire apartment! 

I heard that people were camping out to get free chairs for something like two days.  I'm staying as far away as possible until the clamor dies down.

[schild]

Given how much longer you'll be in Florida, I can't imagine there's a single thing there you need.