Jason and Chris have provided some excellent advice and guidlines when making investments this week. It’s imperative that you know what you’re investing in not only from a personal standpoint, but also from a market perspective. But that alone is not enough, it is imperative that you can differentiate between what you know and what you like. Failing to be able to do so will cost you in the long term.
Let me present 3 steps to making an investment decision:
Frank, Jason and I were having dinner this past Saturday and we were discussing future markets. Jason brought up Biotech and was talking about some of the possibilities for future advances, and how they may affect the industry. Now, Biotech is something I know very little about — in fact, I know almost nothing about it. As a result I probably am not going to invest in Biotech in the near future.
What follows is a question posed to us after Jason’s article last week. As well as my response to that question. I hope to have answered the reader’s questions completely, and I hope that my response proves valuable as well. I’ve left the response as is, and I’ll be covering different sorts of investments and other strategies in weeks to come, as I build my own confidence and knowledge. I’ll close with a few comments that cover some areas that I feel my original response did not adequately address.
I read your Savings Speech article today, and it was not unlike many time-value-of-money articles I have read in the past. I am curious, though, what type of investment you would expect to see an average 9% return from?
Today Cisco announced that it would be purchasing Scientific Atlanta, for close to 7 Billion dollars. Which after taking Scientific Atalanta’s cash into account will mean the actual cost is closer to 5.3 Billion. Most of the sources are speculating that this is the expression of Cisco’s desire to move deeper into the consumer market. But I think that it’s more than that and Cisco already has a plan for this acquisition.
On Tuesday Chris posted about “Digital Media Convergence”, and picked Microsoft as one of the main benefactors/facilitators of just such a shift. A reader responded to the post with some excellent comments, and a due amount of concern, as to why one should be wary of investing in Microsoft.
I would first like to say, that this is just such an environment which we hope to foster here at InvestorGeeks. It’s one of the reasons we started the Forums. So in that spirit here is why I think that Microsoft is ripe for investment.
Below is an excerpt from a conversation that Chris and I had last night. It concerns emerging markets, and some thoughts on how best to enter them. I’ve just posted the conversation as is, not even bothering to modify for typos and mispellings. In a few weeks, I’ll post more thoroughly on this topic, as it interests me, and deserves my full measure of attention. Also, this is just an aside, and not a substitute/cop-out for my weekly article, that will follow sometime tomorrow.
On Tuesday, Chris tried to explain the “media convergence” that is becoming more of a reality everyday, a daunting task to say the least. Chris described the scenario made possible now by Apple’s video iPod: downloading a television show through your computer at work (over lunch) to watch on your TV at home (over dinner).
Two things have become clear to me:
With growing legions of users watching TV programming on their own schedules, and ultra-high bandwidth soon being pumped to every home, the dawn of digital media convergence will soon arrive, and Yahoo! and Microsoft are well positioned (and priced) to give investors a real bang for their buck.
What’s this convergence thing?
So imagine this: you’re at work and you just realized that you missed your favorite show last night. But you’re not worried. You log onto the web and download last night’s episode in digital quality for under a couple bucks. Within minutes it’s on your media player, and after you get home, you plug your media player into your home TV, and are watching it without the need to sit through all those darn commercials.
Frank presented some great short-term and long-term stocks in Tuesday’s post. It’s important when investing to differentiate between short-term and long-term plays. You should always know why you are buying a stock, and knowing when you plan on selling the stock (in the short-term or long-term) is an important part of that equation.
But what do you do if a company looks good in the short-term AND the long-term? I’m going to address this topic using one of Frank’s picks as an example: SIRI (Sirius Satellite Radio Inc.)
