There are many different approaches to choosing stocks. Each comes with advantages and
disadvantages, so you should try to find the approach best suited to your own financial situation and goals. Over time, you’ll develop your own set of criteria to pick stocks. Stick with the investing
style that works best for you. Mixing up approaches may dilute the effectiveness of your chosen

strategy:

grow its business.

ahead.

1. The price of a stock reflects the company’s current and expected value. To what extent do
you think stock investing is a visceral/emotional/psychological activity? To what extent do
you think stock investing can be boiled down to mathematical terms?

2. Which of the four strategies presented here is the best approach for you? Is there another
approach that is better than these?

3. How do you conduct “adequate research” on your investments? How do you assign proper
weights to “snapshots” looks versus long-term patterns? How do you differentiate between

“talking heads” and people who have actually succeeded in their investments?

4. Why do you build an investment portfolio? How do you build that portfolio?

• Do some research on the Dow Theory and see if is applicable today.
• Do some research on three investors in the new today—George Soros, Warren Buffet, and
Kirk Kerkorian—and see what investment strategy each developed.
• How does the volatility of the financial markets affect your investment portfolio? What can
you do to handle/deal with sudden swings in value?
• How do you calculate how well your portfolio is doing? How do you measure total return
on your investment?

• Take a major stock—say Microsoft—and see if any of the four approaches (Technical

analysis, Fundamental analysis, Value and growth investing, Long-term investing) would

have provided you larger profit.

• Invite a representative of a stock brokerage to visit your class, to explain how a brokerage

conducts its business and advises its client.

• Assign members of the class to four groups, each one representing one of the investment

strategies above. Over the course of three months, have each group invest according to its

investment strategy and see how much each group profits at the end of the period.

Balance Sheet —A quantitative summary of a company’s financial condition at a given point in
time, including assets, liabilities, and net worth

Growth Rate —The compounded annualized rate of growth of a company’s
revenues/earnings/dividends

Stock —Stocks are ownership shares in a corporation. Your amount of ownership is a function
of the percentage of your holdings to the entire number of shares issued. If 100,000 shares have
been issues and you own 10,000 shares, then you own 10% of the corporation. You can realize
income from dividends on your shares or appreciation in the value of the shares you hold.

By: Mark Sheldon Wong - Bluebox Global Solutions
 

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