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I have been overtaken with the urge to buy stock. I think the time might be right, especially if you follow the sage advice of "buy something when no one is talking about it". People are talking about real estate these days. Thats where the money is and the go-go profits (personally I think, at least where I am, the market is way to high and will eventually sputter out, start dragging down prices eventually causing massive foreclosures as people who bought with ARMs realize they can't afford the house. This will end up spreading as more national lenders are exposed to key markets and it will affect their ability to lend in better markets. and oh yes, the sky IS falling) are right now. Which is why I wouldn't want to be in it now. So I am looking at stocks, not many folks are excited about them right now. I am hoping to spot some deals. Not really sure what I am gonna end up buying though. I have been looking at Deckers. They own the Teva, Ugg and Simple footwear companies. They have no debt, rapid growth in the Ugg line, new CEO (the founder stepped down), good management and an innovative product line. They also have a pretty low P/E.
ALso, I noticed US Steel has an amazing low P/E -- like 6%. This is due, in part, because the price of steel has gone down significantly.
It's interesting when you step outside of a stocks "story" and start applying basic economic principles to what you buy. Remarkably I have just come around to this concept fairly recently. It obviously works best for commodities (simple supply/demand) but can certainly be applied to companies as well that provide products. So much of my economic education has been on theory, its mindblowing to actually start to put it into practice!
I still think stocks are a bad way to create wealth -- you need money to start, and usually big money to get substantial gains. It is good, however, to preserve wealth. Plus I like it.
On a side note, I read the other day that the founder of Morningstar (compamy recently went public) purchased Inc and Fast Company magazine. For 35 million total. The company he bought it from paid 500mil for them. ouch.
July 14 2005, 01:45:41 UTC 6 years ago
401k plans are my project for the next few weeks. Separate stocks will come later, as I earn my own trust in handling these things well. But you're right--I'd much rather be in the stock market than in real estate right now. Which isn't saying much, since I'd rather be on Jupiter than anywhere close to the real estate market right now. But still. Stocks just seem like a more interesting field to explore.
July 14 2005, 01:51:44 UTC 6 years ago
Yeah, I love Inc. Apparently their ad revenue has been way down. But the guy that bought them, from what I hear, is a "good" guy who is interested in maintaining the integrity of the company. He is also a very prudent investor. And, for 35 million, I am sure he will be able to wring out enough profit. I think Inc has had various owners over the years. I managed to read the last 5 years worth of issues and there is a noticeable change in quality (and size). Hopefully they will return to some of the old columns.