HOG: We've got Evan the Stock Market Maven to teach us
ordinary nubs how to make money in the Stock Market. And maybe give
us a hot stock tip. So what are the basics?
EVAN: When investing in stocks you have to weigh the risk to
reward factor. You want to limit the amount of risk you take so your
losses are minimal.
HOG: Kind of like sex with a random bim. You want to limit your risk by
wrapping your jammy in plastic, but you still get the reward of
feeling her snuggle-bubbles.
EVAN: That is exactly my point.
However, the lower the risk usually the lower the return. So, you
want to be somewhere in the middle unless you are a huge risk taker
or vice versa.
HOG: Ah, I see. It's more like approaching bims in the bar. You can
easily talk to the Big Fat Nasty chick, but the return is... a Big
Fat Nasty chick. Approaching a Super Hot Girl is high return, but a
higher risk of rejection. So you're saying, maybe go for the
above-average pretty girl… I mean stock.
EVAN: Exactly, the super hot girl will most likely turn you
down so go for the average chick.
Also, my stock advice is for a certain period of time and can range
from 1 day to 10 years. Today I am going to recommend Starbucks (SBUX)
for a couple of simple reasons.
HOG: Oooh! Make my stock order a Grande! When you buy stock, do they give
you discount coupons or anything cool like that?
EVAN: Some companies give you dividends during the year,
which is a percentage of the shares you own of that particular
company. If a company has a lot of extra cash they usually give
dividends, but we'll get into that later.
If you are not familiar with P/E ratios, earnings per share,
doesn't always matter, you can still invest in stock.
HOG: Okay, cool. Because I thought P/E was that old school rap group
Chuck D and Flava Flav.
EVAN: Actually, yes that is a rap group called Public Enemy,
but I mean Price per Earnings.
We are talking about Starbucks because of one simple reason. Coffee
is addicting!!!!!!!! Now I'm sure you never heard those words before
coming from a stockbroker or analyst. Starbucks will be around
forever, selling $5.00 cups of coffee to high school kids. They are
going to be drinking coffee for the rest of their lives. So lets see:
$5.00 forever equals mo money, mo money, mo money.......
HOG: With that theory I should invest in everything that is addicting…
cigarette companies, pornography, and MySpace.
HOG: But what if a new competitor starts up? For instance, Dunkin Donuts
sells coffee, too. Or what if someone opens a new fancy place called Stirbeans?
EVAN: Good point Hogster.... there is competition for
Starbucks and it is Dunkin Donuts (YUM) however, Starbucks is the
market leader in the coffee industry and even though
Dunkin Donuts does sell a
good cup of coffee, did you ever try their latte.......just not the
Now the Starbucks stock isn't growing as fast as it used to because there are
a lot of stores already and how many more can they open? (Can we say
HOG: Do Chinese people like coffee? I think Chinese people prefer tea and
bootleg DVDs. Can Starbucks sell that in China? What about Starbucks
EVAN: Actually Starbucks does sell CD's so your theory on
that is legit. And if Starbucks can open a store in Italy, then the
Chinese will also enjoy. I think Iraq will have to wait.
So the growth is limited but so is Coca Cola and Philip Morris --
yes I am comparing them. If you want a long term company to hold for
a couple of years go with SBUX and you will be pleasantly surprised.
HOG: Okay, so for a long-term relationship, go with a
girl or stock that
is stable and is somewhat mature.
Too young… and she could act all silly and spend your money
Too old… and she's lost her good looks and she's close to dying.
In between… and she's the right age to be fun, grow with you, and
maybe even give birth to a new baby company.
Sweet. Who knew the Stock Market is really like a woman? Next week
can you tell us about "Stock Splits"? That sounds sexy.
EVAN: Umm...your analogy is quite extreme, but I guess you
can look at it like that.
To speak with Evan, email him