Further Reasons Behind Stock Choices

We were also asked to explain how our stocks reacted to news and business developments my college class, Business Policy and Strategy in which we were to “invest” approximately $10,000 in stocks, bonds, mutual funds, etc.

I am graduating from American University with a degree in Business Administration with a specialization in Finance and Accounting. I was with UBS Financial Services under a financial advisor last year.

I knew before taking this course that in order to properly diversify a portfolio there needs to be at least 15 different types of stocks. I had a portfolio made entirely of socks with no bonds or mutual funds because the goal of this portfolio is for retirement and I was taught never to buy a stock that you could not let sit for at least 20 years.

I think this portfolio did well in spite of the fluctuations we experienced in the stock market this spring. The following is a list of news events that effect the stocks that I chose which were:

AAPL Apple
APD Air Products & Chemicals
BAC Bank of America
BK The Bank of New York
C Citigroup
CL Colgate-Palmolive Co
CSCO Cisco
DD DuPont
FDX Fed Ex Corporation
GS Goldman Sachs Group
HPT Hospitality Properties Trust
IBM IBM
MER Merryll Lynch & Co Inc.
WYE Wyeth

The Following are several headlines of what happened in the news that played a part in effecting the stocks that I had chosen with my comments in red:

Tue, May 1, 2007
UPDATE - Google expands personalization with iGoogleat Reuters

This is past the date that I snap shot my portfolio, but this would cause the Google stock to increase.

Mon, Apr 30, 2007
Joe Nocera on Steve Jobs' Role in Apple Scandalat Business 2.0
Apple TV On Sale at Costco for $289at Business 2.0
Bad blood between Adobe and Microsoftat Business 2.0 (Mon 9:59am)
Monday Morning Apple Linksat Business 2.0 (Mon 9:40am)
Ahead of the Bell: Apple Edges UpAP (Mon 9:08am)
Bad blood between Microsoft and Adobe will cause the Microsoft stock to go down.
Steve Jobs being named in a scandal will hurt Apple despite the positive market share.

April 29
U.S. Manufacturing Sector Accelerates - AP -The nation's manufacturing sector showed surprising strength in April, growing at a faster-than-expected pace and pushing up prices for fuel, metals and corn-based products, a trade group said Tuesday.
Venezuela Seizes Last Private Oil Fields - AP President Hugo Chavez's government took over Venezuela's last privately run oil fields Tuesday, intensifying a struggle with international oil companies that could slow development of the world's largest known petroleum deposit.
Schools Banning IPods to Beat CheatersAP (Sun, Apr 29)

Sat, Apr 28, 2007
[$$] Subscribing to the IPhone Revenue Streamat Barron's Online (Sat, Apr 28)
April 27-28 Manufacturing increasing prices for fuel, metals, and alternative fuels will depress the market since these will raise the cost to do business in every sector.
Venezuela further increases the cost of oil and fuel by seizing oil fields.
IPods being used for cheating may reduce sales by parents, but the IPhone getting publicity may negate the bad news.

Saturday April 28, 2007
Chile Asks Google to Fix Map Gaffe
Dollar Slumps; Euro Hits Record High
Google stock will go down by messing up their mapping software. The stockmarket will suffer from the Dollar decreasing in value.

Friday April 27, 2007
Economy Crawls, Raising Recession Fears
Chevron 1Q Profit Surges 18 Percent
Southwest Gas 1Q Profit Up
Venezuelans Struggle to Food Staples
Goldman Invests in Arcadian Networks
State by state, Microsoft responds to assault on its dominanceat MarketWatch (Fri, Apr 27)
Microsoft Milks The Monopolyat Forbes.com (Fri, Apr 27)
Some Apple laptops may have batter problems - no safety riskat CNNMoney.com (Fri, Apr 27)
Microsoft's Vista Sales Boost 3Q ProfitAP (Fri, Apr 27)
Apple says some notebooks may have battery issuesat Reuters (Fri, Apr 27)
Apple iPhone's Slippery Secretat Business 2.0 (Fri, Apr 27)
Apple And Amazon Spur Tech ETFsat Forbes.com (Fri, Apr 27)
Economy bad news will cause the market to go down.
Gas companies making prices may help people feel that the fuel industry is holding on through the fuel problems.
Goldman stock may increase from investments.
Microsoft stock may increase from doing well
Apple stock may decrease from laptop problems, but the coordination with Amazon may mitigate the issue.

April 27 – Wyeth CFO, Kenneth Martin, resigning April 27, 2007
Change of leadership at Wyeth will cause the stock to go down

Thu, Apr 26, 2007
Apple Shares Above $100 on 2Q ProfitAP (Thu, Apr 26)
[$$] Apple, Microsoft Stir Interestat The Wall Street Journal Online (Thu, Apr 26)
[$$] Apple, 3M Post Gains On Profitsat The Wall Street Journal Online (Thu, Apr 26)
April 26 – Wyeth Shareholders wish to keep CEO/Chairman role together and pay dividend
Wyeth Shareholders Support Pay Proposal
Positive press for Apple and Microsoft will help increase their stock prices. Wyeth struggling to keep leadership may decrease stock.

Wednesday April 25, 2007
Treasury Prices Down Despite Mixed Data
Individual Taxes Set One-Day Record
More Banks Respond to Student Loan Probe
Treasury Prices Down means that the government feels we have a strong economy which may stimulate the market. Taxes coming in strong gives the government money to spend which stimulates the market. Banks answering to loan problems which will hurt bank stocks.

April 24 – Wyeth Key Biotech Qualities outlined in Wall Street Publication and FDA Approval
FDA approval will increase Wyeth stock.

Thu, Apr 19, 2007
Microsoft Exec Disses iPhone Down Underat Business 2.0 (Thu, Apr 19)
Earnings Outlook: Mac, iPod sales, new product releases to dominate Apple reportat MarketWatch (Thu, Apr 19)
April 19 – Wyeth Profits rise on vaccine sales on quarterly report
Microsoft dissing iPhone puts both companies in the media which is good for both Microsoft and Apple. Wyeth stock should rise from positive vaccine report.

Wed, Apr 18, 2007
iPhone on target for end of June launch, AT&T saysReuters
Apple stock should increase with new product getting coverage to hit the market.

April 15 – Wyeth Ends license agreement with SCOLR
Wyeth ending a license agreement will decrease their stock price.

Friday April 13, 2007
Google to Acquire DoubleClick for $3.1B
Google stock will increase from new technology.

Wed, Apr 11, 2007
Apple Adds MGM Movies to ITunesAP (Wed, Apr 11)

Apple stock will increase from new product offering.

April 5 – Wyeth FDA drug inspection complete

April 3 – Wyeth Purchases Japan Branch

April 1 – Wyeth Stock praised by Barron’s
April 1-5 is all positive news for Wyeth and will increase the stock price.

Friday March 30, 2007
Wall Street's Major Indexes
Ethanol Demand Boosts Corn Planting
Microsoft: Attacks on Windows Flaw Rise
Increase in corn will effect the fuel and agricultural markets by increasing their stock prices. These markets will effect the rest of the other markets as they will make doing business more expensive and will cause stock prices to drop. Microsoft attacking Windows will hurt both companies stocks.

March 26 – FDA approval and Wyeth gets BeneFIX Approval
FDA approval will cause Wyeth stock to rise.

Sunday March 25, 2007
Wall Street Awaits Home Sales, GDP Data
'No Child' Test Demands Taxing System
Group Meets in Shadow of Foreclosures
Subprime Bust Forces Families From Homes
Problems in the housing market will cause banks to have negative effects on their stocks. It also means that will have a struggling economy which will slow investment and cause all markets to go down. Extra taxes will also hurt the stock market.

Tuesday March 20, 2007
Treasury Prices Up Ahead of Fed Meeting
DuPont CEO Earned More Than $10M in 2006
March 20 – Wyeth’s Alzheimer research program expected to fail
Treasury prices up will lead to conservativism in the stock market. DuPont executive compensation will make the stock go down. Wyeth getting negative press will make the stock go down.

Thursday March 1, 2007
Corn Turned to Ethanol to Rise Next Year
DJIA Leaders & Laggards: Intel, Citi
Hospitality Properties to Offer Notes
Apple shares rise 3.6% following Lehman upgradeat MarketWatch (Thu, Mar 1)
Apple Shares Climb 3 PercentAP
Alternative fuels will increase the price of the energy stocks which will slow down all other sectors. Citibank gets good press which will increase its stock. Hospitality Properties offering notes will decrease their stock. Apple stock will go up with positive reviews by Lehman and other sources.

Wednesday February 28, 2007
Wyeth: FDA Inspection to Take More Time
FDA inspection delay will make Wyeth stock go down.

Thu, Feb 22, 2007
Microsoft Hit With $1.52B in DamagesAP (Thu, Feb 22)
Cisco-Apple Truce Murky on DetailsAP (Thu, Feb 22)
Microsoft Tells Some Users No on VistaAP (Thu, Feb 22)
Dow dips after recent record; oil prices jump.at CNNMoney.com (Thu, Feb 22)
Apple and Cisco Resolve Trademark Disputeat BusinessWeek Online (Thu, Feb 22)
S&P Keeps Strong Buy on Appleat BusinessWeek Online (Thu, Feb 22)
You want a piece of this, eh Cisco?at Fortune (Thu, Feb 22)
Apple, Cisco Call A Truceat Forbes.com (Thu, Feb 22)
Microsoft hit with lawsuit damages will make the stock go down along with having customer problems with Vista. Cisco and Apple getting along will help both stocks go up. Oil prices go up which will increase fuel stocks, but decrease other markets.

Overall for the news – I still feel strongly that it is important to review a stock over a longer period of time (6 months) instead of daily to get a real sense of the overall fluctuations as daily news can make a stock go up and down which doesn’t give a true reading for the direction that a stock is headed.

What do you think caused the fluctuations?