Saturday, January 3, 2009

New TPC Feature: Stock Pick of the Day

Over the last several months I've been following the stock market and watching it choke and spasm its way down to some incredibly low levels. As a biology major in college and a current dental school student, I've never spent a lot of time learning the deep intricacies of Wall Street, but I've always found it fascinating and thought that current conditions might offer up some great opportunities for making money.

So, the first thing I did was to start reading up on the history of stock prices, what made them surge upward, plunge downward, and remain constant for years at a time. Here's a chart I found that I really liked.

Dow Jones Industrial Average Over 100 Years

As many of you probably have realized by now, I'm into numbers and charts and quantifying potential, so the above chart really got me thinking.  There are some incredible patterns that pop out, and if the last 50 to 75 years are any indication of the future, we could be in the middle of an 18 to 20 year bear market, with the beginning of a new bull market showing up in about 10 years.  

I don't want to spend too much time discussing the chart because it doesn't really teach us a whole lot, other than the fact that the market has some basic cycles that it works through that seem to be on a generational scale.  My main purpose in this post is to point out the fact that at my current age (26 years old), it's time for me to put some of my brain power to work in learning how to identify investment opportunities so that I can retire at a decent age in the future.  

So, over my winter break, I've been reading anything I could get my hands on that helped me understand how to best take advantage of the market, and what to look for when doing so.  I've read through most of The Intelligent Investor, and am currently finishing up The SnowBall, a bigoraphy about Warren Buffet.  I've also spent many hours digging through Yahoo! Finance, Google Finance,, and any other investment oriented website I thought was worth my time.  Next week I'm going to order Security Analysis and work my way through learning how to identify and value good business investment opportunities.  

I won't spend much time on TPC explaining or regurgitating things I've learned, but I am planning to periodically identify stocks that I've come across that I think are good values and worth investigating.  I won't do so on a daily basis, but I hope to post the stock of the day once or twice a week depending on circumstances.  Let me know what you think of the whole idea.

Adam G.
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