Invested
So how does a novice with the requisite minimum $500 invest? There is no shortage of advisors and brokers who can answer that question. My problem with all these seminars and consultations is that I don't know what barrow they are pushing. The good news is that research can be easily done from home. I found Netbank Securities had some good videos so there the principle is similar: they tell you what's what and, with luck, they'll get you to buy your share parcels through them.
Certainly I'm a mug blogger with nothing invested but my super so what I did was sample from those companies and exchange trust funds that had featured on previous posts for their exceptional or noteworthy aspects. I wanted to see what would have happened to shares bought five years ago: would they have gone up or down or stayed stagnant, and were there dividends paid over that time worth the purchase.
As mug blogger data, there are a number of stumbles: some of those lists draw exclusively from Nasdaq where there are other stock exchanges with possibly quite different readings. I couldn't go back to August of 2011 on that index with any accuracy and had to use Yahoo Finance which did a good job but there were companies like Alibaba, MORL and (critically) Westrock for whom they had only the latest share price. Asia Leather (based, unbelievably, in India where cows are sacred) is the world's largest supplier but isn't publically listed. Other brands and entities like CVG Alcasa in Venzuela, D.B. Schenker, Group Kamach, a large congolmerate in Central African Republic, Jafza International in Djibouti, Kirribilla, Levi's, New South China Mall, Safi Group of Companies in Afghanistan, and Tuvalu Telcommunications Corporation don't appear either because they are trading under another name, are private companies or are (as I suspect is the case with Tuvalu Telecommunications) government instrumentalities.
Still, it can't hurt to toss around the details we do have and see what we can make of it. The one attribute the mug blogger has in all of this is impartiality. An expert might be in there trying to push one thing or another, the rank amateur knows just enough to avoid such activity.
II
Shares in Alexander's Inc were $376.99, allowing the chancer with that five hundred to buy a single share which he or she could now sell for $445.29, a profit of $58.30, subject to any broker's fees. Still, if you're squirreling away that much over five years, there are possibly other places you could have invested the three hundred and seventy five odd dollars in 2011 and made more from it.
And here we're talking about a share envelope that has shown there is continued and increased value.
But it's the volatility that keeps some potential investors away from the stock market so, if this is your concern, you'll probably be looking at real estate or just simply spend the money, at least knowing that you have had that holiday or bought that mink coat instead of seeing cash vanish on paper.
III
Speaking of that mink coat, if this blogger comes across a bit bolshie, why this sustained dive into shareholder value? Isn't that what every social warrior rails against? Isn't the problem that companies will forego their other responsibilities in order to keep the shareholders happy?
I think it's constructive to at least know something of how companies get to expand, how their products and services proliferate along with the profit. I'm as interested in this as anything else in the world. I don't think the Left should be sticking their fingers in their ears any more than the Right.
There is also the sense in which there is a commercial democracy, if that can ever exist, with those fabled Mum and Dad investors. Never mind the single investors who can really go to town.
IV
With our $500, we could also have bought nearly ten shares in Wal-mart or nearly five shares in Volkswagen. Our VW shares would be up to $129.05 and Wal-Mart $73.46 so a good return on investment all round.
The investor/stockholder in all of us would have been most excited by shares in Yamaha which went up from $7.62 to $27.62. Not only is that a neat rise, those with the five hundred to invest who put it it all on Yamaha - that is to say, we would have held sixty five shares (with some change left over from our five hundred) where we would now purchase only eighteen, or to put it more sensibly, which would now be worth... well, put away the calculator, that's an extra twenty dollars value added to each share we own and that's 65 x 20 = 1300. So, yes, that's one thousand three hundred dollars we've made in clear profit in five years, plus we still hold the original parcel.
I can see the allure.
V
Apple are the surprise here as their shares have dropped from $380.44 to $106.27. Clearly there is a complex correlation between perceived share value and market success.
Sinopec dropped from $7.02 to $5.58
VI
Start-off investors couldn't have bought shares in Associated British Foods, Burberry, Google cum Alphabet Inc, Seaboard Corporation or Shinsegae Inc. All worth way more than five hundred bucks and all going up in value apart from Shinsegae which had so much further to fall it isn't funny.
Here there's a further point I don't understand as Berkshire Hathaway in this index is suddenly affordable at a greatly shrunken $71.75 entry price, now only $144. Yes, doubled in value but nowhere near that two hundred and nineteen thousand dollar figure I coopted a few posts ago.
I did notice, as I was trawling through, that a company would often have different shoots that would have their own shareprice attached to it; one overarching company didn't have the share value, only components. I've brought some of these figures across myself. Could the Berkshire I was looking at in the last chart be a bit of the company while there was a larger Berkshire Hathaway (larger Shell etc.) with its share value registered. This would mean that some companies were all carved up by clever accountants or brokers while others, like Seaboard and Shinsegae are worth so much they couldn't care who could afford them.
VII
Company/Ticker | Share purchase price 2011 | Current share value 2016 |
---|---|---|
Alexander's Inc | 376.99 | 445.29 |
Apple Inc | 380.44 | 106.27 |
Associated British Foods | 1,014.00 | 2,890.00 |
Avnet | 18.49 | 35.35 |
Berkshire Hathaway | 71.75 | 144.00 |
BlackRock | 114.18 | 327.70 |
Burberry | 1,299.00 | 1,305.00 |
China Construction Bank | 0.51 | 0.61 |
CocaCola Co. | 10.90 | 9.21 |
Computacenter | 427.20 | 809.00 |
Cooper Companies | 0.03 | 0.08 |
Costco | 77.45 | 166.86 |
ExxonMobil | 75.01 | 87.73 |
Fidelity | 30.91 | 43.65 |
Google/ Alphabet Inc | 806.93 | 800.11 |
ICBC | 5.41 | 4.44 |
Institutional Financial Markets, Inc. | 2.60 | 1.04 |
Macy's | 26.61 | 33.91 |
Microsoft | 26.12 | 58.06 |
Qatar National Bank | 140.60 | 152.70 |
Seaboard Corporation | 2,645.83 | 2,920.00 |
Shinsegae Inc. | 308,000.00 | 182,000.00 |
Sinopec Corp | 7.02 | 5.58 |
Toyota | 78.00 | 115.84 |
Volkswagen | 110.00 | 129.05 |
Wal-Mart | 50.59 | 73.46 |
Yamaha | 7.62 | 27.62 |
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