Investing

[Humodour]

I am new to it. I want to hear more about it. Specifically experiences others have had with it, and whom they invested in, and if it worked out for them or not.

 

I am going to purchase around $10,000 of IBM shares today.

[Syraxis]

I am going to purchase around $10,000 of IBM shares today.

 

Why? They got some good long term plan going on?

[Morgoth]

It's the psychedelics, mang, They completely mess up his brain (or what is left of it).

[Humodour]

I am going to purchase around $10,000 of IBM shares today.

 

Why? They got some good long term plan going on?

 

I will say more later today after I have purchased their shares as this is a public forum and I'm a huge proponent of chaos theory (butterfly flaps its wings, causes a tornado kind of thing). Not paranoia since the share market has been mathematically proven to be a complex system with emergent behaviour and chaotic phenomena.

 

But yes.

 

I will leave you to consider this: If somebody had purchased $10,000 of Apple shares on April 17th, 2003, those shares would now be worth (ignoring inflation and share dividends and any brokerage fees) around $500,000.

 

2003. Apple. A 5000% share price increase.

 

If somebody had purchased $10,000 Apple shares about 1.5 years ago, those shares would be worth around $20,000 now.

Edited June 14, 2011 by Krezack

[Hurlshort]

You should invest in my company, Hurlshot Industries. We have cornered the market on something really special. I can't give it away, but it involves frozen water and combustible oxygen tanks.

[Tale]

$10,000 in Tale Does Stuff, LLC, would go a long way.

[Guard Dog]

Krez, I realize you do not consider me a credible source of info about...well anything, however this is a subject I know a little about and have enjoyed some success at. I have not looked hard at IBM or any other "tech" stock but I hope you are not buying in because you are hoping for another Apple like growth trend. If so you might as well by lottery tickets.

 

Two thing to look for in a stock, 1) EBITA, Earnings Before Interest Tax Amortiztion. This is the 1# measure of the comapy's profitability. 2) Debt service or debt to equity ratio. Apple was a smart buy in 2003 because it's debt service was only 14% (under 30% is good). IBM according to Forbes has a EBITA of 23.3% and a D/E of 89%. Granted there is more to dertermining if this is a bad thing because you need to analyze just what their debt encompasses but at first look that does not get my juices flowing.

 

My best advice to you based on your risk tolerance is buying into a real commodity (but NOT gold, it is way over price. In fact I've been selling my gold of late). Their demand is high with all of the economic unertainty and they are largely immune from inflation concerns. Silver or copper are solid bets right now. I would avoid currency or any government bond right not, no matter whose it is. If you are looking at stocks in the US choose one with a low debt service that is offering a product or service that will not be impacted by instability in the US govt.

 

Just my $.02. I took the money I recived from my gold divestment and bought real estate over in Nashville & Murfesboro. The price has never been better and it won't stay that way forever.

[Humodour]

Krez, I realize you do not consider me a credible source of info about...well anything, however this is a subject I know a little about and have enjoyed some success at. I have not looked hard at IBM or any other "tech" stock but I hope you are not buying in because you are hoping for another Apple like growth trend. If so you might as well by lottery tickets.

 

Two thing to look for in a stock, 1) EBITA, Earnings Before Interest Tax Amortiztion. This is the 1# measure of the comapy's profitability. 2) Debt service or debt to equity ratio. Apple was a smart buy in 2003 because it's debt service was only 14% (under 30% is good). IBM according to Forbes has a EBITA of 23.3% and a D/E of 89%. Granted there is more to dertermining if this is a bad thing because you need to analyze just what their debt encompasses but at first look that does not get my juices flowing.

 

My best advice to you based on your risk tolerance is buying into a real commodity (but NOT gold, it is way over price. In fact I've been selling my gold of late). Their demand is high with all of the economic unertainty and they are largely immune from inflation concerns. Silver or copper are solid bets right now. I would avoid currency or any government bond right not, no matter whose it is. If you are looking at stocks in the US choose one with a low debt service that is offering a product or service that will not be impacted by instability in the US govt.

 

Just my $.02. I took the money I recived from my gold divestment and bought real estate over in Nashville & Murfesboro. The price has never been better and it won't stay that way forever.

 

That's the type of post I was hoping for, so thanks!

 

And frankly, regardless of what we agree on, 1+1=2, and economics is just applied maths, so if you know your stuff, you know your stuff and I am happy to listen!

 

It won't influence my current semi-gamble with IBM (as much a learning experience as a long-term investment), but it will help inform my future transactions.

 

What is amortisation and what does a debt/equity ratio indicate and why? I will do some further reading as well, so don't feel you must answer me.

[Rosbjerg]

1+1=2, and economics is just applied maths.

 

Not entirely. But GDs advice sounds pretty good (I don't know very much about investments, but I did make a luckily guess once)

[Guard Dog]

What is amortisation and what does a debt/equity ratio indicate and why? I will do some further reading as well, so don't feel you must answer me.

Short answer Amortization is the differential between equity & interest in intagible assets. For example if I bought a radio tower on a 10 year mortgage for $10 million and leased it out for 15 million for 10 years I'd have a 75% amortization on that income for the duration. Now the tower itself will decrease in value over that 10 years, that is call depreciation. They are different things.

 

Debt/Equity is the ratio of capital a company have to it's liabilties. If I have $100M in assets and $300k in debt then my D/E is 30%

[MajorChaos]

I am new to it. I want to hear more about it. Specifically experiences others have had with it, and whom they invested in, and if it worked out for them or not.

 

I am going to purchase around $10,000 of IBM shares today.

 

I've got a bridge that I can sell you...

 

Seriously though, when ever I think of "investing" I think of what Will Rogers said... I am not so interested in the return on my investment as in the return of my investment.

 

Why IBM? And what is your investment time frame. If you can't hold it for at least several years, I'd be leary of any stock. And what are you going to do if it drops 10% after you buy it... and then another 10%... etc. From personal experience, it's a lot easier to get in than to get out.

 

Anyway, good luck!

[Walsingham]

Going entirely on scuttlebutt I've heard... IBM have completely no idea of where they want to be in the market, or how to get there. It's pretty much just momentum keeping them going.

 

10k sounds like a lot to wager on one 'horse', anyway. Unless you've considerably more capital than I thought.

[Azure79]

I've often thought about the following. Since I read up so much on video games and what's coming out and what popular trends on video games are, even though certain genres hold no interest to me, could I create a portfolio solely on publicly traded video game companies that might give me a modest return.

 

I haven't actually done any research towards this, just a vague thoughts like, if I buy Act-Blizz stock before D3 comes out could I expect an increase in stock price due to the success of the game?

 

My investments are mostly geared towards real estate and by that I mean one rental property, but hey, it's a start.