Earning cash on the side through Odesk.com

We can all use a bit more cash even in the best of times and these, I am sure you have noticed, are not 'the best of times'. Unemployment is pegged at over 9% and under-employment (current employment not adequately meeting your financial needs) is far higher. If you are one of the unlucky ones that has been unemployed for more than six months, finding a job isn't getting any easier. The daily grind of job searching, resume editing, cover-letter writing, filling out applications and the occasional interview is taxing. If your looking for a way to break up the drudgery and make a few bucks while your at it, I have a few suggestions.

This is the first of a series of blogs I call Cash on the Side. This series will focus on methods of legitimately earning cash to keep you going through the tough times, pad your nest egg, save up for tickets to Disney World or whatever your financial aspirations may be.

Let me introduce you to ODESK.com.  

Some of my more observant readers might notice the Odesk advertisement over there (=====>>>). Odesk is an online resource that connects online employers to online contractors. You might be saying to yourself, "but I am not an online contractor." Neither was I but that is the good part, you can be. If you have knowledge, skills or an abundance of spare time you can be an online contractor. Unemployment might be sky high but there is no lack of online work and through Odesk you can find thousands of job listings.

This is not a get rich quick scheme. The pay is commensurate with the difficulty of the work. The more tedious, repetitious and unskilled the job requirements the lower the pay. More specialized, difficult work pays more. For example, I have earned a few hundred bucks through ODesk by ghost-writing 500 word articles that serve as content for other peoples websites at $5 per article.

What types of job listings are on ODESK.com? 

The jobs posted vary in duration from a single task that may take 20 minutes, like creating a spreadsheet t, to long term employment as a virtual assistant or software developer. The pay ranges from a couple of bucks for unskilled work to thousands. Some jobs are as simple as data entry (transcribing a PDF document into an Excel spreadsheet) or as complex as software development, drafting a business plan or providing financial analysis reports. There really is an amazing range of job listings. Below you will find a list of some of the available categories and sub-categories posted;

• Web Development - Web design, E-commerce, Website Project Management
• Software Development - Desktop Applications, Game Design, Mobile Apps
• Network and Information Systems - Network, Server and Database Administration
• Writing and Translation - Technical Writing, Creative Writing, Website Content
• Administrative Support - Data Entry, Personal Assistant, Web Research
• Design and Multimedia - Graphic Design, Logo Design, 3D Modeling and CAD
• Customer Service - Technical Support, Phone Support, Customer Service and Support
• Sales and Marketing - Advertising, Search Engine Optimization, Public Relations
• Business Services - Accounting, Business Consulting, Statistical Analysis

How does ODESK.com work?

The first question on your mind is probably the cost. Good news! It's is free for contractors. Employers foot the bill. The rate that Odesk charges the employer is 10% for each transaction. If the contract is for $50 then the work will cost the employer $55 total.

WARNING: Be sure to discuss whether or not the Odesk fee will be passed to you prior to accepting a contract. Otherwise you may take a job and fined your payment reduced by 10%.

Anyone can search for opportunities on Odesk but to apply for a contract you will have to take the time to build a profile. I highly recommend crafting a meaningful profile. Online contracting requires a certain amount of trust on both sides of the job. Providing a profile picture, listing work history, taking some assessments to back up your expressed skills and abilities will likely garner more invitations to apply for contracts. The number of jobs you can apply to is directly linked to how much effort you put into creating your profile.

WARNING: Likewise, you should not accept contracts from employers that do not have a history of paying for work. Odesk does allow employees and employers to provide feedback similar to that on EBay or Amazon. This helps to ensure the employer is reputable. Odesk also allows you to see how many jobs an employer has posted, how many are active and how much money they have paid out. All good indicators of whether you can trust the employer. 

After you create a profile you can cruise the site for jobs. Read the entire job description before applying for a contract. I recommend steering clear of job listings that use poor grammar, have misspellings and lack detail. Many employers will put a key phrase at the bottom of their job listing and request that you transcribe it at the top of your application. This is to determine whether or not you read the entire listing and can follow direction. It also ensures that an actual person has applied for a job manually and is not using a computer program (computers cannot read text directions). Many employers want you to have Skype (Free online video chat service) for interviews or project meetings.

Added benefits of online contracting....

Being an online contractor, even if you don't get an abundance of work, can fill gaps in your work history on your resume. This continuity could be the difference between getting the job or not. The resourcefulness and determination to be a part of the workforce and not rest on your laurels is a quality that many employers can appreciate.

You can also expand your skill set by taking assignments that require you to learn new things and develop skills you already have. This is a way to gain the experience you need to get to the next level in your current career path or to transition to another career without the risk of quitting your current job.

You can look for work that aligns with a hobby, creative writing perhaps. If you have every wanted to be a writer or jounalist, this is an opportunity to test those waters albiet at reduced pay. There are many job listing for ghost-writers or collaborators on books, manuals and scripts listed.

If it is too good to be true, it probably is....    

I listed a few warnings above but just in case you breezed by them or have a pronounced inability to see words written in italics (Hey, it could happen), here they are again;

There are scammers on this website. Be careful. Odesk does not provide any sort of conflict resolution. There are pretty simple ways to avoid them but it requires you to stay vigilant. Don't accept contracts from people that have no feedback, have not paid out to contractors or have very brief or grammatically incorrect job listings. Be sure to ask questions and clarify the expectations, deadlines, pay and whether you or the employer will pay the Odesk fee prior to accepting a contract.

Good luck!!!

NOTE: If you decide to create a profile on Odesk you can get to the webpage by clicking the Odesk advertisement on the top right of this page. If you create a profile and start working, I would appreciate if you come back and leave a comment on this page. Let me know if this article helped you out.  

Comparative Analysis: Apples to Apples

If you have been following this blog over the last couple months, first, I would like to say, Thank you! It has been a pleasure writing for you. If you haven't, you can catch up by visiting a few of my other posts. We have been discussing how to find stocks of interest in your everyday life (here), a few tips on what to look for in a stock as a beginner (here) and some free online resources to dig up additional information (here) on a publicly traded company.

Today, I am going to discuss comparative analysis. It sounds intimidating but trust me, you are already familiar with the concept. You have probably heard someone say the phrase "compare apples to apples", "that's apples and oranges" or some other similar phrase. It just means that it is far easier to compare things that are alike.

Consider the following question; Which is a better movie, Braveheart or The Notebook? I personally think they are both great movies (yes, I have been known to enjoy a chick flick on occasion). But I like them both for very different reasons. If I watched Braveheart and I wrote down what I thought made it such  great movie and then judged The Notebook by the same criteria I don't expect I would consider it great or even good. Nearly everything I enjoyed about Braveheart was absent The Notebook. I simply cannot compare the two by the same criteria and come to an honest conclusion. The same is true for Stocks.

When you are doing your stock research you will come across a lot of number and ratios that won't make sense by themselves. How much debt is too much? What is a good dividend? What is a good Price/Earnings ratio?

There is no template for what a good investment looks like. Different industries or sub-industries should be judged by different criteria. To determine what criteria a company should be judged and to get some context for all of those numbers and ratios you should look at a few different things;

Revenues ~ Looking at the reported quarterly revenues is a good place to start. Revenue is the total amount of cash coming in from sales of the product or service the company provides. This is often referred to as the "top line". For this number obviously higher is better.

Net Income ~ Net Income is the revenues minus expenses and losses. This is commonly referred to as the "bottom line". Again, the higher the number the better but you also want to be mindful of the relationship between revenue and net income. If revenue goes up drastically but net income stay the same there may be issues that need to be investigated. There are many factors that can impact that relationship, some good, some bad. Perhaps raw material costs are going up (probably bad) or maybe the company has been investing in new equipment (probably good) but whatever the case, it is important you know why.

Gross Margin ~ The gross margin can help you define the relationship between the revenue and the net income. It is generally expressed as a percentage. That percentage identifies how much revenue is turned into profit on a per unit basis. It sounds complicated but conceptually it is not. Think of it like this; If I own a sandwich shop and I sell a foot long sub for $5 and the cost of the bread, meat, cheese, vegetables, condiments, paper wrapping and labor come to $3 my Gross Margin per unit is 40%. This is an indication of how efficiently the company makes money.

Debt ~ Not all debt is bad. In many industries you will find that a certain amount of debt (it varies) is appropriate. In fact, having little or no debt might actually be harmful to a company in a competitive industry. Debt is often used to expand a company. Having no debt might mean that the company does know how or has no desire to expand which can limit earnings potential. Of course having too much debt is bad as well. Finding a range of what is the appropriate amount of debt for a company can be difficult but comparative analysis can help.

Price to Earnings Ratio (P/E) ~ As I explained in a previous article (here) the P/E is a very important number that can signify the perceived growth potential (or lack thereof) or value of a company. This number more than all the others discussed above is only valuable when compared to other P/Es.

That is a few of the numbers you should be comparing but to what do you compare them? 

• Competitors ~ Always look at the competition, preferably the company's chief rival like Coke and Pepsi. 
• Past Performance ~ To know where a company is going it helps to know where it has been. What is the company's P/E ratio now and how does that compare to its highest and lowest over the last few years? Are they accruing more debt or paying debt down? Are revenues trending up? Is net income outpacing the trend in revenue or is it lagging? Identifying trends is an important part of Stock Analysis. Often companies have a seasonal cycle, so be sure to compare the 1st quarter of one year to the 1st quarter of the next, the 2nd quarter to the 2nd quarter and so on.
• Expectations ~ Company's often make statements in earnings reports or press releases that indicate how much they expect to earn or grow in the upcoming quarters. Financial Analysts do the same. How do their expectations compare?  Do they match your expectations?

When performing comparative analysis, context is king. The more context you have the more sense you can make of that great jumble of numbers you will find in earnings reports, financial statements and Yahoo! Finance pages.

I will break down those numbers in a future blog so stay tuned and as always, if you have any questions feel free to post them in the comments section. I would love to hear them.      

Despite all the fear, Economy on the mend

If you have been paying attention to the Stock Market over the last few weeks you are probably confused, perhaps frustrated and maybe even feeling a bit nauseated. Since last Thursday the DOW has been like the ocean roiled by a great storm, swinging over 400 points alternating from positive to negative, 4 times (see the chart below) over the last week. Overall the DOW is down over 1,500 points since mid-July. If your new to the Stock Market or have purchased any stock in the last few months chances are you are in the red. This is a scary time but there is a valuable lesson here. Much like the ocean, one must respect the power of the Stock Market. It can bring you a great bounty or ruin if you do not take proper precautions but you can stay afloat.



DOW 5-day chart: Dangerous Waters



Don't Panic!!! 

The first step to surviving in these dangerous waters is to keep your wits about you. This is not the time to bail out of your holdings. Remember, you haven't lost a penny until you sell your stock for less than you bought in. It may make your stomach turn to look at your unrealized gains/losses but I highly recommend you hold on and let this storm pass. The Stock Market has weathered many storms over the last century and I don't expect that this one will be different.

If checking on your portfolio is giving you heart burn I recommend tuning it out for a little while. Take into account your time horizon (when you plan on accessing the funds in your account). If it is an IRA and you have 25 years until retirement age, you don't have to watch your portfolio every day, week or even every month. You should be investing with a very long term view and your holdings should not require a lot of maintenance (check out this article for more details).  

This isn't 2008 

A lot of media folks are trying to draw comparisons to the market in 2008. Don't buy it. While economic conditions seem worse now than they did then, the truth is, underneath it all companies are far healthier. They have less debt, more cash and are more efficient than they were in 2008. While our Government may be worse off, American companies are stronger than they have been in years. Its going to be American companies that drag us out of the recession, not the US Government.

Unfortunately, the health of American companies has not translated to a much needed increase in hiring. Unemployment is the greatest risk to the economy. While the health of the US Government is a concern, it is a symptom not the cause of our economic troubles. Companies are not hiring because up until now they have been able to squeeze greater productivity out of fewer employees but that only last so long. Eventually, efficiency is maximized and to increase capacity a company has to hire. I believe after 2 years of layoffs and process improvements American companies have reached that point. Hiring will soon follow. It may be in fits and starts but I think we could see hiring turn around as early as this fall.

What is happening?

A few things are causing this crazy volatility in the Stock Market but it all really boils down to fear and uncertainty. There are a lot of people that are genuinely frightened by the European debt crisis. There are some fairly large economies in Europe that are in trouble. While the Global economy seems to be in recovery the worry is that the instability that these countries may cause by going bankrupt would push us back into recession. People are also concerned that America may be on a similar path to bankruptcy and the political strife in Washington, DC isn't building confidence. The recovery is not happening fast enough for many analysts and that is prompting a lot of media reports that foster more fear and uncertainty.

A slow recovery is .....good?

Yes, the pace of the recovery is slow but I view that as a good sign. Sound crazy? If you think so, believe me, you are not alone. I know lot of people are still unemployed and people are losing their homes to foreclosure. That is terrible but give me a chance to explain.

Think of the Global Economic Crisis of 2008 like a broken bone. When you break your arm you go to the hospital and have it set and placed in a caste so that you will not damage it further and to give it a chance to heal, right? We did that by bailing out some banks and automakers, injecting cash into the economy with government bond buying programs (Quantitative Easing and QE2) and lowering the cost of borrowing by keeping interest rates low.   

Eventually, you have to take the caste off but the limb has atrophied. It is weaker and you use it reluctantly afraid it may snap.You use it tentatively and rehab it, slowly building the muscles back to their previous strength. Similarly, households, companies and even countries are rehabilitating their economies. Everyone is altering their sending habits whether they be cutting coupons, laying off workers or establishing austerity measures. Everyone is reestablishing fiscal responsibility by saving more and spending less. We are all strengthening our balance sheets and trying to improve our credit. It is a slow but rewarding process of which there are no real effective shortcuts.

One might suggest a shot of steroids to help with muscle growth but if the muscle recovery outpaces the bone hardening that may cause the bone to snap all over again. Even if the bone doesn't snap, the muscles may become dependent on the artificial enhancer or grow a tolerance requiring more and more of the supplement. No supplement is completely devoid of side effects and as the dosage rises so does the potential for those unintended side effects.

The very same can be expected if the US or any government attempts to meddle with the progress of this recovery. Like most things worth achieving in this world, a recovery of this sort will be long and not without suffering and there is no shortcut to success. Anyone promising the contrary (*cough, Washington) is selling something and I am not buying.  

Speaking of buying

The silver lining to this troublesome tale is that the recent downturn in the Stock Market has improved the value of quite a bit of companies like Ford, Southwest Airlines, General Electric, Caterpillar and Imax (All of which I own). It is a stock pickers market and if you do your research you are likely to find some great deals. 

   

How To Use P/E To Compare Stock Values

In a previous blog (here) I took you on a quick tour of the Yahoo! Finance and explained what some of the numbers and ratios mean. Today I will expand on one of the most prevalent ratios when analyzing stocks, P/E or the Price to Earnings ratio, also known as "the Multiple". Calculating this ratio is simple. You just take the stock price (P) and divide it by the earnings per share (E or EPS). The hard part is interpreting the P/E. There are no hard and fast rules that indicate what is a good or bad P/E.

You will find that this is a continuing theme in stock analysis. I would love to provide you with a check list of what makes a great stock but we live in a complex world where context is very important.

Using P/E to compare stock values

P/E serves a couple important functions. First, it provides a means of comparing the value of companies of different sizes. A common misconception when people look at stock prices is that a higher priced stock is more expensive than a lower priced stock. The truth is that there are a lot of factors that change a stocks price but to keep it simple consider these two;

• How much is the company worth? 
• How many shares of stock are in circulation?

Theoretically, if both of these numbers were concrete and indisputable you would just take the first number and divide it by the second (company worth / total shares) and that would give you a concrete stock price. Unfortunately, the first bullet is not a concrete number though. Many people will have many different opinions on a company's worth or total value. 

Since the company's total value is not concrete, financial analysts look to a company's earnings instead. Earnings are concrete, indisputable and reported quarterly by every publicly traded company. But stock analysis is about comparing company's to one another. How do you do that for companies of different sizes? McDonald's (MCD) is the largest fast food chain in the world. How can we compare its stock to say, Chipotle Mexican Grill (CMG). We just add up the previous four quarters worth of earnings (1 year) and divide that by the total number of shares in circulation. That gives you the Earnings Per Share (EPS).

EPS shows you the earning power each share represents, essentially telling you how much your portion of the company earns for each share you own. It is easy to assume that higher numbers are better but that isn't the whole story. What you and I am concerned about as investors is the value of a stock and to find that you have to consider what it cost, its price. That is where the P/E ratio comes in.

For example;

Apple (AAPL) has a stock price of about $393.30 and a EPS of just $25.56.

Coinstar Inc. (CSTR), owner of Redbox movie kiosks, has a stock price of about $54.23 and a EPS of $1.62.

At a glance most people would say that Apple is more expensive than Coinstar but Apple also has a much higher EPS and that has to count for something, right? How can you definitively compare them? You take the stock price and divide it by the EPS. It shakes out like this;

Apple: $393.30 / $25.56 = 15.56
Coinstar Inc: $54.23 / $1.62 = 33.54

What do these numbers mean? Well, at the current price you have to pay over 33 times what Coinstar has earned per share to by the stock where as you only have to pay just over 15 times EPS to purchase Apple. This seems to indicate that Apple is curently a better value despite the fact that the stock costs almost $400 per share.   

Analysis does not end there, of course. A lower P/E does not necesarily mean that the company is a better value or that it will provide better returns. But now you should have a better understanding of how and why those ratios were derived. I will follow up with another post that discusses P/E as an indication of potential earnings growth pretty soon. As always, f you have any questions feel free to post them to my comments section below and I will respond quickly. Thanks for stopping by.

3 Long Term Trends

When you are picking stocks for your retirement portfolio you don't want to have to fuss over them on a daily, weekly or even monthly basis. You should shoot for low maintenance stocks that you can buy hold and largely forget about. You can do this by purchasing industry leaders that support long term trends. These are trends, not fads. Fads can make you money but you have to babysit them. Below I have identified a few trends that I think are lasting. I also threw in a few companies that I personally think will benefit greatly from these trends.

NOTE: The companies mentioned below are meant as an example of how to play the trends I have identified. I am not recommending anyone purchase these stocks at their current prices without additional research and due diligence. 


E-Commerce -There isn't much that is out of reach if you have an Internet connection and a credit card these days. People are more comfortable shopping from home or on their mobile devices than they have been in the past and that seems to be a continuing trend. Obviously online retailers like online mega-store, Amazon.com (AMZN) benefit but retail is only one of the benefactors. I think some of the less obvious plays on this trend are potentially more lucrative in the long run.

Visa (V) is one of my top picks for playing this trend. E-commerce requires a credit card and Visa is the most widely used card out there and they get a cut of every transaction. I also think that the younger generation uses far less paper money than previous generations and I do not expect that to change. Not long ago it would seem silly to use a credit (or debit) card to buy a gallon of milk but that is normal these days. One must also consider the emerging markets. Many countries are improving the overall quality of life for their people and that includes infrastructure upgrades that lead to Internet access and access to credit. While I don't believe paper money will be phased out anytime soon, I do think the volume of credit card transactions is climbing steadily higher and will continue to do so for a very long time.    


Waste Disposal - This is a service that will always be needed and there is significant room for growth in emerging markets. Countries like China and India have vast populations that are clawing their way out of poverty into a rapidly growing middle class. Suddenly these people have income and access to all sorts of packaged goods that were previous unavailable or out of reach. This is going to increase the volume of trash and keep companies like Waste Management (WM) and Republic Services Inc (RSG) very busy for decades to come.

In particular, I like Waste Management. They are the largest waste disposal company in America and already have a number of joint ventures with Chinese companies that have given them a foothold in the world's fastest growing economy. It also happens that China has a vast and increasing problems with illegal dump sites, water contamination and mismanaged landfills. That foothold represents a lot of potential profit in the not too distant future. Waste Management is also a leader in the technologies that turn waste into fuel and sports an attractive 3.5% dividend yield.      


Green Technology - I am not buying into green technology companies right now because they currently rely too heavily on government subsidies and tax incentives to maintain their profitability. Those government subsidies and tax incentives are in danger during these uncertain economic times. However, I do believe that resource conservation is a long term trend and not a fad. Because of that belief I am on the lookout for a green technology company that has a sustainable business model.

Other ways to get in on green technology is by supporting (owning) larger, well established companies with significant green initiatives. For instance, automakers like Ford (F) that are striving to not only make their vehicles more fuel efficient but are making their manufacturing processes more efficient as well. Or a company like Johnson Controls Incorporated (JCI) that specializes in batteries and making  buildings more efficient (among other business lines) through the use of smart power control systems.

Teaching Our Children Financial Responsibilty

I am going to step away from my discussions on the Stock Market for a moment and answer a question that I get asked often by parents with young children. The question is "How do I teach my children financial responsibility?"

This is a GREAT question!
 
It is my firm belief (and the reason for this blog) that as a nation we are severely under-educated when it comes to finance. Ironic, considering we are the richest nation in the world and the founders of capitalism. Often financial lessons are learned the hard way and generally at the expense of our credit scores. The majority of our important life lessons are learned while we are still young children. whether we are talking about manners, good hygiene, sharing or financial responsibility.

My recommendation for teaching financial responsibility is simple really, an allowance but with a few significant tweaks. A typical allowance grants the child a set amount of cash on a weekly basis. This could be automatic or based on the child completing their chores. In my opinion, both of these methods are flawed.

How to teach the value of a dollar?

An automatic allowance teaches the child that they can get something for nothing and that just doesn't happen in the real world. I recommend a real allowance, not an entitlement. Tying the allowance to the child's chores is a step in the right direction. My concern is paying for chores that the kid should be doing anyway like keeping their room clean or doing the dishes after dinner. Those are obligations that are inherent to being part of the family. In an effort to teach the value of a dollar, I think an unintended consequence is a diminished acceptance of family responsibility.


So, how do you teach your child the value of a dollar without them trying to squeeze you for a few bucks every time they put a dish in the dishwasher or make their bed?

I recommend having two lists of chores. The first is a list of their responsibilities; things like keeping their room clean, helping with the common areas (vacuuming the living room, dusting the den etc), mowing the lawn and similar chores. This is stuff they do because they are part of the family and they  live in the house too. I believe rewarding these things monetarily under-minds the sense of responsibility to family that we all want our children to feel. Somethings you do because it is right without the expectation of a cash reward.

For the second list I recommend focusing on chores that the kids can do that make life easier for the parents or save the family money; things like washing Dad's car, cleaning the garage, doing the laundry (at least, their own), weeding Mom's garden, perhaps mowing Grandma's lawn. For this list you can set prices and add new tasks to the list as you go. Some of these jobs might be one time things like helping Dad tar the driveway. If you want to make the lesson especially realistic, you can focus on jobs that are unpleasant and time-consuming.

This teaches the value of hard work and of the all-mighty dollar but it doesn't necessarily instill the best spending or saving habits.

How to teach your child to save?

For this I recommend opening the First Bank of Mom and Dad. Make a deal with your kids that at the end of each month you will give them a nickel for every dollar they save. You can choose whatever interest rate you like of course but I think 5% is enough to make them think twice about spending without breaking your own piggy bank. In a previous blog (here) I wrote about the power of compound interest. Arming them with this knowledge early on can have a huge impact on their financial health for years to come.

How to teach financial discipline?

Financial discipline is all about delayed gratification and spending within your means. This is perhaps the most important lesson of them all because as soon as your children turn 18 they will be assaulted with dozens of applications for credit cards. While credit cards are not evil, they can cause a lot of damage if not handled correctly.

So, you have already provided an incentive for saving money but what do you do if they want advance on their allowance. Well, the First Bank of Mom and Dad can handle that too. If they need a loan, offer them the same terms (5% a month) with an additional fee if they are late with a payment, maybe an additional 10%. This may seem harsh but it is far more lenient than the credit card company will be.

Free Investing Tools for Beginners: Yahoo! Finance

In previous blogs I wrote about what the stock market is (here), how to find stocks you may be interested in buying based on your own knowledge and experience as a consumer (here) and a few tips for picking stocks for beginners (here). If you happened to have read them over the past few weeks (or hastily over the last 15 minutes) you may have some ideas for companies you want to invest in. But how do you find out whether your ideas are good ones? There really is only one way. Research. Don't worry, it's not nearly as dull as it sounds. 

So you have a company name. Where do you go from there?

Its time to do a little digging. You should be familiar with the product or service the company provides to some degree already but you have to find out more about the business. What is the company's ticker symbol? How big is it? Where do they operate? What other products and services to they provide and to whom? Who are there major competitors?

Eventually, these and other important questions will have to be answered, preferably before you decide whether to buy in or not. I write "eventually" because I think a layered approach is the most accessible. Over the next few blogs I intend to show you around some useful (and free) tool available right here on your friend the Internet. These are websites that I use to track the market and investigate companies that I invest in.

The first tool I would like to introduce is the Yahoo! Finance page. I think a visual aid will help so right click here and select "open link in a new window". Got it open? It might be helpful to have this page and the Yahoo! Finance page open side by side.

Welcome to the Yahoo! Finance homepage. Here you can check out some financial headlines, get a snap shot of the markets activities for the day (notice the chart a quarter way down the left side of the page) or use the "Get Quotes" search box (top left). I am going to let you poke around on the homepage on your own. I am more interested in the company pages on Yahoo! Finance. You access these pages through the "Get Quotes" search box.

Get Quotes: This search box is a great way to find the company's ticker symbol. The ticker symbol is a  unique identifier (usually 3 letters or less) used when trading stock. You likely have seen ticker symbols marching across the bottom of your television screen if you have ever flipped to CNBC or FOX Business channel. To find the ticker symbol just start typing the company name in the search box. A drop down list of companies will appear and you can select the intended company.

Go ahead, try it! If you don't have a company in mind take a look at Walt Disney Corporation (DIS). I split this page into 4 sections. I am only going to go over the first section today, the Stock Information. The otther sections, the Chart, the Headlines and the Links along the left side of the page, require a blog or more of their own.

Section One: Stock Information 
This is the section smack dab in the middle of your screen just below the company name. Some of this information is pretty intuitive but I am going to go over it line by line starting with the left-most column.

Last Trade: This is the price that this particular stock was sold for in the last trade. This isn't necessarily the price it is still selling for though. Price changes happen rapidly and there is a fifteen minute delay before this information shows up on your screen.

Trade Time: Another easy one. This is the time (or date if it is a weekend or holiday) that the last trade was executed.

Change: This line shows the difference in the stock price since the market open (9:30 AM EST M-F, excluding holidays). The arrow indicates whether the price has increased or decreased (also illustrated by the color: green for an increase, red of a decrease). It shows the dollar value of the increase and the percentage (in parenthesis).

Prev. Close: Short for previous close. This is the price that the stock closed at on the previous trading day.

Open: This is the price that the stock was at the market open. This price is often different than the previous day's closing price because there is after market trading in the US and other the markets around the world (Asian, European etc) effect US stocks as well.

Bid: Here you see two numbers that look something like this: 40.00 x 300 (or something similar). This means that there is a large open order to purchase 300 shares of this stock at the price indicated ($40.00 per share). This is the highest bid of the currently open orders. These numbers will change when this order is filled, canceled or modified so it is no longer the highest bid, or a new higher buy order is placed.

Ask: This is the flip side of "Bid". Here you see two numbers in the same format as above. The difference here is that instead of a buy order. This represents a large sell order.

SIDE NOTE: Often these numbers will change very rapidly for popular stocks and the two prices, Bid and Ask, will be very close, within pennies of one another. This is not always the case though. Some stocks will show a large gap between the Bid and Ask prices. This might indicate a divergence in public opinion. 

1y Target Est: Short for 1 year Target Estimates. This is supposed to be a prediction of what the stock price will be a year from now. Honestly, I am not sure where Yahoo! gets these numbers. I suspect this is the average, median or mean of a group of Analysts following the stock. Frankly, I put absolutely no faith in these numbers and I implore you to ignore them as well.

Day's Range: This is another easy one. This is the lowest and highest price the stock has traded for over the course of the day.

52wk Range: Short for 52 week Range. This one is similar to the Day's Range but instead of the day it represents the lowest and highest prices over the past year.

Volume: This is how many share of this stock have changed hands today. This number is often in the tens of millions for well known corporations. By itself this number doesn't tell you much.

Avg Vol (3m): Short for Average Volume (3 months). This is the average number of share traded daily over the past three months. If you compare this number to the number above it (Volume) you have an indication of how much interest there is in this particular stock. A spike in volume generally coincides with some news or event that may impact the stocks value. It is a sign that you should be looking for that news because it may require some action (buying more, selling etc).

Market Cap: This number is the perceived value of the company based on the price of the stock and multiplied by the number of shares outstanding. So, if you happen to be wondering how many shares of Disney stock are out there simply divide the Market Cap by the stock price for a ball park (accuracy is effected by how much rounding Yahoo! does to the Market Cap).

P/E (ttm): Here is where things start to get interesting. P/E is short for Price to Earning ratio, also known as "the multiple". To get this number you take the stock price (P) and divide it by the earnings per share (E or EPS). This is a very important number. A high P/E generally indicates a stock may be expensive or that there is a great expectation for growth in future earnings. A low P/E generally means a stock may be cheap or that the expectation for earnings growth is limited. It isn't as simple as that of course. I will write more about this in a later blog.

EPS (ttm): Short for Earnings per share. This number represent the company's annual earnings (think revenue or sales, not net income. I will write more about this when I go over financial statements) divided by the total number of shares.

SIDE NOTE: I am sure you didn't miss the fact that I ignored the (ttm) on the previous two definitions. It stands for trailing twelve months. This indicates that the EPS number is a total of the previous years earnings. This effects how we consider this information. A lot can happen in twelve months that can impact (positively or negatively) a company's ability to earn. Like everything, these numbers cannot be taken at face value. 

Div & Yield: This one is short for Dividend and Yield. I wrote briefly about dividends in a previous blog (here). The first number is the dollar amount you will earn annually for each share of this stock you own. It is often split into quarterly payments.

The yield is a percentage that represents the annual return you will gain simply for owning the stock. To find the yield you divide the dividend by the stock price. There are a lot of reasons that a high yield is attractive. First and foremost it is the closest thing to a guaranteed return you will find when dealing with stocks.

5 Classic job hunting tips that never went out of style

I decided to take a detour on my blogging adventure to write about a topic that is relevant for far too many Americans these days, many of which are friends and family, job hunting. This topic is not directly related to my previous articles but since it involves income and a persons ability to save, invest and support a family, I think it isn't too far off topic.

Over the course of my career I have had the opportunity to take part in dozens of interviews, both as an interviewer and an interviewee. I have noticed a significant change over the past decade in the observance of common customs and courtesies surrounding the interview process.

I think during the boom times when unemployment was at 5% or lower, job seekers became complacent. It was easy too become a passive job seeker. The Internet provided an easy way to apply to position or simply post a profile with a resume and let recruiters and employers find you. Common customs and courtesies seemed to have eroded because separating yourself from the pack wasn't a requirement anymore. Those times have come and gone and they may not be back any time soon. Unemployment is still near 9% years after the worst of the financial crisis and job growth has been slow. There are more college graduates flooding the talent pool each semester and experienced and educated people have been laid off and are willing to accept lower tier positions that they may not have considered in the past.

Here is a list of 5 classic interview tips that are still relevant and maybe more so now than ever.

Dress the part (even at a job fair)

I've been to job fairs in which 30% of the job seekers are decked out in their very finest flip flops and t-shirts. If you want an interview, DRESS LIKE IT!! While clothes don't make the man, they do say something about the amount of effort you put into your job search and that may correlate to your work performance. Employers don't have the time to get to know you. They have to rely on superficial evidence to weed out candidates. Don't give them a reason to doubt your considerable desire to work for them.

Smile

I have been on both sides of the desk at interviews and let me tell you, it is OK to smile. In fact, it is more than OK. Interviews are generally a high pressure situation.  Smiling makes you appear comfortable, calm under pressure, approachable and friendly. Moreover, you may find that it actually boosts your confidence. Interviews needn't be clinical and serious. A well written resume illustrates your experience and expertise but can't effectively communicate your personality, social aptitude and enthusiasm. That is what the interview is for and a smile is a great start.

Customize your resume

Employers want to think that you only have eyes for them. You wouldn't recycle a love letter from an ex-girlfriend with your new lady love, right? Guys.....right? If you are struggling to answer, let me help you. Of course you wouldn't. Don't do it with employers either. Ensure that your resume matches the job description, skills and experience requirements as closely as possible without exaggeration or falsehood.

Effort is important. Taking the time to customize a resume is a way to show the employer that you are willing to go the extra mile.

Be prepared

If you get called in for an interview be prepared. Bring copies of your resume  (I recommend at least 4), recommendation letters (no more than two) and past performance reviews. I have gotten a lot of positive feedback on my "candidate packet". I take a standard navy blue folder, staple a cover sheet on the front that lists the position title, requisition number, company name (and logo if you can find one online), my name and the date and time of the interview. On the inside (left pocket) I provide an index. In the right pocket I provide a copy of my resume, a recommendation letter, a customer feedback letter and 3 years worth of performance reviews.

Remeber, effort is important. This will take you 10 minutes to create but can leave a lasting impression. It shows you are thoughtful, organized and willing to work for what you want.

Write a thank you letter (maybe two)

Within 3 business days of your interview be sure to send a thank you letter to everyone that participated in the interview. Thank them for their time and consideration and remind them why you want the job. This is your last chance to make an impression so if you walked out of the interview and thought about things you should have said, now is your chance.

If you find out later that you did not get the job I recommend writing a second letter to the hiring manager. Again you should thank them for their time but also solicit feedback. Reiterate your desire to participate in this particular line of work. Ask for any feedbacks or notes from the interview the hiring manager may have and is willing to share. Ask if the hiring manager would recommend a particular experience, training or education to pursue that will better prepare you for future interviews. In my experience, only 1 in 10 hiring managers will provide feedback but that feedback is nearly always invaluable and can be the first step to establish a lasting business relationship. You may not have been selected for this job but your persistance may be rewarded with a future opportunity working for the same employer.

Picking Stocks: For Beginners

If you read my last post  you may have a few ideas for stocks you might like to own. If not, you can check that post out here. So, you have an idea for a stock but how do you know if it is a good one? Here are a few rules for beginners that will help you separate your good ideas from the bad ones.

Go with what you know: Being intimately familiar with a company, its products or services is crucial for the beginning investor. The incite gained by being a customer is invaluable and can make up for a lack of financial education to some degree. Let's look at McDonald's (Ticker Symbol: MCD). You have probably been to McDonald's a few dozen, if not hundreds of times over the course of your life. If you haven't think of a fast food chain that you have.

You would notice if the prices went up or the customer service went down. You can probably identify when a new item is put on the menu or an old one removed. You might have tried the new item and have an opinion or heard opinions from your friends and family about the new item. You probably noticed that quite a few McDonald's are selling specialty coffee now and it is pretty good. Many McDonald's stores have been renovated to look more upscale. You probably drive buy one or more McDonald's on a weekly basis and would notice if they were shutdown. You can probably list at least 5 competitors and have an opinion on why McDonald's is better or worse than they are. Wow, after looking at all of that, you seem like an expert, don't you? Furthermore, you have friends, family and co-workers that have incite that you can leverage by having a casual conversation.

For example, I was talking to a family friend today that works as a mail carrier. He told me that at one point a couple years ago a few of his co-workers were discussing the huge increase in the number of Netflix envelopes they were delivering. That is a pretty good indication of that the company was doing very well.

Understand the business:
This is an expansion of the first rule but it is important and distinct enough to warrant a few paragraphs of its own. When I say "understand the business", I don't simply mean knowing what a company sells. I mean understand how they make money. For instance, movie theaters make most of their money in concessions. Tickets sales largely go to the studio that produced the film. The extra $3 (or so) that you pay for a 3-D movie might go the 3-D technology company (but not necessarily).

You should also understand what sets them apart from their competitors. This rule is why I avoid pharmaceutical companies. It isn't that they are not profitable companies, I just don't understand why Merck is any better than Pfizer. I do have a pretty strong opinion when I choose an airline though. I can explain why I prefer Southwest Airlines (Ticker Symbol: LUV) over every other domestic airline.

You should also think about who a companies primary customers are. This will help you understand what events (global, national, regional or local) might impact a stock. For instance, we are currently experiencing extremely high unemployment. Certain companies actually benefit from these conditions. For instance, Monster Worldwide Inc (Ticker Symbol: MWW), is the company resonsible for Monsters.com, the website that assists job seekers find employers and vice versa. Discount stores are another industry that does well in tough economic times, companies like Walmart (Ticker Symbol: WMT).

Go with established companies: I always recommend folks new to the stock market choose companies with a history of success and a solid brand name. Companies like Walt Disney (Ticker Symbol: DIS) or Coca Cola (Ticker Symbol: KO) This does not guarantee success (nothing really does) but it will help you avoid companies that that don't have staying power or are fads or fly-by-night operations. These are companies that have been around long enough to see difficult economic times and have survived or even come back stronger. They have made mistakes and recovered. They are mature, stable and generally return cash to their stockholders in the form of a quarterly dividend.

SIDE NOTE: Stay away from penny stocks (stocks priced under $4.00).

Power to the people!

Finding a good stock isn't nearly as complicated as you think it is. No, really. I mean it. You know far more about picking stocks than you realize. You are a consumer. You interact with dozens, maybe hundreds of products, services, and companies on a weekly basis. You have family, friends and co-workers that talk about products, services and companies daily. You know what you like, you know what they like.

That is a pretty good start when you are considering buying stock. It isn't enough but it gives you a place to begin your research. In later blogs I will take you through my process for that deeper research but for now lets keep it simple. Here are some questions you can ask yourself that can lead you on your search for a winning stock;

• What product or service just seems to be everywhere? What product can you not leave the house without seeing? Coke, McDonald's, IPads and IPhones (Apple), Amazon Kindle (I'm a big fan by the way).
• What marketing push worked on you? Domino's pizza admitting that they were selling an inferior product and promising to fix it won me over. I was intrigued. I had to try it and I have to say, I like the new pizza. I hadn't eaten a Domino's pizza in over 5 years but I am a regular customer now. Apparently, a lot of other people felt the same way. Domino's Pizza's stock (Tiker symbol: DPZ) is up over 80% since last August.
• What company consistently delivers a quality product, service or experience? 10 out of 11 Pixar movies have been #1 in the box office and all of them have been extremely profitable. The only reason Tangled did not make it to number 1 was because a Harry Potter movie came out the previous week. Pixar was purchased by Disney (Ticker Symbol: DIS).  
• What product or service do you abslutely love? For instance, when I am booking a flight I always fly Southwest (Ticker Symbol: LUV) if there are seats available. They generally have the lowest fares, they don't charge to check a bag and I think they have great customer service. Chances are, if I feel that way about them many other people do to.   
• What product or service can you not imagine living without? or said another way, what product or service has changed your life permanently? There are certain products or services that change the way we do things forever. For instance, the internet, cell phones, credit cards, DVR, GPS, streaming video (Netflix) etc. Finding the leader in these segments of industry might be a pretty good start.

Finding a winning stock isn't about crunching numbers and watching CNBC 12 hours a day. Its about recognizing the impact consumers (you, me, your friends, family and co-workers) have on individual companies and the stock market as a whole. Where we decide to spend our money decides which companies succeed and which fail. We, the middle class and below, power the stock market but too few of us participate in it. If we want to close the gap between the rich and the rest of us, we need to leverage all of the tools available to us. 

So, hopefully I have gotten you to start looking around, thinking about your own habits, experiences and interactions with companies and their products and services in  a new way. If you have time think about the questions I posted above, try jotting a few companies down over the next week or two. I will follow up this post with one that will get into the next layer of research.