Scottrade Seminar

Our Scottrade Seminar on October 29th, 2013 was a great experience! Mr. Kreyche from the Tustin Scottrade branch delivered a short discussion on the basics of mutual funds, enhancing our comprehension of investment basics overall. Thank you very much, Mr. Kreyche, for your continued generosity towards E-Stock!

~Andrew Jabara
President of the E-Stock Club

New Kiva Loan!

Hello Everyone,

We have just made a new Kiva loan to Florinda from Peru.

 

Florinda chose to start her career in making and selling garments from a realization in her previous job; she could make and sell her own designs. With the money she obtains from her Kiva loan, Florinda will be able to buy more fabrics and thread to augment her business.

The "No Deal": How Congressional Gridlock Affects YOU

Though the markets inexplicably rose on the first day of congressional gridlock in Washington, today a drop of 58.56 points on the Dow marks the beginnings of what could be a very long standoff. Instead of diving into who is to blame, let us focus instead on what the government shutdown will do to your financial health.
 
Obviously, major drops in US markets and other financial markets tied to the economic well-being of the US will shrink your investments. What shutdown also does is prevent you from applying for small business loans, applying for Medicare and Social Security benefits (although people already enrolled will continue to receive benefits), and prevent you from visiting national parks, landmarks and monuments. If you had planned a vacation to Yellowstone or DC, you may have to suspend your trip, which can cost hundreds to thousands of dollars in fees from airplane tickets, car rentals and hotels. Fortunately, there is one silver lining; the last time the government shut down (in the 1990s), the markets shot up about 7% once a deal was reached. After a few days, the market will be so jaded with Congress that it will continue as normal or start plummeting down. This can be a great opportunity to buy at lower prices, assuming that Congress manages to save itself in time.
 
The next big battle is on October 17th, when the US runs out of money again. If nothing is done, then the US will default on its loans for the first time in history. Should this happen, financial darkness will fall.
 
~Andrew Jabara
President of the E-Stock Club

The Flash Freeze

Today, another sign of just how vulnerable investment markets are appeared. The NASDAQ shut down for more than three hours, bringing many trades to a halt and hearkening back to the "flash crash" of May 2010, when the Dow fell nearly 1,000 points due to an incorrect shutdown of financial markets. Indeed, not all stocks were completely in lockdown. Some stocks, including Apple (AAPL) continued to trade, albeit in a limited fashion.

What went wrong? NASDAQ blames the outage on an inability for its electronic trading system ARCA to connect with the New York Stock Exchange. Basically, the Security Information Processor (SIP) of one place ostensibly failed to connect with the other, causing a standstill in trading information.

While the NASDAQ has failed in the past (it was brought down by squirrels in 1987 and 1994), standstills of any magnitude greatly worry retail investors, regular people who do not have access to high-speed trading algorithms or legions of expert traders. Failed stock exchanges are always worrisome, but it is important to remain calm and vigilant in the event of any mishap. When the next major freeze occurs, just remember that it isn't the first day the financial markets stood still.

Andrew Jabara
President of the E-$tock Club

A Summer Miracle: The Resurrection of Facebook

Hello people of Earth, Mars and beyond!

If you have even glanced at the paper or online news, you must have found out that Facebook has shot up in price recently. On Wednesday, June 24th, Facebook (FB) was at a dismal $26.51. At the time of writing, Facebook is over the $37 threshold. More astounding than the 30% rise in share price on June 25th, however, is that the momentum is still strong. Because many people bought stock in FB between the $38-$45 range on its first day of trading, I see the $40 threshold as a true test for momentum. Past that mark, people will either get out of the miserable ride they had endured with Facebook over the past year or will be caught up in the momentum and continue to hold.

Why did Facebook shoot up? The obvious answer lies in earnings. FB blew past expectations, earning a gross income of $1.81 billion, with mobile advertising revenue reaching 41%. Facebook also grew its number of daily active users by 27%, and with monthly mobile active users representing 71% of Facebook's clientele, all the numbers form a beautiful, healthy company. Since FB had been at a "discount" price of $26, everyone jumped in for some profit.

While I "like" this turnaround, the $40 threshold still looms. If Facebook passes it with little difficulty, it has the potential to soar beyond $50 in August.

~Andrew Jabara
President of the E-Stock Club
Disclaimer: The author currently holds a position in Facebook.

Mid-June Kiva Repayments Received!

Our two loans on the main Kiva website have again been partially repaid!

Abdel Karim from Lebanon has paid $1.39 back on his loan.

Carolina from the Philippines has paid a very impressive $5.00 back!

In total, that is another $6.39 in on-time repayments!

An end-of-school-year post

Well, it has been a long year. As finals wrap up next week, I hope that all members of E-Stock have enjoyed their time in this club.

What have we done? To list a few events:
Loaning on Kiva.com
MarketWatch Spring Competition
Beckman Finance Newsletter
Recycling Program

What events have we seen make the stock market quake? To list another few:
Congress falls off the "fiscal cliff"
The US Presidential Election
Boston Marathon Bombing

For a nice finish to E-Stock: 2012-2013, a few members responded to the question "What commodity are you bullish on?"

"Acai Berries" ~ Courtney Le
"Palm Oil" ~ Emily Ko
"Sugar" ~ Nicholas Partlow
"Corn" ~ Calvin Chen
"Avocados" ~ Marissa Gerchick

What am I bullish on?
"Helium"

Enjoy the summer!

Andrew Jabara
President of the E-$tock Club

Our first Kiva Zip repayment!

Hello Everyone,

Therese has paid back $2.09 from our $25 loan to her Training with Gaming business. I am sure that the loan is already being put to good use by making a difference for kids with autism!

Kiva Loans are Starting to be Repaid!

We currently have two loans on the main Kiva lending platform:

Abdel Karim is using the money for motorcycle repair in relation to generators in Lebanon. He has repaid 5.52% of the loan or $1.38 so far.

Catalina has continued to buy new products for her store in the Philippines. She has repaid 8% of the loan or $2.00 so far.

That adds up to a grand total of $3.38 we have received back! Good job, members of the E-Stock club, for choosing people who have not only started to pay us back, but are actually paying us back earlier than scheduled!

~Andrew Jabara
President of the E-$tock Club

Recycling Program!

Hello,

The E-$tock Club has partnered with Go-Green Club to start the Beckman Recycling Program! Today was our first collection of cans and bottles from ten recycling bins scattered throughout campus. The result:
  +  +
                                 =

One big trash bag filled! That is not a bad haul for five days and ten bins (three pictured above).

The recycling program has many useful purposes on campus;
 First of all, we are helping to clean up campus by providing an outlet for people to "go green" and recycle.

Second, the funds that recycling will give us will be used to fund more loans on Kiva and other future projects.

Finally, this is a great segue into commodities! A commodity is, at its simplest form, a good that meets a want or a need in society. Plastic and aluminum are two commodities, and at the recycling center the base buyback price is currently at $1.07 for PET 1 ("water bottle") plastic and $1.59 for aluminum cans in California. Another interesting thing about commodities is that greater demand can create greater value for them. For example, California law dictates that you can demand to be paid by count on up to 50 items of one type of recyclable object. For example, you could bring in 50 water bottles and be paid $0.05 each (for a grand total of $2.50) if the bottles are under 24 oz. (over 24 ounces will net you $0.10 per item).

Thank you to all who helped make campus a greener place (and put some green into our club accounts). Keep up the good work!

~Andrew JabaraAndrew JabaraAndrew JabaraAndrew JabaraAndrew Jabara

President of the E-$tock Club

Social Media and your wallet

If you watched the Dow today, you most likely would have seen it suddenly tank a little after 1 pm. While momentum was regained and the Dow finished strong, why did the sinkhole occur?

The simple reason lies in one word: Twitter.

The Associated Press Twitter account was hacked into, allowing an unscrupulous person to post a picture of the White House burning, "reporting" explosions at the White House and injury ostensibly sustained by President Barack Obama.

While this issue was quickly rectified, it does reveal how powerful our interconnected world can be swung on pure mob mentality. The Dow lost 147 points in less than three minutes after the "report" came out on Twitter, briefly entering into the red before returning to a gain of 152 points to end the day.

Remember that most people trading in the stock market are, well, people. Even computer algorithms can be triggered by trading on a whim. We must realize that the market will be swayed by momentous events, but also retain a rational mindset to truly succeed.

Andrew Jabara
President of the E-Stock Club

(A glimpse of the Dow's swoon, courtesy of MarketWatch)

Two more loans funded on Kiva!

During the club meeting today, E-Stock has made two more loans to people in need.

First to receive a loan today was Abdel Karim from Dahieh, Lebanon, whose job of repairing motorcycle and power generators will receive a boost from the loan, which will allow him to buy special parts he uses in repairs. You can read more about Abdel here.

Second on our list was Catalina from Binalbagan, Negros Occidental, Philippines. She will be using her money to buy more groceries to sell from her general store. Catalina has taken out a loan before on Kiva and paid it back faster than expected, so it seemed foolhardy not to lend to her. You can read more about Catalina here.

Thank you to all members of E-Stock who made these donations possible. Let's continue to help the global economy!

Update: The loan made by Catalina has been fully funded! We will start to receive repayments within the next couple of months.
Update: The loan made to Abdel has been fully funded!

First loan on Kiva!

Hello!

E-Stock has recently opened up a Kiva account, and now the first loan has been made to Theresa. You can read her full story at: https://zip.kiva.org/loans/705.

Theresa raised an autistic child, and with her new app developments she has great promise for helping to mend autistic barriers. Her Training Faces app, for example, helps autistic students recognize emotions.

      vs.      


If you notice something a little different about Kiva, that is because I used Kiva Zip to make our first loan. Kiva Zip is a special part of Kiva that allows loans to be made directly to the borrower rather than passively, as the often pre-disbursed loans you will find on the main Kiva page do. This way allows E-Stock to directly impact people in our global community.

There will be more loans made in the future, so stay tuned!

Update 4/30/13: Theresa's loan has been fully funded! We hope this loan will be able to make a positive impact on her business.

Boston Marathon and the Dow collapse from a terrorist attack

Today, on Monday, April 15th, 2013, two explosive devices were set off at the Boston Marathon, killing at least two people and injuring over 100 more. In terms of morality and of finance, this was a horrible tragedy.

Remember that finance is often tied to the mood of the nation. There are "American" investments, "Chinese" investments, "Chilean" investments, etc. When a nation is attacked, people tend to instinctively flee and move their assets somewhere else. As a result, the Dow dropped 266 points today to a dismal 14,559.

Does a tragedy always mean "sell, sell sell?" Not necessarily; the terrorist attack on the 1996 Atlanta Olympics, for example, did not make the market flinch. Part of the selloff was certainly driven today by investors worried about economic slowdowns in the US as well as Europe's continued entanglements.

Let this be an example of the need to stay up-to-date on current events. If it floods in China, what will happen to investments dependent on rice? If a hurricane rips through half of the US, what companies will be most active in rebuilding homes (or themselves)? If you always take some time to review current events, you'll have that much of an edge over Wall Street.


(Paramedics rush the injured to hospitals as the marathon devolves into chaos)

Hello Everyone!

I have just uploaded the previous editions of the Beckman Finance Newsletter! Click on the links below to check them out!

Beckman Finance Newsletter November 2012
Beckman Finance Newsletter December 2012