Monday, October 22, 2007

The journey started - Bought NTGR stocks

I bought 32 Netgear (NASDAQ:NTGR) stocks on 10/22/2007 for $30.2 each. Ameritrade charged my $10 for the transaction. So, I would consider the cost of each stock to be $30.51.

I want to keep track of the following information for every new stock that I buy:

1) Why am I buying this stock (Research that I did, factors that convinced me to buy that stock, why didn't I buy the stocks of a different company in the same market/domain?)

- Earnings per share (EPS) was 1.18
- The company's 52 week's high was about $41 and 52 week's low was about $21
- The stock reached around $26 in July 07 due to poor Q2 results.
- The company gave a good Q3 outlook
- The company is venturing into Storage area solutions, coming up with innovative products like Skype phone, digital entertainer HD (for homes). The company was named in Deloitte Technology fast 50 program.
- TheStreet.com has given a buy rating with a target price of $41.
- The company's performance is good since it went IPO.

2) When will I sell the stock?

I am planning to sell the stocks when the value reaches $40 or above.

I'll think about selling this stock if it continues to go down and goes below $20.

3) What am I going to do with the money that I get out of this stock?

I am going to donate 20% of the profit and save the remaining amount. I'll probably buy an iPhone (when I save a lot or when Jobs announces another price cut :))

I joined the world of volatility

In late 2006, I was fanatic about trading stocks in the market. Thanks to my financing fundamentals from the MBA degree. I got very motivated and opened a free trading account with Ameritrade in early 2007. At that time, I had more interest & less money to invest. So, I had to fetter my thoughts. However, I decided to continuously monitor and keep track of the economy and the market.

I personally felt that I've gained more skills & knowledge by keeping track of the market than by reading books. Though I cannot claim to be dexterous at trading stocks, I now have a decent understanding of the dynamics of the market.

In October 2007, I read Robert Kiyosaki's "Rich Dad Poor Dad" - a great eye opener. This book exhilarated my passion to invest in stocks. I decided to start trading stocks to improve my financial ingenuity.

I was looking at companies from different industries, reading analysts reports, reading press releases, analyzing the quarterly reports etc., I first thought of investing in eBay - thinking that eBay would announce good Q3 results & due to the holiday season they'll do well in Q4 also. The results from eBay was a bummer. They've to write-off some money to meet the obligations of the Skype deal. The stock didn't do well. I felt fortunate that I didn't invest in eBay :)

After a couple of days, I transferred $1K from my bank account and bought 32 Netgear (NTGR) stocks on 10/22/2007.

I have created this blog to keep track of the things that I learn during the process of developing my financial intelligence. Hopefully, this blog will be useful for others also (Too early to say this with just one posting!). I am hoping to update this during every trade that I make.