Blog Post #2

Let me begin by commenting on the markets from the last time I spoke with my mentor.  We have hit several odd transitions in the broader stock market along with a very rapid and volatile technology sector.  The fundamentals of the stocks I look at have been deteriorating and have made it difficult to study them and fully try to understand why their stock price is changing in so little time on no news.  The indexes have been on +10 days of going up which seems like a good thing, but it has been creating fear of a recession as this normally is one of the signals that one is near.  

So I called up my mentor Tom and we began by talking about a few stocks that we particularly like and swapped information about what we thought was going on in the markets and where we through they would be going.  This is one of my favorite parts of our conversations because I learn more of how a professional stock picker finds his stocks and what fundamentals they find important or stress over others.  As the conversation continued, we moved onto the idea of "Biblically based investing".  He began telling me about how difficult it is to find companies that even have the information to sift through for hours to have a high probability that they are using their money well and not supporting things that the broader Christian church wouldn't support.  It may seem obvious to invest in companies that are trying to further the kingdom of God, but what would you do if your job depended on it?  What if your salary or the amount of profit you could bring in changes when you implement this way of investing?  Neither of us had concrete answers but I enjoyed listening to him speak about how it is important to search for these things and be aware of what my money invested in the company is actually being used for. 

There are some companies in the markets that when you buy their company you are essentially buying the debt of a company and the return is off of their ability to pay it.  The more common way is that when you buy it you gain a share of the entire company.  Both a share of the debt but also equity in the profits.  You hope that these two numbers are different and that your profits increase faster than your debt as your company grows.  

Hopefully the markets level out and continue growing.