Investment Journals

As discussed last class, you will be required to provide evidence of your stock market activities each day.  To make this easy and environmentally friendly, we will use our Google Docs account to create an Investment Journal.


I wanted to provide you with examples of quality journal entries that meet the required expecations.  Enjoy.


January 5, 2011


Today i was looking at Petsmart and its peers. Their price to earnings ratio is not the highest out of the sector but not the lowest either. Petsmart beat expectations each time except for the last quarter. Im going to wait a little bit to see if maybe they will have a pullback (a 5% price reduction) because the company is up right now and I want to buy the stock when it is lower. One of the reasons i am wating for a pullback because they were talking about it happening in the news.


Another fantastic journal entry is as follows:


December 20

• I bought into American express at 41.73 per share
• The p/e ratio of axp is 13, better than its industry average of 15, the estimated target is around 50 dollars per share, the volume today is at 24 million far superior to the 10 day average of 9.4 million so it is obvious that people have been selling it to collect their profits. I was able to buy it around the daily low and it has climbed since then,
• The company is one of the industry leaders
• The beta is 1.94 (making it slightly more volatile than the market)
• The price has been going down the past 4.5 days
• kbw has set the target price now at 60$
• I have now found that some of the reason why the price has been going down is because the American Express card is being effected by new fed rules for debit card interchange rates.  I need to be careful because of the higher fees and new rules may negatively impact the stock's performance. 
• axp has potential to drop under $40 per share.  I am going to watch the volume closely to see what the concensus opinion is regarding the stock.

Class 16: Deciding What to Buy (April 5 & 6)

EQ - What makes your 5 companies look strong as potential investment choices?

1. Activator: Read This
2. Create a list of your top 5 investment choices
• Analyze and compare these companies to their top 2 peers
• P/E Ratio
• Book to Market
• Growth Projections
• Recent News
• Justify your stock selections in a 2 page paper
3. Your final report is 100% due at the end of the period (No excuses)
4. Submit these to the substitute

Class 15: Relationship of the Balance Sheet and Income Statement

EQ - How does cash flow from purchasing an asset versus purchasing liabilities?

1. The only rule you need to know
2. How does cash flow
3. Cash flow handout
4. Differences between Assets and Liabilities
5. Picking your assets:  Pick a Top 5 stock list

Class 12-14: Using Financial Reports to Determine Stock Value

EQ - What can the balance sheet tell us about a company's financial stability?  How can we use this information to determine a stock's value?

1. Annual Report Packet
2. Discussion
3. A closer look at the Balance Sheet
• Assets
• Liabilities
• Stockholder's Equity
4. Try it together
5. Reviewing Stock Quote Data
• Market Capitalization
• Earnings
• Shares Outstanding
6. Intro Book to Market Ratio
7. Project
• Choose a company
• Quote analysis
• Calculate the P/E
• Analyze the Balance Sheet
• Determine Book to Market
8. Repeat the process for 2 major competitors
9. Determine your investment choice

Class 11: Beyond the P/E

EQ – How do we analyze financial reports to assess and compare investment opportunities?

1. Top Secret Handout - "Anything in life worth having is worth working for." - Carnegie
2. Independently complete the lesson material
3. Question the information - Write your questions on a separate sheet of paper
4. If time permits you may review your answers with a partner.
5. Please bring the Top Secret Handout with you to our next class

Class 8 - 10: The Hard Part - Valuatation

EQ - Why is it important to understand the difference between price and value?

1. Activator: Cell Phone v. Dr. Pepper
2. Determining Value - $10/10 shares or $1/100 shares
3. Chalk Talk - Is it cheap or expensive?
4. Real Life Application - Yahoo v. Google v. Baidu
5. Discussion Question - Does price matter when making investment decisions? Why or why not?
6. Valuation - Earnings-based <-- Great link from Fool.com
7. TOD - Write questions about the reading for Mr. Hill to answer next class.
8. Real-Life P/E Ratio comparison

Class 7: Invest in what you know

EQ – Why is investing in what you know a good strategy?

1. Access www.weseed.com
2. Click the Learn tab at the top of the website
3.  Read and take notes on Level 2 – Invest In What You Know
4. Read and take notes on Level 2- Working at the Stock Market