How To Create A Fortune

Disclaimer

2005-04-09T00:15:00.000-07:00

This website is designed to provide general information regarding the subject covered.

I have taken reasonable precautions in the preparation of this site. However, I do not assume any responsibility for any errors or omissions. I specifically disclaim any liability resulting from the use or application of the information contained in this website. The information is not intended to serve as legal advice related to individual situations.

$tock Market Tips

2005-03-23T00:26:00.000-08:00

Stocks www.marketwatch.com/

Before buying

If you have decided to go ahead and buy and sell your own stocks, but where do you begin? Thanks to in Internet you can find out a lot by just logging on.

It is suggested by many financial experts that before you lay down any hard-earned money, you need to first research a few stocks to see if they are sound companies that have the potential to earn money and grow over time.

One of the best sources of information about a public company is in its financial reports, like an annual report, a quarterly report, or a special filing with the Securities and Exchange Commission. And luckily for everyone, these reports are usually available online at each company's web site, or at the SEC’s EDGAR database online (which is also free).

Perusing the annual report or looking at a company’s earnings report can tell you a lot about how the company is doing and, in some cases, what they have in the pipeline that will help it in the future.

And there is some quick math you can do to test a company’s health. You may have heard of “earnings per share” or “profit margins” or “price-to-earnings ratios”--and you should familiarize yourself with a few of these terms. Visit the glossary to find out more about those terms.

Another good source to find out more about a company are Wall Street analysts and stock brokers. Analysts and brokers are usually employed by a bank to give their opinions on a stock. Some say you should buy, or hold, accumulate a particular stock, but if you look beyond the opinion there is sometimes hard numbers and much research to read up on.

A good strategy is to use analysts and brokers to get information about a stock and then to check some of the numbers for yourself before investing.

Keep abreast of what analysts are saying and how it affects a stock. Some analysts carry a lot of weight and what they say can move a stock significantly, within minutes of giving an opinion. And others are just dead wrong about a stock again and again.

Also, if you are investing for the first time, look for a company that has been out for a while and is paying dividends and has a low price-to-earnings ratio. Older, more solid companies tend to have some history of excellent earnings and you can learn a lot by studying a company that has a good track record.

And although history shouldn’t be heavily-weighed when making a stock pick, looking at what a company has done in the past can help you see how it might react to changes in the future.

Risks

You will also want to learn what risks are involved when investing in stocks especially if you plan on buying and selling them often. Although some people trade stocks for a living, it is not for everyone and can really be a dangerous endeavor that will eat up your savings in a jiffy. And there are arguments as to who makes more money over time--the active trader or the buy-and-hold types.

Make realistic goals about how much you may make on a stock over time. Some think that since they have been making 20 percent gains or more in the past couple of years, that this will always be the case. That is not very realistic if the market slows down and it is more difficult for companies to make profits. Do not take on more risk than you are comfortable with just to hope for above-average returns.

Diversifying your stock portfolio, or investing in different stocks with different revenue streams is really key. Make sure you spend a lot of time looking at the forest as well as the trees. And stock splits and other factors can really effect how your stock portfolio is weighed so set aside time to revisit your goals.

And remember that everyone is in it for the money--not just you. Brokers, exchanges, fund mangers, etc. Use your broker or fund manager to find out exactly what you are getting into. Really find out how a broker or fund manager makes money off of you and what fees are involved. Go to the various stock exchange web sites or SEC's web site and read up on regulations and risks.

This is especially true when it comes to margin accounts--or an account that is set up by a broker who lets you borrow money, pay interest on that money, and trade it as well. Margin accounts can be very risky, so know the risks before signing up.

The key to successful stock picking is that you must do your homework and find out as much as you can about the company behind the stock. Really dig and don't give up. There's tons of free information out there and the more you know the more you will be rewarded.

It's a big job, which is why many rely of mutual fund managers, brokers and others to do the stock picking for them. But if you have the knack, the time and the money, nothing is standing in your way to do it yourself.

Starting A Business

2005-03-20T13:08:00.000-08:00

Are You Qualified
To Be an Entrepreneur?

By JOSEPH R. MANCUSO

What defines an entrepreneur? Many studies have been conducted to determine whether company founders share certain personality traits and characteristics.

From these findings, a profile has emerged which can be used to forewarn individuals who want to start companies but may not be ideally suited to entrepreneurship. Yet such assessments aren't foolproof. Entrepreneurs come in all shapes and sizes, and many who don't conform to the standard have been wildly successful at being their own bosses.

Still, if you're thinking of going into business for yourself, it may be comforting to find out if you have the traits and characteristics typical of entrepreneurs. Many have used the 26-question quiz developed from my research on entrepreneurs to answer this question. It was first published three decades ago and has been updated every few years. From the results, you can decide how well suited you are to founding a company.

A Good Match

Joshua Z. Tabin, founder of the Tabin Corp., a Chicago technology-solutions company, fits the profile established by the quiz almost perfectly and likely would score high.

Entrepreneurs often are the children or grandchildren of immigrants, and all of Mr. Tabin's grandparents are from Russia. Although born in America, his mother couldn't speak English until she started school. Mr. Tabin's relationship with the key breadwinner in his family, his father, was strained and competitive, another factor true of many entrepreneurs.

Mr. Tabin hated high school and was expelled. He completed college, the degree that most entrepreneurs achieve. Although he always wanted to found and run his own company, he first worked in a range of computer- and sales-related jobs on the assumption that "working for others was the best way to learn," he says. "That's why I didn't start a business earlier."

Being fired from jobs tends to correlate with entrepreneurship. Mr. Tabin was fired four times. After the last pink slip, at age 27, he decided to launch his own firm. He sold most of his possessions, including his suits and cars, and racked up $30,000 in credit-card debt to fund the enterprise. Entrepreneurs also tend to be risk-takers.

Mr. Tabin's main reason for starting a company, he says, was to realize his vision for how a business should be operated. Tabin Corp. attempts to create an entrepreneurial culture by giving employees a lot of freedom and making them accountable for their results. In its first six months, the company made $2,000. The next year, it grossed $600,000. Tabin Corp. now consists of three divisions and generates revenues of nearly $30 million annually.

Another key reason for starting a firm: "I don't like working for anyone else," says Mr. Tabin, now 33. "I view myself as an entrepreneur because I have an urge to create, not to just fit in and have my career revolve around someone else's vision."

Outside the Norm

But even people who haven't started their own companies can be entrepreneurial. Some entrepreneurs buy companies instead of starting them. Some inherit companies or take over for a founder. And some work within large corporations, finding and starting new ventures that are later spun off.

Mike Sheaffer didn't start Hi-Line Inc., the Dallas-based industrial products company he runs today. But he has many entrepreneurial traits and qualities nonetheless. He was nine when he started his first business. The lemonade stand in front of the family's Dallas home wasn't just a simple table and chairs. "It was like a construction project," he says. "It had a window and a screen so that people couldn't reach in and steal stuff. I sold chewing gum, cookies and Cokes, not just lemonade."

That summer, Mr. Sheaffer's father, Joe, was starting Hi-Line. He taught Mike one of his earliest entrepreneurial lessons. Mike had been buying packs of gum for the lemonade stand for four cents apiece from the supermarket, then reselling them at the same price. "When my father saw that, he sat me down and gave me my first lesson in profit and loss," says the younger Mr. Sheaffer.

Mike began working for his father occasionally as a preteen. He joined the company full-time in 1976 at age 26. His first project was to clean the warehouse from top to bottom, he says. He became president of Hi-Line in 1988.

While he didn't start the business, he's become an entrepreneur in his own right. He's tripled revenues and employees during his tenure by innovating and promoting entrepreneurial strategies within the company. He corresponds quite closely to the typical entrepreneurial profile: He is the oldest son of an entrepreneur; he started several businesses before he was 20; and he would make a poor employee because he hates other people telling him what to do.

Now the question that will test definitions of the "typical entrepreneur" is whether Mike's oldest child, now six years old, also will be an entrepreneur when she takes over the business. When your parents are self-employed, the opportunity to learn entrepreneurship at the dinner table is immense.

Failure and Success

If you think you're entrepreneurial and decide to start a company, don't be discouraged if you fail. An extraordinary high percentage of entrepreneurs fail in their first, second and even third ventures. At some point, they find the magic formula for success and their businesses take off.

In fact, it's difficult to study entrepreneurs because many, if not most, are absorbed into the business world or fail. When I began researching this group, I included those who had failed in my initial sample. In fact, some entrepreneurs in the study were both winners and losers, depending upon which of their companies were used as criteria.

To determine how you might fare as an entrepreneur, answer each question honestly on the accompanying 26-question quiz. The resulting scores identify five potential ranges for success as an entrepreneur, from successful to latent to borderline, plus whether you're better suited to working for others.

-- Mr. Mancuso is founder and president of the Chief Executive Officers' Club Inc., a New York-based not-for-profit educational association of CEOs and entrepreneurs.

How To Create A Fortune

Disclaimer

$tock Market Tips

Starting A Business

Are You QualifiedTo Be an Entrepreneur?

Are You Qualified
To Be an Entrepreneur?