Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
Just heard a piece on NPR yesterday where they were discussing investing, and only about 50% of people between 18-30 thought that investing in the market was a good idea. More popular answers? Real estate and savings accounts. Crazy kids.
Its not the same for kids as it is for you, or even myself. For one thing, they are mired in debt from college. Figures I have heard range from 40,000 all the way to 200,000 dollars in debt. The fact is that most kids are paycheck to paycheck and would have to get more credit to afford a slight emergency. The mere ability for a kid to get a savings account ( read something more liquid than a 401k, and less volatile than large caps) is impressive. My first goal was to get a 6 month emergency fund regardless of the rate. Being able to rest at night knowing that a few bumps in the road won't affect me go a long way.
As for real estate, also consider that kids grew up during the Kiyosaki era, and think that the boom/ easy credit are still possible. However, I am seeing most people putting nearly 0 down, and going for 30 year loans ; even than they are barely paycheck to paycheck. The reason people do R/E is that it still seems to them that they can flip their property and make money. The concept of investing ( not speculating) is foreign to them. Its easier to apply for a loan for something they can't afford, than to do due diligence of a company. From personal experience, I know only one or two of my friends who have opted for investing over buying into R/E.
To keep with the thread's topic, I'll throw in my two cents. I subscribe to Graham's value investing teachings, and attempt to dig into a companies financials a little before I buy. I won't pretend to forcast the future, but try and look at how well a company has done in the pats 5 or 10 years in regards to earnings ( and EPS), its return on invested capital, if it pays dividends, and how its financial situation is. Since I don't have much time, I simply look at what officers are buying/ selling to get agreement if the share is overpriced or under priced. If the later, I buy. A few I am long on are large caps including BP, Waters ( WAT), FOSL, AAPL ( its overpriced now), and XOM. I really don't own much stock in comparison to you guys though, but my portfolio has generated a decent return since last year.
I feel that rising oil prices might put a hold on any economic recovery, so I am waiting for price drops in a few big caps. This might be a few months out though.
