Helping to do research for and suggest actions on our stock market investments can make me feel really smart and really dumb all at the same time. I will feel pleased that I finally understand how to glance at the company summary and key statistics at Yahoo! Finance, and know certain things. Then, I will make suggestions on buys or sells to my husband, which he likes me to do, and he will review them and bring up issues that make my head spin. But he has been learning about the stock market longer than I have, and, I remind myself, that is why two heads are better than one. Preferably, though, two heads with the same degree of concern in our investments, which is why we do it ourselves and don’t hire a financial manager or mostly invest in “funds.”
1. Short Ratios in Perspective
It is not always that he understands an investment parameter much more than I do, its just that he has heard of it and knows just enough to wonder if we need to know more. That is how this last week, I ended up researching short ratios on stocks and reporting back to him what I had found. In this case, it ended up confirming and clarifying the concept for him. If you are interested (but don’t get overwhelmed if you are “not there yet,”) here are two articles that I found.
A High Short Interest Ratio Can Be a Warning or an Opportunity
Short Ratio Stock Sentiment Indicator
The summary is that while we would never use short ratios as an investment strategy, sometimes it can be helpful to notice that other people are and look further into the news headlines about a stock to see why this activity. Keep in mind that I’m still not claiming to have a full grasp on exactly what all these terms and numbers mean, but I am starting to. I will continue to educate myself patiently on the subject, while going forth with investments, because we are doing decently without understanding every weird statistical ratio that people like to calculate.
2. Fast Graphs Make Many Concepts Visual and Easily Compared
Part of the challenge of investing in the organization of our own stocks and the information we are tracking. Again, we are not trying to follow every single characteristic of a stock or the company that it represents. For one thing, we don’t think that they are all equally important. For another, many of them overlap in ways. Lastly, we agree with the common conclusion that trying to evaluate every statistic available on a given stock is mind numbing and doesn’t appreciably increase the prospects of choosing a better investment. Just a reminder, all of this is said from the perspective of buy stable value and hold long term, while monitoring semi-regulalry for obvious trouble or opportunity.
My dad introduced me to F.A.S.T. graphs as a way to monitor stocks and I am impressed. These graphs synthesize a number of statistics of a stock that highlight it’s quality compared to its current value. And they are done in a visually pleasing and easy to read way, assuming you have some understanding of the values spoken of. But even if you don’t, I think studying those values while looking at the graphs helps draw a lot of the ideas together. I will mention that I have read several articles written by Chuck Carnevale on Seeking Alpha, the creator of this website, and he is one of my favorites. Possibly because he reminds me of my dad, but he explains things so well and avoids hype. Another thing is that compared to many of the online or newsletter resources that I have seen, the cost of subscribing to his constantly updated graphs is quite affordable. I look forward to using them in the future
3. Google Spread Sheets for the Technically Challenged
For a few years now, my dad has been telling me, “You owe it to yourself to learn about spread sheets.” Other people mention using them like it is as easy as using a coloring book. When I try to set them up or read instructions on them, I come to the conclusion that the creators of the programs or the teaching tools have no idea how to communicate with the uninitiated. And I console myself with the fact that I got an “A” in college level Calculus. But last week, something clicked.
I had watched my dad show me things he did on spread sheets many times, but it was so foreign to me that I couldn’t follow how he was making it happen. “Link this cell to this one and you will get this real time calculation” sounded really good, but I couldn’t make it happen in my world. Then, last week, something clicked. I know, I already said that, but it feels momentous! I finally grasped what code he was putting where and where the cursor had to be to make this meaningful. He also showed me a page of google shortcuts to make stock market activity link to any spread sheet I make.
He does not use Google spreadsheets himself, although he has before. The main reason is that there was no way to link individual Google spreadsheets 2 years ago, when he wanted to start a system of spreadsheets to manage more than one account and link them all to final values. Yeah. Get your mind around that.
I found this fabulous video tutorial specifically about making a spreadsheet for stocks. I can already tell that being able to refer to this during my process will make things go much more smoothly:
For now, I am content to make one functional spreadsheet that I can easily update and share with my husband when he wants to be updated. I did manage to make a simple google spreadsheet, that shows all our stocks and things like cost basis and current value, using what I learned when I made the running log recently. But I have imminent plans to make it fancier! I am determined to add those functions that give real time data, partly because I don’t want to have to manually change it all the time. Once I get it done, I will probably be so excited that I will have to tell you all about it!
