How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
[text_ad]
Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.
If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)
If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.
[text_ad]
Read More
Close
How To Invest Library Archives
The Blackstone Group LP, $36.61, symbol BX on New York (Shares outstanding: 520.5 million; Market cap: $21.5 billion; www.blackstone.com), is a global alternative asset manager and provider of financial advisory services. The company’s alternative asset management businesses include managing corporate private equity funds, real estate opportunity funds, hedge funds, mezzanine funds, senior debt funds and closed-end mutual funds. Mezzanine financing is a mixture of debt and equity financing that private companies use to fund expansion. Mezzanine debt gives the lender the right to convert the debt to equity if the borrower defaults. It typically entails less due diligence by the lender, and the borrower puts up little or no collateral....
Denison Mines Corp., $1.09, symbol DML on Toronto (Shares outstanding: 505.9 million; Market cap: $561.5 million; www.denisonmines.com), holds 22.5% of France-based Areva SA’s McClean Lake uranium-processing plant in Saskatchewan. It also has stakes in exploration properties in that province’s Athabasca Basin, including its 60%-owned project at Wheeler River. Internationally, Denison owns 100% of the Mutanga project in Zambia, roughly 77% of the Dome project in Namibia and an 85% stake in projects held by the Gurvan Saihan joint venture in Mongolia. In addition, Denison decommissions mines and provides other environmental services through its DES division and is the manager of Uranium Participation Corp. (symbol U on Toronto), which invests in uranium oxide (U3O8) in concentrates....
The Consumer Discretionary Select Sector SPDR Fund, $70.81, symbol XLY on New York (Units outstanding: 131.9 million; Market cap: $9.3 billion; www.spdrs.com), aims to track the S&P Consumer Discretionary Select Sector Index. The ETF’s top holdings are Walt Disney Co., Comcast, Home Depot, Amazon.com, McDonald’s, Time Warner, Twenty-First Century Fox, Nike, Lowes Companies and Starbucks. Many consumer stocks have risen in the last year, as an improving U.S. economy and employment numbers benefit firms that rely on purchases of non-essential goods. Consumer spending accounts for almost 70% of the U.S. economy....
Theme investing has natural appeal. It simplifies things. Investors like it because they feel it can put their investment returns into overdrive. Some also feel it adds fringe benefits to their investing, by letting them support social objectives. Brokers like it because it gives them a rationale to recommend a variety of stocks. If a client thinks gold prices are headed up, a broker can think of all sorts of gold-themed investment opportunities. They include established gold miners; junior gold companies that are working on a promising gold property; or penny golds that are outright speculations. Other possibilities are financial companies that sell gold-related merchandise like gold coins....
Westport Innovations, $4.02, symbol WPT on Toronto (Shares outstanding: 63.2 million; Market cap: $248.3 million; www.westport.com), develops technology that lets engines operate on gaseous fuels, such as natural gas or hydrogen. The company also has a 50/50 joint venture with Cummins Inc. (symbol CMI on New York) called Cummins Westport Inc. The partnership sells a range of low-emission alternative-fuel engines for medium-duty trucks. In the nine months ended September 30, 2014, Westport’s revenue fell 7.4%, to $103.2 million from $111.4 million a year earlier (all figures except share price and market cap in U.S. dollars). It lost $84.7 million, compared to a year-ago loss of $96.0 million. Per-share losses narrowed to $1.34 a share from $1.72 on fewer shares outstanding....
Capstone Infrastructure Corp., $3.28, symbol CSE on Toronto (Shares outstanding: 93.4 million; Market cap: $318.1 million; www.capstoneinfrastructure.com), is an electricity producer with 449 megawatts of capacity. It operates gas, wind, hydro, biomass and solar facilities and is developing wind projects capable of generating a total of 79 megawatts. Capstone also invests in utilities, including a 33.3% stake in a municipal-heating business in Sweden and 50% of a regulated water utility in the U.K. The company plans to keep looking for acquisitions to boost its cash flow per share. But that adds risk, especially since it has previously added a wide range of operations, including solar and biomass, and made acquisitions in foreign markets like Sweden....
Gogo Inc. $13.99, symbol GOGO on Nasdaq (Shares outstanding: 85.3 million; Market cap: $1.2 billion; www.gogoair.com), offers a service that lets passengers with Wi-Fi-enabled devices get online on Gogo-equipped aircraft. The company offers Internet access on more than 10 major airlines and 2,000 individual airliners. Over 6,000 business jets also use its systems. Gogo charges $59.95 a month or $16 for an all-day pass. Commercial aircraft using Gogo’s service include domestic Delta Air Lines flights and nearly all of that company’s regional jets; all AirTran Airways and Virgin America flights; and select Aeromexico, Japan Airlines, Air Canada, Alaska Airlines, American Airlines, United Airlines and US Airways flights....
Metalore Resources, $2.88, symbol MET on Toronto (Shares outstanding: 1.8 million; Market cap: $5.1 million; www.metaloreresources.com), produces natural gas in Norfolk County in Southwestern Ontario. Right now, the company is producing gas from 85 wells. It also distributes gas to 85 businesses and consumers along its gathering pipelines through an agreement with Union Gas Ltd. Metalore is in the early stages of exploring its 100%-owned Cedartree Lake gold property near Sioux Narrows, Ontario. It also has 21% to 26% joint-venture interests in a group of over 600 gold-mining claims in Ontario’s Beardmore-Geraldton area. For the three months ended September 30, 2014, the company reported revenue of $230,842 from natural gas sales, down 9.7% from $255,554 a year earlier. Cash flow rose slightly, to $103,243, or $0.06 a share, from $102,797, or $0.06....
PG&E Corp., $58.16, symbol PCG on New York (Shares outstanding: 475.1 million; Market cap: $27.6 billion; www.pgecorp.com), is a holding company for Pacific Gas and Electric, which supplies power and natural gas, mainly in northern and central California. The company serves 5.3 million power customers (80% of revenue) and 4.4 million gas users (20%). PG&E’s electricity revenue breaks down as follows: 41% residential, 39% commercial, 11% industrial, 8% agricultural and 1% from other customers. Natural gas distribution revenue is 60% residential and 40% commercial. The company buys 57% of its power from other producers. It also generates electricity from its own plants: nuclear (24%), hydroelectric (11%) and gas (8%)....
When you take up a new job or pastime, you automatically pick up the jargon that goes with it. That’s human nature. You see it everywhere. In a health food store, moonlighting high-school students can rattle off opinions about which herbal tea or homeopathic remedy you should take for your heart problem. The students seem to know what they’re talking about. But they may simply be repeating what they read on the package, or heard from the company sales rep. Similarly, a sporting goods clerk may ask detailed questions about pain in your lower back and metatarsals before recommending a particular golf shoe. (For that matter, many weekend golfers sound like they make a living from the sport.)...