Thursday, July 14, 2005

Today in the stock market

Yes! GM is finally only about 15% down from when I bought it!

For the most part, I'm pretty happy with the investments I've made via E*Trade. I have tried to teach myself a few basic things about how to evaluate stocks, but I have a long way to go. A couple of years ago I read a great article in Bloomsberg Personal Finance magazine (which seems to be defunct now?) about how to calculate what should theoretically be the downside price of a stock. Being fairly conservative when it comes to finances, I like the idea of value investing. I bought a couple of things based on that advice and it panned out well. McDonald's (MCD) is up 67%! I also bought Lucent (LU) because at $1.69 a share, why the hell not! It's now at $3.16. (I wish I'd bought more than 200 shares!)
GM was a more recent purchase-- it seemed like a no-brainer. The dividend yield was better than most savings accounts, and I thought, hey, big blue chip kinda thing, should be solid as a rock. Within a week or two, I began to be proved wrong! At one point I was down by about 45%. At this point I was really glad I'd only bought 50 shares!
I do have funny timing sometimes. Two days after I bought McDonalds, the obesity lawsuit against them hit the papers. A week after I bought Lucent, there was some FCC ruling that I didn't understand, but which was considered a blow to their chances for a turnaround. So I've had my "oh shit!" moments, but at least they've mostly worked out in the long run!

4 comments:

jim said...

you should try some of their bonds instead of the stock... i've had luck with GMW, the 8% yearly dividend is nice too.

Madame X said...

Interesting, corporate bonds are something I don't know much about. GM's are technically junk bonds now, right?

Monty Loree said...

The other day I heard that GM was teetering on the verge of being delisted from DOW. That's unbelieveable. How many multibillion companies are not listed on the down. I think they quoted GM as having $300 million in sales. I also heard that GM's main source of revenue is GMAC, their financing arm.

That's pretty scary.

Financial Maturity blog

Anonymous said...

I've just recently come across your blog and have found the information useful and at times amusing. I came a cross this one today while looking through the archives of your blog and wanted to know - Do you still have that GM stock? When did you get rid of it? How are you feeling considering everything that GM is going through now?