Friday, June 02, 2006

STOCK NEWS?

I ventured into the world of investing somewhat last year. I was putting some money into my 401(k), but then stopped after I realized my company wasn’t going to be matching my funds. However, I was still able to get a 17.3 percent return on my investment. I’ve been investing in a Roth IRA now, and have had a more modest return of only 11 percent, but even that’s pretty good.

However, I made the jump into stocks last year when I bought some Delta stock. I know, you’re thinking that I’m crazy, Delta was bankrupt. Sure, so it’s a small amount, only 200 bucks. My train of thought was this, “If I lose 200 bucks will it really matter to me in 2 years?” The answer was no. However, if Delta is to recover, emerge from bankruptcy, and the stock rises, even marginally, I could make a good chunk of money off that 200 dollar investment.

So here’s the deal, I put 200 bucks into Delta at .75 cents, after the 14.99 trade commission I got 245 shares. Since then the stock has dropped as low as .38 cents, and as high as .89, but has been treading, give or take, at .60 for the last two months. As of today, the stock is at .75 cents, meaning excluding the commission, I’ve broken even.

My judgment on Delta as a buy was because I just couldn’t see the government letting the second/third largest carrier in the country go under, nor did I see the state of Georgia letting that happen either. Delta just employs way too many people. So, I figured that I could buy the stock really low, although had I waited I could have gotten it even lower, and then sat on it for a few years. My goal is to see it go up to 4 or 5 bucks a share eventually, and then I’d cash out. 245 shares at .75 equals 183.75 dollars. 245 shares at 4.00 equal 980. I’ll see a 490% gain on my investment. Small potatoes, but still neat to think about…

Meanwhile, in my fantasy league I “bought” 5000.00 worth of MasterCard when it went public at 39.00 a share. As of 10:47 am it’s up to 48.10. So far I’ve “made” 1166.66 dollars, or 25% gain short term. I figured, MasterCard was as a safe a bet, at least long term, as anything on Wall Street. I mean, come on, it’s Master Card. Too bad I didn’t have any real money. I don’t know how the stock will fare, but several things I’ve read expect it to sit at 50 bucks for a while, and then move with the economy. As more and more people slip into debt just to meet their daily demands on life, Master Card is as safe a bet as any.

Ferrari is supposed to go public sometime in the near future. I expect that stock to do well, since Ferrari seems to run some solid books and makes smart business decisions on how they produce and market their cars. Should be interesting to see how that does when it comes out.

-Steve

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