I purchased stocks from eight different companies. These stocks were bought from the period, 21st and 28th September, 1st October 2010 and 4th November 2010.
These stocks were purchased from WIPRO (WIT), Apple (APPL), Google (GOOG), Forward Industries Inc. (FORD), Baidu Inc. (BIDU), SPX Corporation (SPW), Petroleo Brasileiro, Southwest Airline (LUV).
WIPRO is a Technology Company and they partnered with Oracle in strategic planning for their customers in September 2010. This helped to foster growth among customers. WIPRO makes a profit in its niche market and it is one of the largest product engineering and support service provider worldwide (Market Watch, 2010).
Google, another well known company is able to generate cash from its online services to customers. Google is known for advertising services online. Google has been one of the most profitable companies in terms of buying stocks because of its three acquisitions, in 2009 through 2010. Google acquired, Aardvark, Recaptcha Incorporated and On2 Technologies.
APPLE also used market entry strategies by acquiring a company called Digital Music Service. This is one of main reasons I purchased stocks from APPLE. APPLE is well known for its modern technological products and they sell their products on a worldwide basis.
Another company in which stocks were purchased was, Baidu Incorporated. Baidu is Chinese language internet service provider. Their aim is to provide the best way in retrieving information from the internet for its customers. The cash is also generated through advertising online, like Google Incorporated. Baidu and Google have seen increase strong quarterly profits, which has helped to boost their performance on the global market.
Petroleo Brasileiro is an oil company which generates its cash from the production of natural gas, crude oil and refining activities.
SPX Corporation is known as the Piston Ring Company and is known for high integrity pumps, values, filters, fluid mixers and a number of other similar products.
Calculated P/E Ratio or stocks purchased from the various companies
P/E = Market price per share/Earnings per share
Month of September
Market Symbol
Quantity
Price per share
EPS
PE/Ratio
SPW
1000
64.33
1.10
58.48
PBR
500
35.70
2.25
15.86
LUV
1000
13.34
1.02
13.08
BIDU
500
103.57
2.75
37.66
Annual percentage yield (APY) = (1+∑R) 12 - 1
= (1 + 0.41 ) 12 - 1
= (1.0041) 12 - 1
= 1.0477 - 1
= 0.0477
APY for the September = 4.77%
Month of October
Market Symbol
Quantity
Price per share
EPS
PE/Ratio
WIT
1000
15.76
1.13
13.95
Month of November
Market Symbol
Quantity
Price per share
EPS
PE/Ratio
AAPL
1000
317.37
10.11
37.73
FORD
1000
3.68
1.02
3.60
300
586.36
22.10
26.53
Annual percentage yield (APY) = (1+∑R) 12 - 1
= (1 + 0.57 ) 12 - 1
= (1.0057) 12 - 1
= 1.4610 - 1
APY for the November = 4.61%
The stock market simulation was a whole new experience for me. It was my intention to acquire more returns. However, because of my lack of experience in purchasing stock, I lost monies. In the beginning, I was not able to hold a high position in the game, however, I did not venture into to taking too many risks which could have resulted in the loss of more monies. I decided not to purchase too many stocks to avoid the constant loss of monies.
In the beginning of the game, I started with one million dollars. As the stock market fluctuated, I loss and I gained equity. There were days when the stock market did poorly and had to be monitored before purchasing stocks.
I traded with Google because this company had a great amount of share capital. Google along with Apple were high gainers in the stock market. Apple introduced its new product line of ipod and iphones on the market, and was therefore doing well globally. I was weary of purchasing too many stocks at once because of the constant fluctuations and the possibility of not getting enough returns.
Factors influencing my portfolio
In the beginning of the game, I was unable to manage my funding of one million dollars. I was therefore unable to achieve the amount of returns I would have liked to. However, during the game, I was able to maximize on profits. My portfolio was not very attractive at times. However, as stock price fluctuated I was able to gain returns on stocks.
There were days when I lost monies, however it was not a significant amount. One of the reasons for this could have been the volume or size of my portfolio. I was unable to hold a high position in the game, however, my purchases allowed me to gain equity.
What I did well?
I believe I made some good trades with good companies who have had mergers and acquisitions. I saw gains in my portfolio, although I would have liked to see more gains. I was able to diversify in the purchasing of my stock by buying from different companies. Companies which I believed would have good returns. Although most of colleagues held a higher position throughout the game, they also lost monies as seen shown in their portfolio.
What was done poorly?
I believe I was not positive enough in going into the simulation because of my fear of dealing with figures and calculations and in addition taking big risks. Hence the reason why I did not make as many trades as some of my colleagues. I am not a big risk taker. After careful, review of my trades, I noticed that I purchased stocks from similar companies which could have put me at a disadvantage. For example, Apple, Google and WIPRO. I believe, this was because of inexperience in the stock market.
In addition, I needed to do more in depth research on each of the companies I purchased stock from. This I realize is a crucial factor in the stock market. In the real world, this is pivotal in order to gain high returns. Because of my lack of knowledge in the firms, I did not purchase stocks from companies that were profitable. Although I was able to view the map of the market and smart money, this was not enough information to be aware of the right companies to trade with. This called for more thorough research of companies. My lack of knowledge has also caused me to trade with companies which were not doing too well in the market.
I then attempted to sell some of my stocks because of the fluctuations in the market. However, I did not sell the stocks because I would have lost a significant amount of monies, because the price I paid for the stock was always higher than the amount I would have sold the stocks for. I was endeavouring to move from position eighteen to a higher position. However, I realized that the position or rank is not all that important. However, is having a better understanding of how the stock market works. I will therefore continue to learn more on the stock market which would help me in future personal endeavours.
Comparative Portfolio Analysis
My other colleagues were obviously taking bigger risks by purchasing shares from a number of different companies and they were also purchasing a significantly amount of shares from those companies. However, as stated earlier I am not a big risk taker and preferred to purchase a minimal amount of stocks to ensure that I did not lose too much money. However, at times I lost more that I expected. I have concluded that it could be the time in which the stocks were purchased. Maybe I needed to pay more attention to what time of the day my colleagues who were gaining in the stock market purchased their stocks.
Conclusion
The stock market simulation has been a learning experience for me and I am happy I was exposed to something I have never done before. It has taught me that I will have to learn to take risk in order to be a successful business person. I have learnt taking risk is all part of the business world and in order to make money, one needs to spend money. This has been a great experience for me. The practice run was a good idea, since we all go the chance to know what was expected of us in the simulation. Although I did not place in the first ten, I am happy to gain the experience in purchasing stock on the stock market.
I have also learnt that in order to gain some you have to lose some and this would apply both to personal and business life.
