Investors Blog Network Festival #7

Welcome to the 7th edition of the Investors Blog Network. Here are the festival entries.

• Is Early Release of Study Data to Doctors Unfair? by H.S. Ayoub @ BioHealth Investor. Hisham raises a very interesting question “Can the release of early results [drug testing results] to doctors be construed as insider information?“.

Regulators should keep on eye out for investment firms and hedge funds who claim to hire doctors as ‘analysts’, while the true purpose is to have insiders at the major medical meetings and conferences to acquire key preliminary data ahead of the general public.

I never thought along these lines. May be it helps to be investing buddies with a good doctor

• Stocks Vs Real Estate, Winning Investment Strategies by SVB @ The Digerati Life. SVB points out some advantages and disadvantages of investing in real estate as compared to investing in stocks. Of course, each approach has it’s own attractions, but personally, investing in real estate seems a bit intimidating to me - when I think real estate, I think negotiations, heavy leverages, and lack of sufficient scope for diversification.
  

• The Starbucks Effect and the Saturation Point by Market Matador @ Market Matador. Think Starbucks is doing a great job at expansion? Read this post.

By flooding the market with spots for coffee, Starbucks has been wasting growth potential, and opting for current market optimization. Unfortunately, the optimization is becoming wasteful and hurting the brand image.

The effect is apparent in the falling price of Starbucks ( SBUX ) shares. The matador points towards a potential buying opportunity if the trend continues - in the anticipation that the stock will rise in future.

• SBUX: StarBucks International Plans to Enter Russia and India by End of 2007 by TJP @ Investor Trip. Another post wondering whether it’s the right time to buy Starbucks stock ( SBUX ). With earnings projected to grow at 21% annually, and shares hovering near the lowest price over 52 weeks, it does sound tempting. However, in the previous bulleted post above, Market Matador predicts that the price may fall even lower - so a little more wait might be in order.

• Dividend Stock Analysis - Lowe’s Companies Inc (LOW) by Average Joe @ Investment Jungle. Average Joe analyzes the performance of Lowe’s dividend yields.

The posts mentions the term *intrinsic value* with regards to Lowe’s stock ( LOW ) price. For those who don’t know what that is, Investopedia defines “intrinsic value” as:

The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value.

So, if a stock is trading at a price lower than it’s intrinsic value, then it is *undervalued* and probably it might be a good idea to buy it - generally, there will be a tendency for the stock price to move towards it’s intrinsic value in time to come - that means greater potential for gain (in my opinion).
Is Gold a Good Investment by WBL @ Wealth Building Lessons. An extensive analysis on the performance of gold as an investment. I started on this gold buying track earlier (you can read about it here and here), but eventually things got a bit complicated for me and I lost the tempo. WBL’s post puts me right back on track. I think I should buy it before I start hearing the words “inflation worries” with increasing frequency on the news.

• How Not To Make Money In Stocks Guaranteed! by Tyler @ Dividend Money. Tyler highlights some surefire ways of not benefiting from investments in stocks. This is for novices like me. With regards to keeping investment records, he says this:

If you’re really lucky, you won’t even know your adjusted cost base for tax purposes!

Well…I am almost there - even with the ridiculously small investments I have made so far.

• Sometimes You Should Roll The Dice by Fletchlives @ fletchlivesforecasts. The author expresses this worry:

What I haven’t learned throughout that process is the most advantageous way to keep track of my thoughts which lead me to make or not make those trades. Sure I can look at a printout, but I don’t have any explanation of why I made the decision in which I did at that time, or what factors led me to believe that the stock would move up or down.

At this point, you (and I) should go back to Tyler’s post above (the previous bulleted entry) and read up the section on record keeping - it will make better sense with this background.

• CNBC Million Dollar Portfolio Challenge - IBN Network Final Results by Super Saver @ My Wealth Builder. During one of the previous festivals, Super Saver initiated a Investors Blog Network (IBN) portfolio to be submitted to CNBC’s Million Dollar Challenge. He shares the results through this post. The portfolio ranked among the top 14% in terms of value with a gain of about 12%.

• Mining Merger Mania: Say It Three Times Fast by Michael K. Dawson @ The Time and Money Group. Michael discusses the increasing tendency of mining companies merging together - an effect caused by demand (mainly due to rapid growth in India and China) overtaking the supply. Invest wisely and make those mergers work in your favor.

• Find People Who Are Looking To Help Financially by Cade Krueger @ Write To Right. If you are in the market to raise money for your business, this article is for you. Cade highlights the questions that may be raised by potential investors before they promise you their money.

That concludes the seventh edition of the Investor’s Blog Network (IBN) Festival. Thanks are due to Hisham @ BioHealth Investor for letting me host this edition of the festival - and for rekindling the “learn more about investing” fire.

In a couple of days, I will be posting about my current investing attitude and will discuss my pathetic portfolio - or whatever is a collection of just a couple of stocks is called. So come back with all the investment advice you have, because I am probably going to need it.

Image sources: Gold - www.everythinginvestment.co.uk