Tom implied it is necessary to be a CPA or have an understanding of GAAP. Although I don’t believe that is mandatory as an investor, merely suggesting to someone, without a basic understanding of accounting, to “learn to read a financial statement” - is pretty shallow and unrealistic to the average person. Perhaps companies do manipulate their books, to believe anything else would be naive. But, if if you feel that threatened by a company’s financial reporting, don’t be an investor then!

When targeting certain sectors, it is true that a rising tide elevates all ships, but one must still be able to “pluck the prettiest flower” amongst the bunch. How can you do that?

Investing requires more than speculating on the market’s direction, it requires proficiency in accounting, economics, finance, etc.

This will not happen to anyone overnight though.
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Sure you own a piece of paper, but I think the mental check of viewing it as owning a company can help people make better decisions on where to put their money. (That ticker symbol they see on a website is more than just a name, it is a living, breathing company).

Sure, I don’t know every detail of all the new products in Apple’s pipeline, but I sure understand their direction, and I sure have a pretty good idea of where their pipeline is heading. I understand their products much more than Goldman Sachs! Better investment that GS? maybe not, but a good exercise nonetheless.

Saying that nuclear is poised to have a strong 15 years is exactly my point in looking at the potential future sector performance. However, GE worries me because of its financial component.

Energy companies are pretty much the only domestic companies i like. I love Chesapeake Energy (CHK).

Sure who cares about telling others about a stock. My point is that if you can get your dad into a stock, you should be pretty confident in doing your homework. It’s a mental check. Whether you do it or not doesn’t matter.

Exit strategy is huge, I agree. Know what you want to make or have an estimate, then stick to it! That’s why I’ve been unloading Chesapeake Energy as it’s gotten into the 60’s even though most people on here are telling me I’m nuts!

Thanks!

Here’s a quick rundown:

1) You only own a piece of paper. If you owned K-Mart before they went broke, what do you have left? The company never closed its doors, the CEO didn’t lose his job, but you were left with nothing.

2) Unless you’re employed by a company, you have no way of ever having enough information as to what they’re doing. You know Phillip Morris? What else do they do? You’re aware of every product in Apple’s pipeline (knowing what they sell now is useless information).

3) Are you a CPA? Do you understand GAAP? How does the company show sales? Every company cooks their books….legally! Can you spot the frauds?

4) Who cares if a “sector” (I think you mean industry) is poised to outperform? The only thing that matters is money flow into and out of sectors and industries. Nuclear power is going to be much stronger over the next 15 years. That means GE should “outperform”. But they’re at a 4 year low!!!

5) So you wouldn’t invest in any of the domestic oil companies? Any of the domestic utilities?

6) This is tied into #10….and they both should be #1!

7) Sure you want the company to make money, but the only reason you buy a stock is to sell it…..hopefully at a profit!

Do you have a set of rules that governs your sector and industry allocations? It’s impossible to tell from the comment.

9) Who cares? If you’re interested in making money, you’ll tell everyone. The goal is not to make money with every stock. No one has ever done it or ever will do it. Your goal is to make money over the long run consistently.

10) The mistake that most every investor makes is they spend a ton of time trying to pick out the right stock, but spend almost no time figuring out how to sell the stock once they’ve bought it. ALWAYS go in with your exit strategy set, including how much of a loss you’re willing to take. This should be your first rule!

Best of luck investing!!