Beware: Inflated Financial Statements

Hey Guys,


I am tired of companies that have things to hide.


Higher earnings reported isn't always good. Companies can have higher earnings this year. When in reality, they actually lost money from the previous year. Yes, this happens all the time. The most common way this happens is by "One Time Effects". Such as, when a company adds money to their bottom line, from a sale of an asset. An asset can be almost anything the company owns (Buildings, Plant Equipment, etc. etc.)


There are other legal ways that companies can manipulate there financial statements. To provide for better earnings. Many professionals can uncover the hidden factors. This could be one reason why stocks report higher earnings. Then they continue to plummet afterwards.


There are so many ways that companies can manipulate financial statements its sickening. The average investor doesn't understand this. This is why I am recommending you go out and buy a college textbook/book about "financial statements".


Below, are some textbooks/books you can purchase at Amazon:





Also, I never use "money" sites to look up companies financial statements. Such as, Yahoo, Msn, etc. I only use these sites to look up stock prices and charts. These sites will hide financial figures sometimes. Not on purpose, but information is sometimes only stated in the original filings by the company. These orginal filings are at (www.sec.gov).


Happy Trading

Nokia - A Lesson to be Learned

Hey Guys,


Do any of you remember, when people were selling Nokia Corp. like crazy? This happened about 2 years ago. The stock was at 22 and within 4 months it was down to 12. You were hearing in the news that Nokia was losing market share in europe. There style of hand phones were outdated. SELL, SELL. This all was the cause for the manic selling.


Anyways, look at the Nokia Corp. finances. Two years ago they had no debt, there free cashflow was huge, about 2,000,000,000 at all times. Their revenues were growing every year by billions and still is. Remember, when people said they were losing market share? Well, They were actually gaining market share overall in the world. It was just in europe. Where they were losing a few percentage points of market share.


I am telling this story becuase there is a lesson to be learned here. Do Your Own Homework. The news, reports, and etc. were saying stay away from nokia. While at the time I was trying to convince my Aunt to Buy, Buy. She likes to invest a little. She didn't listened though, lol. The stock is up about 100% in two years.


Good Luck Investing.

Expedia Stock is Booked

Hey Guys,

I am announcing my first pick for my portfolio.

Expedia Inc. (EXPE) - Price picked at 13.05 a share.

Expedia is an online travel agency that does bookings for airlines, hotels, and etc. Expedia.com is there website.


After, looking through there financials. I believe within the next year they have good potential. They just started trading there stock on the NASDAQ exchange about a year ago.

First of all, the stock has several companies/people that own over 5% of the company. For example, Microsoft Corp. owns 5.5% as of 12-31-05. Their travel "bookings" has gone up consistantly about by $3,000,000,000 each year for the past 3 years. The book value is $16.74 a share right now. It is down from about $20 per share from last year. Which is negative, but I believe it is ok. Their price to earning is a little high for me at about 22. Within the next year, I believe there earning's will grow to outweigh this 22. No Long Term Debt. I believe this speaks for itself.


Read there lastest 10-K annual report here: Expedia Inc's 10-K Report


I only have a few major concerns. I am worried about whether or not if Expedia will be able to grow their travel "bookings" in this economic condition. Will people be able to afford vacations and trips? Which maybe, will be a plus for expedia since they offer discounts. I also, worry about competition. Travel agency market is a very competitive market. Especially, now with the growth of the internet.

All-in-all, I believe Expedia has a solid foundation to overcome these negative concerns I have. I am going to post Expedia Inc. as one of my portfolio picks. The price of the stock may fall in the short term, but by the end of next year it will be justified I believe.


Good Luck out there and do your own homework.

Up and Running - Welcome!

Hey Guys,

Welcome to my new stock blog. I will be creating a portfolio of stocks that I pick. The stocks that I pick will be mostly based on fundamentals. I will be commenting on other stocks and/or whoever I disagree with.

About 2 years ago, I went to college for finance. It was boring and I can read text books on my own to learn about finance. So, I dropped out with A's and B's. Now, it will be nearly impossible to get a finance job anywhere. That's okay, I believe I am smart enough to make my own way in this world. So, I know quite a bit, but I am no certified professional.

Anyways, Post comments even if you disagree. Be Active.