Investing

3 Reasons Microsoft Is a Great Company

Microsoft (MSFT) is one of the leading companies in the technology sector. The media and the President may obsess over Amazon (AMZN), investors may follow Warren Buffett into Apple (AAPL), and the average Joe may spend half his day on Google (GOOG/GOOGL), Netflix (NFLX), and Facebook (FB), but Microsoft has been quietly expanding its empire far beyond its traditional PC business. It has everything from a popular video game system to a 500 million-member social network to commercial software and cloud services. Those products are generating growth and income for the company’s shareholders. Here are three reasons they are doing this so well. Continue reading “3 Reasons Microsoft Is a Great Company”

Investing

What Is a Stop Loss Order? Why Use It? And Why Not?

pexels-photo-159888.jpegYou may have noticed that your online broker offers a few order options when purchasing a stock or other security. I wrote in my review of the Robinhood app that many reviewers on the App Store blamed Robinhood for paying too much for a trade when the real problem was that they did not understand and properly utilize Robinhood’s limit order option.

If you simply post the default market order, your order will go through at whatever price your broker and another trader agree upon a few seconds or minutes later, which might not be the same market price you see on your screen. That could be frustrating if the price goes up in that short period of time, which is not unusual.

A limit order makes sure that your trade won’t go through any higher than a certain price. If the price of the security goes up between the click of the order button and when the trade actually happens, the broker won’t buy it for more than the customer wants to pay for it. It will wait for a cheaper trade to be available or the order to expire.

There are tons of order types being used in today’s technology-driven trading environment, most of which the average investor does not even know about. Commercial investment brokers like the popular online ones usually only offer a few order types, and it is probably for the best, as we are about to see how complicated they can be.

A novice might notice that his broker offers the option for a stop loss order and wonder what that means. He could hit the ‘help’ button or Google the term to see what it is, and at first glance it may look like an interesting idea. Let’s dig deeper into what it is and what the broader implications of it are before we use it to make a major financial decision. Continue reading “What Is a Stop Loss Order? Why Use It? And Why Not?”

Book Reviews

Book Review: University of Berkshire Hathaway

university of berkshire hathawayThe market is flooded with books about Warren Buffett. This is the 5th one that I have read. Some books assemble or quote Buffett’s writings; others reverse engineer Buffett’s investment strategy. Often these authors seem to be trying to convince you they have inside information or trying to indoctrinate you into the Buffett cult. University of Berkshire Hathaway is not one of those books. It has details you won’t find anywhere else, which makes it a relevant addition to the prolific repertoire of books about Buffett and Berkshire. Continue reading “Book Review: University of Berkshire Hathaway”