When I decided to take a break from dancing I made a goal to educate myself in the stock market, investing in general, and macroeconomic issues on a global scale - obviously it's a work in progress.
The past couple of years I read a lot of investing books, and I read the Report on Business, Economist etc. daily and try to keep an eye out for trends so I can make informed decisions.
I own several company stocks (among other types of investments) that I *believe* were based on sound decisions - I based the choice to buy on what I interpreted as fair price, solid, productive and promising company fundamentals. I suppose my timeframe is "long-term" as I don't need the money in the near future, however I'm more concerned with a company's performance than # of years.
My concern is that I'm not really 'getting' it. Obviously I'm not going to be right all the time and I expect to lose $ in some cases - and I'm happy to consider it like "tuition" in business/investing school. But if I am not learning from the loss then it IS a waste.
Here are my questions and I'd really appreciate any comments, thoughts or advice. Thanks in advance:
Is it possible I'm placing too much emphasis on a sound balance sheet? I know not everything is transparent. One of my criteria involves looking at price to earnings ratio - but how much does it really indicate about a company? Market sentiment can't bankrupt a company, right?!
Here's an example: A company who's shares I own (RIM / RIMM) just reported it's quarterly earnings and market sentiment seems to play a HUGE part in this one - anyway the share price just went way down. The earnings per share were a cent lower than company and analyst expectations - but I don't get why that's so undesirable. Apparently profits overall were still "in line with expectations". My understanding is that projected revenues were missed by 0.5% and it grew revenue 'only' 18%.
The quarterly revenue was down though - maybe this is what matters to analysts or short-term investors/traders? I take a look around me and base my thoughts on what I see happening around me and I do try to determine the 'value' of the company and I understand that there are really confilcted opinions on this particular company.
But is there a resource or book you recommend that will help me understand numbers and balance sheets, P/E, EPS better than I currently do? Thank you!



Reply With Quote

Bookmarks