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Stock Lesson VII

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Next Microsoft. Next Bill Gates. Next Google. Next…

We all want to get the hold of “next big thing” before it becomes real, don’t we? Think about this, the stock of Cisco, the networking and communication company, increased 73 times from 1990 to 2000 in 10 years. The Microsoft stock’s performance was similar. 

From time to time, when a young company came up with some cool product or service, and performed well in the market and financially, people will praise it as “next Microsoft”, and think its founder will be next Bill Gates. The reality is, except Google, no company has come close to Microsoft in past 10 years. But sometimes we innocent investors (like me) fell into this trap.

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Stock Lesson VI

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It’s the earning season again. Many companies already came out with their 2006 Q3 (July to Sept) earnings. Some are good (Apple, eBay and Google), some are bad (Intel, Motorola and Yahoo). Some people are happy because they bought Google before the earning; some people are not because they bought Yahoo…

I don’t know why people want to bet on the earnings. But I played exactly this earning game when I was new to stock market. And the results is not pleasing at all. Betting on earning is pretty much like “guess the coin toss” because we as outsiders don’t have any edge. But for those brave hearts who really can not resist the excitement, here is my lessons and suggestions:

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