Sunday, November 3, 2019
Investment Essay Example | Topics and Well Written Essays - 1000 words
Investment - Essay Example 99.03 98.98 98.65 Technology SPDR (ETF) 34.82 34.58 34.69 34.66 34.58 SPDR S&P 500 ETF Trust 180.94 178.94 179.73 179.75 180.53 GE 26.94 26.45 26.64 26.56 26.66 eBay 52.01 51.41 51.09 51.93 51.35 AAPL 560.02 567.9 565 566.32 551.23 Cimarex shrank in value from $98.65 per share on Monday to $95.95 by weekÃ¢â¬â¢s end. But if the investment game had commenced at the recent low of $64.99 in June 28, capital gain would have been a very satisfying +47.6% before transaction charges and taxes. SPY (SPDR S&P 500 ETF Trust) was moribund that week as market sentiment held back the ETF to trade between $178.94 and $180.94. Hence, devoting the lionÃ¢â¬â¢s share of the training investment in SPY did little good at all as the stock closed the week a measly 0.2% up for the week. Nonetheless, its beta of 0.92 at last count suggested that the ETF is not as volatile as the market as a whole. Apple is a long-term hold, beloved of institutional buyers and pension fund managers. The closing price of $ 560.68 when the simulation game ended on Friday, Dec. 6, corresponded to a market cap of $503.871 billion. This despite founder Steve Jobs having passed away in late 2011, two years now, and no seriously new breakthrough products in the same timespan (Thomson Reuters 1). Chairman/CEO Tim Cook is not the visionary that Steve Jobs was. Even as he languished in his deathbed, the latter had engineered a long-term run-up in the stock price with the cash cow iPod line, energized the world with the launch of the iPhone, and brought down the moribund desktop PC industry with the iPad tablet PC. Anyone holding the stock in late 2004 (the aforementioned pension funds that are loathe to sell AAPL) would have ridden the dizzying rise of the stock from $11.36 in February 2004 to $560.02 (a 48-fold gain) on the... The paper tells that during the gaming period in question, Apple and eBay did in fact record the best capital gains of 1.6% and 1.3%, respectively. Apple was once again on a roll this week. It approves that Apple is a long-term hold, beloved of institutional buyers and pension fund managers. The closing price of $560.68 when the simulation game ended on Friday, Dec. 6, corresponded to a market cap of $503.871 billion. This despite founder Steve Jobs having passed away in late 2011, two years now, and no seriously new breakthrough products in the same timespan. According to the paper at the end of week, loading the portfolio with SPY. GE, eBay and Cimarex turned out to be too conservative and defensive a strategy. In retrospect, SPY was too cautious in approximating the performance of the S&P 500. Though ETFÃ¢â¬â¢s have much lower expense ratios, no investment minimums, are taxed less and grant option and short-selling opportunities, the lesson learned is that minimizing risk with diversification works but rewards the patient investor over a long bull market. On the other hand, AAPL contributed tremendously to portfolio gains because management was clearly bent on continuing its 18-month run of unleashing quarterly dividends as never before in the last ten years. The object lesson: the intrinsic value of a market leader that has had a two-generation love affair with its upscale markets beats ETFÃ¢â¬â¢s and industrials when market sentiment is mixed, as it has been since mid-2007, the start of the Great Recession.