BornEntrepreneur

So, I’ve been realized that other than holding on to some shares of Microsoft since my 16th birthday, I really know very little about the stock market—and picking winners.  I figured I’d lessen the gap of knowledge a bit by picking up a couple books on investing in the stock market.  Here’s what I learned from the first one:

You Can Be a Stock Market Genius Even if You’re Not Too Smart: Uncover the Secret Hiding Places of Stock Market Profits
by Joel Greenblatt

1. increase # of stocks to decrease risk. (seems obvious, i know…but there was this cool set of statistics mentioned the book that shows the risk going down 75% when you have 4 stocks and all the way up to something around 80 stocks.  never seen it written out in statistics like that, rather than simply saying “don’t put all your eggs in one basket”)
   
2. Buy spin-off companies.  (This is was the biggest point of the authors.  Says this is where the guaranteed cash is. There’s proven statistics on it)
3. invest in companies that might be acquired soon
4. invest in good companies that are coming out of bankruptcy.
5. invest right after corporate restructuring has been announced
6. look for cool concept stores and invest in their public parent company (if there is one)
7. the Wall Street Journal is the best source for investment news.  (I guess this makes sense given that the WSJ Online is one of the few successful subscriber based periodicals online. Now that you know what tips off a good investment you can make sense of the news.)
8. Look into investment newsletters (but it costs some cash to subscribe)
1. Outstanding Investor Digest – the best
2. The Turnaround Letter

So I’m going to start reading the financial news more, watch the announcements, etc.  Mainly looking for company spin-offs as the authors seemed so confident as money makers.  Was searching for a website or blog that specialized in making announcements like this, but have yet to find one.  My first investment may not be for a little while, but I’ve got my ETrade and Zecco accounts all ready to go.