US Trade Deficit

I'm not sure how this blog is useful, or should be graded on, seeing as you basically told everyone the answer today in class, Mr. Moloney...However, I will continue explaining what was asked.

A trade deficit is the amount where a country's imports, are more expensive than it's exports. The U.S. trade deficit went down in 2007 because our mighty dollar became extremely less valuable. When the cost of our dollar goes down, other countries see it as an opportunity to buy a lot of our exports for cheap. A large trade deficit is bad for the country, because a country should be making more money than it is spending. If a country spends more money on buying goods from other countries, than it does selling it's goods to other countries, then it adds to our national debt, at least the way I see it. It's bad to import more goods than to export because it means were not making as much money. If we ever make it out of this economic turmoil, we should definitely see our country's trade deficit dropping faster than google's stocks.

Opportunity Costs

An opportunity cost is when you lose something that you could have gotten, when another alternative is chosen. I guess in lamer terms, this must mean that for instance; Say I were to go to the food court at Queens Center Mall. There are many choices of food to eat. Let's also say that I have high blood pressure and I'm terribly overweight. If I choose something loaded with calories, like...McDonalds, over something more healthy, like Sushi, or perhaps Subway, I could possibly get a heart attack, or die. While the sushi or the Subway sandwich would have probably not killed me.

This is probably related to stocks in the way that people choose between two stocks, the one they choose from, takes a dramatic drop, and they lose money. I had a problem with google. Where it dropped 40 points in only 2 days. I mean, it dropped like crazy. It may as well have crashed for me. I bought it at 512. At the moment of making this entry. It is at about 460. When it was at it's peak, it was around 530. So I lost about 1000 in the stock game. My personal experience with opportunity costs has taught me never to invest in google again.

My Investment Strategy

The reason that I chose the companies were for some basic reasons. I think everyone in the class invested in apple simply for the heck of investing in Apple. However, I know for a fact that Apple will have a new press conference at the end of the month. Either they'll be releasing the new Software Developers Kit for the iPhone, or they'll be releasing the new fourth generation MacBook Pro's, seeing as they've been detected over networks as "MacBook Pro 4.0". The reason that I've invested in Yahoo was the fact that of recently, they were offered lots and lots of money from Microsoft, and they turned them down. Yahoo also is a very stable stock, and hopefully will rise soon. As for Google, when Microsoft was prepared to buy Yahoo, they tried to interfere, and I guess they succeeded because Yahoo turned them down. I also heard rumors that Yahoo and Google may merge in order to probe internet searches. Now I have a very interesting reason for investing in Intel. I feel that they'll be going up pretty soon, hopefully. You see Intel is researching new processors. Some new technology called "Phase Change Memory". Something where instead of using electrons to transfer data, it uses atoms. My strategy relies on how popular, or upcoming events for the company.

Introduction to the Stock Market

1) What exactly is a stock and why do companies sell stock in the first place?

A stock is a certificate that shows you own a very small fraction of a corporation. If the company makes a lot of money, you do as well. Stocks also show that you have voting power within the company, the more stocks you own from one company, the more voting power you have on decision making.

2) What is the difference between a public and a private company?

A private company only allows a select group of people to purchase a stock, while a public company allows anybody to purchase a stock.

3) What is the Dow Jones Industrial Average?

It is an indicator that averages 65 stocks in 3 different categories, in order to evaluate how the market as a whole, is doing.

4) What is a blue chip stock?

A blue chip stock is the most valuable stock you can buy.

5) What is the New York Stock Exchange and the NASDAQ?

The New York Stock Exchange is a New York City based stock exchange. It's currently the largest Stock Exchange in the world. NASDAQ (National Association of Securities Dealers Automated Quotations) is a stock exchange for all of America. It is the largest electronic screen based market in the United States.

6) What is a mutual fund?

A mutual fund is a group investment. When a lot of people together pool their money into investments. There is usually a Fund Manager or "Portfolio Manager".

7) What are some of the biggest companies on the stock market, how much is their stock?


Chevron - $207.2 billion
Toyota Motor - $205.5 billion
Bank of America - $122.6 billion

8) What is the PE ratio of a stock?

PE ratio is a price-to-earnings ratio. It is a measure of the price paid for a share according to the money earned by the company per share.

9) What is a stock dividend?

A stock dividend is a payment by the company to it's shareholders.