First Time Investor's Quick Links:
Powerball - Kitco Pool Account - Coca Cola -
Precious Metals - Kmart - Kodak - Sears -
Turner Broadcasting - Walmart

Friday, September 30, 2005


In my previous post, I stated that my first foray into the stock market was a ten share purchase of Sears and Roebuck. (For those born after the 70's, that's what Sears was called.)

But why Sears?

While thinking of which companies I would like to invest in, I asked myself what criteria I should use. After all, there was plenty of advice available regarding Earnings Ratios, etc. Did I want to learn what all that was, and research company portfolios, to determine into which companies I should invest?

I decided that since I was investing so little initial funds, I would just go with my gut. One of the first criteria that came to mind was longevity. I asked myself, of the big companies, which have been around for a long time? For whatever reason, Sears came to mind. Sears has been around since the late 1880s. It seemed that a company that had been around that long must be doing something right, so perhaps I had my first candidate.

I told my Mom I was thinking of getting into the stock market.

She said, "Really? Which company are you thinking of investing in?"

I said "Sears!"

And she said, "Oh! I shop at Sears all the time!"

Normally such a statement by itself would have been sufficient to ensure I had picked a winner, but she had more.

"Did you know your Grandpa used to buy chickens from Sears?"

I did not know that. My Grandpa was a farmer in Minnesota during the early 1900s, and it seems that at the time, Sears and Roebuck was quite a supplier of choice for farmers of the day.

The Sears Catalog

So Grandpa ordered chickens from, get this, the Sears Catalog. A week or so later, a crate would come to the farm with live chicks from Sears.

Ahhh, yes. The Sears Catalog. For those of you born in the late 80s, that was a really thick catalog you used to get for free at Sears - all you had to do was ask for it. The Sears Catalog. This book was so big and heavy, Mom used to use it, (along with the Phone Book,) to hold items she was gluing down with Elmer's Glue . And when my sister could not reach the dinner table, Mom would say, "Run and get the Sears Catalog so your sister can reach the table." Yes, the Sears catalog had a special place in our family history.

How could Sears be a bad investment?

*** Read from the Beginning *** Next Article ***

Labels: ,

Friday, September 23, 2005

Just jump right in

Long before the days of E-Trade and Ameritrade, you had to go to the offices of an actual stock broker if you wanted to buy a few shares of stock.

Around the mid-80s, when the MBA boom was in full swing, followed by the stock market boom of the 90s, discount brokerage services were the rage.

They boasted low commissions to lure new investors to trade for the first time. ("As low as $35!")

Around that time, I was starting to do well in my career, and found I had a few bucks to spare. I had always wanted to get started investing in the stock market, but didn't know where to begin. The discount brokers seemed a good bet.

I figured the best way to begin my investing "career" was to just jump right in, however small my initial investments. I decided to pick a few companies and buy ten shares each. That would get me started.

I chose my first company in which to invest, Sears, I believe. Then I visited the branch of a local discount trader in my town.

"How can I help you?" asked the broker who greeted me.

"I'd like to invest in Sears and Roebuck!" was my proud exclamation, knowing that I had taken that first step.

"I'd be delighted to help. How many shares would you like to purchase?" he asked, professionally.

"Ten shares!"

The broker dropped his pencil. I could sort of feel his eyes rolling in his head, as if to say, "My last sale was 1000 shares of Ford Motor Company, and this guy wants ten shares of Sears."

"Of course, you realize that there will be an 'odd lot differential' for this purchase," he said dryly.

An odd what?? I asked myself.

"An odd what??" I asked the broker.

"An odd lot differential. Since you would like to purchase less than 100 shares, there is an additional charge."

So I had my first lesson in investing in the stock market. The expectation is that if you're going to buy stock, you're going to buy at least a hundred shares. A hundred shares! Let's see. Sears is selling for 34 3/8 ... 100 shares would be $3437.50 ... and I am thinking of spending a tenth of that.

Well, I thought, I came in here to buy stock, I learned my first lesson, and I am not going to let that affect my decision. I said, "Let's go ahead."

He placed the order, I paid the man the cost, plus the differential, plus the commission, and walked out of there a shareholder of ten shares of stock in the Sears and Roebuck company!!

About a week or so later, I received the stock certificate in the mail. There it was, all fancy with the scrolled borders and my name and all, but most important, the indication of how many shares I now own:


And to ensure no foul play, there was a bold statement on the certificate: "Good for less than one hundred thousand shares."

I was in my glory.

*** Read from the Beginning *** Next Article ***

Labels: ,

Friday, September 16, 2005

Introduction to First Time Investor

I remember when I first decided to buy stocks. I was frustrated because I always remembered the expression "it takes money to make money," and yet I wasn't 'out there' investing in the stock market.

Over the course of this weblog, I will attempt to recap my experiences when first entering the land of "Investing in the Stock Market" as a "first time investor."

I hope you learn something from it.

*** Next Article ***