Finance crew: buy this ish NOW

[PV Audio 5,000+ posts]

Instead of sitting in this thread trying to prove an irrelevant detail, why don't you start appraising companies with good long term Fundamentals. Or figure out a way to increase your personal Economic worth and value. That way you can actually invest outside of your current paradigm.
It doesn't matter if buying shares on the secondary market is considered loaning the company money or not. The Corporation issued it's Equities upon establishment in exchange for front money to get it's self off the ground. They opted to use that form of Leverage as the spring board and that is still the practice of lending money and it took place at least someplace in time. Whether you consider it lending or holding an equitable interest in the corporation somebody still LENT their currency to the company.

So beneath all that jargon, you're preaching technicalities. Gotcha.

 

[Flipx99 5,000+ posts]

Instead of sitting in this thread trying to prove an irrelevant detail, why don't you start appraising companies with good long term Fundamentals. Or figure out a way to increase your personal Economic worth and value. That way you can actually invest outside of your current paradigm.
It doesn't matter if buying shares on the secondary market is considered loaning the company money or not. The Corporation issued it's Equities upon establishment in exchange for front money to get it's self off the ground. They opted to use that form of Leverage as the spring board and that is still the practice of lending money and it took place at least someplace in time. Whether you consider it lending or holding an equitable interest in the corporation somebody still LENT their currency to the company.

Because I don't follow companies....I follow sectors. I am quite confident in my abilities in corporate finance, as well as my ability to form a sentence without capitalizing unneccesarily.

It does matter. You are referring to venture capital, angel lending, perhaps. None of which has anything to do with the firm in question as it had its IPO long ago. Someone at some point may have lent currency to the company, but I continue to fail to find the connection between an equitable investment and lending. I think you should preach this to many Muslims who use partnerships, equity investing etc as a mechanism to generate returns as loaning money for interest is against the fundamentals of their religion.

 

[its_bacon12 10+ year member]

Then, you are Speculating and that is not the game I play.
If you really want to get anywhere in these markets you going to have to think like a Money Lender because that is EXACTLY what you are doing. You are loaning money to this company.

Think of every dollar that enters your hands as a bank deposit and every dollar that leaves your hands for potential growth as a loan. If you don't do it this way you're going to watch the ticker everyday, be emotionally attached to your holding, and all your logic will go out the window.

There is two side to this game:

a. Chucking dice in hopes of Short-term Capital Gains based upon market fluctuation.

Or.

b. REALLY taking a solid position when the stock is depressed, positioning yourself as a Creditor to the business, and knowing the business entirely.

You want to invest in the value the company brings to human beings and hold it for it's Cash-Flow from it's Dividend. This increases your earning ability and you can move on, appraising new investments. Adding more and more economic power and more income.

You do not want to speculate. You want to add more economic power to your portfolio and preserve your Capital.

Read their Annual Reports, learn their business, and then based upon your gut feeling and present knowledge, make a well informed lending/investment decision.

...only during the IPO are you "loaning" money to the company..

 

[Flipx99 5,000+ posts]

...only during the IPO are you "loaning" money to the company..

I wouldn't say so then...I would say only the venture capitalists and hedge funds actually loan money. They are paid back during the IPO oftentimes...I still don't think the primary dealers are making a loan persay. I could be wrong, as my interest lies more with structured finance.

Either way, LEH is not an IPO...and the shares Lemons bought had nothing to do with loaning anyone any money.

 

[its_bacon12 10+ year member]

May be OT but the only time I would ever invest money in stocks (individually speaking) is when I see a company that for some reason the stock crashes hard (for instance, the Options Backdating Cases as of late) but the Future Earning stays the same. That is a company that is prime as a takeover target for another company, and when the prospective takeover company acquires, the stock price normally would jump, multiplying by 2, 3, 4.. depends on many factors including the size and stability of acquiring company.

 

[PV Audio 5,000+ posts]

I wouldn't say so then...I would say only the venture capitalists and hedge funds actually loan money. They are paid back during the IPO oftentimes...I still don't think the primary dealers are making a loan persay. I could be wrong, as my interest lies more with structured finance.
Either way, LEH is not an IPO...and the shares Lemons bought had nothing to do with loaning anyone any money.

I know where he's going, but it doesn't apply to this situation.

 

[its_bacon12 10+ year member]

I wouldn't say so then...I would say only the venture capitalists and hedge funds actually loan money. They are paid back during the IPO oftentimes...I still don't think the primary dealers are making a loan persay. I could be wrong, as my interest lies more with structured finance.
Either way, LEH is not an IPO...and the shares Lemons bought had nothing to do with loaning anyone any money.

Yeah, and for that guy to say buying LEH shares is loaning the company money has absolutely no idea what he's talking about. There are PLENTY of ways for a company to raise capital, stock offerings are one, but not second hand.

 

[Flipx99 5,000+ posts]

I know where he's going, but it doesn't apply to this situation.

Where is he going? I sure don't get it.

 

[PV Audio 5,000+ posts]

May be OT but the only time I would ever invest money in stocks (individually speaking) is when I see a company that for some reason the stock crashes hard (for instance, the Options Backdating Cases as of late) but the Future Earning stays the same. That is a company that is prime as a takeover target for another company, and when the prospective takeover company acquires, the stock price normally would jump, multiplying by 2, 3, 4.. depends on many factors including the size and stability of acquiring company.

Take a look at Intel and tell me what you think. I'm itching to buy, but I'm not knowledgeable enough about stocks and finance to be positive.

 

[Flipx99 5,000+ posts]

Take a look at Intel and tell me what you think. I'm itching to buy, but I'm not knowledgeable enough about stocks and finance to be positive.

Most people with knowledge don't reccomend individual stocks. I know I don't with the exception of one, IRBT, and that is for fun and I think they make a quirky product.

 

[PV Audio 5,000+ posts]

Where is he going? I sure don't get it.

I'm pretty sure that he's thinking about it as though the company is just starting or just went public, and in which case, I would be using my investment as collateral. This isn't happening in the least, so it doesn't apply. That's how I took it at least, but I'm not financially savvy. //content.invisioncic.com/y282845/emoticons/biggrin.gif.d71a5d36fcbab170f2364c9f2e3946cb.gif

 

[PV Audio 5,000+ posts]

Most people with knowledge don't reccomend individual stocks. I know I don't with the exception of one, IRBT, and that is for fun and I think they make a quirky product.

I'm not in this to make a lot of money, it's a section of my savings I've set aside to learn how the market works.

 

[its_bacon12 10+ year member]

Honestly, if you want a sure bet, wait for Openwave to blow open in the next ~3-6 months. They a HUGE options backdating case my firm is working on right now. Also, one of the experts at this firm did a research project on this exact thing - whether or not these options backdating companies would be a target for takeover.

 

[Flipx99 5,000+ posts]

I'm pretty sure that he's thinking about it as though the company is just starting or just went public, and in which case, I would be using my investment as collateral. This isn't happening in the least, so it doesn't apply. That's how I took it at least, but I'm not financially savvy. //content.invisioncic.com/y282845/emoticons/biggrin.gif.d71a5d36fcbab170f2364c9f2e3946cb.gif

If the company just went public, you'd still be buying shares on the secondary market. The only way for you to actually loan them money would be...well, I don't know as bonds, commercial paper, etc are all sold on the secondary market.

 

[Flipx99 5,000+ posts]

I'm not in this to make a lot of money, it's a section of my savings I've set aside to learn how the market works.

Then I would pick a company that I thought did something interesting. Investing is no fun if you have no idea what the companies you own actually do. IRBt - iRobot. They make those vaccuum cleaners shaped like discs that clean the floor for you automatically. Is it a fundentally sound company...well it does okay considering they make premium products and we are in a recession. They also make products for military purposes.

Either way, because I am interested and understand what they do...it makes it easier to understand the annual reports and other data...and more interesting to read.