4 ms·

In his book "Rocket Boys", Homer Hickman tells how his mother saved a little from her household budget and invested it in stock of companies that made bandaids,

by marze 16y ago

In his book "Rocket Boys", Homer Hickman tells how his mother saved a little from her household budget and invested it in stock of companies that made bandaids, and eventually used the proceeds to buy a summer house in Florida. Her children needed bandaids requently, and she could tell which were the ones that really worked, so she invested in those firms. Lesson: invest in companies where you have a good/deep understanding of the product/industry.

patio11 16y ago
Don't miss the important bit in that anecdote: save a little money, consistently, over a long period of time. Do that and your stock selection scarcely matters. (Indeed, you'd probably do better with index funds.)
- DeusExMachina 16y ago
  Lesson: invest in companies where you have a good/deep understanding of the product/industry. I already invest in a company that I know well, Apple. Being a hacker, a Mac/iPhone/iPad developer and a fan (no so much lately) I know and understand the company quite a bit. I bought some stock in 2009 and it's performing quite well. But I know the risks of falling in love with a company, that's why I'm trying to differentiate. save a little money, consistently, over a long period of time I'm lucky that I have learnt this a long time ago, coming from a family that had economic problems since I can remember. My parents taught me the importance of saving with bad examples. Regarding index funds, I don't live in the USA and I'm trying to figure out how I could invest in them (it does not seem so simple, from here).
  - patio11 16y ago
    If you can invest in stocks like Apple, you can invest in Exchange Traded Funds (ETFs). Take a look at what Vanguard has available in index funds with an ETF equivalent, then buy that symbol as a stock. For example, VTI is their total market fund. You get basically the performance of the US market (Wilshire index) minus .07 basis points (i.e. 7 hundredths of a percent) minus whatever your trading costs for the shares are.
  - dennisgorelik 16y ago
    It's ok to fall in love with the company. Just don't forget to sell as soon as you fall out of love with the company. You may also pay attention to the price of the stock: if you love the company and feel that stock is undervalued -- buy more. If you feel that stock is overvalued -- hold or sell. If you don't like/trust company anymore -- sell. Still it's important to diversify your portfolio: Pick at least two companies to invest into. There is no need to pick more than five. Don't sell in panic when price goes down -- if you didn't sell company when you was more expensive yesterday -- why sell it today when you get even less? Don't buy in greed when stock price goes up. If you didn't think that company was undervalued yesterday -- why buy it today when it's even more expensive? You are right to invest long term. If you are buying/selling same stock more often than once per year -- you are spending too much time on it. Time that you could better spend in your profession.

by marze 16y ago

patio11 16y ago

Don't miss the important bit in that anecdote: save a little money, consistently, over a long period of time. Do that and your stock selection scarcely matters. (Indeed, you'd probably do better with index funds.)

DeusExMachina 16y ago
Lesson: invest in companies where you have a good/deep understanding of the product/industry. I already invest in a company that I know well, Apple. Being a hacker, a Mac/iPhone/iPad developer and a fan (no so much lately) I know and understand the company quite a bit. I bought some stock in 2009 and it's performing quite well. But I know the risks of falling in love with a company, that's why I'm trying to differentiate. save a little money, consistently, over a long period of time I'm lucky that I have learnt this a long time ago, coming from a family that had economic problems since I can remember. My parents taught me the importance of saving with bad examples. Regarding index funds, I don't live in the USA and I'm trying to figure out how I could invest in them (it does not seem so simple, from here).
- patio11 16y ago
  If you can invest in stocks like Apple, you can invest in Exchange Traded Funds (ETFs). Take a look at what Vanguard has available in index funds with an ETF equivalent, then buy that symbol as a stock. For example, VTI is their total market fund. You get basically the performance of the US market (Wilshire index) minus .07 basis points (i.e. 7 hundredths of a percent) minus whatever your trading costs for the shares are.
- dennisgorelik 16y ago
  It's ok to fall in love with the company. Just don't forget to sell as soon as you fall out of love with the company. You may also pay attention to the price of the stock: if you love the company and feel that stock is undervalued -- buy more. If you feel that stock is overvalued -- hold or sell. If you don't like/trust company anymore -- sell. Still it's important to diversify your portfolio: Pick at least two companies to invest into. There is no need to pick more than five. Don't sell in panic when price goes down -- if you didn't sell company when you was more expensive yesterday -- why sell it today when you get even less? Don't buy in greed when stock price goes up. If you didn't think that company was undervalued yesterday -- why buy it today when it's even more expensive? You are right to invest long term. If you are buying/selling same stock more often than once per year -- you are spending too much time on it. Time that you could better spend in your profession.