Below are the 5 companies that I chose to monitor the ...



INSTRUCTIONSPart 1: NOTE:? Please read instructions for the stock market project before proceeding with work. It will save you time. 1. Building your own portfolio Select five companies for the purpose of tracking the stock market, conducting research on the companies, and preparing company reports. You will be investing in common stocks only, but you will be able to select from two national stock exchanges, the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the NASDAQ.Make a simulated $50,000 purchase in the common stock of your five selected companies (Approximately $10,000 each; you have to buy whole shares and not a fraction of a share). To determine purchase price, check one of the business websites suggested. Please provide the following information in your stock market update:1. Name of company.2. Stock/Trading symbol.3. Date and last price on the date of purchase.4. Number of shares purchased.5. Total purchase (in dollars)6. A brief description of the company including its size, products and services.7. Reasons for your selection (for example, you can back up your personal opinions with financial facts such as unique products or services, strong competitive advantage, high earning growth rate, strong buy rating from analysts etc.).You will make your purchases according to the following rules:a. Your brokerage fees will be $10 every time you buy or sell one company's stock.b. You will ignore all taxes?(do not forget about dividends you collect, if any, add them to your cash balance (you are not re-investing the dividends)).c. From Week 4 to Week 12, you can change your mind and sell shares in one or two companies at most. In this case, you have to sell all shares and reinvest your proceeds in one or two new companies. In other words, you will always have five companies in your portfolio.Part 2: Index purchase: Simulate a $50,000 purchase of SPIDERS (Trading symbol SPY). SPIDERS stands for shares of an Exchange Traded Fund traded in the AMEX. SPIDERS mimics the Standard & Poor 500 Index, a broad market index.?This strategy will work well during the "bull" market. When the stock market goes up, you gain the average of the market return. This strategy worked well during the long bull market from 1983 to around March 2000.? Selling short an Index Fund (NASDAQ 100). Short-sellers are investors who borrow stock from a broker and sell it in the market, betting that the stock price will fall so they can buy it back at a lower price. This strategy works well during the bear market. The bear market started in March 2000. For a period of slightly more than 2+ years, all major market indexes lost considerable ground. The Dow Jones Industrial Average dropped from 11,500 to around 7,800, the S&P 500 dropped from more than 1,500 to around 800, and the NASDAQ Composite Index dropped from more than 5,000 to around 1,200. Deposit a simulated $50,000 in a broker's account. Borrow stock from the broker and short-sell "QQQ", the trading symbol of shares of an Exchange Traded Fund traded in the AMEX. QQQ mimics shares in the NASDAQ 100 Index. On the 9th?week from your starting date, buy back all shares of QQQ. If the price of QQQ goes down, you make a profit by selling high and buying low. During less than 10 months in the year 2002, some ultra short mutual funds employed this strategy successfully. For example, ProFunds: Ultra Short OTC investment fund gained 136%. However, shorting can be a risky investing strategy because unlike buying stock, where you cannot lose more money than you put in, short-selling losses can be unlimited if the borrowed stock keeps rising. Leo Guzman, president of Guzman & Company, a brokerage firm, warns shorting should be left for the professional investors. ?Record the dates of buying and selling, number of shares, price per share, total purchases and sales. For the purpose of computing gain or loss, use $100 total for the broker's commissions and the fund's management fee.Your Final Stock Market Report should include background information for?all investments. It must include: company name, trading symbol, location, mission, product/service line,?competitors, revenues, earnings information, and stock exchange traded on, any current activities that you think may make your selected companies a good or bad investment in the future. In your opinion, which of the?seven?are good investments for the short-term and for the long-term. Your report should also include share price when you start tracking the stock, number of shares purchased, value of investment on date sold, and profit or loss on the investment. Go to COURSE DOCUMENTS and retrieve the Stock Market template Part #3. In conclusion, express what you learned about the stock market. Answer these questions: 1) Is it a good place for short-term investment?? 2) Long-term investment? 3)Back up your opinion with financial facts and historical data. Some people say that "The stock market is the biggest casino in the world." Do you agree? 4) Why and why not? 5) For the three investing strategies, which one(s) do you prefer for the short-term investment? 6) Long-term investment? 7) How do you modify strategy #1 to make it less risky? 8) Should you increase or decrease the number of stocks in strategy #1? 9) Should you invest in a variety of companies offering different products and services??Your final report must be two to three typed pages double spaced in size 12 font. This is a summary report so don't ever exceed three pages! See sample below….Below are the 5 companies that I chose to monitor the stock market.A.???????????? Name of company: Exxon Mobil CorpStock/Trading symbol: XOM?Date and last price on the date of purchase: 8/29/07 $85.23 per shareNumber of shares purchased: 117 shares?Brokerage Fees: $10Total purchase (in dollars): $9971.91?A brief description of the company including its size, products and services: Exxon Mobil Corporation, formerly named Exxon Corporation, was incorporated in the State of New Jersey in 1882. On November 30, 1999, Mobil Corporation became a wholly-owned subsidiary of Exxon Corporation, and Exxon changed its name to Exxon Mobil Corporation. The Company's principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. ExxonMobil is a major manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a wide variety of specialty products. ExxonMobil also has interests in electric power generation facilities. The number of regular employees was 83.7 thousand, 85.9 thousand and 88.3 thousand at years ended 2005, 2004 and 2003, respectively. The number of CORS employees was 22.4 thousand, 19.3 thousand and 17.4 thousand at years ended 2005, 2004 and 2003, respectively.Reasons for your selection: My husband is self-employed and relies heavily on the funds in his self-employed pension fund. This stock is one of the top investments in one of his portfolios. I am just interested to know in the long-run how this stock will help him achieve his goals. ??B.??? Name of company: EBay Inc.?Stock/Trading symbol: EBAY?Date and last price on the date of purchase: 8/29/07 $33.45 per shareNumber of shares purchased: 298 shares?Brokerage Fees: $10Total purchase (in dollars): $9968.10?A brief description of the company including its size, products and services: EBay Inc. was formed as a sole proprietorship in September 1995 and was incorporated in California in May 1996. In April 1998, the Company reincorporated in Delaware and in September 1998 it completed the initial public offering of its common stock. The Company's purpose is to pioneer new communities around the world built on commerce, sustained by trust, and inspired by opportunity. EBay brings together millions of buyers and sellers every day on a local, national and international basis through an array of websites. The Company provides online marketplaces for the sale of goods and services, online payments services and online communication offerings to a diverse community of individuals and businesses. The Company currently has three primary businesses: the eBay Marketplaces, Payments and Communications. As of December 31, 2005, eBay Inc. and its subsidiaries employed approximately 11,600 people.?Reasons for your selection: I am really interested in how well EBay performs. Frequently, I shop through this forum and would be amazed of this company did not continuously make a profit.??C.??? Name of company: Microsoft CorporationStock/Trading symbol: MSFT?Date and last price on the date of purchase: 8/29/07 $28.59Number of shares purchased: 349 shares?Brokerage Fees: $10Total purchase (in dollars): $9977.91?A brief description of the company including its size, products and services: Microsoft was founded in 1975. It develops and markets software, services and solutions that deliver new opportunity, convenience, and value to people's lives. The Company's seven product segments are: Client; Server and Tools; Information Worker; Microsoft Business Solutions; MSN; Mobile and Embedded Devices; and Home and Entertainment. Its customers include individual consumers, small and medium-sized organizations, enterprises, governmental institutions, educational institutions, Internet Service Providers, application developers, and OEMs. As of June 30, 2005, the Company employed approximately 61,000 people. ?Reasons for your selection: My children’s college plan depends heavily on this stock, so I am very concerned on how this will turn out or maybe we?’ll trade.?D.??? Name of company: Apple Inc?Stock/Trading symbol: AAPL?Date and last price on the date of purchase: 8/29/07 $134.08 per shareNumber of shares purchased: 74 shares?Brokerage Fees: $10Total purchase (in dollars): $9921.92?A brief description of the company including its size, products and services: Apple Computer, Inc. was incorporated under the laws of the State of California on January 3, 1977. The Company designs, manufactures, and markets personal computers and related software, services, peripherals, and networking solutions. Apple also designs, develops, and markets a line of portable digital music players along with related accessories and services including the online distribution of third-party music, audio books, music videos, short films, and television shows. The Company sells its products worldwide through its online stores, its own retail stores, its direct sales force, and third-party wholesalers, resellers, and value added resellers. As of September 24, 2005, the Company had approximately 14,800 full-time equivalent employees and an additional 2,020 temporary employees and contractors?Reasons for your selection: My family has invested money in their products such as the famous iPod, macbook and i-phone, so I just wanted to know how well it could perform in the long run before I invest in the stock.?E.???? Name of company: Nissan Motors?Stock/Trading symbol: NSANY?Date and last price on the date of purchase: 8/29/07 $19.13 per shareNumber of shares purchased: 522 shares?Brokerage Fees: $10Total purchase (in dollars): $9985.86?A brief description of the company including its size, products and services: It is primarily engaged in the manufacture and sales of products in the automobile segment. Products include passenger cars, buses and trucks, as well as related components. ?Reasons for your selection: I have two paid off Nissan vehicles that have always been good to me, so I would like to return a thank you by investing in their stock to keep them providing safe and reliable quality vehicles. Below is the SPY and QQQ processingPurchase ETF called SPY – You are purchasing – holding and selling this one like you did for the stocks in Part 1.Name of company: SpidersStock/Trading symbol: SPYDate and last price on the date of purchase: 9/14/07 $148.90 per shareNumber of shares purchased:?335 sharesFees: $100Total purchase (in dollars): $49881.50?Shorting strategy—Short the ETF – QQQQ – You are borrowing, selling and later buying back this ETF – Look up short sale on Google to be sure you understand.Name of company: PowersharesStock/Trading symbol: QQQQDate and last price on the date of Borrowing /Sale: 9/14/07 $49.22 per shareNumber of shares borrowed/sold:?1013 sharesFees: $100Total sale (in dollars): $49859.86Below is the final purchase and sales report of the stock market project??Purchase Price Number of Shares Total InvestmentSymbolPer SharePurchasedPurchase amtHonda Motor Co.HMC34.492899971.61Microsoft CorporationMSFT28.023569985.12Southwest Airlines Co.LUV11.2988810035.52Lockheed Martin Corp.LMT75.7213210005.04SpidersSPY106.946649,915.40Exchange Traded FundQQQQ47.36111753,001.12BB&TBBT27.513639996.13Totals??3611152909.94Selling Price Total DividendsNet Per ShareSelling AmtCommissionCollectedGain/Loss34.499971.61200030.6710,918.52200933.4013.3811,881.44200.271,846.1982.9910,954.6820209.131,158.77120.8856,330.0810006,414.6844.6449,962.881000-3,038.2433.7612,254.882002,258.75?162274.09300209.49573.55Honda Motor Company ltd. Honda is a Japanese multinational corporation known primarily for producing automobiles and motorcycles. The firm also produces other land and aquatic based vehicles and has been extending its research department into other ventures, such as the Honda Asimo, an advanced humanoid robot. Honda is headquartered in Tokyo, with a domestic branch, the American Honda Motor Co., located in Torrance, California. Its shares are traded on the New York Stock Exchange, as well as the Tokyo Stock Exchange and eight other international stock markets. The company has grown to become the sixth largest automobile manufacturer in the world.Microsoft CorporationMicrosoft is a multinational computer technology corporation that develops, licenses, manufactures and supports a wide range of software for computing devices. The firm’s most profitable and known for products include the Microsoft Windows Operating System and Microsoft Office. It was established by William Henry Gates (Bill Gates) in Albuquerque, New Mexico in 1975. It is currently headquartered in Redmond Washington. Just recently, the company has attempted to extended it’s Windows products into PDA’s and smart phones, as well as entering the multi-billion dollar video game console market, already dominated by Sony and Nintendo, in late 2001. Microsoft has footholds in other markets as well, with assets such as MSNBC cable television network, the MSN web portal, Microsoft Encarta multimedia encyclopedia and the home entertainment market with products such as the Xbox, Xbox 360, Zune and MSN TV. The company’s initial public stock offering, or IPO, held in 1986 made four billionaires and 12,000 millionaires from Microsoft employees in turn with the company’s already rising stock price, which has currently leveled out and fell due to current economic times. Southwest Airlines Co. As of 2007, Southwest Airlines is the largest airline in the world by number of passengers carried each year. It is said to be America’s lowest-cost airline. The firm is the sixth largest U.S. airline by revenue and maintains the third-largest passenger fleet of airlines among all of the world’s commercial airlines. As of last year, Southwest operates roughly 3,500 flights daily. It is one of the world’s most profitable airlines, posting a profit for the 36th consecutive year in 2009, although it has reported individual quarterly losses. The business model behind the company’s success is due to flying multiple, short flights into secondary airports of major markets, which is more efficient and less costly, and it does this with only one type of aircraft, the Boeing 737. Southwest Airlines is currently headquartered in Dallas, Texas.Lockheed Martin Corp. Formed in 1995 by the merger with Lockheed and Marin Mairetta, Lockheed Martin is an American aerospace, defense, security and technology advanced company with worldwide interests. As of 2008, the firm has become the largest defense contractor in terms of revenue, most of which comes from the United States Department of Defense, other U.S. federal government agencies and foreign military consumers. Some of the company’s most successful endeavors include the F-22 raptor, F-16 Fighting Falcon, C-130 Hercules, Trident missile, Titan missile, Viking 1 and 2 landers and the Space Shuttle External Tank. The corporation is headquartered in Bethesda, Maryland. BB&T CorporationBB&T is an American bank that offers full-service retail and commercial banking services along with other financial services like insurance, investments, retail brokerage, mortgage, corporate finance, consumer finance, payment services, international banking, leasing and trust. Based in Winston-Salem of North Carolina, the company operates 1,850 financial centers in the Southern United States and the Eastern coast, with assets recorded at 165.3 billion as of June 2008. The bank has it roots as far back as 1872, when Alpheus Branch and Thomas Jefferson Hadley founded the “Branch and Hadley” merchant bank in Wilson, North Carolina. Over the years, the bank has gone through many name changes until it fell upon it’s current name, Branch Banking and Trust, or BB&T. SummaryI have learned more about this market than I thought I ever would in completing this project. I do believe that the stock market can be a good place for both short-term and long-term investments, under certain conditions, of course. One of the conditions I find most important it timing. Although we have been through a tough recession over the past few years, if you understand the business cycle and have a basic understanding of historical cycle patterns, we know that after a recession, or contraction, comes a period of recovery. Since World War II, most complete cycles have lasted three to five years. However, today it is believed that these cycles are irregular in frequencies, and although we may not know the extent of the time frame of the current recession, we should know that eventually we will enter into a recovery cycle, which we may already be doing at this point in time. This project would be considered short-term, and after analyzing my results along with other students project’s, this market at this time is a good place for investment most of us have seen a fairly large return. If this could be a sign that we could be heading towards recovery, then now would be the best time to invest in the long-term, as prices would continue to rise. I believe that “the stock market is the biggest casino in the world” holds truth in that incorporates more money in one single market compared to that of any casino in the world. However, they do differ in terms of risk. As mentioned before, the stock market is attuned to the business cycle, as a casino is not. If you understand the cycle, then you should know when to make investments in the market, to minimize your losses and maximize your gains. Inside a casino, making it big comes down to pure luck. Creating your own portfolio seems like the better strategy when making short-term investments, and investing in SPIDERS seems to work well in the long run. In my opinion, the best way to change strategy one, your own portfolio, you should think like a professional investor, contrary to our academic community which states that you could throw darts at a list of securities on the Wall Street Journal. This kind of mind set would also do well to increase the number of stocks in this strategy, but knowing which ones to do so with. If you really have an interest in this market, such as myself, then I believe it is necessary to diversify your portfolio among a variety of firms offering different products and services. ................
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