Your Questions About How To Pick Stocks To Buy

Helen asks…

What happens to a company’s stock options when the company is acquired by a public company?

i assume they are converted to the public company stock 1-for-1 or on another agreements stipulated in the purchase. but what happens to the vesting schedule? are they automatically vested once the purchase is complete and options are converted or do they keep the same vesting schedule.

ex. i have 1000 shares, 500 are non-vested at the time of purchase.
a) nothing. they keep the same vesting schedule
b) acquiring company dictates new vesting schedule based on their stock policy.
c) they are all automatically vested once purchase is complete.

John answers:

That is usually determined through negotiations between each companies board of directors prior to agreeing to the merger.

If you have to pick one go with C. They are automatically vested once purchase is complete… At least that is what happened when the company I used to work for was bought. Everyone was 100% vested automatically.. Which was cool because I was only partially vested before we got bought.

Michael asks…

Any suggestions on buying a kayak and helmet camera for my situation?

I’m moving to Oregon in a couple months and want to take up rapids kayaking when I do. As a novice any tips on buying a kayak and also about how much am I looking at when buying (I don’t care if new or used, just inexpensive as possible). Also I’ll be wanting to get a waterproof helmet cam for when I’m on the water. Any suggestions on what I need to make sure when buying it and cost?

John answers:

I would recommend sticking with the GoPro Hero series cameras. All the whitewater and sea kayak paddlers I know who film their trips use them and swear by their reliability and toughness. The quality of the video from them is outstanding and they have a lot of accessories for helmet or boat mounting. REI stores have displays demonstrating them and stock them. Their salespeople are going to know more about using them on the water than the folks in electronics stores. I’m pretty sure you get the member dividend of 10% after buying one there, too. I plan to pick one up at my REI branch this summer.

There are plenty of GoPro videos on YouTube — run a search and check them out.

As for buying a kayak, you should not do that until you’ve gotten some guided instruction in whitewater. It is NOT something you should try to teach yourself on your own.

There are hundreds of kayak models and dozens of styles — the guided trips will provide you with boats and you can get a feel for the types and for the fit. Fit is very important in a whitewater boat and your body size has to match the boat. Plus there are river runners, playboats, squirt boats, surf boats, etc.

Once you have a sense from taking some training trips of what kind you want, you can usually find used whitewater boats for around $300 to $600. I just bought a 6 year old ww kayak myself (a Dagger RPM) for $275 plus $60 for a good used Harmony whitewater paddle, $30 for a helmet and $40 for a sprayskirt and a set of flotation bags. So, that was around $400 for the whole set-up.

By the way, here is an excellent blog by a guy who builds kayaks in Oregon — super cool dude. Though he is mainly into sea kayaks he also does local whitewater out there and you can find some of his trip reports with photos on paddling the fast creeks out there. He’s a real character and a top notch paddler. Enjoy!

Http://www.capefalconkayak.com

Donald asks…

Is it good to buy stock in a bad day?

Because the market fluectuates, I cna buy cheaper and sell it to make some profit. Is this good idea?

John answers:

Yes, it is better to buy stocks when the prices are down. You still have to be careful which stocks you buy, because prices can continue to come down. So you have to pick stocks that have long term potential, and as the price goes lower, buy some more. Eventually, the good stocks will go up again.

Joseph asks…

I want to start investing in the stock market, can anyone help?

I am wanting to get into the stock market, and i am looking for some personal help? Anyone out there know of someone or something that can really help me, “one on one” with the in’s and out’s of the market. How to make it one my own, and at home, or home office type setting?

John answers:

Diversify. Don’t put all your money into one stock. If it were to go bankrupt (such as Enron did), you’d lose everything.

And don’t think the key to making money is by picking a stock that will triple in value overnight. The key is to buy in solid companies, and waiting over the course of time.

I recommend investing in mutual funds or in ETF’s (which are mutual funds you buy just like a stock). They are a basket of companies (such as 100 companies) that are put together in one fund, and you buy shares of that fund. All in all they’re pretty safe.

Some ticker symbols of ETF’s that are pretty well diversified are VO, VTI, NYC, and SPY.

And if you want to invest in overseas markets, consider EFA, DIM, and VWO.

Now is a decent time to buy. Things aren’t looking too good, but stocks are very low. As the old saying goes, “buy low, sell high.”

Set up an account at sharebuilder.com. It only costs you $10 to buy, $10 to sell. Plus, there are no monthly charges.

Below are links to sharebuilder and vanguard (which has a lot of ETF’s to choose from).

Good luck.

Charles asks…

Selling my stock picking algorithm to hedge funds. Where do I start?

I’m a C++ developer and I recently made a nice little stock picking algorithm that was able to gain 5000% over a 10-year simulated trading period.

I’m trying to sell it to hedge funds, much cheaper than what they’re paying their own programmers. Anyone ever heard of hedge funds buying stuff like this from people? Where should I start?

John answers:

> Anyone ever heard of hedge funds buying stuff like this from people?

Hedge funds don’t use *stock* picking algorithms. What you are looking for are mutual funds invested in stocks. The typical hedge funds tried to get a positive performance decorrelated from the stock market.

> Where should I start?

By trading it yourself.

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