Facebook: Blue in Person, Gold in Investment

Happy Tuesday to everyone! First, I would like to congratulate our Vice-President, Chris Cattafi, on his acceptance to NYU! Also, we know everyone is busy over the holidays therefore this will be our last post of the calendar year. We wish everyone Happy Holidays, Merry Christmas, and a Happy New Year (full of investing ;) ).
Our post today is about social network giant Facebook (FB). First established to compare people, and then as a social media site reserved exclusively for top-tier universities, Facebook now has over one billion users every month. Taken from a Harvard dorm room, the company established and run by CEO Mark Zuckerberg since 2004 is the epitome of modern online communications. Since the conglomerate is free, FB builds its revenue from advertising, lots and lots of advertising. For those of you who use Facebook, you most likely notice the right column filled with ads, often times specialized. You may also notice throughout the site the ability to advertise, create a page for a business, and even promote one's recently posted status update to ensure everyone will see it! These abilities, some of them quite ridiculous, build the bulk of revenues, and the recent addition of more advertising opportunities are sending stocks skyrocketing.
As we look at Facebook's stock history, we see a sharp drop since the beginning, a slight curve back up, and a drop down towards $20 a share. We all remember Facebook's first day on the market; easily one of the biggest failures, sinking about $12 in a week. Stocks have again been falling since July, but with new advertising campaigns are on the rise again.
In late October, Facebook sought such new programs to increase profits, investment, and overall reliability on the stock market. The newly announced campaign allowed Facebook to open at $24 on October 24th, while it closed at $20 on the 23rd. This 25% increase slowly fell back down towards mid-November, but is now tremendously rising again. When hitting a monthly low, Facebook predicted less revenue than the previous quarter. Fortunately (and for us), I predicted that stocks would quickly rise again -- we bought 90 shares of FB on the Investopedia Stock Simulator priced at $22.34 each nearly a month ago. This fairly large investment, of over $2000, has certainly paid off. When starting to write this, I sold all 90 shares at $27.81, in accordance to my predicted jump upwards. The difference between buy/sell amounts to a profit of almost $500, an outstanding 25%. Now is a better time than ever to invest in Facebook: it is headed back into the top of the market and we expect even more growth and profits over the next year. Perhaps a New Year's resolution could be to invest more in FB!
Thanks for reading our posts about the Stock Market and the global economy. We will write again in January to analyze Pharmaceuticals, and follow with Consumer Goods to analyze holiday shopping a few weeks later. With that, the Investment Club at LMHS wishes everyone Happy Holidays and a Happy New Year!!!

What Is The Fiscal Cliff?

     Welcome back, everyone! Today, we are going to discuss an esoteric topic that currently leaves much of the American public in confusion: the Fiscal Cliff. Indeed, economists have predicted that the end of 2012 will bring about a dramatic, apocalyptic-sounding event known as the fiscal cliff. But as a statistic would indicate, 80% of Americans are left with a simple question on their minds: what IS the fiscal cliff?
     The fiscal cliff pertains to a series of actions to be taken by the federal government in early 2013 in order to reduce the national budget deficit to almost half its current value. To clarify, the budget deficit refers to the amount of money which the government owes to its creditors within a specific period of time--it is not to be confused with the national debt which is applied to pay for the accumulation of deficit. So why should this reduction in deficit affect the average American? Well, among the most significant contributors to the deficit is government spending, which will be expected to decline with the advent of the fiscal cliff: this includes a reduction in spending for defense, federal agencies, and Cabinet departments (with major social programs such as Medicaid, Social Security, and veterans' benefits remaining exempt). Furthermore, a decline in budget deficit will result in tax increases, thereby offsetting the income tax cuts of the Bush Administration as well as the payroll tax cuts implemented by the Obama Administration.
     With economic stability for the next year at stake, several political stances have developed potential solutions for the fiscal cliff. For example, the Democratic party has agreed to support the extension of Bush Administration tax cuts for the bottom 98% of the economy whilst allowing for tax cuts for the top 2%, as recently confirmed in a public statement. Additionally, President Obama has expressed support for spending cuts such as $1.6 trillion in tax increases over the next decade as well as $400 million of cuts to Medicare over the same time frame. On the other hand, the Republican party has proposed to mitigate the fiscal cliff by extending the Bush-implemented tax cuts (including those for the top 2%) and by cutting the national deficit by $2.2 trillion over the next decade by reducing tax and federal expenditures such as exemptions (charity donations, loopholes, etc.) and Medicare (by raising the eligibility age), respectively.
    The average American deserves to know that the fiscal cliff is not a dramatic economic cataclysm but is nonetheless quite serious. The proposals offered to quell the effects of this reduction in deficit must go into effect by the end of 2012 in order to allow for desirable mitigation. With that in mind, Americans should watch carefully for the latest updates on this volatile subject.


-Chris Cattafi, Co-Founder and Vice President of Investment Club

Vodafone

As we finished the trio of communications, we mentioned that Verizon is co-owned by another company: Vodafone (VOD). Vodafone also focuses on wired and wireless connectivity, specifically prepaid phones, calling cards, postpaid services (such as Verizon's major plans), and world calling cards. This company was established in 1984 as Racal Strategic Radio Limited; in 1991, however, it RCR Ltd. separated and established a new, independent, and public company called Vodafone. In 1999, the company split 5:1 (GIANT growth). The group changed its name after merging with AirTouch Comm. in 1999 but reverted to Vodafone Group Plc. in 2000. In the latter year, Vodafone worked with Bell Atlantic to create Verizon Wireless.

Our records of Vodafone date to the late 1980's, but the company saw little growth until the Information Era and the split. By 2002, stocks were barely 30% of what they were in 2000, but they were again on the rise. With its holdings growing, VOD saw sustained growth until late 2007. The recession in 2008 again caused a harsh drop in stocks of about 50%. In 2009, Verizon completed its acquisition of AllTell and begin a minor stage of growth that capped around $30.

Lately, Vodafone has been slowing down and losing EPS. Late October witnessed the beginning of investing in the company with accompanying falling stock prices. In mid-November, Comcast planned to layoff 450 employees from NBC Universal; unfortunately, the loss of profits from one major company in the sector also shakes the rest and Vodafone's stocks fell. We predicted soon thereafter that stocks would increase again from $25 to $26, and to buy then to make money. Currently, Vodafone is headed back down after meeting a peak. Once stocks hit about $25 or lower, we strongly encourage investing in the company.

Verizon: Mobile Dominance on the Horizon

To finish our triad of the three major mobile service players, we are looking at Verizon Communications (VZ). Verizon is actually co-owned by VZ and Vodafone (VOD), which we will analyze later this week! To start off, Verizon was established in 1983, the same year as AT&T. The company, which focuses on wired and wireless communications, specializes in cellular providing, network cards/ mobile USB data ports, home networks and providers, as well as business solutions through Verizon Enterprise, comparable to AT&T Enterprise and Sprint Business; although Verizon offers other services, these comprise the majority which affect the business and financial changes we observe.

Right from the beginning, Verizon exhibited tremendous growth. Quintupling within a decade in the late 20th century, and tripling yet again into the Information Era to a record $63 a share, Verizon is easily one of the best growing companies we have observed, at least in early stages. Unfortunately, the end of the Information Era (the Internet boom and technological excitements between 1999-2001) also marked the end of this supreme stock reign, as stocks fell 50%. After seeing newfound growth from 2006 to 2007 and early 2008, the Recession hit and fell back to 2002 levels. Verizon, however, is now selling for $44.03 (similar to pre-recession costs). When we initially studied the company in recent times, we began in late October and early November, with traces of a steepening decline. Fortunately, we bought in mid-November when stocks hit their low and begin rising again. The only significant event in November was the case again Verizon Wireless (note the difference, --Communications and --Wireless). Verizon Wireless asked its two parent companies, Verizon Comm. and Vodafone, for a bailout of $17 billion, but instead of, well, bailing itself out, it spent it on further wireless developments. Even though this situation is like the Federal Government suing Bank of America, Verizon Wireless was forced to pay $8.5 billion each to Verizon Comm. and the latter.
As Verizon expands Verizon Wireless and improves the 4G networks and availability, as well as allow more competitive prices (remember that no company may monopolize a market and drive others out of business), the company will continue to grow. The expenditure of buying T-Mobile could also prove a worthy decision to aid with the expansion of the company globally. We currently expect Verizon to slow down a bit and for stocks to depreciate value, but they will quickly swing back up. Buy while cheap! We bought our stocks on Investopedia in mid-November when stocks hit their low, and on just a few shares have made $18. This is certainly a company worth investing, both in the short- and long-terms.

Oil Today: A Slippery Situation?

    Welcome back, everyone! Today, we're going to discuss one of modern society's most treasured and versatile resources: oil. Over the past 10 years, oil prices worldwide have skyrocketed to unprecedented proportions, motivating drastic actions by some nations to reduce dependency on oil; the ambivalent success of this transition has created some stability. Nonetheless, the price of oil remains subject to turbulence and instability as a result of several political complications.
     Among the world's major commodities, oil is particularly driven by politics. Indeed, the political affairs of individual nations hold the largest influence over the oil industry; in the wake of the monumental political turmoil in the Middle East (the source of 33% of the world's know oil supply), this is not a good sign. As of recently, some Middle Eastern militia groups have attempted to seize control of certain key oil-producing nations, creating a precarious situation for the global oil market. Similarly, the potential for domestic and offshore drilling in the United States has generated a fair amount of controversy. Indeed, parts of the Gulf of Mexico, the southwestern U.S and Alaska harbor immense deposits of oil and natural gas, some of which remain untapped (and others have been drilled by foreign countries such as China and Russia. This is the result of the American federal government's inability to invest in the domestic oil industry, causing not only an increased reliance on imported oil, but also a degradation and lack of development of oil drilling technology; the latter is to blame for such events as the infamous BP oil spill of 2009; in this ecological disaster, a malfunction at a decades-old oil well operated by BP in the Gulf of Mexico led to a massive contamination of huge expanses of ocean, damaging not only local ecosystems but also local fishing industries. Likewise, the construction of an oil pipeline in the Alaskan wilderness has received backlash by environmentalists, due to its supposed disruptive effect on local ecosystems.
     As one of modern civilization's most valued resources, the trade of oil holds an especially critical role in international political affairs. It should thus come as no surprise that the price of oil is largely subject to influence by various political factors. It has served as both a source of violence and conflict as well as a source of innovation and prosperity. With that in mind, one should closely watch the current affairs of the world's largest oil exporters (i.e. the Middle East, Russia, China) for a good forecast of fluctuations in oil prices.


-Chris Cattafi, Investment Club Co-Founder and Vice President

Sprint: Mobile Not for Long

Welcome back everyone! Today we are continuing our segment on the largest mobile companies in the US, with the clash between AT&T (already posted), Sprint, and Verizon. Today's company is the oldest and the weakest - Sprint Nextel (S). Over 100 years old, Sprint was established in 1899 as the Brown Telephone Company. The company changed names from Brown Tel. to United Utilities and to United Telecom, at the same time it completed the first transnational fiber optic line in the mid-1980s. At this point, while AT&T and Verizon were puny startups while Sprint charted the future of mobile telecommunications and, in 1989, laid the first transatlantic fiber optic cable. This was the company's peak. Since then, Sprint oscillated to the top but now faces the harsh curve downwards, possibly never shooting back up. Other companies, including the two major rivals we discuss, took over the market at the turn of the century. The Information Era marked the end of a century of innovation and a fall to stagnant, uncompetitive times for the company masked by a final name change to Sprint.
As we look at Sprint's stock history (we only looked since the Information Era, we know there was tremendous growth prior), we noticed a disappointing decline in the price of shares. The end of the era's boost hit hard and the company never fully gained again levels from the 1900s. Fortunately, Sprint gained some ground again into 2006 and 2007. Since 2007, S has been headed by CEO Dan Hesse; mix a change in management in late 2007 with a recession in 2008 and the solution is devastating. Sprint, a company which sold shares for about $20 in 2007, now sells them for a weak $5-6. Unfortunately, Sprint Nextel seems unable to recoup from this devastating loss, and is on the road to failure. In late October, the company was suffering graver losses than usual and was forced to sell 70% of the company to Japanese Softbank Corp. Once Sprint files for bankruptcy again, we expect JSC to buy out the rest of the company or for another buyer to make the purchase. In the case of that happening, we hope services remain available in the US as to not have major employment and economic repercussions.
Although we know the company needs a revival of monetary trade, we advise against investing in S. Sprint Nextel is currently in a vicious cycle: loss of customers, loss of sales, loss of revenue, decline of EPS, less investing, and repeat. Investing in Sprint may revitalize the company a tad (if thousands of investors were to suddenly gain interest, which is highly unlikely) but for individuals looking for profit, this misses the target. This would be a waste of money and time in the long term.

Mobile Showdown - AT&T

 

As we veered into the communications sector, we simply could not stay away from the massive rivalry existing between AT&T, Sprint, and Verizon. Although each company is not necessarily owned by just one larger company, we want to see what makes the companies tick, why they are the top three (in the USA), and which are the best investments. This week we will analyze all three major carriers, starting today with AT&T (T).

AT&T once again falls under the wired and wireless connectivity description, but perhaps more than other companies. T encompasses all wired connectivity (Internet cables, home phones, etc.) and all wireless devices as well (cell phones, broadband, TV antennas through contracts with DirectTV, Dish, and the like). Judging from the plethora of services offered, not specified to any particular area of expertise but rather a wide range of services for personal and business use, we can already see why AT&T remains one of the top players. As we will discuss in the coming days, however, other large companies will display similar products and positions. The key to earning a competitive stand in the market, of course, is through competitive pricing; the best prices per product will gain the most customers, but competitiveness prevents any company from monopolizing the market.
Our records date back to the mid-1980's, when AT&T was established in 1983. Until 1999 the company showed tremendous, and unbelievably positive growth. Since the turn of the century, and the end of the Information Era madness, stocks fell back down but restrengthened before the recession in 2008. Fortunately, however, stocks recuperated into 2012; unfortunately, a stark contrast to early 2012, the latter part of the year began showing decline in stock price. While these long-term occurrences helped us to predict future economic growth, more recent activity shows social issues, rather than those economic, provoke AT&T's current stock instability. On November 1st, AT&T and T-Mobile spread a rumor of a possible liaison, but this enacted few new trading trends as the other companies had similarly exposed such claims. Note that we are not analyzing T-Mobile; it is the only company of the top four to have lost competitive vigor (we will discuss it in later posts). Back to T and social issues, mid-November witnessed that AT&T was voted the best employer of LGBT. In modern society, this remains a highly controversial debate, fought between conservatives and liberals, which we will not delve further into. This new controversy surrounding the company causes heavy fluctuations in the market and we decided to declare the company as a not buy.
Since our decision, we have noticed a slight revitalization in the communications sector that spurted minor growth within AT&T. Google supposedly holds claims to partner with Dish Network in making a new wireless service; overall, the sector is seeing greater activity and promised growth. Although we still have doubts about investing in AT&T, and haphazardly made slight profits in our own trials, we believe stocks are starting to stabilize and encourage short-term investing before the end of the fiscal quarter!

Broadsoft

Welcome back, and happy December to everyone! Today we are looking at a company very similar to last week's Broadcom, Broadsoft (BSFT). Comparatively, Broadsoft was established later (in 1998, 7 years later) and is headed by Michael Tessler. Broadsoft also falls under our wired and wireless connectivity category, but focuses more on VoIP, Voice over IP (Internet Protocol), which allows to call using one's wired/wireless network instead of using a lone service. The company offers three major products: Broadworks, which provides video, fax, and voice connectivity; Broadcloud offers cloud infrastructure and instant communication (IM and Skype-like services); and Broadtouch combines the two former products and provides the ultimate business communications, with a balance between basic phone and fax and newer cloud services.
When we observed the Stock Market initially, beginning in late 2010, we immediately noticed tremendous growth into 2011, but instability since. Solely from this first perspective, we can expect stocks to rise again with the end of the year, and the beginning of the next Fiscal Year - stocks typically rise with the quarter/year change in expectation of new growth. At the end of October, Broadsoft misleadingly rose their price target, prompting an influx in trading. The earnings released were higher than expected, but unfortunately also lower than the previous FY; on November 6th, the market for BSFT opened nearly 6 points below the previous day's close. That same day, however, it became a stock recommended by analysts for investment - after such a drop, it could only go back up. We advised to buy while stocks were low, as we strongly predict growth in late December and early January; we will keep our stocks on the market until this incline, then sell. Since buying after the drop, we have made about $13 in profit. We stay true to our advice and still suggest to buy while stocks are low!

Global Outlook - Early December 2012

Welcome back, everyone! Today, we're going to take a panoramic view at the global economy as a whole, continent by continent:

In North America, the approach of the looming fiscal cliff remains a significant issue to economists and the public alike. Mixed optimism and pessimism regarding the fiscal cliff has likewise affected economic activity. Some project a potential rise in taxes for the wealthy as a result of this occurrence.

In South America, the rising price of grain has caused many to speculate an agricultural shift towards corn production in the near future, drastically affecting such economies as Argentina and Paraguay. Similarly, the rise of oil prices has inspired major Brazilian oil firm Petrobras to expand into the petroleum industry, so as to compete amongst oil superpowers such as Venezuela.

In Europe, many economists project that the debt crisis of the last few years is currently waning; thus, confidence in the Euro has improved, causing significant appreciation of the Euro and resultant deprecation of the British pound. Furthermore, some nations such as Norway have expressed plans to invest in U.S real estate.

The Asian economy, having experienced a recent downturn, has taken measures to revive some of its important markets. The Japanese property market exemplifies this trend and now experiences a pinnacle in economic activity. Likewise, Singapore's economy looks forward to a renewed Western interest in Singaporean industries and firms.

In Australia, the economy once perturbed by the recession of recent years has revived its steady growth by a gradual scaling-back process. Despite this, Australian airline services have experienced a degree of conflict through the competition between Qantas Airlines and Virgin Australia.

In Africa, devastating economic failure ravages the majority of the continent: indeed, only 28% of all African citizens maintain stable, salaried jobs. Several East African nations have expressed a collective interest in the advancement of their public transit systems. The fiscal opportunities withheld by the African continent is expected to rise in the long run.

This concludes our Global Outlook for early December!

Broadcom

As we near the end of the month, we are entering our next sector of analysis, communications. This includes companies that provide wired and wireless services, such as the major cellular carriers; that play a major role with Internet-based broadcasting, such as Facebook; also included are producers and holders of servers and equipment manufacturers. The company we are looking at today is Broadcom Corp (BRCM).

This company falls under the "wired and wireless connectivity" label in our charts (most of the companies over the next weeks will be categorized as such) but it specializes in IP (Internet Protocol) Processors, Bluetooth technology, broadband, cable, and cellular connections (2G, 3G, 4G, and the like). Established in 1991, and currently headed by CEO Scott McGregor, Broadcom sells stocks for about $30 and proved itself as one of the more static companies; even though we made some money in our simulated investments, no significant margin for profit yet exists. First, we need to turn back the clock to the late 90's, when Broadcom went public and started trading. Like most other companies of the time, and a significant aspect of the transition, BRCM experienced the surge of the Information Era but soon fell back to 1998 levels in 2001. There was a slight spike in early 2006 due to new Fiscal Year hopes, and the same was seen in early 2011. On more recent terms, this quarter is not looking good - stocks have fallen about $2 over the past month (remember we said shares were quite stagnant). The last week of October, to explain the sudden drop, Broadcom suggested investors to buy before the earnings releases, but the earnings were significantly below expectations. Within two days, stocks plummeted from $34.11 to $31.5 (closing at $32 on the second day). We suggested our members to buy while stocks were low, following this advice ourselves, and made a profit of about $15. This is insignificant compared to higher-risk investments, but is still good for low-risk; however, we do not predict tremendous growth in the short-term, but rather expect stocks to remain in the $31-33 area. If you are interested in investing in a company that focuses on all-around communications, this is a great choice for a long-term investment.

Hostess: Tough Times for Twinkies

Welcome back, everyone! We hope that everyone has had a lovely transition into the holiday season. Among the most prominent economic events to occur as of late is the declaration of bankruptcy by Hostess Co, the food company responsible behind such delectable treats as Twinkies since 1930. Naturally, fans of the ubiquitous bakery would publicly speculate and sensationalize this turn of events. Despite this, one can deduce the cause of the fall of the Hostess enterprise based on several economic factors.
The first of these economic factors concerns an accumulation of debt by the corporation as a partial result of prior declarations of bankruptcy; indeed, the first of these manifested in 2004 due to an increase in competition with other baked goods companies such as Krispy Kreme Doughnuts. Thus, these growing financial woes pressured the company to reduce pension benefits for its employees, eventually culminating in a breach of contract by Hostess's management. The reduction of worker's pensions, like any comparable maneuver throughout history, resulted in a labor strike within the Hostess company.
 The strike served as a second major economic factor and worsened Hostess's financial crisis; likewise, a contract negotiation proposed by Hostess failed, receiving rejection by 92% of labor employees. As a consequence of the suspension of labor which the strike inevitably caused, Hostess was forced to shut down its factories and layoff most of its employees.
As may be noted, the current liquidation of the Hostess company results from not only an immense commercial debt but also a large-scale labor strike which crippled productivity. The ultimate fate of this company and its world-famous products remains uncertain, but rival baked goods company Flowers has privately expressed intentions to potentially buy out Hostess.

-Chris Cattafi, Investment Club Co-Founder and Vice President

3D Systems

Welcome back! We hope everyone (in the US) had a wonderful Thanksgiving! The company we are analyzing today has done significantly better than we expected. 3D Systems (DDD) is a 3D printing solutions company, producing printers that print 3D models/figures. This company was established in 1986 and is currently headed by CEO Abraham Reichantal. As with other companies, the stock market fluctuates, and our observations begin in mid-2011. DDD saw a steep decline with the end of 2011, but since this January has experienced tremendous growth, with a slight halt in October. At the beginning of October, 3D Systems bought RapidForm for further software tools. At the month's second peak, the 17th, the company anchored London's first ever 3D Print Show; the following week stocks flew upwards. 3D reaffirmed a buy rating on the market, raised their price target, and revenue was announced to increase by 60%. We bought ten shares in the company on Investopedia around the 12th, priced at $35.70, and before the end of the month we had made almost  $100. We were still novice to the 3D market before buying these stocks (we really bought just for analysis) but now realize that 3D printing is the true future of printing, and within the end of the decade will take a significant role in all industries. We believe that DDD will lose some value before the end of the year, but take on a similar pattern at the end of the year. We encourage to invest in 3D Systems, as they are the front-runners in a quickly growing industry!
We are very excited to say that our club is growing and that our predictions are becoming more accurate. We correctly predicted most of the tech sector we analyzed. Make sure to keep reading over the next few weeks as we jump into the Communications Sector!
UPDATE: After Monday's trading on the Stock Market, 3D Systems was shown as the company with the fourth most growth of the day; since we bought the stocks over a month ago, at $36.73, we have accumulated profits of almost $11 per share, and about $110 overall!!

Apple VS. Google

The moment you have all been waiting for has arrived. The infamous tech rivalry between Apple (AAPL) and Google (GOOG) is here. These two giants in the tech world are at the peak of their clash regarding mobile devices and software.
Apple was the first to arrive on the scene, in 1976 (incorporated in '77), when Jobs, Wozniak, and Wayne set to create the Apple 1, the first personal computer. Selling at $666.66, this was the beginning of Apple Computer, Inc. Since then, Apple has only seen growth with the introductions of Apple 2, the Mac, the iPod at the turn of the century, the iPhone in 2007 (also when the name was changed to Apple, Inc.), and the iPad in 2010. Apple revolutionized music and the music experience through iTunes and set forward a new era of mobile technology. Granted, many predecessors such as Microsoft attempted to release similar products, but all failed to satisfy the human experience Apple provided. After Steve Jobs' unfortunate death in 2011 to cancer, Tim Cook took over as present CEO. Upon looking at the stocks since the 1997 incorporation date, we noticed a pattern of pure growth within Apple's trading. What about the surge in 1999? Surprisingly, considering this company held a significant role in the Information Era, Apple saw no significant growth or downfall. Stocks continued to rise slowly, until 2007 - the release of the iPhone. By then, it was clear that Apple was the front runner in the mobile world. The 2008 Recession caused a 25% drop in Apple's stocks but since then the company has more than quadrupled those numbers and, in just four years, grew from a mere $150 to almost $750. Beginning in September of this year, stocks began heading downwards, and were down about $60. When we discussed Apple at our meeting, stocks cost $604 a piece, on Friday (11/16) they closed at $527.68. When Apple released the iPad Mini, relatively (in comparison to other Apple products) few people knew about the new device. Suddenly, when one searched on Apple.com, they found this new, smaller, and significantly unsatisfying iPad. Meant to wipe out some of the competition, this tablet did much the opposite - stocks tumbled down and prediction after prediction prognosticated significant profit issues towards losses. However, now that the stocks are starting to settle down and hit their relative minimum, they can only go up. Improvements in the 4G LTE in the iPhone will certainly boost more sales, and the spread of Apple stores in China will provide a healthy and well-needed push upwards. By the end of the holiday season, we expect Apple to push $650-700 again.
What would we do without Google? A company that made its money solely on advertising is now one of the biggest players in the mobile industry. Google was established in 1998 by Page and Brin, Stanford students seeking to bring the world's wealth of information into one place. Since then, Google has grown from a search engine to a mail server, a cloud service, a social network, and most recently a mobile operating system - Android. This was the new kid on the block, and it was a tough one. Android has now taken iOS over as the leading mobile OS (operating system); considering Android operates on plenty of different phones, manufacturers, and carriers, this is no surprise. Now, the mobile user's internal struggle fights between the Apple cult or cool new features accompanying Android phones (the Galaxy SIII on Android 4.0, to name just one). Unfortunately, what Google has in mobile growth, it lacks in stability on the Stock Market. As far as our records tell us, Google has always been very expensive and very unstable. With each major event and world crisis, Google is almost always involved and even business growth easily impacts the company's stocks. Overall, stocks fluctuate between 100 and 400 points a year. More recent action has prompted a cap around $770 which shares cannot seem to pass. Remember that when less shares are available, the price will increase proportionally; nobody will buy $800 stocks. When we delve into more recent Google action, we see lawsuit after lawsuit in the tech world. Apple and Samsung, Microsoft against Motorola which dragged in Google, and most important for the search engine giant, Vringo (VRNG) and Google. Vringo, a tiny search engine company with stocks barely pushing $4, happens to own hundreds of patents that Google needs if they want to continue expanding their software. Most recommended Google to buy the company instead of settling a $700 million lawsuit; in the end, Vringo partially won, but only about $16 million. This seems minor in the end, but the original accusations led to an $80 collapse per share on October 18th. By the end of October, Google released strong earnings which prompted us to expect a rise in share price. This increase arrived, met the $700 cap, and continued to fall back down as more lawsuits were filed. Now, shares average near $650 for GOOG. Even though these cases will cause problems with investing, investors will soon learn that lawsuits are the next big thing in technology - greedy companies create, patent, and want to make money from each of their designs. We strongly believe Google is currently in the same situation as Apple: once things clear up, both can only improve and they will both more than thrive during the holiday season. We will try to post again early next year to show everyone how they did, but until then, which do you think is better?

1999-2001: The Rise and Fall of the Dot-Com Bubble

     Welcome back, everyone! Instead of focusing on a current event, we're going to backtrack a little bit to examine a significant period in the global economy: the financial boom of 1999-2001 and the minor recession which followed.
      In the mid to late 90s, vast improvements in computer-based technology and communications (such as the development of the Internet) ushered in what became known as the Dot-Com bubble; indeed, the overwhelming optimism surrounding this prospective new field fostered the growth of completely new job sectors and IT careers. It was essentially required of any large firm at this time to make the progression into the "Information Age" and integrate computers into the workplace. Needless to say, the implementation of the Internet had a profound effect on society as a whole, and the economy experienced an unprecedented boom as commercial activity flourished.
     Of course, all that glitters is not gold. As revolutionary and beneficial as the Internet proved for commerce, the World Wide Web gradually became a commonplace standard for all firms and businesses. Thus, by 2001, much of the optimism regarding the "dot-com" era had subsided, resulting in the creation of fewer jobs and a slower rate of development for those firms which had yet to implement this new technology. Consequently, the Dot-Com bubble collapsed, sending much of the world into a minor recession of economic activity; additionally, the unfortunate tragedy which occurred on September 11, 2001 served to undermine the global market even further.
     Upon comparison with other global recessions (especially with that of the late 2000s), the recession of 2001 reveals itself to have been relatively minor and short-lived, leading some to question whether it should truly be classified as such. Nevertheless, the commercial boom of 1999 and the economic cliff of 2001 epitomize the transforming Information Age, a time in which a revolutionary new technology came into the business world, developed at an astonishing rate, and eventually matured to become the modern-day norm with which virtually large firms conduct business. Perhaps when the Internet meets its twilight years and some shimmering new communication system comes to fruition, we may look on the fate of the Dot-Com bubble as a precautionary tale.

-Chris Cattafi, Co-Founder/Vice President of LMHS Investment Club

Hewlett-Packard

Welcome back to the LMHS Invest Club blog! Today's company reigned supreme for over half a decade in the computing world, but has recently fallen off the throne and is no longer the top distributor of personal computers. Yes, Hewlett Packard (HPQ) is our company of the day. It was established in 1947, and is now headed by CEO Margaret Whitman. As we will soon reveal, HP was the leader in the PC industry for almost half a decade, but was surpassed recently by Lenovo. Why is HP breaking down like this? Let's take a look. Like the other companies we observe, HP experienced stunning growth in 1999 but plummeted thereafter by 2002 (we will talk about this very soon!). This tech company turned to a path of consistent growth in late 2005, maintaining it until the 2008 recession - HP was on the top of the world, and was the largest producer and distributor of personal computers. Since 2010, Hewlett-Packard has slowly been dwindling down, off the throne, and far from the top of the industry. Since reaching nearly $60 in 2010, HP rests not even at a quarter of that amount now. Considering the recent plummet, we can almost already conclude HP is a lost investment. Over a month ago, in early October, the company forecasted revenues a staggering 15% below the previous fiscal year. This vicious cycle can only hurt HP - less investing, less stimulation of growth, less internal spending for improvement, fewer sales, less revenue, and the cycle repeats. Unless the public or private investors put more money into the company, the cycle will continue and HP will eventually fall apart. Our best suggestion would be for the company to either split or shut down the personal computing division, which hosts the majority of yearly deficit. Simply put, HP better improve their computers or Lenovo and others will push them in the dust.

Microsoft

Happy Friday to all our readers! We welcome you back to Tech Month, and are bringing to you today one of the biggest players in the software industry, Microsoft (MSFT). This tech giant we have known since 1981, founded by Bill Gates and Paul Allen, focuses on software, operating systems, as well as gaming. The current CEO, however, is Steven Ballmer. The most widespread Microsoft product is the Windows OS. The first system, the "MD-DOS" ran on an IBM computer, and followed soon thereafter with Windows 1.0. Now, the company's most recent OS is Windows 8, designed with emphasis on the most modern technologies, especially tablets. Now, for the stocks. Like other companies, Microsoft experienced steady growth in the 80s and 90s until 1999, when it drastically surged to around $60 a share. Since then, shares have unfortunately remained stagnant in the $25-35 zone. We expected more growth considering the evolution from Windows 98, ME, XP, Vista, and 7, now with the spreading Windows 8. With these first statistics, we do not expect significant growth with the new OS, and October's results provide us congruent information. Windows predicted huge numbers with the release of Windows 8; remember that most PC users use Windows (half the blog readers, just a small sample of all the users worldwide, use Windows). Upon hearing these news, we were excited; we looked forward to seeing upwards development, but unfortunately saw a complete foil. Earnings per Share (EPS) instead fell 20% in mid-October. EPS describes the amount of money expected to be gained or lost on each individual share over a specific period of time, often a quarter (QT) or Fiscal Year (FY). That same month, however, Microsoft announced that their new Windows 8 platform would expand beyond only Nokia phones. Although the Nokia Lumia is increasingly popular, and a well-needed comeback for the company, Microsoft has plans to seek other phone manufacturers, including HTC and its own Windows Phone. Now, for our verdict: we believe Microsoft is heading on the right path but it is not yet a safe bet for investment. Considering the longevity of the stagnancy hovering over Microsoft on the market, investing will be prime when the Surface with Windows 8 Pro is released. Our simulated investments turned a loss as well, as we bought shares at $29.64 and they now sit at $28.81.

Sony

Welcome back to Tech Month! The next company we are discussing focuses on televisions, cameras, video equipment, and gaming hardware - PlayStation. That's right, today we are talking about Sony (SNE). Sony was established in 1946 and is currently headed by the CEO, Kazuo Hirai. This is an interesting company on the Stock Market, as it has failed to experienced significant growth in the long term, adding to the fairly continuous decline in share price since 2001. Unfortunately, Sony never fully recuperated from the 2008 global recession and remains at levels about a fifth of those in 2007. When we look at the month of October, we see an imbalance marked by little room for growth. However, the release of updated products advise an increase in revenue over the coming weeks. The main product of October, the PS3 Slim to be precise, already show signs of gain. The PS3 Slim, as inferred from the title, is the original PS3 but in a slimmer and sleeker body, with sales already surpassing expectations. If Sony keeps up these sales, and continues to produce high-quality products (perhaps a PS4 or the like) in gaming hardware, the company would certainly place itself on the right track to popularity on the market. In mid-October, Sony announced plans for a new convertible (tech, not car). For those of you unfamiliar with the device, a convertible is a tablet with a detachable/attachable hard keyboard. This is a great option for users that want to convert to a tablet, but still want to have the laptop and desktop feel - one of the best transitions. These plans, are we expected, provided sustained growth for the company until the end of the month. A few days later, Sony announced new plans for worker benefits in Japan with the implementation of early retirement. This is something surrounding Japan only, and had no legitimate consequence on the global market, despite the decrease in share price. Unfortunately, we do not predict a healthy future. Considering our simulated investments on Investopedia, we bought fifteen shares a few weeks ago priced at $11.93. The market closed today with Sony at $10.90. The Japanese market, however, experienced a minor collapse with new problems with the Japanese Yen just today. We believe these problems will fade soon, but still do not expect a reliable Sony over the next few months.

European Sovereign-Debt Crisis: The End of the Euro?

      Welcome back, everyone! We hope everyone had a smooth transition out of Daylight Savings Time earlier today.

      As 2012 draws nearer and nearer to a close, our worldwide sensibilities will recognize the conflicts arising in the European economic market. Such is the severity of this recent downturn that many question the persistence of the Euro as a common currency in the near future. As congruent with any major crisis, one naturally must wonder as to why Greece's banks have failed so miserably or why Spain's unemployment rate skyrockets into economic monstrosity. The answer to this question lies in a fundamental aspect of the European market: government debt.

     This crisis, known officially as the European sovereign-debt crisis, arose in late 2009 as a result of the global recession of 2008. As banks around the world pleaded for government bailouts, private debts translated into government debts as the housing and property bubble "burst;" this proved especially significant in Greece, where the entire private sector experienced a collapse. A requested bailout was produced by Germany, ameliorating the Greek structural deficit (whilst simultaneously worsening the recession by inciting spending cuts); despite this, a decline in investor confidence sharply crippled Greek credit. Thus, these factors combined with the resultant political and social unrest have led many to speculate that Greece must eventually leave the Eurozone.

     A similar phenomenon has recently developed in Spain. Before 2010, Spain maintained a relatively low public debt level in comparison to GDP. However, deficits rose by 2011 as a result of the European bailouts. This rise in national debt experienced a snowball effect in early 2012 as interest on Spanish bonds reached 7%. Several austerity measures and a plan for bank recapitalization have been put into place, but Spain's precarious economic condition remains a vital topic of interest.
    
    As one may observe, the recent financial crisis in the Eurozone can be classified as a "crisis of confidence." The precise ramifications of this difficult situation are unclear, as adjustments in creditor-investor relationships remain murky. One can, however, foresee a definite schism of the European commercial alliance as variations in work ethic and economic austerity become all too important.

-Chris Cattafi, Investment Club, Co-Founder and Vice President

Intel

Welcome back to the Invest Club blog! Today's company is Intel (INTC). Intel is a tech company that focuses on digital platforms and processes, and produces chips such as the currently popular i3, i5, and i7. Intel was established in 1968 and is currently headed by Paul Otellini. This company drives further the advancements in computing by producing smaller, faster, and more efficient hardware for desktops, laptops, mobile phones, and tablets alike. Intel saw slight growth on the Stock Market until 1999-2001 when it experienced a tremendous surge upwards followed by a sharp decrease by 75% from the previous year in 2002. If you have been reading some of the other posts on this blog, you may have noticed a continuing trend with most companies we evaluate - this 1999-2001 scenario affects everyone, but not to worry, we are covering this topic tomorrow! We will find out what exactly happened and why everything changed suddenly. Back to Intel: we analyzed the last few weeks on the market and found some interesting figures. On October 8th, Intel announced plans to lay off 7100 employees. Stocks that day opened $0.40 lower than the previous day's close. Just a week later, Intel released its 3rd Quarter Income Statement, which showed profits that surpassed expectations, but that were unfortunately still below original predictions and a whooping 5% lower than than last FY's 3D. It is fair to say that Intel is not headed on the brightest path with such results. Further, analysts expect Intel to lose even more revenue due to the laptop to tablet transition, still a jejune world to this company. We advised our members on Tuesday to avoid investment in Intel, considering the disappointing income statement and the inability to stay on schedule with the growing technological world, and our simulated investments back our predictions. We purchased shares priced at $22.62, which closed on Friday with a price of $22.06. Intel simply is not in a state that is optimal for investing, and, in our point of view, we would set a 'neutral' status.
Thanks for reading the blog, and to our followers!

Amazon.com

Happy Tuesday to all our readers! Our company today is Amazon.com (AMZN). Unfortunately, we have no been able to observe change in the market this week due to Hurricane Sandy and the NYSE Stock Exchange - our hearts go out to everyone in the Northeast affected by the storm! Well, let's look at Amazon. Amazon is an online retail company that was established in 1994; on this website, you can find and buy just about anything. The CEO Jeff Bezos brings innovative ideas to the company, which is growing from its online retailing into the mobile world, with the upbringing of devices such as the Kindle, and new tablets such as the Kindle Fire (HD); also, rumors are emerging of the possibility of Amazon offering a cellular phone. As with tremendous growth in technology, AMZN is seeing sustained growth on the market, having consistently made positive earnings per share (EPS) except for 2008. In late September of this year, Amazon announced plans to expand cloud storage, as to expand its currently standing Amazon Cloud Drive. Later in the month, the retail company won a lawsuit against Apple due to their use of the term, "app store," relative to Apple's "appstore," and no charges were filed. This thankfully avoided yet another drastic lawsuit involving Apple, and gained some ground on the market with increased activity surrounding Amazon. At the beginning of this month, critics claimed the Kindle Paperwhite a winner in the eBook category, placing Amazon once again at the top to earn yet more acclamation on the market. With all the new up-and-coming devices Amazon is releasing, as well as the expansion of cloud services, we advise to buy stocks in AMZN while they are relatively cheap, only around $238. Unfortunately, we bought a few shares two months ago before Amazon headed downhill, and have taken a $60 loss. We do, however, stand behind our predictions and believe Amazon will experience more growth after the NYSE picks back up.

Yahoo! VS. AOL

Happy weekend to all our viewers! Today's post is our debate topic, and we strongly encourage anyone interested to comment and pick either Yahoo! (YHOO) or AOL (AOL). Both companies focus on online properties and services. When you open your web browser, there's a good chance one of the two is your home page! Yahoo! was established in 1995, and is currently headed by Marissa Ann Mayer. In 1999, Yahoo! experienced an extreme surge in stock price, jumping nearly $90 to about $110, but has since then seen a steady decline. Since 2008, stocks have remained near $16-17. In exploring Yahoo!'s development on the market over the last month, we noticed a trend we previously had never seen - never opening at the same price as the previous day. This severe fluctuation may be the outcome of a Chinese company's, Alibaba, plan to buy 40% of stocks in the company. This brought consumer insecurity with investing in YHOO, but early October's return of CEO Marissa Ann Mayer refilled some security, and prompted an increase in stock price. The company remains on a rather unpredictable path, especially with Alibaba's interest in possibly buying majority control of the company. We advised our members against investing in the company, but turned a profit ourselves earned $7.70. Under regular conditions (buying with a fair degree of confidence, not just to see how performance compares to our predictions), however, we would not invest in Yahoo!.
As with Yahoo!, AOL focuses on online properties. AOL, however, was established in 1983 - twelve years earlier - and is now headed by CEO Timothy Armstrong. This company experienced a decline in share price from 2008 until mid 2011, when it hit a low of about $10, and begin recuperating. Now, stocks average around $35-37. In late September, AOL partnered with Vibe Media and saw significant growth for over a week, increasing $3. Another surge upwards occurred when AOL decided to focus more on mobile platforms, a decision made public on October 4th. Since then, the company has curved downwards in price and moved back up - recent days have notice the trend downwards again. Unfortunately, our simulated investments in AOL turned negative, and we have lost over $20 on ten shares. We advise to invest in AOL, but with caution as the performance of its partners can easily affect the company. Have you invested in AOL or YHOO before, if so, how did you do? Although we do not fully advise investing in either company, we would love to hear how are readers have been doing on the market! Feel free to leave a comment, and we will get back to you ASAP. Thanks for reading!

NVidia and Texas Instruments

Today's post continues with our Tech month as we observe two companies, NVidia (NVDA) and Texas Instruments (TXN). NVidia is a company that produces graphics chips and mobile processors. It was established in 1993 and is currently headed by CEO Jen-Hsun Huang. Since electronically public in 1999, we immediately notice that NVidia's stocks are rather unstable and have experienced very little growth in the long term. Share prices peaked in 2007 but are now down to levels previously seen in 2005, about $12-14. In the past month, stocks have remained within this range and have fluctuated between the extremas in just a week. On September 26th, NVidia announced new optimism about cloud gaming - games which involve multi-player online gaming, such as the recently popular League of Legends (LoL). On October 4th, the company reaffirmed a 'buy' status, prompting investment, but was soon downgraded back to a 'neutral' late October 5th. NVidia, despite the common fluctuations, is more stable than before. We advise to invest in the company when stocks reach the lower extrema and promptly sell when it reaches the higher. This is an easy, low-risk strategy to make some money on cheap shares over about a week.
Our other company today is Texas Instruments. This company designs and produces semiconductors and other circuitry, as well as the calculators we all use and love. This company, established in 1951, is currently headed by Richard Templeton. Since our records show, the late 70's, TI has not experienced tremendous growth, except in 1999-2000. Now, in 2012, the stock price is about the same as shares in 2003 up, the stagnant $30 zone. Texas Instruments, unlike many of the other companies we discuss, does not involve significantly in buying other companies and therefore only has market fluctuations from bank ratings and dividend releases. On September 21st, TI announced a quarterly dividend with an increase of 24% over which was previously expected. September 26th saw the downgrade from OP to P with a harsh point drop at the opening of the market. Two weeks later, on October 11th, Credit Suisse downgraded TI to 'neutral,' which surprisingly had a minute impact. Although we can expect growth, we suggest to avoid investing in TI for now; the market could spike again, but it is unlikely considering current conditions. Somehow, we made a profit investing in Texas Instruments, despite the minor euro crisis currently in Europe. This, however, does not change our advice about investing in the company.

IBM and Siemens

Today, we are visiting two very different tech companies, IBM (IBM) and Siemens (SI). IBM, short for International Business Machines, is a company that focuses on IT infrastructure and business processes that was established in 1911. The company has grown to adapt with increasing technologies and is now headed by Virginia Rometty. Since public on the tech market, IBM has experience fairly steady growth and is now heading towards a promising future nearing all time highs of about $200. This initial view seems promising, and recent activity shows the same. Although it is somewhat unstable, it reaches almost $10 gains in just three days and takes significantly longer to lose stock value. In late September and early October, IBM has bought numerous companies: on September 24th, the company acquired a data analysis company called Butterfly Software; on October 1st, IBM also acquired Texas Memory Systems. Even more recently the company signed a cloud service contract with Kwality Dairy India, thus expanding its world reach and helping the shares grow. IBM is partnering with many new companies and signing fresh contracts that will help it grow and we advise to invest in the company. However, the Euro is currently experiencing worsening conditions and the market in every sector is unfortunately unstable. To further demonstrate the severity of the current status, we lost $77 over five shares of IBM in just one day of trading. We will try to analyze current market transitions on the world stock exchange and follow up with our readers quickly.
Our other company today is very different from IBM, and our other companies on the list: Siemens (SI). This is a very diverse company, with its hands in industry, healthcare, and energy technologies. Siemens was established in 1923 and is now headed by CEO Peter Loescher. Immediately when looking at stock prices, since 2001, the unstable market shows an outstanding lack of growth, surprising us - we expected such a multifarious tech company involved in so many industries to experience great growth. The 2008  recession - you can further read about this catastrophic event in the previous post, "2008 Global Recession: Where Did It Come From?" - took a huge toll on Siemens and the company consequently experienced nearly $100 in loss and has only recouped halfway since. Recent events are not providing a healthy outlook for Siemens, but rather raising eyebrows towards allegations of illegal acts. On September 24th, SI denied the claims that it had sold nuclear equipment  to Iran. This, as expected, had a slight downturn on the stocks of the company - who wants to invest in a company that supports anti-American activity? Granted, Siemens is a company that holds great control over nuclear energy, as seen with the TVO desire to buy $2.32 billion in its nuclear claims on October 1st. A week later, on October 8th, a new controversy sparked because of UK's desire to limit nuclear energy for environmental reasons. This brought a sustained decline in stock price. We advise against investing in the company without detailed research into the activities of the energy industry; also, the political issues surrounding Siemens and not allowing consistent growth in the company. We only lost $3.3 on the market today over ten shares and the market seems stable, but the state of the euro can harshly impede the growth of many companies, and a large part of such companies are suffering drastic losses.

2008 Global Recession: Where Did It Come From?

     In December 2007, the global economy took a steady decline into the following year, culminating in September 2008 in what has become known as the largest economic recession in recent history. Over the past 4 years, the impact of this worldwide downturn has become ubiquitous, raising unemployment, foreclosure and bankruptcy rates on a pandemic scale and lowering the average consumer's purchasing power as well as property values. So with these far-reaching consequences, one must naturally inquire as to how such a financial catastrophe came about; unfortunately, a crisis of such a magnitude has no simple origin. Despite this, the cause of the 2008 recession may trace back to several key factors present at its inception.
    The first of these factors is the low interest rates which affected a variety of global markets, especially the housing industry. As a counter to the economic decline of 2000/2001, the U.S Federal Reserve eased credit availability to debtors, pushing spenders further into debt whilst improving purchasing power; the end result of this was a bubble in the housing market of the late 2000s, driving house prices to unprecedented levels.
    The result of this economic bubble was an unanticipated market for credit default swap markets, meant as an alleviation tactic against growing debt levels. However, the nature of such a market requires that the housing market continues to rise: this is where debt-related issues began to truly expand. The artificiality of the consequent boom in housing prices led to a liquidation of debtor's investments. As a result, the housing bubble burst in 2008, plunging housing prices to devastatingly low levels; thus, the housing market fell into crisis and the global recession was born.
    As one may observe, the global recession of 2008 came about not as the result of any particular cause, but as the product of a combination of multiple economic factors. It is the intricacy of such a far-reaching issue which places so much significance on the maintenance of economic stability and reliability, so as to prevent a domino effect from wreaking potential havoc on the global market.

-Christopher Cattafi, Vice President, LMHS Investment Club

Adobe and Oracle

Tech month is finally here!! To start off this great series of companies, we are showcasing two large players in the software business - Adobe (ADBE) and Oracle (ORCL). Adobe is a software company that focuses on programming (we all know Adobe Reader and Flash) that was established in 1983. The current CEO is Shantanu Narayen. As we began observing the company, just a superficial overview since the late '80s, we noticed that it is very unsteady but that it does have a decelerating growth pattern, growth nevertheless. Instability has increased since 2009, and the shares are stuck around $30. Looking at late September and early October, we saw the same instability, but were hopeful for growth. On September 18th, Adobe bore far ahead of earnings, which consequently led to a influx in trading. Shares kept changing hands quickly until the 21th, when it was announced programming companies were falling below par (including Oracle), and the stock price fell a dollar by the beginning of the next week. Last week, however, ADBE began showing growth again and we invested. Buying shares on Monday at $32.26, we sold them on Friday at $33.24, making $10 on just ten shares! We highly suggest investment in Adobe over the short term, as we expect strong growth for a few days.
Next, we looked at a similar software company, Oracle. This company, established in 2005, focuses on IT servers, cloud computing, as well as programming. Oracle owns Java, the computer language used in nearly every electronic device, which was written in 1994. The current CEO is Lawrence Ellison. Unlike Adobe, Oracle shows consistent growth - except 1999-2000, which we will explain over the coming weeks. Since 2011, unfortunately, ORCL has grown unstable. The last month's market for this company has absolutely no clear pattern. Starting on September 20th, Oracle endured a 2% drop in sales and by next week had already dropped two points. Our biggest concern in the company exists in the uncertainty of its future. Some investors and analysis are saying buy, others telling to sell, some just to remain neutral. Other analysts are interchanging between OP (outperform) and P (perform). We advise against investing in Oracle, as shares are not changing hands enough and we cannot be sure of the equities' future. As proof, we invested in the company and bought shares at $31.20 and they are now at $30.48. These could surge right back up very soon, but we really can't predict anything with Oracle. These are significant players in the tech world - I installed updates for both today - and we certainly hope they will keep climbing (Adobe) or pick back up (Oracle).

How do we invest?

To answer a question that I am sure many of the blog readers are wondering, we are writing this post to answer the question, "how do we invest?" Since we are limited on funds and how we can spend our money, we use a simulator to buy, sell, and see how are stocks progress. We use the website www.investopedia.com to simulate all the investments and manage a group game to see how all of our members do. With this website we have adjusted the settings so that each member of the Investment Club has up to $50,000 in cash money to start and their goal is to make as much money as they can. At each meeting, which take place two or  three times a month, we discuss all of the companies that we consequently talk about on the blog and either encourage or discourage our members to/from investing in those companies. From there, members can decide whether they will follow our advice, go a completely different route, or simply invest in stocks that they think have a promising future. This website, conveniently, also has a dictionary for many finance, investing, and stock market related terms.
We do need to give a sign of caution to our readers, that our stocks are not always completely accurate. As we are students, we do not have time throughout the day from 8 AM to 4 PM when the stock market is open to consistently and regularly check if we need to buy or sell stocks. Rather, we buy stocks while creating our PowerPoint and outlines for each meeting, and after we have discussed the company, we will sell stocks to make sure that we profit from each trade. On the other hand, whenever we have time during the day to check the markets and invest, we attempt to grab the opportunity and update our portfolio as we can.

Chipotle and Consumer Foodstuffs Wrap-up

This is our final blog post for Consumer Foodstuffs and we are finishing off with a favorite - Chipotle -as well as with wrap up of the entire two weeks that we have been posting about these. Chipotle is a Mexican food restaurant chain established in 1993, and is now headed by the CEO Steve Ells. The stock-price when we first checked about a month ago was $316.13, and when the market closed today, it was at $285.93. As you can see just from these statistics, we have endured a huge loss. When we first started looking at Chipotle, we noticed that since early 2006 when it went public it has seen tremendous growth. Last quarter it experienced profits 61% higher than the previous quarter. However, Chipotle expected $704.8 million in revenue but instead earned only $690.9 million and, with this in mind, investors stopped investing and the stocks for Chipotle plummeted. As we observed action throughout September, we noticed that Chipotle was instead climbing the ranks into the largest companies, now ranking 315th. In late September, September 26 to be precise, more details emerged about what happened just a few weeks earlier that caused the stock market for Chipotle to collapse. These allegations claimed that the board of directors sold all their stocks right before the collapse, consequently leading investors and analysts to believe that they were part of a 'conspiracy' that provided them millions. All this nonsense and economic and political scandal surrounding chipotle is only furthering our decision not to invest in the company. Since first investing we have lost almost $170 on just five stocks.
We are disappointed leave on such a depressing note to close off Consumer Foodstuffs weeks but we are very excited to begin Tech month. However, we are happy to say to nearly all of our predictions of how companies would do on the stock market were correct. While some companies such as General Mills and Campbell Soup Company grew as expected, other companies including Chipotle and Starbucks suffered and caused us major losses. Now...for the results of our poll. Our readers voted Coke products over Pepsi products with an overwhelming majority!
Please make sure to keep reading later on and over the next few weeks and months, as we will keep blogging and posting more information about companies involved in growing technology, communications systems, healthcare, insurance, and everyday consumer goods. We will also post as soon as we can information about the 1999 to 2001 stock market surge and consequent collapse, as well as the 2008 market crash and recession.

Heinz and McCormick

We are almost done with Consumer Foodstuffs and have just three more companies to tell you about. Our two companies today are HJ Heinz (HNZ) and McCormick (MKC). Heinz, the well known producer of ketchup, also produces and distributes other condiments and frozen meals. It's company was created in 1900 and is currently headed by CEO William Johnson. The company, since our statistics begin providing us information in the 1970s, has shown prominent growth except for 1988, when the company changed hands and name, and 1998 and 2008. Since 2008, the company has more than recuperated and now hits all time highs approaching $60. When looking in more recent terms, on September 6 the companies target stock price was projected to increase and consequently went up sixty cents. About two weeks ago, there was a decline in Campbell stocks and investing in Heinz increased. We bought some stock at $56.11, and sold (all by simulation) them at $56.34 this past Friday. This gives us a slight profit of $2.30, but we do encourage investing in the company. There's a small margin of profit and it's a good low-risk investment for amateur or casual investors.
Our other company today is McCormick (NKC). This company focuses on distributing condiments and spices and was established in 1881. The current CEO is Alan Wilson. We observed the lifetime stocks of the company starting in the 1970s, as the with Heinz, we noticed that it has very steady and a very reliable growth pattern. Shares did not have any major downturns except 2008, during which it dropped by about 10 points. We studied with more depth the fluctuations in September and found key events that changed the share price. On September 6th, McCormick reaffirmed its fiscal year earnings projected, with an expected 11%, instead of the 9% previously announced. This led to a spark in investment in the company, followed by an increase of a dollar in stock price. Three weeks later, when fiscal earnings had only improved by about 6%, nowhere near the 11% everyone expected, and the stocks fell a harsh $2 a piece. We bought stock before the drop, at $62.11, and it is now at $61.76. Although we lost some money on this transaction, we do recommend buying the stocks while they are low as we expect for McCormick's market to spike at again by the end of the month. Make sure to join us tomorrow as we finish off Consumer Foodstuffs (revisited in 2013) and start Tech month (October 16th - November 12th).

Beer, Tea, and Dr. Pepper

We have more beverage companies in our Foodstuffs analyses, and today's are Boston Beer (SAM) and Dr. Pepper Snapple (DPS). Boston Beer, better known as Samuel Adams Beer Company, is a conglomeration of beer distributors that was first established in 1984. The current CEO is Martin Roper. We were quite impressed with Boston Beer's performance on the stock market: public in '95, Facebook-like downturn in '96, steady growth until 2007, drop in 2008, and skyrocketing since 2009. Since going public, actually, it has grown almost 80 points. Around September 20th, Denver Beer Company, one of SAM's competitors, was endorsed, and Samuel Adams fell two points over that week. After reaching a month-high of about $114, the company had its rating decreased and the share price dropped $5. We bought ten stocks in the company at $107.42 (expensive share) and after just a few days had already made $16. This profit, unfortunately, took a turn downhill and we are now at $6 in loss. Even with this change, we do suggest to invest in Boston Beer. Buy now and sell when it reaches the $115s again.
Our other beverage distributor, and our last of the series, is Dr. Pepper Snapple Group. This company was established in 1885, with Dr. Pepper alone. In 2008, it merged with Snapple to form the current company. The current CEO is Larry Young. At first view of the stocks since the merge, the company seems to be fairly stable and profitable. This is an extreme deviation from the actual stocks of DPS. We further delved into recent prices and found heavy fluctuations from day to day. On September 13th, the market closed at $45.4. The next day, the company was reported growing and healthy; it opened at $44.5 that same day, and closed at $44.1. On September 25th, Coca-Cola was reported to have bought a large quantity of shares from Aujun, and Dr. Pepper Snapple's stocks plummeted further to down $43.6. Although we love Snapple and Dr. Pepper, we advise against investing in the company for now. The stocks are very unstable and unpredictable. We have lost $10 in simulated investments in the company on just 10 shares.

SmartBalance and Campbell

Today's post for Consumer Foodstuffs are about SmartBalance (SMBL) and Campbell (CPB). SmartBalance, a functional food products and replacement food products solutions company, was created in 2005. It distributes products that are healthier than the everyday products sold. The current CEO of SMBL is Stephen Hughes. Since incorporation, SmartBalance showed a tremendous future in the stock market, nearly doubling in just two years. However, since late 2007 and 2008, the stock have been falling; in mid 2012, the company experienced a well needed surge and increased its share value by almost $7. As we began studying more recent activity in the company, we were looking forward to big changes, but the market is fairly stable. On September 14th, the company's price target was risen, and so were stocks. Two weeks later, on September 27th, the mother company of SmartBalance, Dean Foods, sought buyers from MorningStar which consequently increased the stocks by half a point. With its cheap price and stability, investing in SMBL is a great low-risk plan for new investors, especially those worrying about a large profit/loss margin. We bought ten shares in the company nearly a month ago, priced at $12.18 and now at $12.14, and, although we lost some money, this still shows the stability of the market. Always remember to buy low and sell high.
Our other company is Campbell. This American favorite soup distributor, as well as other convenient foods, was established in 1922, and is now headed by Denise Morrison. The company grew from the 70s up until 1998, when it reached its apex at $60, and has since remained stagnant around the $30 mark. During September, the share price stayed close to $34 without significant change. On September 10th, Campbell released astonishing statistics that lowered the stock price: it announced that it had lost 14% of the market since the previous decade. Considering Campbell now owns 53%, a decade earlier it had control of 67% of sales in soup and such products! Later, the September 19th release of the new V8 Fusion Juice kindled new trading with the company and increase shares by almost a dollar. Campbell seems to be heading in the right direction on the stock market, and, since the dividend release in late September, looks to be on the rise. We suggest to invest in the company short term, as it can easily fluctuate between $33-$35 in a single day.

Hillshire VS. Tyson

As we continue with our Consumer Foodstuffs weeks, we are now looking at Hillshire Brands (HSH) and Tyson Foods (TSN). Hillshire is a meat food solutions company established in 1934 that is now headed by Sean Connolly. We studied the stock market of this company, since the split from DE US (a coffee retailer) in July 2012, and have noticed that, although the shares significantly declined since the split, they are on the beginnings of a road to recovery. Unfortunately, as we observed more recent trading, their market has been consistently unstable, never pushing above $27.5. On September 12th, BMO Capital Markets reiterated the market performance of Hillshire Brands which resulted in a gain of almost 1.5 points. Just yesterday, the market was back down to the level a month ago. As we do with our other companies, we bought ten simulated shares of Hillshire, each priced at $26.70. Note that we bought these nearly a month ago, around September 14th. Although the shares are now at $26.50, turning a small loss, we could have gained a profit having sold the stocks on September 21st. Granted, even with this very real possibility, we still advise against investing in Hillshire. This is one of the most unstable companies and we see no positive possibilities for the company in the near future.
Our other company of this post is Tyson Foods. Tyson is also a meat food solutions company but that was established in 1931. The current CEO is Donald Smith. Since the mid-70s, the company has slowly increased, but experienced severe spikes both up and down (especially down) since the 1990s. On September 10th, a competitor of both companies, Hormel was reduced to a 'neutral' status and activity increased in other similar foodstuffs companies, including Tyson. A week later, Brasil Foods decided not to buy Tyson, which consequently reduced the share price for a day. As  with Hillshire, we bought ten shares at $16.10; the market closed today at $16.11. Yes, this was indeed a profit (very minute) but it shows the lack of a good future in investing with Tyson. Unfortunately, we do not have any positive advice for either of these companies. This is not the best time to invest in such products, but we sincerely hope the market for such goods will soon pick up and allow these companies to attain levels unreached since last decade.

Kellogg & Starbucks

Welcome back to Consumer Foodstuffs week. Today we are looking at Kellogg (K) and Starbucks (SBUX). First, Kellogg is a cereal and convenient food distributor that was established in 1922. The current CEO is John Bryant. As with our other companies, we simulated investments by buying ten shares in the company, priced at $51.49. Since then, we have turned this into a minute profit, as the market closed today at $51.58. Historically, the company has not exactly been stable - it has great spikes, but also great tumbles. Shares reach highs in 1997, 2008, and 2010, but have always fallen right back down, best seen in 2000 and 2008. Looking at the company in more recent terms, stocks are fluctuating between neutral and buy ratings. Just a month ago, on September 4th, Kellogg reaffirmed its neutral rating and dropped about a quarter point that day, and another half point by the next week. The week of September 27th, the cereal distributor announced the release of new low-calorie products, which prompted growth over the next weeks (no other major events occurred) and by last week reached almost $52 a share. We believe the company is a good short-term investment, but do not expect it to turn a tremendous profit.
Our second company is the coffee retail chain, Starbucks. This favorite of many was established in 1985 and is now headed by Chief Exec. Howard Schultz. We 'bought' ten shares about two weeks ago, priced at $50.93, and made quite a loss since then. The market closed at $47.35 today, marking nearly $36 in losses since buying the stocks. Since incorporation, the company has seen tremendous growth, followed by 2008, and then a staggering recuperation and all-time high in early 2012. The company now is struggling to maintain those statistics - the market for Starbucks is very unstable. On September 4th, the company closed a deal with LivingSocial, to sell $10 gift cards at $5, an attractive proposal that lifted share price by a dollar. At the end of the following week, the company announced its reaffirmation of the 'buy' status and that it expected growth to $57, from the stagnant $52. To say the least, the stocks fell far from expectations, dropping nearly $3. The current instability with the company, and the desperate actions taken to meet expectations, along with our own losses at a two month low only adds to our advice against investing in Starbucks.

Coke VS. Pepsi

One of the greatest battles in foodstuffs history, the everlasting clash of Coca-Cola (KO) and PepsiCo (PEP). These two worldwide beverage manufacturers and distributors have been competing since the 1890s, specifically 1892 for Coke and 1898 for Pepsi (Coca-Cola really is the first, Pepsi fans...). The current CEO of Coca-Cola is Muhtar Kent and of PepsiCo is Indra Nooyi. The stock prices of the two on Sunday were $37.93 and 70.77, respectively.
Now, let's focus on Coca-Cola. We bought ten shares on Monday priced at $38.16 each. After a full week of trading, the shares are now priced at $38.58. Profit! Since 2009, the company has been growing at a fantastic rate, near doubling the stock price. On September 13th, Coca-Cola was reintroduced into Myanmar following a fifty-two year hiatus, increasing the price by a quarter of a point. Almost two weeks later, Coca-Cola partnered with Global Fund; with its widespread distribution network, the company is able to help spread critical medicine to regions in need, in regions such as Ghana, Tanzania, and Mozambique. This partnership also elevated stocks by a quarter point, but more importantly will aid untouched parts of Africa in critical times.
Enough Coke, who wants Pepsi? As with Coca-Cola, we bought ten shares of PepsiCo at $70.70 a piece. Again like Coke, we made a profit as the shares are now at $71.10. This company has seen much steadier growth output on the market since incorporation. Since 2008, PepsiCo has strongly recuperated and we expect it to reach 2007 levels soon. On September 12th, the shares actually suffered a near-dollar loss due to its favorite rival - Coca-Cola. On this date, Coke introduced RimZim, a rejuvenated drink made with exotic Indian spices, in India, after noticing a prolonged loss in competitiveness in the second-most populated country. Stocks remained on the lower spectrum (closer to $70) until September 26th. Before discussing this, it is crucial to note that Pepsi is based in the Netherlands, for tax reasons. On this date, PepsiCo won the "Debt vs. Equity" dispute caused because the company was taxed and treated as an American company. This sent the shares back in the $71 region, that is until the next few days (but back up this week!).
We were happy with our investments in both companies this week. Although PepsiCo has greater cash flow, Coca-Cola has a greater market cap. Which would you invest in? We recommended both, but for different reasons - short-term is better for PepsiCo, as it is expected to grow by about 4% over the next fiscal year; long-term is better for Coca-Cola, as it is expected to grow by 7% over the next FY, reaping 75% more profits than Pepsi, considering the amount of stocks one can buy with limited funds. Sorry to all Pepsi fans out there, but the monetary battle between Coke and Pepsi is won by Coke, although we do recommend both of these medium-risk investments.

Feel free to leave comments on both your investing decisions between the two companies, your favorite drink, and any comments about the blog.

McDonald's and Kraft Foods

Continuing this week's "Consumer Foodstuffs" topic, we are presenting McDonald's (MCD) and Kraft Foods (KFT). McDonald's, the well known fast food franchise spread across the world was established in 1933; that is almost eighty years of McDonald's! The current Chief Executive is Donald Thompson. The stock price this Sunday was $91.75 and is now at $90.93. Looking at lifetime statistics for the company, their shares have increased value since incorporation until present, except for a brief period between 2000 and 2003. On September 20th/21st, McDonald's annouced its quarterly cash had increased by 15%, leading to almost a point increase on the market. Just a week later, on September 27th, the company was downgraded from a 'buy' to a 'neutral' status, and we thus concluded it was too unstable to currently invest. In our simulated investments, we did lose nearly $12 on ten shares, which we purchased at $92.11. Considering this was only with ten shares, greater shareholders lost significantly more money in just two days.
Our other highlight company of the day this week is Kraft Foods (KFT). This convenience food company was established in 2000 and is currently led by CEO Irene Rosenfeld. The stock price on Sunday marked $41.35. We bought ten shares on Monday at $41.08, and by today made almost $7. Unfortunately, the company has not made much growth since incorporation, especially in a very kinetic time frame, for the better and worse, from 2003 to 2009. On more recent terms, KFT stocks have been changing drastically with each turn of events. September 6th, Kraft Foods announced its future split into Kraft Foods Group and Mondelez, scheduled for October 1st, which quickly led to a point-and-a-half drop in share price. The split yesterday, despite our expectations, actually gained us a profit. We do somewhat speculate inconsistencies with the stocks as the week progresses, and as the public and investors gain more knowledge concerning Kraft's split.

Thank you for reading, and keep visiting the blog daily/weekly for our analyses!! More to come this week: Coca-Cola vs. Pepsi, Kellogg, Boston Beer, and many more!

Costco & The Fresh Market

Our first two companies to analyze in "Consumer Foodstuffs" Week are Costco Wholesale (COST) and The Fresh Market (TFM). Costco, a bulk shopping / wholesale company was established in 1983; the current CEO is W. Jelinek. The stock price Sunday was $100.16 (we bought ten shares at $100.63) and closed today at $100.51. Since going public, this company has shown consistent growth, except for an unstable period between 2000 and 2008. Looking at All-Time price variations, Costco seems to be on the right track to keep growing. The mid-September gender bias case caused a hiatus in growth and stock prices are now decreasing, especially since September 25th. We advise not to invest in the company for now, as it may worsen further, but there are definitely possible investing opportunities in the near future.
Our other preview company for the week is The Fresh Market. This specialty foods retailer was established in 1981 and is now headed by Craig Carlock. The stock price on Sunday was $59.93, we bought ten shares at $59.19 and the market closed at $58.71 this afternoon. After studying the TFM's market prices, we agreed that they are highly unstable, explainable by the company's poor balance sheet - there is not enough flowing cash. Recent movements in the industry are sparking an interest in buying stocks: Amazon revealed a new web-based organic retailer named Vine, a product of Quidsi, a company bought in 2010. This will surely aid Fresh Market's share value with more interest in investing. Although we did lose money today, we are hopeful that TFM can provide decent temporary investing.

Analyses of the Stock Market coming soon!!

Hey everyone, our first stock category of the year will be....Consumer Foodstuffs! We will talk about companies such as Kellogg, PepsiCo, and Chipotle. Make sure to check regularly for new posts!

Thank you for visiting our Investment Club page!! We will soon be posting our promised stock 'digests' for all the different economic sectors.