My Journey in Investing: The Investing Process Part 2
Now, getting into what stocks I actually purchased. I was looking for companies that were lower than they had been in the past couple of months in order to make a low-purchase that I could sell higher (obviously). Additionally, in order to guarantee that the currently low stock was in fact healthy and that it wouldn’t depreciate further, they had to have been increasing in the long term. For me, this meant that over the last five years the stock price must have followed a positive trend. Due to my lack of technical knowledge, I believed that at the time, this signified that the stock would continue appreciating. Since I was focused on large market cap companies I made the assumption that even if its stock didn't greatly increase, it was bound to eventually stabilize and go back to “normal” from its current depreciation which would again provide me with again. Now, in most circumstances, this criteria might have been a little difficult to meet but due to the turbulence I previously during the ongoing trade talks, there were a plethora of companies that seemed promising to me.
Firstly, Google:
An even better example, Amazon:
So I bought one share of Amazon and Google for $ 1,765.00 and $ 1,156.2581, respectively. I still had $ 2,079 left which I planned to invest as well.
Keeping with the theme, I got a little excited and decide to purchase shares from two other companies that are depreciating, but that I believed would recover. You see, in amazon and Google, there was nothing inherently wrong with their company that caused a small blip in prices, for Amazon and Boeing, however, there was. As I described previously, Netflix failed to reach its Q3 projections and is currently in the process of losing is dominion over online streaming. On the other hand, Boeing faced failure after failure trying to get its 737 Max plan to work safely resulting in them losing lots of money and reputation. Thus my logic for purchasing these companies changed slightly. I believed that these companies are such major players in their industry that and their consumer bases are so dependant on their products that there is no way the company could do anything but grow. Simply put, I interact with both companies consistently in my daily life and thus I had faith in the quality of the company and its stocks as well. For Boeing, I understood that along with Airbus it dominated nearly all commercial airlines in with its planes. Its Dreamliner and 737 dominate the skies and thus despite its recent failures I was sure in its ability to rebound. Similarly, Netflix has become a staple in entertainment and is immensely popular with younger Generations. Since its originals are performing so well, I believe the company is bound to dwarf other competing platforms, which will further increase its evaluation. Most people seem to disagree with this sentiment, but fading isn’t that bad of a strategy in betting, so let's see how it works here!
I bought two shares of Boeing and one share of Netflix for $ 332.00 and $ 305.9431, respectively. I still had $ 1,109 left which I planned to invest as well.
This brings me the last two companies I decided to purchase shares from. For these companies, I decided to rely more on testimonials and advice from other investors to make my investments. Delta seemed promising to me based on words of a couple of my relatives as well as the fact that nearly everyone I talked to that consistently flew Delta had good words about the Airlines. Since I had faith in the company as a consumer I felt like I understood the industry I decided to buy-in. Most of Delta’s competitors seem to be on a downward trajectory, namely United which over the past couple years seemed to be riddled with bad PR. Next, I purchased LuLu Lemon, which ended up being one of my better purchases. Intensely enough, my thought process going into purchasing was quite simple- where I live in the Bay Area, I literally see the brand everywhere I go. With such immense popularity, I felt that it was simply dominating other activewear brands, especially amongst women. I also remembered reading somewhere (I forget where exactly right now) that Lulu Lemon is increasing its expansion in international markets which could open another huge revenue stream.
I purchased twelve shares of Delta Airlines, and two of Lulu Lemon for $ 58.8074 and $ 180.0028, respectively. I didn’t have too much purchasing power left, so I decided to finish up and wait to see how these performed!