Thursday, February 23, 2012

Holding and Investment Disclosure

To boost some of my credibility I feel like now is the time to disclose my hypothetical investments which I have monitored closely.

I invested a hypothetical, rough $50,000 in a number of stocks over a staggered time period in order to capitalize on each stock/company's best opportunity for investment.

I purchased 40 shares of AAPL (Apple) on September 14, 2011 after a recommendation from several analysts and a number of positive news articles about their coming quarters. The price I purchased at was $392.96 (total--$15,800), or roughly 1/3 of my total investment.

I purchased 100 shares of IBM (IBM) on September 22, 2011 after following the stock for a long enough period of time to observe when it was experiencing a temporary pullback tied to the broader market, but knew it was waiting for a pullaway. I paid $169.34 share (total--$16,934).

I purchased 100 shares of McDonald's (MCD) on September 8, 2011 on the day of their highest activity level in months, knowing that McDonald's was due for a breakout to new all-time highs. I paid 85.03 per share (total--$8,503)

I purchased 200 shares of Dunkin Donuts Brands (DNKN) on July 31, 2011 shortly after their IPO for $29 even. Dunkin, as I have consistently said, will take a while to get off the ground and has definitely bee lost in a lot of the other IPOS their year and last year, but is a business model which CANNOT fail. Dunkin is expanding into nearly every corner of America at a rapid (some would say alarming) rate. If you look back through movie and television clips from the past 10 years, and some from even before then, you will see Dunkin Donuts containers. It's amazing that they haven't gone public before this year, but better late than never. (Total--$5,800)

I purchased 75 shares of Walt Disney (DIS) on September 8, 2011 at $31.04 per share after news of their commitment to more feature length animated and CGI films came out, as well as their promise to revitalize and improve specific portions of their theme parks while simultaneously lowering ticket prices for specific dates and for families who stay at their hotels. (Total--$2,328)

While some would say this very short list is quite non-diversified and is subject to very small gains over a long period of time, especially when considering the small amount of profit initially invested, I'm using this instead as a perfect template for amassing a large portfolio beginning with just a small initial investment and sticking with a few well-researched stock picks.

Today, February 23rd, at the stock market open I have a hypothetical stock portfolio of $20,572 for APPL, $19,396 for IBM, $10,064 for MCD, $5,816 on DNKN, and $3,091 for DIS for a grand total of: $58,939.

I've gained roughly 1/5 of my investment over the past 6 month period of time.

While $10,000 certainly isn't anything to quit your day job over, the fact that if one were to exponentially increase their initial investment (while keeping with the same investment formula and percentages) they would be looking at a large amount of money. A $1,000,000 investment for an investor would have returned $200,000 in 6 months, and a $10,000,000 by a hedge fund would have resulted in a $2 million profit. Now, if the amount invested into each stock were changed or updated for a higher investment, my percentage rate of return is much higher if, for example, one were to put a higher percentage into a stock like AAPL which is very expensive for an investor with a smaller portfolio.

The broader market during this same period of time rose roughly 1,500 points on the DOW or around 10%.

My plan is to hold these for an extended period of time and, when I feel the market is topping out, I will dump my positions in certain stocks and enter into others. One of the ones I'm looking forward to is the Facebook IPO. I plan on using my profits only for my new investments so that I have a portfolio comprised entirely of profits so that there is little to nothing to lose from the investments.

More to come later on.

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