The Journal – December 24, ​2017

Welcome to the first issue of The Journal. My goal with The Journal is to post once a week a list of everything that I found interesting.

Articles:

CRISPR in 2018: Coming to a Human Near You by Emily Mullin

Why Young Investors Should Hope For a Crash by Michael Batnick

This $5 Billion Encrypted App Isn’t for Sale at Any Price By Stepan Kravchenko, Nour Al Ali, and Ilya Khrennikov

Videos:

A Conversation with Charlie Munger and Michigan Ross – 2017 – 56 min

Mohnish Pabrai Lecture at Boston College (Carroll School of Mgmt) – Nov 30, 2017 – 140 min

Making a Flipbook Machine – 10 min

Vertical Farming

Last year for the first time, I grew vegetable plants in my backyard, and I found fascinating seeing the plants grow and eating fresh plants whenever I want. Now that it is winter, I am looking for a way to grow plants indoors, and I found out about The Smart Farm by Click And Grow. It is a ridiculous 9 900$ indoor farm that can grow 288 plants. When I was doing some research to look at commercial uses of vertical framing and their benefits, I found these two videos very interesting.

Tokyo’s Vertical Farms – The Future of Farming | WIRED – 3 min

This Farm of the Future Uses No Soil and 95% Less Water – 4 min

The Investor Podcast

For about two weeks, I have been listening to The Investor Podcast. I used to listen to some of their podcasts and now, that I am more interested in value investing, I have listened to all their episodes until episode 123. I have learned a lot from listening to their podcasts, and I would recommend them to everybody who wants to learn more about value investing.

The Dhandho Investor

I finished reading this week The Dhandho Investor by  Mohnish Pabra. The book is very interesting and filled with useful information about how to invest in the stock market or a business without losing money and obtaining a high return on your investment. I would recommend the book, like the podcasts, to everybody who wants to learn more about value investing.

SeekingAlpha

For about three years, I have have been very passionate about the stock market and all things business. After acquiring a pretty good knowledge about the stock market, by any mean, I am not an expert I decided to become a contributor to seekingalpha.com. I wrote two articles, one last month and one this week. Please, check it out and any feedback will be really appreciated.

Dream Global REIT: A Low-Risk Company With An 6.74% Yield

Tucows – Ting Is The Future!

Thanks for reading, happy holidays and see you next week!

Balal Rasool

Advertisement

Book reviewed: Learn to Earn by John Rothchild and Peter Lynch

“Learn to Earn” by John Rothchild and Peter Lynch is a book for any investor and anyone interning to learn how a company earns money.

The book accomplishes on what it sets out to accomplish by showcasing that capitalism is the best economic system.

The author, John Rothchild, is most know for his work as the former editor of Washington Monthly as well as a former columnist for Time and Fortune.

The co-author, Peter Lynch, is an investor know the As the manager of the Magellan Fund at Fidelity Investments between the years 1977 and 1990. Peter Lynch averaged a 29.2% annual return with is mindblowing.

I enjoyed reading the book. The book helps me confirm my thought that the best economic system is capitalism for the company, the consumer and the investor.

I enjoyed the first chapter where the author briefs a quick history lesson of capitalism and explain without a capitalist country like the United-stade would it prosper as it did. I also like the appendix two where the author helps ride a company balance sheet.

The only thing the I did like is that the book isn’t updated and the references are old. Unless this I enjoyed reading the book.

I would recommend this book to anyone interning to learn how a company earn money and to learn about the stocks.

 

Book Review: The neatest little guide to stock market investing by Jason Kelly

 

“The neatest little guide to stock market investing” by Jason Kelly is a book for anyone who wants to learn about the stock market.

The book accomplishes on what it sets out to accomplish by giving a good overview of every step related to becoming a business owner in a public company.

The author, Jason Kelly, is most know for his book “The 3% Signal” and his newsletter “The Kelly Letter” about the stock market and investing.

I liked the book. I had some knowledge about the stock market prior, but reading the book helped me think like an investor. I learnt how to evaluate stocks and all the termer related such as P/E, ROE and all the other measurement.

I enjoyed the third chapter where the author writes about Warren Buffett, Benjamin Graham, Peter Lynch and other investor masters. He summarizes the investor philosophy which is very helpful. I also liked the way the author related all aspects of investing with one example throughout the book.

There is nothing that I didn’t like about the book. Although the book had a dry and academic tone which is expected for these kinds of books, I loved reading this book.

I would recommend this book to everyone because I truly believe everyone should learn the basics of investing even though the invest in an index fund or mutual funds.

What I have learn during​ 1 year of investing

This is what I learned after one year and a couple of months investing on the stock market. I have learned a lot from my first, second experience until now on the market.

The biggest mistake that I made when purchasing ownership in a company was buying stock without learning about the company, especially for my first investment. I bought the stock hoping it will go up and I failed terribly. The stock crumbled down. In fact, I lost 48% of my book value. Regardless of my loss, now when I find an interesting company, I research about the company even if I don’t buy the stock.

“The dumbest reason in the world to buy a stock is because it’s going up.”
-Warrant Buffet

I have learned only to invest in an excellent company and for the long-term. Why in the long-term? Because an excellent company will always go up, from the technology industry to the waste industry.

I find it hard to be informed about a company announcement, what the market is saying about the company. To be more informed, I use stock apps as a news feed for the company I follow. This is very useful for me, I personally use Yahoo! Finance.

I have acknowledged being patient because there will be days and even weeks where you are losing money. The key is just to be patient and it will eventually go up. Of course, it applies only if you invest in an excellent company.

I have been able to learn if the market will react in a way that I will be losing or gaining money on a day. For example, during the election day, when Trump was winning, the market went down because of the news that Trump was winning. On the other hand, when Trump has been elected president, the market went up and nowadays is high almost at all time. During the quarter earning, if analyst expects that a company will not perform as the predicted, there will most likely have a sellout. This is a good time to buy a stock at discount prices before it gets back up if you believe that the company will perform in the long-term.

When one of my companies was being acquired, I have learned that a company acquisition is a long process. Indeed, it takes months for the acquisition and any news can affect the company stock prices. In my case, I had to vote for the acquisition.

I learned that I can reinvest dividend every quarter even though the number of shares will not be a lot, in the long run, it will grow. That’s the beauty of compounding.

I have learned utilizing fundamental analysis is better that technical analysis. This is if you want to own a company because technical analysis is entirely unconcerned about the companies from which they are buying stock.

For next year, what I want to do is to diversify more my portfolio. I would like to own 15 to 25 companies, both grown and income companies. I want to read more books about the stock market and especially The intelligent investor by Benjamin Graham, the father of value investing.

If you are willing to learn about investing, I recommend Investment 101 by Michelle Chang. I have written a review about the book just click on this.

Book Review: Investment 101 by Michele Cagan​

Investing 101 by Michelle Cagan is a book for the newcomer in the vast world of investing.

The book accomplishes on what it sets out to accomplish by giving a good overview of every branch in investment such as stock, bonds, ETFs, Mutual funds, currency commodity trading and real estate.

The author, Michele Cagan, has worked in several fields involving money such as financial planner, accountant, and tax advisor. She also wrote several books on personal finance and business.

I very much liked the book. I had some knowledge about investing prior but reading the book probably gave me a better understanding than the average person. I was still able to learn a lot which is never a bad thing. I have expanded my knowledge about the stock market and learned about new ways to invest especially in the bonds market.

The book has a dry and academic tone but is very easy to understand and not boring at least for me and the author doesn’t implement fancy words. It is written for the new learner with no or very little knowledge about personal finance.

I enjoyed the last two chapter where the author writes about how a person can build a profitable portfolio built according to the person’s needs. I also loved the chapter where the author introduces successful investors and gives their advice to the reader. Finally, I loved the part where the author gives an exercise where you can learn about your risk tolerance which is an important aspect of investing.

I did not enjoy parts where the author talked about mutual funds, currency, and commodity trading because I have no interest in this type of investment.

Event though I did not enjoy some parts of the book, I would change nothing about it. I believe that every part is important because every person has different ways to invest and all of them are important even if all these branches are not meant for everyone.

I would recommend this book to everyone because I truly believe everyone should learn the basics of investing.

Bombardier, my second experience in the stock market

After a major loss with my first experience in the stock market, I was in the search for a company that I knew how they make their money in general. I have decided on the 11th of November to buy 100 shares of Bombardier (BBD-B.TO).Bombardier is an aerospace and transportation company. Their headquarter is in Montreal, Quebec.

Before I bought any stock of Bombardier, I knew they were struggling as a company with the C Series Jet. Despite this, I had an optimistic view about the company and it is a quite popular company with a big impact in history here in Quebec.

Source: Bombardier

As time passed, my stake at Bombardier grew, I had 850 shares at one point in time. Last week, I sold 750 of my shares with a positive return, to diversify my portfolio. So my investments are not settled only to one company. If it was not the diversification of my portfolio I would’ve never sold my shares for a long time because I believe it is a good long term investment. I also think the company will perform better with the help of the government of Quebec who Invested $1 billion to help the company and from Caisse de depot et placement du Quebec‘s help.

Bombardier stocks decline when Boeing won the contracte against Bombardier.

Boeing stocks raise upon the winning of the contract.

 

With this investment, I have learned that airplane companies quite depend on airline companies. If an airplane manufacturer wins a contract against its competition, the stock of the airplanes manufacturers will rise. For example, on January 21st, the news came that Boeing (BA) won a contract against Bombardier for United Airlines with a decline of Bombardier’s stock by around 16% and Boeing stock increase by 5%. I think that airline companies influence quite a lot for airplane manufactured companies. Every time, when Bombardier loses a contract their stock decreases especially when their C Series Jet is involved.

Compared to my first encounter with the stock market, I was very satisfied with the purchase of Bombardier’s stock and I hope it will stay in my portfolio for a long time. I also hope Bombardier will perform better so the company gets out of any struggle and participate to the growth of the economy of Quebec and Canada. During this week,  I have increased my steak in Bombardier.